UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
| x | QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31,
2015
| o | TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from
to .
Commission file number: 000-54710
Pershing Gold Corporation
(Exact name of registrant as specified in its
charter)
Nevada
(State or other jurisdiction of incorporation
or
organization) |
|
26-0657736
(I.R.S. Employer Identification No.) |
| |
|
|
1658 Cole Boulevard
Building 6, Suite 210
Lakewood CO |
|
80401 |
| (Address of principal executive
offices) |
|
(Zip Code) |
Registrant’s
telephone number, including area code (720) 974-7254
(Former
name, former address and former fiscal year, if changed since last report.)
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically
and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405
of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files). x Yes o No.
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer”
in Rule 12b-2 of the Exchange Act (Check one):
| Large accelerated filer o |
|
Accelerated filer o |
| |
|
|
| Non-accelerated filer o |
|
Smaller reporting company x |
| (Do not check if a smaller reporting company) |
|
|
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes o No x
Applicable only to issuers involved in bankruptcy proceedings
during the preceding five years:
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution
of securities under a plan confirmed by a court. Yes o No o
Applicable only to corporate issuers:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of
the latest practicable date. As of May 14, 2015, there were 390,730,098 shares of common stock, par value $0.0001, outstanding.
PERSHING GOLD CORPORATION
TABLE OF CONTENTS
ITEM 1 Financial Statements
PERSHING GOLD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| | |
March 31, | | |
December 31, | |
| | |
2015 | | |
2014 | |
| | |
(Unaudited) | | |
| |
| ASSETS | |
| | | |
| | |
| CURRENT ASSETS: | |
| | | |
| | |
| Cash and cash equivalents | |
$ | 5,512,402 | | |
$ | 15,147,837 | |
| Restricted cash | |
| 2,250,000 | | |
| 2,250,000 | |
| Prepaid expenses and other current assets | |
| 660,084 | | |
| 798,633 | |
| | |
| | | |
| | |
| Total Current Assets | |
| 8,422,486 | | |
| 18,196,470 | |
| | |
| | | |
| | |
| NON - CURRENT ASSETS: | |
| | | |
| | |
| Property and equipment, net | |
| 6,185,008 | | |
| 6,398,221 | |
| Mineral rights | |
| 22,786,912 | | |
| 16,786,912 | |
| Reclamation bond deposit | |
| 25,000 | | |
| 25,000 | |
| | |
| | | |
| | |
| Total Non - Current Assets | |
| 28,996,920 | | |
| 23,210,133 | |
| | |
| | | |
| | |
| Total Assets | |
$ | 37,419,406 | | |
$ | 41,406,603 | |
| | |
| | | |
| | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | |
| | | |
| | |
| | |
| | | |
| | |
| CURRENT LIABILITIES: | |
| | | |
| | |
| Accounts payable and accrued expenses | |
$ | 306,001 | | |
$ | 714,291 | |
| Note payable - current portion | |
| 24,880 | | |
| 24,423 | |
| | |
| | | |
| | |
| Total Current Liabilities | |
| 330,881 | | |
| 738,714 | |
| | |
| | | |
| | |
| LONG-TERM LIABILITIES: | |
| | | |
| | |
| Note payable - long term portion | |
| 10,925 | | |
| 17,319 | |
| Asset retirement obligation | |
| 769,762 | | |
| 798,605 | |
| | |
| | | |
| | |
| Total Liabilities | |
| 1,111,568 | | |
| 1,554,638 | |
| | |
| | | |
| | |
| Commitments and Contingencies | |
| | | |
| | |
| | |
| | | |
| | |
| STOCKHOLDERS' EQUITY : | |
| | | |
| | |
| Preferred stock, $0.0001 par value; 50,000,000 authorized | |
| | | |
| | |
| Convertible Series A Preferred stock ($0.0001 Par
Value; 2,250,000 Shares Authorized; none issued and outstanding as of March
31, 2015 and December 31, 2014) | |
| - | | |
| - | |
| Convertible Series B Preferred stock ($0.0001 Par
Value; 8,000,000 Shares Authorized; none issued and outstanding as of March
31, 2015 and December 31, 2014) | |
| - | | |
| - | |
| Convertible Series C Preferred stock ($0.0001 Par
Value; 3,284,396 Shares Authorized; none issued and outstanding as of March
31, 2015 and December 31, 2014) | |
| - | | |
| - | |
| Convertible Series D Preferred stock ($0.0001 Par
Value; 7,500,000 Shares Authorized; none issued and outstanding as of March
31, 2015 and December 31, 2014) | |
| - | | |
| - | |
| Convertible Series E Preferred stock ($0.0001 Par
Value; 15,151 Shares Authorized; 9,425 issued and outstanding as of March
31, 2015 and December 31, 2014) | |
| 1 | | |
| 1 | |
| Common stock ($0.0001 Par Value; 800,000,000 Shares
Authorized; 355,406,041 shares issued and outstanding as of March 31, 2015 and December 31, 2014) | |
| 35,541 | | |
| 35,541 | |
| Additional paid-in capital | |
| 158,497,285 | | |
| 157,985,176 | |
| Accumulated deficit | |
| (122,224,989 | ) | |
| (118,168,753 | ) |
| | |
| | | |
| | |
| Total Stockholders' Equity | |
| 36,307,838 | | |
| 39,851,965 | |
| | |
| | | |
| | |
| Total Liabilities and Stockholders' Equity | |
$ | 37,419,406 | | |
$ | 41,406,603 | |
See accompanying notes to unaudited consolidated
financial statements.
PERSHING GOLD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
| | |
For the Three Months Ended March 31, | |
| | |
2015 | | |
2014 | |
| | |
(Unaudited) | | |
(Unaudited) | |
| | |
| | |
| |
| Net revenues | |
$ | - | | |
$ | - | |
| | |
| | | |
| | |
| Operating expenses: | |
| | | |
| | |
| Compensation and related taxes | |
| 1,079,845 | | |
| 1,276,128 | |
| Exploration cost | |
| 1,441,596 | | |
| 534,726 | |
| Consulting fees | |
| 301,106 | | |
| 277,793 | |
| General and administrative expenses | |
| 1,233,382 | | |
| 1,023,010 | |
| | |
| | | |
| | |
| Total operating expenses | |
| 4,055,929 | | |
| 3,111,657 | |
| | |
| | | |
| | |
| Loss from operations | |
| (4,055,929 | ) | |
| (3,111,657 | ) |
| | |
| | | |
| | |
| Other income (expenses): | |
| | | |
| | |
| Interest expense and other finance costs, net of interest
income | |
| (307 | ) | |
| (1,166 | ) |
| | |
| | | |
| | |
| Total other income (expenses) - net | |
| (307 | ) | |
| (1,166 | ) |
| | |
| | | |
| | |
| Loss before provision for income taxes | |
| (4,056,236 | ) | |
| (3,112,823 | ) |
| | |
| | | |
| | |
| Provision for income taxes | |
| - | | |
| - | |
| | |
| | | |
| | |
| Net loss | |
$ | (4,056,236 | ) | |
$ | (3,112,823 | ) |
| | |
| | | |
| | |
| Net loss per common share, basic and diluted | |
$ | (0.01 | ) | |
$ | (0.01 | ) |
| | |
| | | |
| | |
| Weighted average common shares outstanding - Basic
and Diluted | |
| 355,406,041 | | |
| 277,847,383 | |
See accompanying notes to unaudited consolidated
financial statements.
PERSHING GOLD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH
FLOWS
| | |
For the Three Months Ended March 31,
|
| | |
2015 | | |
2014 | |
| | |
(Unaudited) | | |
(Unaudited) | |
| | |
| | |
| |
| CASH FLOWS FROM OPERATING ACTIVITIES: | |
| | | |
| | |
| | |
| | | |
| | |
| Net loss | |
$ | (4,056,236 | ) | |
$ | (3,112,823 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
| Depreciation | |
| 283,479 | | |
| 243,023 | |
| Accretion | |
| 11,537 | | |
| - | |
| Stock-based compensation | |
| 512,109 | | |
| 854,173 | |
| | |
| | | |
| | |
| Changes in operating assets and liabilities: | |
| | | |
| | |
| Other receivables | |
| - | | |
| 17,276 | |
| Prepaid expenses and other current assets | |
| 138,549 | | |
| 130,833 | |
| Accounts payable and accrued expenses | |
| (408,290 | ) | |
| (102,984 | ) |
| | |
| | | |
| | |
| NET CASH USED IN OPERATING ACTIVITIES | |
| (3,518,852 | ) | |
| (1,970,502 | ) |
| | |
| | | |
| | |
| CASH FLOWS FROM INVESTING ACTIVITIES: | |
| | | |
| | |
| Purchase of mineral rights | |
| (6,000,000 | ) | |
| - | |
| Asset retirement obligation settled | |
| (18,737 | ) | |
| - | |
| Purchase of property and equipment | |
| (91,909 | ) | |
| (71,501 | ) |
| | |
| | | |
| | |
| NET CASH USED IN INVESTING ACTIVITIES | |
| (6,110,646 | ) | |
| (71,501 | ) |
| | |
| | | |
| | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | |
| | | |
| | |
| Purchase of treasury stock | |
| - | | |
| (181,421 | ) |
| Payments on notes payable | |
| (5,937 | ) | |
| (5,512 | ) |
| | |
| | | |
| | |
| NET CASH USED IN FINANCING ACTIVITIES | |
| (5,937 | ) | |
| (186,933 | ) |
| | |
| | | |
| | |
| NET DECREASE IN CASH AND CASH EQUIVALENTS | |
| (9,635,435 | ) | |
| (2,228,936 | ) |
| | |
| | | |
| | |
| CASH AND CASH EQUIVALENTS- beginning of period | |
| 15,147,837 | | |
| 7,743,107 | |
| | |
| | | |
| | |
| CASH AND CASH EQUIVALENTS- end of period | |
$ | 5,512,402 | | |
$ | 5,514,171 | |
| | |
| | | |
| | |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |
| | | |
| | |
| Cash paid for: | |
| | | |
| | |
| Interest | |
$ | 741 | | |
$ | 1,166 | |
| Income taxes | |
$ | - | | |
$ | - | |
See accompanying notes to unaudited consolidated
financial statements.
PERSHING GOLD CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2015
NOTE 1 — ORGANIZATION AND DESCRIPTION OF BUSINESS
Pershing Gold Corporation (the “Company”), formerly
named Sagebrush Gold Ltd., was incorporated under the laws of the State of Nevada on August 2, 2007. The Company is a gold
and precious metals exploration company pursuing exploration and development opportunities primarily in Nevada. The Company is
currently focused on exploration of its Relief Canyon properties in Pershing County in northwestern Nevada. None of the Company’s
properties contain proven and probable reserves, and all of the Company’s activities on all of its properties are exploratory
in nature.
On August 30, 2011, the Company, through its wholly-owned subsidiary, Gold Acquisition Corp. (“Gold
Acquisition”), acquired the Relief Canyon Mine property (“Relief Canyon”) located in Pershing County, near Lovelock,
Nevada, for an aggregate purchase price consisting of $12,000,000 cash and $8,000,000 in senior secured convertible promissory
notes.
A wholly-owned subsidiary, Pershing Royalty Company, a Delaware
corporation, was formed on May 17, 2012 to hold royalty interests in two gold exploration properties.
A wholly-owned subsidiary, EXCX Funding Corp., a Nevada corporation was formed in January 2011 and
held a note payable - related party, which was exchanged for the Company’s Series E Convertible Preferred Stock (“Series E
Preferred Stock”) and warrants in August 2013 and was cancelled. On April 6, 2014 EXCX Funding Corp. was liquidated
and dissolved.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation and principles of consolidation
The consolidated financial statements are prepared in accordance
with U.S. generally accepted accounting principles (“US GAAP”) and present the consolidated financial statements of
the Company as of March 31, 2015. All intercompany transactions and balances have been eliminated. All adjustments (consisting
of normal recurring items) necessary to present fairly the Company’s financial position as of March 31, 2015, and the results
of operations and cash flows for the three months ended March 31, 2015 have been included. The results of operations for the three
months ended March 31, 2015 are not necessarily indicative of the results to be expected for the full year. The accounting policies
and procedures employed in the preparation of these consolidated financial statements have been derived from the audited financial
statements of the Company for the fiscal year ended December 31, 2014, which are contained in the Company’s Form 10-K
as filed with the Securities and Exchange Commission (“SEC”) on March 5, 2015. The consolidated balance sheet
as of December 31, 2014, contained herein, was derived from those financial statements.
Use of estimates
In preparing the consolidated financial statements, management
is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the
consolidated balance sheet, and revenues and expenses for the period then ended. Actual results may differ significantly from
those estimates. Significant estimates made by management include, but are not limited to, the useful life of property and
equipment, amounts and timing of closure obligations, the assumptions used to calculate fair value of options and warrants granted,
beneficial conversion on convertible notes payable and preferred stock, capitalized mineral rights, asset valuations, and
the fair value of common stock issued.
Cash and cash equivalents
The Company considers all highly liquid investments with a maturity
of three months or less when acquired to be cash equivalents. The Company places its cash with high credit quality financial institutions.
The Company’s accounts at these institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”)
up to $250,000. At March 31, 2015, the Company had bank balances exceeding the FDIC insurance limit on interest bearing accounts.
To reduce its risk associated with the failure of such financial institutions, the Company evaluates at least annually the rating
of the financial institutions in which it holds deposits.
Restricted cash
Restricted cash consists of cash and investments which are held
as collateral under a surface management surety bond issued on the Company’s behalf.
PERSHING GOLD CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2015
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Fair value of financial instruments
The Company has adopted ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”),
for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value
to be applied to existing generally accepted accounting principles that requires the use of fair value measurements, establishes
a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did
not have an impact on the Company’s financial position or operating results, but did expand certain disclosures.
ASC 820 defines fair value as the price that would be received
to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the
use of unobservable inputs.
These inputs are prioritized below:
Level 1: Observable
inputs such as quoted market prices in active markets for identical assets or liabilities
Level 2: Observable
market-based inputs or unobservable inputs that are corroborated by market data
Level 3: Unobservable
inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.
The Company analyzes all financial instruments with features of
both liabilities and equity under the FASB’s accounting standard for such instruments. Under this standard, financial assets
and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
The carrying amounts reported in the consolidated balance sheets
for cash and cash equivalents, prepaid expenses, accounts payable and accrued expenses approximate their estimated fair market
values based on the short-term maturity of these instruments. The carrying amount of the note payable at March 31, 2015 approximates
its respective fair value based on the Company’s incremental borrowing rate.
Prepaid expenses and other current assets
Prepaid expenses and other current assets of $660,084 and $798,633
at March 31, 2015 and December 31, 2014, respectively, consist primarily of costs paid for future services which will occur
within a year and deferred offering cost related to direct incremental costs of raising capital. Prepaid expenses principally
include prepayments for consulting and business advisory services, insurance premiums, drilling services, and mineral lease fees
which are being amortized over the terms of their respective agreements. The Company defers as other assets the direct incremental
costs of raising capital until such time as the offering is completed. At the time of the completion of the offering, the costs
are charged against the capital raised.
Mineral property acquisition and exploration costs
Costs of lease, exploration, carrying and retaining unproven mineral
lease properties are expensed as incurred. The Company expenses all mineral exploration costs as incurred as it is still in the
exploration stage. If the Company identifies proven and probable reserves in its investigation of its properties and upon development
of a plan for operating a mine, it would enter the development stage and capitalize future costs until production is established.
When a property reaches the production stage, the related capitalized costs are amortized using the units-of-production method
over the estimated life of the proven and probable reserves. If in the future the Company has capitalized mineral properties,
these properties will be periodically assessed for impairment.
To date, the Company has not established the commercial feasibility
of any exploration prospects; therefore, all exploration costs are being expensed. During the three months ended March 31, 2015
and 2014, the Company incurred exploration cost of approximately $1.4 million and $0.5 million, respectively.
ASC 930-805, “Extractive Activities-Mining: Business Combinations”
(“ASC 930-805”), states that mineral rights consist of the legal right to explore, extract, and retain at least a
portion of the benefits from mineral deposits. Mining assets include mineral rights. Acquired mineral rights are considered tangible
assets under ASC 930-805. ASC 930-805 requires that mineral rights be recognized at fair value as of the acquisition date. As
a result, the direct costs to acquire mineral rights are initially capitalized as tangible assets. Mineral rights include costs
associated with acquiring patented and unpatented mining claims.
PERSHING GOLD CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2015
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
ASC 930-805-30-1 and 30-2 provides that in fair valuing mineral
assets, an acquirer should take into account both:
· The value
beyond proven and probable reserves (“VBPP”) to the extent that a market participant would include VBPP in determining
the fair value of the assets.
· The effects of
anticipated fluctuations in the future market price of minerals in a manner that is consistent with the expectations of market
participants.
Property and equipment
Property and equipment are carried at cost. The cost of repairs
and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed
of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income
in the year of disposition. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets,
generally one to twenty five years.
Impairment of long-lived assets
The Company accounts for the impairment or disposal of long-lived assets according to the ASC 360, “Property,
Plant and Equipment”. The Company continually monitors events and changes in circumstances that could indicate that the carrying
amounts of long-lived assets, including mineral rights, may not be recoverable. Long-lived assets in the exploration stage are
monitored for impairment based on factors such as the Company’s continued right to explore the area, exploration reports,
assays, technical reports, drill results and the Company’s continued plans to fund exploration programs on the property,
and whether sufficient work has been performed to indicate that the carrying amount of the mineral property cost carried forward
as an asset will not be fully recovered. The tests for long-lived assets in the exploration stage are monitored for impairment
based on factors such as current market value of the long-lived assets and results of exploration, future asset utilization, business
climate, mineral prices and future undiscounted cash flows expected to result from the use of the related assets.
Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an
asset to the estimated future net undiscounted cash flows expected to be generated by the asset. When necessary, impaired assets
are written down to estimated fair value based on the best information available. Estimated fair value is generally based on either
appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate
discounted future cash flows. Accordingly, actual results could vary significantly from such estimates. The Company recognizes
an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The Company
did not record any impairment of its long-lived assets at March 31, 2015 and December 31, 2014, respectively.
Asset Retirement Obligations
Asset retirement obligations (“ARO”), consisting primarily
of estimated mine reclamation and closure costs at the Company’s Relief Canyon property, are recognized in the period incurred
and when a reasonable estimate can be made, and recorded as liabilities at fair value. Such obligations, which are initially estimated
based on discounted cash flow estimates, are accreted to full value over time through charges to accretion expense. Corresponding
asset retirement costs are capitalized as part of the carrying amount of the related long-lived asset and depreciated over the
asset’s remaining useful life. Asset retirement obligations are periodically adjusted to reflect changes in the estimated
present value resulting from revisions to the estimated timing or amount of reclamation and closure costs. The Company reviews
and evaluates its asset retirement obligations annually or more frequently at interim periods if deemed necessary.
Income taxes
The Company accounts for income taxes pursuant
to the provision of ASC 740-10, “Accounting for Income Taxes” (“ASC 740-10”) which requires, among other
things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition
of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying
amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for
which management believes it is more likely than not that the net deferred asset will not be realized.
PERSHING GOLD CORPORATION
AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2015
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The Company follows the provision of ASC 740-10
related to Accounting for Uncertain Income Tax Positions. When tax returns are filed, there may be uncertainty about the merits
of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10,
the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence,
management believes it is more likely than not that the position will be sustained upon examination, including the resolution
of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions.
Tax positions that meet the more likely than
not recognition threshold are measured at the largest amount of tax benefit that is more than 50 percent likely of being realized
upon settlement with the applicable taxing authority. The portion of the benefit associated with tax positions taken that exceed
the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance
sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination.
The Company believes its tax positions are
all more likely than not to be upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits.
The Company has adopted ASC 740-10-25, “Definition
of Settlement”, which provides guidance on how an entity should determine whether a tax position is effectively settled
for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled
upon the completion and examination by a taxing authority without being legally extinguished. For tax positions considered effectively
settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than
not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The
federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally
for three years after they are filed.
Stock-based compensation
Stock-based compensation is accounted for based on the requirements
of the Share-Based Payment Topic of ASC 718, “Compensation — Stock Compensation”, which requires recognition
in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity
instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively,
the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for
an award based on the grant-date fair value of the award.
Pursuant to ASC Topic 505-50, “Equity Based Payments to Non-employees”,
for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement
date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total
amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of
the award at the reporting date.
Related party transaction
Parties are considered to be related to the Company if the parties,
directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company.
Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners
of the Company and its management and other parties with which the Company may deal if one party controls or can significantly
influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented
from fully pursuing its own separate interests. The Company discloses all related party transactions.
Recent accounting pronouncements
In August 2014, the FASB issued ASU No. 2014-15, “Presentation
of Financial Statements—Going Concern.” The provisions of ASU No. 2014-15 require management to assess an entity’s
ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing
standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every
reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s
plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s
plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment
for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in
this ASU are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter.
The Company is currently assessing the impact of this ASU on the Company’s consolidated financial statements.
PERSHING GOLD CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2015
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
In November 2014, FASB issued ASU 2014-17, “Business Combinations:
Pushdown Accounting”. This ASU amended the Business Combination Accounting Standards Codification to provide guidance on
whether and at what threshold an acquired entity that is a business or nonprofit activity can apply pushdown accounting in its
separate financial statements. The Company’s adoption of FASB ASU No. 2013-17 effective November 14, 2014 did not have an
impact on the Company’s consolidated results of operations, financial position and related disclosures.
Other accounting standards that have been issued or proposed by
FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial
statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or
are unrelated to its financial condition, results of operations, cash flows or disclosures.
NOTE 3 — MINERAL PROPERTIES
The Company’s Relief Canyon property
rights currently total approximately 25,000 acres and are comprised of approximately 948 owned unpatented mining claims, 120 owned
millsite claims, 172 leased unpatented mining claims, and 2,235 acres of leased and 2,770 acres of subleased private lands. Most
of the property on which the Relief Canyon deposit is located is subject to a 2% net smelter return production royalty, with a
portion of that property subject to net smelter return production royalties totaling 4.5%. The rest of the property is subject,
under varying circumstances, to net smelter return production royalties ranging from 2% to 5%.
Pershing Pass Property
The Pershing Pass property consists of over 700 unpatented mining
claims covering approximately 12,000 acres and a mining lease of private lands covering approximately 600 acres. Out of the
total unpatented mining claims, 17 unpatented mining claims are subject to a 2% net smelter return royalty and 19 unpatented mining
claims are leased with a purchase option.
The primary term of the unpatented mining claim lease referenced
above is ten years, which may be extended as long as mineral exploration, development or mining continue on the property. Production
from the lease is subject to a 1% net smelter return royalty on precious metals and a 0.5% net smelter royalty on all other metals
produced from the leased property. Prior to production, and starting in September 2016, the Company is required to pay a $10,000
per year advance minimum royalty payment until September 2023. The annual advance minimum royalty increases to $12,500 in
September 2023, to $15,000 in September 2028 and to $20,000 in September 2033. The Company has the right to buy
the leased claims at any time for $250,000.
The primary term of the private lands lease referenced above
is ten years, which may be extended as long as mineral development work continues on the property. Production from the lease is
subject to a 2% net smelter return royalty on all metals produced other than gold, and to a royalty on gold indexed to the gold
price, ranging from 2% at gold prices of less than $500 per ounce to 3.5% at gold prices over $1,500 per ounce. Prior to one year
after commercial production, the Company can repurchase up to 3% of the royalty on gold production at the rate of $600,000 for
each 1%.
Newmont Properties
On April 5, 2012, the Company purchased from Victoria Gold
Corp. and Victoria Resources (US) Inc. their interest in approximately 13,300 acres of mining claims and private lands adjacent
to the Company’s original landholdings at the Relief Canyon Mine in Pershing County, Nevada.
PERSHING GOLD CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2015
NOTE 3 — MINERAL PROPERTIES (continued)
Approximately 8,900 acres of the lands that the Company acquired
from Victoria Gold Corporation were a leasehold interest comprised of unpatented mining claims and private lands subject to a 2006
Mineral Lease and Sublease with Newmont USA Ltd. (“Newmont”), which the Company refers to as the Newmont Leased property.
At that time, the Newmont Leased property consisted of 155 unpatented lode mining claims owned by Newmont comprising approximately
2,800 acres, approximately 4,900 acres of privately-owned fee minerals leased by Newmont from the owners, and 62 unpatented
mining claims that were owned by Victoria within the Newmont Leased property and area of interest.
On January 14, 2015, the Company entered
into an Asset Purchase Agreement with Newmont pursuant to which the Company acquired for $6.0 million 74 unpatented mining claims
totaling approximately 1,300 acres that the Company had previously leased from Newmont, entered into a new mining lease directly
with New Nevada Resources, LLC and New Nevada Lands, LLC for approximately 1,600 acres of fee, or private, land that the Company
had previously subleased from Newmont.
New Mining Lease with New Nevada Resources
and New Nevada Lands, Replacing Portion of Newmont Sublease
As part of the January 2015 transactions
completed pursuant to the Asset Purchase Agreement, a subsidiary of the Company entered into a Mining Lease (the “2015 Mining
Lease”) with New Nevada Resources, LLC and New Nevada Lands, LLC (the “Owners”), covering certain fee lands (the
“Leased Properties”) included in the Company’s Relief Canyon properties. The 2015 Mining Lease has a term of
twenty years and for as long thereafter as any mining, development or processing operations are being conducted on a continuous
basis. The 2015 Mining Lease contains customary terms and conditions, including an advance royalty and a 2.5% net smelter returns
production royalty on the Leased Properties payable to the Owners.
Newmont Leased Property
As part of the Asset Purchase Agreement
transactions, Newmont and the Company entered into an amendment of the 2006 Minerals Lease and Sublease (the “Third Amendment”),
pursuant to which the Company agreed to a $2.6 million work commitment on the properties remaining subject to the 2006 Minerals
Lease and Sublease to be expended by the seventh anniversary of the effective date of the Third Amendment. As of mid-December 2014,
the Company can credit approximately $2.4 million in exploration expenditures already incurred against the $2.6 million work commitment.
Also as part of the transactions completed
pursuant to the Asset Purchase Agreement, Newmont and the Owners entered into a new Mining Lease (the “2015 Newmont Lease”)
covering about 2,770 acres of private lands included in the Company’s Relief Canyon properties (the “Subleased Properties”)
and subleased by the Company from Newmont pursuant to the 2006 Minerals Lease and Sublease. The 2015 Newmont Lease has a term of
twenty years and for as long thereafter as any mining, development or processing operations are being conducted or a continuous
basis. The 2015 Newmont Lease contains customary terms and conditions, including an advance royalty and a 2.5% net smelter returns
production royalty on the Subleased Properties payable to the Owners. The Company continues to hold rights to the Subleased Properties
pursuant to its 2006 Minerals Lease and Sublease with Newmont.
PERSHING GOLD CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2015
NOTE 3 — MINERAL PROPERTIES (continued)
General
The Company has posted a statewide surface management surety
bond with the United States Department of the Interior Bureau of Land Management (“BLM”) as required by the State of
Nevada in an amount of approximately $5.6 million, which is approximately $340,000 in excess of the coverage requirement as of
March 31, 2015, to reclaim land disturbed in its exploration and mining operations. The surface management surety bond is provided
through a third-party insurance underwriter. When the bond was issued in November 2013, the Company was required to place $2,250,000,
or 45% of the original $5.0 million bond, in a collateral account. No further collateral has been required for subsequent increases
in the bond amount. The funds deposited in the collateral account are classified as restricted cash on the Company’s balance
sheet.
As of March 31, 2015, based on management’s review of
the carrying value of mineral rights, management determined that there is no evidence that the cost of these acquired mineral rights
will not be fully recovered and accordingly, the Company has determined that no adjustment to the carrying value of mineral rights
was required.
As of the date of these consolidated financial statements, the
Company has not established any proven or probable reserves on its mineral properties and has incurred only acquisition and exploration
costs.
Mineral properties consisted of the following:
| | |
March 31, 2015 (Unaudited) | | |
December 31,
2014 | |
| Relief Canyon Mine — Gold Acquisition | |
$ | 8,501,071 | | |
$ | 8,501,071 | |
| Relief Canyon Mine — Newmont Properties | |
| 13,709,441 | | |
| 7,709,441 | |
| Pershing Pass Property | |
| 576,400 | | |
| 576,400 | |
| | |
| | | |
| | |
| | |
$ | 22,786,912 | | |
$ | 16,786,912 | |
PERSHING GOLD CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2015
NOTE 4 – PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
| | |
Estimated Life | |
March 31, 2015
(Unaudited) | | |
December 31,
2014 | |
| Furniture and fixtures | |
5 years | |
$ | 56,995 | | |
$ | 56,995 | |
| Office and computer equipment | |
1 - 5 years | |
| 402,835 | | |
| 402,835 | |
| Land | |
— | |
| 358,886 | | |
| 266,977 | |
| Building and improvements | |
5 - 25 years | |
| 815,036 | | |
| 817,187 | |
| Site costs | |
10 years | |
| 1,403,762 | | |
| 1,407,465 | |
| Crushing system | |
20 years | |
| 2,489,298 | | |
| 2,495,865 | |
| Process plant and equipment | |
10 years | |
| 3,495,742 | | |
| 3,504,964 | |
| Vehicles and mining equipment | |
5 - 10 years | |
| 699,025 | | |
| 699,025 | |
| | |
| |
| 9,721,579 | | |
| 9,651,313 | |
| Less: accumulated depreciation | |
| |
| (3,536,571 | ) | |
| (3,253,092 | ) |
| | |
| |
| | | |
| | |
| | |
| |
$ | 6,185,008 | | |
$ | 6,398,221 | |
For the three months ended March 31, 2015 and 2014, depreciation
expense amounted to $283,479 and $243,023, respectively.
NOTE 5 — NOTES PAYABLE
In August 2012, the Company issued a note payable in the amount
of $92,145 in connection with the acquisition of mining equipment. The note payable bears interest at approximately 7% per annum
and is secured by a lien on the mining equipment. The note is payable in 48 equal monthly payments of $2,226 beginning in September 2012.
Notes payable — short and long term portion consisted of
the following:
| | |
March 31, 2015
(Unaudited) | | |
December 31, 2014 | |
| Total notes payable | |
$ | 35,805 | | |
$ | 41,742 | |
| Less: current portion | |
| (24,880 | ) | |
| (24,423 | ) |
| Long term portion | |
$ | 10,925 | | |
$ | 17,319 | |
NOTE 6 – ASSET RETIREMENT OBLIGATIONS
In conjunction with the permit approval permitting the Company
to resume mining in the existing open pits at the Relief Canyon Mine during the third quarter of 2014, the Company has recorded
an asset retirement obligation based upon the reclamation plan submitted in connection with the permit.
| The following table summarizes activity in the Company’s ARO: | |
| | |
March 31, 2015 | |
| Balance, beginning of period | |
$ | 798,605 | |
| Accretion expense | |
| 11,537 | |
| Reclamation expenditures | |
| (18,737 | ) |
| Additions and changes in estimates | |
| (21,643 | ) |
| Balance, end of period | |
$ | 769,762 | |
PERSHING GOLD CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2015
NOTE 7 — STOCKHOLDERS’ EQUITY
Effective December 2014, the Company amended its Articles of Incorporation to increase the total amount
of authorized capital stock from 550,000,000 shares to 850,000,000 shares consisting of 800,000,000 shares of Common Stock, par
value $0.0001 per share and 50,000,000 shares of Preferred Stock, par value $0.0001 per share.
Preferred Stock
The Company is authorized within the limitations and restrictions
stated in the Amended and Restated Articles of Incorporation to provide by resolution or resolutions for the issuance of 50,000,000
shares of Preferred Stock, par value $0.0001 per share in such series and with such designations, preferences and relative, participating,
optional or other special rights and qualifications, limitations or restrictions as the Company’s Board of Directors establish.
Series A Convertible Preferred Stock
As of March 31, 2015, 2,250,000 shares of Series A Preferred Stock, $0.0001 par value, were
authorized with none outstanding.
Series B Convertible Preferred Stock
As of March 31, 2015, 8,000,000 shares of Series B Preferred Stock, $0.0001 par value, were
authorized with none outstanding.
Series C Convertible Preferred Stock
As of March 31, 2015, 3,284,396 shares of Series C Preferred Stock, $0.0001 par value, were
authorized with none outstanding.
9% Series D Cumulative Preferred Stock
As of March 31, 2015, 7,500,000 shares of Series D Preferred Stock, $0.0001 par value, were authorized
with none outstanding.
Convertible Series E Preferred Stock
As of March 31, 2015, 15,151 shares of Series E Preferred Stock, $0.0001 par value, were authorized
with 9,425 Series E shares outstanding.
Common Stock Options
A summary of the Company’s outstanding stock options as of
March 31, 2015 and changes during the period then ended are presented below:
| | |
Number of
Options | | |
Weighted
Average
Exercise
Price | | |
Weighted
Average
Remaining
Contractual
Life
(Years) | |
| Balance at December 31, 2014 | |
| 32,600,000 | | |
$ | 0.40 | | |
| 7.18 | |
| Granted | |
| — | | |
| — | | |
| — | |
| Exercised | |
| — | | |
| — | | |
| — | |
| Forfeited | |
| — | | |
| — | | |
| — | |
| Cancelled | |
| — | | |
| — | | |
| — | |
| Balance at March 31, 2015 | |
| 32,600,000 | | |
| 0.40 | | |
| 6.93 | |
| | |
| | | |
| | | |
| | |
| Options exercisable at end of period | |
| 32,600,000 | | |
$ | 0.40 | | |
| | |
| Options expected to vest | |
| — | | |
| | | |
| | |
| Weighted average fair value of options granted during the period | |
| | | |
$ | — | | |
| | |
At March 31, 2015 there was approximately $293,000 intrinsic value
for the stock options outstanding in the above table.
PERSHING GOLD CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2015
NOTE 7 — STOCKHOLDERS’ EQUITY (continued)
Common Stock Warrants
A summary of the Company’s outstanding stock warrants as
of March 31, 2015 and changes during the period then ended are presented below:
| | |
Number of
Warrants | | |
Weighted
Average
Exercise
Price | | |
Weighted
Average
Remaining
Contractual
Life
(Years) | |
| Balance at December 31, 2014 | |
| 38,054,543 | | |
$ | 0.43 | | |
| 1.83 | |
| Granted | |
| 150,000 | | |
| 0.30 | | |
| 4.00 | |
| Cancelled | |
| — | | |
| — | | |
| — | |
| Forfeited | |
| — | | |
| — | | |
| — | |
| Exercised | |
| — | | |
| — | | |
| — | |
| Balance at March 31, 2015 | |
| 38,204,543 | | |
$ | 0.43 | | |
| 1.59 | |
| | |
| | | |
| | | |
| | |
| Warrants exercisable at March 31, 2015 | |
| 38,204,543 | | |
$ | 0.43 | | |
| 1.59 | |
| | |
| | | |
| | | |
| | |
| Weighted average fair value of warrants granted during the period | |
| | | |
$ | 0.16 | | |
| | |
On January 28, 2015, the Company issued four-year warrants to purchase 150,000 shares of common stock
to a consultant. The warrants vested on March 1, 2015 and are exercisable at $0.30 per share. The 150,000 warrants were valued on
the grant date at approximately $0.16 per warrant or a total of approximately $24,300 using a Black-Scholes option pricing model
with the following assumptions: stock price of $0.30 per share (based on the quoted trading price on the date of grant), volatility
of 72%, expected term of 4 years, and a risk free interest rate of 1.25%.
Treasury Stock
The Company accounts for treasury stock under the cost method. Between February 2014 and March 2014,
the Company reacquired 492,513 shares of its common stock from certain employees of the Company. The reacquisition by the Company
of its common stock is the result of certain employees electing to surrender shares in order to satisfy their minimum applicable
withholding obligation due to the vesting of restricted stock awards. The Company recorded a charge $181,421 in connection with
the 2014 stock surrenders. In July 2014, 400,000 unvested restricted stock awards were returned to treasury stock as a result of
an employee termination. The value of the treasury stock was reflected separately as a deduction from stockholders’ equity.
In December 2014, all treasury stock was cancelled and as a result at March 31, 2015, there was no stock held in treasury.
NOTE 8 — NET LOSS PER COMMON SHARE
Net loss per common share is calculated in accordance with ASC
Topic 260, “Earnings Per Share”. Basic loss per share is computed by dividing net loss available to common stockholder,
adjusted for preferred dividends, by the weighted average number of shares of common stock outstanding during the period. The
computation of diluted net loss per share does not include anti-dilutive common stock equivalents in the weighted average shares
outstanding. The following table sets forth the computation of basic and diluted loss per share:
| | |
For the Three
Months
ended
March 31,
2015 | | |
For the Three
Months
ended
March 31,
2014 | |
| Numerator: | |
| | | |
| | |
| Net loss | |
$ | (4,056,236 | ) | |
$ | (3,112,823 | ) |
| Denominator: | |
| | | |
| | |
| Denominator for basic and diluted
loss per share (weighted-average shares) | |
| 355,406,041 | | |
| 277,847,383 | |
| | |
| | | |
| | |
| Net loss per common share, basic
and diluted | |
$ | (0.01 | ) | |
$ | (0.01 | ) |
PERSHING GOLD CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2015
NOTE 8 — NET LOSS PER COMMON SHARE (continued)
The following were excluded from the computation of diluted shares outstanding as they would have had
an anti-dilutive impact on the Company’s net loss. In periods where the Company has a net loss, all dilutive securities are
excluded.
| | |
March 31, 2015 | | |
March 31, 2014 | |
| Common stock equivalents: | |
| | | |
| | |
| Stock options | |
| 32,600,000 | | |
| 32,900,000 | |
| Stock warrants | |
| 38,204,543 | | |
| 26,244,621 | |
| Convertible preferred stock | |
| 33,324,114 | | |
| 28,968,000 | |
| | |
| | | |
| | |
| Total | |
| 104,128,657 | | |
| 88,112,621 | |
NOTE 9 — COMMITMENTS AND CONTINGENCIES
Operating Lease
The Company leases its corporate facility,
and certain office equipment, in Lakewood, Colorado under operating leases with expiration dates through 2018. Rent expense was
$11,651 and $11,352 for the three months ended March 31, 2015 and 2014, respectively.
Future minimum rental payments required under operating leases
are as follows:
| 2015 | |
$ | 39,501 | |
| 2016 | |
| 81,345 | |
| 2017 | |
| 83,343 | |
| 2018 | |
| 45,455 | |
| | |
$ | 249,644 | |
In April 2015, the Company executed a new operating lease agreement
for its corporate facility in Lakewood, Colorado. The new lease is for a period of 39 months commencing in May 2015 and expiring
in July 2018.
Mining Leases
As more fully discussed in Note 3 — Mineral Properties, the
Company leases certain mineral properties included in its Pershing Pass Property. The future minimum lease payments under these
mining leases are as follows:
| 2015 | |
$ | 10,000 | |
| 2016 | |
| 20,000 | |
| 2017 | |
| 25,000 | |
| 2018 | |
| 25,000 | |
| 2019 | |
| 25,000 | |
| Thereafter | |
| 92,500 | |
| | |
$ | 197,500 | |
NOTE 10 — SUBSEQUENT EVENTS
Private Placement
In April 2015 the Company raised approximately $11.5 million
in gross proceeds through the sale of 35,324,057 Units priced at $0.325 per Unit, with each Unit comprised of one share (the “Unit
Shares”) of the Company’s Common Stock and a 24 month warrant (the “Warrant”) to purchase 0.4 of a share
of Common Stock (the “Warrant Shares”) at an exercise price of $0.44. Net proceeds totaled approximately $10.7 million
after commissions. A total of 35,324,057 shares of Common Stock and warrants to acquire 14,129,578 shares of Common Stock were
issued in the private placement, with 30 month warrants to acquire an additional 2,163,326 shares of Common Stock at an exercise
price of $0.325 were issued to broker-dealers acting on behalf of the Company in the placement.
PERSHING GOLD CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2015
NOTE 10 — SUBSEQUENT EVENTS (continued)
In connection with the private placement, the Company and the
investors entered into registration rights agreements which require the Company to file a registration statement under the
Securities Act of 1933, as amended, to register the resale of the Common Stock issued as part of the Units and the Common
Stock issuable upon the exercise of the Warrants. The Registration Rights Agreement also contains piggyback registration
rights requiring the Company to include the investors’ shares of Common Stock under certain circumstances in future
registration statements that may be filed by the Company.
The forms of Warrant and Registration Rights Agreement are filed
as exhibits to this Quarterly Report on Form 10-Q.
ITEM 2 Management’s Discussion and Analysis
of Financial Condition and Results of Operations
Pershing Gold Corporation and its subsidiaries (“Pershing
Gold”, the “Company” or “we”) is a gold and precious metals exploration company pursuing exploration
and development opportunities primarily in Nevada. We are currently focused on exploration at our Relief Canyon properties
in Pershing County in northwestern Nevada.
This discussion should be read in conjunction with Management’s
Discussion and Analysis included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014.
Forward-Looking Statements
This Report on Form 10-Q and other written and oral statements made from time to time by us may contain
so-called “forward-looking statements,” all of which are subject to risks and uncertainties. Forward-looking
statements can be identified by the use of words such as “expects,” “plans,” “will,” “forecasts,”
“projects,” “intends,” “estimates,” and other words of similar meaning. Forward-looking statements
include, without limitation, statements relating to our business goals, planned exploration and metallurgical work, business strategy,
planned engineering studies, planned permitting activities, plans to complete an updated estimate of mineralized material and resources
and the timing thereof, plans to complete an economic study of the Relief Canyon Mine, our efforts to obtain external financing
and our liquidity and capital resources outlook. Forward-looking statements are based on our current expectations and
assumptions regarding our business, the economy and other future conditions. Our actual results may differ materially
from those contemplated by the forward-looking statements, which are inherently subject to risks and uncertainties, some of which
cannot be predicted or quantified. Important factors that could cause actual results to differ materially from those
anticipated in forward- looking statements include without limitation results of future exploration, engineering studies and
planned economic studies on our Relief Canyon properties; increases in estimates or costs of exploration and other activities;
our ability to raise necessary capital to conduct our exploration and other activities and do so on acceptable terms or at all;
results from exploration and changes in interpretations of geological, metallurgical or other technical information; problems or
delays in permitting or other government approvals; and the risk factors set forth in our Annual Report on Form 10-K for the
year ended December 31, 2014.
Overview
During the three months ended March 31, 2015, we focused primarily on completing the 2014 drilling program
focused on expanding the Relief Canyon Mine deposit, continuing permitting, engineering and other work related to the potential
commencement of mining at the Relief Canyon Mine, completing the acquisition of certain properties and rights from Newmont, and
the $11.5 million gross proceeds private placement. An overview of certain significant events during the three month period follows:
| |
· |
In January 2015, we completed a drilling program commenced in 2014 that consisted of 134 holes for a total of approximately 74,000 feet focused on extending and upgrading the current deposit. |
| |
· |
During the period we reported certain results of the drilling program, including high-grade gold intercepts in newly defined high-grade zones. |
| |
· |
During the period, we continued our evaluation of the drilling program results. We plan to provide an updated resource and mineralized material estimate in the second quarter of 2015. |
| |
· |
In March 2015, we submitted a Plan of Operations Modification to the US Bureau of Land Management and the Nevada Division of Environmental Protection that would permit us to increase our current pit boundary in all directions. |
| |
· |
In January 2015, we entered into a transaction with Newmont pursuant to which we acquired certain properties and rights to properties that we had previously leased and subleased from Newmont, and improved the arrangements under which we continue to lease and sublease properties from Newmont. These properties and rights are included in the approximately 25,000 acres of Relief Canyon properties located in and near the Company’s Relief Canyon Project in Pershing County, Nevada that the Company has held since April 2012. We paid Newmont $6.0 million in connection with this transaction. The properties and rights we acquired from Newmont, which we previously leased or subleased from Newmont, together with the properties that we already own, include the lands on which the existing Relief Canyon mine and processing facilities are located, lands to the south and west of the current mine pits that the Company believes are prospective for potential expansion of the Relief Canyon deposit, and lands that could in the future be used for new or expanded mine support facilities. |
| |
· |
After the period, in April 2015, we raised $11.5 million in gross proceeds, or $10.7 million net of commissions, through the private placement to certain accredited investors of 35,324,057 units for $0.325 per unit, comprised of one share of Common Stock and a 24 month warrant to acquire 0.4 of a share of Common Stock at an exercise price of $0.44, resulting in the issuance of a total of 35,324,057 shares of our Common Stock and warrants to acquire 14,129,578 shares of our Common Stock. |
Results of Operations
Three months ended March 31, 2015 and 2014
Net Revenues
We are an exploration stage company with no operations, and we generated no revenues for the three months
ended March 31, 2015 and 2014.
Operating Expenses
Total operating expenses for the three months ended March 31, 2015 as compared to the three months ended
March 31, 2014, were $4.1 million and $3.1 million, respectively. The $1.0 million increase in operating expenses for the three
months ended March 31, 2015 is comprised largely of a $0.9 million increase in exploration expenses on our Relief Canyon properties
and an increase of $0.2 million in general and administrative expenses primarily for public company expenses and legal costs in
the current period offset by a $0.2 million decrease in compensation expense related primarily to lower stock-based compensation
expense.
Loss from Operations
We reported loss from operations of $4.1 million and $3.1 million
for the three months ended March 31, 2015 and 2014, respectively. The increase in operating loss was due primarily to the increases
in operating expenses described above.
Other Income (Expenses)
Total other income (expense) was approximately ($300) and ($1,200)
for the three months ended March 31, 2015 and 2014, respectively. The change in other income (expense) is primarily attributable
to a decrease in interest expense.
Net Loss
As a result of the operating expense and other income (expense)
discussed above, we reported a net loss of ($4.1) million for the three months ended March 31, 2015 as compared to a net loss
of ($3.1) million for the three months ended March 31, 2014.
Liquidity and Capital Resources
At March 31, 2015, our cash and cash equivalents totaled $5.5
million. Our cash and cash equivalents decreased during the three months ended March 31, 2015 by $9.6 million from our cash
and cash equivalents balance at December 31, 2014 of $15.1 million. The decrease in cash and cash equivalents was primarily
the result of cash used in investing activities of $6.1 million for the purchase of mineral rights and property and cash used
in operations of $3.5 million that was comprised largely of exploration expenditures, primarily at the Relief Canyon mine
focused on increasing and upgrading our current estimate of mineralized material, and general and administrative expenses,
including consultant fees, compensation costs, legal fees and public company expenses. In
April 2015, we completed private placements to accredited investors for the purchase of 35,324,057 units, comprised of
35,324,057 shares of our Common Stock and warrants to acquire 14,129,578 shares of our Common Stock for aggregate net
proceeds, after commissions, of approximately $10.7 million.
We plan the following expenditures for the
remainder of fiscal year 2015:
| · | $3.7 million on general and
administrative expenses (including employee salaries, public company expenses, consultants and land holding costs); |
| · | $3.5 million on exploration
drilling to expand the current Relief Canyon deposit; |
| · | $0.5 million on additional
work at the Relief Canyon Mine including updated resource and mineralized material estimates, further metallurgy tests and completion
of a thorough economic study; |
| · | $0.3 million on additional
permitting and bonding, including an environmental assessment to expand the open-pit mines at the Relief Canyon Mine property
above the water table. |
The actual amount we spend for year 2015 may vary significantly from the amounts specified above and will
depend upon several factors, including the results of our exploration, the results of the preliminary economic assessment of the
Relief Canyon Mine, work related to the potential start of mining operations at the Relief Canyon Mine property, the timing of
obtaining the necessary permitting approvals and whether we are able to raise additional external financing. Following completion
of the private placement transactions in April 2015, we expect to require additional financing to fund operations by late 2016.
Recent Accounting Pronouncements
In August 2014, the FASB issued ASU No. 2014-15, “Presentation
of Financial Statements—Going Concern.” The provisions of ASU No. 2014-15 require management to assess an entity’s
ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing
standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every
reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s
plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s
plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment
for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in
this ASU are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter.
We are currently assessing the impact of this ASU on the Company’s consolidated financial statements.
In November 2014, FASB issued ASU 2014-17, “Business Combinations:
Pushdown Accounting”. This ASU amended the Business Combination Accounting Standards Codification to provide guidance on
whether and at what threshold an acquired entity that is a business or nonprofit activity can apply pushdown accounting in its
separate financial statements. The Company’s adoption of FASB ASU No. 2013-17 effective November 14, 2014 did not have an
impact on the Company’s consolidated results of operations, financial position and related disclosures.
Other accounting standards that have been issued or proposed by
FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial
statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or
are unrelated to its financial condition, results of operations, cash flows or disclosures.
Critical Accounting Policies and Estimates
The discussion and analysis of our financial condition and results
of operations are based upon our financial statements, which have been prepared in accordance with U.S. generally accepted accounting
principles. The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts
of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis,
we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under
the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or
conditions.
Management believes the following critical accounting policies
affect the significant judgments and estimates used in the preparation of the financial statements.
Principles of Consolidation
The consolidated financial statements are prepared in accordance
with U.S. generally accepted accounting principles and present the financial statements of the Company and our wholly-owned subsidiaries.
In the preparation of our consolidated financial statements, intercompany transactions and balances are eliminated.
Use of Estimates
In preparing the consolidated financial statements, management
is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the
consolidated balance sheet, and revenues and expenses for the period then ended. Actual results may differ significantly from
those estimates. Significant estimates made by management include, but are not limited to, the useful life of property and
equipment, amounts and timing of closure obligations, the assumptions used to calculate fair value of options and warrants granted,
beneficial conversion on convertible notes payable and preferred stock, capitalized mineral rights, asset valuations, and
the fair value of common stock issued.
Stock-Based Compensation
Stock-based compensation is accounted for based on the requirements
of the Share-Based Payment Topic of ASC 718 which requires recognition in the financial statements of the cost of employee and
director services received in exchange for an award of equity instruments over the period the employee or director is required
to perform the services in exchange for the award (presumptively, the vesting period). ASC 718 also requires measurement of the
cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant
to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the
“measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is
reached, the total amount of compensation expense remains uncertain.
Property and Equipment
Property and equipment are carried at cost. The cost of repairs
and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed
of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income
in the year of disposition. We examine the possibility of decreases in the value of fixed assets when events or changes in circumstances
reflect the fact that their recorded value may not be recoverable. Depreciation is calculated on a straight-line basis over the
estimated useful life of the assets, generally from one to twenty five years.
Mineral Property Acquisition and Exploration Costs
Costs of lease, exploration, carrying and retaining unproven mineral
lease properties are expensed as incurred. The Company has chosen to expense all mineral exploration costs as incurred given that
it is still in the exploration stage. Once the Company has identified proven and probable reserves in its investigation of its
properties and upon development of a plan for operating a mine, it would enter the development stage and capitalize future costs
until production is established. When a property reaches the production stage, the related capitalized costs will be amortized,
using the units-of-production method over proven and probable reserves. When the Company has capitalized mineral properties, these
properties will be periodically assessed for impairment of value and any diminution in value. To date, the Company has not established
the commercial feasibility of any exploration prospects; therefore, all costs are being expensed.
ASC 930-805 states that mineral rights consist of the legal right to explore, extract, and retain at least
a portion of the benefits from mineral deposits. Mining assets include mineral rights. Acquired mineral rights are considered tangible
assets under ASC 805. ASC 805 requires that mineral rights be recognized at fair value as of the acquisition date. As a result,
our direct costs to acquire mineral rights are initially capitalized as tangible assets. Mineral rights include costs associated
with acquiring patented and unpatented mining claims and mill sites. If proven and probable reserves are established for the property
and it has been determined that a mineral property can be economically developed, costs will be amortized using the units-of-production
method over proven and probable reserves. For mineral rights in which proven and probable reserves have not yet been established,
we assess the carrying values for impairment at the end of each reporting period and whenever events or changes in circumstances
indicate that the carrying value may not be recoverable.
Long-Lived Assets
We review for impairment whenever events or circumstances indicate
that the carrying amount of assets may not be recoverable, pursuant to guidance established in ASC 360-10-35-15, “Impairment
or Disposal of Long-Lived Assets”. An impairment is considered to exist when the sum of expected undiscounted future
cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s
estimated fair value and its carrying amount.
Asset Retirement Obligations
Asset retirement obligations, consisting primarily of estimated
mine reclamation and closure costs at the Company’s Relief Canyon property, are recognized in the period incurred and when
a reasonable estimate can be made, and recorded as liabilities at fair value. Such obligations, which are initially estimated
based on discounted cash flow estimates, are accreted to full value over time through charges to accretion expense. Corresponding
asset retirement costs are capitalized as part of the carrying amount of the related long-lived asset and depreciated over the
asset’s remaining useful life. Asset retirement obligations are periodically adjusted to reflect changes in the estimated
present value resulting from revisions to the estimated timing or amount of reclamation and closure costs. We review and evaluate
the asset retirement obligations annually or more frequently at interim periods if deemed necessary.
Off-Balance Sheet Arrangements
Since our inception, we have not engaged in any off-balance sheet
arrangements, including the use of structured finance, special purpose entities or variable interest entities.
Contractual Obligations
Not applicable.
ITEM 3 Quantitative and Qualitative Disclosures
About Market Risk
Not applicable.
ITEM 4 Controls and Procedures
Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as
such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange
Act”), that are designed to ensure that information required to be disclosed by us in reports that we file or submit under
the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange
Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief
Executive Officer and Vice President Finance, to allow timely decisions regarding required disclosure. In designing and evaluating
our disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived
and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures
are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment
in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls
and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential future conditions.
With respect to the quarterly period ended March 31, 2015, under
the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and
operations of our disclosure controls and procedures. Based upon this evaluation, the Company’s management has concluded
that certain disclosure controls and procedures were effective as of March 31, 2015.
Changes in Internal Controls
There have been no changes in the Company’s internal control
over financial reporting during the three months ended March 31, 2015 that have materially affected, or are reasonably likely
to materially affect, the Company’s internal controls over financial reporting.
PART II — OTHER INFORMATION
None.
Not applicable.
| ITEM
2 |
Unregistered
Sales of Equity Securities and Use of Proceeds |
On January 28, 2015, the Company issued four-year
warrants to purchase 150,000 shares of common stock to a consultant. The warrants vested on March 1, 2015 and are exercisable
at $0.30 per share. The issuance of these securities was deemed to be exempt from the registration requirements of the
Securities Act of 1933 by virtue of Section 4(2) thereof, as a transaction by an issuer
not involving a public offering.
| ITEM
3 |
Defaults
Upon Senior Securities |
There have been no events that are required to be reported
under this Item.
| ITEM
4 |
Mine
Safety Disclosures |
None.
None.
| 4.1* |
|
Form of Investor Warrant |
| 4.2* |
|
Form of Placement Agent Warrant |
| 10.1* |
|
Form of Subscription Agreement among the Company and certain
accredited investors |
| 10.2* |
|
Form of Registration Rights Agreement among the Company and
certain accredited investors |
| 10.3* |
|
Placement Agency Agreement, dated March 19, 2015, between the Company and Noble Financial Capital Markets |
| 31.1* |
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer |
| 31.2* |
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer |
| 32.1 |
|
Chief Executive Officer and Chief Financial Officer Certification Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.** |
| 101.ins* |
|
XBRL Instance Document |
| 101.sch* |
|
XBRL Taxonomy Schema Document |
| 101.cal* |
|
XBRL Taxonomy Calculation Document |
| 101.def* |
|
XBRL Taxonomy Linkbase Document |
| 101.lab* |
|
XBRL Taxonomy Label Linkbase Document |
| 101.pre* |
|
XBRL Taxonomy Presentation Linkbase Document |
* Filed herewith
** Furnished herewith
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| |
Pershing Gold Corporation |
| |
|
|
| Date: May 14, 2015 |
By: |
/s/ Stephen Alfers |
| |
|
Stephen Alfers |
| |
|
President and Chief Executive Officer
(Principal Executive Officer) |
| Date: May 14, 2015 |
By: |
/s/ Eric Alexander |
| |
|
Eric Alexander |
| |
|
Vice President Finance and Controller
(Principal Financial Officer) |
Exhibit 4.1
| |
FORM OF WARRANT |
|
| NO. _________ |
PERSHING GOLD CORPORATION |
_______ Shares
________, 2015 |
WARRANT TO PURCHASE COMMON STOCK
VOID ON THE EXPIRATION DATE
THIS WARRANT AND THE SECURITIES ISSUABLE
UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S.
SECURITIES ACT”) OR ANY STATE SECURITIES LAWS, AND MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO PERSHING GOLD
CORPORATION (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE U.S. SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH REGULATION S UNDER THE U.S. SECURITIES ACT, (D) IN COMPLIANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE U.S.
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, OR (E)
IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE LAWS AND REGULATIONS
GOVERNING THE OFFER AND SALE OF SECURITIES, AND, IN THE CASE OF (C) OR (E), ONLY IF THE HOLDER HAS PRIOR TO SUCH TRANSFER FURNISHED
TO THE COMPANY AN OPINION OF COUNSEL OF RECOGNIZED STANDING IN CUSTOMARY FORM AND SUBSTANCE AND IN THE CASE OF (D), THE HOLDER
HAS PROVIDED TO THE COMPANY CUSTOMARY DOCUMENTATION OF THE HOLDER AND ITS BROKER.
FOR VALUE RECEIVED, PERSHING GOLD CORPORATION,
a Nevada corporation (the “Company”), hereby agrees to sell upon the terms and on the conditions hereinafter
set forth, but no later than __________, 2017 (the “Expiration Date”), to _________________, whose address is
______________________________________________, or registered assigns (the “Holder”), under the terms as hereinafter
set forth, from and after the issue date hereof (“Initial Issue Date”) _______________________________ (________)
fully paid and non-assessable shares of the Company’s common stock, par value $0.0001 per share (the “Warrant Stock”),
at a purchase price of $0.44 per share (the “Warrant Price”), pursuant to this warrant (this “Warrant”). The
number of shares of Warrant Stock to be so issued and the Warrant Price are subject to adjustment in certain events as hereinafter
set forth. The term “Common Stock” shall mean, when used herein, unless the context otherwise requires,
the stock and property at the time receivable upon the exercise of this Warrant.
This Warrant has been issued pursuant to
the terms of the Subscription Agreement between the Company and the Holder dated the same date as this Warrant (the “Subscription
Agreement”). Capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Subscription
Agreement.
| a. | Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at
any time or times on or after the Initial Issue Date and on or before the Expiration Date by delivery to the Company (or such other
office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder
appearing on the books of the Company) of a duly executed facsimile copy of the Notice of Exercise Form annexed hereto. Within
two (2) “Trading Days” (a day on which the OTCQB or stock exchange on which the Company’s stock is listed
is open for business) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Warrant Price for the
shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless
the cashless exercise procedure specified in Section 1(b) below is specified in the applicable Notice of Exercise. Notwithstanding
anything herein to the contrary (although the Holder may surrender the Warrant to, and receive a replacement Warrant from, the
Company), the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all
of the Warrant Stock available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender
this Warrant to the Company for cancellation within two (2) Trading Days of the date the final Notice of Exercise is delivered
to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total amount of Warrant Stock available
hereunder shall have the effect of lowering the outstanding amount of Warrant Stock purchasable hereunder in an amount equal to
the applicable amount of Warrant Stock purchased. The Holder and the Company shall maintain records showing the amount of Warrant
Stock purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise Form within one
(1) Trading Day of delivery of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree
that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Stock hereunder, the amount
of Warrant Stock available for purchase hereunder at any given time may be less than the amount stated on the face hereof. |
| b. | Cashless Exercise. This Warrant may be exercised, in whole or in part, at any
time the Warrant Stock is not registered for resale pursuant to an effective registration statement under the U.S. Securities Act,
by means of a “cashless exercise” (in lieu of making a payment upon such exercise) in which the Holder shall be entitled
to receive a certificate for the number of shares of Warrant Stock equal to the quotient obtained by dividing [(A-B) (X)] by (A),
where: |
(A) = the closing price of the
Warrant Stock on the Trading Day immediately preceding the date on which Holder elects to exercise this Warrant by means of a “cashless
exercise,” as set forth in the applicable Notice of Exercise;
(B) = the Warrant Price, as adjusted
hereunder; and
(X) = the number of shares of
Warrant Stock that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise
were by means of a cash exercise rather than a cashless exercise.
| d. | No fractional shares of Common Stock will be issuable upon any exercise of this Warrant and the
Holder will not be entitled to any cash payment or compensation in lieu of a fractional share of Common Stock. |
| (i) | Delivery of Certificates Upon Exercise. Not later than five (5) Trading Days after the latest
of (A) the delivery to the Company of the Notice of Exercise, (B) surrender of this Warrant (if required) and (C) payment of the
aggregate Purchase Price as set forth above (including by cashless exercise, if permitted) (such date, the “Warrant Stock
Delivery Date”), the Company shall deliver, or cause to be delivered, to the exercising Holder a certificate or certificates
(bearing the restrictive legend set forth below) representing the number of shares of Warrant Stock being acquired upon the exercise
of such Warrant; provided however, if the Company is then a participant in the Depository Trust Company (“DTC”)
through its Deposit Withdrawal Agent Commission (“DWAC”) system and the Warrant Shares have been resold by the
Holder pursuant to an effective resale registration statement or an exemption from registration with respect to which an opinion
of counsel reasonably acceptable to the Company confirming such exemption has been delivered, then Certificates for shares purchased
hereunder shall be transmitted by the Company’s transfer agent (the “Transfer Agent”) to the Holder by
crediting the account of the Holder’s prime broker with DTC through its DWAC system. The Company shall use commercially reasonable
efforts to deliver such shares as promptly as practicable but in any event prior to the Warrant Stock Delivery Date. The Warrant
Stock shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to
have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised, with payment to
the Company of the aggregate Purchase Price (or by cashless exercise, if permitted) and all taxes required to be paid by the Holder,
if any, prior to the issuance of such shares, having been paid. The Company understands that a delay in the delivery of the Warrant
Stock after the Warrant Stock Delivery Date could result in economic loss to the Holder. As compensation to the Holder for such
loss, the Company agrees to pay (as liquidated damages and not as a penalty) to the Holder for late issuance of Warrant Stock upon
exercise of this Warrant the proportionate amount of $100 per “Business Day” (any day except any Saturday, any Sunday,
any day which shall be a federal legal holiday in the United States or any day on which banking institutions in the City of New
York are authorized or required by law or other governmental action to close) (increasing to $200 per Business Day after the tenth
Trading Day) commencing after the second Trading Day following the Warrant Stock Delivery Date for each $10,000 of Exercise Price
of Warrant Stock for which this Warrant is exercised which are not timely delivered. The Company shall pay any payments incurred
under this Section in immediately available funds upon demand. Furthermore, in addition to any other remedies which may be available
to the Holder, in the event that the Company fails for any reason to effect delivery of the Warrant Stock by the Warrant Stock
Delivery Date, the Holder may revoke all or part of the relevant Warrant exercise by delivery of a notice to such effect to the
Company, whereupon the Company and the Holder shall each be restored to their respective positions immediately prior to the exercise
of the relevant portion of this Warrant, except that the liquidated damages described above shall be payable through the date notice
of revocation or rescission is given to the Company. |
| (ii) | Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part,
the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the certificate
or certificates representing Warrant Stock, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase
the unpurchased Warrant Stock called for by this Warrant, which new Warrant shall in all other respects be identical with this
Warrant. |
| (iii) | Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Exercise. In addition
to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder a certificate
or the certificates representing the Warrant Stock pursuant to an exercise on or before the Warrant Stock Delivery Date, and if
after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s
brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Stock
which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash
to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any)
for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of shares of Warrant
Stock that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which
the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the
portion of the Warrant and equivalent number of shares of Warrant Stock for which such exercise was not honored (in which case
such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued
had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common
Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock
with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding
sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating
the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss.
Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely
deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof;
provided however that the Holder shall not be entitled to recover more than once for the same damages and that the
Company shall not be liable for any consequential, or punitive damages. |
| (iv) | Closing of Books. The Company will not close its stockholder books or records in any manner
which prevents the timely exercise of this Warrant, pursuant to the terms hereof. |
| g. | Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant,
and a Holder shall not have the right to exercise any portion of this Warrant, to the extent that after giving effect to such issuance
after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and
any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in
excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares
of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable
upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of
Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned
by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion
or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates. Except
as set forth in the preceding sentence, for purposes of this Section 1(g), beneficial ownership shall be calculated in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder
that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act
and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation
contained in this Section 1(g) applies, the determination of whether this Warrant is exercisable (in relation to other securities
owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion
of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this
Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion
of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation
to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above
shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
For purposes of this Section 1(g), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number
of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with
the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by
the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral
request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares
of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after
giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates
since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation”
shall be 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares
of Common Stock issuable upon exercise of this Warrant. The Holder, upon not less than 61 days’ prior notice to the Company,
may increase or decrease the Beneficial Ownership Limitation provisions of this Section 1(g), provided that the Beneficial Ownership
Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to
the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 1(g)
shall continue to apply. Any such increase or decrease will not be effective until the 61st day after such notice is
delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict
conformity with the terms of this Section 1(g) to correct this paragraph (or any portion hereof) which may be defective or inconsistent
with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to
properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this
Warrant. Notwithstanding the foregoing, the Beneficial Ownership Limitation shall not apply if the Holder beneficially owns, as
of the Initial Issue Date, in excess of 9.99% of the number of shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant held by such Holder. |
| 2. | Disposition of Warrant Stock and Warrant. |
| a. | The Holder hereby acknowledges that this Warrant and any Warrant Stock purchased pursuant hereto
are, as of the date hereof, not registered under the Securities Act of 1933, as amended (the “U.S. Securities Act”)
or under any applicable state securities law; and that the Company’s reliance on certain exemptions under the U.S. Securities
Act and applicable state securities laws is predicated in part on the representations made by the Holder in Article IV of the Subscription
Agreement. |
| b. | Any certificate representing Common Stock issued upon the exercise of this Warrant will bear a
legend substantially similar to the following: |
THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE STATE
SECURITIES LAWS. SUCH SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES AND MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER
SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FILED BY THE ISSUER WITH THE U.S.
SECURITIES AND EXCHANGE COMMISSION COVERING SUCH SECURITIES UNDER THE SECURITIES ACT OR AN EXEMPTION FROM REGISTRATION. AN OPINION
OF COUNSEL SATISFACTORY TO THE ISSUER MAY BE REQUIRED BY THE ISSUER OR THE TRANSFER AGENT.
In addition, so long as the foregoing legend
may remain on any stock certificate delivered to the Holder, the Company may maintain appropriate “stop transfer” orders
with respect to such certificates and the shares represented thereby on its books and records and with those to whom it may delegate
registrar and transfer functions.
| 3. | Reservation of Shares. The Company hereby agrees that at all times there shall
be reserved for issuance upon the exercise of this Warrant such number of shares of its Common Stock as shall be required for issuance
upon exercise of this Warrant. The Company further agrees that all shares which may be issued upon the exercise of the
rights represented by this Warrant will be duly authorized and will, upon issuance and against payment of the exercise price, be
validly issued, fully paid and non-assessable, free from all taxes, liens, charges and preemptive rights with respect to the issuance
thereof, other than taxes, if any, in respect of any transfer occurring contemporaneously with such issuance and other than transfer
restrictions imposed by federal, state or other applicable securities laws. |
| 4. | Exchange, Transfer or Assignment of Warrant. Subject to compliance with any applicable
securities laws, this Warrant is exchangeable, without expense, at the option of the Holder, upon presentation and surrender hereof
to the Company or at the office of its stock transfer agent, if any, for other Warrants of different denominations, entitling the
Holder or Holders thereof to purchase in the aggregate the same number of shares of Common Stock purchasable hereunder. Upon
surrender of this Warrant to the Company or at the office of its stock transfer agent, if any, with the Assignment Form annexed
hereto duly executed and funds sufficient to pay any transfer tax, the Company shall, without charge, execute and deliver a new
Warrant in the name of the assignee named in such instrument of assignment and this Warrant shall promptly be canceled. |
| 5. | Capital Adjustments. This Warrant is subject to the following further provisions: |
| a. | Subdivision or Combination of Shares. If the Company at any time while this Warrant
remains outstanding and unexpired shall subdivide or combine its Common Stock, the number of shares of Warrant Stock purchasable
upon exercise of this Warrant and the Warrant Price shall be proportionately adjusted. Any adjustment under this Section
5(a) shall become effective at the close of business on the date the subdivision or combination becomes effective or, if earlier,
the record date with respect to the subdivision or combination. |
| b. | Stock Dividends and Distributions. If the Company at any time while this Warrant
is outstanding and unexpired shall issue or pay the holders of its Common Stock, or take a record of the holders of its Common
Stock for the purpose of entitling them to receive, a dividend payable in, or other distribution of, Common Stock, then (i) the
Warrant Price shall be adjusted in accordance with Section 5(e) and (ii) the number of shares of Warrant Stock purchasable upon
exercise of this Warrant shall be adjusted to the number of shares of Common Stock that the Holder would have owned immediately
following such action had this Warrant been exercised immediately prior thereto. |
| c. | Stock and Rights Offering to Stockholders. If the Company shall at any time while
this Warrant is outstanding distribute to all holders of its Common Stock any shares of capital stock of the Company (other than
Common Stock) or evidences of its indebtedness or assets (excluding cash dividends or distributions) or rights or warrants to subscribe
for or purchase any of its securities (excluding those referred to in the immediately preceding paragraph), or securities convertible
or exchangeable into Common Stock (any of the foregoing, the “Securities”), then in each such case, the Company
shall without regard to any Beneficial Ownership Limitation reserve shares or other units of such Securities for distribution to
the Holder upon exercise of this Warrant so that, in addition to the shares of the Common Stock to which such Holder is entitled,
such Holder will receive upon such exercise the amount and kind of such Securities which such Holder would have received if the
Holder had, immediately prior to the record date for the distribution of the Securities, exercised this Warrant. |
| d. | Organic Change. Any recapitalization, reorganization, reclassification, consolidation,
merger, sale of all or substantially all of the Company’s assets to another person or entity or other transaction that is
effected in such a way that holders of Common Stock are entitled to receive (either directly or upon subsequent liquidation) stock,
securities or assets with respect to or in exchange for Common Stock is referred to herein as an “Organic Change.” |
| (i) | In connection with any (x) bona fide sale of all or substantially all of the Company’s assets
to an acquiring person or entity or (y) other Organic Change involving an arm’s length third party or parties following which
the Company is not the surviving entity and as a result of which the then current stockholders of the Company will not, directly
or indirectly own 50% or more of the surviving entity, the Company shall elect in its sole discretion: (A) to require that the
Holder exercise this Warrant prior to the consummation of such Organic Change, and if not so exercised, that this Warrant shall
terminate upon consummation of such Organic Change, or (B) to secure from the person or entity purchasing such assets or the successor
resulting from such Organic Change (in each case, the “Acquiring Entity”) a written agreement (in form and substance
reasonably satisfactory to the Holder) to deliver to the Holder, in exchange for this Warrant, a warrant of the Acquiring Entity
(the “Replacement Warrant”) evidenced by a written instrument substantially similar in form and substance to
this Warrant and reasonably satisfactory to the Holder reflecting the adjustments required so as to preserve the value of the Warrant
applicable at the Closing of the transaction, by the terms of the Replacement Warrant. The Replacement Warrant shall
be exercisable for such number of shares of common stock or other securities of the Acquiring Entity as the Holder would have had
the right to receive upon such Organic Change by a holder of the number of shares of Warrant Stock that such Holder would have
been entitled to receive upon exercise of this Warrant had this Warrant been exercised immediately prior to the effective date
of such Organic Change without regard to any Beneficial Ownership Limitation. The Company shall give the Holder written
notice of such Organic Change at least twenty (20) days prior to the closing and consummation of such Organic Change (and shall
give notice of record date pursuant to Section 6(a)). |
| (ii) | Prior to the consummation of any Organic Change unless not required as contemplated in subsection
(i) above, the Company shall make appropriate provision (in form and substance reasonably satisfactory to the Holder) to ensure
that the Holder will thereafter have the right to acquire and receive in lieu of or in addition to (as the case may be) the shares
of Common Stock immediately theretofore acquirable and receivable upon the exercise of this Warrant, such shares of stock, securities
or assets that would have been issued or payable in such Organic Change with respect to or in exchange for the number of shares
of Common Stock that would have been acquirable and receivable upon the exercise of this Warrant as of the date of such Organic
Change without regard to any Beneficial Ownership Limitation. |
| e. | Warrant Price Adjustment. Except as otherwise provided herein, whenever the number
of shares of Warrant Stock purchasable upon exercise of this Warrant is adjusted, as herein provided, the Warrant Price payable
upon the exercise of this Warrant shall be adjusted to that price determined by multiplying the Warrant Price immediately prior
to such adjustment by a fraction (i) the numerator of which shall be the number of shares of Warrant Stock purchasable upon exercise
of this Warrant immediately prior to such adjustment, and (ii) the denominator of which shall be the number of shares of Warrant
Stock purchasable upon exercise of this Warrant immediately thereafter. |
| f. | Par Value. Notwithstanding anything to the contrary contained in Section 5, if,
as a result of an adjustment pursuant to Section 5, the par value per share of Common Stock would be greater than the Warrant Price,
then the Warrant Price shall be an amount equal to the par value per share of the Common Stock but the number of shares the holder
of this Warrant shall be entitled to purchase shall be such greater number of shares of Common Stock as would have resulted from
the Warrant Price that, absent such limitation, would have been in effect pursuant to this Section 5. |
| g. | Certain Shares Excluded. The number of shares of Common Stock outstanding at any given time
for purposes of the adjustments set forth in this Section 5 shall exclude any shares then directly or indirectly held in the treasury
of the Company. |
| h. | Deferral and Cumulation of De Minimis Adjustments. The Company shall not be required
to make any adjustment pursuant to this Section 5 if the amount of such adjustment would be less than one percent (1%) of the Warrant
Price in effect immediately before the event that would otherwise have given rise to such adjustment. In such case,
however, any adjustment that would otherwise have been required to be made shall be made at the time of and together with the next
subsequent adjustment which, together with any adjustment or adjustments so carried forward, shall amount to not less than one
percent (1%) of the Warrant Price in effect immediately before the event giving rise to such next subsequent adjustment. |
| i. | Duration of Adjustment. Following each computation or readjustment as provided
in this Section 5, the new adjusted Warrant Price and number of shares of Warrant Stock purchasable upon exercise of this Warrant
shall remain in effect until a further computation or readjustment thereof is required. |
| a. | Notice of Record Date. In case: |
| (i) | the Company shall take a record of the holders of its Common Stock (or other stock or securities
at the time receivable upon the exercise of this Warrant) for the purpose of entitling them to receive any dividend (other than
a cash dividend) or other distribution, or any right to subscribe for or purchase any shares of stock of any class or any other
securities, or to receive any other right; |
| (ii) | of any Organic Change; or |
| (iii) | of any voluntary dissolution, liquidation or winding-up of the Company; |
then, and in each such case,
the Company will mail or cause to be mailed to the Holder hereof at the time outstanding a notice specifying, as the case may be,
(i) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, or (ii) the date on which such Organic Change, dissolution, liquidation or winding-up
is to take place, and the time, if any, is to be fixed, as of which the holders of record of Common Stock (or such stock or
securities at the time receivable upon the exercise of this Warrant) shall be entitled to exchange their shares of Common Stock
(or such other stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation,
merger, conveyance, dissolution or winding-up. Such notice shall be mailed at least ten (10) days prior to the record
date therein specified, or if no record date shall have been specified therein, at least ten (10) days prior to such specified
date, provided, however, failure to provide any such notice shall not affect the validity of such transaction.
| b. | Certificate of Adjustment. Whenever any adjustment shall be made pursuant to Section 5 hereof,
the Company shall promptly make a certificate signed by its Chairman, Chief Executive Officer, President, Vice President, Chief
Financial Officer or Treasurer, setting forth in reasonable detail the event requiring the adjustment, the amount of the adjustment,
the method by which such adjustment was calculated and the Warrant Price and number of shares of Warrant Stock purchasable
upon exercise of this Warrant after giving effect to such adjustment, and shall promptly cause copies of such certificates to be
mailed (by first class mail, postage prepaid) to the Holder of this Warrant. |
| 7. | Loss, Theft, Destruction or Mutilation. If this Warrant is lost, stolen, mutilated
or destroyed, upon receipt by the Company, in the case of loss, theft or destruction, of an indemnity in customary form or, in
the case of mutilation, upon surrender and cancellation of this Warrant, the Company will execute and deliver in lieu thereof,
without expense to the Holder, a new Warrant of like denomination and tenor dated the date hereof. |
| 8. | Warrant Holder Not a Stockholder. The Holder of this Warrant, as such, shall
not be entitled by reason of this Warrant to any voting or other rights whatsoever as a stockholder of the Company. |
| 9. | Notices. All notices and other communications hereunder shall be in writing and shall be
deemed duly given (a) on the date of delivery if delivered personally, or if by facsimile or email, upon written confirmation
of receipt by facsimile, e-mail or otherwise, (b) on the first business day following the date of dispatch if delivered utilizing
a next-day service by a recognized next-day courier or (c) on the earlier of confirmed receipt or the fifth business day following
the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder
shall be delivered to the addresses set forth below, or pursuant to such other instructions as may be designated in writing by
the party to receive such notice: |
| (1) | if to the Company, to: |
Pershing Gold Corporation
1658 Cole Boulevard
Building 6, Suite 210
Lakewood, CO 80401
Attention: Stephen Alfers
Email: SAlfers@pershinggold.com
Facsimile: 720-974-7249
with a copy (which shall not
constitute notice) to:
Davis Graham & Stubbs LLP
1550 17th Street, Suite 500
Denver, Colorado 80202
Attention: Deborah J. Friedman
Email: Deborah.friedman@dgslaw.com
Facsimile: 303-893-1379
| (2) | if to Holder to the address, email and facsimile number(s), and with such copies as indicated in
the warrant register maintained by the Company. |
| 10. | Choice of Law. This Warrant and all disputes or controversies arising out of
or relating to this Warrant or the transactions contemplated hereby shall be governed by, and construed in accordance with, the
internal laws of the State of Nevada, without regard to the laws of any other jurisdiction that might be applied because of the
conflicts of laws principles of the State of Nevada. |
| 11. | Jurisdiction and Venue. Each of the parties irrevocably agrees that any legal
action or proceeding arising out of or relating to this Warrant brought by the other party or its successors or assigns shall be
brought and determined in any appropriate Nevada State or federal court, and each of the parties hereby irrevocably submits to
the exclusive jurisdiction of the aforesaid courts for itself and with respect to its property, generally and unconditionally,
with regard to any such action or proceeding arising out of or relating to this Warrant and the transactions contemplated hereby.
Each of the parties agrees not to commence any action, suit or proceeding relating thereto except in the courts described above
in Nevada, other than actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such
court in Nevada as described herein. Each of the parties further agrees that notice as provided herein shall constitute sufficient
service of process and the parties further waive any argument that such service is insufficient. Each of the parties hereby irrevocably
and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any action
or proceeding arising out of or relating to this Warrant or the transactions contemplated hereby, (a) any claim that it is
not personally subject to the jurisdiction of the courts in Nevada as described herein for any reason, (b) that it or its
property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through
service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise)
and (c) that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the
venue of such suit, action or proceeding is improper or (iii) this Warrant, or the subject matter hereof, may not be enforced
in or by such courts. |
| 12. | Amendment and Waiver. Except as otherwise provided herein, the provisions of
this Warrant and the other Warrants may be amended and the Company may take any action herein prohibited, or omit to perform any
act herein required to be performed by it, only if the Company has obtained the written consent of the Holder. |
| 13. | Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action
or the expiration of any right required or granted herein shall not be a Trading Day, then, such action may be taken or such right
may be exercised on the next succeeding Trading Day. |
| 14. | Non-waiver and Expenses. No course of dealing or any delay or failure to exercise any right
hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers
or remedies. Without limiting any other provision of this Warrant or the Subscription Agreement, if the Company willfully and knowingly
fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay
to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’
fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise
enforcing any of its rights, powers or remedies hereunder. |
| 15. | Limitation of Liability. No provision hereof, in the absence of any affirmative action by
the Holder to exercise this Warrant to purchase Warrant Stock, and no enumeration herein of the rights or privileges of the Holder,
shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether
such liability is asserted by the Company or by creditors of the Company. |
| 16. | Remedies. The Holder, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this
Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would
be adequate. |
| 17. | Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights
and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the
Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of
any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Stock. |
| 18. | Severability. Wherever possible, each provision of this Warrant shall be interpreted in
such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid
under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating
the remainder of such provisions or the remaining provisions of this Warrant. |
| 19. | Warrant Register. The Company shall register this Warrant, upon records to be maintained
by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time
to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any
exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary. |
[signature page follows]
IN WITNESS WHEREOF, the Company has duly
caused this Warrant to be signed on its behalf, in its corporate name and by its duly authorized officers, as of the date first
written above.
| |
PERSHING GOLD CORPORATION |
| |
|
| |
By: |
|
| |
Name: Eric Alexander |
| |
Title: Vice President of Finance and Controller |
[Signature Page – Warrant]
Exhibit 4.2
| |
FORM OF PLACEMENT AGENT WARRANT |
|
| NO. ________ |
PERSHING GOLD CORPORATION |
_________ Shares
_________, 2015 |
WARRANT TO PURCHASE COMMON STOCK
VOID ON THE EXPIRATION DATE
THIS WARRANT AND THE SECURITIES ISSUABLE
UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S.
SECURITIES ACT”) OR ANY STATE SECURITIES LAWS, AND MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO PERSHING GOLD
CORPORATION (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE U.S. SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH REGULATION S UNDER THE U.S. SECURITIES ACT, (D) IN COMPLIANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE U.S.
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, OR (E)
IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE LAWS AND REGULATIONS
GOVERNING THE OFFER AND SALE OF SECURITIES, AND, IN THE CASE OF (C) OR (E), ONLY IF THE HOLDER HAS PRIOR TO SUCH TRANSFER FURNISHED
TO THE COMPANY AN OPINION OF COUNSEL OF RECOGNIZED STANDING IN CUSTOMARY FORM AND SUBSTANCE AND IN THE CASE OF (D), THE HOLDER
HAS PROVIDED TO THE COMPANY CUSTOMARY DOCUMENTATION OF THE HOLDER AND ITS BROKER.
FOR VALUE RECEIVED, PERSHING GOLD CORPORATION,
a Nevada corporation (the “Company”), hereby agrees to sell upon the terms and on the conditions hereinafter
set forth, but no later than ___________, 2017 (the “Expiration Date”), to _________________, whose address
is _____________________________________, or registered assigns (the “Holder”), under the terms as hereinafter
set forth, from and after the issue date hereof (“Initial Issue Date”) ____________________________________
(_________) fully paid and non-assessable shares of the Company’s common stock, par value $0.0001 per share (the “Warrant
Stock”), at a purchase price of $0.325 per share (the “Warrant Price”), pursuant to this warrant (this
“Warrant”). The number of shares of Warrant Stock to be so issued and the Warrant Price are subject
to adjustment in certain events as hereinafter set forth. The term “Common Stock” shall mean, when
used herein, unless the context otherwise requires, the stock and property at the time receivable upon the exercise of this Warrant.
This Warrant has been issued pursuant to
the terms of the Placement Agency Agreement between the Company and the Holder dated March 19, 2015 (the “Placement Agency
Agreement”). Capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Placement
Agency Agreement.
| a. | Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at
any time or times on or after the Initial Issue Date and on or before the Expiration Date by delivery to the Company (or such other
office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder
appearing on the books of the Company) of a duly executed facsimile copy of the Notice of Exercise Form annexed hereto. Within
two (2) “Trading Days” (a day on which the OTCQB or stock exchange on which the Company’s stock is listed
is open for business) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Warrant Price for the
shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless
the cashless exercise procedure specified in Section 1(b) below is specified in the applicable Notice of Exercise. Notwithstanding
anything herein to the contrary (although the Holder may surrender the Warrant to, and receive a replacement Warrant from, the
Company), the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all
of the Warrant Stock available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender
this Warrant to the Company for cancellation within two (2) Trading Days of the date the final Notice of Exercise is delivered
to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total amount of Warrant Stock available
hereunder shall have the effect of lowering the outstanding amount of Warrant Stock purchasable hereunder in an amount equal to
the applicable amount of Warrant Stock purchased. The Holder and the Company shall maintain records showing the amount of Warrant
Stock purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise Form within one
(1) Trading Day of delivery of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree
that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Stock hereunder, the amount
of Warrant Stock available for purchase hereunder at any given time may be less than the amount stated on the face hereof. |
| b. | Cashless Exercise. This Warrant may be exercised, in whole or in part, at any
time the Warrant Stock is not registered for resale pursuant to an effective registration statement under the U.S. Securities Act,
by means of a “cashless exercise” (in lieu of making a payment upon such exercise) in which the Holder shall be entitled
to receive a certificate for the number of shares of Warrant Stock equal to the quotient obtained by dividing [(A-B) (X)] by (A),
where: |
(A) = the closing price of the
Warrant Stock on the Trading Day immediately preceding the date on which Holder elects to exercise this Warrant by means of a “cashless
exercise,” as set forth in the applicable Notice of Exercise;
(B) = the Warrant Price, as adjusted
hereunder; and
(X) = the number of shares of
Warrant Stock that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise
were by means of a cash exercise rather than a cashless exercise.
| d. | No fractional shares of Common Stock will be issuable upon any exercise of this Warrant and the
Holder will not be entitled to any cash payment or compensation in lieu of a fractional share of Common Stock. |
| (i) | Delivery of Certificates Upon Exercise. Not later than five (5) Trading Days after the latest
of (A) the delivery to the Company of the Notice of Exercise, (B) surrender of this Warrant (if required) and (C) payment of the
aggregate Purchase Price as set forth above (including by cashless exercise, if permitted) (such date, the “Warrant Stock
Delivery Date”), the Company shall deliver, or cause to be delivered, to the exercising Holder a certificate or certificates
(bearing the restrictive legend set forth below) representing the number of shares of Warrant Stock being acquired upon the exercise
of such Warrant; provided however, if the Company is then a participant in the Depository Trust Company (“DTC”)
through its Deposit Withdrawal Agent Commission (“DWAC”) system and the Warrant Shares have been resold by the
Holder pursuant to an effective resale registration statement or an exemption from registration with respect to which an opinion
of counsel reasonably acceptable to the Company confirming such exemption has been delivered, then Certificates for shares purchased
hereunder shall be transmitted by the Company’s transfer agent (the “Transfer Agent”) to the Holder by
crediting the account of the Holder’s prime broker with DTC through its DWAC system. The Company shall use commercially reasonable
efforts to deliver such shares as promptly as practicable but in any event prior to the Warrant Stock Delivery Date. The Warrant
Stock shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to
have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised, with payment to
the Company of the aggregate Purchase Price (or by cashless exercise, if permitted) and all taxes required to be paid by the Holder,
if any, prior to the issuance of such shares, having been paid. The Company understands that a delay in the delivery of the Warrant
Stock after the Warrant Stock Delivery Date could result in economic loss to the Holder. As compensation to the Holder for such
loss, the Company agrees to pay (as liquidated damages and not as a penalty) to the Holder for late issuance of Warrant Stock upon
exercise of this Warrant the proportionate amount of $100 per “Business Day” (any day except any Saturday, any Sunday,
any day which shall be a federal legal holiday in the United States or any day on which banking institutions in the City of New
York are authorized or required by law or other governmental action to close) (increasing to $200 per Business Day after the tenth
Trading Day) commencing after the second Trading Day following the Warrant Stock Delivery Date for each $10,000 of Exercise Price
of Warrant Stock for which this Warrant is exercised which are not timely delivered. The Company shall pay any payments incurred
under this Section in immediately available funds upon demand. Furthermore, in addition to any other remedies which may be available
to the Holder, in the event that the Company fails for any reason to effect delivery of the Warrant Stock by the Warrant Stock
Delivery Date, the Holder may revoke all or part of the relevant Warrant exercise by delivery of a notice to such effect to the
Company, whereupon the Company and the Holder shall each be restored to their respective positions immediately prior to the exercise
of the relevant portion of this Warrant, except that the liquidated damages described above shall be payable through the date notice
of revocation or rescission is given to the Company. |
| (ii) | Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part,
the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the certificate
or certificates representing Warrant Stock, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase
the unpurchased Warrant Stock called for by this Warrant, which new Warrant shall in all other respects be identical with this
Warrant. |
| (iii) | Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Exercise. In addition
to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder a certificate
or the certificates representing the Warrant Stock pursuant to an exercise on or before the Warrant Stock Delivery Date, and if
after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s
brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Stock
which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash
to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any)
for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of shares of Warrant
Stock that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which
the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the
portion of the Warrant and equivalent number of shares of Warrant Stock for which such exercise was not honored (in which case
such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued
had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common
Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock
with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding
sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating
the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss.
Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely
deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof;
provided however that the Holder shall not be entitled to recover more than once for the same damages and that the
Company shall not be liable for any consequential, or punitive damages. |
| (iv) | Closing of Books. The Company will not close its stockholder books or records in any manner
which prevents the timely exercise of this Warrant, pursuant to the terms hereof. |
| g. | Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant,
and a Holder shall not have the right to exercise any portion of this Warrant, to the extent that after giving effect to such issuance
after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and
any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in
excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares
of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable
upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of
Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned
by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion
or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates. Except
as set forth in the preceding sentence, for purposes of this Section 1(g), beneficial ownership shall be calculated in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder
that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act
and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation
contained in this Section 1(g) applies, the determination of whether this Warrant is exercisable (in relation to other securities
owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion
of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this
Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion
of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation
to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above
shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
For purposes of this Section 1(g), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number
of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with
the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by
the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral
request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares
of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after
giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates
since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation”
shall be 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares
of Common Stock issuable upon exercise of this Warrant. The Holder, upon not less than 61 days’ prior notice to the Company,
may increase or decrease the Beneficial Ownership Limitation provisions of this Section 1(g), provided that the Beneficial Ownership
Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to
the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 1(g)
shall continue to apply. Any such increase or decrease will not be effective until the 61st day after such notice is
delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict
conformity with the terms of this Section 1(g) to correct this paragraph (or any portion hereof) which may be defective or inconsistent
with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to
properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this
Warrant. Notwithstanding the foregoing, the Beneficial Ownership Limitation shall not apply if the Holder beneficially owns, as
of the Initial Issue Date, in excess of 9.99% of the number of shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant held by such Holder. |
| 2. | Disposition of Warrant Stock and Warrant. |
| a. | The Holder hereby acknowledges that this Warrant and any Warrant Stock purchased pursuant hereto
are, as of the date hereof, not registered under the Securities Act of 1933, as amended (the “U.S. Securities Act”)
or under any applicable state securities law; and that the Company’s reliance on certain exemptions under the U.S. Securities
Act and applicable state securities laws is predicated in part on the representations made by the Holder in Article IV of the Subscription
Agreement. |
| b. | Any certificate representing Common Stock issued upon the exercise of this Warrant will bear a
legend substantially similar to the following: |
THE SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY
APPLICABLE STATE SECURITIES LAWS. SUCH SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES AND MAY NOT BE OFFERED FOR SALE, SOLD,
DELIVERED AFTER SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FILED BY THE ISSUER
WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION COVERING SUCH SECURITIES UNDER THE SECURITIES ACT OR AN EXEMPTION FROM REGISTRATION.
AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER MAY BE REQUIRED BY THE ISSUER OR THE TRANSFER AGENT.
In addition, so long as the foregoing
legend may remain on any stock certificate delivered to the Holder, the Company may maintain appropriate “stop transfer”
orders with respect to such certificates and the shares represented thereby on its books and records and with those to whom it
may delegate registrar and transfer functions.
| 3. | Reservation of Shares. The Company hereby agrees that at all times there shall
be reserved for issuance upon the exercise of this Warrant such number of shares of its Common Stock as shall be required for issuance
upon exercise of this Warrant. The Company further agrees that all shares which may be issued upon the exercise of the
rights represented by this Warrant will be duly authorized and will, upon issuance and against payment of the exercise price, be
validly issued, fully paid and non-assessable, free from all taxes, liens, charges and preemptive rights with respect to the issuance
thereof, other than taxes, if any, in respect of any transfer occurring contemporaneously with such issuance and other than transfer
restrictions imposed by federal, state or other applicable securities laws. |
| 4. | Exchange, Transfer or Assignment of Warrant. Subject to compliance with any applicable
securities laws, this Warrant is exchangeable, without expense, at the option of the Holder, upon presentation and surrender hereof
to the Company or at the office of its stock transfer agent, if any, for other Warrants of different denominations, entitling the
Holder or Holders thereof to purchase in the aggregate the same number of shares of Common Stock purchasable hereunder. Upon
surrender of this Warrant to the Company or at the office of its stock transfer agent, if any, with the Assignment Form annexed
hereto duly executed and funds sufficient to pay any transfer tax, the Company shall, without charge, execute and deliver a new
Warrant in the name of the assignee named in such instrument of assignment and this Warrant shall promptly be canceled. |
| 5. | Capital Adjustments. This Warrant is subject to the following further provisions: |
| a. | Subdivision or Combination of Shares. If the Company at any time while this Warrant
remains outstanding and unexpired shall subdivide or combine its Common Stock, the number of shares of Warrant Stock purchasable
upon exercise of this Warrant and the Warrant Price shall be proportionately adjusted. Any adjustment under this Section
5(a) shall become effective at the close of business on the date the subdivision or combination becomes effective or, if earlier,
the record date with respect to the subdivision or combination. |
| b. | Stock Dividends and Distributions. If the Company at any time while this Warrant
is outstanding and unexpired shall issue or pay the holders of its Common Stock, or take a record of the holders of its Common
Stock for the purpose of entitling them to receive, a dividend payable in, or other distribution of, Common Stock, then (i) the
Warrant Price shall be adjusted in accordance with Section 5(e) and (ii) the number of shares of Warrant Stock purchasable upon
exercise of this Warrant shall be adjusted to the number of shares of Common Stock that the Holder would have owned immediately
following such action had this Warrant been exercised immediately prior thereto. |
| c. | Stock and Rights Offering to Stockholders. If the Company shall at any time while
this Warrant is outstanding distribute to all holders of its Common Stock any shares of capital stock of the Company (other than
Common Stock) or evidences of its indebtedness or assets (excluding cash dividends or distributions) or rights or warrants to subscribe
for or purchase any of its securities (excluding those referred to in the immediately preceding paragraph), or securities convertible
or exchangeable into Common Stock (any of the foregoing, the “Securities”), then in each such case, the Company
shall without regard to any Beneficial Ownership Limitation reserve shares or other units of such Securities for distribution to
the Holder upon exercise of this Warrant so that, in addition to the shares of the Common Stock to which such Holder is entitled,
such Holder will receive upon such exercise the amount and kind of such Securities which such Holder would have received if the
Holder had, immediately prior to the record date for the distribution of the Securities, exercised this Warrant. |
| d. | Organic Change. Any recapitalization, reorganization, reclassification, consolidation,
merger, sale of all or substantially all of the Company’s assets to another person or entity or other transaction that is
effected in such a way that holders of Common Stock are entitled to receive (either directly or upon subsequent liquidation) stock,
securities or assets with respect to or in exchange for Common Stock is referred to herein as an “Organic Change.” |
| (i) | In connection with any (x) bona fide sale of all or substantially all of the Company’s assets
to an acquiring person or entity or (y) other Organic Change involving an arm’s length third party or parties following which
the Company is not the surviving entity and as a result of which the then current stockholders of the Company will not, directly
or indirectly own 50% or more of the surviving entity, the Company shall elect in its sole discretion: (A) to require that the
Holder exercise this Warrant prior to the consummation of such Organic Change, and if not so exercised, that this Warrant shall
terminate upon consummation of such Organic Change, or (B) to secure from the person or entity purchasing such assets or the successor
resulting from such Organic Change (in each case, the “Acquiring Entity”) a written agreement (in form and substance
reasonably satisfactory to the Holder) to deliver to the Holder, in exchange for this Warrant, a warrant of the Acquiring Entity
(the “Replacement Warrant”) evidenced by a written instrument substantially similar in form and substance to
this Warrant and reasonably satisfactory to the Holder reflecting the adjustments required so as to preserve the value of the Warrant
applicable at the Closing of the transaction, by the terms of the Replacement Warrant. The Replacement Warrant shall
be exercisable for such number of shares of common stock or other securities of the Acquiring Entity as the Holder would have had
the right to receive upon such Organic Change by a holder of the number of shares of Warrant Stock that such Holder would have
been entitled to receive upon exercise of this Warrant had this Warrant been exercised immediately prior to the effective date
of such Organic Change without regard to any Beneficial Ownership Limitation. The Company shall give the Holder written
notice of such Organic Change at least twenty (20) days prior to the closing and consummation of such Organic Change (and shall
give notice of record date pursuant to Section 6(a)). |
| (ii) | Prior to the consummation of any Organic Change unless not required as contemplated in subsection
(i) above, the Company shall make appropriate provision (in form and substance reasonably satisfactory to the Holder) to ensure
that the Holder will thereafter have the right to acquire and receive in lieu of or in addition to (as the case may be) the shares
of Common Stock immediately theretofore acquirable and receivable upon the exercise of this Warrant, such shares of stock, securities
or assets that would have been issued or payable in such Organic Change with respect to or in exchange for the number of shares
of Common Stock that would have been acquirable and receivable upon the exercise of this Warrant as of the date of such Organic
Change without regard to any Beneficial Ownership Limitation. |
| e. | Warrant Price Adjustment. Except as otherwise provided herein, whenever the number
of shares of Warrant Stock purchasable upon exercise of this Warrant is adjusted, as herein provided, the Warrant Price payable
upon the exercise of this Warrant shall be adjusted to that price determined by multiplying the Warrant Price immediately prior
to such adjustment by a fraction (i) the numerator of which shall be the number of shares of Warrant Stock purchasable upon exercise
of this Warrant immediately prior to such adjustment, and (ii) the denominator of which shall be the number of shares of Warrant
Stock purchasable upon exercise of this Warrant immediately thereafter. |
| f. | Par Value. Notwithstanding anything to the contrary contained in Section 5, if,
as a result of an adjustment pursuant to Section 5, the par value per share of Common Stock would be greater than the Warrant Price,
then the Warrant Price shall be an amount equal to the par value per share of the Common Stock but the number of shares the holder
of this Warrant shall be entitled to purchase shall be such greater number of shares of Common Stock as would have resulted from
the Warrant Price that, absent such limitation, would have been in effect pursuant to this Section 5. |
| g. | Certain Shares Excluded. The number of shares of Common Stock outstanding at any given time
for purposes of the adjustments set forth in this Section 5 shall exclude any shares then directly or indirectly held in the treasury
of the Company. |
| h. | Deferral and Cumulation of De Minimis Adjustments. The Company shall not be required
to make any adjustment pursuant to this Section 5 if the amount of such adjustment would be less than one percent (1%) of the Warrant
Price in effect immediately before the event that would otherwise have given rise to such adjustment. In such case,
however, any adjustment that would otherwise have been required to be made shall be made at the time of and together with the next
subsequent adjustment which, together with any adjustment or adjustments so carried forward, shall amount to not less than one
percent (1%) of the Warrant Price in effect immediately before the event giving rise to such next subsequent adjustment. |
| i. | Duration of Adjustment. Following each computation or readjustment as provided
in this Section 5, the new adjusted Warrant Price and number of shares of Warrant Stock purchasable upon exercise of this Warrant
shall remain in effect until a further computation or readjustment thereof is required. |
| a. | Notice of Record Date. In case: |
| (i) | the Company shall take a record of the holders of its Common Stock (or other stock or securities
at the time receivable upon the exercise of this Warrant) for the purpose of entitling them to receive any dividend (other than
a cash dividend) or other distribution, or any right to subscribe for or purchase any shares of stock of any class or any other
securities, or to receive any other right; |
| (ii) | of any Organic Change; or |
| (iii) | of any voluntary dissolution, liquidation or winding-up of the Company; |
then, and in each such case,
the Company will mail or cause to be mailed to the Holder hereof at the time outstanding a notice specifying, as the case may be,
(i) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, or (ii) the date on which such Organic Change, dissolution, liquidation or winding-up
is to take place, and the time, if any, is to be fixed, as of which the holders of record of Common Stock (or such stock or
securities at the time receivable upon the exercise of this Warrant) shall be entitled to exchange their shares of Common Stock
(or such other stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation,
merger, conveyance, dissolution or winding-up. Such notice shall be mailed at least ten (10) days prior to the record
date therein specified, or if no record date shall have been specified therein, at least ten (10) days prior to such specified
date, provided, however, failure to provide any such notice shall not affect the validity of such transaction.
| b. | Certificate of Adjustment. Whenever any adjustment shall be made pursuant to Section 5 hereof,
the Company shall promptly make a certificate signed by its Chairman, Chief Executive Officer, President, Vice President, Chief
Financial Officer or Treasurer, setting forth in reasonable detail the event requiring the adjustment, the amount of the adjustment,
the method by which such adjustment was calculated and the Warrant Price and number of shares of Warrant Stock purchasable
upon exercise of this Warrant after giving effect to such adjustment, and shall promptly cause copies of such certificates to be
mailed (by first class mail, postage prepaid) to the Holder of this Warrant. |
| 7. | General Restrictions. The registered Holder of this Warrant agrees by his, her or its acceptance
hereof, that such Holder will not: (a) sell, transfer, assign, pledge or hypothecate this Warrant for a period of 180 calendar
days following the Initial Issue Date to anyone other than: (i) Noble Financial Capital Markets (“Noble”),
or (ii) a bona fide officer or partner of Noble in accordance with FINRA Conduct Rule 5110(g)(1), or (b) cause this Warrant or
the securities issuable hereunder to be the subject of any hedging, short sale, derivative, put or call transaction that would
result in the effective economic disposition of this Warrant or the securities hereunder, except as provided for in FINRA Rule
5110(g)(2). On and after 180 calendar days following the Initial Issue Date, transfers to others may be made subject to compliance
with or exemptions from applicable securities laws. In order to make any permitted assignment, the Holder must deliver to the Company
the Assignment Form attached hereto (the “Notice of Assignment”) duly executed and completed, together with the Warrant
and payment of all transfer taxes, if any, payable in connection therewith. The Company shall within five Business Days transfer
this Warrant on the books of the Company and shall execute and deliver a new Warrant or Warrants of like tenor to the appropriate
assignee(s) expressly evidencing the right to purchase the aggregate number of shares of Warrant Stock purchasable hereunder or
such portion of such number as shall be contemplated by any such assignment. |
| 8. | Loss, Theft, Destruction or Mutilation. If this Warrant is lost, stolen, mutilated
or destroyed, upon receipt by the Company, in the case of loss, theft or destruction, of an indemnity in customary form or, in
the case of mutilation, upon surrender and cancellation of this Warrant, the Company will execute and deliver in lieu thereof,
without expense to the Holder, a new Warrant of like denomination and tenor dated the date hereof. |
| 9. | Warrant Holder Not a Stockholder. The Holder of this Warrant, as such, shall
not be entitled by reason of this Warrant to any voting or other rights whatsoever as a stockholder of the Company. |
| 10. | Notices. All notices and other communications hereunder shall be in writing and shall be
deemed duly given (a) on the date of delivery if delivered personally, or if by facsimile or email, upon written confirmation
of receipt by facsimile, e-mail or otherwise, (b) on the first business day following the date of dispatch if delivered utilizing
a next-day service by a recognized next-day courier or (c) on the earlier of confirmed receipt or the fifth business day following
the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder
shall be delivered to the addresses set forth below, or pursuant to such other instructions as may be designated in writing by
the party to receive such notice: |
| (1) | if to the Company, to: |
Pershing Gold Corporation
1658 Cole Boulevard
Building 6, Suite 210
Lakewood, CO 80401
Attention: Stephen Alfers
Email: SAlfers@pershinggold.com
Facsimile: 720-974-7249
with a copy (which shall not
constitute notice) to:
Davis Graham & Stubbs LLP
1550 17th Street, Suite 500
Denver, Colorado 80202
Attention: Deborah J. Friedman
Email: Deborah.friedman@dgslaw.com
Facsimile: 303-893-1379
| (2) | if to Holder to the address, email and facsimile number(s), and with such copies as indicated in
the warrant register maintained by the Company. |
| 11. | Choice of Law. This Warrant and all disputes or controversies arising out of
or relating to this Warrant or the transactions contemplated hereby shall be governed by, and construed in accordance with, the
internal laws of the State of Nevada, without regard to the laws of any other jurisdiction that might be applied because of the
conflicts of laws principles of the State of Nevada. |
| 12. | Jurisdiction and Venue. Each of the parties irrevocably agrees that any legal
action or proceeding arising out of or relating to this Warrant brought by the other party or its successors or assigns shall be
brought and determined in any appropriate Nevada State or federal court, and each of the parties hereby irrevocably submits to
the exclusive jurisdiction of the aforesaid courts for itself and with respect to its property, generally and unconditionally,
with regard to any such action or proceeding arising out of or relating to this Warrant and the transactions contemplated hereby.
Each of the parties agrees not to commence any action, suit or proceeding relating thereto except in the courts described above
in Nevada, other than actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such
court in Nevada as described herein. Each of the parties further agrees that notice as provided herein shall constitute
sufficient service of process and the parties further waive any argument that such service is insufficient. Each of the parties
hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise,
in any action or proceeding arising out of or relating to this Warrant or the transactions contemplated hereby, (a) any claim
that it is not personally subject to the jurisdiction of the courts in Nevada as described herein for any reason, (b) that
it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether
through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise)
and (c) that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the
venue of such suit, action or proceeding is improper or (iii) this Warrant, or the subject matter hereof, may not be enforced
in or by such courts. |
| 13. | Amendment and Waiver. Except as otherwise provided herein, the provisions of
this Warrant and the other Warrants may be amended and the Company may take any action herein prohibited, or omit to perform any
act herein required to be performed by it, only if the Company has obtained the written consent of the Holder. |
| 14. | Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action
or the expiration of any right required or granted herein shall not be a Trading Day, then, such action may be taken or such right
may be exercised on the next succeeding Trading Day. |
| 15. | Non-waiver and Expenses. No course of dealing or any delay or failure to exercise any right
hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers
or remedies. Without limiting any other provision of this Warrant or the Subscription Agreement, if the Company willfully and knowingly
fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay
to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’
fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise
enforcing any of its rights, powers or remedies hereunder. |
| 16. | Limitation of Liability. No provision hereof, in the absence of any affirmative action by
the Holder to exercise this Warrant to purchase Warrant Stock, and no enumeration herein of the rights or privileges of the Holder,
shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether
such liability is asserted by the Company or by creditors of the Company. |
| 17. | Remedies. The Holder, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this
Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would
be adequate. |
| 18. | Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights
and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the
Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of
any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Stock. |
| 19. | Severability. Wherever possible, each provision of this Warrant shall be interpreted in
such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid
under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating
the remainder of such provisions or the remaining provisions of this Warrant. |
| 20. | Warrant Register. The Company shall register this Warrant, upon records to be maintained
by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time
to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any
exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary. |
[signature page follows]
IN WITNESS WHEREOF, the Company has duly
caused this Warrant to be signed on its behalf, in its corporate name and by its duly authorized officers, as of the date first
written above.
| |
PERSHING GOLD CORPORATION |
| |
|
| |
By: |
|
| |
Name: Eric Alexander |
| |
Title: Vice President of Finance and Controller |
[Signature Page – Warrant]
Exhibit 10.1
FORM OF SUBSCRIPTION AGREEMENT
PERSHING GOLD CORPORATION
Pershing Gold Corporation
1658 Cole Boulevard
Building 6, Suite 200
Lakewood, Colorado 80401
Attn: Stephen Alfers, President & CEO
Ladies and Gentlemen:
1. Subscription.
The undersigned (the “Purchaser”) will purchase __________ Units (the “Units”) at a price of $0.325 per
Unit. Each Unit consists of one (1) share of the Company’s Common Stock and one (1) twenty-four (24) month Warrant
to purchase 0.40 of a share of Common Stock, with each whole warrant having an exercise price of $0.44 per share, subject to adjustment
in certain circumstances. The Units are being offered (the “Offering”) by the Company pursuant to the offering terms
set forth in the Company's Amended and Restated Confidential Private Placement Memorandum, dated March 9, 2015, as the same may
be amended and/or supplemented, from time to time (collectively, the “PPM”). Certain capitalized terms used, but not
otherwise defined in this Agreement will have the respective meanings provided in the PPM.
The Units will be offered
for sale until the earlier of (i) the date upon which subscriptions for the Maximum Offering have been accepted, (ii) April 21,
2015 (subject to the right of the Company to extend the offering for an additional 30 days without further notice to investors)
or (iii) the date upon which the Company and the Placement Agent elect to terminate the Offering (the “Termination Date”).
The Company may hold
one or more closings (each, a “Closing”) with respect to purchases of Units in the offering at such times as the Company
shall elect following the receipt of accepted subscriptions for U.S. $1,000,000 in the aggregate (the "Minimum Offering").
The last Closing of the Offering, occurring on or prior to the Termination Date, is referred to as the “Final Closing”.
Any subscription documents or funds received after the Final Closing will be returned without interest or deduction. In the event
that a Closing of the Purchaser's subscription does not occur prior to the Termination Date, all amounts paid by the Purchaser
shall be returned to the Purchaser without interest or deduction.
The minimum investment for any subscriber
under the Offering is US$32,500 (the "Minimum Investment). However, subscriptions for investment below the Minimum Investment
may be accepted at the discretion of the Company. There is no maximum investment for individual investors, although the maximum
aggregate proceeds from the Offering may not exceed $15,000,000 (the “Maximum Offering”) provided that the Company
may in its discretion increase the amount of maximum aggregate proceeds of the Offering up to $30,000,000 (the “Increased
Maximum Offering”). The Company reserves the right (but is not obligated) to allow its employees, agents, officers, directors
and affiliates purchase Units in the Offering, and all such purchases will be counted towards the Maximum Offering.
The terms of the Offering are more completely
described in the PPM, whose terms are incorporated herein in their entirety.
2. Payment.
The Purchaser will immediately make a wire transfer payment to the Escrow Agent pursuant to the wire instructions provided on the
signature page below, in the full amount of the purchase price of the Units being subscribed for. Together with the wire transfer
of the full purchase price, the Purchaser is delivering a completed and executed Signature Page to this Subscription Agreement,
along with a completed and executed Accredited Investor Certification, which is annexed hereto. By executing this Subscription
Agreement, the Purchaser represents and warrants that it (i) has read and understood the PPM, (ii) has executed the Registration
Rights Agreement (attached as an exhibit to the PPM), and (iii) agreed to the terms of the Warrant (also attached as an exhibit
to the PPM) (this Subscription Agreement, the Registration Rights Agreement and the Warrant, collectively, the “Transaction
Documents”), and will be treated for all purposes as if it did review, approve and execute, if required, each such Transaction
Document, even though the Purchaser may not have physically signed the signature pages to such documents.
3. Deposit
of Funds. All payments made as provided in Section 2 hereof will be deposited by the Escrow Agent in a non-interest bearing
escrow account (the “Escrow Account”).
4. Acceptance
of Subscription. The Purchaser understands and agrees that the Company, in its sole discretion, reserves the right to accept
this or any other subscription for the Units, in whole or in part, notwithstanding prior receipt by the Purchaser of notice of
acceptance of this or any other subscription. The Company will have
no obligation hereunder until the Company returns to the Purchaser an executed copy of this Subscription Agreement.
If the Purchaser’s subscription is rejected in whole or in part (at the sole discretion of the Company) or the Offering is
terminated prior to the Closing on the Purchaser’s Units, funds received from the Purchaser and not applied to the purchase
of Units will be returned without interest, penalty, expense or deduction, and this Subscription Agreement will thereafter be of
further force or effect only to the extent such subscription was accepted. The Purchaser may revoke its subscription and obtain
a return of the subscription amount paid to the Escrow Account at any time before the date of the Initial Closing by a writing
delivered to the Placement Agent and the Company. The Purchaser may not revoke this subscription or obtain a return of the subscription
amount paid to the Escrow Agent on or after the date of the Initial Closing. Any subscription received after the Initial Closing
but prior to the Termination Date shall be irrevocable.
5. Representations
and Warranties of the Purchaser. The Purchaser hereby acknowledges, represents, warrants, and agrees as follows:
(a) None
of the Securities has been registered under the United States Securities Act of 1933, as amended (the “Securities Act”),
or any applicable state securities laws. The Purchaser understands that the offering and sale of the Securities is intended to
be exempt from the registration requirements of the Securities Act, by virtue of Section 4(a)(2) thereof and Rule 506 of Regulation
D promulgated thereunder, based, in part, upon the representations, warranties and agreements of the Purchaser contained in this
Subscription Agreement. The Purchaser agrees to supply all requested documents and information to ensure compliance as may be requested
by the Company or the Placement Agent;
(b) Prior
to the execution of this Subscription Agreement, the Purchaser and the Purchaser’s attorney, accountant, purchaser representative
and/or tax advisor, if any (collectively, “Advisors”), received and carefully reviewed the PPM, this Subscription Agreement,
and each of the Transaction Documents, and all other documents requested by the Purchaser or its Advisors, and understood the information
contained therein;
(c) Neither
the United States Securities and Exchange Commission (the “Commission”) nor any state securities commission has approved
or disapproved of the Securities or passed upon or endorsed the merits of the Offering or confirmed the accuracy or determined
the adequacy of the PPM. The PPM has not been reviewed by any Federal, state or other regulatory authority. No representation to
the contrary has been made to the Purchaser, and any such representation could be a criminal offense;
(d) All
documents, records, and books pertaining to the investment in the Securities including, but not limited to, all information regarding
the Company, requested by the Purchaser and its Advisors, were made available for inspection and review;
(e) The
Purchaser and its Advisors have had a reasonable opportunity to ask questions of and receive answers from the Company’s officers
and any other persons authorized by the Company to answer such questions, concerning the Offering, the Securities, the Transaction
Documents and the business, financial condition, results of operations and prospects of the Company, and all such questions have
been answered by the Company to the full satisfaction of the Purchaser and its Advisors;
(f) In
evaluating the suitability of an investment in the Company, the Purchaser has not relied upon any representation or other information
(oral or written) other than those contained in the PPM;
(g) The
Purchaser is unaware of, is in no way relying on, and did not become aware of the offering of the Securities 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, radio or over the Internet,
in connection with the offering and sale of the Securities and is not subscribing for the Securities and did not become aware of
the Offering through or as a result of any seminar or meeting, or any solicitation of a subscription, involving a person not previously
known to the Purchaser in connection with investments in securities generally;
(h) The
Purchaser has taken no action which would give rise to any claim by any person for brokerage commissions, finders’ fees or
the like relating to this Subscription Agreement or the transactions contemplated hereby (other than fees to be paid by the Company
as described in the PPM);
(i) The
Purchaser, either alone or together with its Advisors 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 Offering to evaluate the merits and risks of an investment in the Securities and the Company and to make an informed investment
decision with respect thereto;
(j) The
Purchaser is not relying on the Company, the Placement Agent or any of their respective employees or agents with respect to the
legal, tax, economic and related considerations of an investment in any of the Securities, and as to such matters the Purchaser
has relied on the advice of, or has consulted with, only its own Advisors;
(k) The
Purchaser is acquiring the Securities solely for its own account for investment purposes and not with a view to resale or distribution
thereof, in whole or in part. The Purchaser has no agreement or arrangement, formal or informal, with any person to sell or transfer
all or any part of any of the Securities, and the Purchaser has no plans to enter into any such agreement or arrangement;
(l) The
Purchaser understands and agrees that purchase of the Securities is a high-risk investment and the Purchaser is able to afford
an investment in a speculative venture having the risks and objectives of the Company. The Purchaser knows it must bear the substantial
economic risks of the investment in the Securities indefinitely because none of the Securities may be offered, sold, pledged, hypothecated
or otherwise transferred or disposed of, directly or indirectly, unless subsequently registered under the Securities Act and applicable
state securities laws or an exemption from such registration requirements is available. Legends will be placed on the certificates
representing the Securities to the effect that the Securities have not been registered under the Securities Act or applicable state
securities laws, and appropriate notations thereof will be made in the Company’s books;
(m) The
Purchaser has adequate means of providing for its current financial needs and foreseeable contingencies and has no need for liquidity
from its investment in the Securities for an indefinite period of time;
(n) The
Purchaser is aware that an investment in the Securities involves a number of very significant risks and has carefully read and
considered the Company's periodic filings with the Commission, as well as the matters set forth in the PPM and, in particular,
the matters under the caption “Risk Factors” therein, and understands any of such risk may materially adversely affect
the Company’s operations and future prospects;
(o) At
the time the Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on which it exercises
any Warrants, it will be, an “accredited investor” within the meaning of Regulation D, Rule 501(a), promulgated by
the Commission under the Securities Act; the Purchaser has truthfully and accurately completed the Purchaser Questionnaire attached
to this Subscription Agreement and will submit to the Company in writing such further assurances and information of such status
as may be reasonably requested by the Company in order to verify Accredited Investor status under Regulation D, Rule 506;
(p) The
Purchaser: (i) if a natural person, represents that the Purchaser has reached the age of 21 and has full power and authority to
execute and deliver this Subscription 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 association, joint stock company, trust,
unincorporated organization or other entity, represents that such entity was not formed for the specific purpose of acquiring the
Securities, 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 Subscription Agreement
and all other related agreements or certificates and to carry out the provisions hereof and thereof and to purchase and hold the
Securities, the execution and delivery of this Subscription Agreement has been duly authorized by all necessary action, this Subscription
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 Subscription Agreement in a representative or fiduciary capacity, represents that it has full power
and authority to execute and deliver this Subscription Agreement in such capacity and on behalf of the subscribing individual,
ward, partnership, trust, estate, corporation, or limited liability company or partnership, or other entity for whom the Purchaser
is executing this Subscription Agreement, and such individual, partnership, ward, trust, estate, corporation, or limited liability
company or partnership, or other entity has full right and power to perform pursuant to this Subscription Agreement and make an
investment in the Company, and represents that this Subscription Agreement constitutes a legal, valid and binding obligation of
such entity. The execution and delivery of this Subscription Agreement will not violate or be in conflict with any order, judgment,
injunction, agreement or controlling document to which the Purchaser is a party or by which it is bound;
(q) The
Purchaser hereby acknowledges receipt and careful review of this Agreement, the PPM (including all exhibits thereto), the Registration
Rights Agreement, the Warrant and all other exhibits, annexes and appendices thereto (collectively referred to as the “Offering
Materials”), and has had access to the Company’s Annual Report on Form 10-K and the exhibits thereto for the fiscal
year ended December 31, 2014 (the “Form 10-K”) as well as all subsequent periodic and current reports filed with the
Commission as publicly filed with and available at the website of the Commission which can be accessed at www.sec.gov.
(r) The
Purchaser represents to the Company that any information which the Purchaser 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 or
exclusion from registration under the Securities Act and any state securities laws in connection with the offering of Securities
as described in the PPM;
(s) The
Purchaser has significant prior investment experience, including investment in non-listed and unregistered securities. The Purchaser
has a sufficient net worth to sustain a loss of its entire investment in the Company in the event such a loss should occur. The
Purchaser’s overall commitment to investments which are not readily marketable is not excessive in view of the Purchaser’s
net worth and financial circumstances and the purchase of the Securities will not cause such commitment to become excessive. This
investment is a suitable one for the Purchaser;
(t) The
Purchaser is satisfied that it has received adequate information with respect to all matters which it or its Advisors, if any,
consider material to its decision to make this investment;
(u) The
Purchaser acknowledges that any and all estimates or forward-looking statements or projections included in the PPM were prepared
by the Company in good faith, but that the attainment of any such projections, estimates or forward-looking statements cannot be
guaranteed, will not be updated by the Company and should not be relied upon;
(v) No
oral or written representations have been made, or oral or written information furnished, to the Purchaser or its Advisors, if
any, in connection with the offering of the Securities other than those contained in the PPM;
(w) Within
five (5) days after receipt of a request from the Company, the Purchaser will provide such information and deliver such documents
as may reasonably be necessary to comply with any and all laws to which the Company or this Offering is subject;
(x) THE
SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED
AND SOLD IN RELIANCE ON EXEMPTIONS OR EXCLUSIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE SECURITIES ARE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED, TRANSFERRED OR DISPOSED
OF, DIRECTLY OR INDIRECTLY, EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE
SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY,
NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE
PPM. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL;
(y) In
making an investment decision, the Purchaser has relied on its own examination of Company and the terms of the Offering, including
the merits and risks involved;
(z) (For
ERISA plans only) The fiduciary of the ERISA plan (the “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 Purchaser or Plan fiduciary (a) is responsible
for the decision to invest in the Company; (b) is independent of the Company and any of its affiliates; (c) is qualified to make
such investment decision; and (d) in making such decision, the Purchaser or Plan fiduciary has not relied on any advice or recommendation
of the Company or any of its affiliates; and
(aa) The
Purchaser has read in its entirety the PPM and all exhibits and annexes thereto, including, but not limited to, all information
relating to the Company, and the Securities, and understands fully to its full satisfaction all information included in the PPM
including, but not limited to, the Section entitled “Risk Factors”.
(bb) The
Purchaser represents that the Purchaser was contacted regarding the sale of the Securities by the Company or the Placement Agent
(or another person whom the Purchaser believed to be an authorized agent or representative thereof) with whom the Purchaser had
a prior substantial pre-existing relationship.
(cc) The
Purchaser consents to the placement of a legend on any certificate or other document evidencing the Securities and, when issued,
the Warrant Shares, to the effect that such securities have not been registered under the Securities Act or any state securities
or “blue sky” laws and setting forth or referring to the restrictions on transferability and sale applicable thereto
and referenced in this Agreement. The Purchaser is aware that the Company will make a notation in its appropriate records with
respect to the restrictions on the transferability of such Securities. The legend to be placed on each certificate shall be in
form substantially similar to the following:
“THE SECURITIES REPRESENTED
BY THIS CERTIFICATE WERE ISSUED PURSUANT TO A MARCH 2015 PRIVATE PLACEMENT AND HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES OR “BLUE SKY LAWS,” AND MAY NOT
BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE
WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO
THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”
(dd) The
Purchaser acknowledges that if he or she is a registered representative of a Financial Industry Regulatory Authority (“FINRA”)
member firm, he or she must give such firm the notice required by the FINRA’s Rules of Fair Practice, receipt of which must
be acknowledged by such firm prior to an investment in the Securities.
(ee) Reserved.
(ff) The
Purchaser agrees not to issue any public statement with respect to the Offering, the Purchaser’s investment or proposed investment
in the Company or the terms of any agreement or covenant between them and the Company without the Company’s prior written
consent, except such disclosures as may be required under applicable law.
(gg) The
Purchaser acknowledges that the Offering and the information contained in the Offering Materials or otherwise made available to
the Purchaser is confidential and non-public and agrees that the Offering and all information shall be kept in confidence by the
Purchaser and neither used by the Purchaser for the Purchaser’s personal benefit (other than in connection with this subscription)
nor disclosed to any third party for any reason, notwithstanding that a Purchaser’s subscription may not be accepted by the
Company; provided, however, that (a) the Purchaser may disclose such information to its affiliates and advisors who may have a
need for such information in connection with providing advice to the Purchaser with respect to its investment in the Company so
long as such affiliates and advisors have an obligation of confidentiality, and (b) this obligation shall not apply to any such
information that (i) is part of the public knowledge or literature and readily accessible at the date hereof, (ii) becomes part
of the public knowledge or literature and readily accessible by publication (except as a result of a breach of this provision)
or (iii) is received from third parties without an obligation of confidentiality (except third parties who disclose such information
in violation of any confidentiality agreements or obligations, including, without limitation, any subscription or other similar
agreement entered into with the Company).
(ii) The
Purchaser understands that the Securities are “restricted securities” as defined in Rule 144 of the Securities Act
and are therefore subject to restrictions on resale. The Purchaser understands and hereby acknowledges that, except as provided
in the Registration Rights Agreement, the Company is under no obligation to register the Securities under the Securities Act or
any state securities or “blue sky” laws or to assist the Purchaser in obtaining an exemption from various registration
requirements, other than as set forth herein.
6. Intentionally
Omitted.
7. Indemnification.
The Purchaser agrees to indemnify and hold harmless the Company, the Placement Agent, the Escrow Agent and each of their respective
officers, directors, managers, employees, agents, attorneys, control persons and affiliates upon demand from and against all losses,
liabilities, claims, damages, costs, fees and expenses whatsoever (including, but not limited to, any and all expenses incurred
in investigating, preparing or defending against any litigation commenced or threatened) based upon or arising out of any actual
or alleged false acknowledgment, representation or warranty, or misrepresentation or omission to state a material fact, or breach
by the Purchaser of any covenant or agreement made by the Purchaser herein or in any other document delivered in connection with
this Subscription Agreement or any other Transaction Document.
8. Binding
Effect. This Subscription Agreement will survive the death or disability of the Purchaser and will be binding upon and inure
to the benefit of the parties and their heirs, executors, administrators, successors, legal representatives, and permitted assigns.
If the Purchaser is more than one person, the obligations of the Purchaser hereunder will be joint and several and the agreements,
representations, warranties and acknowledgments herein will be deemed to be made by and be binding upon each such person and such
person’s heirs, executors, administrators, successors, legal representatives and permitted assigns.
9. Modification.
This Subscription Agreement will not be modified or waived except by an instrument in writing signed by the party against whom
any such modification or waiver is sought.
10. Notices.
Any notice or other communication required or permitted to be given hereunder will be in writing and will be mailed by certified
mail, return receipt requested, or delivered by reputable overnight courier such as FedEx against receipt to the party to whom
it is to be given (a) if to the Company, at the address set forth on the signature page below or (b) if to the Purchaser, at the
address set forth on the signature page hereof, and (c) if to the Placement Agent, at the address set forth on the Instructions
page above (or, in either case, to such other address as the party being notified will have furnished in writing in accordance
with the provisions of this Section 10). Any notice or other communication given by certified mail will be deemed given at the
time of certification thereof, except for a notice changing a party’s address which will be deemed given at the time of receipt
thereof. Any notice or other communication given by overnight courier will be deemed given at the time of delivery.
11. Assignability.
This Subscription Agreement and the rights, interests and obligations hereunder are not transferable or assignable by the Purchaser
and the transfer or assignment of any of the Securities will be made only in accordance with all applicable laws.
12. Applicable
Law. This Subscription Agreement will be governed by and construed under the laws of the State of Nevada as applied to agreements
among Nevada residents entered into and to be performed entirely within Nevada. The parties hereto (1) agree that any legal suit,
action or proceeding arising out of or relating to this Subscription Agreement may be instituted in the state or federal courts
sitting in the State of Nevada, (2) waive any objection which the parties may have now or hereafter to the venue of any such suit,
action or proceeding, and (3) irrevocably consent to the jurisdiction of the state and federal courts sitting in the State of Nevada
in any such suit, action or proceeding. Each of the parties hereto further agrees to accept and acknowledge service of any and
all process which may be served in any such suit, action or proceeding in the state or federal courts sitting in Nevada and agrees
that service of process upon it mailed by certified mail to its address will be deemed in every respect effective service of process
upon it, in any such suit, action or proceeding. THE PARTIES HERETO, TO THE EXTENT PERMITTED BY APPLICABLE LAW, WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS SUBSCRIPTION AGREEMENT OR ANY DOCUMENT
OR AGREEMENT CONTEMPLATED HEREBY.
13. Blue
Sky Qualification. The purchase of Securities pursuant to this Subscription Agreement is expressly conditioned upon the exemption
from qualification of the offer and sale of the Securities from applicable federal and state securities laws.
14. Use
of Pronouns. All pronouns and any variations thereof used herein will be deemed to refer to the masculine, feminine, neuter,
singular or plural as the identity of the person or persons referred to may require.
15. Confidentiality.
The Purchaser acknowledges and agrees that any information or data the Purchaser has acquired from or about the Company not otherwise
properly in the public domain, was received in confidence. The Purchaser agrees not to divulge, communicate or disclose, except
as may be required by law or for the performance of this Subscription Agreement, or use to the detriment of the Company or for
the benefit of any other person or persons, or misuse in any way, any confidential information of the Company, including any trade
or business secrets of the Company and any business materials that are treated by the Company as confidential or proprietary, including,
without limitation, confidential information obtained by or given to the Company about or belonging to third parties.
16. Miscellaneous.
(a) This
Subscription Agreement, together with the other Transaction Documents, constitutes the entire agreement between the Purchaser and
the Company with respect to the subject matter hereof and supersedes all prior oral or written agreements and understandings, if
any, relating to the subject matter hereof. The terms and provisions of this Subscription Agreement may be waived, or consent for
the departure therefrom granted, only by a written document executed by the party entitled to the benefits of such terms or provisions.
(b) Each
of the Purchaser’s and the Company’s representations and warranties made in this Subscription Agreement will survive
the execution and delivery hereof and delivery of the Securities.
(c) Each
of the parties hereto will pay its own fees and expenses (including the fees of any attorneys, accountants, appraisers or others
engaged by such party) in connection with this Subscription Agreement and the transactions contemplated hereby whether or not the
transactions contemplated hereby are consummated.
(d) This
Subscription Agreement may be executed in one or more counterparts each of which will be deemed an original, but all of which will
together constitute one and the same instrument.
(e) Each
provision of this Subscription Agreement will be considered separable and, if for any reason any provision or provisions hereof
are determined to be invalid or contrary to applicable law, such invalidity or illegality will not impair the operation of or affect
the remaining portions of this Subscription Agreement.
(f) Paragraph
titles are for descriptive purposes only and will not control or alter the meaning of this Subscription Agreement as set forth
in the text.
17. Signature
Page. It is hereby agreed by the parties hereto that the execution by the Purchaser of this Subscription Agreement, in the
place set forth below, will be deemed and constitute the agreement by the Purchaser to be bound by all of the terms and conditions
hereof as well as by each of the other Transaction Documents, and will be deemed and constitute the execution by the Purchaser
of all such Transaction Documents without requiring the Purchaser’s separate signature on any of such Transaction Documents.
[REMAINDER OF PAGE INTENTIONALLY LEFT
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PERSHING GOLD CORPORATION
SIGNATURE PAGE TO
SUBSCRIPTION AGREEMENT
Purchaser hereby elects to purchase
a total of ______Unit(s) at a purchase price of $0.325 per Unit (NOTE: to be completed by the Purchaser).
Date (NOTE: To be completed by the Purchaser):
__________________, 2015
If the
Purchaser is an INDIVIDUAL, and if purchased as JOINT TENANTS, as TENANTS IN COMMON, or as COMMUNITY PROPERTY:
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If the
Purchaser is a PARTNERSHIP, CORPORATION, LIMITED LIABILITY COMPANY or TRUST:
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AGREED AND ACCEPTED:
PERSHING GOLD CORPORATION
Exhibit 10.2
PERSHING GOLD CORPORATION
FORM OF REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION
RIGHTS AGREEMENT (the “Agreement”), dated as of April __, 2015, is made by and between Pershing Gold
Corporation, a Nevada corporation (the “Company”) and the undersigned investors (each an “Investor”
and collectively, the “Investors”).
RECITALS
WHEREAS, in
connection with that certain Subscription Agreements by and between the Company and the Investors (the “Subscription
Agreement”), each Investor has purchased from the Company certain units (the “Units”),
each Unit consisting of (a) one share (the “Share” and collectively with all Shares issued as part of
the Units, “Shares”) of common stock, par value $0.0001 per share, of the Company (“Common
Stock”), and (b) a warrant (the “Warrant” and collectively with all Warrants issued as
part of the Units, “Warrants”) to purchase 0.40 of a share of Common Stock at an exercise price of $0.44
per share for a period of twenty-four (24) months from the date of issuance, at a negotiated price of $0.325 per Unit.
WHEREAS, to
induce the Investors to purchase the Units, the Company has agreed to grant the Investors certain rights with respect to registration
of Registrable Securities under the Securities Act pursuant to the terms of this Agreement.
AGREEMENT
NOW, THEREFORE,
the Company and the Investors, and each of them, hereby covenant and agree as follows:
1. Recitals.
The recitals set forth above are true and correct and are incorporated herein by reference.
2. Certain
Definitions. As used in this Agreement, the following terms shall have the following respective meanings:
“Agreement”
shall have the meaning set forth in the Preamble hereof.
“Automatic
Registration Statement” shall have the meaning set forth in Section 3(a) of this Agreement.
“Closing”
shall mean the closing of the sale of the Units purchased by an Investor.
“Closing
Date” means the date on which the Closing occurred.
“Commission”
shall mean the Securities and Exchange Commission, or any other federal agency at the time administering the Securities Act.
“Common Stock”
shall have the meaning set forth in the Recitals hereof.
“Company”
shall have the meaning set forth in the Preamble hereof.
“Effectiveness
Date” shall mean that date which is sixty (60) days following the Filing Date (in case of a no review by the Commission
staff) or one hundred eighty (180) days following the Filing Date (in the case of a review by the Commission staff).
“Delay Period”
shall have the meaning set forth in Section 3(b) of this Agreement.
“Effectiveness
Period” shall have the meaning set forth in Section 3(a) of this Agreement.
“End of Suspension
Notice” shall have the meaning set forth in Section 3(c) of this Agreement.
“Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended.
“Filing Date”
shall mean with respect to the Automatic Registration Statement required hereunder, that date which is forty-five (45) days following
the Final Closing Date and, with respect to any additional Registration Statements which may be required herein, the earliest practical
date on which the Company is permitted by SEC Guidance to file such additional Registration Statement related to the Registrable
Securities.
“Final Closing
Date” means closing date of the Offering after which the Company ceases to offer for sale the Units.
“Investor”
shall have the meaning set forth in the Preamble hereof.
“Offering”
shall have the meaning set forth in the Subscription Agreements.
“Piggyback
Registration” shall have the meaning set forth in Section 4(a) of this Agreement.
“Prospectus”
means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated
by the Commission pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments
and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to
be incorporated by reference in such Prospectus.
“Purchase
Price” shall have the meaning set forth in the Subscription Agreements.
“Register,”
“registered” and “registration” each shall refer to a registration of the Registrable
Securities effected by preparing and filing a Registration Statement or statements or similar documents in compliance with the
Securities Act and the declaration or ordering of effectiveness of such Registration Statement or document by the Commission.
“Registrable
Securities” shall mean (a) all Shares, (b) all Warrant Shares then issuable upon exercise of the Warrants delivered
to the Investors in connection with the Offering (assuming on such date the Warrants are exercised in full without regard to any
exercise limitations therein), and (c) any securities issued or then issuable upon any stock split, dividend or other distribution, recapitalization
or similar event with respect to the foregoing provided, however, that any such Registrable Securities shall cease to be Registrable
Securities (i) when subject to an effective Registration Statement under the Securities Act as provided for hereunder, (ii) upon
any sale pursuant to a Registration Statement or Rule 144 under the Securities Act or (iii) at such time such securities become
eligible for resale without volume or manner of sale restrictions and without current public information pursuant to Rule 144(c)
as set forth in a written opinion letter to such effect, addressed, delivered and acceptable to the affected Investor.
“Registration
Statement” means any registration statement required to be filed hereunder pursuant to Sections 3 or
4 and any additional registration statements contemplated herein, including (in each case) the Prospectus, amendments and
supplements to any such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference or deemed to be incorporated by reference in any such registration statement.
“Rule 415”
means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time
to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.
“Rule 424”
means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time
to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.
“SEC Guidance”
means (i) any publicly-available written or oral guidance, comments, requirements or requests of the Commission staff and (ii)
the Securities Act.
“Securities
Act” shall mean the United States Securities Act of 1933, as amended.
“Selling
Stockholder Questionnaire” shall have the meaning set forth in Section 6 of this Agreement.
“Shares”
shall have the meaning set forth in the Recitals hereof.
“Subscription
Agreement” shall have the meaning set forth in the Recitals hereof.
“Suspension
Event” shall have the meaning set forth in Section 3(c) of this Agreement.
“Suspension
Notice” shall have the meaning set forth in Section 3(c) of this Agreement.
“Warrant”
shall have the meaning set forth in the Recitals hereof.
“Warrant
Shares” shall mean the shares of Common Stock to be issued upon exercise of the Warrants.
Capitalized terms used
but not defined herein shall have the meanings set forth in the Subscription Agreement.
3. Automatic
Registration.
(a) On
or prior to the Filing Date, the Company shall prepare and file with the Commission a registration statement (the “Automatic
Registration Statement”) covering the resale of all of the Registrable Securities for an offering to be made on a
continuous basis pursuant to Rule 415. The Automatic Registration Statement required hereunder shall be on Form S-1 or Form S-3,
as applicable, and shall contain substantially the “Plan of Distribution” attached hereto as Annex A.
Subject to the terms of this Agreement, the Company shall use its reasonable best efforts to cause the Automatic Registration Statement
to be declared effective under the Securities Act as promptly as possible after the filing thereof, but in any event not later
than the Effectiveness Date, and shall use its best efforts to keep the Automatic Registration Statement continuously effective
under the Securities Act until the earlier of (i) the date when all Registrable Securities covered by the Registration Statement
have been sold thereunder or pursuant to Rule 144 or (ii) the date when all Registrable Securities covered by the Registration
Statement may be sold by non-affiliates of the Company without the requirement for the Company to be in compliance with the current
public information requirement under Rule 144(c), as determined by counsel to the Company pursuant to a written opinion letter
to such effect, addressed, delivered and acceptable to the affected Investor (the “Effectiveness Period”).
The maximum amount of Registrable Securities that may be included in the Automatic Registration Statement at any one time shall
be limited by Rule 415 as required by the Commission. In the event that there is a limitation by the Commission on the number of
Registrable Securities that may be included for registration at one time, the Company shall promptly so advise the Investors and
use its best efforts to file an additional Automatic Registration Statement covering such ineligible Registrable Securities, on
a pro-rata basis, within 30 days of the date such securities become eligible and cause such Automatic Registration Statement to
be declared effective by the Commission as soon as reasonably practicable.
(b) Notwithstanding
anything to the contrary set forth herein, the Company shall have the right to delay the filing of the Registration Statement for
a period not in excess of 60 consecutive days and no more than 90 days in any consecutive 12-month period (a “Delay
Period”), if the Company is pursuing a public offering of securities and the underwriter recommends a Delay Period.
(c) In
the case of an event that causes the Company to suspend the use of a Registration Statement (a “Suspension Event”),
the Company shall give written notice (a “Suspension Notice”) to the Investors to suspend sales of the
Registrable Securities included in the Registration Statement and such notice shall continue only for so long as the Suspension
Event or its effect is continuing. No Investor shall effect any sales of the Registrable Securities pursuant to such Registration
Statement (or such filings) at any time after it has received a Suspension Notice from the Company and prior to receipt of an End
of Suspension Notice (as defined below) with respect to such Registration Statement. The Investors may recommence effecting sales
of the Registrable Securities pursuant to such Registration Statement (or such filings) following further notice to such effect
(an “End of Suspension Notice”) from the Company, which End of Suspension Notice shall be given by the
Company to the Investors in the manner described above promptly following the conclusion of any Suspension Event and its effect.
(d) If:
(i) the Automatic Registration Statement is not filed on or prior to its Filing Date (if the Company files the Automatic Registration
Statement without affording the Holders the opportunity to review and comment on the same as required by Section 5(a)
herein, the Company shall be deemed to have not satisfied this clause (i)), or (ii) a Registration Statement registering for resale
all of the Registrable Securities is not declared effective by the Commission by the Effectiveness Date (unless the reason for
such non-registration of all or any portion of the Registrable Securities is as a result of SEC Guidance under Rule 415 or similar
rule which limits the number of Registrable Securities which may be included in a registration statement with respect to the Holders),
or (iii) after the effective date of a Registration Statement, such Registration Statement ceases for any reason to remain continuously
effective as to all Registrable Securities included in such Registration Statement, or the Investors are otherwise not permitted
to utilize the prospectus therein to resell such Registrable Securities, for more than ten (10) consecutive calendar days or more
than an aggregate of fifteen (15) calendar days (which need not be consecutive calendar days) during any 12-month period (any such
failure or breach being referred to as an “Event”, and for purposes of clause (i) and (iv), the date
on which such Event occurs, and for purpose of clause (iii) the date on which such ten (10) or fifteen (15) calendar day period,
as applicable, is exceeded being referred to as an “Event Date”), then, in addition to any other rights
the Investors may have hereunder or under applicable law, on each such Event Date and on each monthly anniversary of each such
Event Date (if the applicable Event shall not have been cured by such date) until the applicable Event is cured, the Company shall
pay to each Investor an amount in cash, as partial liquidated damages and not as a penalty, equal to 1.0% of the aggregate purchase
price paid by such Investor pursuant to the Subscription Agreement. The parties agree that the maximum aggregate liquidated damages
payable to an Investor under this Agreement shall be 15% of the aggregate Purchase Price paid by such Investor. If the
Company fails to pay any partial liquidated damages pursuant to this Section in full within seven days after the date payable,
the Company will pay interest thereon at a rate of 18% per annum (or such lesser maximum amount that is permitted to be paid by
applicable law) to the Investor, accruing daily from the date such partial liquidated damages are due until such amounts, plus
all such interest thereon, are paid in full. The partial liquidated damages pursuant to the terms hereof shall apply on a daily
pro rata basis for any portion of a month prior to the cure of an Event. Notwithstanding the foregoing, no payments shall be owed
(i) to any affiliate of the Company, (ii) with respect to any period during which all of the holder’s Registrable Shares
may be sold by such holder under Rule 144 without the requirement for the Company to be in compliance with the current public information
requirement under Rule 144(c), or (iii) in circumstances described in Section 3(c).
4. Piggyback
Registrations.
(a) With
respect to any Registrable Securities not otherwise included in the Automatic Registration Statement or any other Registration
Statement as a result of any limitation imposed by the Commission under Rule 415 (the “Excluded Registrable Securities”),
whenever the Company proposes to register (including, for this purpose, a registration effected by the Company for other shareholders)
any of its securities under the Securities Act (other than pursuant to (i) an Automatic Registration pursuant to Section 3
hereof or (ii) registration pursuant to a registration statement on Form S-4 or S-8 or any successor forms thereto), and the
registration form to be used may be used for the registration of Registrable Securities (a “Piggyback Registration”),
the Company will give written notice to the holder of Excluded Registrable Securities of its intention to effect such a registration
and will, subject to the provisions of Section 4(b) hereof, include in such registration all Excluded Registrable Securities
with respect to which the Company has received a written request for inclusion therein within twenty (20) days after the receipt
of the Company’s notice.
(b) If
a Piggyback Registration is an underwritten secondary registration on behalf of holders of the Company’s securities, and
the managing underwriters advise the Company in writing that in their opinion the number of securities requested to be included
in such registration exceeds the number which can be sold in such offering without adversely affecting the marketability of the
offering, the Company will, if permitted by all applicable agreements, include in such registration a pro rata share of Excluded
Registrable Securities requested to be included in such Registration Statement as calculated by dividing the number of Excluded
Registrable Securities requested to be included in such Registration Statement by the number of the Company’s securities
requested to be included in such Registration Statement by all selling security holders. In such event, the holder of Excluded
Registrable Securities shall continue to have registration rights under this Agreement with respect to any Excluded Registrable
Securities not so included in such Registration Statement.
(c) Notwithstanding
the foregoing, if, at any time after giving a notice of Piggyback Registration and prior to the effective date of the Registration
Statement filed in connection with such registration, the Company shall determine for any reason not to register or to delay registration
of such securities, the Company may, at its election, give written notice of such determination to each record holder of Excluded
Registrable Securities and, following such notice, (i) in the case of a determination not to register, shall be relieved of its
obligation to register any Excluded Registrable Securities in connection with such registration, and (ii) in the case of determination
to delay registering, shall be permitted to delay registering any Excluded Registrable Securities for the same period as the delay
in registering such other securities.
5. Registration
Procedures. If and whenever the Company is required to effect the registration of any Registrable Securities pursuant to this
Agreement, the Company will:
(a) not
less than four (4) trading days prior to the filing of each Registration Statement and not less than one (1) trading day prior
to the filing of any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated
or deemed to be incorporated therein by reference), and subject, if appropriate, to the relevant parties’ entry into a customary
agreement to maintain the confidentiality of any non-public information provided (a “Confidentiality Agreement”)
or the Company may excise any information which would constitute material non-public information regarding the Company, the Company
shall (i) furnish to one counsel on behalf of all sellers of Registrable Securities copies of all such documents proposed to be
filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the review
of such sellers, and (ii) cause its officers and directors, counsel and independent registered public accountants to respond to
such inquiries as shall be necessary, in the reasonable opinion of counsel to the sellers of Registrable Securities, to conduct
a reasonable investigation within the meaning of the Securities Act. Notwithstanding the above, the Company shall not be obligated
to provide each seller of Registrable Securities advance copies of any universal shelf registration statement registering securities
in addition to those required hereunder, or any Prospectus prepared thereto.
(b) prepare
and file with the Commission the Registration Statement with respect to such Registrable Securities and use its best efforts to
cause such Registration Statement to become effective in an expeditious manner;
(c)
(i) prepare and file with the Commission such amendments, including post-effective amendments, to a Registration Statement and
the Prospectus used in connection therewith as may be necessary to keep a Registration Statement continuously effective as to the
applicable Registrable Securities for the Effectiveness Period, (ii) cause the related Prospectus to be amended or supplemented
by any required Prospectus supplement (subject to the terms of this Agreement), and, as so supplemented or amended, to be filed
pursuant to Rule 424, (iii) respond as promptly as reasonably possible to any comments received from the Commission with respect
to a Registration Statement or any amendment thereto and provide as promptly as reasonably possible to one counsel for all sellers
of Registrable Securities true and complete copies of all correspondence from and to the Commission relating to a Registration
Statement (provided that, the Company may either obtain a Confidentiality Agreement from Investors or excise any information contained
therein which would constitute material non-public information regarding the Company), and (iv) comply in all material respects
with the applicable provisions of the Securities Act and the Exchange Act, as amended, with respect to the disposition of all Registrable
Securities covered by a Registration Statement during the applicable period in accordance (subject to the terms of this Agreement)
with the intended methods of disposition by each seller of Registrable Securities thereof set forth in such Registration Statement
as so amended or in such Prospectus as so supplemented.
(d) if
during the Effectiveness Period, the number of Registrable Securities at any time exceeds 100% of the number of shares of Common
Stock then registered in a Registration Statement, then the Company shall file as soon as reasonably practicable, but in any case
prior to the applicable Filing Date, an additional Registration Statement covering the resale by the Investors of not less than
the number of such Registrable Securities.
(e) furnish
to each seller of Registrable Securities and to each underwriter such number of copies of the Registration Statement and the Prospectus
included therein (including each preliminary prospectus) as such persons reasonably may request in order to facilitate the intended
disposition of the Registrable Securities covered by such Registration Statement;
(f) use
its commercially reasonable efforts (i) to register or qualify the Registrable Securities covered by such Registration Statement
under the state securities or “blue sky” laws of such jurisdictions as the sellers of Registrable Securities or, in
the case of an underwritten public offering, the managing underwriter, reasonably shall request, (ii) to prepare and file in those
jurisdictions such amendments (including post-effective amendments) and supplements, and take such other actions, as may be necessary
to maintain such registration and qualification in effect at all times for the period of distribution contemplated thereby and
(iii) to take such further action as may be necessary or advisable to enable the disposition of the Registrable Securities in such
jurisdictions, provided, that the Company shall not for any such purpose be required to qualify generally to transact business
as a foreign corporation in any jurisdiction where it is not so qualified or to consent to general service of process in any such
jurisdiction;
(g) use
its commercially reasonable efforts to list the Registrable Securities covered by such Registration Statement with any securities
exchange on which the Common Stock of the Company is then listed;
(h) immediately
notify each seller of Registrable Securities and each underwriter under such Registration Statement, at any time when a Prospectus
relating thereto is required to be delivered under the Securities Act, of the happening of any event of which the Company has knowledge
as a result of which the Prospectus contained in such Registration Statement, as then in effect, includes any untrue statement
of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing and promptly amend or supplement such Registration Statement to correct
any such untrue statement or omission;
(i) promptly
notify each seller of Registrable Securities of the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that purpose and make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible time;
(j) if
the offering is an underwritten offering, enter into a written agreement with the managing underwriter selected in the manner herein
provided in such form and containing such provisions as are usual and customary in the securities business for such an arrangement
between such underwriter and companies of the Company’s size and investment stature, including, without limitation, customary
indemnification and contribution provisions;
(k) if
the offering is an underwritten offering, at the request of any Investor, furnish to such Investor on the date that Registrable
Securities are delivered to the underwriters for sale pursuant to such offering: (i) a copy of an opinion, dated such date, of
counsel representing the Company for the purposes of such registration, addressed to the underwriters, stating that such Registration
Statement has become effective under the Securities Act and that (A) to the knowledge of such counsel, no stop order suspending
the effectiveness thereof has been issued and no proceedings for that purpose have been instituted or are pending or contemplated
under the Securities Act, (B) the Registration Statement, the related Prospectus and each amendment or supplement thereof comply
as to form in all material respects with the requirements of the Securities Act (except that such counsel need not express any
opinion as to financial statements or other financial, statistical, or technical information, including without limitation information
regarding mineral reserves, mineralized material or resources, contained therein) and (C) to such other effects as reasonably may
be requested by counsel for the underwriters; and (ii) a copy of a letter dated such date from the independent public accountants
retained by the Company, addressed to the underwriters, stating that they are independent registered public accountants within
the meaning of the Securities Act and that, in the opinion of such accountants, the financial statements of the Company included
in the Registration Statement or the Prospectus, or any amendment or supplement thereof, comply as to form in all material respects
with the applicable accounting requirements of the Securities Act, and such letter shall additionally cover such other financial
matters (including information as to the period ending no more than five business days prior to the date of such letter) with respect
to such registration as such underwriters reasonably may request;
(l) take
all actions reasonably necessary to facilitate the timely preparation and delivery of certificates (not bearing any legend restricting
the sale or transfer of such securities) representing the Registrable Securities sold pursuant to the Registration Statement and
to enable such certificates to be in such denominations and registered in such names as each Investor or any underwriters may reasonably
request; and
(m) take
all other reasonable actions necessary to expedite and facilitate the registration of the Registrable Securities pursuant to the
Registration Statement.
6. Obligations
of Investors. Each Investor shall furnish to the Company such information regarding such Investor, the number of Registrable
Securities owned and proposed to be sold by it, the intended method of disposition of such securities and any other information
as shall be required to effect the registration of the Registrable Securities, and cooperate with the Company in preparing the
Registration Statement and in complying with the requirements of the Securities Act. Each Investor agrees to furnish to the Company
a completed questionnaire in the form attached to this Agreement as Exhibit A to the Subscription Agreement (a “Selling
Stockholder Questionnaire”) on a date that is not less than fifteen (15) trading days prior to the Filing.
7. Expenses.
(a) All
expenses incurred by the Company in complying with Sections 3, 4 and 5 including, without limitation, all registration
and filing fees (including the fees of the Commission and any other regulatory body with which the Company is required to file),
printing expenses, fees and disbursements of counsel and independent public accountants for the Company, fees and expenses (including
counsel fees) incurred in connection with complying with state securities or “blue sky” laws, and fees of transfer
agents and registrars are referred to herein as “Registration Expenses”. All underwriting discounts and
selling commissions applicable to the sale of Registrable Securities are referred to herein as “Selling Expenses”.
(b) The
Company will pay all Registration Expenses in connection with any Registration Statement filed hereunder, and the Selling Expenses
in connection with each such Registration Statement shall be borne by the participating sellers in proportion to the number of
Registrable Securities sold by each or as they may otherwise agree.
(c) Notwithstanding
anything herein to the contrary, at the request of any Investor, the Company shall employ its counsel at the Company’s expense
to prepare any and all legal opinions necessary for the prompt removal of restrictive legends from certificates representing Registrable
Securities as, when and to the extent such legends may be removed in compliance with the Securities Act and/or Rule 144.
8. Indemnification
and Contribution.
(a) In
the event of a registration of any of the Registrable Securities under the Securities Act pursuant to the terms of this Agreement,
the Company will indemnify and hold harmless and pay and reimburse, each Investor thereunder, each underwriter of such Registrable
Securities thereunder and each other person, if any, who controls such seller or underwriter within the meaning of the Securities
Act or the Exchange Act, against any losses, claims, damages or liabilities, joint or several, to which each such Investor, underwriter
or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material
fact contained in any Registration Statement under which such Registrable Securities were registered under the Securities Act pursuant
hereto or any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise out
of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, or any violation or alleged violation of the Securities Act or any state securities
or “blue sky” laws and will reimburse each such Investor, each such underwriter and each such controlling person for
any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, that the Company will not be liable in any such case if and to the extent that any such loss, claim,
damage or liability arises out of or is based upon the Company’s reliance on an untrue statement or alleged untrue statement
or omission or alleged omission so made in conformity with information furnished in writing (which may include by email) by any
such seller, any such underwriter or any such controlling person in writing specifically for use in such Registration Statement
or prospectus.
(b) In
the event of a registration of any of the Registrable Securities under the Securities Act pursuant hereto, each seller of such
Registrable Securities thereunder, severally and not jointly, will indemnify and hold harmless the Company, each person, if any,
who controls the Company within the meaning of the Securities Act, each officer of the Company who signs the Registration Statement,
each director of the Company, each underwriter and each person who controls any underwriter within the meaning of the Securities
Act, against all losses, claims, damages or liabilities, joint or several, to which the Company or such officer, director, underwriter
or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon reliance on any untrue statement or alleged untrue statement of
any material fact contained in the registration statement under which such Registrable Securities were registered under the Securities
Act pursuant hereto or any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof,
or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse the Company and each such officer, director, underwriter
and controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action; provided that such seller will be liable hereunder in any such case if and only
to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in conformity with information pertaining to such seller, as
such, furnished in writing to the Company by such seller specifically for use in such Registration Statement or prospectus; and
provided, further, that the liability of each seller hereunder shall be limited to the proceeds received by such seller from the
sale of Registrable Securities covered by such Registration Statement. Notwithstanding the foregoing, the indemnity provided in
this Section 8(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or expense
if such settlement is effected without the consent of such indemnified party and provided further, that the Company shall not be
liable in any such case pursuant to this Section 8 to the extent that any such loss, claim, damage or liability (or
action in respect thereof) arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged
omission in such Registration Statement, which untrue statement or alleged untrue statement or omission or alleged omission is
completely corrected in an amendment or supplement to the Registration Statement and the undersigned indemnitees thereafter fail
to deliver or cause to be delivered such Registration Statement as so amended or supplemented prior to or concurrently with the
sale of the Registrable Securities to the person asserting such loss, claim, damage or liability (or actions in respect thereof)
or expense after the Company has furnished the undersigned with the same.
(c) Promptly
after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof,
but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to such indemnified
party other than under this Section 8 and shall only relieve it from any liability which it may have to such indemnified
party under this Section 8 if and to the extent the indemnifying party is materially prejudiced by such omission. In
case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the
defense thereof with counsel reasonably satisfactory to such indemnified party, and, after notice from the indemnifying party to
such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable
to such indemnified party under this Section 8 for any legal expenses subsequently incurred by such indemnified party
in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected; provided
that if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded based upon written advice of its counsel that there may be reasonable defenses available to it
that are different from or additional to those available to the indemnifying party, or if the interests of the indemnified party
reasonably may be deemed to conflict with the interests of the indemnifying party, the indemnified party shall have the right to
select a separate counsel and to assume such legal defenses and otherwise to participate in the defense of such action, with the
expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the indemnifying
party as incurred.
(d) In
order to provide for just and equitable contribution to joint liability under the Securities Act in any case in which either (i)
any holder of Registrable Securities exercising rights under this Agreement, or any controlling person of any such holder, makes
a claim for indemnification pursuant to this Section 8 but it is judicially determined (by the entry of a final judgment
or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal)
that such indemnification may not be enforced in such case notwithstanding the fact that this Section 8 provides for
indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any such selling holder
or any such controlling person in circumstances for which indemnification is provided under this Section 8; then, and
in each such case, the Company and such holder will contribute to the aggregate losses, claims, damages or liabilities to which
they may be subject (after contribution from others) in such proportion so that such holder is responsible for the portion represented
by the percentage that the public offering price of its Registrable Securities offered by the Registration Statement bears to the
public offering price of all securities offered by such Registration Statement, and the Company is responsible for the remaining
portion; provided, that, in any such case, (A) no such holder will be required to contribute any amount in excess of the public
offering price of all such Registrable Securities offered by it pursuant to such Registration Statement and (B) no person or entity
guilty of fraudulent misrepresentation (within the meaning of Section 12(f) of the Securities Act) will be entitled to contribution
from any person or entity who was not guilty of such fraudulent misrepresentation.
9. Changes
in Capital Stock. If, and as often as, there is any change in the capital stock of the Company by way of a stock split, stock
dividend, combination or reclassification, or through a merger, consolidation, reorganization or recapitalization, or by any other
means, appropriate adjustment shall be made in the provisions hereof so that the rights and privileges granted hereby shall continue
as so changed.
10. Representations
and Warranties of the Company. The Company represents and warrants to the Investors as follows:
(a) The
execution, delivery and performance of this Agreement by the Company have been duly authorized by all requisite corporate action
and will not violate any provision of law, any order of any court or other agency of government, the Articles of Incorporation
or Bylaws of the Company or any provision of any indenture, agreement or other instrument to which it or any or its properties
or assets is bound, conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under
any such indenture, agreement or other instrument or result in the creation or imposition of any lien, charge or encumbrance of
any nature whatsoever upon any of the properties or assets of the Company or its subsidiaries.
(b) This
Agreement has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms, subject to any applicable bankruptcy, insolvency or other laws affecting the rights of
creditors generally and to general equitable principles and the availability of specific performance.
11. Rule
144 Requirements. The Company agrees to, for so long as any Investor owns Registrable Securities:
(a) make
and keep current public information about the Company available, as those terms are understood and defined in Rule 144 under the
Securities Act;
(b) use
its best efforts to file with the Commission in a timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements); and
(c) furnish
to any Investor upon request (i) a written statement by the Company as to its compliance with the reporting requirements of Rule
144 and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), (ii)
a copy of the most recent annual or quarterly report of the Company, and (iii) such other reports and documents of the Company
as such holder may reasonably request to avail itself of any similar rule or regulation of the Commission allowing it to sell any
such securities without registration.
12. Termination.
All of the Company’s obligations to register Registrable Securities under Sections 3, 4, and 5 hereof
shall terminate with respect to each Investor upon the date on which such Investor no longer holds Registrable Securities or the
date on which such Investor’s Registrable Securities are eligible for resale without volume or manner of sale restrictions
pursuant to Rule 144 and without the requirement for the Company to be in compliance with the current public information requirement
under Rule 144(c), as determined by counsel to the Company pursuant to a written opinion letter to such effect, addressed, delivered
and acceptable to the affected Investor.
13. Miscellaneous.
(a) All
covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit
of the respective successors and assigns of the parties hereto (including without limitation transferees of any Registrable Securities),
whether so expressed or not.
(b) All
notices, requests, consents and other communications hereunder shall be in writing and shall be delivered in person, mailed by
certified mail, return receipt requested, postage prepaid, addressed or sent by a nationally recognized overnight courier service:
(i) if to the Company, at Pershing Gold Corporation, 1658 Cole Boulevard, Building 6, Suite 200, Lakewood, Colorado 80401, Attn:
Stephen Alfers, President & CEO ; and (ii) if to any holder of Registrable Securities, to such holder at such address as may
have been furnished to the Company or its counsel in writing by such holder; or, in any case, at such other address or addresses
as shall have been furnished, in writing to the Company or its counsel (in the case of a holder of Registrable Securities) or to
the holders of Registrable Securities (in the case of the Company) in accordance with the provisions of this paragraph. Any notice
or other communication or deliveries hereunder shall be deemed given and effective upon actual receipt by the party or at the address
of the party to whom such notice is required to be given.
(c) This
Agreement shall be governed by and construed under the laws of the State of Nevada, without giving effect to principles of conflicts
of laws. The Company and Investors (i) agree that any legal suit, action or proceeding arising out of or relating to this Agreement
may be instituted in the state or federal courts located in the State of Nevada, (ii) waive any objection which the Company or
Investors may have now or hereafter to the venue of any such suit, action or proceeding, and (iii) irrevocably consent to the jurisdiction
of any such federal or state court in any such suit, action or proceeding. The Company and Investors further agree to accept and
acknowledge service of any and all process which may be served in any such suit, action or proceeding and agree that service of
process upon the Company or Investors mailed by certified mail, return receipt requested, postage prepaid, to, in the case of the
Company, the Company’s address, and in the case of an Investor, to such Investor’s address as set forth on the Company’s
books and records, shall be deemed in every respect effective service of process upon the Company, in any such suit, action or
proceeding. THE PARTIES HERETO AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY.
(d) In
the event of a breach by the Company or by the Investors, of any of their obligations under this Agreement, the Investors or the
Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including
recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and each of the Investors
agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any
of the provisions of this Agreement and each of them hereby further agrees that, in the event of any action for specific performance
in respect of such breach, it shall waive the defense that a remedy at law would be adequate.
(e) This
Agreement may not be amended or modified without the written consent of the Company and the holders of a majority of the Registrable
Securities.
(f) Failure
of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof. No waiver shall be effective unless and until it is in writing and signed by the
party granting the waiver.
(g) This
Agreement may be executed in two or more counterparts (including by facsimile or .pdf transmission) each of which shall be deemed
an original, but all of which together shall constitute one and the same instrument. This Agreement, once executed by a party,
may be delivered to the other party hereto by facsimile transmission or sent by electronic mail of a copy of this Agreement bearing
the signature of the party so delivering this Agreement.
(h) If
any provision of this Agreement shall be held to be illegal, invalid or unenforceable, such illegality, invalidity or unenforceability
shall attach only to such provision and shall not in any manner affect or render illegal, invalid or unenforceable any other provision
of this Agreement, and this Agreement shall be carried out as if any such illegal, invalid or unenforceable provision were not
contained herein.
(i) This
Agreement constitutes the entire agreement among the Company and the Investors relative to the subject matter hereof and supersedes
in its entirety any and all prior agreements, understandings and discussions with respect thereto.
(j) The
headings of the sections of this Agreement are for convenience and shall not by themselves determine the interpretation of this
Agreement.
[Signature Page Follows]
Signature Page to the Registration Rights
Agreement
IN WITNESS WHEREOF,
the parties hereto have executed this Registration Rights Agreement as of the date set forth in the first paragraph hereof.
COMPANY:
PERSHING GOLD CORP.
INVESTORS:
The Investors set forth on Exhibit A
to this Agreement have executed a Subscription Agreement with the Company which provides, among other things, that by executing
the Subscription Agreement each Investor is deemed to have executed the REGISTRATION RIGHTS AGREEMENT in all respects and is bound
by its terms.
Exhibit 10.3
PLACEMENT AGENCY AGREEMENT
March 19, 2015
Introduction.
Subject to the terms and conditions herein (this "Agreement"), Pershing Gold Corp., a Nevada corporation (the "Company"),
hereby agrees to sell up to an aggregate of a minimum of $1,000,000 of its units (the "Minimum Offering") and a maximum
of $15,000,000 of its units (the "Maximum Offering"), which may be increased at the election of the Company up to $30,000,000
(the “Increased Maximum Offering”), with each unit (a "Unit") consisting of: (i) one share of common stock,
par value $0.0001 per share (the "Unit Shares"), and (ii) one warrant (an "Investor Warrant") to purchase 0.4
of one share of Common Stock at an exercise price of $0.44 per share (the "Investor Warrant Shares" and, together
with the Unit Shares and the Investor Warrants, the "Securities"). The Securities are being sold directly to a limited
number of "accredited investors" (each, an "Investor" and, collectively, the "Investors") as such
term is defined in Rule 501 of Regulation D ("Regulation D") promulgated under the Securities Act of 1933, as amended
(the "Securities Act") through Noble Financial Capital Markets (the "Placement Agent"). The purchase price
to the Investors for each Unit is $0.325. Each Investor Warrant will be exercisable on a cash or cashless basis (at the sole discretion
of the holder) until a registration statement covering the shares of Common Stock underlying the Investor Warrants has been declared
effective and thereafter for cash only; provided that if such registration statement is no longer effective, then the holders will
again have the option (at their sole discretion) to exercise on a cashless or cash basis. The Investor Warrants expire twenty four
(24) months from issuance.
The Placement Agent
may retain other brokers or dealers to act as sub-agents or selected-dealers on its behalf in connection with the Offering (as
defined below). The Securities are being offered pursuant to an Amended and Restated Confidential Private Placement Memorandum,
dated March 9, 2015, together with the exhibits and attachments thereto and any amendments or supplements thereto prepared and
furnished by the Company (the "Memorandum"). The Subscription Agreement, Registration Rights Agreement and Warrant attached
to the Memorandum are referred to herein collectively as the “Subscription Documents”.
The Company and the Placement
Agent hereby confirm their agreement as follows:
Section 1. Agreement to Act
as Placement Agent.
(a) On
the basis of the representations, warranties and agreements of the Company herein contained, and subject to all the terms and conditions
of this Agreement, the Placement Agent shall be the exclusive Placement Agent (together with the subagents engaged by Placement
Agent as set forth on Exhibit A (the “Subagents”)) in connection with the offering and sale by the Company of the Securities
pursuant to the Subscription Documents (collectively, the "Offering"), with the terms of the Offering to be set forth
in the Memorandum and the Subscription Documents. The Placement Agent will act on a reasonable "best efforts basis" and
the Company agrees and acknowledges that there is no guarantee of the successful placement of the Securities, or any portion thereof,
in the prospective Offering. Under no circumstances will the Placement Agent or any of its "Affiliates" (as defined below)
be obligated to underwrite or purchase any of the Securities for its own account or otherwise provide any financing. The Placement
Agent shall act solely as the Company's agent and not as principal. The Placement Agent shall have no authority to bind the Company
with respect to any prospective offer to purchase the Securities and the Company shall have the sole right to accept offers to
purchase Securities and may reject any such offer, in whole or in part. Subject to the terms and conditions hereof, payment of
the purchase price for, and delivery of, the Securities shall be made at one or more closings (each a "Closing" and the
date on which each Closing occurs, a "Closing Date") provided the Minimum Offering is met. As compensation for services
rendered, on each Closing Date, the Company shall pay to or on behalf of the Placement Agent the fees and expenses set forth below:
1. To
the Placement Agent, $25,000.00 non-refundable cash retainer due immediately upon execution of the Engagement Letter between the
Placement Agent and the Company dated February 20, 2015 (the “Engagement Letter”).
2. To
the Placement Agent, $200,000 cash fee (the “Placement Fee”), payable by wire, at the first closing of a sale of the
Securities.
3. At
each closing (“Closing”) of any sale of the Securities to purchasers,
(i) on
behalf of the Placement Agent, a cash fee to each Subagent (the “Subagent Fee”), payable by wire, equal to 8% of the
aggregate gross proceeds received from a sale of the Securities to any purchasers introduced by such Subagent, other than the Company
Investors and the Honig Investors, each as defined below, provided that Subagents shall receive no fees in respect of the funds
raised from Barry Honig, his family and affiliated entities or Dr. Frost as listed on Schedule 1 hereto (the “Honig Investors”)
or from investors introduced by the Company (the “Company Investors”); and
(ii) to
the Placement Agent, one or more warrants (the “Placement Agent Warrants”) to purchase common stock equal to 2% of
the number of shares of the Company’s common stock issued and sold to investors other than the Company Investors and the
Honig Investors and, on behalf of the Placement Agent, one or more warrants to each Subagent (the “Subagent Warrants”)
equal to 8% of the number of shares of the Company’s common stock issued and sold to any purchasers introduced by such Subagent
provided that Placement Agent and Subagents shall not be entitled to warrant coverage for shares purchased by the Honig Investors
or the Company Investors. The Placement Agent Warrants and the Subagent Warrants will have a term of 30 months and have an exercise
price equal to that of the shares issued in the Placement. The Placement Agent Warrants and the Subagent Warrants will be exercisable
on a cash or cashless basis until a registration statement covering the shares underlying the Placement Agent Warrants and the
Subagent Warrants has been declared effective, and thereafter for cash only; provided that if such registration statement is no
longer effective, the holder will again have the option to exercise on a cashless or cash basis. The Placement Agent Warrants and
the Subagent Warrants will not be transferable for one year from the date of issuance, except as permitted by the Financial Industry
Regulatory Authority (“FINRA”) Rule 5110(g)(1). Placement Agent shall also be granted one time piggyback registration
rights with respect to the shares underlying the Placement Agent Warrants and Subagent Warrants.
(b) The
Company will pay Placement Agent up to $25,000 for its reasonably incurred and documented placement agent legal fees. Other reasonably
incurred transaction related expenses, including out of pocket expenses, will also be reimbursed.
(c) The
term of the Placement Agent's exclusive engagement will be until the earlier of the completion of the Offering or April 21, 2015
(the "Term"), which term may be extended for an additional 30 days at the sole discretion of the Company; provided, however,
that either party hereto may terminate the engagement at any time upon 10 days written notice to the other party. Notwithstanding
anything to the contrary contained herein, the provisions concerning confidentiality, indemnification and contribution contained
herein and the Company's obligations contained in the indemnification provisions will survive any expiration or termination of
this Agreement, and the Company's obligation to pay fees actually earned and payable and to reimburse expenses actually incurred
and reimbursable pursuant to Section 1 hereof and which are permitted to be reimbursed under FINRA rules, will survive any expiration
or termination of this Agreement. Nothing in this Agreement shall be construed to limit the ability of the Placement Agent or its
Affiliates to pursue, investigate, analyze, invest in, or engage in investment banking, financial advisory or any other business
relationship with Persons (as defined below) other than the Company. As used herein (i) "Persons" means an individual
or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity of any kind and (ii) "Affiliate" means
any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person as such terms are used in and construed under Rule 405 under the Securities Act of 1933, as amended (the "Securities
Act").
(d) Until
each Closing is held, all subscription funds received shall be held by an escrow agent to be selected by Placement Agent, subject
to the approval of Company (the "Escrow Agent"). Placement Agent shall not have any independent obligation to verify
the accuracy or completeness of any information contained in any Subscription Documents or the authenticity, sufficiency or validity
of any check delivered by any prospective Investor in payment for the Securities, nor shall Placement Agent incur any liability
with respect to any such verification or failure to verify, unless it had actual knowledge that any information in the Subscription
Documents was untrue. All subscription checks and funds shall be promptly and directly delivered without offset or deduction to
the Escrow Agent.
Section 2. Representations,
Warranties and Covenants of the Company. The Company hereby represents, warrants and covenants to the Placement Agent as of
the date hereof, and as of each Closing Date, as follows:
(a) Offering
Materials. Neither the Company nor any of its directors and officers has distributed and none of them will distribute, prior
to each Closing Date, any offering material in connection with the offering and sale of the Securities other than the Memorandum
and materials that have been approved by the Placement Agent and its counsel.
(b) Subsidiaries.
All of the direct and indirect subsidiaries of the Company (the "Subsidiaries") are set forth in the Memorandum. The
Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any
liens, charges, security interests, encumbrances, rights of first refusal, preemptive rights or other restrictions (collectively,
"Liens"), and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are
fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.
(c) Organization
and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power
and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company
nor any Subsidiary is in violation nor in default of any of the provisions of its respective certificate or articles of incorporation,
bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business
and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity
or enforceability of this Agreement or any other agreement entered into between the Company and the Investors, (ii) a material
adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and
the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company's ability to perform in any material respect
on a timely basis its obligations under this Agreement or the transactions contemplated under the Memorandum (any of(i), (ii) or
(iii), a "Material Adverse Effect") and no action, claim, suit, investigation or proceeding (including, without limitation,
an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened ("Proceeding")
has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power
and authority or qualification.
(d) Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by this Agreement and the Subscription Documents and otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of each of this Agreement by the Company and the consummation by it of the transactions contemplated
hereby and thereby and under the Subscription Documents have been (or, prior to the commencement
of the offering, will have been) duly authorized by all necessary action on the part of the Company and no further action is required
by the Company, the Company's Board of Directors (the "Board of Directors") or the Company's stockholders in connection
therewith other than in connection with the Required Approvals (as defined below). This Agreement has been duly executed by the
Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights
generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies
and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
(e) No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the transactions contemplated pursuant
to the Subscription Documents, the issuance and sale of the Securities and the consummation
by it of the transactions contemplated hereby and thereby to which it is a party do not and will not (i) conflict with or violate
any provision of the Company's or any Subsidiary's certificate or articles of incorporation and bylaws, or other organizational
or charter documents (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become
a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or
give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both)
of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding
to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or
affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is
subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary
is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to
result in a Material Adverse Effect.
(f) Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice
to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of this Agreement and the transactions contemplated
pursuant to the Subscription Documents, other than such filings as are required to be made
under applicable state securities laws a set forth in Section 4(b) (collectively, the "Required Approvals").
(g) Issuance
of the Securities; Registration. The Securities are duly authorized and, when issued and paid for in accordance with the Subscription
Documents, will be duly and validly issued, fully paid and non-assessable, and the Securities shall be free and clear of
all Liens imposed by the Company. The Investor Warrant Shares and the shares underlying the Placement Agent Warrants and Subagent
Warrants when issued in accordance with their respective terms, will be validly issued, fully paid and non-assessable, free and
clear of all Liens imposed by the Company. The Company has reserved from its duly authorized capital stock, the maximum number
of shares of Common Stock issuable pursuant to the Subscription Documents.
(h) Capitalization.
The capitalization of the Company is as set forth in the Memorandum. The Company has not issued any capital stock since its most
recently filed periodic report under the Exchange Act, other than the issuance of Common Stock or other equity grants to officers,
directors, employees and/or consultants under existing equity compensation plans of the Company, the issuance of 150,000 warrants
to consultants, and Common Stock issued pursuant to the exercise of securities of the Company or the Subsidiaries which would entitle
the holder thereof to acquire at any time any Common Stock, including, without limitation, any debt, preferred stock, rights, options,
warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the
holder thereof to receive, Common Stock ("Common Stock Equivalents") outstanding as of the date of the most recently
filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right, right of participation,
or any similar right to participate in the transactions contemplated by this Agreement and the transactions contemplated pursuant
to the Memorandum, except for Laidlaw’s rights pursuant to the Engagement Letter between Laidlaw and the Company dated July
22, 2014. Except as a result of the purchase and sale of the Securities and as otherwise set forth in Memorandum or the SEC Reports
(as defined below), there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements
by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents.
The issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any
Person (other than the Investors) and will not result in a right of any holder of Company securities to adjust the exercise, conversion,
exchange or reset price under any of such securities. All of the outstanding shares of capital stock of the Company are validly
issued, fully paid and non-assessable, have been issued in compliance with all federal and state securities laws, and none of such
outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities.
No further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale
of the Securities. Except as otherwise described in the SEC Reports or the Memorandum, there are no stockholders agreements, voting
agreements or other similar agreements with respect to the Company's capital stock to which the Company is a party or, to the knowledge
of the Company, between or among any of the Company's stockholders.
(i) SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents
required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the 12 months preceding the date hereof (or such shorter period as the Company was required by law or
regulation to file such material) (the foregoing materials being collectively referred to herein as the "SEC
Reports") on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports
prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material
respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when
filed, 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 the aggregate and in the light of the circumstances under which they
were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations of Commission (the Commission with respect
thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States
generally accepted accounting principles applied on a consistent basis during the periods involved ("GAAP"), except
as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial
statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position
of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows
for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit
adjustments.
(j) Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included
within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof, (i) there has
been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect,
(ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses
incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the
Company's financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered
its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its
stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company
has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company equity compensation
plans. The Company does not have pending before the Commission any request for confidential treatment of information. Except for
the issuance of the Securities contemplated by the Offering, no event, liability, fact, circumstance, occurrence or development
has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective
business, prospects, properties, operations, assets or financial condition that would be required to be disclosed by the Company
under applicable securities laws as of the date of each Closing that has not been publicly disclosed at least one Trading Day prior
to such Closing.
(k) Litigation.
Except as disclosed in the SEC Reports, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending
or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties
before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local
or foreign) (collectively, an "Action") which (i) adversely affects or challenges the legality, validity or enforceability
of any of this Agreement and the transactions contemplated pursuant to the Memorandum or the Securities or (ii) could, if there
were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any
Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a final determination of violation
of or liability under federal or state securities laws or of breach of fiduciary duty. To the knowledge of the Company, there has
not been and is not pending or contemplated any investigation by the Commission involving the Company or any current or former
director or officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of
any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.
(l) Labor
Relations. No material labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees
of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company's or its Subsidiaries'
employees is a member of a union that relates to such employee's relationship with the Company or such Subsidiary, and neither
the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe
that their relationships with their employees are good. No executive officer, to the knowledge of the Company, is, or is now expected
to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement
or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the
continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with
respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state and local
laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except
where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(m) Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the
Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any
court, arbitrator or governmental body, or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any
governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as
could not have or reasonably be expected to result in a Material Adverse Effect.
(n) Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations, permits, and licenses issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as currently conducted,
except where the failure to possess such permits or licenses could not reasonably be expected to result in a Material Adverse Effect
("Material Permits"), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the
revocation or modification of any Material Permit.
(o) Title
to Real Property; Liens, Etc. Except as described in the SEC Reports, each of the Company and the Company's subsidiary, Gold
Acquisition Corp., a Nevada corporation ("GAC") has record title to the unpatented mining claims ("Mining Claims")
and unpatented millsites ("Millsites") it owns, and record title to its leasehold and subleasehold interests in real
property (the "Leasehold Estates"), in each case subject to no Encumbrances, other than (a) the material production royalties
disclosed in the SEC Reports or in the Memorandum, (b) Encumbrances resulting from taxes which have not yet become delinquent;
and (c) Encumbrances which do not materially detract from the value of the property subject thereto or materially impair the operations
of the Company; and (d) those that have otherwise arisen in the ordinary course of business, none of which are material; and, with
respect to the Mining Claims and Millsites, subject to the paramount title of the United States of America and the statutory rights
of third parties to use the surface of the Mining Claims and Millsites and to explore for and develop federal leasable minerals.
Each of the Company and GAC is in compliance with all material terms of each lease or sublease of real property to which it is
a party or is otherwise bound. Nothing in this Section, however, shall be deemed to be a representation or a warranty that any
of the Mining Claims contains a discovery of valuable minerals. The Company has good and marketable title to the personal property
owned by it.
(p) Patents
and Trademarks. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property
rights and similar rights necessary or material for use in connection with their respective businesses as described in the SEC
Reports and which the failure to so have could have a Material Adverse Effect (collectively, the "Intellectual Property Rights").
To the knowledge of the Company, all such Intellectual Property Rights are enforceable. The Company and its Subsidiaries have taken
reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except
where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(q) Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including,
but not limited to, directors and officers insurance coverage. Neither the Company nor any Subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.
(r) Transactions
With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company and,
to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction with the Company
or any Subsidiary (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 entity in which any officer,
director, or any such employee has a substantial interest or is an officer, director, trustee or partner, in each case in excess
of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred
on behalf of the Company, and (iii) other employee benefits, including stock option agreements under any stock option plan of the
Company.
(s) Sarbanes-Oxley;
Internal Accounting Controls. The Company is in compliance with any and all applicable requirements of the Sarbanes-Oxley Act
of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission
thereunder that are effective as of the date hereof and as of each Closing Date except where failure to do so could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect. Under the supervision and with the participation
of management, including the Company's Chief Executive Officer and Vice President of Finance, the Company assessed the effectiveness
of its internal control over financial reporting as of December 31, 2013. In making this assessment, management used the criteria
set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework.
Based on the Company's assessment, and as set forth in its Annual Report on Form 10-K for the year ended December 31, 2013
filed with the SEC on March 26, 2014, management has concluded that, as of December 31, 2013 (the "Evaluation Date"),
the Company's internal control over financial reporting is effective based upon these criteria. Since the Evaluation Date, there
have been no changes in the Company's internal control over financial reporting (as such term is defined in the Exchange Act) that
has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
(t) Certain
Fees. Except to the Placement Agent and any subagent, no brokerage or finder's fees or commissions are or will be payable by
the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with
respect to the transactions contemplated by this Agreement and the transactions contemplated pursuant to the Memorandum. The Investors
shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees
of a type contemplated in this Section that may be due in connection with the transactions contemplated by this Agreement and the
transactions contemplated pursuant to the Memorandum.
(u) Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will
not be or become an Affiliate of an "investment company" within the meaning of the Investment Company Act of 1940, as
amended. The Company shall conduct its business in a manner so that it will not become an "investment company" subject
to registration under the Investment Company Act of 1940, as amended.
(v) Registration
Rights. No Person has any right to cause the Company to effect the registration under the Securities Act of any securities
of the Company, except as set forth in the SEC Reports or the Memorandum.
(w) Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the
Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration
of the Common Stock under the Exchange Act nor has the Company
received any notification that the Commission is contemplating terminating such registration. The Company has not, in the 12 months
preceding the date hereof, received notice from the OTCQB to the effect that the Company is not in compliance with the rules or
regulations of the OTCQB. To the Company's knowledge it is, and has no reason to believe that it will not in the foreseeable future
continue to be, in compliance with all such rules and regulations of the OTCQB.
(x) Application
of Takeover Protections. The Company has taken all necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover
provision under the Company's certificate of incorporation (or similar charter documents) or the laws of its state of incorporation
that is or could become applicable to the Investors as a result of the Investors and the Company fulfilling their obligations or
exercising their rights in connection with the transactions contemplated pursuant to the Memorandum, including without limitation
as a result of the Company's issuance of the Securities and the Investors' ownership of the Securities.
(y) Disclosure.
Except with respect to the material terms and conditions of the Offering, the Company confirms that neither it nor to its knowledge
any other Person acting on its behalf has provided any of the Investors or their agents or counsel with any information that it
believes constitutes or might constitute material, non-public information which is not otherwise disclosed in the SEC Reports.
The Company understands and confirms that the Investors will rely on the foregoing representation in purchasing the Units. All
of the disclosure furnished by or on behalf of the Company to the Investors regarding the Company, its business and the transactions
contemplated hereby is true and correct and, when taken in the aggregate, does not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under
which they were made, not misleading. The press releases disseminated by the Company during the twelve months preceding the date
of this Agreement taken as a whole together with the SEC Reports do not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to make the statements, in light of the circumstances
under which they were made and when made, not misleading.
(z) 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
cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of any applicable shareholder
approval provisions of the OTCQB.
(aa) Tax
Status. Each of the Company and its Subsidiaries has filed all U.S. federal, state, local and foreign tax returns which are
required to be filed by each of them and all such returns are true and correct in all material respects, except for such failures
to file which could not reasonably be expected to have a Material Adverse Effect. The Company and each Subsidiary has paid all
taxes pursuant to such returns or pursuant to any assessments received by any of them or by which any of them is obligated to withhold
from amounts owing to any employee, creditor or third party except where not reasonably expected to have a Material Adverse Effect.
The Company and each Subsidiary has properly accrued all taxes required to be accrued and/or paid, except where the failure to
accrue would not have a Material Adverse Effect. To the knowledge of the Company, the tax returns of the Company and its Subsidiaries
are not currently being audited by any state, local or federal authorities. Neither the Company nor any Subsidiary has waived any
statute of limitations with respect to taxes or agreed to any extension of time with respect to any tax assessment or deficiency.
The Company has set aside on its books adequate provision for the payment of any unpaid taxes except where not reasonably expected
to have a Material Adverse Effect.
(bb) Foreign
Corrupt Practices. Neither the Company, nor to the knowledge of the Company, any agent or other person acting on behalf of
the Company, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful
expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials
or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully
any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is in violation
of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.
(cc) Accountants.
The Company's accounting firm is set forth in the SEC Reports. Such accounting firm is a registered public accounting firm as required
by the Exchange Act.
(dd) Regulation
M Compliance. The Company has not, and to its knowledge no one
acting on its behalf has, (i) taken, directly
or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or, paid any compensation for
soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another
to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Placement
Agent in connection with the Offering.
(ee) Office
of Foreign Assets Control. Neither the Company nor, to the Company's
knowledge, any director, officer, agent,
employee or affiliate of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control
of the U.S. Treasury Department ("OFAC").
(ff) U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the
meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Investor's request.
(gg) Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act
of 1956, as amended (the "BHCA") and to regulation by the Board of Governors of the Federal Reserve System
(the "Federal Reserve"). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly
or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent
or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither
the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank
or any entity that is subject to the BHCA and to regulation by the Federal Reserve.
(hh) Money
Laundering. The operations of the Company are and have been conducted at all times in compliance with applicable financial
record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable
money laundering statutes and applicable rules and regulations thereunder (collectively, the "Money Laundering Laws"),
and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving
the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
(ii) Certificates.
Any certificate signed by an officer of the Company and delivered to the Placement Agent or to counsel for the Placement Agent
shall be deemed to be a representation and warranty by the Company to the Placement Agent as to the matters set forth therein.
(jj) Reliance.
The Company acknowledges that the Placement Agent will rely upon the accuracy and truthfulness of the foregoing representations
and warranties and hereby consents to such reliance.
(kk) General
Solicitation Materials. In connection with the Offering, the Company has not published, distributed, issued, posted or otherwise
used or employed and shall not publish, distribute, issue, post or otherwise use or employ (i) any form of general solicitation
or advertising within the meaning of Rule 502 under the Securities Act ("General Solicitation"), or (ii) any General
Solicitation that constitutes a written communication within the meaning of Rule 405 under the Securities Act.
(ll) Amendments
or Supplements to Written General Solicitation Materials. The Company will furnish a copy of any amendment or supplement to
a Written General Solicitation Material to the Placement Agent and counsel for the Placement Agent and obtain the Placement Agent's
written consent prior to any publication, distribution, issuance, posting or other use or employment of any such amendment or supplement.
(mm) Notice
to Placement Agent. If at any time after the date hereof and prior to a Closing, any event shall have occurred as a result
of which any Written General Solicitation Material, as then amended or supplemented, would conflict with the information in the
Memorandum, or would include an untrue statement of a material fact or omit 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, or, if for any other reason
it shall become necessary to amend or supplement any Written General Solicitation Material, the Company shall promptly notify the
Placement Agent and upon its request, shall use its best efforts to ensure that all purchasers or expected purchasers of the Securities
receive corrected Written General Solicitation Materials.
(nn) Investors.
The Company represents, warrants and agrees that all sales of Securities shall be made only to "accredited investors"
(as such term is defined in Rule 501 of Regulation D under the Securities Act), and that it will obtain from each Investor a Subscription
Agreement that contains Investor representations concerning each Investor's status as an accredited investor.
(oo) No
Disqualification Events. To the knowledge of the Company, none of the Company, any of its predecessors, any affiliated issuer,
any director, executive officer, other officer of the Company participating in the Offering, any beneficial owner of 20% or more
of the Company's outstanding voting equity securities, calculated on the basis of voting power, any promoter (as that term is defined
in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale nor any compensated
solicitor or any director, executive officer, other officer of the compensated solicitor participating in the Offering, (each,
an "Issuer Covered Person" and, together, "Issuer Covered Persons") is subject to any of the
"Bad Actor" disqualifications described in Rule 506(d)(1 )(i) to (viii) under the Securities Act (a "Disqualification
Event"), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable
care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent
applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Placement Agent a copy of any disclosures
provided thereunder.
(pp) Notice
of Disqualification Events. The Company will notify the Placement Agent in writing, prior to a Closing Date of any Disqualification
Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification
Event relating to any Issuer Covered Person.
(qq) Sufficient
Capital. The Company's directors and executive officers have determined that the proceeds from the Offering, assuming receipt
of the Maximum Offering or Increased Maximum Offering, plus cash on hand, will provide sufficient working capital for the Company's
ongoing operations at approximately current expenditure levels for 6 to 18 months from the Closing of the Offering.
(rr) FINRA
Affiliations. There are no affiliations with any FINRA member firm among the Company's officers, directors or, to the
knowledge of the Company, any five percent (5%) or greater stockholder of the Company.
(ss) Solvency.
Based on the consolidated financial condition of the Company as of each Closing Date, after giving effect to the receipt by the
Company of the proceeds from the sale of the Securities pursuant to the Memorandum, (i) the fair saleable value of the Company's
assets exceeds the amount that will be required to be paid on or in respect of the Company's existing debts and other liabilities
(including known contingent liabilities) as they mature, and (ii) the current cash flow of the Company, together with the proceeds
the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash,
would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company
does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts
of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to
believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within
one year from each Closing Date. The SEC Reports sets forth as of the date hereof all outstanding secured and unsecured Indebtedness
of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement,
"Indebtedness" means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts
payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect
of indebtedness of others, whether or not the same are or should be reflected in the Company's balance sheet (or the notes thereto),
except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course
of business, and (z) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in
accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.
Section 3.
Delivery
and Payment. Each Closing shall occur at such place as shall be agreed upon by the Placement Agent and the Company). Subject
to the terms and conditions hereof, at each Closing payment of the purchase price for the Securities sold on such Closing Date
shall be made by Federal Funds wire transfer or check against delivery of such Securities, and such Securities shall be registered
in such name or names and shall be in such denominations, as the Placement Agent may request at least one business day before the
time of purchase.
Deliveries of the documents
with respect to the purchase of the Securities, if any, shall be made at the offices of Placement Agent. All actions taken at a
Closing shall be deemed to have occurred simultaneously.
Section 4.
Covenants and Agreements of the Company. The Company further covenants and agrees with the Placement Agent as follows:
(a) Blue
Sky Compliance. The Company will cooperate with the Placement Agent and the Investors in endeavoring to qualify the Securities
for sale under the securities laws of such United States jurisdictions as the Placement Agent and the Investors may reasonably
request and will make such applications, file such documents, and furnish such information as may be reasonably required for that
purpose, provided the Company shall not be required to qualify as a foreign corporation or to file a general consent to service
of process in any jurisdiction where it is not now so qualified or required to file such a consent, and provided further that the
Company shall not be required to produce any new disclosure documents. The Company will, from time to time, prepare and file such
statements, reports and other documents as are or may be required to continue such qualifications in effect for so long a period
as the Placement Agent may reasonably request for distribution of the Securities. The Company will advise the Placement Agent promptly
after the Company is notified (or other has knowledge of) of the suspension of the qualification or registration of (or any such
exemption relating to) the Securities for offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding
for any such purpose, and in the event of the issuance of any order suspending such qualification, registration or exemption, the
Company shall use its best efforts to obtain the withdrawal thereof at the earliest possible moment.
(b) Amendments,
Supplements and Other Matters. The Company will comply with the Securities Act and the Exchange Act, and the rules and regulations
of the Commission thereunder, so as to permit the completion of the distribution of the Securities and other shares of Common Stock
as contemplated in this Agreement and the Subscription Documents.
The Company represents
and warrants to Placement Agent that all information concerning the Company contained in the Memorandum is true, complete and accurate
in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in light of the circumstances under which such statements are made. If at
any time during the Term an event occurs which would cause the Memorandum to contain an untrue statement of a material fact or
to omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they
were made, not misleading, the Company will notify Placement Agent immediately of such event, and promptly prepare an appropriate
amendment or supplement to the Memorandum. Before finalizing any amendment to the Memorandum, the Company will furnish the Placement
Agent with a copy of such proposed amendment or supplement and will not distribute any such amendment or supplement to which the
Placement Agent reasonably objects. If the Placement Agent unreasonably objects to any amendment that the Company deems necessary,
the Company has the right to terminate the Term, and to terminate the sale of any Securities and in the event of a material change
the investors will have the right to rescind their subscription and the Placement Agent may terminate the Offering.
(c) Copies
of any Amendments and Supplements to the Memorandum. The Company will furnish the Placement Agent, without charge, during the
Term, as many copies of the Memorandum as the Placement Agent may reasonably request.
(d) Periodic
Reporting Obligations. For as long as the Investor Warrants remain outstanding, the Company will duly file, on a timely basis,
with the Commission all reports and documents required to be filed under the Exchange Act within the time periods and in the manner
required by the Exchange Act.
(e) Transfer
Agent. The Company will maintain, at its expense, a DWAC, fast-
eligible registrar and transfer agent for
the Common Stock.
(f) Additional
Documents. The Company will enter into a subscription agreement with each Investor (the "Subscription Agreement")
and other transaction documents to be entered into pursuant to the Subscription Agreement, which form of subscription agreement
has been reviewed by and is acceptable to the Placement Agent and the Company. The Company
agrees that the Placement Agent may rely upon, and is a third party beneficiary of, the representations and warranties, and applicable
covenants, set forth in the Subscription Agreement.
(g) No
Manipulation of Price. The Company will not take, directly or indirectly, any action designed to cause or result in, or that
has constituted or might reasonably be expected to constitute, the stabilization or manipulation of the price of any securities
of the Company during the Term.
(h) Acknowledgment.
The Company acknowledges that any advice given by the Placement Agent to the Company is solely for the benefit and use of the management
and Board of Directors of the Company and may not be used, reproduced, disseminated, quoted or referred to, without the Placement
Agent's prior written consent.
Section 5.
Conditions
of the Obligations of the Placement Agent. The obligations of the Placement Agent hereunder shall be subject to the accuracy
of the representations and warranties on the part of the Company set forth in Section 2 hereof, in each case as of the date hereof
and as of each Closing Date as though then made, to the timely performance by each of the Company of its covenants and other obligations
hereunder on and as of such dates, and to each of the following additional conditions:
(a) Corporate
Proceedings. All corporate proceedings and other legal matters in connection with this Agreement the Memorandum, and the sale
and delivery of the Securities, shall have been completed or resolved in a manner reasonably satisfactory to the Placement Agent,
and the Placement Agent shall have been furnished with such papers and information as it may reasonably have requested in writing
before the date of this Agreement to enable such Placement Agent to pass upon the matters referred to in this Section 5.
(b) No
Material Adverse Change. Subsequent to the execution and delivery of this Agreement and prior to each Closing Date, in the
Placement Agent's sole judgment after consultation with the Company, there shall not have occurred any Material Adverse Change
or Material Adverse Effect.
(c) Opinion
of Counsel for the Company. The Placement Agent shall have received on each Closing Date the favorable opinion of US legal
counsel to the Company, dated as of such Closing Date, addressed to the Placement Agent and the Investor(s) whose subscription
are included in the Closing, and in form and substance satisfactory to the Placement Agent.
(d) Officers'
Certificate. The Placement Agent shall have received on each Closing Date a certificate of the Company, dated as of such Closing
Date, signed by the Chief Executive Officer and Chief Financial Officer of the Company, to the effect that, and the Placement Agent
shall be satisfied that, the signers of such certificate have reviewed Memorandum and this Agreement and to the further effect
(but not limited to) that:
(i) The
representations and warranties of the Company in this Agreement are true and correct, as if made on and as of such Closing Date,
and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied
at or prior to such Closing Date;
(ii) No
order having the effect of ceasing or suspending the distribution of the Securities or any other securities of the Company has
been issued by the SEC and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Company,
contemplated by the SEC; and
(iii) Subsequent
to the respective dates as of which information is given in the Memorandum, there has not been: (a) any Material Adverse Change;
(b) any transaction that is material to the Company and the Subsidiaries taken as a whole, except transactions entered into in
the ordinary course of business; (c) any obligation, direct or contingent, that is material to the Company and the Subsidiaries
taken as a whole, incurred by the Company or any Subsidiary, except obligations incurred in the ordinary course of business; (d)
any material change in the capital stock (except changes thereto resulting from the exercise of outstanding stock options or warrants)
or outstanding indebtedness of the Company or any Subsidiary; (e) any dividend or distribution of any kind declared, paid or made
on the capital stock of the Company; or (f) any loss or damage (whether or not insured) to the property of the Company or any Subsidiary
which has been sustained or will have been sustained which has a Material Adverse Effect.
(e) Registration
Rights. The Company will be required to file within 45 days of the date of the final closing of the Offering (the "Filing
Deadline") a registration statement (the "Registration Statement") registering for resale all shares
of Common Stock of the Company issued as part of the Units and all shares of shares of Common Stock of the Company issuable upon
exercise of the Investor Warrants. The Company agrees to use its reasonable best efforts to have the Registration Statement declared
effective within 30 days of being notified by the SEC that the Registration Statement will not be reviewed by the SEC (and in such
case of no SEC review, not later than 60 days after the Filing Deadline) or within 180 days after the Filing Deadline in the event
the SEC provides comments to the Registration Statement. The Company shall not have taken any action designed to terminate, or
likely to have the effect of terminating, the registration of the Common Stock under the Exchange Act or delisting or suspending
from trading the Common Stock from the OTCQB.
(f) Additional
Documents. On or before each Closing Date, the Placement Agent shall have received such information and documents as it may
require for the purposes of enabling them to pass upon the issuance and sale of the Securities as contemplated herein, or in order
to evidence the accuracy of any of the representations and warranties, or the satisfaction of any of the conditions or agreements,
herein contained.
If any condition specified
in this Section 5 is not satisfied when and as required to be satisfied, this Agreement may be terminated by the Placement
Agent by notice to the Company at any time on or prior to a Closing Date, which termination shall be without liability on the part
of any party to any other party, except that Section 7 (Payment of Expenses), Section 8 (Indemnification and Contribution) and
Section 9 (Representations and Indemnities to Survive Delivery) shall at all times be effective and shall survive such termination.
Section 6. Covenants
and Agreements of the Placement Agent. The Placement Agent represents, warrants, covenants and agrees with the Company:
(a) (i) Offers
of the Securities by the Placement Agent for sale by the Company have been and will be made only in such jurisdictions in
which: (i) the Placement Agent is a registered broker-dealer or exempted from the jurisdiction's broker-dealer registration
requirements; and (ii) the Placement Agent has been advised by its counsel that the offering and sale of the Securities is
registered under, or is exempt from registration under, applicable laws.
(ii) Offers
of the Securities by the Placement Agent for sale by the Company will be made (A) in the United States to solely "accredited
investors" (as such term is defined in Rule 501(a) of Regulation D under the Securities Act) ("U.S. Accredited Investor")
in compliance with the provisions of Rule 506 of Regulation D under the Securities Act and Section 4(a)(2) of the Securities
Act and (B) outside the United States in compliance with the provisions of Rule 903 of Regulation S under the Securities Act. Immediately
prior to making any offer of Securities to any person in the United States, based solely upon information provided to the Placement
Agent by each offeree, the Placement Agent had reasonable grounds to believe and did believe that each offeree was a U.S. Accredited
Investor. All offers will only be made to accredited investors as such term is defined under National Instrument 45-106 - Prospectus
and Registration Exemptions. The Placement Agent shall furnish to each Investor a copy of the Memorandum at the time it offers
the Securities to such Investor.
(b) Placement
Agent has not distributed and will not distribute, prior to each Closing Date, any offering
material in connection with the offering and sale of the Securities other than the Memorandum and materials that have been approved
by the Company and its counsel.
(c) The
Placement Agent was and will be, on the date of each offer of Securities and subsequent sale of Securities by the Company: (i)
a registered broker-dealer under the Securities Exchange Act of 1934, as amended; (ii) a member in good standing of FINRA; and
(iii) registered as a broker-dealer in each jurisdiction in which it is required to be registered as such in order to offer the
Securities for sale by the Company in such jurisdiction.
(d) The
Placement Agent will periodically notify the Company of the jurisdictions in which it intends the Securities to be offered by it
or will be offered by it pursuant to this Agreement, and will periodically notify the Company of the status of the Offering conducted
pursuant to this Agreement.
(e) The
Placement Agent has not entered, and will not enter, into any other contractual arrangement with respect to the offer of the Securities
with any third party without the written consent of the Company, such consent not to be unreasonably withheld.
(f) Offers
of Securities by the Placement Agent have not been and shall not be made (i) by any form of "general solicitation or general
advertising" (as such term is used in Rule 502(c) of Regulation D under the Securities Act), or (ii) in any manner
involving a public offering within the meaning of Section 4(a)(2) of the Securities Act.
(f) The
Placement Agent represents and warrants that none of it, or any of its directors, executive officers, general partners, managing
members or other officers participating in the offering of the Securities (each, an "Agent Covered Person" and, together,
"Agent Covered Persons"), is subject to any of the "Bad Actor" disqualification described in Rule 506(d)(1)
of Regulation D under the Securities Act (a "Disqualification Event") except for a Disqualification Event (i) covered
by Rule 506(d)(2)(i) of Regulation D under the Securities Act and (ii) a description of which has been furnished in writing to
the Company prior to the date hereof or, in the case of a Disqualification Event occurring after the date hereof, prior to any
closing date of the Offering.
(g) The
Placement Agent represents and warrants that it is not aware of any person (other than any Agent Covered Person) that has been
or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Securities
pursuant to Rule 506(b) of Regulation D under the Securities Act. The Placement Agent agrees that it will notify the Company,
prior to any closing of the Offering, of any agreement entered into between the Placement Agent and any such person in connection
with such sale.
(h) The
Placement Agent agrees that it will notify the Company, in writing, prior to any closing of the Offering, of (i) any Disqualification
Event relating to any Agent Covered Person not previously disclosed to the Company in accordance with the immediately preceding
two paragraphs, and (ii) any event that would, with the passage of time, become a Disqualification Event relating to any Agent
Covered Person.
(i) (i) The
Placement Agent acknowledges that the Placement Agent Warrants and Subagent Warrants and the underlying shares have not been registered
under the Securities Act or the securities laws of any state of the United States, will be "restricted securities" (as
such term is defined in Rule 144(a)(3) under the Securities Act) and may not be transferred unless registered under the Securities
Act or an exemption from such registration is available, and will bear a legend to that effect. The Placement Agent also confirms
that it is a U.S. Accredited Investor.
Section 7. Payment
of Expenses. The Company agrees to pay all costs, fees and expenses incurred by the Company in connection with the performance
of its obligations hereunder and in connection with the transactions contemplated by Offering, including, without limitation: (i)
all expenses incident to the issuance, delivery and qualification of the Securities (including all printing and engraving costs);
(ii) all fees and expenses of the registrar and transfer agent of the Common Stock; (iii) all necessary issue, transfer and other
stamp taxes in connection with the issuance and sale of the Securities; (iv) all fees and expenses of the Company's counsel, independent
public or certified public accountants and other advisors; (v) all costs and expenses incurred in connection with the preparation,
printing, filing, shipping and distribution of the Memorandum, and all amendments and supplements thereto; and (vi) all filing
fees, reasonable attorneys' fees and expenses incurred by the Company and/or the Placement Agent in connection with qualifying
or registering (or obtaining exemptions from the qualification or registration of) all or any part of the Securities for offer
and sale under the state securities or blue sky laws or the securities laws of any other country, and any supplements thereto.
Section 8. Indemnification
and Contribution.
(a) The
Company agrees to indemnify and hold harmless the Placement Agent, its affiliates and each person controlling the Placement Agent
(within the meaning of Section 15 of the Securities Act), and the directors, officers, agents and employees of the Placement Agent,
its affiliates and each such controlling person (the Placement Agent, and each such entity or person, an "Indemnified Person")
from and against any losses, claims, damages, judgments, assessments, costs and other liabilities (collectively, the "Liabilities"),
and shall reimburse each Indemnified Person for all fees and expenses (including the reasonable fees and expenses of one counsel
for all Indemnified Persons, except as otherwise expressly provided herein) (collectively, the "Expenses") as
they are incurred by an Indemnified Person in investigating, preparing, pursuing or defending any Actions, whether or not any Indemnified
Person is a party thereto, (i) caused by a breach by the Company of any of its representations, warranties or covenants contained
in this Agreement or in any certificate delivered by or on behalf of the Company to Placement Agent or its affiliates in connection
with this Agreement, (ii) caused by, or arising out of or in connection with, any untrue statement or alleged untrue statement
of a material fact contained in the Memorandum or by any omission or alleged omission to state therein a material fact necessary
to make the statements therein, in light of the circumstances under which they were made, not misleading (other than untrue statements
or alleged untrue statements in, or omissions or alleged omissions from, information relating to an Indemnified Person furnished
in writing by or on behalf of such Indemnified Person expressly for use in such documents) or (iii) otherwise arising out of or
in connection with advice or services rendered or to be rendered by any Indemnified Person pursuant to this Agreement, the transactions
contemplated thereby or any Indemnified Person's actions or inactions in connection with any such advice, services or transactions;
provided, however, that, in the case of clause (iii) only, the Company shall not be responsible for any Liabilities or Expenses
of any Indemnified Person that have resulted primarily from such Indemnified Person's (x) gross negligence, bad faith, willful
misconduct or violation of law in connection with any of the advice, actions, inactions or services referred to above or (y) use
of any offering materials or information concerning the Company in connection with the offer or sale of the Securities in the Offering
which were not authorized for such use by the Company. The Company also agrees to reimburse each Indemnified Person for all Expenses
as they are incurred in connection with enforcing such Indemnified Person's rights under this Agreement.
(b) Upon
receipt by an Indemnified Person of actual notice of an Action against such Indemnified Person with respect to which indemnity
may be sought under this Agreement, such Indemnified Person shall promptly notify the Company in writing; provided that failure
by any Indemnified Person so to notify the Company shall not relieve the Company from any liability which the Company may have
on account of this indemnity or otherwise to such Indemnified Person, except to the extent the Company shall have been prejudiced
by such failure. The Company shall, if requested by the Placement Agent, assume the defense of any such Action including the employment
of counsel reasonably satisfactory to the Placement Agent, which counsel may also be counsel to the Company. Any Indemnified Person
shall have the right to employ separate counsel in any such Action and participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Person unless: (i) the Company has failed promptly to assume the defense
and employ counsel or (ii) the named parties to any such Action include such Indemnified Person, and such Indemnified Person shall
have been advised in the opinion of counsel that there is a conflict of interest that prevents such counsel from representing both
the Company or another client of such counsel and such Indemnified Person. The Company shall not be liable for any settlement of
any Action effected without its written consent (which shall not be unreasonably withheld). In addition, the Company shall not,
without the prior written consent of the Placement Agent (which shall not be unreasonably withheld), settle, compromise or consent
to the entry of any judgment in or otherwise seek to terminate any pending or threatened Action in respect of which indemnification
or contribution may be sought hereunder (whether or not such Indemnified Person is a party thereto) unless such settlement, compromise,
consent or termination includes an unconditional release of each Indemnified Person from all Liabilities arising out of such Action
for which indemnification or contribution may be sought hereunder. The indemnification required hereby shall be made by periodic
payments of the amount thereof during the course of the investigation or defense, as such expense, loss, damage or liability is
incurred and is due and payable.
(c) In
the event that the foregoing indemnity is unavailable to an Indemnified Person other than in accordance with this Agreement, the
Company shall contribute to the Liabilities and Expenses paid or payable by such Indemnified Person in such proportion as is appropriate
to reflect (i) the relative benefits to the Company, on the one hand, and to the Placement Agent and any other Indemnified Person,
on the other hand, of the matters contemplated by this Agreement or (ii) if the allocation provided by the immediately preceding
clause is not permitted by applicable law, not only such relative benefits but also the relative fault of the Company, on the one
hand, and the Placement Agent and any other Indemnified Person, on the other hand, in connection with the matters as to which such
Liabilities or Expenses relate, as well as any other relevant equitable considerations; provided that in no event shall the Company
contribute less than the amount necessary to ensure that all Indemnified Persons, in the aggregate, are not liable for any Liabilities
and Expenses in excess of the amount of fees actually received by the Placement Agent pursuant to this Agreement. For purposes
of this paragraph, the relative benefits to the Company, on the one hand, and to the Placement Agent on the other hand, of the
matters contemplated by this Agreement shall be deemed to be in the same proportion as (a) the total value paid or contemplated
to be paid to or received or contemplated to be received by the Company in the transaction or transactions that are within the
scope of this Agreement, whether or not any such transaction is consummated, bears to (b) the fees paid to the Placement Agent
under this Agreement. Notwithstanding the above, no person guilty of fraudulent misrepresentation within the meaning of Section
1 1(f) of the Securities Act, as amended, shall be entitled to contribution from a party who was not guilty of fraudulent misrepresentation.
(d) The
Company also agrees that no Indemnified Person shall have any liability (whether direct or indirect, in contract or tort or otherwise)
to the Company for or in connection with advice or services rendered or to be rendered by any Indemnified Person pursuant to this
Agreement, the transactions contemplated hereby or any Indemnified Person's actions or inactions
in connection with any such advice, services or transactions except for Liabilities (and related Expenses) of the Company that
have resulted primarily from such Indemnified Person's gross negligence, bad faith or willful misconduct in connection with any
such advice, actions, inactions or services.
(e) The
reimbursement, indemnity and contribution obligations of the Company set forth herein shall apply to any modification of this Agreement
and shall remain in full force and effect regardless of any termination of, or the completion of any Indemnified Person's services
under or in connection with, this Agreement.
Section 9. Representations
and Indemnities to Survive Delivery. The respective indemnities,
agreements, representations, warranties and other statements of the Company or any person controlling the Company, of its officers,
and of the Placement Agent set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Placement Agent, the Company, or any of its or their partners, officers or directors
or any controlling person, as the case may be, and will survive delivery of and payment for the Securities sold hereunder and any
termination of this Agreement. A successor to a Placement Agent, or to the Company, its directors or officers or any person controlling
the Company, shall be entitled to the benefits of the indemnity, contribution and reimbursement agreements contained in this Agreement.
Section 10. Notices.
All communications hereunder shall be in writing and shall be mailed or hand delivered as follows:
If to the Placement Agent to:
Noble Financial Capital Markets
951 Yamato Road, Suite 210
Boca Raton, FL 33431
Attention: Francisco Penafiel
With a copy to (which shall not constitute
notice):
Broad and Cassel
2 South Biscayne Blvd, 21st Floor
Miami, FL 33131
Attention: Carlos E. Loumiet
If to the Company:
Pershing Gold Corporation
1658 Cole Boulevard
Building 6, Suite 200
Lakewood,
Colorado 80401
Attn: Stephen Alfers, President & CEO
With a copy to (which shall not constitute notice):
Davis Graham & Stubbs LLP
1550 Seventeenth Street, Suite 500
Denver, Colorado
80202
Attn: Deborah Friedman, Esq.
Any party hereto may change the address
for receipt of communications by giving written notice to the others.
Section 11. Successors.
This Agreement will inure to the benefit of and be binding upon the parties hereto, and to the benefit of the employees, officers
and directors and controlling persons referred to in Section 8 hereof, and to their respective successors, and personal representative,
and no other person will have any right or obligation hereunder.
Section 12. Partial
Unenforceability. The invalidity or unenforceability of any section, paragraph or provision of this Agreement shall not affect
the validity or enforceability of any other section, paragraph or provision hereof. If any Section, paragraph or provision of this
Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and
only such minor changes) as are necessary to make it valid and enforceable.
Section 13. Governing
Law Provisions. This Agreement shall be governed by the internal laws of the State of Florida, without regard to the conflict
of laws principles thereof.
Section 14. General Provisions.
(a) This
Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof. This Agreement
may be executed in two or more counterparts, each one of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. This Agreement may not be amended or modified unless in writing
by all of the parties hereto, and no condition herein (express or implied) may be waived unless waived in writing by each
party whom the condition is meant to benefit. Section headings herein are for the convenience of the parties only and shall
not affect the construction or interpretation of this Agreement.
(b) The
Company acknowledges that in connection with the offering of the Securities: (i) the Placement Agent has acted at
arm's-length and owes no fiduciary duties to the Company or any other person, (ii) the Placement Agent owes the Company only
those duties and obligations set forth in this Agreement and (iii) the Placement Agent may have interests that differ from
those of the Company. The Company waives to the full extent permitted by applicable law any claims it may have against the
Placement Agent arising from an alleged breach of fiduciary duty in connection with the offering of the Securities.
(c) If,
during a period of twelve (12) months following the termination of the Placement Agent’s exclusive engagement pursuant
to Section 1(c) hereof, the Company engages in a financing transaction involving the sale or issuance of equity or debt securities
(a “Subsequent Transaction”), the Company shall ask the Placement Agent to serve as one of the Company’s representatives
in the Subsequent Transaction. If the Placement Agent participates as one of the Company’s representatives in the Subsequent
Transaction, the Placement Agent shall be compensated with respect to the aggregate gross proceeds received from a sale of the
securities offered in such transaction to any purchaser in such Subsequent Transaction that is listed on Exhibit B hereto, at the
then applicable rate of compensation, without regard to whether such purchaser was introduced to the transaction by the Placement
Agent. For the avoidance of doubt, this Section 14(c) shall survive termination of this Agreement.
(d) This
Agreement shall replace and supersede the Engagement Letter in all respects, and upon execution hereof the Engagement Letter shall
be of no further force or effect.
[The remainder of this page has been
intentionally left blank.]
The foregoing
Placement Agency Agreement is hereby confirmed and accepted as of the date first above written.
NOBLE FINANCIAL CAPITAL MARKETS
| By: |
/s/ Richard H. Giles |
|
| |
Name: Richard Giles |
|
| |
Title: Head of Investment Banking |
|
| |
|
|
| PERSHING GOLD CORPORATION |
|
| a Nevada corporation |
|
| |
|
|
| By: |
/s/ Stephen D. Alfers |
|
| |
Name: Stephen D. Alfers |
|
| |
Title: President and Chief Executive Office |
|
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Stephen Alfers, certify that:
1. I
have reviewed this quarterly report on Form 10-Q of Pershing Gold Corporation;
2. Based
on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with
respect to the period covered by this quarterly report;
3. Based
on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in
all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this quarterly report;
4. The
registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined
in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
| a) | designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly for the period in which
this quarterly report is being prepared; |
| b) | designed such internal control over financial reporting, or
caused such internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles; |
| c) | evaluated the effectiveness of the registrant’s disclosure
controls and procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; |
| d) | disclosed in this report any change in the registrant’s
internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter that has materially affected, or is reasonably likely to materially
affect, the registrant’s internal control over financial reporting; |
5. The
registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s
auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
a) all significant deficiencies and material
weaknesses in the design or operation of internal controls which are reasonably likely to adversely affect the registrant’s
ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that
involves management or other employees who have a significant role in the registrant’s internal controls over financial
reporting.
| Dated: May 14, 2015 |
By: |
/s/ Stephen Alfers |
| |
|
Stephen Alfers
President and Chief Executive Officer
(Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Eric Alexander, certify that:
1. I
have reviewed this quarterly report on Form 10-Q of Pershing Gold Corporation;
2. Based
on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with
respect to the period covered by this quarterly report;
3. Based
on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in
all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this quarterly report;
4. The registrant’s other certifying
officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:
| a) | designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly for the period in which
this quarterly report is being prepared; |
| b) | designed such internal control over financial reporting, or
caused such internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles; |
| c) | evaluated the effectiveness of the registrant’s disclosure
controls and procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; |
| d) | disclosed in this report any change in the registrant’s
internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter that has materially affected, or is reasonably likely to materially
affect, the registrant’s internal control over financial reporting; |
5. The
registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s
auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
a) all significant deficiencies and material
weaknesses in the design or operation of internal controls which are reasonably likely to adversely affect the registrant’s
ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that
involves management or other employees who have a significant role in the registrant’s internal controls over financial
reporting.
| Dated: May 14, 2015 |
By: |
/s/ Eric Alexander |
| |
|
Eric Alexander
Vice President Finance and Controller
(Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT
OF 2002
In connection with the Quarterly Report of
Pershing Gold Corporation (the “Company”) on Form 10-Q for the period ended March 31, 2015 as filed with
the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certify, pursuant
to 18 U.S.C. section 1350 of the Sarbanes-Oxley Act of 2002, that:
| (1) |
The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and |
| |
|
| (2) |
The information contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Company. |
| Date: May 14, 2015 |
By: |
/s/ Stephen Alfers |
| |
|
Stephen Alfers
President and Chief Executive Officer
(Principal Executive Officer) |
| Date: May
14, 2015 |
By: |
/s/ Eric
Alexander |
| |
|
Eric Alexander
Vice President
Finance and Controller
(Principal
Financial Officer) |
A signed original of this written statement required by Section 906,
or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic
version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities
and Exchange Commission or its staff upon request.
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