The foregoing action has been ratified by the
written consent of the holders of a majority in interest of our voting capital stock, consisting of our outstanding common stock,
and Series M Preferred Stock, as well as our board of directors by written consent. We anticipate that a copy of the Definitive
Information Statement will be mailed to our shareholders. We have also attached a copy of the Restatement to this Information Statement
for your reference.
In effecting the Reverse Split, we are consolidating
the number of our outstanding shares of common stock on a ratio of 1 share for every 20 shares issued and outstanding as of the
record date set forth below. We will not issue fractional shares and will round each fractional share up to the nearest whole share.
The Restatement is not
effective until at least 20 days after the mailing of this Information Statement. We anticipate that the effective date for the
Restatement will be on or about October 15, 2013.
If the Share Exchange was not adopted by majority
written consent, it may have been required to be considered by our stockholders at a special stockholders’ meeting convened
for the specific purpose of approving the Share Exchange. The elimination of the need for a special meeting of stockholders to
approve the Share Exchange is made possible by Section 78.320 of Nevada Revised Statutes (the “NRS”), which provides
that the written consent of the holders of outstanding shares of voting capital stock, having not less than the minimum number
of votes which would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were
present and voted, may be substituted for such a special meeting. Pursuant to the NRS, a majority in interest of our capital stock
entitled to vote thereon is required in order to approve the Share Exchange. In order to eliminate the costs and management time
involved in holding a special meeting, our Board of Directors determined that it was in the best interests of all of our shareholders
that the Share Exchange, be adopted by majority written consent and this Information Statement to be mailed to all stockholders
as notice of the action taken.
The record date for purposes of determining
the number of outstanding shares of our voting capital stock, and for determining stockholders entitled to vote in the Share Exchange,
is the close of business on March 13, 2013 (the “ Exchange Record Date”). As of the Exchange Record Date, we had outstanding:
If the Restatement, and Reverse Split were not
adopted by majority written consent, they would have been required to be considered by our stockholders at a special stockholders’
meeting convened for the specific purpose of approving the Restatement, and Reverse Split. The elimination of the need for a special
meeting of stockholders to approve the Restatement, and Reverse Split is made possible by Section 78.320 of Nevada Revised Statutes
(the “NRS”), which provides that the written consent of the holders of outstanding shares of voting capital stock,
having not less than the minimum number of votes which would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted, may be substituted for such a special meeting. Pursuant to the NRS,
a majority in interest of our capital stock entitled to vote thereon is required in order to approve the Restatement, and Reverse
Split. In order to eliminate the costs and management time involved in holding a special meeting, our Board of Directors determined
that it was in the best interests of all of our shareholders that the Restatement, and Reverse Split, be adopted by majority written
consent and this Information Statement to be mailed to all stockholders as notice of the action taken.
The record date for purposes of determining
the number of outstanding shares of our voting capital stock, and for determining stockholders entitled to vote in the Restatement
and Reverse Split, is the close of business on September 9, 2013 (the “Record Date”). As of the Record Date, we had
outstanding:
We are not soliciting any votes in connection
with the Share Exchange, Restatement, and Reverse Split. The persons that have consented to the Share Exchange, Restatement, and
Reverse Split hold a majority of the Company’s outstanding voting rights and, accordingly, such persons have sufficient voting
rights to approve the Share Exchange, Restatement, and Reverse Split.
On August 20, 2013, our board of directors and
the holder of a majority in interest of our voting capital stock approved a 1-for-20 reverse split of our common shares (“Reverse
Split”). This approval is anticipated to be effective 20 days after this Information Statement has been distributed to our
shareholders.
As a result of the Reverse Split, each shareholder
of record as of September 20, 2013, will receive one (1) share of common stock for each twenty (20) shares of common stock they
held prior to the Reverse Split, provided however, that fractions of a share shall be rounded up to the nearest whole share. We
anticipate that following the Reverse Split, there will be approximately 22,400,000 shares of common stock issued and outstanding.
There will be no shares of preferred stock issued and outstanding.
As a result of the Restatement, our board of
directors may issue up to 700 Million shares of common stock and 25 million shares of preferred stock, which will have a major
dilutive effect upon you, our shareholders.
Our board of directors believes that the Reverse
Split is advisable and in the best interests of the Company and its stockholders to allow the Company to execute new business plan
and position itself to raise additional investment capital, if needed.
We are amending and restating our Articles of
Incorporation in its entirety to make the following changes:
We believe these changes to our Articles of
Incorporation will not adversely affect stockholders but will enable the Company’s board of directors, without further authorization
from shareholders, to issue up to 700,000,000 shares of common stock and up to 25,000,000 shares of preferred stock having such
rights, privileges, and preferences as determined by the board of directors, for consideration deemed adequate in exchange for
such shares. We have attached a copy of the Restatement to this Information Statement.
On March 14, 2013, our board of directors
and the holders of a majority in interest of our voting capital stock approved the Share Exchange. A summary of the principal terms
of the Share Exchange Agreement, a copy of which is attached as appendix B to this Information Statement, is as follows:
As a result of the Share Exchange , the Company
consummated the transactions contemplated by the Exchange Agreement pursuant to which the Registrant issued 1,000.999 shares of
Series M Preferred Stock of the Registrant to former Excelsior shareholders, which represents 74% of the issued and outstanding
shares of the Company on a fully diluted basis immediately following the closing of the Share Exchange and full conversion of the
Series M Preferred Stock. Douglas McFarland, our former CEO, has beneficial voting control over a majority of our outstanding shares
and may, therefore, unilaterally determine the election of our Board of Directors and the direction of the Company.
As a condition to the Share
Exchange, Georgette Wansor, the sole officer and director of the Company, as well as the Majority Shareholder, agreed to cancel
155,466,645 shares of our common stock, par value $0.001 (the “Cancelled Stock”).
Immediately following the
Closing, the Company intends to change its name to Excelsior Gold & Metals, Inc. to better reflect the nature of its business.
On January 7, 2013 we filed a preliminary 14C Information Statement to change our name and increase our number of authorized shares
of common stock to 700,000,000. We expect to file the Definitive 14C and complete the corporate actions now that the Share Exchange
has closed.
Prior to the consummation
of the Share Exchange, our Board of Directors was comprised of one director, Ms. Wansor. Effective at the closing of the Share
Exchange, Ms. Wansor resigned from her position as Chairman and appointed Mr. Douglas McFarland to serve as Chairman of our Board
and W. Glen Zinn and Paul Donaldson to serve as members of the Board effective 10 days following the mailing of Schedule 14(f)
to our shareholders. Ms. Wansor tendered her resignation as a director to be effective 10 days following the mailing of Schedule
14(f).
On May 14, 2013, Douglas
McFarland was replaced as Chief Executive Officer and as a Director of the Company by Paul Donaldson. Mr. McFarland will be remaining
on as a consultant to assist the Company in the execution of its business plan.
A summary of the aforementioned
officers and directors background and experience is as follows:
From June 2006-2009, Gutiérrez
was owner & chief field engineer for MineSeal, LLC, a company he started specializing in mine closures utilizing a polyurethane
foam manufactured by the company.
From July 1998-June 2006,
Gutiérrez was mining engineer/mineral examiner for the U.S. Forest Service evaluating mineral properties and lead mine closure/remediation
specialist.
April 1992-July 1998, Gutiérrez
worked as a mining engineer at the Washington office level for the U.S. Forest Service and State Department, U.S. Embassy, in Venezuela.
He served as a mining & environmental advisor to the Venezuelan government in the gold and diamond sectors of Bolivar State,
Venezuela. During that same time period, Gutiérrez consulted for the USAID (World Bank) and U.S. State Department in Brazil
in sustainable mining practices and alternative mercury-free methods for gold recovery.
Gutiérrez holds
a B.A. (anthropology) from the University of Nevada, and a B.S. (Geology) School of Mines, University of Idaho. He attended graduate
studies in geological engineering at the University of Idaho, Moscow. Juan is a Licensed Professional Geologist, Certified Mineral
Examiner, Registered Environmental Manager and meets the requirements of a QP, as a Registered Member of SME, recognized under
the Canadian Instrument 43-101.
As a result of the Share
Exchange, we will develop our mining interests by drilling and proving mineral reserves in our first two properties, the Great
Excelsior Mine (“Excelsior Mine”), which interests consist of 60 lode mining claims (also sometimes referred to as
the “Excelsior Claims”) in Northeast Washington, and the Liver Peak Property (“Liver Peak”), which comprises
30 unpatented federal mining claims covering 620 acres in the Lolo National Forest in Sanders County, Montana, about 8 kilometers
northeast of the town of Thompson Falls. (also sometimes referred to as the “Liver Peak Claims”), (collectively, the
“Assets”), 1,000.999 shares of Series M Preferred Stock of the Company to former Excelsior shareholders, which represents
74% of the issued and outstanding shares of the Company on a fully diluted basis. The foregoing actions have been ratified by the
written consent of the holders of a majority in interest of our voting capital stock, consisting of our outstanding common stock,
as well as our board of directors, by written consent on March 14, 2013. We anticipate that a copy of this Definitive Information
Statement will be mailed to our shareholders as of the date hereof.
Our board of directors believes that the Share
Exchange is advisable and in the best interests of the Company and its stockholders for the following reasons:
As previously noted, immediately
following the completion of the Share Exchange, Douglas McFarland, was
appointed Chief Executive Officer,
and Chairman of the Board.
On May 14, 2013, Douglas
McFarland resigned and was replaced as Chief Executive Officer by Paul Donaldson. Mr. McFarland will be remaining on as a consultant
to assist the Company in the execution of its business plan.
Pursuant to the terms of the Share Exchange
the following conditions of closing must be met or waived or the Share Exchange will not be consummated:
This Information Statement describes
the transactions relating to the approval of the Share Exchange by holders of a majority of the outstanding voting shares of the
Company. Our Board of Directors is providing this Information Statement to you pursuant to Section 14(c) of Exchange Act solely
to inform you of, and provide you with information about the Share Exchange .
Shareholders of record as of the
close of business on March 13, 2013 are entitled to receive this Information Statement, which describes the actions that have been
approved by the written consent of the holders of a majority of the outstanding voting shares of the Company.
No, we are not asking you to vote for approval
of the Share Exchange, Restatement, or the Reverse Split or to provide your written consent, because your vote or written consent
is not required for approval. The Share Exchange, Restatement, and Reverse Split has already been approved by the written consent
of the holders of a majority of the outstanding voting shares of the Company.
Our board of directors may issue up to 700 Million
shares of common stock and 25 million shares of preferred stock, which will have a major dilutive effect upon you, our shareholders.
Our board of directors believes
that the Reverse Split is advisable and in the best interests of the Company and its stockholders to allow the Company to execute
new business plan and position itself to raise additional investment capital, if needed.
Douglas McFarland, our former CEO,
has beneficial voting control over a majority of our outstanding shares and may, therefore, unilaterally determine the election
of our Board of Directors and the direction of the Company.
The consideration for the Share Exchange
was determined in arm's length negotiations between the Company and disinterested directors of Excelsior. Following extensive negotiations
between the parties, the Company purchased all of the outstanding common stock of Excelsior in exchange for 1,000.999 shares of
Series M preferred stock, which represents 74% of the Company’s issued and outstanding common stock on a fully diluted basis,
immediately following the share exchange. The Series M Preferred Stock is convertible into 302,000,000 shares of common stock,
conditional upon the amendment of the Company’s Articles of Incorporation to increase the number of authorized shares to
700,000,000.
Yes. Before the Share Exchange may
be consummated, certain closing conditions must be satisfied or waived. These conditions are described in this Information Statement
in the section above entitled
The Share Exchange - Closing Conditions
. If these conditions are not satisfied or waived,
then the Share Exchange will not be consummated even though it has been approved by the Board and by written consent of the holders
of a majority of the outstanding voting shares of the Company.
Excelsior’s objective
as a small mining company is to consolidate mining interests, claims, mineral rights, and operations within one company and to
develop these mining interests by drilling and proving mineral reserves specifically in its first two properties located in Washington
and Montana.
Excelsior is a Utah Limited
liability Company, and from inception until the closing of the Share Exchange, Excelsior solely existed as a vehicle to pursue
acquisition of and development of the Excelsior and Liver Peak Claims.
The mining industry is highly fragmented, as
there are many gold and silver prospectors and producers, both small and large, in every market and region throughout the world.
As these metals are well established commodities with well established markets, we believe that a production-stage mine will undoubtedly
have a ready market for extracted minerals. Nevertheless, the global economic downturn has weakened the mining sector, which is
expected to witness greater consolidation and reliance on non-traditional sources of financing to develop mining properties. In
addition, we expect that the industry will also likely see a greater degree of vertical integration of mineral extraction and distribution
firms.
Excelsior’s principal
property is a deposit located in Northeast Washington where it holds 60 lode mining claims in respect of the Great Excelsior Mine
located in Whatcom County in the Mount Baker quadrangle in western Washington State.
The explored portion of
the deposit is located on a large down-dropped landslide block. There are 105 core and reverse circulation holes delineating the
identified reserves. The Great Excelsior Mine was a former gold and silver producer which was forced to close in 1918 due to falling
metal prices and a shortage of supplies. This mining property has been explored by numerous mining companies over the years, including
ASARCO, Silver Standard, Ltd., Quintana Resources, Inc., US Borax, Steelhead Resources, Inc, FMC Gold Corp., Stanford Metals, Ltd,
and Arizuma Silver, Inc. Although a NI 43-101 compliant report has not been produced in respect of the mining claims Excelsior
holds, it is estimated that 493,000 ounces of potential gold-equivalent drill indicated resources are available to be mined, and
an additional 500,000 ounces of potential gold-equivalent non-drill indicated resources are also available. The term “gold-equivalent”
means that the precious metal content contained in these claims (whether of silver, gold, or other minerals) is estimated to be
equivalent in value to gold in these respective drill and non-drill indicated resources. Below are two 3-dimensional maps showing
a cross section of drill holes, and the contours of the project and probable deposit locations thereunder.
The minerals underlying the Excelsior Claim
consist of a disseminated sediment-hosted submarine epithermal volcanogenic silver and gold deposit, striking N300E which is open
to the southwest (along strike) and to the west. American Mine Services, Inc. (1987) with the following reserve calculations:
Mark Hawksworth of FMC Gold Corporation (1989)
estimated the untested exploration potential of the Excelsior Claims to be +500,000 equivalent ounces of gold. This conclusion
was based upon the evaluation of six areas (not included in the above table) within and adjacent to the claim group. Estimated
tonnage for calculated and untested reserves is believed to be 7.1 million tons of 0.08 Aueq.
In October of 1999, Rick Tschauder reviewed
the Excelsior Claims’ geologic and assay data for Atlas Mining Company and did a sensitivity study to determine mining feasibility
at the then- current gold and silver prices (Au $280/oz, Ag $5.35/oz). He concluded that there appeared to be sufficient ore for
four (4) years production at 250 tpd the mine would produce 75,000 tons per year over a four (4) year period. The total estimated
high grade reserves are 300,000 tons. Approximately 95 percent of the high grade (>0.1 opt Aqeq) mineralization is located within
or immediately adjacent to the felsic volcanic rocks (Franklin, 1985).
Using the Rockware 2004 program and an “easterly
weighted” inverse distance squared algorithm, Doug McFarland, Chief Executive Officer of Excelsior, recalculated the tonnage
and grade of high-grade ore body and obtained 279,652 tons of 0.338 opt Aueq and 353,043 tons using a cut off of 0.18 opt Aueq.
Mr. McFarland believes that this zone can be profitably mined by a small 250 tpd operation at current
prices. Mr. McFarland further believe that the area bounded by 10,700
E to 11,300E and 9400N to 9900N can be profitably mined at 195,000 tpd using open pit methods.
If Excelsior is able to commence production
in respect of the Great Excelsior Claims, it would likely not construct milling facilities but would instead transport extracted
material to a nearby mill operated by other larger gold and silver producers. Extensive metallurgical testing had been done on
the ore by Hazen Research, Inc. of Golden, Colorado. Recovery of 96.8 percent of the silver and 95.6 percent of the gold could
also, in our opinion, be accomplished by flotation accompanied by a nitric acid leach of the concentrates and CIL recovery.
Excelsior also has rights in respect of a second
property located in Montana known as the Liver Peak property which comprises 30 unpatented federal mining claims covering 620 acres
in the Lolo National Forest in Sanders County, Montana, about 8 kilometers northeast of the town of Thompson Falls.
The Liver Peak claims are centered on an elliptical
area measuring 2.7 kilometers by 2.1 kilometers of strong hydrothermal alteration and quartz veining. General Moly Inc. maintains
about 890 acres of unpatented mining claims contiguous with the Liver Peak property on southeastern fringes of the altered area.
It is Excelsior’s belief that Liver Peak is rich in molybdenum reserves, and would expect to only incur an extraction cost
of 5-10% per ton.
Historic drilling on the Liver Peak property
between 1967 and 1981 by Bear Creek Mining, Asarco, and Noranda, totaled 10 holes for 6600 meters drilled. This drilling intersected
three significant zones of molybdenum mineralization grading over 0.1% MoS2 accompanied by elevated tungsten and silver over an
area extending at least 600 meters by 300 meters and extending to depths of nearly 1400 meters. The system is substantially untested
at depth.
Molybdenum mineralization has been found in
three subsurface regions, termed the Upper Zone, the North Zone, and the Lower Zone, all of which are probably genetically linked
to a deep mass of quartz-eye porphyry intersected in the last deep hole drilled on the property in 1979. Falling molybdenum prices
in 1982 led Noranda to abandon the project and drop their claims. No significant work to determine the extent of the quartz-eye
porphyry and related molybdenum-tungstensilver mineralization has been done since that time.
In the last deep exploration drilling conducted
on the property in 1979, drill hole LP-4 (total depth 1460 meters) intersected 687 meters of a felsic intrusive complex including
a distinctive quartz-eye porphyry that carried significant molybdenite in stockwork quartz veinlets associated with secondary K-feldsparand
silica alteration. Significant molybdenum mineralization was found in ashallow zone between 268 meters and 564 meters grading 0.118%
MoS2 hosted by Precambrian Belt Series sedimentary rocks, and a lower zone between 1198 metersand 1387 meters grading 0.126% MoS2
hosted by stockwork quartz veinlets in quartz-eye porphyry immediately overlying a silica-altered microgranite. The hole was terminated
at a depth of 1460 meters in microgranite carrying increasing amounts of secondary K-feldspar and secondary biotite. A previous
drill hole LP-2, located 250 meters northwest of LP-4, encountered 216 meters grading 0.10% MoS2 between depths of 70 meters and
320 meters and a lower zone between depths of 637 meters and 853 meters (TD) grading 0.10% MoS2 though it wasn't drilled deep enough
to encounter the quartz-eye porphyry.
Rising molybdenum prices beginning in 2004 led
Idaho General Mines (General Moly) to restake the district. For unknown reasons in 2006, Idaho General Mines dropped the claims
in the core of the district, and they were subsequently relocated by several affiliates of West Coast Resource Associates, the
principals of which are Doug McFarland, the Chief Executive Officer, Chairman of the Board, and controlling shareholder of the
Company, and Paul Donaldson, a director of the Company, following the Share Exchange . In early 2012, West Coast Resource Associates,
LLC. consolidated its holdings by restaking the key ground in the district, directly over the known molybdenum mineralization and
the underlying quartz-eye porphyry.
Mining claims are subject to the same risk of
defective title that is common to all real property interests. Additionally, mining claims are self-initiated and self-maintained
and therefore, possess some unique vulnerabilities not associated with other types of property interests. It is impossible to ascertain
the validity of unpatented mining claims solely from an examination of public real estate records and, therefore, it can be difficult
or impossible to confirm that all of the requisite steps have been followed for location and maintenance of a claim. Furthermore,
as these interests are derived from mining claims in foreign jurisdictions, the risk of a defective claim or other problems with
ownership and development of the claim (including but not limited to the right of eminent domain) is compounded further. If the
validity of a patented mining claim or mineral interest is challenged by an applicable governmental body on the grounds that mineralization
has not been demonstrated, the claimant has the burden of proving the present economic feasibility of mining minerals located thereon.
Such a challenge might be raised at any stage of development or at the commencement of production, or simply when the government
seeks to include the land in an area to be dedicated to another use.
Excelsior’s reserve and resource figures
are estimates, and we cannot assure you that the indicated level of recovery will be realized or that it will have the resources
to do so. Because mining development is inherently capital intensive, we would expect that the Company would partner with a larger
mining company or other strategic source of capital and knowledge in respect of any significant development or operational activity.
Prolonged declines in the market price of gold may render reserves containing relatively lower grades of gold mineralization uneconomic
to exploit and could materially reduce our reserves. Should such reductions occur, discontinuation of exploration and development
(including the
production of a NI 43-101 compliant report) could be discontinued.
There are numerous uncertainties inherent in estimating quantities of proven and probable gold reserves. The estimates in this
document are based on various assumptions relating to gold prices during the expected life of production and the results of additional
planned development work, either by Excelsior directly or in partnership with a larger mining company or other third party with
more sufficient capitalization. Actual future production rates, sales prices, and amounts, revenues, taxes, operating expenses,
environmental and regulatory compliance expenditures, development expenditures and recovery rates may vary substantially from those
assumed in any estimates we have given. Any significant change in these assumptions, including changes that result from variances
between projected and actual results, could result in a material downward or upward revision of current estimates.
Gold has increased in value from $400 per Troy
ounce in early 2005 to over $1,200 at the end of May 2013. The price of gold has been on a relatively steady increase over the
long term, with some disruption in this trend during 2008 and since 2012. Deleveraging in 2008, which caused many financial institutions
to sell hard assets, drove the price decline from a high of approximately $1,000 in late 2007 to a low of approximately $700 in
mid 2008. In 2010, gold outperformed most other asset classes, with the spot price appreciating more than 27% during the year,
but further appreciated by more than 10% in 2011 before receding slightly during 2012. Since one of the most widespread uses of
gold is as a store of value, interest in owning the metal has increased significantly since the lows of 2008. The large fiscal
stimulus of the US, Europe and China, combined with economic instability, has heightened the concern for future inflation, driving
additional interest in owning gold. Gold is a currency without a country, and as such is preferred when confidence falls in any
one of the major currencies, or when international tensions build.
Physical demand for gold has outpaced the discovery
of new deposits and the introduction of new supply from developing deposits in the past decade. The supply and production shortfall
has been partly offset by central banks selling and the recycling of scrap gold. In the wake of the financial crisis of 2008, central
banks have reversed course, holding and purchasing gold. China and India have both reported increases in their gold reserves year
over year.
This report contains forward-looking statements
that involve risks and uncertainties. We use words such as anticipate, believe, plan, expect, future, intend and similar expressions
to identify such forward-looking statements. You should not place too much reliance on these forward-looking statements. Our actual
results are likely to differ materially from those anticipated in these forward-looking statements for many reasons.
Excelsior Gold Corporation
was incorporated in the State of Utah on November 21, 2012, as a holding company for the Excelsior Mine, and the Liver Peak Property,
with the view of becoming an acquisition target for a larger corporation that is less limited on capital resources. There is no
historical financial information about us upon which to base an evaluation of our performance. We are an exploration stage corporation
and have not generated any revenues from operations. We cannot guarantee we will be successful in our business operations. Our
business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible
delays in the exploration of our properties, possible cost overruns due to price and cost increases for services and economic conditions.
Because we do not currently derive any production revenue from operations, its ability to conduct exploration and development on
properties is largely based upon its ability to raise capital by equity funding.
We have not generated any
revenues since the inception of the Company and we have been issued a “going concern” opinion from our auditors.
Following is management’s discussion of
the relevant items affecting results of operations for the year ended December 31, 2012.
As of December 31, 2012, our primary source
of liquidity consisted of $-0- in cash and cash equivalents. Since inception, we have financed our operations through a combination
of short and long-term loans.
From the period of inception (November 21, 2012)
through December 31, 2012 we have sustained a net loss of $2,000 which has resulted in an accumulated deficit at December 31, 2012
of $2,000 and are currently experiencing a substantial shortfall in operating capital which raises doubt about our ability to continue
as a going concern. Without additional revenues, working capital loans, or equity investment, there is substantial doubt as to
our ability to continue operations. We believe the Share Exchange will improve operations in the future.
We believe these conditions have resulted from,
but are not limited to, the ability to (i) generate revenues at levels sufficient to cover our costs and provide a return for investors,
(ii) attract additional capital in order to finance growth, and (iii) successfully compete with other comparable companies having
financial, production and marketing resources significantly greater than those of the Company.
We believe that our capital resources are insufficient
for ongoing operations, with minimal current cash reserves, particularly given the resources necessary to expand our mining exploration
and development. We will likely require considerable amounts of financing to make any significant advancement in our business strategy.
There is presently no agreement in place that will guarantee financing for our Company, and we cannot assure you that we will be
able to raise any additional funds, or that such funds will be available on acceptable terms. Funds raised through future equity
financing will likely be substantially dilutive to current shareholders. Lack of additional funds will materially affect our Company
and our business, and may cause us to substantially curtail or even cease operations. Consequently, you could incur a loss of your
entire investment in the Company.
We believe the following more critical accounting
policies are used in the preparation of our financial statements:
There are no recently issued accounting pronouncements
that have not yet been adopted that are expected, when adopted, to have a material impact on the consolidated financial statements
or notes thereto.
This report contains or incorporates by reference
forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 concerning
our future business plans and strategies, the receipt of working capital, future revenues and other statements that are not historical
in nature. In this report, forward-looking statements are often identified by the words “anticipate,” “plan,”
“believe,” “expect,” “estimate,” and the like. These forward-looking statements reflect our
current beliefs, expectations and opinions with respect to future events, and involve future risks and uncertainties which could
cause actual results to differ materially from those expressed or implied.
Other uncertainties that could affect the accuracy
of forward-looking statements include:
This list is not exhaustive of the factors that
may affect any of our forward-looking statements. You should read this report completely and with the understanding that our actual
future results may be materially different from what we expect. These forward-looking statements represent our beliefs, expectations
and opinions only as of the date of this report. We do not intend to update these forward looking statements except as required
by law. We qualify all of our forward-looking statements by these cautionary statements.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows the amount of the
Company’s common stock beneficially owned (unless otherwise indicated) as of the Share Exchange and Restatement (and assuming
the cancellation of the shares of Ms. Wansor as more fully described in this Report), by (1) any person known to the Company to
be the beneficial owner of more than 5% of the outstanding shares of the Company’s common stock, (2) each director/director
nominee of the Company, (3) each named executive officer, and (4) all directors/director nominees and executive officers as a group.
The number of shares beneficially owned by each
entity, person, director/director nominee, or executive officer is determined under SEC rules and the information is not necessarily
indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which
the entity or individual has sole or shared voting power or investment power and also any shares that the entity or individual
had the right to acquire as of the date of the Share Exchange, and Restatement, or within 60 days after the Share Exchange, and
Restatement, through the exercise of any stock option or other right. Unless otherwise indicated, to our knowledge each individual
has sole investment and voting power, or shares such powers with his spouse, with respect to the shares set forth in the table.
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Sole
Voting and
Investment
Power
|
|
Other
Beneficial
Ownership
|
|
Total
|
|
Percent of
Class
Outstanding
|
|
Paul Donaldson
(1)
|
|
|
0
|
|
|
|
152,333,055
|
|
|
|
152,333,055
|
|
|
|
33.53
|
%
|
|
W. Glen Zinn
(2)
|
|
|
5,001,103
|
|
|
|
—
|
|
|
|
5,001,103
|
|
|
|
1.10
|
%
|
|
John Gutierrez
(3)
|
|
|
2,500,552
|
|
|
|
—
|
|
|
|
2,500,552
|
|
|
|
0.55
|
%
|
|
Roger Gill
(4)
|
|
|
2,500,552
|
|
|
|
—
|
|
|
|
2,500,552
|
|
|
|
0.55
|
%
|
|
Douglas McFarland
(5)
|
|
|
301,699
|
|
|
|
294,196,646
|
|
|
|
294,498345
|
|
|
|
64.82
|
%
|
|
All directors/director nominees and executive officers as a group (3 persons)
|
|
|
7,501,655
|
|
|
|
152,333,055
|
|
|
|
159,834,710
|
|
|
|
35.18
|
%
|
* Indicates ownership of less than one
percent (1%).
(1)
Chairman and CEO of the Company. Includes 505 Series M Shares which are held directly by West
Coast Resource Associates, LLC, a limited liability company jointly controlled by Mr. Donaldson and Douglas McFarland, a former
Chief Executive Officer and Director of the Company. The number of shares of common stock beneficially shown in the table above
assumes that the Series M shares have been converted to common stock at a conversion rate of 301,999 to 1.
(2)
President, Chief Operating Officer, and Director of the Company. Includes 5,001,103 shares
of Common Stock issuable from the conversion of 16.56 shares of Series M Preferred Stock. The number of shares of common stock
beneficially shown in the table above assumes that the Series M shares have been converted to common stock at a conversion rate
of 301,999 to 1.
(3)
Director of the Company. Includes 2,500,552 shares of Common Stock issuable from the conversion
of 8.28 shares of Series M Preferred Stock. The number of shares of common stock beneficially shown in the table above assumes
that the Series M shares have been converted to common stock at a conversion rate of 301,999 to 1.
(4)
Director of the Company. Includes 2,500,552 shares of Common Stock issuable from the conversion
of 8.28 shares of Series M Preferred Stock. The number of shares of common stock beneficially shown in the table above assumes
that the Series M shares have been converted to common stock at a conversion rate of 301,999 to 1.
(5)
Former Chief Executive Officer, Director, and controlling shareholder of the Company. Includes
302,000,000 shares of Common Stock issuable from the conversion of 972.83 shares of Series M Preferred Stock, one (1) of which
is held directly by Mr. McFarland and 466.83 of which are held directly by Alto Cascade Resources, LLC., a limited liability company
controlled by Mr. McFarland. The remaining 505 Series M Shares are held directly by West Coast Resource Associates, LLC, a limited
liability company in which Mr. McFarland serves as a manager and principal owner. The number of shares of common stock beneficially
shown in the table above assumes that the Series M shares have been converted to common stock at a conversion rate of 301,999 to
1.
DESCRIPTION OF
CAPITAL STOCK
Common Stock
Our restated charter authorizes
us to issue up to 700, 000,000 shares of common stock. All shares of our common stock have equal rights as to earnings, assets,
dividends and voting privileges. Distributions may be paid to the holders of our common stock if, as and when authorized by our
board of directors and declared by us out of assets legally available therefor. Shares of our common stock have no preemptive,
conversion or redemption rights and are freely transferable, except where their transfer is restricted by federal and state securities
laws or by contract. In the event of our liquidation, dissolution or winding up, each share of our common stock would be entitled
to share ratably in all of our assets that are legally available for distribution after we pay all debts and other liabilities
and subject to any preferential rights of holders of our preferred stock, if any preferred stock is outstanding at such time. Each
share of our common stock is entitled to one vote on all matters submitted to a vote of stockholders, including the election of
directors. Our board of directors will have the ability, without seeking shareholder approval, to issue additional shares of common
stock in the future for such consideration as the board may consider sufficient. The issuance of additional common stock in the
future may reduce your proportionate ownership and voting power.
Preferred Stock
Our restated charter authorizes
us to issue up to 25,000,000 shares of Preferred stock. On March 14, 2013, the Company authorized the designation of 1,500 shares
of its 25,000,000 authorized Preferred stock as Series M Stock. The Series M Preferred Stock shall be subordinate to and rank junior
to all indebtedness of the Company now or hereafter outstanding. The Series M Preferred Stock shall not pay a dividend; provided
that no cash dividends or distributions shall be declared or paid or set apart for payment on the Common Stock unless such cash
dividend or distribution is likewise declared, paid or set apart for payment on the Series M Stock. Holders of the Series M Stock
shall vote on an “as converted” basis, together as a single class, with the Common Stock, on all matters requiring
the approval, ratification or consent of holders of Common Stock of the Company. The Common Stock into which the Series M Preferred
Stock is convertible shall, when issued, have all of the same voting rights as other issued and outstanding Common Stock of the
Company, and none of the rights of the Series M Stock. Following the Restatement of the Company’s Articles of Incorporation
to increase the number of authorized shares of Common Stock to seven hundred million (700,000,000), the holder of any such shares
of Series M Stock shall automatically convert (a “Mandatory Conversion”) all of the shares of Series M Stock held by
such person into a number of fully paid and non-assessable shares of Common Stock equal to the product of (i) the number of shares
of Series M Stock; and (ii) the Conversion Multiple of Three Hundred One Thousand Six Hundred Ninety Nine (301,699). In other words,
for every share of Series M Stock held, the holder will receive 301,699 shares of common stock of the Company. Consequently, the
majority holder of our Series M Stock stock is able to unilaterally control the election of our board of directors and, ultimately,
the direction of our Company.
NO DISSENTER’S RIGHTS
Under the NRS, stockholders are not entitled
to dissenter’s rights of appraisal with respect to the Share Exchange .
PROPOSALS BY SECURITY HOLDERS
No security holder has requested us to include
any additional proposals in this Information Statement.
INTEREST OF CERTAIN PERSONS IN OR OPPOSITION TO MATTERS TO BE
ACTED UPON
No officer, director or director nominee has
any substantial interest in the matters acted upon by our Board and shareholders, other than his role as an officer, director or
director nominee. No director has informed us that he intends to oppose the Share Exchange, Restatement or Reverse Split.
DELIVERY OF DOCUMENTS TO SECURITY HOLDERS SHARING AN ADDRESS
Only one
Information Statement is being delivered to multiple security holders sharing an address unless we received contrary instructions
from one or more of the security holders. We shall deliver promptly, upon written or oral request, without charge, a separate copy
of the Information Statement to a security holder at a shared address to which a single copy of the document was delivered. A security
holder can notify us that the security holder wishes to receive a separate copy of the Information Statement by sending a written
request to us at 2845 Snowflake Dr., Boise, Idaho 83706, or by calling us at (208) 761-5970. A security holder may utilize the
same address and telephone number to request either separate copies or a single copy for a single address for all future information
statements and proxy statements, if any, and annual reports of the Company.
In addition, you
may obtain copies of such information on our website at www.excelsiorgoldcorp.com or the SEC’s web site (www.sec.gov). You
may inspect these reports and other information, as well as the registration statement and the related exhibits and schedules at
the public reference facilities of the SEC at room 1580, 100 F. Street, N.E., Washington, D.C. 20549.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Paul Donaldson
Paul Donaldson
Chief Executive Officer
September ___, 2013
APPENDIX A
EXCELSIOR GOLD CORPORATION
(An Exploration Stage
Company)
Financial Statements as of
December 31, 2012 and
from inception on November 21, 2012 through
December 31, 2012
CONTENTS
|
EXCELSIOR
GOLD CORPORATION
|
|
(an exploration
stage company)
|
|
Balance
Sheet
|
|
|
|
|
|
ASSETS
|
|
|
|
December
31,
|
|
|
|
2012
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
—
|
|
|
|
|
|
|
|
|
Total
Current Assets
|
|
|
—
|
|
|
|
|
|
|
|
|
OTHER ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Mining
Assets
|
|
|
167,119
|
|
|
|
|
|
|
|
|
Total
Other Assets
|
|
|
167,119
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
$
|
167,119
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES
|
|
|
—
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, no par
value; 10,000,000 shares
|
|
|
|
|
|
authorized, 1,000,999
shares issued
|
|
|
|
|
|
and
outstanding, respectively
|
|
|
—
|
|
|
Additional
paid-in capital
|
|
|
169,119
|
|
|
Deficit
accumulated during the exploration stage
|
|
|
(2,000
|
)
|
|
|
|
|
|
|
|
Total
Stockholders' Deficit
|
|
|
167,119
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
$
|
167,119
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
|
|
EXCELSIOR
GOLD CORPORATION
|
|
(an exploration
stage company)
|
|
Statement
of Operations
|
|
|
|
|
|
|
|
From Inception
|
|
|
|
on November
21,
|
|
|
|
2012 through
|
|
|
|
December
31,
|
|
|
|
2012
|
|
|
|
|
|
NET
REVENUES
|
|
$
|
—
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
General
and administrative
|
|
|
2,000
|
|
|
|
|
|
|
|
|
Total
Operating Expenses
|
|
|
2,000
|
|
|
|
|
|
|
|
|
LOSS
FROM OPERATIONS
|
|
|
(2,000
|
)
|
|
|
|
|
|
|
|
LOSS BEFORE INCOME TAXES
|
|
|
(2,000
|
)
|
|
|
|
|
|
|
|
INCOME
TAX EXPENSE
|
|
|
—
|
|
|
|
|
|
|
|
|
NET
LOSS
|
|
$
|
(2,000
|
)
|
|
|
|
|
|
|
|
BASIC AND DILUTED:
|
|
|
|
|
|
Net
loss per common share
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding
|
|
|
500,999
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
|
|
EXCELSIOR
GOLD CORPORATION
|
|
(an exploration
stage company)
|
|
Statement
of Stockholders' Equity
|
|
For the
Period November 21, 2012 through December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
|
|
Common
Stock
|
|
Paid-in
|
|
Accumulated
|
|
|
|
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, November 21, 2012
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of
stock for services
|
|
|
1,000
|
|
|
|
—
|
|
|
|
2,000
|
|
|
|
—
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of stock for
purchase
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of mining rights
|
|
|
999,999
|
|
|
|
—
|
|
|
|
167,119
|
|
|
|
—
|
|
|
|
167,119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ended December 31,
2012
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,000
|
)
|
|
|
(2,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December
31, 2012
|
|
|
1,000,999
|
|
|
$
|
—
|
|
|
$
|
169,119
|
|
|
$
|
(2,000
|
)
|
|
$
|
167,119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying
notes are an integral part of these financial statements.
|
|
EXCELSIOR
GOLD CORPORATION
|
|
(an exploration
stage company)
|
|
Statement
of Cash Flows
|
|
|
|
|
|
|
|
From Inception
|
|
|
|
on November
21,
|
|
|
|
2012 through
|
|
|
|
December
31,
|
|
|
|
2012
|
|
|
|
|
|
CASH FLOWS FROM OPERATING
ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
Net
income loss
|
|
$
|
(2,000
|
)
|
|
Adjustments
to reconcile net income loss to net
|
|
|
|
|
|
cash
used by operating activities:
|
|
|
|
|
|
Stock
issued for services
|
|
|
2,000
|
|
|
|
|
|
|
|
|
Net
Cash Used by Operating Activities
|
|
|
—
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|
|
—
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
—
|
|
|
|
|
|
|
|
|
NET CHANGE IN CASH AND
CASH EQUIVALENTS
|
|
|
—
|
|
|
|
|
|
|
|
|
CASH
AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
|
|
—
|
|
|
|
|
|
|
|
|
CASH
AND CASH EQUIVALENTS, END OF PERIOD
|
|
$
|
—
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL CASH FLOW
INFORMATION:
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Payments For:
|
|
|
|
|
|
Interest
|
|
$
|
—
|
|
|
Income
taxes
|
|
$
|
—
|
|
|
|
|
|
|
|
|
Non-cash
investing and financing activities:
|
|
|
|
|
|
Stock
issued for services
|
|
$
|
2,000
|
|
|
Stock
issued for acquisition of mining rights
|
|
$
|
167,119
|
|
|
|
|
|
|
|
|
The accompanying
notes are an integral part of these financial statements.
|
NOTE 1 ORGANIZATION AND DESCRIPTION OF BUSINESS
Excelsior Gold Corporation (the
“Company”) was incorporated in the State of Utah on November 21, 2012. The Company is an Exploration Stage Company,
as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915,
Development Stage Entities
. The Company’s principal business is the acquisition and exploration of mineral resources.
The Company has not presently determined whether its properties contain mineral reserves that are economically recoverable.
These financial statements have
been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities
in the normal course of business. The Company has never generated revenues since inception and has never paid any dividends and
is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The continuation of the Company as a
going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary
equity financing to continue operations, and the attainment of profitable operations. These financial statements do not include
any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might
be necessary should the Company be unable to continue as a going concern.
NOTE 2 SIGNIFICANT
ACCOUNTING POLICIES
This summary of significant accounting
policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements
and notes are representations of the Company’s management who are responsible for their integrity and objectivity. These
accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently
applied in the preparation of the financial statements. The following policies are considered to be significant:
The Company recognizes income and
expenses based on the accrual method of accounting. The Company has elected a calendar year-end.
|
|
b.
|
Cash and Cash Equivalents
|
Cash equivalents are generally comprised
of certain highly liquid investments with original maturities of less than three months.
|
|
c.
|
Use of Estimates in the Preparation of
Financial Statements
|
The preparation of financial statements
in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those
estimates.
NOTE 2 SIGNIFICANT
ACCOUNTING POLICIES (Continued)
|
|
d.
|
Basic and Fully Diluted Net Loss per Share
of Common Stock
|
In accordance with Financial Accounting
Standards No. ASC 260, “Earnings per Share,” basic net loss per common share is based on the weighted average number
of shares outstanding during the periods presented. Diluted earnings per share is computed using the weighted average number of
common shares plus dilutive common share equivalents outstanding during the period. There are no common stock equivalents as of
December 31, 2012.
|
|
|
December 31, 2012
|
|
Net loss (numerator)
|
|
$
|
(2,000
|
)
|
|
Weighted average shares outstanding (denominator)
|
|
|
500,999
|
|
|
Basic and fully diluted net loss per share amount
|
|
$
|
(0.00
|
)
|
|
|
e.
|
Property and Equipment
|
Property and equipment are stated
at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives
of the assets. When assets are disposed of, the cost and accumulated depreciation (net book value of the assets) are eliminated
and any resultant gain or loss reflected accordingly. Betterments and improvements are capitalized over their estimated useful
lives whereas repairs and maintenance expenditures on the assets are charged to expense as incurred.
|
|
f.
|
Recent Accounting Pronouncements
|
We have reviewed accounting pronouncements
issued during the past two years and have adopted any that are applicable to the Company. We have determined that none had a material
impact on our financial position, results of operations, or cash flows for the period from inception on November 21, 2012 through
December 31, 2012.
The Financial Accounting Standards
Board (FASB) has issued FASB ASC 740-10 (Prior authoritative literature: Financial Interpretation No. 48, "Accounting for
Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109 (FIN 48)). FASB ASC 740-10 clarifies the accounting for
uncertainty in income taxes recognized in an enterprise's financial statements in accordance with prior literature FASB Statement
No. 109, Accounting for Income Taxes. This standard requires a company to determine whether it is more likely than not that a tax
position will be sustained will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-
not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements.
As a result of the implementation of this standard, the Company performed a review of its material tax positions in accordance
with recognition and measurement standards established by FASB ASC 740-10.
NOTE 2 SIGNIFICANT
ACCOUNTING POLICIES (Continued)
Deferred taxes are provided on
a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax
credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are
the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by
a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates
on the date of enactment.
|
|
h.
|
Concentrations of Credit Risk
|
Financial instruments that potentially
subject the Company to concentrations of credit risks consist of cash and cash equivalents. The Company places cash and cash equivalents
at well known quality financial institutions. Cash and cash equivalents at banks are insured by the Federal Deposit Insurance Corporation
for up to $250,000. The Company did not have any cash or cash equivalents in excess of this amount at December 31, 2012.
NOTE 3 EQUITY TRANSACTIONS
On November 21, 2012, the Company
issued 1,000 shares of common stock to the incorporator upon incorporation and was recorded as general and administrative expenses
on the statements of operations in the amount of $2,000.
On December 11, 2012, the Company
issued 999,999 shares of common stock for the purchase of mining assets in the states of Montana and Washington.
NOTE 4 SUBSEQUENT EVENTS
On December 13, 2012, Excelsior
Gold entered into a non-binding letter of intent to be purchased by Helmer Drilling Corp., a Nevada corporation. The shareholders
of Excelsior Gold will receive 302,000,000 shares of Helmer Drilling common stock in exchange for the outstanding shares of Excelsior
Gold. It is anticipated that Helmer Drilling Corp. will become a mining exploration company and will change its name to Excelsior
Gold & Metals, Inc.
The Company has evaluated subsequent
events from the balance sheet date through the date the financial statements were issued and has determined that there are no other
events that would have a material impact on the financial statements.
APPENDIX B
SHARE EXCHANGE AGREEMENT
BY AND AMONG
HELMER DIRECTIONAL DRILLING CORP.
EXCELSIOR
GOLD CORPORATION
AND
THE STOCKHOLDERS OF EXCELSIOR GOLD CORPORATION
DATED:
March
14, 2013
Share Exchange Agreement
This Share Exchange
Agreement, dated as of March 11, 2013, is made by and among Helmer Directional Drilling Corp., a Nevada corporation (the “
Acquiror
Company
”), Georgette Wansor (the “
Acquiror Company Principal Shareholder
”), Excelsior Gold Corporation,
a company organized under the laws of the State of Utah (the “
Company
”), and the shareholders of the Company
(the “
Shareholders
”).
BACKGROUND
WHEREAS
,
the Shareholders have agreed to transfer to the Acquiror Company, and the Acquiror Company has agreed to acquire from the Shareholders,
all of the Shares, which Shares constitute 100% of the issued and outstanding shares of the Company, in exchange for 1,000.999
shares of the Acquiror Company’s Series M preferred stock to be issued on the Closing Date (the “
Acquiror
Company Preferred Shares
”), whereby each Acquiror Company Preferred Share shall be convertible into Three Hundred
One Thousand Six Hundred Ninety Nine (301,699) shares of Acquiror Company’s common stock (the “
Conversion Shares
”)
when the Acquiror Company amends its Article of Incorporation to increase the number of its authorized common stock to Seven Hundred
Million (700,000,000) (the “
Mandatory Conversion
”). After giving effect to the Mandatory Conversion,
the Conversion Shares shall constitute approximately 74.0% of the Acquiror Company’s issued and outstanding common shares
immediately after the closing of the Share Exchange. The designation, rights, preferences and other terms and provisions of the
Acquiror Company Preferred Shares are set forth in the Certificate of Designations, Preferences, Rights of the Series M Preferred
Stock attached hereto as
Exhibit A
(the “
Series M Certificate of Designations
”).
WHEREAS,
concurrent with the Share Exchange and as a condition to its consummation, the Acquiror Company Principal Shareholder shall agree
to cancel the 155,466,645 shares of common stock held and owned by the Acquiror Company Principal Shareholder (the “
Cancelled
Shares
”).
NOW THEREFORE,
in consideration of the premises and the mutual covenants, agreements, representations and warranties contained herein, and other
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION I
DEFINITIONS
Unless the context
otherwise requires, the terms defined in this Section 1 will have the meanings herein specified for all purposes of this Agreement,
applicable to both the singular and plural forms of any of the terms herein defined.
1.1
“
Accredited Investor
” has the meaning set forth in Regulation D under the Securities Act.
1.2
“
Acquired Companies
” means, collectively, the Company and the Company Subsidiaries.
1.3
“
Acquiror Company Balance Sheet
” means the Acquiror Company’s balance sheet at December 31, 2012.
1.4
“
Acquiror Company Board
” means the Board of Directors of the Acquiror Company.
1.5
“
Acquiror Company Common Stock
” means the Acquiror Company’s common stock, par value US $0.001
per share.
1.6
“
Acquiror Company Preferred Shares
” means the Series M preferred stock of the Acquiror Company being
issued to the Shareholders pursuant hereto.
1.7
“
Affiliate
” shall mean, with respect to any Person, any other Person that (a) directly or indirectly,
whether through one or more intermediaries or otherwise, controls or is controlled by or is under common control with such Person.
For purposes of this definition, “control” (including with correlative meanings “controlled by” and “under
common control with”) of a Person means the power, direct or indirect, to direct or cause the direction of the management
and policies of such Person, whether through ownership of voting securities, by contract or otherwise. For the purposes of this
definition, a Person shall be deemed to control any of his or her immediate family members.
1.8
“
Agreement
” means this Share Exchange Agreement, including all Schedules and Exhibits hereto, as this
Share Exchange Agreement may be from time to time amended, modified or supplemented.
1.9
“
Closing
” has the meaning set forth in Section 3.1.
1.10
“
Closing Date
” has the meaning set forth in Section 3.1.
1.11
“
Code
” means the Internal Revenue Code of 1986, as amended.
1.12
“
Commission
” means the Securities and Exchange Commission or any other federal agency then administering
the Securities Act and the Exchange Act.
1.13
“
Company
” means Excelsior Gold Corporation, a company organized under the laws of the State of Utah.
1.14
“
Company Board
” means the Board of Directors of the Company.
1.15
“
Company Indemnified Party
” has the meaning set forth in Section 9.1.
1.16
“
Company Subsidiaries
” means all of the direct and indirect Subsidiaries of the Company.
1.17
“
Equity Security
” means any stock or similar security, including, without limitation, securities containing
equity features and securities containing profit participation features, or any security convertible into or exchangeable for,
with or without consideration, any
stock or similar security, or any security
carrying any warrant, right or option to subscribe to or purchase any shares of capital stock, or any such warrant or right.
1.18
“
ERISA
” means the Employee Retirement Income Security Act of 1974, as amended.
1.19
“
Exchange Act
” means the Securities Exchange Act of 1934 or any similar federal statute, and the rules
and regulations of the Commission thereunder, all as the same will then be in effect.
1.20
“
Exhibits
” means the several exhibits referred to and identified in this Agreement.
1.21
“
Form 8-K
” means a current report on Form 8-K under the Exchange Act.
1.22
“
GAAP
” means, with respect to any Person, United States generally accepted accounting principles applied
on a consistent basis with such Person’s past practices.
1.23
“
Governmental Authority
” means any federal or national, state or provincial, municipal or local government,
governmental authority, regulatory or administrative agency, governmental commission, department, board, bureau, agency or instrumentality,
political subdivision, commission, court, tribunal, official, arbitrator or arbitral body, in each case whether U.S. or non-U.S.
1.24
“
Indebtedness
” means any obligation, contingent or otherwise. Any obligation secured by a Lien on, or
payable out of the proceeds of, or production from, property of the relevant party will be deemed to be Indebtedness.
1.25
“
Intellectual Property
” means all industrial and intellectual property, including, without limitation,
all U.S. and non-U.S. patents, patent applications, patent rights, trademarks, trademark applications, common law trademarks, Internet
domain names, trade names, service marks, service mark applications, common law service marks, and the goodwill associated therewith,
copyrights, in both published and unpublished works, whether registered or unregistered, copyright applications, franchises, licenses,
know-how, trade secrets, technical data, designs, customer lists, confidential and proprietary information, processes and formulae,
all computer software programs or applications, layouts, inventions, development tools and all documentation and media constituting,
describing or relating to the above, including manuals, memoranda, and records, whether such intellectual property has been created,
applied for or obtained anywhere throughout the world.
1.26
“
Laws
” means, with respect to any Person, any U.S. or non-U.S. federal, national, state, provincial,
local, municipal, international, multinational or other law (including common law), constitution, statute, code, ordinance, rule,
regulation or treaty applicable to such Person.
1.27
“
Lien
” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind, including,
without limitation, any conditional sale or other title retention agreement, any lease in the nature thereof and the filing of
or agreement to give any financing statement
under the Uniform Commercial Code of
any jurisdiction and including any lien or charge arising by Law.
1.28
“
Material Acquiror Company Contract
” means any and all agreements, contracts, arrangements, leases, commitments
or otherwise, of the Acquiror Company, of the type and nature that the Acquiror Company is required to file with the Commission.
1.29
“
Material Adverse Effect
” means, any change, effect or circumstance which, individually or in the aggregate,
would reasonably be expected to (a) have a material adverse effect on the business, assets, financial condition or results of operations
of the Acquiror Company or the Acquired Companies, as the case may be, in each case taken as a whole or (b) materially impair the
ability of the Acquiror Company or the Acquired Companies, as the case may be, to perform their obligations under this Agreement,
excluding any change, effect or circumstance resulting from (i) the announcement, pendency or consummation of the transactions
contemplated by this Agreement, (ii) changes in the United States securities markets generally, or (iii) changes in general economic,
currency exchange rate, political or regulatory conditions in industries in which the Acquiror Company or the Acquired Companies,
as the case may be, operate or (c) result in litigation, claims, disputes or property loss in excess of US$150,000 in the future,
and that would prohibit or otherwise materially interfere with the ability of any party to this Agreement to perform any of its
obligations under this Agreement in any material respect.
1.30
“
Order
” means any award, decision, injunction, judgment, order, ruling, subpoena, or verdict entered,
issued, made, or rendered by any Governmental Authority.
1.31
“
Organizational Documents
” means (a) the articles or certificate of incorporation and the by-laws or
code of regulations of a corporation; (b) the partnership agreement and any statement of partnership of a general partnership;
(c) the limited partnership agreement and the certificate of limited partnership of a limited partnership; (d) the articles or
certificate of formation and operating agreement of a limited liability company; (e) any other document performing a similar function
to the documents specified in clauses (a), (b), (c) and (d) adopted or filed in connection with the creation, formation or organization
of a Person; and (f) any and all amendments to any of the foregoing.
1.32
“
Permitted Liens
” means (a) Liens for Taxes not yet payable or in respect of which the validity thereof
is being contested in good faith by appropriate proceedings and for the payment of which the relevant party has made adequate reserves;
(b) Liens in respect of pledges or deposits under workmen’s compensation laws or similar legislation, carriers, warehousemen,
mechanics, laborers and material men and similar Liens, if the obligations secured by such Liens are not then delinquent or are
being contested in good faith by appropriate proceedings conducted and for the payment of which the relevant party has made adequate
reserves; (c) statutory Liens incidental to the conduct of the business of the relevant party which were not incurred in connection
with the borrowing of money or the obtaining of advances or credits and that do not in the aggregate materially detract from the
value of its property or materially impair the use thereof in the operation of its business; and (d) Liens that would not have
a Material Adverse Effect.
1.33
“
Person
” means all natural persons, corporations, business trusts, associations, companies, partnerships,
limited liability companies, joint ventures and other entities, governments, agencies and political subdivisions.
1.34
“
Proceeding
” means any action, arbitration, audit, hearing, investigation, litigation, or suit (whether
civil, criminal, administrative or investigative) commenced, brought, conducted, or heard by or before, or otherwise involving,
any Governmental Authority.
1.35
“
Rule 144
” means Rule 144 under the Securities Act, as the same may be amended from time to time, or
any successor statute.
1.36
“
Series M Certificate of Designations
” has the meaning set forth in the Background section of this Agreement.
1.37
“
Schedule 14(f) Filing
” means an information statement filed by the Acquiror Company on Schedule 14f-1
under the Exchange Act.
1.38
“
Schedules
” means the several schedules referred to and identified herein, setting forth certain disclosures,
exceptions and other information, data and documents referred to at various places throughout this Agreement.
1.39
“
SEC Documents
” has the meaning set forth in Section 6.25.
1.40
“
Section 4(2)
” means Section 4(2) under the Securities Act, as the same may be amended from time to time,
or any successor statute.
1.41
“
Securities Act
” means the Securities Act of 1933, as amended, or any similar federal statute, and the
rules and regulations of the Commission thereunder, all as the same will be in effect at the time.
1.42
“
Share Exchange
” has the meaning set forth in Section 2.1.
1.43
“
Shares
” means the issued and outstanding shares of the Company.
1.44
“
Subsidiary
” means, with respect to any Person, any corporation, limited liability company, joint venture
or partnership of which such Person (a) beneficially owns, either directly or indirectly, more than 50% of (i) the total combined
voting power of all classes of voting securities of such entity, (ii) the total combined equity interests, or (iii) the capital
or profit interests, in the case of a partnership or limited liability company; or (b) otherwise has the power to vote or to direct
the voting of sufficient securities to elect a majority of the board of directors or similar governing body.
1.45
“
Survival Period
” has the meaning set forth in Section 11.1.
1.46
“
Taxes
” means all foreign, federal, state or local taxes, charges, fees, levies, imposts, duties and
other assessments, as applicable, including, but not limited to, any income, alternative minimum or add-on, estimated, gross income,
gross receipts, sales, use, transfer,
transactions, intangibles, ad valorem,
value-added, franchise, registration, title, license, capital, paid-up capital, profits, withholding, payroll, employment, unemployment,
excise, severance, stamp, occupation, premium, real property, recording, personal property, federal highway use, commercial rent,
environmental (including, but not limited to, taxes under Section 59A of the Code) or windfall profit tax, custom, duty or other
tax, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest, penalties or additions
to tax with respect to any of the foregoing; and “Tax” means any of the foregoing Taxes.
1.47
“
Tax Group
” means any federal, state, local or foreign consolidated, affiliated, combined, unitary or
other similar group of which the Acquiror Company is now or was formerly a member.
1.48
“
Tax Return
” means any return, declaration, report, claim for refund or credit, information return, statement
or other similar document filed with any Governmental Authority with respect to Taxes, including any schedule or attachment thereto,
and including any amendment thereof.
1.49
“
Transaction Documents
” means, collectively, all agreements, instruments and other documents to be executed
and delivered in connection with the transactions contemplated by this Agreement.
1.50
“
U.S.
” means the United States of America.
1.51
“
U.S. Dollars
” or “
US $
” means the currency of the United States of America.
1.52
“
U.S. Person
” has the meaning set forth in Regulation S under the Securities Act.
SECTION II
EXCHANGE OF SHARES AND SHARE CONSIDERATION
2.1
Share Exchange
. At the Closing, (i) the Shareholders shall transfer 1,000,999 shares, representing all of the issued
and outstanding Shares of the Company to the Acquiror Company, and the Acquiror Company shall issue 1,000.999 fully paid and nonassessable
Acquiror Company Preferred Shares (the “
Share Exchange
”) to the Shareholders; and (ii) the Acquiror Company
Shareholder shall effectuate an agreement agreeing to cancel and forfeit all rights to the Cancelled Shares.
2.2
Withholding
. The Acquiror Company shall be entitled to deduct and withhold from the Acquiror Company Shares otherwise
issuable pursuant to this Agreement to any Shareholders such amounts as it is required to deduct and withhold with respect to the
making of such payment under the Code or any provision of state, local, provincial or foreign tax Law. To the extent that amounts
are so withheld, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to such Shareholders
in respect of which such deduction and withholding was made.
2.3
Directors of Acquiror Company at Closing Date
. On the Closing Date, the current sole director of the Acquiror Company
shall appoint Mr. Douglas McFarland to serve as a
member and Chairman of the Acquiror
Company Board and appoint Mr. W. Glen Zinn and Mr. Paul Donaldson as members of the Acquiror Company Board to be effective on the
tenth day after the mailing of the Schedule 14(f) to the stockholders of record of the Acquiror Company (the “
Effective
Time
”). On the Closing Date, Wansor shall tender her resignation as a director of the Acquiror Company to be effective
at the Effective Time.
2.4
Officers of Acquiror Company at Closing Date
. On the Closing Date, Wansor shall resign from each officer position
held at the Acquiror Company and the Acquiror Company Board shall appoint Douglas McFarland to serve as the Chief Executive Officer,
W. Glen Zinn to serve as the Chief Financial Officer, and Paul Donaldson to serve as the Chief Technology Officer.
2.5
Section 368 Reorganization
. For U.S. federal income tax purposes, the Share Exchange is intended to constitute a
“
reorganization
” within the meaning of Section 368(a)(1)(B) of the Code. The parties to this Agreement hereby
adopt this Agreement as a “
plan of reorganization
” within the meaning of Sections 1.368-2(g) and 1.368-3(a)
of the United States Treasury Regulations. Notwithstanding the foregoing or anything else to the contrary contained in this Agreement,
the parties acknowledge and agree that no party is making any representation or warranty as to the qualification of the Share Exchange
as a reorganization under Section 368 of the Code or as to the effect, if any, that any transaction consummated prior to the Closing
Date has or may have on any such reorganization status. The parties acknowledge and agree that each (i) has had the opportunity
to obtain independent legal and tax advice with respect to the transaction contemplated by this Agreement, and (ii) is responsible
for paying its own Taxes, including without limitation, any adverse Tax consequences that may result if the transaction contemplated
by this Agreement is not determined to qualify as a reorganization under Section 368 of the Code.
2.6
Unwind Provision
. In the event that Acquiror Company is unable to raise $3,500,000 within twelve months from debt
and/or equity investors for the development of the assets of the Company, a majority of the Shareholders may at their option unwind
this transaction by returning the Conversion Shares to the Acquiror Company and the Acquiror Company must surrender the Shares
to the Shareholders.
SECTION III
CLOSING DATE
3.1
Closing Date
. The closing of the Share Exchange (the “
Closing
”) shall take place at 10:00 a.m.
Eastern Time on the day all of the closing conditions set forth in Sections 8 and 9 herein have been satisfied or waived, or at
such other time and date as the parties hereto shall agree in writing (the “
Closing Date
”).
SECTION IV
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS
4.1
Generally
. Subject to the disclosures contained in the relevant Schedules attached hereto, the Shareholder hereby
represents and warrants to the Acquiror Company as follows:
4.1.1
Authority
. Such Shareholders have the right, power, authority and capacity to execute and deliver this Agreement
and each of the Transaction Documents to which such Shareholders are a party, to consummate the transactions contemplated by this
Agreement and each of the Transaction Documents to which such Shareholders are a party, and to perform such Shareholders’
obligations under this Agreement and each of the Transaction Documents to which such Shareholders are a party. This Agreement has
been, and each of the Transaction Documents to which such Shareholders are a party will be, duly and validly authorized and approved,
executed and delivered by such Shareholders. Assuming this Agreement and the Transaction Documents have been duly and validly authorized,
executed and delivered by the parties thereto other than such Shareholders, this Agreement is, and each of the Transaction Documents
to which such Shareholders are a party have been, duly authorized, executed and delivered by such Shareholders and constitutes
the legal, valid and binding obligation of such Shareholders, enforceable against such Shareholders in accordance with their respective
terms, except as such enforcement is limited by general equitable principles, or by bankruptcy, insolvency and other similar Laws
affecting the enforcement of creditors rights generally.
4.1.2
No Conflict
. Neither the execution or delivery by such Shareholders of this Agreement or any Transaction Document
to which such Shareholders are a party, nor the consummation or performance by such Shareholders of the transactions contemplated
hereby or thereby will, directly or indirectly, (a) contravene, conflict with, or result in a violation of any provision of the
Organizational Documents of such Shareholders (if such Shareholders are not a natural person); (b) contravene, conflict with, constitute
a default (or an event or condition which, with notice or lapse of time or both, would constitute a default) under, or result in
the termination or acceleration of, any agreement or instrument to which such Shareholders are a party or by which the properties
or assets of such Shareholders are bound; or (c) contravene, conflict with, or result in a violation of, any Law or Order to which
such Shareholders, or any of the properties or assets of such Shareholders, may be subject.
4.1.3
Ownership of Shares
. Such Shareholders own, of record and beneficially, and have good, valid and indefeasible title
to and the right to transfer to the Acquiror Company pursuant to this Agreement, such Shareholders’ Shares free and clear
of any and all Liens. Except as set forth on
Schedule 4.1.3
, there are no options, rights, voting trusts, stockholder agreements
or any other contracts or understandings to which such Shareholders are a party or by which such Shareholders or such Shareholders’
Shares are bound with respect to the issuance, sale, transfer, voting or registration of such Shareholder’s Shares. At the
Closing Date, the Acquiror Company will acquire good, valid and marketable title to such Shareholders’ Shares free and clear
of any and all Liens.
4.1.4
Litigation
. There is no pending Proceeding against such Shareholders that involve the Shares or that challenges,
or may have the effect of preventing, delaying or making illegal, or otherwise interfering with, any of the transactions contemplated
by this Agreement and, to the knowledge of such Shareholders, no such Proceeding has been threatened, and no event or circumstance
exists that is reasonably likely to give rise to or serve as a basis for the commencement of any such Proceeding.
4.1.5
No Brokers or Finders
. No Person has, or as a result of the transactions contemplated herein will have, any right
or valid claim against such Shareholders for any commission, fee or other compensation as a finder or broker, or in any similar
capacity, and such Shareholders will indemnify and hold the Acquiror Company harmless against any liability or expense arising
out of, or in connection with, any such claim.
4.2
Investment Representations
. The Shareholders hereby represent and warrant as follows:
4.2.1
Acknowledgment
. The Shareholders understand and agree that the Acquiror Company Preferred Shares to be issued pursuant
to this Agreement and the Share Exchange have not been registered under the Securities Act or the securities laws of any state
of the U.S. and that the issuance of the Acquiror Company Preferred Shares is being effected in reliance upon an exemption from
registration afforded either under Section 4(2) of the Securities Act for transactions by an issuer not involving a public offering
or Regulation D for offers and sales to accredited investors.
4.2.2
Status
. By its execution of this Agreement, the Shareholders represent and warrant to the Acquiror Company that the
Shareholders are all Accredited Investors.
4.2.3
Stock Legends
. The Shareholders hereby agree with the Acquiror Company as follows:
(a)
Securities Act Legend
. The certificate(s) evidencing the Acquiror Company Preferred Shares issued to the Shareholders
and the Conversion Shares to be issued to the Shareholders upon the Mandatory Conversion, and each certificate issued in transfer
thereof, will bear the following legend:
THE SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “
SECURITIES ACT
”),
OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE
TRANSFERRED EXCEPT (1) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS OR (2) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS, IN WHICH CASE THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE COMPANY AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION
ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED
IN THE MANNER CONTEMPLATED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS.
(b)
Other Legends
. The certificate(s) representing such Acquiror Company Preferred Shares and the Conversion Shares to
be issued to the Shareholders upon the Mandatory Conversion, and each certificate issued in transfer thereof, will also bear any
other legend required under any applicable Law, including, without limitation, any U.S. state corporate and state securities law,
or contract.
(c)
Opinion
. The Shareholders will not transfer any or all of the Acquiror Company Preferred Shares or the Conversion
Shares absent an effective registration statement under the Securities Act and applicable state securities law covering the disposition
of the Shareholders’ Acquiror Company Preferred Shares or the Conversion Shares, as the case may be, without first providing
the Acquiror Company with an opinion of counsel (which counsel and opinion are reasonably satisfactory to the Acquiror Company)
to the effect that such transfer will be exempt from the registration and the prospectus delivery requirements of the Securities
Act and the registration or qualification requirements of any applicable U.S. state securities laws.
(d)
Consent
. The Shareholders understand and acknowledge that the Acquiror Company may refuse to transfer the Acquiror
Company Preferred Shares and the Conversion Shares, unless the Shareholders comply with this Section 4.2 and any other restrictions
on transferability. The Shareholders consent to the Acquiror Company making a notation on its records or giving instructions to
any transfer agent of the Acquiror Company’s preferred stock and Common Stock in order to implement the restrictions on transfer
of the Acquiror Company Perferred Shares and the Conversion Shares.
SECTION V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Subject to the disclosures
contained in the relevant Schedules attached hereto, the Company represents and warrants to the Acquiror Company as follows:
5.1
Organization and Qualification
.
5.1.1
The Company is duly incorporated and validly existing under the laws of the State of Utah, has all requisite authority and
power (corporate and other), governmental licenses, authorizations, consents and approvals to carry on its business as presently
conducted, to own, hold and operate its properties and assets as now owned, held and operated by it, to enter into this Agreement,
to carry out the provisions hereof except where the failure to be so organized, existing and in good standing or to have such authority
or power will not, in the aggregate, have a Material Adverse Effect. The Company is duly qualified, licensed or domesticated as
a foreign corporation in good standing in each jurisdiction wherein the nature of its activities or its properties owned or leased
makes such qualification, licensing or domestication necessary, except where the failure to be so qualified, licensed or domesticated
will not have a Material Adverse Effect.
5.2
Subsidiaries
. The Company does not own directly or indirectly, any equity or other ownership interest in any corporation,
partnership, joint venture or other entity or enterprise.
5.3
Organizational Documents
.
5.3.1
The copies of the Memorandum and Articles of Association of the Company and the documents which constitute all other Organizational
Documents of the Company, that have been delivered to the Acquiror Company prior to the execution of this Agreement are true and
complete and have not been amended or repealed. The Company is not in violation or breach of any of the provisions of its Organizational
Documents.
5.4
Authorization and Validity of this Agreement
. The Company has all requisite authority and power (corporate and other),
authorizations, consents and approvals to enter into this Agreement and each of the Transaction Documents to which the Company
is a party, to consummate the transactions contemplated by this Agreement and each of the Transaction Documents to which the Company
is a party, to perform its obligations under this Agreement and each of the Transaction Documents to which the Company is a party,
and to record the transfer of the Shares and the delivery of the new certificates representing the Shares registered in the name
of the Acquiror Company. The execution, delivery and performance by the Company of this Agreement and each of the Transaction Documents
to which the Company is a party have been duly authorized by all necessary corporate action and do not require from the Company
Board or the Shareholders any consent or approval that has not been validly and lawfully obtained. The execution, delivery and
performance by the Company of this Agreement and each of the Transaction Documents to which the Company is a party requires no
authorization, consent, approval, license, exemption of or filing or registration with any Governmental Authority or other Person.
5.5
No Violation
. Neither the execution nor the delivery by the Company of this Agreement or any Transaction Document
to which the Company is a party, nor the consummation or performance by the Company of the transactions contemplated hereby or
thereby will, directly or indirectly, (a) contravene, conflict with, or result in a violation of any provision of the Organizational
Documents of the Company; (b) contravene, conflict with, constitute a default (or an event or condition which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination or acceleration of, or result in the imposition
or creation of any Lien under, any agreement or instrument to which the Company is a party or by which the properties or assets
of the Company are bound ; (c) contravene, conflict with, or result in a violation of, any Law or Order to which the Company, or
any of the properties or assets owned or used by the Company, may be subject; or (d) contravene, conflict with, or result in a
violation of, the terms or requirements of, or give any Governmental Authority the right to revoke, withdraw, suspend, cancel,
terminate or modify, any licenses, permits, authorizations, approvals, franchises or other rights held by the Company or that otherwise
relate to the business of, or any of the properties or assets owned or used by, the Company, except, in the cases of clauses (b),
(c) and (d), for any such contraventions, conflicts, violations, or other occurrences as would not have a Material Adverse Effect.
5.6
Binding Obligations
. Assuming this Agreement and the Transaction Documents have been duly and validly authorized,
executed and delivered by the parties hereto and thereto other than the Company, this Agreement and each of the Transaction Documents
to which the Company is a party are duly authorized, executed and delivered by the Company and constitute the legal, valid and
binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as such enforcement
is limited by general equitable principles, or by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors
rights generally.
5.7
Capitalization and Related Matters
.
5.7.1
Capitalization of the Company
. The authorized capital stock of the Company consists of 10,000,000 Shares, of which
1,000,999 shares are issued and outstanding. Except as set forth on
Schedule 5.7.1
, there are no outstanding or authorized
options, warrants, calls, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights
or other securities or contracts that could require the Company to issue, sell or otherwise cause to become outstanding any of
its authorized but unissued shares of capital stock or any securities convertible into, exchangeable for or carrying a right or
option to purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to become outstanding any new
class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights
agreements, rights of first refusal or other contracts pertaining to the capital stock of the Company. The issuance of all of the
Shares described in this Section 5.7.1 has been in compliance with the laws of the State of Utah. All issued and outstanding shares
of the Company’s capital stock are duly authorized, validly issued, fully paid and nonassessable and have not been issued
in violation of any preemptive or similar rights. The owners of the Shares of the Company own, and have good, valid and marketable
title to, all the Shares of the Company.
5.7.2
No Redemption Requirements
. There are no outstanding contractual obligations (contingent or otherwise) of the Company
to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership interests in,
the Company or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any other
Person.
5.8
Compliance with Laws and Other Instruments
. Except as would not have a Material Adverse Effect, the business and
operations of the Company have been and are being conducted in accordance with all applicable Laws and Orders. Except as would
not have a Material Adverse Effect, the Company has not received notice of any violation (or any Proceeding involving an allegation
of any violation) of any applicable Law or Order by or affecting the Company and, to the knowledge of the Company no Proceeding
involving an allegation of violation of any applicable Law or Order is threatened or contemplated. Except as would not have a Material
Adverse Effect, the Company is not, and is not alleged to be, in violation of, or (with or without notice or lapse of time or both)
in default under, or in breach of, any term or provision of its Organizational Documents or of any indenture, loan or credit agreement,
note, deed of trust, mortgage, security agreement or other material agreement, lease, license or other instrument, commitment,
obligation or arrangement to which the Company is a party or by which any of the
Company’s properties, assets or
rights are bound or affected. To the knowledge of the Company, no other party to any material contract, agreement, lease, license,
commitment, instrument or other obligation to which the Company is a party is (with or without notice or lapse of time or both)
in default thereunder or in breach of any term thereof. The Company is not subject to any obligation or restriction of any kind
or character, nor is there, to the knowledge of the Company, any event or circumstance relating to the Company that materially
and adversely affects in any way its business, properties, assets or prospects or that prohibits the Company from entering into
this Agreement or would prevent or make burdensome its performance of or compliance with all or any part of this Agreement or the
consummation of the transactions contemplated hereby or thereby.
5.9
Certain Proceedings
. There is no pending Proceeding that has been commenced against the Company and that challenges,
or may have the effect of preventing, delaying, making illegal, or otherwise interfering with, any of the transactions contemplated
in this Agreement. To the Company’s knowledge, no such Proceeding has been threatened.
5.10
No Brokers or Finders
. Except as disclosed in Schedule
5.10
, no Person has, or as a result of the transactions
contemplated herein will have, any right or valid claim against the Company for any commission, fee or other compensation as a
finder or broker, or in any similar capacity, and the Company will indemnify and hold the Acquiror Company harmless against any
liability or expense arising out of, or in connection with, any such claim.
5.11
Title to and Condition of Properties
. Except as would not have a Material Adverse Effect, the Company owns (with
good and marketable title in the case of real property) or holds under valid leases or other rights to use all real property, plants,
machinery and equipment necessary for the conduct of the business of the Company as presently conducted, free and clear of all
Liens, except Permitted Liens. The material buildings, plants, machinery and equipment necessary for the conduct of the business
of the Company as presently conducted are structurally sound, are in good operating condition and repair and are adequate for the
uses to which they are being put, in each case, taken as a whole, and none of such buildings, plants, machinery or equipment is
in need of maintenance or repairs, except for ordinary, routine maintenance and repairs that are not material in nature or cost.
5.12
Board Recommendation
. The Company Board has, by unanimous written consent, determined that this Agreement and the
transactions contemplated by this Agreement, are advisable and in the best interests of the Company and its Shareholders.
5.13
Intellectual Property
. The Company and each of the Company Subsidiaries owns or possesses all patents, trademarks,
domain names (whether or not registered) and any patentable improvements or copyrightable derivative works thereof, websites and
intellectual property rights relating thereto, service marks, trade names, copyrights, licenses and authorizations, and all rights
with respect to the foregoing, which are necessary for the conduct of its business as now conducted without any conflict with the
rights of others.
5.14
Due Diligence
. The Company has had the opportunity to perform all due diligence investigations
of the Acquiror Company and its business that the Company has deemed
necessary or appropriate and to ask
all questions of the officers and directors of the Acquiror Company that the Company wished to ask. The Company has reviewed sufficient
information to allow it to make the satisfactory evaluation on the merits and risks of the transactions contemplated by this Agreement.
Notwithstanding the foregoing, nothing herein shall derogate from or otherwise modify the representations and warranties of the
Acquiror Company set forth in this Agreement, on which the Shareholders have relied in making an exchange of the Shares of the
Company for the Acquiror Company Preferred Shares.
5.15
Liabilities.
Except as indicated in the financial statements and those incurred in the
ordinary business hereto, since December 31, 2012, neither t
he Company nor the Company Subsidiaries
has
incurred any external liabilities, obligations, claims or losses (whether liquidated or unliquidated, secured or unsecured, absolute,
accrued, contingent or otherwise) which, individually or in the aggregate, are reasonably likely to cause a Material Adverse Effect.
5.16
Adverse Interest.
No current officer, director or Person known to
the Company or
the Company Subsidiaries
to be the record or beneficial owner in excess of 5% of such entity’s
outstanding stock, is a party adverse to
the Company or the Company Subsidiaries
or has a material
interest adverse to
the Company or the Company Subsidiaries
in any material pending Proceeding.
5.17
No Material Adverse Effect
. Since December 31, 2009, the Company and the Company Subsidiaries
has not suffered a Material Adverse Effect.
SECTION VI
REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR
COMPANY
Subject to the disclosures
contained in the relevant Schedules attached hereto, the Acquiror Company represent and warrant to the Shareholders and the Company
as follows:
6.1
Organization and Qualification
. The Acquiror Company is duly organized, validly existing and in good standing under
the laws of Nevada, has all requisite corporate authority and power, governmental licenses, authorizations, consents and approvals
to carry on its business as presently conducted and to own, hold and operate its properties and assets as now owned, held and operated
by it. The Acquiror Company is duly qualified, licensed or domesticated as a foreign corporation in good standing in each jurisdiction
wherein the nature of its activities or its properties owned, held or operated makes such qualification, licensing or domestication
necessary, except where the failure to be so duly qualified, licensed or domesticated and in good standing would not have a Material
Adverse Effect.
Schedule 6.1
sets forth a true, correct and complete list of the Acquiror Company’s jurisdiction of
organization and each other jurisdiction in which the Acquiror Company presently conducts its business or owns, holds and operates
its properties and assets.
6.2
Subsidiaries
. The Acquiror Company does not own, directly or indirectly, any equity or other ownership interest in
any corporation, partnership, joint venture or other entity or enterprise.
6.3
Organizational Documents
. True, correct and complete copies of the Organizational Documents of the Acquiror Company
have been delivered to the Company prior to the execution of this Agreement, and no action has been taken to amend or repeal such
Organizational Documents since such date of delivery. The Acquiror Company is not in violation or breach of any of the provisions
of its Organizational Documents.
6.4
Authorization
. The Acquiror Company and the Acquiror Company Principal Shareholder have all requisite authority and
power (corporate and other), governmental licenses, authorizations, consents and approvals to enter into this Agreement and each
of the Transaction Documents to which the Acquiror Company and the Acquiror Company Principal Shareholder is a party, to consummate
the transactions contemplated by this Agreement and each of the Transaction Documents to which the Acquiror Company and the Acquiror
Company Principal Shareholder is a party and to perform its obligations under this Agreement and each of the Transaction Documents
to which the Acquiror Company and the Acquiror Company Principal Shareholder is a party. The execution, delivery and performance
by the Acquiror Company and the Acquiror Company Principal Shareholder of this Agreement and each of the Transaction Documents
to which the Acquiror Company and the Acquiror Company Principal Shareholder is a party have been duly authorized by all necessary
corporate action and do not, other than approval by the Acquiror Company stockholders in relation to the actions contemplated by
the Schedule 14F Filing, require from the Acquiror Company Board any consent or approval that has not been validly and lawfully
obtained. The execution, delivery and performance by the Acquiror Company and the Acquiror Company Principal Shareholder of this
Agreement and each of the Transaction Documents to which the Acquiror Company and the Acquiror Company Principal Shareholder is
a party requires no authorization, consent, approval, license, exemption of or filing or registration with any Governmental Authority
or other Person other than such other customary filings with the Commission for transactions of the type contemplated by this Agreement
and the Transaction Documents.
6.5
No Violation
. Neither the execution nor the delivery by the Acquiror Company and the Acquiror Company Principal Shareholder
of this Agreement or any Transaction Document to which the Acquiror Company and the Acquiror Company Principal Shareholder is a
party, nor the consummation or performance by the Acquiror Company and the Acquiror Company Principal Shareholder of the transactions
contemplated hereby or thereby will, directly or indirectly, (a) contravene, conflict with, or result in a violation of any provision
of the Organizational Documents of the Acquiror Company; (b) contravene, conflict with, constitute a default (or an event or condition
which, with notice or lapse of time or both, would constitute a default) under, or result in the termination or acceleration of,
or result in the imposition or creation of any Lien under, any agreement or instrument to which the Acquiror Company or the Acquiror
Company Principal Shareholder is a party or by which the properties or assets of the Acquiror Company or the Acquiror Company Principal
Shareholder are bound; (c) contravene, conflict with, or result in a violation of, any Law or Order to which the Acquiror Company
or the Acquiror Company Principal Shareholder, or any of the properties or assets owned or used by the Acquiror Company or the
Acquiror Company Principal Shareholder, may be subject; or (d) contravene, conflict with, or result in a violation of, the terms
or requirements of, or give any Governmental Authority the right to revoke, withdraw, suspend, cancel, terminate or modify, any
licenses, permits, authorizations, approvals, franchises or other rights held by the Acquiror
Company or the Acquiror Company Principal
Shareholder or that otherwise relate to the business of, or any of the properties or assets owned or used by, the Acquiror Company
or the Acquiror Company Principal Shareholder, except, in the case of clauses (b), (c), or (d), for any such contraventions, conflicts,
violations, or other occurrences as would not have a Material Adverse Effect.
6.6
Binding Obligations
. Assuming this Agreement and the Transaction Documents have been duly and validly authorized,
executed and delivered by the parties hereto and thereto other than the Acquiror Company and the Acquiror Company Principal Shareholder,
this Agreement and each of the Transaction Documents to which the Acquiror Company and the Acquiror Company Principal Shareholder
is a party are duly authorized, executed and delivered by the Acquiror Company and the Acquiror Company Principal Shareholder and
constitutes the legal, valid and binding obligations of the Acquiror Company and the Acquiror Company Principal Shareholder, enforceable
against the Acquiror Company and the Acquiror Company Principal Shareholder in accordance with their respective terms, except as
such enforcement is limited by general equitable principles, or by bankruptcy, insolvency and other similar Laws affecting the
enforcement of creditors rights generally.
6.7
Securities Laws
. Assuming the accuracy of the representations and warranties of the Shareholders, the issuance of
the Acquiror Company Preferred Shares pursuant to this Agreement will be when issued and paid for in accordance with the terms
of this Agreement issued in accordance with exemptions from the registration and prospectus delivery requirements of the Securities
Act and the registration permit or qualification requirements of all applicable state securities laws.
6.8
Capitalization and Related Matters
.
6.8.1
Capitalization
. The authorized capital stock of the Acquiror Company consists of 325,000,000 shares: 300,000,000
shares of the Acquiror Company’s Common Stock are authorized, par value $0.001, of which 261,466,723 shares are issued and
outstanding immediately prior to the Share Exchange; 25,000,000 shares of the Acquiror Company’s preferred stock are authorized,
par value $0.001, of which none are issued or outstanding. All issued and outstanding shares of the Acquiror Company’s Common
Stock immediately prior to the Share Exchange and the Share Exchange are duly authorized, validly issued, fully paid and nonassessable,
and have not been issued in violation of any preemptive or similar rights. At the Closing Date, the Acquiror Company will have
sufficient authorized and unissued Acquiror Company’s Common Stock and Preferred Stock to consummate the transactions contemplated
hereby. There are no outstanding options, warrants, purchase agreements, participation agreements, subscription rights, conversion
rights, exchange rights or other securities or contracts that could require the Acquiror Company to issue, sell or otherwise cause
to become outstanding any of its authorized but unissued shares of capital stock or any securities convertible into, exchangeable
for or carrying a right or option to purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to
become outstanding any new class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements,
registration rights agreements, rights of first refusal or other contracts pertaining to the capital stock of the Acquiror Company.
The issuance of all of the shares of Acquiror Company’s
Common Stock described in this Section
6.8.1 have been in compliance with U.S. federal and state securities laws and state corporate laws and no stockholder of the Acquiror
Company has any right to rescind or bring any other claim against the Acquiror Company for failure to comply under the Securities
Act, or state securities laws.
6.8.2
No Redemption Requirements
. Except as contemplated by the Cancelled Shares, there are no outstanding contractual
obligations (contingent or otherwise) of the Acquiror Company to retire, repurchase, redeem or otherwise acquire any outstanding
shares of capital stock of, or other ownership interests in, the Acquiror Company or to provide funds to or make any investment
(in the form of a loan, capital contribution or otherwise) in any other Person.
6.8.3
Duly Authorized
. The issuance of the Acquiror Company Preferred Shares has been duly authorized and, upon delivery
to the Shareholders of certificates therefor in accordance with the terms of this Agreement, the Acquiror Company Preferred Shares
will have been validly issued and fully paid, and will be nonassessable, have the rights, preferences and privileges specified,
will be free of preemptive rights and will be free and clear of all Liens and restrictions, other than Liens created by the Shareholders
and restrictions on transfer imposed by this Agreement and the Securities Act.
6.9
Compliance with Laws
. The business and operations of the Acquiror Company have been and are being conducted in accordance
with all applicable Laws and Orders. The Acquiror Company has not received notice of any violation (or any Proceeding involving
an allegation of any violation) of any applicable Law or Order by or affecting the Acquiror Company and, to the knowledge of the
Acquiror Company, no Proceeding involving an allegation of violation of any applicable Law or Order is threatened or contemplated.
The Acquiror Company is not subject to any obligation or restriction of any kind or character, nor is there, to the knowledge of
the Acquiror Company, any event or circumstance relating to the Acquiror Company that materially and adversely affects in any way
its business, properties, assets or prospects or that prohibits the Acquiror Company from entering into this Agreement or would
prevent or make burdensome its performance of or compliance with all or any part of this Agreement or the consummation of the transactions
contemplated hereby.
6.10
Certain Proceedings
. There is no pending Proceeding that has been commenced against the Acquiror Company and that
challenges, or may have the effect of preventing, delaying, making illegal, or otherwise interfering with, any of the transactions
contemplated by this Agreement. To the knowledge of the Acquiror Company, no such Proceeding has been threatened.
6.11
No Brokers or Finders
. Except as disclosed in
Schedule 6.11
, no Person has, or as a result of the transactions
contemplated herein will have, any right or valid claim against the Acquiror Company for any commission, fee or other compensation
as a finder or broker, or in any similar capacity.
6.12
Absence of Undisclosed Liabilities
. Except as set forth on
Schedule 6.12
or in the SEC Documents, as hereafter
defined, the Acquiror Company has no debt, obligation or liability (whether accrued, absolute, contingent, liquidated or otherwise,
whether due or to become due,
whether or not known to the Acquiror
Company) arising out of any transaction entered into at or prior to the Closing Date or any act or omission at or prior to the
Closing Date, except to the extent set forth on or reserved against on the Acquiror Company Balance Sheet. Any and all debts, obligations
or liabilities with respect to directors and officers of the Acquiror Company and of the Acquiror Company will be cancelled prior
to the Closing. The Acquiror Company has not incurred any liabilities or obligations under agreements entered into, in the usual
and ordinary course of business since December 31, 2012.
6.13
Changes
. Except as set forth on
Schedule 6.13
or in the SEC Documents, the Acquiror Company has conducted
its business in the usual and ordinary course of business consistent with past practice and has not:
6.13.1
Ordinary Course of Business
. Entered into any transaction other than in the usual and ordinary course of business,
except for this Agreement and each of the Transaction Documents;
6.13.2
Adverse Changes
. Suffered or experienced any change in, or affecting, its condition (financial or otherwise), properties,
assets, liabilities, business, operations, results of operations or prospects other than changes, events or conditions in the usual
and ordinary course of its business or those that would not have a Material Adverse Effect;
6.13.3
Loans
. Made any loans or advances to any Person other than travel advances and reimbursement of expenses made to
employees, officers and directors in the ordinary course of business;
6.13.4
Liens
. Created or permitted to exist any Lien on any material property or asset of the Acquiror Company, other than
Permitted Liens;
6.13.5
Capital Stock
. Issued, sold, disposed of or encumbered, or authorized the issuance, sale, disposition or encumbrance
of, or granted or issued any option to acquire any shares of its capital stock or any other of its securities or any Equity Security,
or altered the term of any of its outstanding securities or made any change in its outstanding shares of capital stock or its capitalization,
whether by reason of reclassification, recapitalization, stock split, combination, exchange or readjustment of shares, stock dividend
or otherwise;
6.13.6
Dividends
. Declared, set aside, made or paid any dividend or other distribution to any of its stockholders;
6.13.7
Material Acquiror Company Contracts
. Terminated or modified any Material Acquiror Company Contract, except for termination
upon expiration in accordance with the terms thereof;
6.13.8
Claims
. Released, waived or cancelled any claims or rights relating to or affecting the Acquiror Company in excess
of US $10,000 in the aggregate or instituted or settled any Proceeding involving in excess of US $10,000 in the aggregate;
6.13.9
Discharged Liabilities
. Paid, discharged or satisfied any claim, obligation or liability in excess of US $10,000
in the aggregate, except for liabilities incurred prior to the date of this Agreement in the ordinary course of business;
6.13.10
Indebtedness
. Created, incurred, assumed or otherwise become liable for any Indebtedness in excess of US $10,000
in the aggregate, other than professional fees;
6.13.11
Guarantees
. Guaranteed or endorsed in a material amount any obligation or net worth of any Person;
6.13.12
Acquisitions
. Acquired the capital stock or other securities or any ownership interest in, or substantially all of
the assets of, any other Person;
6.13.13
Accounting
. Changed its method of accounting or the accounting principles or practices utilized in the preparation
of its financial statements, other than as required by GAAP;
6.13.14
Agreements
. Entered into any agreement, or otherwise obligated itself, to do any of the foregoing.
6.14
Material Acquiror Company Contracts
. The Acquiror Company has provided to the Company, prior to the date of this
Agreement, true, correct and complete copies of each written Material Acquiror Company Contract, including each amendment, supplement
and modification thereto.
6.14.1
No Defaults
. Each Material Acquiror Company Contract is a valid and binding agreement of the Acquiror Company that
is party thereto, and is in full force and effect. The Acquiror Company is not in breach or default of any Material Acquiror Company
Contract to which it is a party and, to the knowledge of the Acquiror Company, no other party to any Material Acquiror Company
Contract is in breach or default thereof. No event has occurred or circumstance exists that (with or without notice or lapse of
time) would (a) contravene, conflict with or result in a violation or breach of, or become a default or event of default under,
any provision of any Material Acquiror Company Contract or (b) permit the Acquiror Company or any other Person the right to declare
a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate or modify any
Material Acquiror Company Contract. The Acquiror Company has not received notice of the pending or threatened cancellation, revocation
or termination of any Material Acquiror Company Contract to which it is a party. There are no renegotiations of, or attempts to
renegotiate, or outstanding rights to renegotiate any material terms of any Material Acquiror Company Contract.
6.15
Employees
.
6.15.1
Except as set forth on
Schedule 6.15.1
, the Acquiror Company has no employees, independent contractors or other Persons
providing services to them. Except as would not have a Material Adverse Effect, the Acquiror Company is in full compliance with
all Laws regarding employment, wages, hours, benefits, equal opportunity, collective bargaining,
the payment of Social Security and other
taxes, and occupational safety and health. The Acquiror Company is not liable for the payment of any compensation, damages, taxes,
fines, penalties or other amounts, however designated, for failure to comply with any of the foregoing Laws.
6.15.2
No director, officer or employee of the Acquiror Company is a party to, or is otherwise bound by, any contract (including
any confidentiality, non-competition or proprietary rights agreement) with any other Person that in any way adversely affects or
will materially affect (a) the performance of his or her duties as a director, officer or employee of the Acquiror Company or (b)
the ability of the Acquiror Company to conduct its business. Except as set forth on
Schedule 6.15.2
, each employee of the
Acquiror Company is employed on an at-will basis and the Acquiror Company does not have any contract with any of its employees
which would interfere with its ability to discharge its employees.
6.16
Tax Returns and Audits
.
6.16.1
Tax Returns
. The Acquiror Company has filed all material Tax Returns required to be filed (if any) by or on behalf
of the Acquiror Company and has paid all material Taxes of the Acquiror Company required to have been paid (whether or not reflected
on any Tax Return). No Governmental Authority in any jurisdiction has made a claim, assertion or threat to the Acquiror Company
that the Acquiror Company is or may be subject to taxation by such jurisdiction; there are no Liens with respect to Taxes on the
Acquiror Company’s property or assets other than Permitted Liens; and there are no Tax rulings, requests for rulings, or
closing agreements relating to the Acquiror Company for any period (or portion of a period) that would affect any period after
the date hereof.
6.16.2
No Adjustments, Changes
. Neither the Acquiror Company nor any other Person on behalf of the Acquiror Company (a)
has executed or entered into a closing agreement pursuant to Section 7121 of the Code or any predecessor provision thereof or any
similar provision of state, local or foreign law; or (b) has agreed to or is required to make any adjustments pursuant to Section
481(a) of the Code or any similar provision of state, local or foreign law.
6.16.3
No Disputes
. There is no pending audit, examination, investigation, dispute, proceeding or claim with respect to
any Taxes of the Acquiror Company, nor is any such claim or dispute pending or contemplated. The Acquiror Company has delivered
to the Company true, correct and complete copies of all Tax Returns and examination reports and statements of deficiencies assessed
or asserted against or agreed to by the Acquiror Company, if any, since its inception and any and all correspondence with respect
to the foregoing.
6.16.4
Not a U.S. Real Property Holding Corporation
. The Acquiror Company is not and has not been a United States real property
holding corporation within the meaning of Section 897(c)(2) of the Code at any time during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code.
6.16.5
No Tax Allocation, Sharing
. The Acquiror Company is not and has not been a party to any Tax allocation or sharing
agreement.
6.16.6
No Other Arrangements
. The Acquiror Company is not a party to any agreement, contract or arrangement for services
that would result, individually or in the aggregate, in the payment of any amount that would not be deductible by reason of Section
162(m), 280G or 404 of the Code. The Acquiror Company is not a “consenting corporation” within the meaning of Section
341(f) of the Code. The Acquiror Company does not have any “tax-exempt bond financed property” or “tax-exempt
use property” within the meaning of Section 168(g) or (h), respectively of the Code. The Acquiror Company does not have any
outstanding closing agreement, ruling request, request for consent to change a method of accounting, subpoena or request for information
to or from a Governmental Authority in connection with any Tax matter. During the last two years, the Acquiror Company has not
engaged in any exchange with a related party (within the meaning of Section 1031(f) of the Code) under which gain realized was
not recognized by reason of Section 1031 of the Code. The Company is not a party to any reportable transaction within the meaning
of Treasury Regulation Section 1.6011-4.
6.17
Material Assets
. The financial statements of the Acquiror Company set forth in the SEC Documents reflect the material
properties and assets (real and personal) owned or leased by the Acquiror Company.
6.18
Litigation; Orders
. There is no Proceeding (whether federal, state, local or foreign) pending or, to the knowledge
of the Acquiror Company, threatened against or affecting the Acquiror Company or any of Acquiror Company’s properties, assets,
business or employees. To the knowledge of the Acquiror Company, there is no fact that might result in or form the basis for any
such Proceeding. The Acquiror Company is not subject to any Orders.
6.19
Licenses
. The Acquiror Company possesses from the appropriate Governmental Authority all licenses, permits, authorizations,
approvals, franchises and rights that are necessary for the Acquiror Company to engage in its business as currently conducted and
to permit the Acquiror Company to own and use its properties and assets in the manner in which it currently owns and uses such
properties and assets (collectively, “
Acquiror Company Permits
”). The Acquiror Company has not received notice
from any Governmental Authority or other Person that there is lacking any license, permit, authorization, approval, franchise or
right necessary for the Acquiror Company to engage in its business as currently conducted and to permit the Acquiror Company to
own and use its properties and assets in the manner in which it currently owns and uses such properties and assets. The Acquiror
Company Permits are valid and in full force and effect. No event has occurred or circumstance exists that may (with or without
notice or lapse of time): (a) constitute or result, directly or indirectly, in a violation of or a failure to comply with any Acquiror
Company Permit; or (b) result, directly or indirectly, in the revocation, withdrawal, suspension, cancellation or termination of,
or any modification to, any Acquiror Company Permit. The Acquiror Company has not received notice from any Governmental Authority
or any other Person regarding: (a) any actual, alleged, possible or potential contravention of any Acquiror Company Permit; or
(b) any actual, proposed, possible or potential revocation, withdrawal, suspension, cancellation, termination of, or modification
to,
any Acquiror Company Permit. All applications
required to have been filed for the renewal of such Acquiror Company Permits have been duly filed on a timely basis with the appropriate
Persons, and all other filings required to have been made with respect to such Acquiror Company Permits have been duly made on
a timely basis with the appropriate Persons. All Acquiror Company Permits are renewable by their terms or in the ordinary course
of business without the need to comply with any special qualification procedures or to pay any amounts other than routine fees
or similar charges, all of which have, to the extent due, been duly paid.
6.20
Interested Party Transactions
. Except as set forth on
Schedule 6.20
, no officer, director or stockholder of
the Acquiror Company or any Affiliate or “associate” (as such term is defined in Rule 405 of the Commission under the
Securities Act) of any such Person, has or has had, either directly or indirectly, (1) an interest in any Person which (a) furnishes
or sells services or products which are furnished or sold or are proposed to be furnished or sold by the Acquiror Company, or (b)
purchases from or sells or furnishes to, or proposes to purchase from, sell to or furnish the Acquiror Company any goods or services;
or (2) a beneficial interest in any contract or agreement to which the Acquiror Company is a party or by which it may be bound
or affected.
6.21
Governmental Inquiries
. The Acquiror Company has provided to the Company a copy of each material written inspection
report, questionnaire, inquiry, demand or request for information received by the Acquiror Company from any Governmental Authority,
and the Acquiror Company’s response thereto, and each material written statement, report or other document filed by the Acquiror
Company with any Governmental Authority.
6.22
Bank Accounts and Safe Deposit Boxes
. Except as set forth on
Schedule 6.22
, the Acquiror Company does not
have any bank or other deposit or financial account, nor does the Acquiror Company have any lock boxes or safety deposit boxes.
6.23
Intellectual Property
. The Acquiror Company does not own, use or license any Intellectual Property in its business
as presently conducted.
6.24
Title to Properties
. The Acquiror Company owns (with good and marketable title in the case of real property) or holds
under valid leases the rights to use all real property, plants, machinery, equipment and other personal property necessary for
the conduct of its business as presently conducted, free and clear of all Liens, except Permitted Liens.
6.25
SEC Documents; Financial Statements
. The Acquiror Company has filed all reports required to be filed by it under
the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the three (3) years preceding the date hereof (or such
shorter period as the Acquiror Company was required by law to file such material) (the foregoing materials being collectively referred
to herein as the “
SEC Documents
”). As of their respective dates, the SEC Documents and any registration statements
filed under the Securities Act (the “
Registration Statements
”) complied in all material respects with the requirements
of the Exchange Act and the Securities Act, as applicable, and the rules and regulations of the Commission promulgated thereunder,
and none of the SEC Documents or Registration Statements, 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 light of the circumstances
under which they
were made, not misleading. All Material
Acquiror Company Contracts to which the Acquiror Company is a party or to which the property or assets of the Acquiror Company
are subject have been appropriately filed as exhibits to the SEC Documents and the Registration Statements as and to the extent
required under the Exchange Act and the Securities Act, as applicable. The financial statements of the Acquiror Company included
in the Registration Statement and the SEC Documents comply in all material respects with applicable accounting requirements and
the rules and regulations of the Commission with respect thereto as in effect at the time of filing, were prepared in accordance
with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto, or, in the
case of unaudited statements as permitted by Form 10-Q of the Commission), and fairly present in all material respects (subject
in the case of unaudited statements, to normal, recurring audit adjustments) the financial position of the Acquiror Company as
at the dates thereof and the results of its operations and cash flows for the periods then ended. The Acquiror Company was originally
organized and operated through the date hereof as a bona fide operating business without any pre-existing plan or strategy that
the Acquiror Company would serve primarily as a merger or acquisition candidate for an unidentified company or companies. The disclosure
set forth in the SEC Documents and Registration Statements regarding the Acquiror Company’s business is current and complete
and accurately reflects operations of the Acquiror Company as it exists as of the date hereof.
6.26
Stock Option Plans; Employee Benefits
.
6.26.1
The Acquiror Company has no stock option plans providing for the grant by the Acquiror Company of stock options to directors,
officers or employees.
6.26.2
The Acquiror Company has no employee benefit plans or arrangements covering their present and former employees or providing
benefits to such persons in respect of services provided the Acquiror Company.
6.26.3
Neither the consummation of the transactions contemplated hereby alone, nor in combination with another event, with respect
to each director, officer, employee and consultant of the Acquiror Company, will result in (a) any payment (including, without
limitation, severance, unemployment compensation or bonus payments) becoming due from the Acquiror Company, (b) any increase in
the amount of compensation or benefits payable to any such individual or (c) any acceleration of the vesting or timing of payment
of compensation payable to any such individual. No agreement, arrangement or other contract of the Acquiror Company provides benefits
or payments contingent upon, triggered by, or increased as a result of a change in the ownership or effective control of the Acquiror
Company.
6.27
Money Laundering Laws
. The operations of the Acquiror Company is and has been conducted at all times in compliance
with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as amended, the money laundering statutes of all U.S. and non-U.S. jurisdictions, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Authority (collectively,
the “
Money Laundering Laws
”) and no Proceeding involving the Acquiror Company with respect to the Money Laundering
Laws is pending or, to the knowledge of the Acquiror Company, threatened.
6.28
Board Recommendation
. The Acquiror Company Board, by unanimous written consent, has determined that this Agreement
and the transactions contemplated by this Agreement are advisable and in the best interests of the Acquiror Company’s stockholders
and has duly authorized this Agreement and the transactions contemplated by this Agreement.
6.29
Certain Registration Matters
. The Acquiror Company has not granted or agreed to grant any person any rights (including
“piggy-back registration rights) to have any securities of the Acquiror Company registered with the Commission or any other
Governmental Authority that have not been satisfied.
SECTION VII
COVENANTS OF THE ACQUIROR COMPANY
7.1
SEC Documents
. From and after the Closing Date, in the event the Commission notifies the Acquiror Company of its
intent to review any SEC Document filed prior to the Closing Date or the Acquiror Company receives any oral or written comments
from the Commission with respect to any SEC Document filed prior to the Closing Date or any disclosure regarding the Acquiror Company’s
business or operations, as in existence through the date hereof in any SEC Document or registration statement filed after the Closing
Date, the Acquiror Company shall promptly notify the Acquiror Company Principal Shareholder and the Acquiror Company Principal
Shareholder shall fully cooperate with the Acquiror Company in connection with such review and response.
7.2
Schedule 14(f) Information Statement
. Within ten (10) days following the Closing Date, the Acquiror Company will
file and mail a Schedule 14(f) information statement to the stockholders of record of the Acquiror Company.
7.3
Form 8-K
. Within four (4) business days of the Closing Date, the Acquiror Company shall file the Form 8-K.
SECTION VIII
COVENANTS AND AGREEMENTS OF THE PARTIES
8.1
Corporate Examinations and Investigations
. Prior to the Closing, each party shall be entitled, through its employees
and representatives, to make such investigations and examinations of the books, records and financial condition of the Company
and the Acquiror Company (and any Subsidiary) as each party may reasonably request. In order that each party may have the full
opportunity to do so, the Company and the Acquiror Company, the Shareholders and the Acquiror Company Principal Shareholder shall
furnish each party and its representatives during such period with all such information concerning the affairs of the Company or
the Acquiror Company or any Subsidiary as each party or its representatives may reasonably request and cause the Company or the
Acquiror Company and their respective officers, employees, consultants, agents, accountants and attorneys to cooperate fully with
each party’s representatives in connection with such review and examination and to make full disclosure of all information
and documents requested by each party and/or its representatives. Any such investigations and examinations shall be conducted at
reasonable times and under
reasonable circumstances, it being agreed
that any examination of original documents will be at each party’s premises, with copies thereof to be provided to each party
and/or its representatives upon request.
8.2
Cooperation; Consents
. Prior to the Closing, each party shall cooperate with the other parties and shall (i) in a
timely manner make all necessary filings with, and conduct negotiations with, all authorities and other Persons the consent or
approval of which, or the license or permit from which is required for the consummation of the Share Exchange and (ii) provide
to each other party such information as the other party may reasonably request in order to enable it to prepare such filings and
to conduct such negotiations.
8.3
Conduct of Business
. Subject to the provisions hereof, from the date hereof through the Closing, each party hereto
shall (i) conduct its business in the ordinary course and in such a manner so that the representations and warranties contained
herein shall continue to be true and correct in all material respects as of the Closing as if made at and as of the Closing and
(ii) not enter into any material transactions or incur any material liability (except in the ordinary course of its business) not
required or specifically contemplated hereby, without first obtaining the written consent of the Company and the holders of a majority
of voting stock of the Company, on the one hand, and the Acquiror Company and the holders of a majority of the Acquiror Company
Common Stock, on the other hand. Without the prior written consent of the Company, the Shareholders, the Acquiror Company or the
Acquiror Company Principal Shareholder, except as required or specifically contemplated hereby, each party shall not undertake
or fail to undertake any action if such action or failure would render any of said warranties and representations untrue in any
material respect as of the Closing.
8.4
Litigation
.
From the date hereof through the Closing, each party hereto shall promptly notify the representative of the other parties of any
known Proceeding which after the date hereof are threatened or commenced against such party or any of its affiliates or any officer,
director, employee, consultant, agent or shareholder thereof, in their capacities as such, which, if decided adversely, could reasonably
be expected to have a Material Adverse Effect upon the condition (financial or otherwise), assets, liabilities, business, operations
or prospects of such party or any of its Subsidiaries.
8.5
Notice of Default
.
From the date hereof through the Closing, each party hereto shall give to the representative of the other parties prompt written
notice of the occurrence or existence of any event, condition or circumstance occurring which would constitute a violation or breach
of this Agreement by such party or which would render inaccurate in any material respect any of such party’s representations
or warranties herein.
8.6
Share Cancellation
.
Immediately prior to the Closing, Wansor shall cancel 155,466,645 shares of her Acquiror Company Common Stock.
8.7
Public Disclosure
.
Except to the extent previously disclosed or to the extent the parties are required by applicable law or regulation to make disclosure,
prior to Closing, no party shall issue any statement or communication to the public regarding the transaction contemplated
herein without the consent of the other party,
which consent shall not be unreasonably withheld. To the extent a party hereto believes it is required by law or regulation to
make disclosure regarding the transaction, it shall, if possible, immediately notify the other party prior to such disclosure and
provide the opportunity for the other party to make reasonable comments to such disclosure.
8.8
Assistance with
Post-Closing SEC Reports and Inquiries
. Upon the reasonable request of the Company, after the Closing Date, the Acquiror Company
Principal Shareholder shall use his reasonable best efforts to provide such information available to him, including information,
filings, reports, financial statements or other circumstances of the Acquiror Company occurring, reported or filed prior to the
Closing, as may be necessary or required by the Acquiror Company for the preparation of the post-Closing Date reports that the
Acquiror Company is required to file with the Commission to remain in compliance and current with its reporting requirements under
the Exchange Act, or filings required to address and resolve matters as may relate to the period prior to the Closing and any Commission
comments relating thereto or any Commission inquiry thereof.
8.9
Transfers.
The
Acquiror Company
Principal Shareholder will not sell, transfer, assign, hypothecate, lien,
or otherwise dispose or encumber the shares owned by him.
8.10
No Loans or Advances
. Except for loans and advances outstanding as of the Closing Date or such loans and advances
that are in compliance with the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder, the Company will
not make any loans, advances or other extensions of credit to the executive officers or directors of the Company, any Subsidiary
or any family member or Affiliate of any of such executive officers or directors.
SECTION IX
CONDITIONS PRECEDENT OF THE ACQUIROR COMPANY
The Acquiror Company’s
obligation to acquire the Shares and to take the other actions required to be taken by the Acquiror Company at the Closing Date
is subject to the satisfaction, at or prior to the Closing Date, of each of the following conditions (any of which may be waived
by the Acquiror Company, in whole or in part):
9.1
Accuracy of Representations
. The representations and warranties of the Company and the Shareholders set forth in
this Agreement or in any Schedule or certificate delivered pursuant hereto that are not qualified as to materiality shall be true
and correct in all material respects as of the date of this Agreement except to the extent a representation or warranty is expressly
limited by its terms to another date and without giving effect to any supplemental Schedule.
9.2
No Force Majeure Event
. There shall not have been any delay, error, failure or interruption in the conduct of the
business of the Company, or any loss, injury, delay, damage, distress, or other casualty, due to force majeure including but not
limited to (a) acts of God; (b) fire or explosion; (c) war, acts of terrorism or other civil unrest; or (d) national emergency.
9.3
Consents
. All material consents, waivers, approvals, authorizations or orders required to be obtained, and all filings
required to be made, by the Company and/or the Shareholders for the authorization, execution and delivery of this Agreement and
the consummation by them of the transactions contemplated by this Agreement, shall have been obtained and made by the Company or
the Shareholders, as the case may be, except where the failure to receive such consents, waivers, approvals, authorizations or
orders or to make such filings would not have a Material Adverse Effect on the Company or the Acquiror Company.
9.4
Certificate of Officer
. The Company will have delivered to the Acquiror Company a certificate executed by an officer
of the Company, certifying the satisfaction of the conditions specified in Sections 9.1, 9.2, and 9.3 relating to the Company.
9.5
Documents
. The Company and the Shareholders must deliver to the Acquiror Company at the Closing:
9.5.1
share certificates evidencing the number of Shares held by the Shareholders, along with executed share transfer forms transferring
such Shares to the Acquiror Company together with a certified copy of a board resolution of the Company approving the registration
of the transfer of such shares to Acquiror Company (subject to Closing and payment of stamp duty);
9.5.2
a Secretary’s Certificate, dated the Closing Date certifying attached copies of (A) the Organizational Documents of
the Company, (B) the resolutions of the Company Board approving this Agreement and the transactions contemplated hereby; and (C)
the incumbency of each authorized officer of the Company signing this Agreement and any other agreement or instrument contemplated
hereby to which the Company is a party;
9.5.3
a Certificate of Good Standing of the Acquiror Company that is dated within five (5) business days of the Closing;
9.5.4
each of the Transaction Documents to which the Company and/or the Shareholders are a party, duly executed; and
9.5.5
such other documents as the Acquiror Company may reasonably request for the purpose of (A) evidencing the accuracy of any
of the representations and warranties of the Company and the Shareholders pursuant to Section 9.1, (B) evidencing the performance
of, or compliance by the Company and the Shareholders with, any covenant or obligation required to be performed or complied with
by the Company or the Shareholders, as the case may be, (C) evidencing the satisfaction of any condition referred to in this Section
9, or (D) otherwise facilitating the consummation or performance of any of the transactions contemplated by this Agreement.
9.6
No Proceedings
. There must not have been commenced or threatened against the Acquiror Company, the Company or the
Shareholders, or against any Affiliate thereof, any Proceeding (which Proceeding remains unresolved as of the Closing Date) (a)
involving any challenge to, or seeking damages or other relief in connection with, any of the transactions contemplated by this
Agreement, or (b) that may have the effect of preventing, delaying, making illegal, or otherwise interfering with any of the transactions
contemplated by this Agreement.
9.7
No Claim Regarding Stock Ownership or Consideration
. There must not have been made or threatened by any Person any
claim asserting that such Person (a) is the holder of, or has the right to acquire or to obtain beneficial ownership of the Shares
or any other stock, voting, equity, or ownership interest in, the Company, or (b) is entitled to all or any portion of the Acquiror
Company Preferred Shares.
9.8
Cancelled Shares
. Prior to the Closing, the Cancelled Shares shall have been completed.
SECTION X
CONDITIONS PRECEDENT OF THE COMPANY
AND THE SHAREHOLDERS
The Shareholders’
obligation to transfer the Shares and the obligations of the Company to take the other actions required to be taken by the Company
in advance of or at the Closing Date are subject to the satisfaction, at or prior to the Closing Date, of each of the following
conditions (any of which may be waived by the Company and the Shareholders jointly, in whole or in part):
10.1
Accuracy of Representations
. The representations and warranties of the Acquiror Company set forth in this Agreement
or in any Schedule or certificate delivered pursuant hereto that are not qualified as to materiality shall be true and correct
in all material respects as of the date of this Agreement except to the extent a representation or warranty is expressly limited
by its terms to another date and without giving effect to any supplemental Schedule.
10.2
No Force Majeure Event
. There shall not have been any delay, error, failure or interruption in the conduct of the
business of the Acquiror Company, or any loss, injury, delay, damage, distress, or other casualty, due to force majeure including
but not limited to (a) acts of God; (b) fire or explosion; (c) war, acts of terrorism or other civil unrest; or (d) national emergency.
10.3
Consents
.
10.3.1
All material consents, waivers, approvals, authorizations or orders required to be obtained, and all filings required to
be made, by the Acquiror Company for the authorization, execution and delivery of this Agreement and the consummation by it of
the transactions contemplated by this Agreement, shall have been obtained and made by the Acquiror Company, except where the failure
to receive such consents, waivers, approvals, authorizations or orders or to make such filings would not have a Material Adverse
Effect on the Company or the Acquiror Company.
10.3.2
Without limiting the foregoing, the Schedule 14(f) Filing shall have been prepared to be filed with the Commission by the
Acquiror Company after the Closing Date.
10.4
Certificate of Officer
. The Acquiror Company will have delivered to the Company a certificate, dated the Closing
Date, executed by an officer of the Acquiror Company, certifying the satisfaction of the conditions specified in Sections 10.1,
10.2, and 10.3 relating to the Acquiror Company.
10.5
Documents
. The Acquiror Company must have caused the following documents to be delivered to the Company and/or the
Shareholders:
10.5.1
share certificate(s) evidencing 1,000.999 shares of Acquiror Company Preferred Shares being issued to the Shareholders pursuant
hereto;
10.5.2
a Secretary’s Certificate, dated the Closing Date certifying attached copies of (A) the Organizational Documents of
the Acquiror Company, (B) the resolutions of the Acquiror Company Board approving this Agreement and the transactions contemplated
hereby; and (C) the incumbency of each authorized officer of the Acquiror Company signing this Agreement and any other agreement
or instrument contemplated hereby to which the Acquiror Company is a party;
10.5.3
a Certificate of Good Standing of the Acquiror Company that is dated within five (5) business days of the Closing;
10.5.4
each of the Transaction Documents to which the Acquiror Company is a party, duly executed;
10.5.5
the resignation of Wansor as the sole officer of the Acquiror Company on the Closing Date;
10.5.6
Acquiror Company Board Resolutions (i) appointing members of the Acquiror Company Board to be effective at the Effective
Time, and (ii) appointing the new officers of the Acquiror Company to be effective at the Closing.
10.5.7
a statement from the Acquiror Company’s transfer agent regarding the number of issued and outstanding shares of common
stock and preferred stock immediately before the Closing; and
10.5.8
such other documents as the Company may reasonably request for the purpose of (i) evidencing the accuracy of any representation
or warranty of the Acquiror Company pursuant to Section 10.1, (ii) evidencing the performance by the Acquiror Company of, or the
compliance by the Acquiror Company with, any covenant or obligation required to be performed or complied with by the Acquiror Company,
(iii) evidencing the satisfaction of any condition referred to in this Section 10, or (iv) otherwise facilitating the consummation
of any of the transactions contemplated by this Agreement.
10.6
No Proceedings
. Since the date of this Agreement, there must not have been commenced or threatened against the Acquiror
Company, the Company or the Shareholders, or against any Affiliate thereof, any Proceeding (which Proceeding remains unresolved
as of the date of this Agreement) (a) involving any challenge to, or seeking damages or other relief in connection with, any of
the transactions contemplated hereby, or (b) that may have the effect of preventing, delaying, making illegal, or otherwise interfering
with any of the transactions contemplated hereby.
10.7
No Claim Regarding Stock Ownership or Consideration
. There must not have been made or threatened by any Person any
claim asserting that such Person (a) is the holder of, or has the right to acquire or to obtain beneficial ownership of the Acquiror
Company Common Stock or any other stock, voting, equity, or ownership interest in, the Acquiror Company, or (b) is entitled to
all or any portion of the Acquiror Company Preferred Shares.
10.8
No Liability
. There must not be any outstanding
obligation or liability (whether
accrued, absolute, contingent, liquidated or otherwise, whether due or to become due) of the Acquiror Company, whether or not known
to the Acquiror Company
.
10.9
Cancellation of Shares.
Prior to the Closing, the Cancelled Shares shall have been completed.
10.10
Certificate of Designation
. Prior to the Closing,
the
Series M Certificate of Designation of the Relative Rights and Preferences of the Series M Convertible Preferred Stock attached
hereto as
Exhibit A
shall have been filed with the Secretary of State of Nevada.
SECTION XI
INDEMNIFICATION; REMEDIES
11.1
Survival
. All representations, warranties, covenants, and obligations in this Agreement shall expire eighteen (18)
months following the date this Agreement is executed (the “
Survival Period
”). The right to indemnification,
payment of damages or other remedy based on such representations, warranties, covenants, and obligations will not be affected by
any investigation conducted with respect to, or any knowledge acquired (or capable of being acquired) at any time, whether before
or after the execution and delivery of this Agreement, with respect to the accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant, or obligation. The waiver of any condition based on the accuracy of any representation or warranty,
or on the performance of or compliance with any covenant or obligation, will not affect the right to indemnification, payment of
damages, or other remedy based on such representations, warranties, covenants, and obligations.
11.2
Breach by the Shareholders
. Nothing in this Section 11 shall limit the Acquiror Company’s right to pursue any
appropriate legal or equitable remedy against the Shareholders with respect to any damages from and after the execution of this
Agreement, until the expiration of the Survival Period arising, directly or indirectly, from or in connection with: (a) any breach
by the Shareholders of any representation or warranty made by the Shareholders in this Agreement or in any certificate delivered
by such Shareholders pursuant to this Agreement or (b) any breach by the Shareholders of any covenants or obligation in this Agreement
required to be performed by the Acquiror Company or the Acquiror Company Principal Shareholder on or prior to the Closing Date
or after the Closing Date. All claims of the Acquiror Company pursuant to this Section 11.2 shall be brought by the Acquiror Company
and those Persons who were stockholders of the Acquiror Company immediately prior to the Closing Date.
SECTION XII
GENERAL PROVISIONS
12.1
Expenses
. Except as otherwise expressly provided in this Agreement, each party to this Agreement will bear its respective
expenses incurred in connection with the preparation, execution, and performance of this Agreement and the transactions contemplated
by this Agreement, including all fees and expenses of agents, representatives, counsel, and accountants. In the event of termination
of this Agreement, the obligation of each party to pay its own expenses will be subject to any rights of such party arising from
a breach of this Agreement by another party.
12.2
Public Announcements
. The Acquiror Company shall promptly, but no later than four (4) business days following the
effective date of this Agreement, issue a press release disclosing the transactions contemplated hereby. The Acquiror Company shall
also file with the Commission a Form 8-K describing the material terms of the transactions contemplated hereby as soon as practicable
following the Closing Date but in no event more than four (4) business days following the Closing Date. Prior to the Closing Date,
the Company and the Acquiror Company shall consult with each other in issuing the Form 8-K, the press release and any other press
releases or otherwise making public statements or filings and other communications with the Commission or any regulatory agency
or stock market or trading facility with respect to the transactions contemplated hereby and neither party shall issue any such
press release or otherwise make any such public statement, filings or other communications without the prior written consent of
the other, which consent shall not be unreasonably withheld or delayed, except that no prior consent shall be required if such
disclosure is required by law, in which case the disclosing party shall provide the other party with prior notice of no less than
three (3) calendar days, of such public statement, filing or other communication and shall incorporate into such public statement,
filing or other communication the reasonable comments of the other party.
12.3
Confidentiality
.
12.3.1
The Acquiror Company, the Acquiror Company Principal Shareholder, the Shareholders and the Company will maintain in confidence,
and will cause their respective directors, officers, employees, agents, and advisors to maintain in confidence, any written, oral,
or other information obtained in confidence from another party in connection with this Agreement or the transactions contemplated
by this Agreement, unless (a) such information is already known to such party or to others not bound by a duty of confidentiality
or such information becomes publicly available through no fault of such party, (b) the use of such information is necessary or
appropriate in making any required filing with the Commission, or obtaining any consent or approval required for the consummation
of the transactions contemplated by this Agreement, or (c) the furnishing or use of such information is required by or necessary
or appropriate in connection with legal proceedings.
12.3.2
In the event that any party is required to disclose any information of another party pursuant to clause (b) or (c) of Section
12.3.1, the party requested or required to make the disclosure (the “
disclosing party
”) shall provide the party
that provided such information (the “
providing party
”) with prompt notice of any such requirement so that the
providing party may seek a protective
order or other appropriate remedy and/or waive compliance with the provisions of this Section 12.3. If, in the absence of a protective
order or other remedy or the receipt of a waiver by the providing party, the disclosing party is nonetheless, in the opinion of
counsel, legally compelled to disclose the information of the providing party, the disclosing party may, without liability hereunder,
disclose only that portion of the providing party’s information which such counsel advises is legally required to be disclosed,
provided that the disclosing party exercises its reasonable efforts to preserve the confidentiality of the providing party’s
information, including, without limitation, by cooperating with the providing party to obtain an appropriate protective order or
other relief assurance that confidential treatment will be accorded the providing party’s information.
12.3.3
If the transactions contemplated by this Agreement are not consummated, each party will return or destroy all of such written
information each party has regarding the other party.
12.4
Notices
. All notices, demands, consents, requests, instructions and other communications to be given or delivered
or permitted under or by reason of the provisions of this Agreement or in connection with the transactions contemplated hereby
shall be in writing and shall be deemed to be delivered and received by the intended recipient as follows: (i) if personally delivered,
on the business day of such delivery (as evidenced by the receipt of the personal delivery service), (ii) if mailed certified or
registered mail return receipt requested, two (2) business days after being mailed, (iii) if delivered by overnight courier (with
all charges having been prepaid), on the business day of such delivery (as evidenced by the receipt of the overnight courier service
of recognized standing), or (iv) if delivered by facsimile transmission, on the business day of such delivery if sent by 6:00 p.m.
in the time zone of the recipient, or if sent after that time, on the next succeeding business day (as evidenced by the printed
confirmation of delivery generated by the sending party’s telecopier machine). If any notice, demand, consent, request, instruction
or other communication cannot be delivered because of a changed address of which no notice was given (in accordance with this Section
12.4), or the refusal to accept same, the notice, demand, consent, request, instruction or other communication shall be deemed
received on the second business day the notice is sent (as evidenced by a sworn affidavit of the sender). All such notices, demands,
consents, requests, instructions and other communications will be sent to the following addresses or facsimile numbers as applicable.
|
If to Acquiror Company:
Helmer Directional Drilling Corp.
11759 Crystal Avenue
Chino, California 91710
Attention: CEO
Telephone No.: 951-500-8583
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If to the Company:
Excelsior Gold Corp
715 13
th
Street NE
Wenatchee, Washington 98802
Attention: Chief Executive Officer
Telephone No.: 509-884-2218
|
with a copy, which shall not constitute notice, to:
Acadia Group
11650 South State St., Suite 240
Draper, Utah 84020
Attention: John Thomas, Esq.
Telephone No.: 801-816-2500
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12.5
Arbitration
. Any dispute or controversy under this Agreement shall be settled exclusively by arbitration in the State
of Nevada in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitration
award in any court having jurisdiction.
12.6
Further Assurances
. The parties agree (a) to furnish upon request to each other such further information, (b) to
execute and deliver to each other such other documents, and (c) to do such other acts and things, all as the other party may reasonably
request for the purpose of carrying out the intent of this Agreement and the documents referred to in this Agreement.
12.7
Waiver
. The rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither the
failure nor any delay by any party in exercising any right, power, or privilege under this Agreement or the documents referred
to in this Agreement will operate as a waiver of such right, power, or privilege, and no single or partial exercise of any such
right, power, or privilege will preclude any other or further exercise of such right, power, or privilege or the exercise of any
other right, power, or privilege. To the maximum extent permitted by applicable law, (a) no claim or right arising out of this
Agreement or the documents referred to in this Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation
of the claim or right unless in writing signed by the other party; (b) no waiver that may be given by a party will be applicable
except in the specific instance for which it is given; and (c) no notice to or demand on one party will be deemed to be a waiver
of any obligation of such party or of the right of the party giving such notice or demand to take further action without notice
or demand as provided in this Agreement or the documents referred to in this Agreement.
12.8
Entire Agreement and Modification
. This Agreement supersedes all prior agreements between the parties with respect
to its subject matter and constitutes (along with the documents referred to in this Agreement) a complete and exclusive statement
of the terms of the agreement between the parties with respect to its subject matter. This Agreement may not be amended except
by a written agreement executed by the party against whom the enforcement of such amendment is sought.
12.9
Assignments, Successors, and No Third-Party Rights
. No party may assign any of its rights under this Agreement without
the prior consent of the other parties. Subject to the preceding sentence, this Agreement will apply to, be binding in all respects
upon, and inure to the benefit of and be enforceable by the respective successors and permitted assigns of the parties. Except
as set forth in Section 11.3 hereof, nothing expressed or referred to in this
Agreement will be construed to give
any Person other than the parties to this Agreement any legal or equitable right, remedy, or claim under or with respect to this
Agreement or any provision of this Agreement. This Agreement and all of its provisions and conditions are for the sole and exclusive
benefit of the parties to this Agreement and their successors and assigns.
12.10
Severability
. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction,
the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable
only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.
12.11
Section Headings, Construction
. The headings of Sections in this Agreement are provided for convenience only and
will not affect its construction or interpretation. All references to “Section” or “Sections” refer to
the corresponding Section or Sections of this Agreement. All words used in this Agreement will be construed to be of such gender
or number as the circumstances require. Unless otherwise expressly provided, the word “including” does not limit the
preceding words or terms.
12.12
Governing Law
. This Agreement will be governed by the laws of the State of Nevada without regard to conflicts of
laws principles.
12.13
Counterparts
. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original
copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement. In the event
that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with
the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT
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COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF,
the parties have executed and delivered this Share Exchange Agreement as of the date first written above.
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Acquiror Company:
Helmer Directional Drilling Corp.
Signed: ________________________
Printed name: Georgette Wansor
Title: President, Chief Executive Officer and Chief Financial Officer
|
|
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Company:
Excelsior Gold Corp
Signed: _______________________
Printed name: Doug McFarland
Title: Chief Executive Officer
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COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF,
the parties have executed and delivered this Share Exchange Agreement as of the date first written above.
SHAREHOLDERS:
Doug McFarland
By:
Name: Doug McFarland
Alto Cascade Resources, LLC
By:
Name:
Title:
West Coast Resource Associates, LLC
By:
Name:
Title:
SCHEDULES
Schedule 4.1.3 Shareholder Ownership of Shares
Schedule 5.1 Company Organization and Qualification
Schedule 5.2 Company Subsidiaries
Schedule 5.7.1 Capitalization of the Company
Schedule 5.11 Company Brokers or Finders
Schedule 6.1 Acquiror Company Organization and Qualification
Schedule 6.2 Acquiror Company Subsidiaries
Schedule 6.11 Acquiror Company Brokers or Finders
Schedule 6.12 Acquiror Company Absence of Undisclosed
Liabilities
Schedule 6.13 Changes
Schedule 6.15.1 Employees
Schedule 6.15.2 Acquiror Company Employees
Schedule 6.20 Interested Party Transactions
Schedule 6.22 Bank Accounts
Schedule 6.25 Acquiror Company SEC Documents
Schedule 6.29 Certain Registration Matters
EXHIBIT A
SERIES M CERTIFICATE OF DESIGNATION
APPENDIX C
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF THE
SERIES M CONVERTIBLE PREFERRED STOCK
OF
HELMER DIRECTIONAL DRILLING CORP.
The Articles of Incorporation
of Helmer Directional Drilling Corp, a Nevada corporation (the “
Company
”), provide that the Company is
authorized to issue 25,000,000 shares of preferred stock with a par value of $0.001, and that the Board of Directors have the authority
to attach such terms as they deem fit with respect to the preferred stock.
Pursuant to the authority
conferred upon the Board of Directors by the Articles of Incorporation, and pursuant to Section 78.1955 of the Nevada Revised Statutes,
the Board of Directors, by Unanimous Written Consent, dated March 11, 2013, adopted a resolution providing for the designation,
rights, powers and preferences and the qualifications, limitations and restrictions of 1,500 shares of Series M Convertible Preferred
Stock, and that a copy of such resolution is as follows:
RESOLVED
, that pursuant to the
authority vested in the Board of Directors of the Company, the provisions of its Articles of Incorporation, and in accordance with
the Nevada Revised Statutes, the Board of Directors hereby authorizes the filing of a Certificate of Designations, Preferences
and Rights of Series M Convertible Preferred Stock of the Company. Accordingly, the Company is authorized to issue Series M Convertible
Preferred Stock with par value of $0.001 per share, which shall have the powers, preferences and rights and the qualifications,
limitations and restrictions thereof, as follows:
1.
Designation and Rank
. The designation of such series of the Preferred Stock shall be the Series M Convertible Preferred
Stock, par value $0.001 per share (the “
Series M Preferred Stock
”). The maximum number of shares of Series
M Preferred Stock shall be 1,500 shares. The Series M Preferred Stock shall rank pari passu to the Company’s common stock,
par value $0.001 per share (the “
Common Stock
”), and junior to all other classes and series of equity
securities of the Company which by their terms do not rank pari passu. The Series M Preferred Stock shall be subordinate to and
rank junior to all indebtedness of the Company now or hereafter outstanding.
2.
Dividends
.
The Series M Preferred
Stock shall not pay a dividend; provided that no cash dividends or distributions shall be declared or paid or set apart for payment
on the Common Stock unless such cash dividend or distribution is likewise declared, paid or set apart for payment on the Series
M Preferred Shares.
3.
Voting Rights
.
Holders of the Series M Preferred Stock shall vote on an “as converted”
basis, together as a single class, with the Common Stock, on all matters requiring the approval, ratification or consent of holders
of Common Stock of the Company.
The Common Stock into
which the Series M Preferred Stock is convertible
shall, when issued, have all of the same voting rights as other issued and outstanding Common Stock of the Company, and none of
the rights of the Series M Preferred Stock.
4.
Conversion
. The holder of Series M Preferred Stock shall have the following conversion rights (the “
Conversion
Rights
”):
(a)
Mandatory Conversion
. On or after the Issuance Date, at such time when the Company amends its Articles of Incorporation
to increase the number of authorized shares of Common Stock to such number that is equal to or greater than seven hundred million
(700,000,000), the holder of any such shares of Series M Preferred Stock shall automatically convert (a “
Mandatory
Conversion
”) all of the shares of Series M Preferred Stock held by such person into a number of fully paid and nonassessable
shares of Common Stock equal to the product of (i) the number of shares of Series M Preferred Stock; and (ii) the Conversion Multiple
(as defined in Section 4(c) below).
(b)
Mechanics of Mandatory Conversion
. The Mandatory Conversion of Series M Preferred Stock shall be conducted in the
following manner:
(i)
Holder's Delivery Requirements
. Upon the Mandatory Conversion, the holder thereof shall surrender to a common carrier
for delivery to the Company’s designated transfer agent (the “
Transfer Agent
”)
as soon as practicable
following such Mandatory Conversion the original certificates representing the shares of Series M Preferred Stock being converted
(or an indemnification undertaking with respect to such shares in the case of their loss, theft or destruction) (the “
Preferred
Stock Certificates
”).
(ii)
Company's Response and Common Stock Issuance
. Upon the Mandatory Conversion, the Company shall immediately send,
via facsimile, a confirmation of receipt of such Preferred Stock Certificates to such holder. Upon receipt by the Transfer Agent
of the Preferred Stock Certificates, the Company shall, within three (3) trading days following the later of the (x) Mandatory
Conversion, and (y) date of receipt of the Preferred Stock Certificates by the Transfer Agent, issue and deliver to the holder
certificates registered in the name of the holder or its designee, representing the number of shares of Common Stock to which the
holder shall be entitled
.
(iii)
Record Holder
. The person or persons entitled to receive the shares of Common Stock issuable upon a conversion of
the Series M Preferred Stock shall be treated for all purposes as the record holder or holders of such shares of Common Stock from
and after the Conversion Date.
(c)
Conversion Price
.
(i)
The term “
Conversion Multiple
” shall mean Three Hundred One Thousand Six Hundred Ninety Nine (301,699).
(d)
No Impairment
. The Company shall not, by amendment of its Articles of Incorporation or through any reorganization,
transfer of assets, consolidation, merger,
dissolution, issue or sale of securities
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed
hereunder, but shall at all times in good faith assist in the carrying out of all the provisions of this Section 4 and in the taking
of all such action as may be necessary or appropriate in order to protect the Conversion Rights of the holders of the Series M
Preferred Stock against impairment.
(e)
Issue Taxes
. The Company shall pay any and all issue and other taxes, excluding federal, state or local income taxes,
that may be payable in respect of any issue or delivery of shares of Common Stock on conversion of shares of Series M Preferred
Stock pursuant hereto;
provided
,
however
, that the Company shall not be obligated to pay any transfer taxes resulting
from any transfer requested by any holder in connection with any such conversion.
(f)
Notices
. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered
personally or by facsimile or three (3) business days following being mailed by certified or registered mail, postage prepaid,
return-receipt requested, addressed to the holder of record at its address appearing on the books of the Company.
(g)
Fractional Shares
. No fractional shares of Common Stock shall be issued upon conversion of the Series M Preferred
Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Company shall round the number of
shares to be issued upon conversion up to the nearest whole number of shares.
(h)
Retirement of Series M Preferred Stock
. Conversion of Series M Preferred Stock shall be deemed to have been effected
on a Mandatory Conversion.
5.
No Preemptive Rights
. No holder of the Series M Preferred Stock shall be entitled to rights to subscribe for, purchase
or receive any part of any new or additional shares of any class, whether now or hereinafter authorized, or of bonds or debentures,
or other evidences of indebtedness convertible into or exchangeable for shares of any class, but all such new or additional shares
of any class, or any bond, debentures or other evidences of indebtedness convertible into or exchangeable for shares, may be issued
and disposed of by the Board of Directors on such terms and for such consideration (to the extent permitted by law), and to such
person or persons as the Board of Directors in their absolute discretion may deem advisable.
6.
Vote to Change the Terms of or Issue Preferred Stock
. The affirmative vote at a meeting duly called for such purpose
or the written consent without a meeting, of the Majority Holders (in addition to any other corporate approvals then required to
effect such action), shall be required for any change to this Certificate of Designation or the Company's Articles of Incorporation
which would amend, alter, change or repeal any of the powers, designations, preferences and rights of the Series M Preferred Stock.
7.
Lost or Stolen Certificates
. Upon receipt by the Company of evidence satisfactory to the Company of the loss, theft,
destruction or mutilation of any Preferred Stock Certificates representing the shares of Series M Preferred Stock, and, in the
case of loss, theft or destruction, of any indemnification undertaking by the holder to the Company and, in the case of mutilation,
upon surrender and cancellation of the
Preferred Stock Certificate(s), the Company shall execute and deliver new preferred stock certificate(s) of like tenor and date;
provided
,
however
, that the Company shall not be obligated to re-issue Preferred Stock Certificates if the holder
contemporaneously requests the Company to convert such shares of Series M Preferred Stock into Common Stock.
8.
Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief
. The remedies provided in this Certificate
of Designation shall be cumulative and in addition to all other remedies available under this Certificate of Designation, at law
or in equity (including a decree of specific performance and/or other injunctive relief), no remedy contained herein shall be deemed
a waiver of compliance with the provisions giving rise to such remedy and nothing herein shall limit a holder's right to pursue
actual damages for any failure by the Company to comply with the terms of this Certificate of Designation. Amounts set forth or
provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be
received by the holder thereof and shall not, except as expressly provided herein, be subject to any other obligation of the Company
(or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable
harm to the holders of the Series M Preferred Stock and that the remedy at law for any such breach may be inadequate. The Company
therefore agrees that, in the event of any such breach or threatened breach, the holders of the Series M Preferred Stock shall
be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing
economic loss and without any bond or other security being required.
9.
Specific Shall Not Limit General; Construction
. No specific provision contained in this Certificate of Designation
shall limit or modify any more general provision contained herein. This Certificate of Designation shall be deemed to be jointly
drafted by the Company and all initial purchasers of the Series M Preferred Stock and shall not be construed against any person
as the drafter hereof.
10.
Failure or Indulgence Not Waiver
. No failure or delay on the part of a holder of Series M Preferred Stock in the
exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise
of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.
[The remainder of this page is intentionally
left blank]
[Signature page to the Certificate of Designations
of Series M Convertible Preferred Stock]
IN WITNESS WHEREOF, the undersigned has executed
and subscribed this Certificate and does affirm the foregoing as true this 14
th
day of March, 2013.
HELMER DIRECTIONAL DRILLING CORP.
By:
___/s/ Georgette Wansor
_______________
Name: Georgette Wansor
Title: Chief Executive Officer
and Chief Financial Officer
APPENDIX D
RESTATED ARTICLES OF INCORPORATION
Helmer Directional Drilling Corp., a corporation
organized and existing under the laws of the State of Nevada, hereby certifies as follows:
1. The name of the corporation is hereby being changed in
this restatement to Excelsior Gold and Metals, Inc. It was originally incorporated under the name of Exclusive Apparel, and the
original Articles of Incorporation of the corporation were filed with the Secretary of State of Nevada on September 15, 2002.
2. Pursuant to Chapter 78, Title 7 of Nevada Revised Statutes,
these Restated Articles of Incorporation restate in its entirety and integrate and further amend the provisions of the Articles
of Incorporation of this corporation.
3. These Amended and Restated Articles have been adopted
and approved by holders of a majority of the outstanding voting shares of the corporation.
4. The text of the Restated Articles of Incorporation as
heretofore restated in its entirety is hereby restated and further amended to read as follows:
ARTICLES OF INCORPORATION
OF
EXCELSIOR GOLD AND METALS, INC.
ARTICLE I. NAME
The name of the corporation is EXCELSIOR GOLD
AND METALS, INC. (the “Corporation”).
ARTICLE II. REGISTERED OFFICE
The name and address of the Corporation’s
registered office in the State of Nevada is Nevada Corporate Credibility, LLC, 2620 Regatta Drive, #102, in the city of Las Vegas,
in the State of Nevada.
ARTICLE III. PURPOSE
The purpose or purposes of the corporation is
to engage in any lawful act or activity for which corporations may be organized under Nevada Law.
ARTICLE IV. CAPITAL STOCK
The Corporation is authorized to issue two classes
of shares to be designated, respectively, "Preferred Stock" and "Common Stock." The number of shares of Preferred
Stock authorized to be issued is Twenty Five Million (25,000,000). The number of shares of Common Stock authorized to be issued
is Seven Hundred Million (700,000,000). The Preferred Stock and the Common Stock shall each have a par value of $0.001 per share.
(A) Provisions Relating to the Common Stock.
Each holder of Common Stock is entitled to one vote for each share of Common Stock standing in such holder's name on the records
of the Corporation on each matters submitted to a vote of the stockholders, except as otherwise required by law.
(B) Provisions Relating to the Preferred
Stock. The Board of Directors (the "Board") is authorized, subject to limitations prescribed by law and the provisions
of this article 4, to provide for the issuance of the shares of Preferred Stock in one or more series, and by filing a certificate
pursuant to the applicable law of the State of Nevada, to establish from time to time the number of shares to be included in each
such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications,
limitations or restrictions thereof. The authority of the Board with respect to each series shall include, but not be limited to,
determination of the following:
(1) The number of shares constituting that
series and distinctive designation of that series;
(2) The dividend rate on the shares of that
series, whether dividends shall be cumulative, and, if so, from which dates or dates, and the relative rights of priority, if any,
of payment of dividends on shares of that series;
(3) Whether that series shall have voting rights,
in addition to the voting rights provided by law, and, if so, the terms of such voting rights;
(4) Whether that series shall have conversion
privileges, and, if so, the terms and conditions of such conversion, including provision for adjustment of the conversion rate
in such events as the Board shall determine;
(5) Whether or not the shares of that series
shall be redeemable, and, if so, the terms and conditions of such redemption, including the date or dates upon or after which they
shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and
at different redemption dates;
(6) Whether that series shall have a sinking
fund for the redemption or purchase of shares of that series, and, if so, the terms and amount of such sinking fund;
(7) The rights of the shares of that series
in the event of voluntary or involuntary liquidation, dissolution or winding up of the corporation, and the relative rights of
priority, if any, of payment of share of that series;
(8) Any other relative or participation rights,
preferences and limitations of that series;
(9) If no shares of any series of Preferred
Stock are outstanding, the elimination of the designation, powers, preferences, and right of such shares, in which event such shares
shall return to their status as authorized but undesignated Preferred Stock.
ARTICLE V. BOARD OF DIRECTORS
(A) Number. The number of directors constituting
the entire Board shall be as fixed from time to time by vote of a majority of the entire Board, provided, however, that the number
of directors shall not be reduced so as to shorten the term of any director at the time in office.
(B) Vacancies. Vacancies on the Board
shall be filled by the affirmative vote of the majority of the remaining directors, though less than a quorum of the Board, or
by election at an annual meeting or at a special meeting of the stockholders called for that purpose.
(C) The election of directors need not be
by written ballot.
ARTICLE VI. BYLAWS
In furtherance and not in limitation of the
powers conferred by statute, the Board is expressly authorized to make, alter, amend or repeal the Bylaws of the Corporation.
ARTICLE VII. LIABILITY
To the fullest extent permitted by Nevada law
as the same exists or as may hereafter be amended, no director of the Corporation shall be personally liable to the Corporation
or its stockholders for or with respect to any acts or omissions in the performance of his or her duties as a director of the Corporation.
Any amendment or repeal of this Article VII will not eliminate or reduce the affect of any right or protection of a director of
the Corporation existing immediately prior to such amendment or repeal.
ARTICLE VIII. STOCKHOLDER
MEETINGS
Meetings of stockholders may be held within
or without the State of Nevada as the Bylaws may provide. The books of the Corporation may be kept outside the State of Nevada
at such place or places as may be designated from time to time by the Board or in the Bylaws of the Corporation.
ARTICLE IX. AMENDMENT OF ARTICLES OF INCORPORATION
The Corporation reserves the right to amend,
alter, change or repeal any provision contained in these Articles of Incorporation, in the manner now or hereafter prescribed by
statute, and all rights conferred upon stockholders herein are granted subject to this reservation.
I, THE UNDERSIGNED, being the Secretary of Excelsior
Gold and Metals, Inc. pursuant to Chapter 78, Article 7 of Nevada Revised Statutes, hereby declare and certify, under penalties
of perjury, that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 9
th
day of September, 2013.
/s/ Paul Donaldson
Paul Donaldson