UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF EARLIEST EVENT REPORTED – MARCH 7, 2013
GOLD HILLS MINING, LTD.
(Exact name of Registrant as specified in its charter)
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NEVADA |
000-50994 |
88-0471870 |
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(State or other jurisdiction of |
(Commission |
(IRS Employer |
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incorporation) |
File Number) |
Identification Number) |
100 Wall Street, 10th Floor
New York, NY 10005
(Address of principal executive offices)
516-602-9065
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act |
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Item 1.01. |
Entry into a Material Definitive Agreement. |
The Company has entered into loan conversion agreements with twenty-two individuals and entities (collectively, the “Creditors”), with effective dates from February 21, 2013 through March 18, 2013, pursuant to which obligations owed by the Company in the aggregate amount of $3,408,389 have been converted into 33,833,890 restricted shares of the Company’s common stock, at a conversion price of $.10 per share, and options to purchase 250,000 shares of the Company’s common stock at an exercise price of $.10 per share. Sixteen of the Creditors acquired some or all of such debt from CRG Finance AG, who is also a corporate development consultant and creditor of the Company. CRG Finance AG has assigned to the Creditors a total of $2,470,245 of indebtedness attributable to loans previously made to the Company by CRG Finance AG and other obligations. The Company was a party to the loan assignment agreements entered into between CRG Finance AG and such Creditors. The Creditors were issued convertible notes by the Company which the Creditors converted into shares of the Company’s common stock.
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Item 3.02. |
Unregistered Sales of Equity Securities. |
On March 7, 2013, March 12, 2013 and March 20, 2013, the Company completed formalities related to the conversion of $3,408,389 in debt owed by the Company for 33,833,890 restricted shares of the Company’s common stock, at a conversion price of $.10 per share, and options to purchase 250,000 shares of the Company’s common stock at an exercise price of $.10 per share, in each case as described in Item 1.01 above, which is incorporated herein by referenced thereto.
Fifteen of the aforementioned stock and option issuance transactions related to conversions of loans and other obligations were executed by non-U.S. persons and were undertaken by the Company in reliance upon the exemption from securities registration under Regulation S of the U.S. Securities Act of 1933, as amended. The remaining seven were executed by U.S. persons pursuant to the exemption from securities registration under Section 4(2) of the Securities Act of 1933, as amended.
Two of the Creditors serve as officers and directors of the Company: Mr. Luciano de Freitas Borges is the Company’s President and a Member of the Company’s Board of Directors (the “Board”) and Mr. Gabriel Margent is the Company’s Chief Financial Officer and a Member of the Board. The Company and Mr. Borges agreed to convert unpaid fees owed to Mr. Borges in the amount of $45,000 into 450,000 shares of the Company’s common stock. The Company and Mr. Margent agreed to convert unpaid fees owed to Mr. Margent in the amount of $25,000 into an option to purchase 250,000 shares of the Company’s common stock at an exercise price of $.10 per share. Each of Mr. Margent and Mr. Borges recused themselves from all Board deliberations and voting regarding the respective issuance of shares or options to themselves.
Following all of the conversions of indebtedness contemplated herein, the Company’s issued and outstanding shares of common stock have increased by an additional 33,833,890 shares, and the Company has 34,206,313 shares of Common Stock issued and outstanding. The Company may convert additional indebtedness in the foreseeable future or sell additional shares of the Company’s common stock.
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Item 5.01. |
Changes in Control of Registrant. |
Prior to the conversion of obligations for shares described herein, Tumlins Trade Inc. owned 55.3% of the Company’s issued and outstanding common stock. Following all of the conversions of indebtedness described in Item 1.01 and 3.02 above, each of which is incorporated herein by referenced thereto, Tumlins Trade Inc. owns a total of 1,639,972 shares of the Company’s common stock, representing 4.8% of the Company’s 34,206,313 shares of common stock which are issued and outstanding following the transactions described above.
The Creditors, including Tumlins Trade Inc., collectively own 99.5% of the Company’s issued and outstanding common stock. Such Creditors have converted obligations totaling $3,408,389 into shares of common stock and options, as described above. The Company is not aware of any arrangements between the Creditors or between the Creditors and other shareholders of the Company regarding the election of directors or other matters. The Creditors have not indicated that they are acting as a group. One of the Creditors, Darby Investment Services Inc., now owns 10.4% of the Company’s issued and outstanding common stock, and the other Creditors own lesser amounts of common stock.
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Item 8.01. |
Other Events. |
On March 20, 2013, the Company’s stock symbol changed to GHML.
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Item 9.01. |
Financial Statements and Exhibits. |
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(d) |
Exhibits. |
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Exhibit No. |
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Description of Exhibits |
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Exhibit 10.36 |
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Form of Loan Assignment Agreement. |
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Exhibit 10.37 |
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Form of Convertible Promissory Note. |
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Exhibit 10.38 |
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Form of Stock Conversion Agreement. |
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# # #
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
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GOLD HILLS MINING, LTD.
By: /s/ Urmas Turu |
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Name: Urmas Turu Title: Interim Chief Executive Officer |
Date: March 20, 2013
Exhibit 10.36
CRG Finance AG
LOAN ASSIGNMENT AGREEMENT
THIS LOAN ASSIGNMENT AGREEMENT, dated as of date set forth on the signature page hereof, by and between CRG Finance AG (the “Assignor”), the assignee named on the signature page hereto (the “Assignee”) and Gold Hills Mining, Ltd. (the “Company”). The Assignor, the Assignee and the Company are sometimes hereinafter referred to individually as a “Party” and collectively as the “Parties.”
RECITALS
WHEREAS, the Assignor has made certain loans to the Company;
WHEREAS, the Assignor now desires to assign to the Assignee, and the Assignee desires to acquire from the Assignor the Assigned Interest (as defined herein) in certain loans made by the Assignor to the Company as described below (the “Loans”) and as governed by those documents described below (the “Loan Documents”); and
WHEREAS, the Company has agreed to issue to the Assignee a new note representing the Assigned Interest, in the form attached hereto as Exhibit A (the “Note”), upon the Assignor’s surrender of any and all Loan Documents representing rights therein or thereto.
NOW THEREFORE, in consideration of the premises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:
I. Definitions.
A. Assigned Interest: Any and all rights, claims (including “claims” within the meaning of Section 101(5) of the Bankruptcy Code) and causes of action of the Assignor against the Company from or in connection with the Loans or the Loan Documents including without limitation: (i) all principal of and interest (whether heretofore or hereafter accrued) on the Loans and all other amounts paid or payable to the Assignor from time to time under the Loan Documents from and after the Effective Date (as defined herein); (ii) any and all payments and property received by or distributions to the Assignor from and after the Effective Date (whether for principal, accrued and unpaid interest, fees or otherwise); (iii) all collateral and security of any kind for or in respect of the foregoing as provided for in the Loan Documents and applicable law; and (iv) all proceeds of any kind of the foregoing.
B. Assumed Obligations: The obligations of the Assignor under the Loan Documents, in respect of the Assigned Interest, solely and to the extent arising on and after the Effective Time (as defined herein).
Loan Assignment Agreement
C. Loan Documents: The Note and all other documents and agreements under which the Assigned Interest or any part thereof has been created and all material documents and agreements relating thereto, and all amendments, waivers and consents thereto.
D. Person: Any person, entity, regulatory body or governmental authority.
E. Proceeds: All proceeds of any kind of the Assigned Interest.
F. Retained Obligations: The obligations of the Assignor under the Loan Documents, in respect of the Assigned Interest, solely and to the extent arising before the Effective Time.
II. Assignment.
A. Assignment. Effective upon receipt of the Acquisition Consideration (the “Effective Time”), the Assignor hereby irrevocably sells, transfers, assigns, grants and conveys the Assigned Interest to the Assignee; and the Assignee hereby assumes the Assumed Obligations; and the Assignee from the Effective Time shall be entitled to collect and receive the Assigned Interest and all Proceeds and to exercise and enforce all rights with respect to the Assigned Interest. The Company shall issue to the Assignee a Note in the Form of Exhibit B attached hereto, reflecting the Assigned Interest, upon the Assignor’s surrender to the Company of all Loan Documents and rights thereunder in connection with such Assigned Interest, together with such additional rights thereto as the Company shall deem necessary and advisable.
B. Consideration. In consideration of the assignment of the Assigned Interest, the Assignee shall deliver to the Assignor the consideration for acquisition of the Assigned Interest as set forth on the signature page below (the “Acquisition Consideration”) on or before close of business on the deadline set forth below, with time being of the essence with respect thereto.
III. Assignor's Representations. The Assignor hereby represents and warrants to the Assignee and its successors and assigns as of the Effective Time that:
A. The Assignor has full power and authority to assign the Assigned Interest and to enter into and perform this Agreement, and such assignment and this Agreement have been duly authorized, are legal, valid and binding and enforceable against the Assignor, and are not in contravention of any law, order or agreement by which the Assignor is bound.
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Loan Assignment Agreement
B. The Assignor has made no prior assignment, hypothecation, pledge, conveyance, participation or other sale or transfer of the Assigned Interest or of any interest therein. The Assignor is the sole legal and beneficial owner of the Assigned Interest and has good title thereto, free and clear of all liens, claims and encumbrances of any kind.
C. No consents, notices, filings, approvals or authorizations are required to be made to or with or received from any person, entity, or governmental body for the sale hereunder and consummation of the transactions contemplated by this Agreement.
D. The Assignor is a sophisticated investor with respect to the Assigned Interest, has adequate information concerning the business and financial condition of the Borrower to make an informed decision regarding the Assigned Interest, and has independently, without reliance on the Assignee and based on such information as it deemed appropriate, made its own analysis and decision to enter into this Agreement.
IV. Assignee's Representations. The Assignee hereby represents and warrants to the Assignor and its successors and assigns, that:
A. The Assignee has full power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, and has obtained all consents and approvals, and, to the best of its knowledge, made all registrations required in connection herewith.
B. This Agreement and any documents to be executed and delivered in connection herewith have been duly authorized by the Assignee, are valid and enforceable against the Assignee in accordance with their terms and are not in contravention of any law, rule, regulation or agreement by which the Assignee is bound.
C. The Assignee has made such examination, review and investigation of facts and circumstances necessary to evaluate the Assigned Interest as it has deemed necessary or appropriate.
D. The Assignee has made its credit determination and analysis based upon such information as the Assignee deems sufficient to enter into this Agreement and not based on any statements or representations by the Assignor except as expressly set forth herein.
E. The sale of the Assigned Interest hereunder is made without recourse, representation or warranty of any kind, except as expressly set forth in this Agreement.
F. The Assignee is a sophisticated investor with respect to the Assigned Interest, has adequate information concerning the business and financial condition of the Borrower to make an informed decision regarding the Assigned Interest, and has independently, without reliance upon the Assignor and based on such information as it deemed appropriate, made its own analysis and decision to enter into this Agreement, the
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Loan Assignment Agreement
Assignee acknowledges that the Assignor has advised the Assignee that Borrower is in default under the Loan Documents and the Loans are due and owing.
V. Company’s Representations. The Company hereby represents and warrants to the Assignee and its successors and assigns as of the Effective Time that:
A. The Company has full power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, and has obtained all consents and approvals, and, to the best of its knowledge, made all registrations required in connection herewith.
B. This Agreement and any documents to be executed and delivered in connection herewith have been duly authorized by the Company, are valid and enforceable against the Company in accordance with their terms and are not in contravention of any law, rule, regulation or agreement by which the Company is bound.
C. Upon the Assignor’s surrender to the Company of the Loan Documents described in Schedule A hereto and any rights represented thereby, the Company shall issue to the Assignee the Note.
VI. Acknowledgments. The Parties acknowledge, represent and warrant to each other that neither Party has made any representation or warranty, whether express or implied, of any kind or character except as expressly set forth in this Agreement and the assignment and transfer of the Assigned Interest by the Assignor to the Assignee is irrevocable.
VII. Payment and Delivery by Assignor of Any Proceeds. Subject to the occurrence of the Effective Time, the Assignor agrees to use commercially reasonable efforts to have any or all Proceeds paid or delivered after the Effective Time to be paid or delivered directly to the Assignee; in the event that the Assignor nevertheless receives any Proceeds after the Effective Time: (a) the Assignor agrees to accept the same on behalf of the Assignee, and to pay or deliver the same within two (2) business day to the Assignee in the same form received, with the endorsement of the Assignor, without cost to the Assignee, recourse or deduction in any manner, when necessary or appropriate; and (b) the Assignor shall have no legal, equitable or beneficial interest in such Proceeds.
VIII. Indemnities.
A. The Assignor agrees to indemnify, defend and hold (i) the Assignee and its officers, directors, employees, agents, partners and controlling persons and their successors, assigns (collectively, the “Assignee Indemnitees”) and (ii) the Company and its officers, directors, employees, agents, partners and controlling persons and their successors, assigns (collectively, the “Company Indemnitees”) harmless from and against any and all expenses, losses, claims, damages and liabilities which are incurred by or threatened against the Assignee Indemnitees, the Company Indemnitees, or any of them,
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Loan Assignment Agreement
including without limitation attorneys' fees and expenses, caused by, or in any way resulting from or relating to: (i) the Assignor's breach of any of the representations, warranties, covenants or agreements of the Assignor set forth in this Agreement and (ii) the Retained Obligations.
B. The Assignee agrees to indemnify, defend and hold each of (i) the Assignor and its officers, directors, employees, agents, partners and controlling persons (collectively, the “Assignor Indemnitees”) and (ii) the Company Indemnitees harmless from and against any and all expenses, losses, claims, damages and liabilities which are incurred by or threatened against the Assignor Indemnitees and the Company Indemnitees or any of them, including without limitation reasonable attorneys' fees and expenses, caused by, or in any way resulting from or relating to: (i) the Assignee's breach of any of the representations, warranties, covenants or agreement of the Assignee set forth in this Agreement and (ii) the Assumed Obligations.
C. The Company agrees to indemnify, defend and hold each of (i) the Assignor Indemnitees, and (ii) the Assignee Indemnitees harmless from and against any and all expenses, losses, claims, damages and liabilities which are incurred by or threatened against the Assignor Indemnitees and the Assignee Indemnitees or any of them, including without limitation reasonable attorneys' fees and expenses, caused by, or in any way resulting from or relating to the Company’s breach of any of the representations, warranties, covenants or agreement of the Company set forth in this Agreement.
IX. Costs and Fees. Except as otherwise expressly provided for herein, each Party shall bear its own costs and expenses, including but not limited to attorneys' fees and expenses, in connection with the closing of the transactions contemplated hereby.
X. Filings and Further Assurances. Each of the Parties hereto agrees, at its own cost and expense, to execute and deliver, or to cause to be executed and delivered, all such instruments (including all necessary endorsements) and to take all such action as the other Party may reasonably request in order to (i) effectuate the intent and purposes of, and to carry out the terms of this Agreement, and (ii) further effect the transfer of legal, beneficial and record ownership of the Assigned Interest to the Assignee.
XI. Integration. This Agreement constitutes the complete agreement of the Parties with respect to the subject matters referred to herein and supersedes all prior or contemporaneous negotiations, promises, covenants, agreements or representations of every nature whatsoever with respect thereto, all of which have become merged and finally integrated into this Agreement. This Agreement cannot be amended, modified or supplemented except by an instrument in writing executed by both Parties.
XII. Notices and Deliveries. Notices shall be given by certified or registered mail or personally or by courier at the addresses to be provided to each of Assignor and Assignee under separate cover as of even date herewith. Any and all Payments and deliveries of Proceeds shall be made in accordance with instructions of Assignee.
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Loan Assignment Agreement
XIII. Miscellaneous. The terms of this Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and assigns. All representations and warranties made herein shall survive the execution and delivery of this Agreement. This Agreement may be executed in counterparts or by facsimile signature, each of which when so executed shall be an original, but all such counterparts shall together constitute but one and the same instrument. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to any conflicts of laws provisions thereof. Each party to this Agreement hereby irrevocably consents to the jurisdiction of the United States Court for the Southern District of New York and the Supreme Court of the State of New York, County of New York in any action to enforce, interpret or construe any provision of this Agreement or of any other agreement or document delivered in connection with this Agreement, and also hereby irrevocably waives any defense of improper venue, forum non conveniens or lack of personal jurisdiction to any such action brought in those courts. Each Party further irrevocably agrees that any action to enforce, interpret or construe any provision of this Agreement will be brought only in one of those courts.
[SIGNATURE PAGE TO FOLLOW]
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Loan Assignment Agreement
Acquisition Consideration:
IN WITNESS WHEREOF, the undersigned have executed and delivered this Loan Assignment Agreement as of this ______ day of _________________.
THE ASSIGNOR: CRG FINANCE AG
By:
Name:
Title:
THE COMPANY: GOLD HILLS MINING, LTD.
By:
Name:
Title:
THE ASSIGNEE:
By:
Name:
Title:
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Loan Assignment Agreement
Schedule A
ASSIGNOR: CRG FINANCE AG
COMPANY: GOLD HILLS MINING, LTD.
ASSIGNEE:
LOAN AMOUNT:
DESCRIPTION OF LOAN DOCUMENTS:
NOTE TO BE DELIVERED BY COMPANY:
ACQUISITION CONSIDERATION:
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Loan Assignment Agreement
Form of Information for Notices
To Assignor:
Notices:
Payments (If Applicable):
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Bank Name: |
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City/State: |
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ABA#: |
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Account Name: |
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Account Number: |
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Re: |
To Assignee:
Notices:
To Company:
Notices: To Company Address of Record, as set forth on the status page of the Company maintained on website of the U.S. Securities & Exchange Commission at: www.sec.gov
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Loan Assignment Agreement
Exhibit A
Form of Note
[Attached]
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Exhibit 10.37
GOLD HILLS MINING, LTD.
ASSIGNEE CONVERTIBLE PROMISSORY NOTE
THIS PROMISSORY NOTE MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT AS PROVIDED HEREIN. ANY ATTEMPTED TRANSFER OF THIS PROMISSORY NOTE IN VIOLATION OF SUCH TERMS SHALL BE NULL AND VOID AND OF NO EFFECT. THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND NO OFFER, TRANSFER OR ASSIGNMENT OF THIS PROMISSORY NOTE MAY BE MADE IN THE ABSENCE OF SUCH REGISTRATIONS OR AVAILABLE EXEMPTIONS THERETO.
US $____________ Dated: ___________
FOR VALUE RECEIVED, Gold Hills Mining, Ltd., a Nevada corporation (the “Borrower”), hereby promises to pay to the order of the assignee creditor set forth on the signature page hereto (“Creditor”), at such time, place and in such manner as Creditor may specify in writing, the principal amount set forth on the signature page hereto (the “Principal”) pursuant to the terms and conditions specified herein (this “Note”). The Borrower shall pay interest on the outstanding principal of this Note at the annual rate of 7.5% per annum, calculated based on a year of 365 days and actual days elapsed (the “Interest”).
1. The Borrower hereby promises to pay to the order of the Creditor the Principal and all Interest due thereon after the first anniversary of the date of this Note upon delivery to the Borrower of written demand by the Creditor for repayment of this Note within not less than thirty (30) calendar days (the “Due Date”), at such place and in such manner as Creditor may specify in writing. In lieu of repayment of the Note in cash, the Creditor at its sole option and discretion may convert this Note and request the Borrower to repay any or all of the Principal and Interest in the form of restricted common stock of the Borrower at a price per share equal to Ten Cents (US $0.10) (the “Conversion Price”). Such Conversion Price shall be effective after the completion of the Company’s reverse split of common stock, pursuant to which the Company shall effect a one (1) for one hundred (100) reverse stock split of the Company’s issued and outstanding shares as disclosed and filed by the Company with the U.S. Securities & Exchange Commission on the Definitive Schedule 14C on January 25, 2013 (the “Reverse Stock Split”). The Conversion Price is hereby deemed to reflect any and all effects of the Reverse Stock Split and the Conversion Price shall not be further adjusted or modified on or after the date hereof with respect to the Reverse Stock Split. The Borrower shall promptly deliver such restricted common stock in accordance with the request of Creditor. Upon delivery of such shares of common stock this Note shall be deemed to be repaid and satisfied in full.
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Gold Hills Mining, Ltd. Promissory Note
2. Any and all fees, costs, expenses and disbursements charged by financial institutions with respect to wire transfer or other transmittal charges incurred in connection with delivery of the Principal from the Creditor to the Borrower shall be deemed to have been received by the Borrower from the Creditor and all such amounts shall be included in the calculation of Principal hereunder.
3. This Note shall not be transferable by Borrower and the Borrower may not assign, transfer or sell all or a portion of its rights and interests to and under this Note to any persons and any such purported transfer shall be void ab initio. The Creditor may transfer and assign this Note at its sole discretion subject to applicable laws, rules and regulations pertaining to such transfers as to which a legal opinion of counsel to Creditor shall be required to be delivered to Borrower, in form and substance acceptable to Borrower.
4. The failure at any time of the Creditor to exercise any of its options or any other rights hereunder shall not constitute a waiver thereof, nor shall it be a bar to the exercise of any of its options or rights at a later date. All rights and remedies of the Creditor shall be cumulative and may be pursued singly, successively or together, at the option of the Creditor. The acceptance by the Creditor of any partial payment shall not constitute a waiver of any default or of any of the Creditor's rights under this Note. No waiver of any of its rights hereunder, and no modification or amendment of this Note, shall be deemed to be made by the Creditor unless the same shall be in writing, duly signed on behalf of the Creditor; and each such waiver shall apply only with respect to the specific instance involved, and shall in no way impair the rights of the Creditor in any other respect at any other time.
5. Any term or condition of this Note may be waived at any time by the party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the party waiving such term or condition.
6. The Borrower represents and warrants that this Note is the valid and binding obligation of the Borrower, fully enforceable in accordance with its terms. The execution and delivery by the Borrower of this Note, the performance by the Borrower of its obligations hereunder and the consummation of the transactions contemplated hereby and thereby does not and will not: (a) conflict with or result in a violation or breach of any of the terms, conditions or provisions of the Borrower’s charter instruments; (b) conflict with or result in a violation or breach of any term or provision of any law or order applicable to the Borrower or any of its assets and properties; or (c) (i) conflict with or result in a violation or breach of, or (ii) result in or give to any person any rights or create any additional or increased liability of the Borrower under or create or impose any lien upon, the Borrower or any of its assets and properties under, any contract or permit to which the Borrower is a party or by which its assets and properties are bound.
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Gold Hills Mining, Ltd. Promissory Note
7. If any provision of this Note is held to be illegal, invalid or unenforceable under any present or future Law, and if the rights or obligations of any party hereto under this Note will not be materially and adversely affected thereby, (i) such provision will be fully severable; (ii) this Note will be construed and enforced as if such illegal, invalid or unenforceable provision had
never comprised a part hereof; (iii) the remaining provisions of this Note will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance here from; and (iv) in lieu of such illegal, invalid or unenforceable provision, there will be added automatically as a part of this Note a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible.
8. Any notice, authorization, request or demand required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given two days after it is sent by an internationally recognized delivery service to the address of record of the Creditor or the Borrower, respectively. Any party may change its address for such communications by giving notice thereof to the other parties in conformity with this Section.
9. This Note shall be governed by and construed under the laws of incorporation of the Borrower as applied to agreements entered into and to be performed entirely within such State. Each party hereby irrevocably consents to the jurisdiction of the courts of any competent jurisdiction over one or more of the parties. In any such litigation the Borrower waives personal service of any summons, complaint or other process and agrees that the service thereof may be made by certified or registered mail directed to the registered corporate office of Borrower in the State of its incorporation. The Borrower hereby expressly waives trial by jury in any litigation in any court with respect to, in connection with, or arising out of this Note or the validity, protection, interpretation, collection or enforcement hereof and the Borrower hereby waives the right to interpose any setoff or non-compulsory counterclaim or cross-claim in connection with any such litigation, irrespective of the nature of such setoff, counterclaim or cross-claim.
10. A default shall exist on this Note if any of the following occurs and is continuing: (i) Failure to pay Principal and any accrued Interest on the Note on or before the Due Date; (ii) Failure by the Borrower to perform or observe any other covenant or agreement of the Borrower contained in this Note; (iii) A custodian, receiver, liquidator or trustee of the Borrower, or any other person acting under actual or purported force of law takes ownership, possession or title to Borrower property; (iv) any of the property of the Borrower is sequestered by court order; (v) a petition or other proceeding, voluntary or otherwise is filed by or against the Borrower under any bankruptcy, reorganization, arrangement, insolvency, readjustment of indebtedness, dissolution or liquidation law of any jurisdiction, whether now or hereafter in effect; or (vi) the Borrower makes an assignment for the benefit of its creditors, or generally fails to pay its obligations as they become due, or consents to the appointment of or taking
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Gold Hills Mining, Ltd. Promissory Note
possession by a custodian, receiver, liquidator or trustee of the Borrower or all or any part of its property. Upon any such default, the Borrower shall immediately notify the Creditor, and upon notice to the Borrower, the Creditor may declare the Principal of the Note, plus accrued Interest, to be immediately due and payable, upon which such Principal and accrued Interest shall become due and payable immediately. Interest upon default shall thereafter accrue at the rate of 15% per annum, calculated based on a year of 365 days and actual days elapsed from the date of such default.
11. The Borrower, any endorser, or guarantor hereof or in the future (individually an “Obligor” and collectively “Obligors”) and each of them jointly and severally: (a) waive presentment, demand, protest, notice of demand, notice of intent to accelerate, notice of acceleration of maturity, notice of protest, notice of nonpayment, notice of dishonor, and any other notice required to be given under the law to any Obligor in connection with the delivery, acceptance, performance, default or enforcement of this Note, any endorsement or guaranty of this Note, any pledge, security, guaranty or other documents executed in connection with this Note; (b) consent to all delays, extensions, renewals or other modifications of this Note, or waivers of any term hereof or thereof, or release or discharge by the Creditor of any of Obligors, or release, substitution or exchange of any security for the payment hereof, or the failure to act on the part of the Creditor or any indulgence shown by the Creditor (without notice to or further assent from any of Obligors), and agree that no such action, failure to act or failure to exercise any right or remedy by the Creditor shall in any way affect or impair the Obligations (as hereinafter defined) of any Obligors or be construed as a waiver by the Creditor of, or otherwise affect, any of the Creditor's rights under this Note, under any endorsement or guaranty of this Note; (c) if the Borrower fails to fulfill its obligations hereunder when due, agrees to pay, on demand, all costs and expenses of enforcement of collection of this Note or of any endorsement or guaranty hereof and/or the enforcement of the Creditor's rights with respect to, or the administration, supervision, preservation, protection of, or realization upon, any property securing payment hereof, including, without limitation, all attorney's fees, costs, expenses and disbursements, including, without further limitation, any and all fees related to any legal proceeding, suit, mediation arbitration, out of court payment agreement, trial, appeal, bankruptcy proceedings or any other actions of any nature whatsoever required on the part of Creditor or Creditor’s representatives to enforce this Note and the rights hereunder; and (d) waive the right to interpose any defense, set-off or counterclaim of any nature or description.
12. The Borrower will not, by amendment of its Certificate of Incorporation or through any reorganization, recapitalization, 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 by the Borrower, but will at all times in good faith assist in the carrying out of all the provisions of this Note and in the taking of all such action as may be necessary or appropriate in order to protect the rights
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Gold Hills Mining, Ltd. Promissory Note
of the Creditor of this Note against impairment. This Note shall be enforceable against all successors and assigns of Borrower. Borrower hereby covenants that all of its subsidiaries and affiliates shall jointly and severally perform this Note to the same and full extent on behalf of Borrower if Borrower is unable to perform.
13. This Note supersedes all prior discussions and agreements between the parties with respect to the subject matter hereof and thereof and contains the sole and entire agreement between the parties hereto with respect to the subject matter hereof.
14. If the Creditor loses this Note, the Borrower shall issue an identical replacement note to the Creditor upon the Creditor's delivery to the Borrower of a customary agreement to indemnify the Borrower reasonably satisfactory to the Borrower for any losses resulting from issuance of the replacement note.
15. The terms and conditions of this Note shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Note, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Note, except as expressly provided in this Note.
[Signature Page Follows]
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Gold Hills Mining, Ltd. Promissory Note
IN WITNESS WHEREOF, the Borrower has caused this Note to be dated, executed and issued on its behalf, by its duly appointed and authorized officer, as of the date first above written.
Principal Amount of the Note: $______________
Gold Hills Mining, Ltd.
By:
Name:
Title:
Creditor:
By:
Name:
Title:
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Exhibit 10.38
GOLD HILLS MINING, LTD.
STOCK CONVERSION AGREEMENT
Notice of Conversion
Holder (the “Holder”)
Date of Note (the “Note”)
Total Note Principal
Total Note Interest as of date hereof
Conversion Price per Share *$.10 (Ten Cents) Per Share* (the “Conversion Price”)
Number of Conversion Shares
THIS STOCK CONVERSION AGREEMENT (this “Agreement”), dated as of date set forth on the signature page hereof, by and between the Holder and Gold Hills Mining. Ltd. (the “Company”). The Holder and the Company are sometimes hereinafter referred to individually as a “Party” and collectively as the “Parties.”
RECITALS
WHEREAS, the Holder has made, or acquired from third parties, that certain Note issued by the Company; and
WHEREAS, the Holder now desires to convert such Note into shares of the Common Stock of the Company, par value $.00001 per share (“the Common Stock”).
NOW THEREFORE, in consideration of the premises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Holder agree as follows:
1. Conversion. The Holder hereby agrees that the Note described above from the Company to the Holder shall be converted into shares of the Common Stock of the Company (“Shares”) at the Conversion Price per share set forth above (the “Conversion”).
CONVERSION AGREEMENT
2. Holder’s Representations. The Holder represents and warrants as follows:
(a) The Holder acknowledges and agrees that the Company shall, and shall instruct its transfer agent to, refuse to register any transfer of the Shares not made pursuant to registration under the Securities Act of 1933, as amended (the “Securities Act”) or pursuant to an available exemption from registration required under the Securities Act.
(b) The Holder understands and acknowledges that the Shares have not been registered under the Securities Act and are being issued to the Holder in reliance upon the exemptions provided in Regulation D of the Securities Act and the Rules and Regulations adopted thereunder. Accordingly, the Shares may not be offered or sold unless the Shares are registered under the Securities Act, or an exemption from the regulation requirements is available. Hedging transactions involving the Shares may not be conducted unless in compliance with the Securities Act.
(c) The Holder understands that the Company is under no obligation to register the Shares under the Securities Act, or to assist the Holder in complying with the Securities Act or the securities laws of any state of the United States or of any foreign jurisdiction. The Holder understands that the Shares must be held indefinitely unless the Shares are registered under the Securities Act or an exemption from registration is available. The Holder acknowledges that the officers of the Holder have been advised of the limitation of Rule 144 promulgated under the Securities Act (“Rule 144”), and that the Holder has been advised that Rule 144 permits resales only under certain circumstances. The Holder understands that it will be unable to sell or trade any of the Shares without either registration under the Securities Act or the availability of exemption from registration.
(d) The Holder acknowledges its understanding that the Conversion is intended to be exempt from registration under Regulation D promulgated under the Securities Act. In furtherance thereof, in addition to the other representations and warranties of the Holder made herein, nothing herein shall construe the Holder as a distributor acting on behalf of the Company with respect to further distribution of the Shares issued to the Holder.
(e) The Holder expressly affirms and certifies the validity of the following acknowledgments, representations and warranties for the benefit of the Company with the intent that the same may be relied upon in determining the suitability of the Holder as a qualified purchaser and transferee of Shares:
(i) In At the time the Holder was offered the Shares, it was, and as of the date hereof it is either (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act, or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act. The Holder is not required to be registered as a broker-dealer under Section 15 of the Exchange Act and the Holder is not a broker-dealer, nor an affiliate of a broker-dealer.
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CONVERSION AGREEMENT
(ii) The Holder, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment. The Holder is able to bear the economic risk of an investment in the Shares and, at the present time, is able to afford a complete loss of such investment.
(iii) The Holder is not purchasing the Shares as a result of any advertisement, article, notice or other communication regarding the Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.
(iv) The Shares will be acquired solely for the account of the Holder, for investment purposes only, and not with a view to, or for sale in connection with, any distribution thereof and with no present intention of distributing or reselling any part of the Shares, provided, however, the Holder reserves the right to sell or transfer the Shares at the Holder’s discretion at any time if made in compliance with the requirements prescribed by applicable law.
(v) The Holder agrees not to sell, pledge, transfer, dispose of, or otherwise deal with or engage in hedging transactions involving, its Shares or any portion thereof except as otherwise permitted herein, unless and until counsel for the Company shall have determined that the intended disposition or action is permissible and does not violate the Securities Act or any applicable state securities laws, or the rules and regulations thereunder.
(vi) The Holder’s jurisdiction of principal place of business and corporate domicile, as set forth on the signature page hereto is true and correct.
(vii) The Holder is not the issuer of the Shares, or a distributor, dealer or an affiliate of the issuer, distributor or a dealer. The Holder is not receiving a selling concession, fee or other remuneration in respect of the Shares received by the Holder.
(f) The Holder agrees that any certificates representing the Shares shall contain an appropriate legend reflecting that they were issued pursuant to Regulation D, which shall be substantially similar to the following:
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CONVERSION AGREEMENT
(g) The Holder agrees to fully comply with all applicable securities laws and not to trade at any time in any securities of the Company on the basis of material non-public information and will not disclose any confidential transactions involving the Company to any third parties, other than to authorized representatives of the Holder who shall be under strict instructions not to make any further disclosures to any other persons.
(h) All representations, warranties and covenants contained in this Agreement shall survive the date hereof and remain in full force and effect without termination.
(i) As a condition of the Conversion, the Holder agrees to execute and deliver such additional representations and warranties as are reasonably requested by the Company, including, supplemental Regulation D Representations if necessary, in order to assure compliance with all applicable securities laws.
(j) The Holder has full power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, and has obtained all consents and approvals, and, to the best of its knowledge, made all registrations required in connection herewith.
(k) This Agreement and any documents to be executed and delivered in connection herewith have been duly authorized by the Holder, are valid and enforceable against the Holder in accordance with their terms and are not in contravention of any law, rule, regulation or agreement by which the Holder is bound.
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CONVERSION AGREEMENT
(l) No person has been authorized to give any information or to make any representation and any decision to exercise the Conversion into the Shares may be based solely on information contained in the Company’s publicly available documents filed by the Company with the U.S. Securities & Exchange Commission. Investing in Company securities involves substantial risks and all Holders should refer to the risk factors set forth in the publicly available Company documents filed with the U.S. Securities & Exchange Commission and thoroughly review such documents prior to making any determination regarding investment in Company securities.
(m) (i) The Holder has the financial ability to bear the economic risk of his investment; (ii) the Holder has adequate means for providing for his current needs and personal contingencies and has no need for liquidity with respect to his investment in the Company; (iii) the Holder has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the prospective investment in the Shares; (iv) the Holder represents it has not been organized for the purpose of acquiring the Shares; and (v) the Holder has been provided an opportunity for a reasonable period of time prior to the date of signature by the Holder of this Agreement to obtain additional information concerning the Conversion of the Note into the Shares, the Company and all other information to the extent the Company possesses such information or can acquire it without unreasonable effort or expense.
(n) The Holder is not relying on the Company, or its affiliates or agents with respect to economic considerations involved in this investment. The Holder has relied solely on its own judgment and its own respective advisors in making an investment determination. The Holder acknowledges and agrees that the proceeds of the Agreement under this Agreement may be used for any and all general corporate purposes of the Company to the full extent permitted by law at any time and for any reason following the Closing without conditions, qualifications, restrictions or limitations of any nature or kind.
(o) The Holder has carefully read and has relied solely upon the information contained in the publicly available Company documents filed with the U.S. Securities & Exchange Commission prior to making an investment determination with respect to the Shares. The Holder has not relied upon any non-public literature, and no oral representations or warranties have been made to the Holder or persons representing the Holder by the Company or any other person which are inconsistent with the publicly available Company documents filed with the U.S. Securities & Exchange Commission. In subscribing for the Shares the Holder is not relying upon any representations other than those contained herein. Copies of all documents filed by the Company with the U.S. Securities & Exchange Commission may be obtained at www.sec.gov.
(p) The Holder understands that an investment in the Shares is a speculative investment which involves a high degree of risk and the potential loss of his entire investment and the Holder can sustain such loss. The Holder understands that the Conversion Price of the Shares bear no relation to the assets, book value or net worth of the Company and were determined at the sole discretion of the Company. The Holder further understands that there may be dilution of his or its investment in the Shares of the Company.
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CONVERSION AGREEMENT
(q) The Holder's overall commitment to investments which are not readily marketable is not disproportionate to the Holder's net worth, and an investment in the Shares will not cause such overall commitment to become excessive. The Holder represents and warrants to the Company that the consideration tendered by the Holder to the Company are not and will not be directly or indirectly derived from activities that may contravene federal, state and international laws and regulations, including anti-money laundering laws under the U.S. Treasury Department’s Office of Foreign Asset Control (“OFAC”). The OFAC prohibits, among other things, the engagement in transactions with, and the provisions of services to, certain foreign countries, territories, entities and individuals. The lists of OFAC prohibited countries, territories, persons and entities can be found on the OFAC website.1 The Holder hereby represents and warrants, to the best of its knowledge, that none of the Holder, any person controlling, controlled by, or under common control with, the Holder, any person having a beneficial interest in the Holder, or any person for whom the Holder is acting as agent or nominee in connection with this investment is: a country, territory, individual or entity named on an OFAC list, or is an individual or entity that resides or has a place of business in a country or territory named on such lists, a senior foreign political figure2, or any immediate family member3 or close associate4 of a senior foreign political figure within the meaning of the U.S. Department of Treasury’s Guidance on Enhanced Scrutiny for Transactions That May Involve the Proceeds of Foreign Official Corruption5 and as referenced in the USA Patriot Act of 2001;6 or a "foreign shell bank"7 and does not transact business with a "foreign shell bank." The Holder agrees to promptly notify the Company should the Holder become aware of any change in the information set forth in these representations. The Holder understands that, by law, the Company may be obligated to "freeze the account" of such Holder, either by prohibiting additional amounts, declining any redemption requests and/or segregating the assets in the account in compliance with governmental regulations, and the Company may also be required to report such action and to disclose the Holder’s identity to OFAC. The Holder understands that the Company may not accept any contributed amounts from the Holder if the Holder cannot make the representation set forth above and the Company may return any amounts to Holder if the information provided to the Company is incomplete or is deemed suspicious. The Holder represents and warrants that the acceptance of the Holder's Agreement together with the appropriate remittance will not breach any applicable anti-money laundering rules and regulations. The Holder undertakes to provide verification of its identity reasonably satisfactory (on a confidential basis), to the Company and/or any entity acting on the Company’s behalf in respect of the acceptance of Agreement s, promptly on request.
(r) The Holder is aware that no federal or state agency has (i) made any finding or determination as to the fairness of this investment; (ii) made any recommendation or endorsement of the Shares or the Company; or (iii) guaranteed or insured any investment in the Shares or any investment made by the Company.
1 The Holder should check the U.S. Treasury Department’s Office of Foreign Assets Control website at http://www.treas.gov/ofac before making the representations.
2 A “senior foreign political figure” is defined as a current or former official in the executive, legislative, administrative, military or judicial branches of a non-U.S. government (whether elected or not), a senior official of a major non-U.S. political party, or a senior executive of a non-U.S. government-owned corporation. In addition, a “senior foreign political figure” includes any corporation, business or other entity that has been formed by, or for the benefit of, a senior foreign political figure.
3 “Immediate family” of a senior foreign political figure typically includes the figure’s parents, siblings, spouse, children and in-laws.
4 A “close associate” of a senior foreign political figure is a person who is widely and publicly known to maintain an unusually close relationship with the senior foreign political figure, and includes a person who is in a position to conduct substantial domestic and international financial transactions on behalf of the senior foreign political figure.
5 Please see http://www.federalreserve.gov/boarddocs/srletters/2001/sr0103a1.pdf for a more extensive discussion of the referenced terms and definitions.
6 The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. I. No. 107-56 (2001).
7 A “foreign shell bank” is a foreign bank that does not have a physical presence in any country.
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CONVERSION AGREEMENT
(s) The Holder acknowledges that the conversion of the Note into the Shares is intended to be exempt from registration under the Securities Act; (i) The Holder acknowledges that the basis for the exemption from registration of the Shares may not be present if, notwithstanding such representations, the Holder is merely acquiring the Shares for a short term fixed or short determinable period in the future for less than one year, or for a market rise, or for sale if the market does not rise, provided, however, the Holder reserves the right to make decisions regarding disposition of the Shares at its own discretion; (ii) the Holder has the financial ability to bear the economic risk of his investment, has adequate means for providing for his current needs and personal contingencies and has no need for liquidity with respect to his investment in the Company; (iii) the Holder has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the prospective investment in the Shares; (iv) the Holder represents it has not been organized for the purpose of acquiring the Shares; and (v) the Holder has been provided an opportunity for a reasonable period of time prior to the date of signature by the Holder of this Agreement to obtain additional information concerning the Shares, the Company and all other information to the extent the Company possesses such information or can acquire it without unreasonable effort or expense.
3. Company’s Representations. The Company hereby represents and warrants to the Holder that:
(a) The Company has full power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, and has obtained all consents and approvals, and, to the best of its knowledge, made all registrations required in connection herewith.
(b) This Agreement and any documents to be executed and delivered in connection herewith have been duly authorized by the Company, are valid and enforceable against the Company in accordance with their terms and are not in contravention of any law, rule, regulation or agreement by which the Company is bound.
4. Irrevocable. The Parties acknowledge, represent and warrant to each other that neither Party has made any representation or warranty, whether express or implied, of any kind or character except as expressly set forth in this Agreement and the conversion of the Note contemplated hereby is irrevocable.
5. Indemnities.
(a) The Holder agrees to indemnify, defend and hold the Company and its officers, directors, employees, agents, partners and controlling persons and their successors, assigns (collectively, the “Company Indemnitees”) harmless from and against any and all expenses, losses, claims, damages and liabilities which are incurred by or threatened against the Company Indemnitees, or any of them, including without limitation attorneys' fees and expenses, caused by, or in any way resulting from or relating to: (i) the Holder’s breach of any of the representations, warranties, covenants or agreements of the Holder set forth in this Agreement.
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CONVERSION AGREEMENT
(b) The Company agrees to indemnify, defend and hold the Holder and its officers, directors, employees, agents, partners and controlling persons and their successors, assigns (collectively, the “Holder Indemnitees”) harmless from and against any and all expenses, losses, claims, damages and liabilities which are incurred by or threatened against the Holder Indemnitees, or any of them, including without limitation attorneys' fees and expenses, caused by, or in any way resulting from or relating to: (i) the Company’s breach of any of the representations, warranties, covenants or agreements of the Company set forth in this Agreement.
6. Costs and Fees. Except as otherwise expressly provided for herein, each Party shall bear its own costs and expenses, including but not limited to attorneys' fees and expenses, in connection with the closing of the transactions contemplated hereby.
7. Filings and Further Assurances. Each of the Parties hereto agrees, at its own cost and expense, to execute and deliver, or to cause to be executed and delivered, all such instruments (including all necessary endorsements) and to take all such action as the other Party may reasonably request in order to effectuate the intent and purposes of, and to carry out the terms of this Agreement.
8. Entire Agreement. This Agreement constitutes the complete agreement of the Parties with respect to the subject matters referred to herein and supersedes all prior or contemporaneous negotiations, promises, covenants, agreements or representations of every nature whatsoever with respect thereto, all of which have become merged and finally integrated into this Agreement. This Agreement cannot be amended, modified or supplemented except by an instrument in writing executed by both Parties. Without limiting the foregoing, the Holder expressly acknowledges and agrees that any and all rights as a creditor of the Company with respect to the Note shall definitively and irrevocably terminate as of the date hereof and the Note is forever extinguished hereby.
9. Notices, Payments and Deliveries. Notices shall be given by certified or registered mail or personally or by courier at the respective addresses set forth on the signature page hereto.
10. Miscellaneous. The terms of this Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and assigns. All representations and warranties made herein shall survive the execution and delivery of this Agreement. This Agreement may be executed in counterparts or by facsimile signature, each of which when so executed by fax, scan or any other means of electronic reproduction shall be an original, for all purposes, and all such counterparts shall together constitute one and the same instrument. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to any conflicts of laws provisions thereof. Each party to this Agreement hereby irrevocably consents to the jurisdiction of the United States Court for the Southern District of New York and the Supreme Court of the State of New York, County of New York in any action to enforce, interpret or construe any provision of this Agreement or of any other agreement or document delivered in connection with this Agreement, and also hereby irrevocably waives any defense of improper venue, forum non conveniens or lack of personal jurisdiction to any such action brought in those courts. Each Party further irrevocably agrees that any action to enforce, interpret or construe any provision of this Agreement will be brought only in one of those courts. Each Party has participated in the negotiation of this Agreement and nothing herein shall be construed against either Party as the draftsperson. There are no third party beneficiaries.
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CONVERSION AGREEMENT
[Signature Page to Follow]
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CONVERSION AGREEMENT
IN WITNESS WHEREOF, the undersigned have executed and delivered this Conversion Notice as of the date set forth below.
Dated:
Holder:
By:
Name:
Title:
Address:
GOLD HILLS MINING, LTD.
By:
Name:
Title:
Address: 100 Wall Street, 10th Floor
New York, NY 10005
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