Exhibit 10.2
 
SUBSCRIPTION AGREEMENT
 
THIS SUBSCRIPTION AGREEMENT (this “Agreement”) is made as of July 19, 2013
between Discovery Gold Corporation, a Nevada corporation (the “Company”), and
Steven Ross, an individual residing at 2275 NW 150th St. Unit D, Opa Locka,
Florida, 33054 (the “Subscriber”).
 
W I T N E S S E T H:
WHEREAS, the Company is offering $50,000 of units (the “Units,” and the
transaction, the “Offering”), each Unit consisting of one  share of common
stock, par value $0.001 per share (the “Shares” or the “Common Stock”) and
one  warrant to purchase 0.5  share of Common Stock substantially in the form
of  Exhibit A attached hereto (the “Warrants”) exercisable at $0.02 per share at
a price of $0.004 per Unit to the Subscriber (the “Offering Price”). The
Offering is being made exclusively to accredited investors pursuant to an
exemption from registration provided under Section 4(2) of the Securities Act of
1933, as amended (the “Securities Act”) and Rule 506 promulgated thereunder; and
 
WHEREAS, the Subscriber desires to purchase that number of Units set forth on
the signature page hereof on the terms and conditions hereinafter set forth.
 
NOW, THEREFORE, in consideration of the premises and the mutual representations
and covenants hereinafter set forth, the parties hereto do hereby agree as
follows:
 
I.  
SUBSCRIPTION FOR UNITS AND REPRESENTATIONS BY SUBSCRIBER

 
1.1  Subject to the terms and conditions hereinafter set forth and in the
Information Package (as defined below) the Subscriber hereby irrevocably
subscribes for and agrees to purchase from the Company such number of Units, and
the Company agrees to sell to the Subscriber as is set forth on the signature
page hereof, at a per Unit price equal to $0.004 per Unit.  Within a
commercially reasonable time after the execution and delivery of this Agreement,
the Subscriber shall deposit the aggregate Offering Price directly to the
Company’s bank account in accordance with the instructions set forth in Section
3.1.  The Subscriber understands and agrees that, subject to Section 2 and
applicable laws, by executing this Agreement, it is entering into a binding
agreement.
 
1.2  The Subscriber recognizes that the purchase of the Units involves a high
degree of risk including, but not limited to, the following: (a) the Company
remains a development stage business with limited operating history and requires
substantial funds in addition to the proceeds of the Offering; (b) an investment
in the Company is highly speculative, and only investors who can afford the loss
of their entire investment should consider investing in the Company and the
Units; (c) the Subscriber may not be able to liquidate its investment; (d)
transferability of the Units (Shares and Warrants) is extremely limited; (e) in
the event of a disposition, the Subscriber could sustain the loss of its entire
investment; (f) the Company has not paid any dividends since its inception and
does not anticipate paying any dividends in the foreseeable future; and (g) the
Company may issue additional securities in the future which have rights and
preferences that are senior to those of the Common Stock.  Without limiting the
generality of the representations set forth in herein, the Subscriber represents
that the Subscriber has carefully reviewed the Company’s reports and filings
with the United States Securities and Exchange Commission (the “SEC”)
(collectively, the “Information Package”).  The foregoing reports contained in
the Information Package are available on the SEC’s website at www.sec.gov.
 
1.3  The Subscriber is, and on each date on which the Subscriber continues to
own restricted securities from the Offering will be, an “Accredited Investor” as
defined in Rule 501(a) under the Securities Act. In general, an “Accredited
Investor” is deemed to be an institution with assets in excess of $5,000,000 or
individuals with a net worth in excess of $1,000,000 (excluding such person’s
principal residence) or annual income exceeding $200,000 or $300,000 jointly
with his or her spouse.
 
 
1

--------------------------------------------------------------------------------

 
1.4  The Subscriber hereby acknowledges and represents that (a) the Subscriber
has knowledge and experience in business and financial matters, prior investment
experience, including investment in securities that are non-listed, unregistered
and/or not traded on a national securities exchange or the Subscriber has
employed the services of a “purchaser representative” (as defined in Rule 501 of
Regulation D), attorney and/or accountant to read all of the documents furnished
or made available by the Company both to the Subscriber and to all other
prospective investors in the Units to evaluate the merits and risks of such an
investment on the Subscriber’s behalf; (b) the Subscriber recognizes the highly
speculative nature of this investment; and (c) the Subscriber is able to bear
the economic risk that the Subscriber hereby assumes.
 
1.5  The Subscriber hereby acknowledges receipt and careful review of this
Agreement, and any documents which may have been made available upon request as
reflected therein (collectively referred to with the Information Package as the
“Offering Materials”) and hereby represents that the Subscriber has been
furnished by the Company during the course of the Offering with all information
regarding the Company, the terms and conditions of the Offering and any
additional information that the Subscriber has requested or desired to know, and
has been afforded the opportunity to ask questions of and receive answers from
duly authorized officers or other representatives of the Company concerning the
Company and the terms and conditions of the Offering.
 
1.6  (a)           In making the decision to invest in the Units the Subscriber
has relied solely upon the information provided by the Company in the Offering
Materials.  To the extent necessary, the Subscriber has retained, at its own
expense, and relied upon appropriate professional advice regarding the
investment, tax and legal merits and consequences of this Agreement and the
purchase of the Units hereunder.  The Subscriber disclaims reliance on any
statements made or information provided by any person or entity in the course of
Subscriber’s consideration of an investment in the Units other than the Offering
Materials.
 
           (b)           The Subscriber represents and warrants that: (i) the
Subscriber was contacted regarding the sale of the Units by the Company (or an
authorized agent or representative thereof) with whom the Subscriber had a prior
substantial pre-existing relationship  and (ii) no Units were offered or sold to
it by means of any form of general solicitation or general advertising, and in
connection therewith, the Subscriber did not (A) receive or review any
advertisement, article, notice or other communication published in a newspaper
or magazine or similar media or broadcast over television or radio, whether
closed circuit, or generally available; or (B) attend any seminar meeting or
industry investor conference whose attendees were invited by any general
solicitation or general advertising; or (C) observe any website or filing of the
Company with the SEC in which any offering of securities by the Company was
described and as a result learned of any offering of securities by the Company.
 
1.7  The Subscriber hereby represents that the Subscriber, either by reason of
the Subscriber’s business or financial experience or the business or financial
experience of the Subscriber’s professional advisors (who are unaffiliated with
and not compensated by the Company or any affiliate of the Company, directly or
indirectly), has the capacity to protect the Subscriber’s own interests in
connection with the transaction contemplated hereby.
 
1.8  The Subscriber hereby acknowledges that the Offering has not been reviewed
by the SEC nor any state regulatory authority since the Offering is intended to
be exempt from the registration requirements of Section 5 of the Securities Act,
pursuant to Regulation D.  The Subscriber understands that the Units have not
been registered under the Securities Act or under any state securities or “blue
sky” laws and agrees not to sell, pledge, assign or otherwise transfer or
dispose of the Units unless they are registered under the Securities Act and
under any applicable state securities or “blue sky” laws or unless an exemption
from such registration is available.
 
1.9  The Subscriber understands that the Units have not been registered under
the Securities Act by reason of a claimed exemption under the provisions of the
Securities Act that depends, in part, upon the Subscriber’s investment
intention.  In this connection, the Subscriber hereby represents that the
Subscriber is purchasing the Units for the Subscriber’s own account for
investment and not with a view toward the resale or distribution to others.  The
Subscriber, if an entity, further represents that it was not formed for the
purpose of purchasing the Units.
 
1.10  The Subscriber understands that the Common Stock is thinly traded.  The
Subscriber understands that even if a public market develops for the Common
Stock, Rule 144 (“Rule 144”) promulgated under the Securities Act requires for
non-affiliates, among other conditions, a six month holding period prior to the
resale of securities acquired in a non-public offering without having to satisfy
the registration requirements under the Securities Act provided the other
requirements of Rule 144 are available at the time of sale (such as availability
of current public information concerning the Company).  The Subscriber
understands and hereby acknowledges that the Company is under no obligation to
register any of the Units under the Securities Act or any state securities or
“blue sky” laws other than as set forth herein.
 
 
2

--------------------------------------------------------------------------------

 
1.11  The Subscriber consents to the placement of a legend on any certificate or
other document evidencing the Units (including the underlying Shares and
Warrants) that such Units have not been registered under the Securities Act or
any state securities or “blue sky” laws and setting forth or referring to the
restrictions on transferability and sale thereof contained in this
Agreement.  The Subscriber is aware that the Company will make a notation in its
appropriate records with respect to the restrictions on the transferability of
such Units. The legend to be placed on each certificate shall be in form
substantially similar to the following:
 
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE
STATE SECURITIES LAWS.  SUCH SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT
PURPOSES AND MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE,
TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FILED BY THE ISSUER WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION
COVERING SUCH SECURITIES UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.
 
1.12  The Subscriber understands that the Company will review this Agreement and
is hereby given authority by the Subscriber to call Subscriber’s bank or place
of employment or otherwise review the financial standing of the Subscriber; and
it is further agreed that the Company, at its sole discretion, reserves the
unrestricted right, without further documentation or agreement on the part of
the Subscriber, to reject or limit any subscription, to accept subscriptions for
fractional Units and to close the Offering to the Subscriber at any time and
that the Company will issue stop transfer instructions to its transfer agent
with respect to such Units.
 
1.13  The Subscriber hereby represents that the address of the Subscriber
furnished by Subscriber on the signature page hereof is the Subscriber’s
principal residence if Subscriber is an individual or its principal business
address if it is a corporation or other entity.
 
1.14  The Subscriber represents that the Subscriber has full power and authority
(corporate, statutory and otherwise) to execute and deliver this Agreement and
to purchase the Units.  This Agreement constitutes the legal, valid and binding
obligation of the Subscriber, enforceable against the Subscriber in accordance
with its terms.
 
1.15  If the Subscriber is a corporation, partnership, limited liability
company, trust, employee benefit plan, individual retirement account, Keogh
Plan, or other tax-exempt entity, it is authorized and qualified to invest in
the Company and the person signing this Agreement on behalf of such entity has
been duly authorized by such entity to do so.
 
1.16  The Subscriber acknowledges that if he or she is a Registered
Representative of a Financial Industry Regulatory Authority (“FINRA”) member
firm, he or she must give such firm the notice required by the FINRA’s Rules of
Fair Practice, receipt of which must be acknowledged by such firm in Section 7.4
below.
 
1.17  The Subscriber acknowledges that at such time, if ever, as the Shares or
Warrants are registered under the Securities Act, sales of the Shares or
Warrants will be subject to state securities laws.
 
1.18  (a)     The Subscriber agrees not to issue any public statement with
respect to the Subscriber’s investment or proposed investment in the Company or
the terms of any agreement or covenant between them and the Company without the
Company’s prior written consent, except such disclosures as may be required
under applicable law or under any applicable order, rule or regulation.
 
 
3

--------------------------------------------------------------------------------

 
             (b)  The Company agrees not to disclose the names, addresses or any
other information about the Subscribers, except as required by law; provided,
that the Company may use the name of the Subscriber for any offering or in any
registration statement in which the Subscriber’s Units (Shares or Warrants) are
included.
 
1.19  The Subscriber agrees to hold the Company and its directors, officers,
employees, affiliates, controlling persons and agents and their respective
heirs, representatives, successors and assigns harmless and to indemnify them
against all liabilities, costs and expenses incurred by them as a result of (a)
any sale or distribution of the Units by the Subscriber in violation of the
Securities Act or any applicable state securities or “blue sky” laws; or (b) any
false representation or warranty or any breach or failure by the Subscriber to
comply with any covenant made by the Subscriber in this Agreement (including the
Confidential Investor Questionnaire contained in Article VII herein) or any
other document furnished by the Subscriber to any of the foregoing in connection
with this transaction.
 

II.  
REPRESENTATIONS BY AND COVENANTS OF THE COMPANY

 
The Company hereby represents and warrants to the Subscriber that:
 
2.1  Organization, Good Standing and Qualification.  The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Nevada and has full corporate power and authority to conduct its
business.
 
2.2  Capitalization and Voting Rights.  The authorized, issued and outstanding
capital stock of the Company is as set forth in the Information Package and all
issued and outstanding shares of the Company are validly issued, fully paid and
non-assessable.  Except as set forth in the Offering Materials and as otherwise
required by law, there are no restrictions upon the voting or transfer of any of
the shares of capital stock of the Company pursuant to the Company’s Articles of
Incorporation (the “Articles of Incorporation”), Bylaws or other governing
documents or any agreement or other instruments to which the Company is a party
or by which the Company is bound.
 
2.3  Authorization; Enforceability.  The Company has all corporate right, power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby.  All corporate action on the part of the Company, its
directors and stockholders necessary for the (a) authorization execution,
delivery and performance of this Agreement by the Company; and (b)
authorization, sale, issuance and delivery of the Units contemplated hereby and
the performance of the Company’s obligations hereunder has been taken.  This
Agreement has been duly executed and delivered by the Company and constitutes a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject to laws of general application
relating to bankruptcy, insolvency and the relief of debtors and rules of law
governing specific performance, injunctive relief or other equitable remedies,
and to limitations of public policy.  The Shares when issued and fully paid for
in accordance with the terms of this Agreement, and Shares issued pursuant to
the terms of the Warrants when exercised in accordance with the terms of such
Warrants, will be validly issued, fully paid and nonassessable.  The issuance
and sale of the Units contemplated hereby will not give rise to any preemptive
rights or rights of first refusal on behalf of any person which have not been
waived in connection with this offering.
 
2.4  No Conflict; Governmental Consents.
 
    (a)  The execution and delivery by the Company of this Agreement and the
consummation of the transactions contemplated hereby will not result in the
violation of any material law, statute, rule, regulation, order, writ,
injunction, judgment or decree of any court or governmental authority to or by
which the Company is bound, or of any provision of the Articles of Incorporation
or Bylaws of the Company, and will not conflict with, or result in a material
breach or violation of, any of the terms or provisions of, or constitute (with
due notice or lapse of time or both) a default under, any lease, loan agreement,
mortgage, security agreement, trust indenture or other agreement or instrument
to which the Company is a party or by which it is bound or to which any of its
properties or assets is subject, nor result in the creation or imposition of any
lien upon any of the properties or assets of the Company.
 
 
4

--------------------------------------------------------------------------------

 
(b)  No consent, approval, authorization or other order of any governmental
authority is required to be obtained by the Company in connection with the
authorization, execution and delivery of this Agreement or with the
authorization, issue and sale of the Units, except such filings as may be
required to be made with the SEC, FINRA and with any state or foreign blue sky
or securities regulatory authority.
 
III.  
TERMS OF SUBSCRIPTION

 
3.1  All funds paid hereunder shall be wired to the Company as follows:
 
Bank Name: JPMorgan Chase NA
Bank Address: 5689 St. Joseph Road, Stevensville, Michigan, 49127
Account Name: Discovery Gold Corporation
Account address: 2460 West 26th Avenue, Suite 380C, Denver, Colorado, 80211
Account number: 00000857591333
Wire code: 021000021
SWIFT CODE: CHASUS33

3.2  Certificates representing the Shares and the Warrants purchased by the
Subscriber pursuant to this Agreement will be prepared for delivery to the
Subscriber within 10 business days following the closing at which such purchase
takes place. The Subscriber hereby authorizes and directs the Company to deliver
the certificates representing the Shares and the Warrants purchased by the
Subscriber pursuant to this Agreement directly to the Subscriber’s residential
or business address indicated on the signature page hereto.
 
IV.  
CONDITIONS TO OBLIGATIONS OF THE SUBSCRIBERS

 
4.1  The Subscriber’s obligation to purchase the Units at the closing at which
such purchase is to be consummated is subject to the fulfillment on or prior to
such closing of the following conditions, which conditions may be waived at the
option of each Subscriber to the extent permitted by law:
 
(a)  Covenants.  All covenants, agreements and conditions contained in this
Agreement to be performed by the Company on or prior to the date of such closing
shall have been performed or complied with in all material respects.
 
(b)  No Legal Order Pending.  There shall not then be in effect any legal or
other order enjoining or restraining the transactions contemplated by this
Agreement.
 
(c)  No Law Prohibiting or Restricting Such Sale.  There shall not be in effect
any law, rule or regulation prohibiting or restricting such sale or requiring
any consent or approval of any person, which shall not have been obtained, to
issue the Units (except as otherwise provided in this Agreement).
 
V.  
INTENTIONALLY OMITTED.

 
VI.  
MISCELLANEOUS

 
6.1  Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail, return
receipt requested, or delivered by hand against written receipt therefor,
addressed as follows:
 
if to the Company, at:
Discovery Gold Corporation
2460 West 26th Avenue, Suite 380C
Denver, CO 80211
Attn:  Stephen E. Flechner, Chief Executive Officer

 
5

--------------------------------------------------------------------------------

 
With a copy to (which shall not constitute notice):

Sichenzia Ross Friedman Ference LLP
61 Broadway, 32nd Floor
New York, NY 10006
Attn:  Darrin Ocasio, Esq.

if to the Subscriber, to the Subscriber’s address indicated on the signature
page of this Agreement.
 
Notices shall be deemed to have been given or delivered on the date of mailing,
except notices of change of address, which shall be deemed to have been given or
delivered when received.
 
6.2  Except as otherwise provided herein, this Agreement shall not be changed,
modified or amended except by a writing signed by both the Company and the
Subscriber.
 
6.3  Subject to anything contrary herein, this Agreement shall be binding upon
and inure to the benefit of the parties hereto and to their respective heirs,
legal representatives, successors and assigns.  This Agreement sets forth the
entire agreement and understanding between the parties as to the subject matter
hereof and merges and supersedes all prior discussions, agreements and
understandings of any and every nature among them.
 
6.4  Upon the execution and delivery of this Agreement by the Subscriber, this
Agreement shall become a binding obligation of the Subscriber with respect to
the purchase of Units as herein provided, subject, however, to the right hereby
reserved by the Company to enter into the same agreements with other subscribers
and to add and/or delete other persons as subscribers.
 
6.5  NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF
THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT ALL THE TERMS AND
PROVISIONS HEREOF SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK WITHOUT REGARD TO SUCH STATE’S PRINCIPLES OF CONFLICTS
OF LAW.  IN THE EVENT THAT A JUDICIAL PROCEEDING IS NECESSARY, THE SOLE FORUM
FOR RESOLVING DISPUTES ARISING OUT OF OR RELATING TO THIS AGREEMENT IS THE
COURTS OF THE STATE OF NEW YORK IN AND FOR THE COUNTY OF NEW YORK OR THE FEDERAL
COURTS FOR SUCH STATE AND COUNTY, AND ALL RELATED APPELLATE COURTS, THE PARTIES
HEREBY IRREVOCABLY CONSENT TO THE JURISDICTION OF SUCH COURTS AND AGREE TO SAID
VENUE.
 
6.6  WAIVER OF JURY TRIAL.  IN ANY ACTION, SUIT, OR PROCEEDING IN ANY
JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW,
HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER
TRIAL BY JURY.
 
6.7  In order to discourage frivolous claims the parties agree that unless a
claimant in any proceeding arising out of this Agreement succeeds in
establishing his claim and recovering a judgment against another party
(regardless of whether such claimant succeeds against one of the other parties
to the action), then the other party shall be entitled to recover from such
claimant all of its/their reasonable legal costs and expenses relating to such
proceeding and/or incurred in preparation therefor.
 
6.8  The holdings of any provision of this Agreement to be invalid or
unenforceable by a court of competent jurisdiction shall not affect any other
provision of this Agreement, which shall remain in full force and effect.  If
any provision of this Agreement shall be declared by a court of competent
jurisdiction to be invalid, illegal or incapable of being enforced in whole or
in part, such provision shall be interpreted so as to remain enforceable to the
maximum extent permissible consistent with applicable law and the remaining
conditions and provisions or portions thereof shall nevertheless remain in full
force and effect and enforceable to the extent they are valid, legal and
enforceable, and no provisions shall be deemed dependent upon any other covenant
or provision unless so expressed herein.
 
 
6

--------------------------------------------------------------------------------

 
6.9  It is agreed that a waiver by either party of a breach of any provision of
this Agreement shall not operate, or be construed, as a waiver of any subsequent
breach by that same party.
 
6.10  The parties agree to execute and deliver all such further documents,
agreements and instruments and take such other and further action as may be
necessary or appropriate to carry out the purposes and intent of this Agreement.
 
6.11  This Agreement may be executed in two or more counterparts each of which
shall be deemed an original, but all of which shall together constitute one and
the same instrument.
 
6.12  Nothing in this Agreement shall create or be deemed to create any rights
in any person or entity not a party to this Agreement.
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
 
 
 
7

--------------------------------------------------------------------------------

 

VII.  
CONFIDENTIAL INVESTOR QUESTIONNAIRE

 
         7.1         The Subscriber represents and warrants that he, she or it
comes within one category marked below, and that for any category marked, he,
she or it has truthfully set forth, where applicable, the factual basis or
reason the Subscriber comes within that category.  ALL INFORMATION IN RESPONSE
TO THIS SECTION WILL BE KEPT STRICTLY CONFIDENTIAL.  The undersigned agrees to
furnish any additional information which the Company deems necessary in order to
verify the answers set forth below.
 
Category A  ___
The undersigned is an individual (not a partnership, corporation, etc.) whose
individual net worth, or joint net worth with his or her spouse, presently
exceeds $1,000,000 (excluding his or her principal residence).

Explanation.  In calculating net worth you may include equity in personal
property and real estate other than your principal residence, including your
cash, short-term investments, stock and securities.  Equity in personal property
and real estate should be based on the fair market value of such property less
debt secured by such property.

Category B  ___
The undersigned is an individual (not a partnership, corporation, etc.) who had
an income in excess of $200,000 in each of the two most recent years, or joint
income with his or her spouse in excess of $300,000 in each of those years (in
each case including foreign income, tax exempt income and full amount of capital
gains and losses but excluding any income of other family members and any
unrealized capital appreciation) and has a reasonable expectation of reaching
the same income level in the current year.

Category C  ___
The undersigned is a director or executive officer of the Company which is
issuing and selling the Units.

Category D  ___
The undersigned is a bank; a savings and loan association; insurance company;
registered investment company; registered business development company; licensed
small business investment company (“SBIC”); or employee benefit plan within the
meaning of Title 1 of ERISA and (a) the investment decision is made by a plan
fiduciary which is either a bank, savings and loan association, insurance
company or registered investment advisor, or (b) the plan has total assets in
excess of $5,000,000 or (c) is a self directed plan with investment decisions
made solely by persons that are accredited investors. (describe entity)

 

   

   

 
Category E  ___
The undersigned is a private business development company as defined in section
202(a)(22) of the Investment Advisors Act of 1940. (describe entity)

 

   

   

 
Category F  ___
The undersigned is either a corporation, partnership, Massachusetts business
trust, or non-profit organization within the meaning of Section 501(c)(3) of the
Internal Revenue Code, in each case not formed for the specific purpose of
acquiring the Units and with total assets in excess of $5,000,000. (describe
entity)

 

   

   

 
 
8

--------------------------------------------------------------------------------

 

Category G  ___
The undersigned is a trust with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring the Units, where the purchase is directed
by a “sophisticated investor” as defined in Regulation 506(b)(2)(ii) under the
Act.

 
Category H  ___
The undersigned is an entity (other than a trust) in which all of the equity
owners are “accredited investors” within one or more of the above
categories.  If relying upon this Category alone, each equity owner must
complete a separate copy of this Agreement.  (describe entity)

 

   

   

 
Category I ___
The undersigned is not within any of the categories above and is therefore not
an accredited investor.

 
The undersigned agrees that the undersigned will notify the Company at any time
on or prior to the closing in the event that the representations and warranties
in this Agreement shall cease to be true, accurate and complete
 
 
          7.2   SUITABILITY (please answer each question)
 
(a)           For an individual Subscriber, please describe your current
employment, including the company by which you are employed and its principal
business:
 

               

 
(b)           For an individual Subscriber, please describe any college or
graduate degrees held by you:
 

               

 
(c)           For all Subscribers, please list types of prior investments:
 

               

 
(d)           For all Subscribers, please state whether you have participated in
other private placements before:
 
YES_______                                           NO_______
 
 
 
9

--------------------------------------------------------------------------------

 
(e)           If your answer to question (d) above was “YES”, please indicate
frequency of such prior participation in private placements of:
 

 
 
Public
Companies
 
 
Private
Companies
 
Public or Private Companies
with no, or insignificant,
assets and operations
 
Frequently
         
Occasionally
         
Never
         

(f)           For individual Subscribers, do you expect your current level of
income to significantly decrease in the foreseeable future:
 
YES_______                                           NO_______
 
(g)           For trust, corporate, partnership and other institutional
Subscribers, do you expect your total assets to significantly decrease in the
foreseeable future:
 
YES_______                                           NO_______
 
(h)           For all Subscribers, do you have any other investments or
contingent liabilities which you reasonably anticipate could cause you to need
sudden cash requirements in excess of cash readily available to you:
 
YES_______                                           NO_______
 
(i)           For all Subscribers, are you familiar with the risk aspects and
the non-liquidity of investments such as the securities for which you seek to
subscribe?
 
YES_______                                           NO_______
 
(j)            For all Subscribers, do you understand that there is no guarantee
of financial return on this investment and that you run the risk of losing your
entire investment?
 
YES_______                                           NO_______
 
7.3   MANNER IN WHICH TITLE IS TO BE HELD.  (circle one)
 
(a)           Individual Ownership
(b)           Community Property
(c)           Joint Tenant with Right of Survivorship (both parties must sign)
(d)           Partnership*
(e)           Tenants in Common
(f)            Company*
(g)           Trust*
(h)           Other*
 
*If Securities are being subscribed for by an entity, the attached Certificate
of Signatory must also be completed.
 
7.4   FINRA AFFILIATION.
 
Are you affiliated or associated with a FINRA member firm (please check one):
 
Yes _________                                           No __________
 
If Yes, please describe:
 

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 
 
10

--------------------------------------------------------------------------------

 
*If Subscriber is a Registered Representative with an FINRA member firm, have
the following acknowledgment signed by the appropriate party:
 
The undersigned FINRA member firm acknowledges receipt of the notice required by
Article 3, Sections 28(a) and (b) of the Rules of Fair Practice.
 
 

   
Name of FINRA Member Firm
 
By:       Date:   

 
 
7.5    The undersigned is informed of the significance to the Company of the
foregoing representations and answers contained in the Confidential Investor
Questionnaire contained in this Article VII and such answers have been provided
under the assumption that the Company will rely on them.
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
 
 
 
 
11

--------------------------------------------------------------------------------

 
DOLLAR SUBSCRIPTION $50,000/ $0.004 = 12,500,000 NUMBER OF UNITS
(EACH UNIT CONSISTING OF ONE SHARE AND ONE WARRANT TO
PURCHASE 0.5 SHARE OF COMMON STOCK)
 
 
 

      Signature   Signature (if purchasing jointly)

 

      Name Typed or Printed    Name Typed or Printed

  

      Title (if Subscriber is an Entity)   Title (if Subscriber is an Entity)

 

      Entity Name (if applicable)    Entity Name (if applicable

 

            Address   Address

 

      City, State and Zip Code   City, State and Zip Code

 

      Telephone-Business    Telephone-Business

                                                                   

      Telephone-Residence    Telephone-Residence

 

      Facsimile-Business   Facsimile-Business

 

      Facsimile-Residence   Facsimile-Residence

 

      Tax ID # or Social Security #      Tax ID # or Social Security #   

 

Name in which securities should be issued:          

 
 
Dated:  ________________ , 2013

This Subscription Agreement is agreed to and accepted as of July ___, 2013.
 
DISCOVERY GOLD CORPORATION

By:           /s/ Stephen E. Flechner 
Name:      Stephen E. Flechner
Title:        Chief Executive Officer
 
 
12

--------------------------------------------------------------------------------

 

 
WARRANT
 
NO. 2
DISCOVERY GOLD CORPORATION
6,250,000 Shares
     

WARRANT TO PURCHASE COMMON STOCK
 
VOID AFTER 5:30 P.M., EASTERN
TIME, ON THE EXPIRATION DATE
 
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND
MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED WITHOUT
COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE
FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS THEREFROM.
 
FOR VALUE RECEIVED, DISCOVERY GOLD CORPORATION, a Nevada corporation (the
“Company”), hereby agrees to sell upon the terms  and on the conditions
hereinafter set forth, but no later than 5:30 p.m., Eastern Time, on the
Expiration Date (as hereinafter defined) to Steven Ross or registered assigns
(the “Holder”), under the terms as hereinafter set forth, Six Million Two
Hundred Fifty Thousand (6,250,000) fully paid and non-assessable shares of the
Company’s Common Stock, par value $0.001 per share (the “Warrant Stock”), at a
purchase price of $0.02 per share (the “Warrant Price”), pursuant to this
warrant (this “Warrant”).  The number of shares of Warrant Stock to be so issued
and the Warrant Price are subject to adjustment in certain events as hereinafter
set forth.  The term “Common Stock” shall mean, when used herein, unless the
context otherwise requires, the stock and other securities and property at the
time receivable upon the exercise of this Warrant.
 
1. Exercise of Warrant.
 
(1)  At any time after the date hereof, the Holder may exercise this Warrant
according to its terms by surrendering this Warrant to the Company at the
address set forth in Section 11, the Notice of Exercise attached hereto having
then been duly executed by the Holder, accompanied by cash, certified check or
bank draft in payment of the purchase price, in lawful money of the United
States of America, for the number of shares of the Warrant Stock specified in
the Notice of Exercise, or as otherwise provided in this Warrant, prior to 5:30
p.m., Eastern Time, on January 19, 2015 (the “Expiration Date”).
 
(2)  This Warrant may be exercised in whole or in part so long as any exercise
in part hereof would not involve the issuance of fractional shares of Warrant
Stock.  If exercised in part, the Company shall deliver to the Holder a new
Warrant, identical in form, in the name of the Holder, evidencing the right to
purchase the number of shares of Warrant Stock as to which this Warrant has not
been exercised, which new Warrant shall be signed by the Chairman, Chief
Executive Officer or President and the Secretary or Assistant Secretary of the
Company.  The term Warrant as used herein shall include any subsequent Warrant
issued as provided herein.
 
(3)  No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of this Warrant. The Company shall pay cash in lieu of
fractions with respect to the Warrants based upon the fair market value of such
fractional shares of Common Stock (which shall be the closing price of such
shares on the exchange or market on which the Common Stock is then traded) at
the time of exercise of this Warrant.
 
(4)  In the event of any exercise of the rights represented by this Warrant, a
certificate or certificates for the Warrant Stock so purchased, registered in
the name of the Holder, shall be delivered to the Holder within  three (3)
trading days after such rights shall have been so exercised. The person or
entity in whose name any certificate for the Warrant Stock is issued upon
exercise of the rights represented by this Warrant shall for all purposes be
deemed to have become the holder of record of such shares immediately prior to
the close of business on the date on which the Warrant was surrendered and
payment of the Warrant Price and any applicable taxes was made, irrespective of
the date of delivery of such certificate, except that, if the date of such
surrender and payment is a date when the stock transfer books of the Company are
closed, such person shall be deemed to have become the holder of such shares at
the opening of business on the next succeeding date on which the stock transfer
books are open. The Company shall pay any and all documentary stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of shares of
Common Stock on exercise of this Warrant.
 
 
13

--------------------------------------------------------------------------------

 
(5)  Compensation for Buy-In on Failure to Timely Deliver Certificates Upon
Exercise.  In addition to any other rights available to the Holder, if the
Company fails to cause its transfer agent to transmit to the Holder a
certificate or the certificates representing the Warrant Stock pursuant to an
exercise within three trading days from the date of such exercise, and if after
such date the Holder is required by its broker to purchase (in an open market
transaction or otherwise) or the Holder’s brokerage firm otherwise purchases,
shares of Common Stock to deliver in satisfaction of a sale by the Holder of the
Warrant Stock which the Holder anticipated receiving upon such exercise (a
“Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if
any, by which (x) the Holder’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased exceeds (y) the
amount obtained by multiplying (1) the number of shares of Warrant Stock that
the Company was required to deliver to the Holder in connection with the
exercise at issue times (2) the price at which the sell order giving rise to
such purchase obligation was executed, and (B) at the option of the Holder,
either reinstate the portion of the Warrant and equivalent number of shares of
Warrant Stock for which such exercise was not honored (in which case such
exercise shall be deemed rescinded) or deliver to the Holder the number of
shares of Common Stock that would have been issued had the Company timely
complied with its exercise and delivery obligations hereunder.  For example, if
the Holder purchases Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to an attempted exercise of shares of Common Stock
with an aggregate sale price giving rise to such purchase obligation of $10,000,
under clause (A) of the immediately preceding sentence the Company shall be
required to pay the Holder $1,000. The Holder shall provide the Company written
notice indicating the amounts payable to the Holder in respect of the Buy-In
and, upon request of the Company, evidence of the amount of such loss.  Nothing
herein shall limit a Holder’s right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing shares of Common Stock upon
exercise of the Warrant as required pursuant to the terms hereof.
 
2. Disposition of Warrant Stock and Warrant.
 
(1)  The Holder hereby acknowledges that this Warrant and any Warrant Stock
purchased pursuant hereto are, as of the date hereof, not registered: (i) under
the Securities Act of 1933, as amended (the “Act”), on the ground that the
issuance of this Warrant is exempt from registration under Section 4(2) of the
Act as not involving any public offering or (ii) under any applicable state
securities law because the issuance of this Warrant does not involve any public
offering; and that the Company’s reliance on the Section 4(2) exemption of the
Act and under applicable state securities laws is predicated in part on the
representations hereby made to the Company by the Holder that it is acquiring
this Warrant and will acquire the Warrant Stock for investment for its own
account, with no present intention of dividing its participation with others or
reselling or otherwise distributing the same, subject, nevertheless, to any
requirement of law that the disposition of its property shall at all times be
within its control.
 
(2)  The Holder hereby agrees that it will not sell or transfer all or any part
of this Warrant and/or Warrant Stock unless and until it shall first have given
notice to the Company describing such sale or transfer and furnished to the
Company either (i) an opinion, reasonably satisfactory to counsel for the
Company, of counsel (skilled in securities matters, selected by the Holder and
reasonably satisfactory to the Company) to the effect that the proposed sale or
transfer may be made without registration under the Act and without registration
or qualification under any state law, or (ii) an interpretative letter from the
Securities and Exchange Commission to the effect that no enforcement action will
be recommended if the proposed sale or transfer is made without registration
under the Act.
 
(3)  If, at the time of issuance of the shares issuable upon exercise of this
Warrant, no registration statement is in effect with respect to such shares
under applicable provisions of the Act, unless an applicable exemption from
registration is available and the Company is provided with an opinion of counsel
acceptable to the Company that registration is not then required, in which case
the certificate representing the Warrant Stock shall not bear any restrictive
legend, the Company may at its election require that the Holder provide the
Company with written reconfirmation of the Holder’s investment intent and that
any stock certificate delivered to the Holder of a surrendered Warrant shall
bear legends reading substantially as follows:
 
 
14

--------------------------------------------------------------------------------

 
“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER OF THIS CERTIFICATE THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT.”
 
In addition, so long as the foregoing legend may remain on any stock certificate
delivered to the Holder, the Company may maintain appropriate “stop transfer”
orders with respect to such certificates and the shares represented thereby on
its books and records and with those to whom it may delegate registrar and
transfer functions.
 
3. Reservation of Shares.  The Company hereby agrees that at all times there
shall be reserved for issuance upon the exercise of this Warrant such number of
shares of its Common Stock as shall be required for issuance upon exercise of
this Warrant.  The Company further agrees that all shares which may be issued
upon the exercise of the rights represented by this Warrant will be duly
authorized and will, upon issuance and against payment of the exercise price, be
validly issued, fully paid and non-assessable, free from all taxes, liens,
charges and preemptive rights with respect to the issuance thereof, other than
taxes, if any, in respect of any transfer occurring contemporaneously with such
issuance and other than transfer restrictions imposed by federal and state
securities laws.
 
4.  Exchange, Transfer or Assignment of Warrant.  This Warrant is exchangeable,
without expense, at the option of the Holder, upon presentation and surrender
hereof to the Company or at the office of its stock transfer agent, if any, for
other Warrants of different denominations, entitling the Holder or Holders
thereof to purchase in the aggregate the same number of shares of Common Stock
purchasable hereunder.  Upon surrender of this Warrant to the Company or at the
office of its stock transfer agent, if any, with the Assignment Form annexed
hereto duly executed and funds sufficient to pay any transfer tax, the Company
shall, without charge, execute and deliver a new Warrant in the name of the
assignee named in such instrument of assignment and this Warrant shall promptly
be canceled. This Warrant may be divided or combined with other Warrants that
carry the same rights upon presentation hereof at the office of the Company or
at the office of its stock transfer agent, if any, together with a written
notice specifying the names and denominations in which new Warrants are to be
issued and signed by the Holder hereof.
 
5.  Capital Adjustments.  This Warrant is subject to the following further
provisions:
 
(1)  Recapitalization, Reclassification and Succession.  If any recapitalization
of the Company or reclassification of its Common Stock or any merger or
consolidation of the Company into or with a corporation or other business
entity, or the sale or transfer of all or substantially all of the Company's
assets or of any successor corporation's assets to any other corporation or
business entity (any such corporation or other business entity being included
within the meaning of the term "successor corporation") shall be effected, at
any time while this Warrant remains outstanding and unexpired, then, as a
condition of such recapitalization, reclassification, merger, consolidation,
sale or transfer, lawful and adequate provision shall be made whereby the Holder
of this Warrant thereafter shall have the right to receive upon the exercise
hereof as provided in Section 1 and in lieu of the shares of Common Stock
immediately theretofore issuable upon the exercise of this Warrant, such shares
of capital stock, securities or other property as may be issued or payable with
respect to or in exchange for a number of outstanding shares of Common Stock
equal to the number of shares of Common Stock immediately theretofore issuable
upon the exercise of this Warrant had such recapitalization, reclassification,
merger, consolidation, sale or transfer not taken place, and in each such case,
the terms of this Warrant shall be applicable to the shares of stock or other
securities or property receivable upon the exercise of this Warrant after such
consummation.
 
(2)  Subdivision or Combination of Shares.  If the Company at any time while
this Warrant remains outstanding and unexpired shall subdivide or combine its
Common Stock, the number of shares of Warrant Stock purchasable upon exercise of
this Warrant and the Warrant Price shall be proportionately adjusted.
 
(3)  Stock Dividends and Distributions.  If the Company at any time while this
Warrant is outstanding and unexpired shall issue or pay the holders of its
Common Stock, or take a record of the holders of its Common Stock for the
purpose of entitling them to receive, a dividend payable in, or other
distribution of, Common Stock, then (i) the Warrant Price shall be adjusted in
accordance with Section 5(5) and (ii) the number of shares of Warrant Stock
purchasable upon exercise of this Warrant shall be adjusted to the number of
shares of Common Stock that the Holder would have owned immediately following
such action had this Warrant been exercised immediately prior thereto.
 
 
15

--------------------------------------------------------------------------------

 
(4)  Stock and Rights Offering to Shareholders.  If the Company shall at any
time after the date of issuance of this Warrant distribute to all holders of its
Common Stock any shares of capital stock of the Company (other than Common
Stock) or evidences of its indebtedness or assets (excluding cash dividends or
distributions paid from retained earnings or current year’s or prior year’s
earnings of the Company) or rights or warrants to subscribe for or purchase any
of its securities (excluding those referred to in the immediately preceding
paragraph) (any of the foregoing being hereinafter in this paragraph called the
“Securities”), then in each such case, the Company shall reserve shares or other
units of such Securities for distribution to the Holder upon exercise of this
Warrant so that, in addition to the shares of the Common Stock to which such
Holder is entitled, such Holder will receive upon such exercise the amount and
kind of such Securities which such Holder would have received if the Holder had,
immediately prior to the record date for the distribution of the Securities,
exercised this Warrant.
 
(5)  Warrant Price Adjustment.  Except as otherwise provided herein, whenever
the number of shares of Warrant Stock purchasable upon exercise of this Warrant
is adjusted, as herein provided, the Warrant Price payable upon the exercise of
this Warrant shall be adjusted to that price determined by multiplying the
Warrant Price immediately prior to such adjustment by a fraction (i) the
numerator of which shall be the number of shares of Warrant Stock purchasable
upon exercise of this Warrant immediately prior to such adjustment, and (ii) the
denominator of which shall be the number of shares of Warrant Stock purchasable
upon exercise of this Warrant immediately thereafter.
 
(6)  Certain Shares Excluded.  The number of shares of Common Stock outstanding
at any given time for purposes of the adjustments set forth in this Section 5
shall exclude any shares then directly or indirectly held in the treasury of the
Company.
 
(7)  Deferral and Cumulation of De Minimis Adjustments.  The Company shall not
be required to make any adjustment pursuant to this Section 5 if the amount of
such adjustment would be less than one percent (1%) of the Warrant Price in
effect immediately before the event that would otherwise have given rise to such
adjustment.  In such case, however, any adjustment that would otherwise have
been required to be made shall be made at the time of and together with the next
subsequent adjustment which, together with any adjustment or adjustments so
carried forward, shall amount to not less than one percent (1%) of the Warrant
Price in effect immediately before the event giving rise to such next subsequent
adjustment.
 
(8)  Duration of Adjustment.  Following each computation or readjustment as
provided in this Section 5, the new adjusted Warrant Price and number of shares
of Warrant Stock purchasable upon exercise of this Warrant shall remain in
effect until a further computation or readjustment thereof is required.
 
6.  Limitation on Exercises.  The Company shall not effect the exercise of this
Warrant, and the Holder shall not have the right to exercise this Warrant, to
the extent that after giving effect to such exercise, the Holder (together with
such Holder’s affiliates) would beneficially own in excess of 4.99% of the
shares of Common Stock outstanding immediately after giving effect to such
exercise.  For purposes of the foregoing sentence, the aggregate number of
shares of Common Stock beneficially owned by such Holder and its affiliates
shall include the number of shares of Common Stock issuable upon exercise of
this Warrant with respect to which the determination of such sentence is being
made, but shall exclude shares of Common Stock which would be issuable upon (A)
exercise of the remaining, unexercised portion of this Warrant beneficially
owned by such Holder and its affiliates and (B) exercise or conversion of the
unexercised or unconverted portion of any other securities of the Company
beneficially owned by such Person and its affiliates (including, without
limitation, any convertible notes or convertible preferred stock or warrants)
subject to a limitation on conversion or exercise analogous to the limitation
contained herein.  Except as set forth in the preceding sentence, for purposes
of this paragraph, beneficial ownership shall be calculated in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended.  To the extent
that the limitation contained in this Section 6 applies, the determination of
whether this Warrant is exercisable (in relation to other securities owned by
the Holder together with any affiliate) and of which portion of this Warrant is
exercisable shall be in the sole discretion of the Holder, and the submission of
a Notice of Exercise shall be deemed to be the Holder’s determination of whether
this Warrant is exercisable (in relation to other securities owned by the Holder
together with any affiliate) and of which portion of this Warrant is
exercisable, in each case subject to such aggregate percentage limitation, and
the Company shall have no obligation to verify or confirm the accuracy of the
determination.  For purposes of this Warrant, in determining the number of
outstanding shares of Common Stock, the Holder may rely on the number of
outstanding shares of Common Stock as reflected in (1) the Company's most recent
Form 10-K, Form 10-Q, Current Report on Form 8-K or other public filing with the
Securities and Exchange Commission, as the case may be, (2) a more recent public
announcement by the Company or (3) any other notice by the Company setting forth
the number of shares of Common Stock outstanding.  For any reason at any time,
upon the written or oral request of the Holder, the Company shall within one (1)
business day confirm orally and in writing to the Holder the number of shares of
Common Stock then outstanding.  In any case, the number of outstanding shares of
Common Stock shall be determined after giving effect to the conversion or
exercise of securities of the Company, including this Warrant, by the Holder and
its affiliates since the date as of which such number of outstanding shares of
Common Stock was reported.  The restriction described in this Section 6 may be
waived, in whole or in part, upon sixty-one (61) days prior notice from the
Holder to the Company to increase such percentage up to 9.99%, but not in excess
of 9.99%.  The provisions of this paragraph shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this Section 6
to correct this paragraph (or any portion hereof) which may be defective or
inconsistent with the intended beneficial ownership limitation herein contained
or to make changes or supplements necessary or desirable to properly give effect
to such limitation.
 
 
16

--------------------------------------------------------------------------------

 
7.  Notice to Holders.
 
(1)  
Notice of Record Date.  In case:

a.     
the Company shall take a record of the holders of its Common Stock (or other
stock or securities at the time receivable upon the exercise of this Warrant)
for the purpose of entitling them to receive any dividend (other than a cash
dividend payable out of earned surplus of the Company) or other distribution, or
any right to subscribe for or purchase any shares of stock of any class or any
other securities, or to receive any other right;

 
b.     
of any capital reorganization of the Company, any reclassification of the
capital stock of the Company, any consolidation with or merger of the Company
into another corporation, or any conveyance of all or substantially all of the
assets of the Company to another corporation; or

 
c.     
of any voluntary dissolution, liquidation or winding-up of the Company;

 
then, and in each such case, the Company will mail or cause to be mailed to the
Holder hereof at the time outstanding a notice specifying, as the case may be,
(i) the date on which a record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of such dividend,
distribution or right, or (ii) the date on which such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation or
winding-up is to take place, and the time, if any, is to be fixed, as of which
the holders of record of Common Stock (or such stock or securities at the time
receivable upon the exercise of this Warrant) shall be entitled to exchange
their shares of Common Stock (or such other stock or securities) for securities
or other property deliverable upon such reorganization, reclassification,
consolidation, merger, conveyance, dissolution or winding-up.  Such notice shall
be mailed at least thirty (30) days prior to the record date therein specified,
or if no record date shall have been specified therein, at least thirty (30)
days prior to such specified date, provided, however, failure to provide any
such notice shall not affect the validity of such transaction.
 
8. Certificate of Adjustment. Whenever any adjustment shall be made pursuant to
Section 5 hereof, the Company shall promptly make a certificate signed by its
Chairman, Chief Executive Officer, President, Vice President, Chief Financial
Officer or Treasurer, setting forth in reasonable detail the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated and the Warrant Price and number of shares of Warrant Stock
purchasable upon exercise of this Warrant after giving effect to such
adjustment, and shall promptly cause copies of such certificates to be mailed
(by first class mail, postage prepaid) to the Holder of this Warrant.
 
9. Loss, Theft, Destruction or Mutilation.  Upon receipt by the Company of
evidence satisfactory to it, in the exercise of its reasonable discretion, of
the ownership and the loss, theft, destruction or mutilation of this Warrant
and, in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to the Company and, in the case of mutilation, upon surrender and
cancellation thereof, the Company will execute and deliver in lieu thereof,
without expense to the Holder, a new Warrant of like tenor dated the date
hereof.
 
 
17

--------------------------------------------------------------------------------

 
10. Warrant Holder Not a Stockholder.  The Holder of this Warrant, as such,
shall not be entitled by reason of this Warrant to any rights whatsoever as a
stockholder of the Company.
 
11. Notices.  Any notice required or contemplated by this Warrant shall be
deemed to have been duly given if transmitted by registered or certified mail,
return receipt requested, or nationally recognized overnight delivery service,
to the Company at its principal executive offices located at Discovery Gold
Corporation, 2460 West 26th Avenue, Suite 380C, Denver, CO 80211 Attention:
Stephen E. Flechner, Chief Executive Officer, or to the Holder at the name and
address set forth in the Warrant Register maintained by the Company.
 
12. Choice of Law.  THIS WARRANT IS ISSUED UNDER AND SHALL FOR ALL PURPOSES BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
 
13. Jurisdiction and Venue.  The Company and Holder hereby agree that any
dispute which may arise between them arising out of or in connection with this
Warrant shall be adjudicated before a court located in New York County, New York
and they hereby submit to the exclusive jurisdiction of the federal and state
courts of the State of York located in New York County with respect to any
action or legal proceeding commenced by any party, and irrevocably waive any
objection they now or hereafter may have respecting the venue of any such action
or proceeding brought in such a court or respecting the fact that such court is
an inconvenient forum, relating to or arising out of this Warrant or any acts or
omissions relating to the sale of the securities hereunder, and consent to the
service of process in any such action or legal proceeding by means of registered
or certified mail, return receipt requested, in care of the address set forth
herein or such other address as either party shall furnish in writing to the
other.
 
14. Amendment.  This Warrant may be modified or amended or the provisions hereof
waived with the written consent signed by the Company and the Holder.
 
 
18

--------------------------------------------------------------------------------

 
IN WITNESS WHEREOF, the Company has duly caused this Warrant to be signed on its
behalf, in its corporate name and by its duly authorized officers, as of this
19th day of July, 2013.
 
DISCOVERY GOLD CORPORATION
 
By:           /s/ Stephen E. Flechner
Name:  Stephen E. Flechner
Title:  Chief Executive Officer
 
 
 
 
 
19

--------------------------------------------------------------------------------

 
 
NOTICE OF EXERCISE
TO:   
Discovery Gold Corporation
2460 West 26th Avenue, Suite 380C
Denver, CO 80211
Attn: Stephen E. Flechner, Chief Executive Officer
Tel: (855) 450-9700
Fax: (303) 463-5416

The undersigned hereby elects to purchase ______________ shares of Warrant Stock
of the Company pursuant to the terms of the attached Warrant to Purchase Common
Stock, and tenders herewith payment of the exercise price in full, together with
all applicable transfer taxes, if any.
 
Payment shall take the form of (check applicable box):
 
o   in lawful money of the United States
 
 
Please issue a certificate or certificates representing said shares of Warrant
Stock in the name of the undersigned or in such other name as is specified
below:
 

--------------------------------------------------------------------------------

 The shares of Warrant Stock shall be delivered to the following DWAC Account
Number, if permitted, or by physical delivery of a certificate to:
 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 
Accredited Investor. The undersigned is an “accredited investor” as defined in
Regulation D promulgated under the Securities Act of 1933, as amended.
 
[SIGNATURE OF HOLDER]
 
 

Name:  
 
Signature:
 
 
Date:
 

 
       
 
 
20

--------------------------------------------------------------------------------

 
                                                                                     
ASSIGNMENT FORM
 
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
 
     FOR VALUE RECEIVED, all of or   shares of the foregoing Warrant and all
rights evidenced thereby are hereby assigned to
 
                                                                       whose
address is
 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

  Dated:  __________ ,         
 
 
 

Holder’s Name:    
 
Holder’s Signature: 
 

 
Name and Title of Signatory: 
 

 

Holder’s Address:   

 

Signature Guaranteed:     

 
 
                                                                                                                                       
NOTE:  The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.
 

 
21

--------------------------------------------------------------------------------