Document:

form8k040411ex10-1.htm

PROPERTY OPTION AGREEMENT

THIS AGREEMENT made and entered into as of the 4th day of April, 2011

BETWEEN:                      MinQuest Inc., a company having a mailing address at 4235 Christy

Way, Reno, Nevada, 89519, U.S.A.

(herein called the “Optionor”)

OF THE FIRST PART

	
AND:

	
Tundra Gold Corp., a company having a mailing address at 200 S Virginia, 8th Floor, Reno, Nevada, 89501, U.S.A.

	
  

	
(herein called the “Optionee”)

	
  

	
OF THE SECOND PART

	
  

	
WHERAS the Optionor has represented that it is the sole recorded and beneficial owner

	
  

	
in and to the property called the Crescent Fault Project (the “Property) described in Schedule “A” attached hereto;

	
  

	
AND WHEREAS the Optionor, subject to the Net Smelter Royalty reserved to the

	
  

	
Optionor, now wishes to grant to the Optionee the exclusive right and option to acquire

	
  

	
an undivided 100% right, title and interest in and to the Property on the terms and

	
  

	
conditions hereinafter set forth;

	
  

	
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of

	
  

	
the premises, the mutual covenants herein set forth and the sum of One Dollar ($1.00) of

	
  

	
lawful money of U.S. currency now paid by the Optionee to the Optionor (the receipt

	
  

	
whereof is hereby acknowledged), the Parties hereto do hereby mutually covenant and

	
  

	
agree as follows:

	
1.

	
Definitions

	
  

	
 The following words, phrases and expressions shall have the following meanings:

(a)           “After Acquired Properties” means any and all mineral interests staked,

located, granted or acquired by or on behalf of either of the parties hereto

during the currency of this Agreement which are located, in the whole or

in part, within one mile of the existing perimeter of the Property;

(b)           “Exchange” means OTCBB Venture Exchange;

  

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(c)

	
“Expenditures” includes all direct or indirect expenses [net of government

	
  

	
incentives and not including payments to the Optionor pursuant to section

	
  

	
4, paragraphs (a), (b)(ii), (c)(ii), (d)(ii), (e)(ii), (f)(ii), (g)(ii), (h)(ii), (i)(ii), (j)(ii), and (k)(ii) hereof ] of or incidental to Mining Operations. The certificate of the Controller or other financial officer of the Optionee, together with a statement of Expenditures in reasonable detail shall be prima facie evidence of such Expenditures; the parties hereto agree that Property payments and Property expenditures are separate payments as outlined in paragraph 4;

(d)           “Facilities” means all mines and plants, including without limitation, all

	
  

	
pits, shafts, adits, haulageways, raises and other underground workings,

	
  

	
and all buildings, plants, facilities and other structures, fixtures and

	
  

	
improvements, and all other property, whether fixed or moveable, as the

	
  

	
same may exist at any time in, or on the Property and relating to the

	
  

	
operator of the Property as a mine or outside the Property if for the

	
  

	
exclusive benefit of the Property only;

	
  

	
(e)

	
“Filing Fees” means all fees, payments and expenses necessary to keep the mineral claims in good standing with federal, state and local government entities;

 (f)           “Force Majeure” means an event beyond the reasonable control of the

	
  

	
Opionee that prevents or delays it from conducting the activities

	
  

	
contemplated by this Agreement other than the making of payments

	
  

	
referred to in Section 4 herein. Such events shall include but not be limited

	
  

	
to acts of God, war, insurrection, action of governmental agencies

	
  

	
reflecting an instability in government procedures, or delay in permitting

	
  

	
unacceptable to both Optionor and Optionee;

	
(g)

	
“Mineral Products” means the commercial end products derived from

	
  

	
operating the Property as a mine:

	
(h)

	
“Mining Operations” includes:

	
(i)

	
every kind of work done on or with respect to the Property by or

	
  

	
under the direction of the Optionee during the Option Period or

	
  

	
pursuant to an approved Work Program; and

  

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(ii)

	
without limiting the generality of the foregoing, including all work

	
  

	
capable of receiving assessment credits pursuant to the Mines and

	
  

	
Minerals act of Nevada and the work of assessment,

	
  

	
geophysical, geochemical and geological surveys, studies and

	
  

	
mapping, investigating, drilling, designing, examining equipping,

	
  

	
improving, surveying, shaft sinking, raising, cross-cutting and

	
  

	
drifting, searching for, digging, trucking, sampling, working and

	
  

	
procuring minerals, ores and metals, in surveying and bringing any

	
  

	
mineral claims to lease or patent, in doing all other work usually

	
  

	
considered to be prospecting, exploration, development, a

	
  

	
feasibility study, mining work, milling concentration, beneficiation

	
  

	
or ores and concentrates, as well as the separation and extraction of

	
  

	
Mineral Products and all reclamation, restoration and permittingactivities;

(i)           “Net Smelter Royalty” means that Net Smelter Royalty as defined in

	
  

	
Schedule “B” attached hereto (“NSR”);

	
(j)

	
“Option” means the option granted by the Optionor to the Optionee to

	
  

	
acquire, subject to the NSR reserved to the Optionor, an undivided 100%

	
  

	
right, title and interest in and to the Property as more particularly set forth

	
  

	
in Section 4;

	
(k)

	
“Option Period” means the period from the date hereof to the date at

	
  

	
which the Optionee has performed its obligations to acquire its 100%

	
  

	
interest in the Property as set out in Section 4 hereof, which ever shall be

	
  

	
the lesser period;

	
(l)

	
“Property” means the mineral claims described in Schedule “A”;

	
(m)

	
“Work Program” means a program of work reasonably acceptable to both

	
  

	
parties in respect of a particular Property, contained in a written document

	
  

	
setting out in reasonable detail;

	
(i)

	
An outline of the Mining Operations proposed to be undertaken

	
  

	
and conducted on the Property, specifically stating the period of

	
  

	
time during which the work contemplated by the proposed

	
  

	
program is to be done and performed;

	
(ii)

	
The estimated cost of such Mining Operations including a

	
  

	
proposed budget providing for estimated monthly cash

	
  

	
requirements in advance and giving reasonable details; and

  

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(iii)

	
The identity and credentials of the person or persons undertaking

the Mining Operations so proposed if not the Optionor,

reasonably acceptable to both parties hereto.

	
2.

	
Headings

	
  

	
Any heading, caption or index hereto shall not be used in any way in construing

	
  

	
or interpreting any provision hereof.

	
3.

	
Singular, Plural

	
  

	
Whenever the singular or masculine or neuter is used in this Agreement, the same

	
  

	
shall be construed as meaning plural or feminine or body politic or corporate or vice

	
  

	
versa, as the context so requires.

	
  

	 

	
4.

	
Option

	
  

	
The Optionor hereby grants to the Optionee the sole and exclusive right and

	
  

	
option (the “Option”) to earn a 100% interest in the Property exercisable as follows:

	
(a)

	
The Optionee paying the sum of $20,000 USD to the Optionor by way of cash and reimburse all holding costs and expenses, such expenses to be identified in Schedule “C”;

	
(b)

	
On or before April 4th, 2012

	
(i)

	
The Optionee incurring Expenditures of $200,000 USD on the

	
  

	
property;

	
(ii)

	
The Optionee paying $20,000 USD to the Optionor;

	
(c)

	
On or before April 4th, 2013

	
(i)

	
The Optionee incurring Expenditures of $200,000 USD on the

	
  

	
Property in addition to the expenditures referred to in clause

	
  

	
(b)(i);

	
(ii)

	
The Optionee paying $65,000 U.S to the Optionor;

  

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(d)

	
On or before April 4th, 2014

	
(i)

	
The Optionee incurring Expenditures of $200,000 USD on the

	
  

	
Property in addition to the expenditures referred to in clauses

	
  

	
(b)(i) and (c)(i) hereof; and

	
(ii)

	
The Optionee paying $45,000 USD to the Optionor;

	
(e)

	
On or before April 4th, 2015

	
(i)

	
The Optionee incurring Expenditures of $250,000 USD on the

	
  

	
Property in addition to the expenditures referred to in clauses

	
  

	
(b)(i), (c)(i) and (d)(i) hereof; and

	
(ii)

	
The Optionee paying $60,000 USD to the Optionor; and

	
(f)

	
On or before April 4th, 2016

	
(i)

	
The Optionee incurring Expenditures of $250,000 USD on the

	
  

	
Property in addition to the expenditures referred to in clauses

	
  

	
(b)(i), (c)(i), (d)(i) and (e)(i) hereof;

	
(ii)  

	
The Optionee paying $70,000 USD to the Optionor.

(g)             On or before April 4th, 2017

(i)           The Optionee incurring Expenditures of $300,000 USD on the Property in addition to the expenditures referred to in clauses (b)(i), (c)(i), (d)(i) and (e)(i) and (f)(i) hereof

    (ii)                 The Optionee paying $80,000 USD to the Optionor; and

(h)            On or before April 4th, 2018

	
(i)

	
The Optionee incurring Expenditures of $300,000 USD on the

	
  

	
Property in addition to the expenditures referred to in clauses

	
  

	
(b)(i), (c)(i), (d)(i), (e)(i), (f)(i) and (g)(i) hereof;

	
(ii)  

	
The Optionee paying $90,000 USD to the Optionor; and

 

 

  

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(i)            On or before April 4th, 2019

(i)           The Optionee incurring Expenditures of $350,000 USD on the

	
  

	
Property in addition to the expenditures referred to in clauses

	
  

	
(b)(i), (c)(i), (d)(i), (e)(i), (f)(i), (g)(i) and (h)(i) hereof;

(ii)           The Optionee paying $100,000 USD to the Optionor; and

	
(j)  

	
On or before April 4th, 2020

(i)           The Optionee incurring Expenditures of $400,000 USD on the

	
  

	
Property in addition to the expenditures referred to in clauses

	
  

	
(b)(i), (c)(i), (d)(i), (e)(i), (f)(i), (g)(i), (h)(i) and (i)(i) hereof;

	
(ii)

	
The Optionee paying $100,000 USD to the Optionor; and

	
(k)  

	
On or before April 4th, 2021

(i)           The Optionee incurring Expenditures of $750,000 USD on the

	
  

	
Property in addition to the expenditures referred to in clauses

	
  

	
(b)(i), (c)(i), (d)(i), (e)(i), (f)(i), (g)(i), (h)(i), (i)(i) and (j)(i) hereof;

(ii)           Optionee paying $250,000 USD to the Optionor.  Following which the Optionee shall be deemed to have exercised the Option (the “Exercise Date”) and shall be entitled to an undivided 100% right, title and interest in and to the Property with the full right and authority to equip the Property for production and operate the Property as a mine subject to the rights of the Optionor to receive the NSR.

The Optionee shall have the one time right exercisable for 90 days following completion of a bankable feasibility study to buy up to two thirds (66.7%) of the Optionor’s NSR interest (i.e. an amount equal to 2% of the NSR interest) for USD $4,000,000. The right to purchase the said NSR interest shall be exercised by the Optionee providing the Optionor with notice of the purchase accompanied by payment in the amount of USD $4,000,000.

The Optionor and Optionee understand and confirm that all Expenditures incurred in a particular period, including any excess in the amount of Expenditures required to be incurred to maintain the Option during such period, shall be carried over and included in the aggregate amount of Expenditures for the subsequent period, but not to exceed more than three (3) consecutive years.

  

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Notwithstanding paragraphs (b)(i), (c)(i), (d)(i), (e)(i), (f)(i), (g)(i), (h)(i), (i)(i), (j)(i) and (k)(i) if the Optionee has not incurred the requisite Expenditures to maintain its option in good standing prior to April 4 __th  of any given year, the Optionee may pay to the Optionor within 60 days following the expiry of such period, the amount of the deficiency and such amount shall thereupon be deemed to have been Expenditures incurred by the Optionee during such period.

(l)           The doing of any act or the incurrence of any cash payments by the

Optionee shall not obligate the Optionee to do any further acts or make

any further payments with the exception of fees and expenses to keep said property in good standing as per paragraph 8b.

5.           Transfer of Title

Upon Optionee’s completion of all requirements to earn a 100 percent interest in the Property, the Optionor will deliver or cause to be delivered to the Optionee’s solicitors a duly executed transfer of Property in favor of the Optionee (the “Optionee Transfer”). The Optionee shall be entitled to record the Optionee Transfer with the appropriate government offices to effect transfer of legal title of the Property into its own name upon the full and complete exercise of the Option by the Optionee. In the event the Optionee Transfer is recorded the Optionor shall be entitled to record notice of its NSR interest.

6.           Mining Operations during Option

During the Option Period, the Optionor may provide its mineral exploration expertise on the Property, on a consultation basis for and on behalf of the Optionee, at the election of the Optionee.  However, the Optionee has the exclusive right to determine what Expenditures and Mining Operations it will perform, when they will be performed, and by whom. If the Optionee elects to use the mineral expertise and consulting services of the Optionor, then the Optionor shall invoice for time for consulting services and related travel expenses from time to time and the prompt payment of such invoices when due shall constitute a portion of Expenditures by the Optionee as contemplated under Section 4 hereof.

During the currency of this Agreement, the Optionee, its servants, agents and workmen and any persons duly authorized by the Optionee, shall have the right of access to and from and to enter upon and take possession of and prospect, explore and develop the Property in such manner as the Optionee in its sole discretion may deem advisable and shall have the right to remove and ship therefrom ores, minerals, metals, or other products recovered in any manner therefrom.

  

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7.           Assignment

During the Option Term, both parties shall have the right to sell, transfer, assign, mortgage, pledge its interest in this Agreement or its right or interest in the Property. It will be a condition of any assignment under this Agreement that such assignee shall agree in writing to be bound by the terms of this Agreement applicable to the assignor.

8.           Termination

This Agreement shall forthwith terminate in circumstances where:

(a)           The Optionee shall fail to comply with any of its obligations hereunder,

subject to Force Majeure, and within 30 days of receipt by the Optionee of written notice from the Optionor of such default, the Optionee has not:

(i)           cured such default, or commenced proceedings to cure such

default and prosecuted same to completion without undue

delay; or

	
  

	
(ii)

	
given the Optionor notice that it denies that such default has occurred.

In the event that the Optionee gives notice that it denies that a default has occurred, the Opionee shall not be deemed to be in default until the matter shall have been determined finally through such means of dispute resolution as such matter has been subjected to by either party; or

	
  

	
(b)

	
The Optionee gives notice of termination to the Optionor, which it shall be at liberty to do at any time after the execution of this Agreement. If and when the Optionee elects to terminate this Agreement, or terminate one of the projects comprising the Property, at such time the Property or the specific project will be returned to the Optionor and all claim fees, payments and expenses will be paid in order to maintain the property in good standing for one year after termination.

Upon the termination of this Agreement under this Section 8, the Optionee shall cease to be liable to the Optionor in debt, damages, claim fees or otherwise, other than to pay the claim fees as described in paragraph (b) of this Section 8 and all liabilities referred to in Section 11.

Upon termination of this Agreement under this Section 8, the Optionee shall return the Property, including all property within the designated boundary of the area of interest, to the Optionor. The Optionee shall vacate the Property within a reasonable time after such termination and relinquishment, but shall have the right of access to the Property for a period of six months thereafter for the purpose of removing its chattels, machinery, equipment and fixtures.

  

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9.           Representations, Optionies and Covenants of the Optionor

The Optionor represents, options and covenants to and with the Optionee as follows:

(a)           The Optionor is a company duly organized validly existing and in

good standing under the laws of Nevada;

(b)           The Optionor has full power and authority to carry on its business and to

enter into this Agreement and any agreement or instrument referred to or contemplated by this Agreement;

	
  

	
(c)

	
Neither the execution and delivery of this Agreement, nor any of the agreements referred to herein or contemplated hereby, nor the consummation of the transactions hereby contemplated hereby, nor the

	
  

	
consummation of the transactions hereby contemplated conflict with,

	
  

	
result in the breach of or accelerate the performance required by, any

	
  

	
agreement to which it is a party;

	
  

	
(d)

	
The execution and delivery of this Agreement and the agreements contemplated hereby will not violate or result in the breach of the laws

	
  

	
of any jurisdiction applicable or pertaining thereto or of its constating

	
  

	
documents;

	
  

	
(e)

	
The Agreement constitutes a legal, valid and binding obligation of the Optionor;

	
  

	
(f)

	
The Property is accurately described in Schedule “A”, is in good standing under the laws of the jurisdiction in which it is located and is free and clear of all liens, charges and encumbrances;

	
  

	
(g)

	
The Optionor is the sole recorded and beneficial owner of the Property

	
  

	
and has the exclusive right to enter into this Agreement and all necessary

	
  

	
authority to transfer its interest in the Property in accordance with the terms of this Agreement;

	
  

	
(h)

	
No Person, firm or corporation has any proprietary or possessorty interest

	
  

	
in the Property other than the Optionor, and no person, firm or corporation is entitled to any royalty or other payment in the nature of rent or royalty on any minerals, ores, metals or concentrates or any other such products removed from the Property other than the government of the state of Nevada pursuant to statute; notwithstanding any Federal, State or County royalties or net proceeds tax derived from mining operations.

  

9

  

	
  

	
(i)

	
Upon request by the Optionee, and at the sole cost of the Optionee, the Optionor shall deliver or cause to be delivered to the Optionee copies of all available maps and other documents and data in its possession respecting the Property. Nothing will be withheld, hidden, or kept from the Optionee, whether the data or information is held or not by the Optionor; and

	
  

	
(j)

	
Subject to performance by the Optionee of its obligations under Section 4, during the Option Period, the Optionor will keep the Property in good standing, free and clear of all liens, charges and encumbrances, will carry out all Mining Operations on the Property in a miner-like fashion if the Optionee elects to use the mining expertise and consulting services of the Optionor, will obtain all necessary licenses and permits as shall be necessary and will file all applicable work up to the legal limits as assessment work under the Mines and Mineral Act (Nevada)

10.           Representations, Optionies and Covenants of the Optionee

The Optionee represents, Options and covenants to and with the Optionor that:

	
  

	
(a)

	
The Optionee is a company duly organized validly existing and in good standing under the laws of Nevada;

	
  

	
(b)

	
The Optionee has full power and authority to carry on its business and to enter into this Agreement and any agreement or instrument referred to or contemplated by this Agreement;

	
  

	
(c)

	
Neither the execution and delivery of this Agreement, nor any of the agreements referred to herein or contemplated hereby, nor the consummation of the transactions hereby contemplated conflict with,

	
  

	
result in the breach of or accelerate the performance required by, any agreement to which it is a party;

	
  

	
(d)

	
The execution and delivery of this Agreement and the agreements contemplated hereby will not violate or result in the breach of the laws of any jurisdiction applicable or pertaining thereto or of its constating documents; and

	
  

	
(e)

	
This Agreement constitutes a legal, valid and binding obligation of the Optionee.

  

10

  

11.           Indemnity and Survival of Representation

The representation and Optionies hereinbefore set out are conditions on which the parties have relied in entering into this Agreement and shall survive the acquisition of any interest in the Property by the Optionee and each of the parties will indemnify and save the other harmless from all loss, damage, costs, actions and suits arising out of or in connection with any breach of any representation, option, covenant, agreement or condition made by them and contained in this Agreement.

The Optionor agrees to indemnify and save harmless the Optionee from any liability to which it may be subject arising from any Mining Operations carried out by the Optionor or at its direction on the Property. The Optionee agrees to indemnify and save harmless the Optionor from any liability to which it may be subject arising from any Mining Operations carried out by the Optionee or at its direction on the Property.

The Optionor agrees to indemnify and save harmless the Optionee from any liability arising form any and every kind of work done on or with respect to the Property prior to the signing of this Agreement (the “Prior Operations”). Without limiting the generality of the foregoing, Prior Operations includes all work capable of receiving assessment credits pursuant to The Mines and Minerals Act of Nevada and the work of assessment, geophysical, geochemical and geological surveys, studies and mapping, investigating, drilling, designing, examining equipping, improving, surveying, shaft sinking, raising, cross-cutting and drifting, searching for, digging, trucking, sampling, working and procuring minerals, ores and metals, in surveying and bringing any mineral claims to lease or patent, in doing all other work usually considered to be prospecting, exploration, development, a feasibility study, mining work, milling, concentration, beneficiation of ores and concentrates, as well as the separation and extraction of Mineral Products and all reclamation, restoration and permitting activities.

12.           Confidentiality    

The parties hereto agree to hold in confidence all information obtained in confidence in respect of the Property or otherwise in connection with this Agreement other than in circumstances where a party has an obligation to disclose such information in accordance with applicable securities legislation, in which case such disclosure shall only be made after consultation with the other party.

  

11

  

13.           Notice

All notices, consents, demands and requests ( in this Section 13 called the “Communication”) required or permitted to be given under this Agreement shall be in writing and may be delivered personally sent by telegram, by telex or telecopier or other electronic means or may be forwarded by first class prepaid registered mail to the parties at their addresses first above written. Any Communication delivered personally or sent by telegram, telex or telecopier or other electronic means including email shall be deemed to have been given and received on the second business day next following the date of sending. Any Communication mailed as aforesaid shall be deemed to have been given and received on the fifth business day following the date it is posted, addressed to the parties at their addresses first above written or to such other address or addresses as either party may from time to time specify by notice to the other; provided, however, that if there shall be a mail strike, slowdown or other labor dispute which might effect delivery of the Communication by mail, then the Communication shall be effective only if actually delivered. For purposes of this agreement and as a definition of address the Optionor’s email shall be defined as rrkern@charter.net and the Optionor’s telecopier number is 775-746-0938. The Optionee’s email shall be defined as gbasrai@gmail.com and the Optionee’s telecopier number is 775-686-2401. Notice will be provided to each party should their respective email address change.

14.           Further Assurances

Each of the parties to this Agreement shall from time to time and at all times do all such further acts and execute and deliver all further deeds and documents as shall be reasonably required in order to fully perform and carry out the terms of this Agreement

15.           Entire Agreement

The parties hereto acknowledge that they have expressed herein the entire understanding and obligation of this Agreement and it is expressly understood and agreed that no implied covenant, condition, term or reservation, shall be read into this Agreement relating to or concerning any matter or operation provided for herein

16.           Proper Law and Arbitration

This Agreement will be governed by and construed in accordance with the laws of the State of Nevada and the laws of the United States of America. The parties hereto hereby irrevocably attorn to the jurisdiction of the Courts of Nevada. All disputes arising out of or in connection with this Agreement, or in respect of any defined legal relationship associated therewith or derived therefrom, shall be referred to and finally resolved by a sole arbitrator by arbitration under the rules of The Arbitration Act of Nevada.

  

12

  

17.           Enurement

This Agreement will ensure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns.

18.           After Acquired Properties

	
  

	
(i)

	
The parties covenant and agree, each with the other, that any and all After Acquired Properties shall be subject to the terms and conditions of this

	
  

	
Agreement and shall be added to and deemed, for the purposes hereof, to

	
  

	
be included in the Property. Any costs incurred by the Optionor in staking, locating, recording or otherwise acquiring any “After Acquired Properties” will be deemed to be Mining Operations for which the Optionor will be entitled to reimbursements as part of the Expenditures payable by the Optionee hereunder.

	
  

	
(ii)

	
Any additional claims agreed by the Optionee to be staked by the Optionor within 1 mile from the existing perimeter of the Property boundaries shall form party of this Agreement. The Optionee will reimburse the Optionor for the costs of staking the additional claims, unless the Optionee does not elect to have the additional claims subject to this Agreement.

19.           Default

Notwithstanding anything in this Agreement to the contrary if any party (a “Defaulting Party”) is in default of any requirement herein set forth the party affected by such default shall give written notice to the Defaulting Party specifying the default and the Defaulting Party shall not lose any rights under this Agreement, unless thirty (30) days after the giving of notice of default by the affected party the Defaulting Party has failed to take reasonable steps to cure the default by the appropriate performance and if the Defaulting Party fails within such period to take reasonable steps to cure any such default, the affected party shall be entitled to seek any remedy it may have on account of such default including, without limiting, termination of this Agreement.

20.           Payment

All references to monies herein shall be in US funds unless otherwise specified. The Optionee shall make payments for the Expenditures incurred by the Optionor no later than 30 days after the receipt of invoices delivered by the Optionee to do any acts or make any payments hereunder, and any act or payment or payments as shall be made hereunder shall not be construed as obligating the Optionee to do any further act or make any further payment or payments.

  

13

  

21.           Supersedes Previous Agreements

This Agreement supersedes and replaces all previous oral or written agreements, memoranda, correspondence or other communications between the parties hereto relating to the subject matter hereof.

IN WITNESS WHEREOF the Parties hereto have duly executed this Agreement effective as of the 4th day April, 2011

MinQuest Inc.

Per:___________________________

Richard R. Kern, President

Tundra Gold Corp.

Per:____/s/ Gurpartap Singh Basrai_______________________

Gurpartap Singh Basrai, President

  

14

  

SCHEDULE “A”

Sections 16, 18 and 20, T28N, R49E, MDB&M, Eureka County, Nevada

	
CLAIM NAME

	
CLAIMANT’S NAME

	
NMC NUMBER

	
DD 38

	
Herb Duerr

	
608567

	
DD 40

	
Herb Duerr

	
608569

	
DD 42

	
Herb Duerr

	
608571

	
DD 44

	
Herb Duerr

	
608573

	
DD 50

	
Herb Duerr

	
608579

	
DD 51

	
Herb Duerr

	
608580

	
CC 1

	
MinQuest Inc.

	
898823

	
CC 2

	
MinQuest Inc.

	
898824

	
CC 3

	
MinQuest Inc.

	
898825

	
DD 33

	
MinQuest Inc.

	
898826

	
DD 34

	
MinQuest Inc.

	
898827

	
DD 35

	
MinQuest Inc.

	
898828

	
DD 36

	
MinQuest Inc.

	
898829

	
DD 37

	
MinQuest Inc.

	
898830

	
DD 39

	
MinQuest Inc.

	
898831

	
DD 41

	
MinQuest Inc.

	
898832

	
DD 43

	
MinQuest Inc.

	
898833

	
DD 45

	
MinQuest Inc.

	
898834

	
DD 46

	
MinQuest Inc.

	
898835

	
DD 47

	
MinQuest Inc.

	
898836

	
DD 48

	
MinQuest Inc.

	
898837

	
DD 177

	
MinQuest Inc.

	
898838

	
DD 178

	
MinQuest Inc.

	
898839

	
DD 49

	
MinQuest Inc.

	
898840

	
DD 52

	
MinQuest Inc.

	
898841

	
DD 53

	
MinQuest Inc.

	
898842

	
DD 179

	
MinQuest Inc.

	
898843

	
DD 185

	
MinQuest Inc.

	
898844

	
DD 184

	
MinQuest Inc.

	
898845

	
DD 183

	
MinQuest Inc.

	
898846

	
DD 182

	
MinQuest Inc.

	
898847

	
DD 181

	
MinQuest Inc.

	
898848

	
DD 180

	
MinQuest Inc.

	
898849

  

15

  

SCHEDULE “B”

“Net Smelter Return” shall mean the aggregate proceeds received by the Optionee from time to time from any smelter or other purchaser from the sale of any ores, concentrates, metals or any other material of commercial value produced by and from the Property after deducting from such proceeds the following charges only to the extent that they are not deducted by the smelter or other purchaser in computing the proceeds:

	
(a)

	
The cost of transportation of the ores, concentrates or metals from the Property to such smelter or other purchaser, including related insurance;

(b)           Smelting and refining charges including penalties; and

	
  

	
The Optionee shall reserve and pay to the Optionor a NSR equal to three (3%) percent

	
  

	
of Net Smelter Return.

	
  

	
Payment of NSR payable to the Optionor hereunder shall be made quarterly within thirty

	
  

	
(30) days after the end of each calendar quarter during which the Optionee receives

	
  

	
Net Smelter Returns in USD dollars or in kind bullion at the discretion of the Optionor.

	
  

	
Within (60) days after the end of each calendar quarter for which the NSR for such

	
  

	
year shall be audited by the Optionee and any adjustments in the payments of NSR

	
  

	
to the Optionor shall be made forthwith after completion of the audit. All payments of

	
  

	
NSR to the Optionor for a calendar year shall be deemed final and in full satisfaction of

	
  

	
all obligations of the Optionee in respect thereof if such payments or the calculations

	
  

	
thereof are not disputed by the Optionor of the same audited statement. The Optionee

	
  

	
shall maintain accurate records relevant to the determination of the NSR and the Optionor

	
  

	
or its authorized agent, shall be permitted the right to examine such records at all

	
  

	
reasonable times.

  

16

  

SCHEDULE “C”

	
Nevada State fees 33 claims @ $85/claim

	 	$	2,805.00	 
	  	 	 	 	 
	
BLM filing fees 33 @ $140

	 	$	4,620.00	 
	  	 	 	 	 
	
County filing fees 33 @ $15.00

	 	$	495.00	 
	  	 	 	 	 
	
Total

	 	$	7,920.00	 

17form8k040411ex10-2.htm

TUNDRA GOLD CORP.

REGULATION S SUBSCRIPTION AGREEMENT

AND INVESTMENT REPRESENTATION

SECTION 1.

1.1           Subscription.                                The undersigned, intending to be legally bound, hereby irrevocably subscribes for and agrees to purchase ____________ shares (the “Shares”) of the common stock (the “Common Stock”) of Tundra Gold Corp., a Nevada corporation (the "Company") in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”).

1.2           Purchase of Shares.                                The undersigned understands and acknowledges that the purchase price to be remitted to the Company in exchange for the Shares shall be an aggregate of ____________ dollars ($______) or $___ per Share.  The Company shall deliver the Shares to the undersigned promptly after the acceptance of this Subscription Agreement by the Company.

1.3           Acceptance or Rejection.

(a)           The undersigned understands and agrees that the Company reserves the right to reject this subscription for the Shares if, in its reasonable judgment, it deems such action in the best interest of the Company, at any time prior to the Closing, notwithstanding prior receipt by the undersigned of notice of acceptance of the undersigned's subscription.

(b)           The undersigned understands and agrees that its subscription for the Shares is irrevocable.

(c)           In the event the sale of the Shares subscribed for by the undersigned is not consummated by the Company for any reason (in which event this Subscription Agreement shall be deemed to be rejected), this Subscription Agreement and any other agreement entered into between the undersigned and the Company relating to this subscription shall thereafter have no force or effect and the Company shall promptly return or cause to be returned to the undersigned the purchase price remitted to the Company by the undersigned, without interest thereon or deduction therefrom, in exchange for the Shares.

SECTION 2.

2.1           Closing.  The closing (the "Closing") of the purchase and sale of the Shares, shall occur simultaneously with the acceptance by the Company of the undersigned's subscription, as evidenced by the Company's execution of this Subscription Agreement.

  

1

  

SECTION 3.

3.1           Investor Representations and Warranties.   The undersigned hereby acknowledges, represents and warrants to, and agrees with, the Company and its affiliates as follows:

(a)           Investment Purposes.  The undersigned is acquiring the Shares for his own account as principal, not as a nominee or agent, for investment purposes only, and not with a view to, or for, resale, distribution or fractionalization thereof in whole or in part and no other person has a direct or indirect beneficial interest in such Shares or any portion thereof.  Further, the undersigned does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to the Shares for which the undersigned is subscribing or any part of the Shares.

(b)           Authority.  The undersigned has full power and authority to enter into this Agreement, the execution and delivery of this Agreement has been duly authorized, if applicable, and this Agreement constitutes a valid and legally binding obligation of the undersigned.

(c)           No General Solicitation.  The undersigned is not subscribing for the Shares as a result of or subsequent to any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or presented at any seminar or meeting, or any solicitation of a subscription by person previously not known to the undersigned in connection with investment securities generally.

(d)           No Obligation to Register Shares.  The undersigned understands that the Company is under no obligation to register the Shares under the Securities Act, or to assist the undersigned in complying with the Securities Act or the securities laws of any state of the United States or of any foreign jurisdiction.

(e)           Investment Experience.  The undersigned is (i) experienced in making investments of the kind described in this Agreement, (ii) able, by reason of the business and financial experience of its officers (if an entity) and professional advisors (who are not affiliated with or compensated in any way by the Company or any of its affiliates or selling agents), to protect its own interests in connection with the transactions described in this Agreement, and (iii) able to afford the entire loss of its investment in the Shares.

(f)           Exemption from Registration.  The undersigned acknowledges his understanding that the offering and sale of the Shares is intended to be exempt from registration under the Securities Act.  In furtherance thereof, in addition to the other representations and warranties of the undersigned made herein, the undersigned further represents and warrants to and agrees with the Company and its affiliates as follows:

(1)           The undersigned realizes that the basis for the exemption may not be present if, notwithstanding such representations, the undersigned has in mind merely acquiring the Shares for a fixed or determinable period in the future, or for a market rise, or for sale if the market does not rise.  The undersigned does not have any such intention;

  

2

  

(2)           The undersigned 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; and

(3)           The undersigned 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.  The undersigned also represents it has not been organized for the purpose of acquiring the Shares; and

(4)           The undersigned has been provided an opportunity for a reasonable period of time prior to the date hereof to obtain additional information concerning the offering of 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.

(g)           Economic Considerations.  The undersigned is not relying on the Company, or its affiliates or agents with respect to economic considerations involved in this investment.  The undersigned has relied solely on its own advisors.

(h)           No Other Company Representations.  No representations or warranties have been made to the undersigned by the Company, or any officer, employee, agent, affiliate or subsidiary of the Company, other than the representations of the Company contained herein, and in subscribing for Shares the undersigned is not relying upon any representations other than those contained herein.

(i)           Compliance with Laws.  Any resale of the Shares during the ‘distribution compliance period’ as defined in Rule 902(f) to Regulation S shall only be made in compliance with exemptions from registration afforded by Regulation S.  Further, any such sale of the Shares in any jurisdiction outside of the United States will be made in compliance with the securities laws of such jurisdiction.  The Investor will not offer to sell or sell the Shares in any jurisdiction unless the Investor obtains all required consents, if any.

(j)           Regulation S Exemption.  The undersigned understands that the Shares are being offered and sold to him in reliance on an exemption from the registration requirements of United States federal and state securities laws under Regulation S promulgated under the Securities Act and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of the Investor set forth herein in order to determine the applicability of such exemptions and the suitability of the Investor to acquire the Shares.  In this regard, the undersigned represents, warrants and agrees that:

(1)           The undersigned is not a U.S. Person (as defined below) and is not an affiliate (as defined in Rule 501(b) under the Securities Act) of the Company and is not acquiring the Shares for the account or benefit of a U.S. Person.  A U.S. Person means any one of the following:

	
  

	
(A)

	
any natural person resident in the United States of America;

  

3

  

(B)           any partnership or corporation organized or incorporated under the laws of the United States of America;

	
  

	
(C)

	
any estate of which any executor or administrator is a U.S. person;

	
  

	
(D)

	
any trust of which any trustee is a U.S. person;

(E)           any agency or branch of a foreign entity located in the United States of America;

(F)           any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. person;

(G)           any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated or (if an individual) resident in the United States of America; and

	
  

	
(H)

	
any partnership or corporation if:

(i) organized or incorporated under the laws of any foreign jurisdiction; and

(ii)           formed by a U.S. person principally for the purpose of investing in securities not registered under the Securities Act, unless it is organized or incorporated, and owned, by accredited investors (as defined in Rule 501(a) under the Securities Act) who are not natural persons, estates or trusts.

(2)           At the time of the origination of contact concerning this Agreement and the date of the execution and delivery of this Agreement, the undersigned was outside of the United States.

(3)           The undersigned will not, during the period commencing on the date of issuance of the Shares and ending on the first anniversary of such date, or such shorter period as may be permitted by Regulation S or other applicable securities law (the “Restricted Period”), offer, sell, pledge or otherwise transfer the Shares in the United States, or to a U.S. Person for the account or for the benefit of a U.S. Person, or otherwise in a manner that is not in compliance with Regulation S.

(4)           The undersigned will, after expiration of the Restricted Period, offer, sell, pledge or otherwise transfer the Shares only pursuant to registration under the Securities Act or an available exemption therefrom and, in accordance with all applicable state and foreign securities laws.

  

4

  

(5)           The undersigned was not in the United States, engaged in, and prior to the expiration of the Restricted Period will not engage in, any short selling of or any hedging transaction with respect to the Shares, including without limitation, any put, call or other option transaction, option writing or equity swap.

(6)           Neither the undersigned nor or any person acting on his behalf has engaged, nor will engage, in any directed selling efforts to a U.S. Person with respect to the Shares and the Investor and any person acting on his behalf have complied and will comply with the “offering restrictions” requirements of Regulation S under the Securities Act.

(7)           The transactions contemplated by this Agreement have not been pre-arranged with a buyer located in the United States or with a U.S. Person, and are not part of a plan or scheme to evade the registration requirements of the Securities Act.

(8)           Neither the undersigned nor any person acting on his behalf has undertaken or carried out any activity for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States, its territories or possessions, for any of the Shares.  The undersigned agrees not to cause any advertisement of the Shares to be published in any newspaper or periodical or posted in any public place and not to issue any circular relating to the Shares, except such advertisements that include the statements required by Regulation S under the Securities Act, and only offshore and not in the U.S. or its territories, and only in compliance with any local applicable securities laws.

(9)           Each certificate representing the Shares shall be endorsed with the following legends, in addition to any other legend required to be placed thereon by applicable federal or state securities laws:

(A)           “THE SECURITIES ARE BEING OFFERED TO INVESTORS WHO ARE NOT U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“THE SECURITIES ACT”)) AND WITHOUT REGISTRATION WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT IN RELIANCE UPON REGULATION S PROMULGATED UNDER THE SECURITIES ACT.”

(B)           “TRANSFER OF THESE SECURITIES IS PROHIBITED, EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO AVAILABLE EXEMPTION FROM REGISTRATION.  HEDGING TRANSACTIONS MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.”

(10)           The undersigned consents to the Company making a notation on its records or giving instructions to any transfer agent of the Company in order to implement the restrictions on transfer of the Shares set forth in this Section 2.

  

5

  

Check if applicable, otherwise cross out:

(k)           Accredited Investor.  The undersigned is an “accredited investor” as that term is defined in Rule 501 of the General Rules and Regulations under the Securities Act by reason of Rule 501(a)(3).

(l)           Potential Loss of Investment; Risk Factors.  The undersigned 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. The undersigned understands that the following factors, among others, could cause the loss of any or all of his investment.

(1)           The Company is a development stage company with no operating history for the undersigned to evaluate its business.  The Company was incorporated in the State of Nevada in September 2009, and as a result is only in the very early stages of development.  Because the Company has no operating history, it is difficult to evaluate its business and future prospects.  The undersigned has also considered the uncertainties and difficulties frequently encountered by companies, such as the Company, in their early stages of development.  The Company’s revenue and income potential is non-existent and its business model is still emerging.  If its business model does not prove to be profitable, the undersigned may lose all of his investment.

(2)           The Company currently does not have enough working capital to satisfy its capital needs.  The Company is dependent upon its management team to fund its ongoing operations, and cannot be certain that future financing will be available to it on acceptable terms when it needs it.  The Company can give no assurances that it will be able to sell any portion of this offering or that management will continue to fund its ongoing operations.  This, along with the possibility of other factors and circumstances the Company cannot predict, may require it to seek additional financing faster than anticipated.  If the Company is unable to obtain financing to meet its needs, the undersigned may lose of his investment.

(3)           The Company’s officers and directors will only devote a limited amount of time to the Company.  Their divided interests may hinder the Company's ability to generate revenue.  This could result in missed business opportunities and worse-than-expected operating results.  The undersigned may lose his entire investment.

(m)           Investment Commitment.  The undersigned's overall commitment to investments which are not readily marketable is not disproportionate to the undersigned's net worth, and an investment in the Shares will not cause such overall commitment to become excessive.

(n)           Receipt of Information.  The undersigned has received all documents, records, books and other information pertaining to the undersigned’s investment in the Company that has been requested by the undersigned.

  

6

  

(o)           Investor Questionnaire.  The undersigned represents and warrants to the Company that all information that the undersigned has provided to the Company, including, without limitation, the information in the Investor Questionnaire attached hereto or previously provided to the Company (the “Investor Questionnaire”), is correct and complete as of the date hereof.

(p)           No Reliance.  Other than as set forth herein, the undersigned is not relying upon any other information, representation or warranty by the Company or any officer, director, stockholder, agent or representative of the Company in determining to invest in the Shares.  The undersigned has consulted, to the extent deemed appropriate by the undersigned, with the undersigned’s own advisers as to the financial, tax, legal and related matters concerning an investment in the Shares and on that basis believes that his or its investment in the Shares is suitable and appropriate for the undersigned.

(q)           No Governmental Review.  The undersigned 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.

(r)           Price of Shares.  The undersigned understands that the price of the Shares offered hereby bear no relation to the assets, book value or net worth of the Company and were determined arbitrarily by the Company.  The undersigned further understands that there is a substantial risk of further dilution on his or its investment in the Company.

SECTION 4.

4.1           Company’s Representations and Warranties.  The Company represents and warrants to the undersigned as follows:

(a)            Organization of the Company.  The Company is a corporation duly organized and validly existing and in good standing under the laws of the State of Nevada.

(b)           Authority.   (a)  The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and to issue the Shares; (b) the execution and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action and no further consent or authorization of the Company or its Board of Directors or stockholders is required; and (c) this Agreement has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such  enforceability  may be limited by applicable bankruptcy, insolvency, or similar laws relating to, or affecting generally the enforcement of, creditors' rights and remedies or by other equitable principles of general application.

  

7

  

(c)           Exemption from Registration; Valid Issuances.  The sale and issuance of the Shares, in accordance with the terms and on the bases of the representations and warranties of the undersigned set forth herein, may and shall be properly issued by the Company to the undersigned pursuant to any applicable federal or state law. When issued and paid for as herein provided, the Shares shall be duly and validly issued, fully paid, and nonassessable. Neither the sales of the Shares pursuant to, nor the Company's performance of its obligations under, this Agreement shall (a) result in the creation or imposition of any liens, charges, claims or other encumbrances upon the Shares or any of the assets of the Company, or (b) entitle the other holders of the Common Stock of the Company to preemptive or other rights to subscribe to or acquire the Common Stock or other securities of the Company. The Shares shall not subject the undersigned to personal liability by reason of the ownership thereof.

(e)           No General Solicitation or Advertising in Regard to this Transaction. Neither the Company nor any of its affiliates nor any person acting on its or their behalf (a) has conducted or will conduct any general solicitation (as that term is used in Rule 502(c) of Regulation D) or general advertising with respect to any of the Shares, or (b) made any offers or sales of any security or solicited any offers to buy any security under any circumstances that would require registration of the Common Stock under the Securities Act.

SECTION 5.

5.1             Indemnity.  The undersigned agrees to indemnify and hold harmless the Company, its officers and directors, employees and its affiliates and their respective successors and assigns and each other person, if any, who controls any thereof, against any loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all expenses whatsoever reasonably incurred in investigating, preparing or defending against any litigation commenced or threatened or any claim whatsoever) arising out of or based upon any false representation or warranty or breach or failure by the undersigned to comply with any covenant or agreement made by the undersigned herein or in any other document furnished by the undersigned to any of the foregoing in connection with this transaction.

5.2           Modification.  Neither this Agreement nor any provisions hereof shall be modified, discharged or terminated except by an instrument in writing signed by the party against whom any waiver, change, discharge or termination is sought.

5.3           Notices.  Any notice, demand or other communication which any  party hereto may be required, or may elect, to give to anyone interested hereunder shall be sufficiently given if (a) deposited, postage prepaid, in a United States mail letter box, registered or certified mail, return receipt requested, addressed to such address as may be given herein, or (b) delivered personally at such address.

5.4           Counterparts.  This Agreement may be executed through the use of separate signature pages or in any number of counterparts and by facsimile, and each of such counterparts shall, for all purposes, constitute one agreement binding on all parties, notwithstanding that all parties are not signatories to the same counterpart. Signatures may  be facsimiles.

  

8

  

5.5           Binding Effect.  Except as otherwise provided herein, this Agreement shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators, successors, legal representatives and assigns.  If the undersigned is more than one person, the obligation of the undersigned shall be joint and several and the agreements, representations, warranties and acknowledgments herein contained shall be deemed to be made by and be binding upon each such person and his heirs, executors, administrators and successors.

5.6           Entire Agreement.  This Agreement and the documents referenced herein contain the entire agreement of the parties and there are no representations, covenants or other agreements except as stated or referred to herein and therein.

5.7           Assignability.  This Agreement is not transferable or assignable by the undersigned.

5.8           Applicable Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada, without giving effect to conflicts of law principles.

5.9           Pronouns.  The use herein of the masculine pronouns "him" or "his" or similar terms shall be deemed to include the feminine and neuter genders as well and the use herein of the singular pronoun shall be deemed to include the plural as well.

5.10           Further Assurances.  Upon request from time to time, the undersigned shall execute and deliver all documents, take all rightful oaths and do all other acts that may be necessary or desirable, in the reasonable opinion of the Company or its counsel, to effect the subscription for the Shares in accordance herewith.

  

9

  

IN WITNESS WHEREOF, the undersigned has executed this Agreement on the   day of ________________, 2011.

Amount of Investment:

$_____________________

INDIVIDUAL INVESTOR:

______________________

Name:

PARTNERSHIP, CORPORATION, TRUST,

CUSTODIAL ACCOUNT, OTHER INVESTOR

______________________________

 (Name of Entity)

By:           __________________

Name:

Title:

Address:

Taxpayer Identification Number:_____________

  

10

  

ACCEPTANCE OF SUBSCRIPTION

(to be filed out only by the Company)

The Company hereby accepts the above application for subscription for Shares on behalf of the Company.

Dated: ___________ ___, 2011

TUNDRA GOLD CORP.

By:______________________________

	
Name:

	
Gurpartap Singh Basrai

	
Title:

	
President and CEO

  

11

  

TUNDRA GOLD CORP.

INVESTOR QUESTIONNAIRE

	
A.

	
General Information

 

	  
	  	  	  
	
1.

	
Print Full Name of Investor:

	
Individual:

	  	  	
______________________________

	  	  	
First, Middle, Last

	  	  	  
	  	  	
Partnership, Corporation, Trust, Custodial Account, Other:

	  	  	  
	  	  	
____________________________________________________________

	  	  	
Name of Entity

	  	  	  
	
2.

	
Address for Notices:

	
____________________________________________________________

	  	  	
______________________________

	  	  	
____________________________________________________________

	  	  	  
	
3.

	
Name of Primary Contact Person:

Title:

	
____________________________________________________________

	  	  	  
	
4.

	
Telephone Number:

	
______________________________

	  	  	  
	
5.

	
E-Mail Address:

	
____________________________________________________________

	  	  	  
	
6.

	
Facsimile Number:

Permanent Address:

 

	
____________________________________

	
 

7.

	
 

Permanent Address:

(if different from Address for Notices above)

 

	
 

____________________________________________________________

	
8.

	
Authorized Signatory:

Title:

	
_____________________________

______________________________

	  	
Telephone Number:

	
______________________________

	  	
Facsimile Number:

 

	
______________________________

  

12

  

B.           Accredited Investor Status

The Investor represents and warrants that the Investor is an “accredited investor” within the meaning of Rule 501 of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”), and has checked the box or boxes below which are next to the categories under which the Investor qualifies as an accredited investor:

 

	
FOR INDIVIDUALS:

 

	
o

	
A natural person with individual net worth (or joint net worth with spouse) in excess of $1 million. For purposes of this item, “net worth” means the excess of total assets at fair market value, including home, home furnishings and automobiles (and including property owned by a spouse), over total liabilities.

	  	  
	
o

	
A natural person with individual income (without including any income of the Investor’s spouse) in excess of $200,000, or joint income with spouse of $300,000, in each of the two most recent years and who reasonably expects to reach the same income level in the current year.

	  	  	  
	
FOR ENTITIES:

	  	  
	
o

	
A bank as defined in Section 3(a)(2) of the Securities Act or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary capacity.

	  	  
	
o

	
An insurance company as defined in Section 2(13) of the Securities Act.

	  	  
	
o

	
A broker-dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934.

	  	  
	
o

	
An investment company registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”). If an Investor has checked this box, please contact David Lubin, Esq. at (516) 569-9629 for additional information that will be required.

	  	  
	
o

	
A business development company as defined in Section 2(a)(48) of the Investment Company Act.

	  	  
	
o

	
A small business investment company licensed by the Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958.

	  	  

  

13

  

	
o

	
A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940. If an Investor has checked this box, please contact David Lubin, Esq. at (516) 569-9629 for additional information that will be required.

	  	  
	
o

	
An organization described in Section 501(c)(3) of the Internal Revenue Code, a corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the Shares, with total assets in excess of $5 million.

	  	  
	
o

	
A trust with total assets in excess of $5 million not formed for the specific purpose of acquiring the Shares, whose purchase is directed by a person with such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Company and the purchase of the Shares.

	  	  
	
o

	
An employee benefit plan within the meaning of ERISA if the decision to invest in the Shares is made by a plan fiduciary, as defined in Section 3(21) of ERISA, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5 million or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors.

	  	  
	
o

	
A plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if the plan has total assets in excess of $5 million.

	  	  
	
o

	
An entity, including a grantor trust, in which all of the equity owners are accredited investors as determined under any of the foregoing paragraphs (for this purpose, a beneficiary of a trust is not an equity owner, but the grantor of a grantor trust is an equity owner).

  

14

  

C.           Confirmation of Relationship

(For Directors, Senior Officers and Control Persons and

Their Close Personal Friends, Close Business Associates and Relatives)

 

The Subscriber represents and warrants to the Company that the Subscriber has read the following definitions from Multilateral Instrument 45-103 Capital Raising Exemptions and certifies that the Subscriber has the relationship(s) to the Company or its directors, senior officers or control persons by virtue of the Subscriber being:

 

(initial one or more as appropriate)

 

	
  

	
_____

	
(a)

	
a director, senior officer or control person of the Company, or of an affiliate of the Company;

 

	
  

	
_____

	
(b)

	
a spouse, parent, grandparent, brother, sister or child of a director, senior officer or control person of the Company, or of an affiliate of the company;

 

	
  

	
_____

	
(c)

	
a close personal friend of a director, senior officer or control person of the Company, or of an affiliate of the Company;

 

	
  

	
_____

	
(d)

	
a close business associate of a director, senior officer or control person of the Company, or of an affiliate of the Company;

 

	
  

	
_____

	
(e)

	
a person or company that is wholly-owned by any combination of persons or companies described in paragraphs (a) to (d),

 

	
  

	
and if (b), (c), (d) or (e) is initialed the director, senior officer or control person is:

 

	
  

	
________________________________________

	
  

	
(Print name of director, senior officer or control person)

 

The foregoing representations and warranties are true and accurate as of the date of this certificate and will be true and accurate as of Closing.  If any such representations and warranties shall not be true and accurate prior to Closing, the Subscriber shall give immediate written notice of such fact to the Company.

  

15

  

 

For the purposes hereof, the following definitions are included for convenience:

 

	
a.  

	
“close business associate” means an individual who has had sufficient prior business dealings with the director, senior officer or control person to be in a position to assess the capabilities and trustworthiness of the director, senior officer or control person.

 

A casual business associate or a person introduced or solicited for the purpose of purchasing securities is not a close business associate.  An individual is not a close business associate solely because the individual is a client or former client.  For example, an individual is not a close business associate of a registrant or former registrant solely because the individual is a client or former client of that registrant or former registrant.

 

The relationship between the purchaser and the director, senior officer or control person must be direct.  For example, the exemption is not available for a close business associate of a close business associate or a director, senior officer or control person.

 

	
b.  

	
“close personal friend” means an individual who has known the director, senior officer or control person for a sufficient period of time to be in a position to assess the capabilities and trustworthiness of the director, senior officer or control person.

 

An individual is not a close personal friend solely because

 

	
·  

	
the individual is a member of the same organization, association or religious group, or

 

	
·  

	
the individual is a client or former client.

 

The relationship between the purchaser and the director, senior officer or control person must be direct.  For example, the exemption is not available for a close personal friend or a close personal friend of the director, senior officer or control person.

 

	
c.  

	
“company” means any corporation, incorporated association, incorporated syndicate or other incorporated organization.

 

	
d.  

	
“person” means and individual, partnership, unincorporated association, unincorporated syndicate, unincorporated organization, trust, trustee, executor, administrator or other legal representative.

 

	
e.  

	
“spouse” means, in relation to an individual, another individual to whom that individual is married, or another individual of the opposite sex or the same sex with whom that individual is living in a conjugal relationship outside marriage.

  

16

  

The Investor understands that the foregoing information will be relied upon by the Company for the purpose of determining the eligibility of the Investor to purchase the Shares. The Investor agrees to notify the Company immediately if any representation or warranty contained in this Subscription Agreement, including this Investor Questionnaire, becomes untrue at any time. The Investor agrees to provide, if requested, any additional information that may reasonably be required to substantiate the Investor’s status as an accredited investor or to otherwise determine the eligibility of the Investor to purchase the Shares. The Investor agrees to indemnify and hold harmless the Company and each officer, director, shareholder, agent and representative of the Company and their respective affiliates and successors and assigns from and against any loss, damage or liability due to or arising out of a breach of any representation, warranty or agreement of the Investor contained herein.

	  	
INDIVIDUAL:

	  	  
	  	
____________________________________

	  	
(Signature)

	  	  
	  	
____________________________________

	  	
(Print Name)

	  	  
	  	
PARTNERSHIP, CORPORATION, TRUST, CUSTODIAL ACCOUNT, OTHER:

	  	  
	  	
___________________________________

	  	
(Name of Entity)

	  	  
	  	
By:  ________________________________

	  	
(Signature)

	  	  
	  	
       ________________________________

	  	
(Print Name and Title)

17

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