-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PdXoVA/Y9zYGH79gEOmut9eWtxu7ped1wiAPIfvLC9qmruySo8IIuiNKBu3fFk9L uIvWT/242Pyyqbe3+gjPUA== 0001014909-05-000084.txt : 20050804 0001014909-05-000084.hdr.sgml : 20050804 20050804161527 ACCESSION NUMBER: 0001014909-05-000084 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20050729 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Termination of a Material Definitive Agreement ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Unregistered Sales of Equity Securities ITEM INFORMATION: Changes in Control of Registrant ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050804 DATE AS OF CHANGE: 20050804 FILER: COMPANY DATA: COMPANY CONFORMED NAME: U S GOLD CORP CENTRAL INDEX KEY: 0000314203 STANDARD INDUSTRIAL CLASSIFICATION: MINERAL ROYALTY TRADERS [6795] IRS NUMBER: 840796160 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-09137 FILM NUMBER: 05999610 BUSINESS ADDRESS: STREET 1: 2201 KIPLING ST STREET 2: STE 100 CITY: LAKEWOOD STATE: CO ZIP: 80215-1545 BUSINESS PHONE: 3032381438 MAIL ADDRESS: STREET 1: 2201 KIPLING STREET STE 100 CITY: LAKEWOOD STATE: CO ZIP: 80215 FORMER COMPANY: FORMER CONFORMED NAME: U S SILVER STATE MINING CORP DATE OF NAME CHANGE: 19880706 FORMER COMPANY: FORMER CONFORMED NAME: SILVER STATE MINING CORP DATE OF NAME CHANGE: 19880629 8-K 1 f8k_29july2005usgold.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): July 29, 2005 U.S. GOLD CORPORATION (Exact name of registrant as specified in its charter) Colorado 0-9137 84-0796160 (State or other jurisdiction of (Commission File (I.R.S. Employer incorporation or organization) Number) Identification No.) 2201 Kipling Street, Suite 100 Lakewood, CO 80215-1545 (Address of principal executive offices) (Zip Code) Registrant's telephone number including area code: (303) 238-1438 (Former name or former address, if changed since last report) Check the appropriate box below if the form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Table of Contents Items Page - ----- ---- Item 1.01 Entry into a Material Definitive Agreement 1 Item 1.02 Termination of a Material Definitive Agreement 2 Item 2.01 Completion of the Acquisition or Disposition of Assets 3 Item 3.02 Unregistered Sales of Equity Securities 3 Item 5.01 Changes in Control of Registrant 3 Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers 4 Item 9.01 Financial Statements and Exhibits 4 Signatures 5 DESCRIPTIONS IN THIS REPORT ARE QUALIFIED BY REFERENCE TO THE CONTENTS OF ANY CONTRACT, AGREEMENT OR OTHER DOCUMENT DESCRIBED HEREIN AND ARE NOT NECESSARILY COMPLETE. REFERENCE IS MADE TO EACH SUCH CONTRACT, AGREEMENT OR DOCUMENT FILED AS AN EXHIBIT TO THIS REPORT, OR INCORPORATED HEREIN BY REFERENCE AS PERMITTED BY REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION. (SEE "ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.") i Item 1.01 Entry into a Material Definitive Agreement On July 29, 2005, U.S. Gold Corporation (the "Company") entered into an agreement to sell an aggregate of 11,100,000 shares of its common stock, par value $0.10 per share (the "Shares"), to Robert R. McEwen for $4,000,000 in cash. The agreement between the Company and Mr. McEwen is represented by a Letter Agreement and Stock Subscription Agreement, each dated July 29, 2005. Following this transaction, Mr. McEwen became the Company's largest shareholder, owning slightly more than 33.3% of its outstanding stock. As a condition to completion of the agreements with Mr. McEwen and in consideration of prior uncompensated services and termination of outstanding stock options, the Company also consummated agreements with each of its existing executive officers pursuant to which their employment contracts with the Company were terminated ("Termination Agreements"). These Termination Agreements provide for cash payments to the three individuals in the aggregate amount of $1,000,000, issuance of 1,025,000 shares of the Company's common stock and distribution of 5,191,352 shares of common stock of Gold Resource Corporation, representing all of the GRC stock owned by the Company prior to the transaction. These Termination Agreements were effective July 28, 2005. The Letter Agreement. In addition to the purchase and sale of the Shares, the Letter Agreement between the Company and Mr. McEwen includes the following terms: o While the employment contracts of existing officers of the Company will be terminated, each individual will continue to serve as an officer at least as long as necessary to allow the outgoing Chief Executive Officer and Principal Financial Officer to sign and file the Company's quarterly report for the second quarter and make the requisite Sarbanes-Oxley Certifications. Certain individuals may also continue beyond that date as employees of the Company on an "at-will" basis. o Four of the six existing directors of the Company, including Messrs. William W. Reid and David C. Reid, will resign as members of the Board of Directors. Pending regulatory filings, it is intended that the vacancies created by the resignation of these individuals will be filled with individuals nominated by Mr. McEwen. o The Company will issue an aggregate of 450,000 shares of its common stock to the four existing independent members of the Board of Directors. These shares will be issued under the Company's Non-Qualified Stock Option and Stock Grant Plan. Each of these directors has also agreed to cancel any outstanding stock options from the Company. o The Company agreed to use its commercially reasonable efforts to cause the Shares to be registered for resale with the Securities and Exchange Commission ("SEC") as promptly as practical after the closing of the transaction and to pay the costs associated with such registration. In addition, Mr. McEwen will be entitled to "piggyback" registration rights on 1 all registrations filed by the Company other than registrations on Form S-4 and S-8. This means that if the Company files a registration statement with the SEC in the future, the Company is obligated to include the Shares issued to Mr. McEwen. o The Company and Mr. McEwen agreed to indemnify each other and their respective representatives and agents from breach of any representation or warranty contained in the Letter Agreement or Subscription Agreement. It is expected that the appointment of the new directors to be nominated by Mr. McEwen will be effective not less than 10 days following the filing of a Schedule 14f-1 by the Company as required by the SEC. The Termination Agreements. In addition to the terms and payments summarized above, the Termination Agreements include the following terms: o Each officer will release the Company from all liabilities except those set forth in the Termination Agreement and except for the Company's indemnification obligations under its Articles of Incorporation and indemnification agreement with the officer. o The Company will distribute to the officers three automobiles and the associated installment purchase obligations. o The Shares to be issued to the officers will be issued under the Company's Non-Qualified Stock Option and Stock Grant Plan. o Each officer agreed to cancel any outstanding stock options from the Company. The following table details the payments to be made by the Company to each of the existing officers: GRC Share Share Name of Officer Cash Payment Issuance Distribution - --------------- ------------ -------- ------------ William W. Reid $469,936 534,968 2,439,606 David C. Reid 301,567 275,784 1,565,539 William F. Pass 228,497 214,248 1,186,207 Item 1.02 Termination of a Material Definitive Agreement The previously announced agreement with Romarco and Western Goldfields provided a 30-day "exclusivity period" within which the Company was limited in discussions for a merger or acquisition with any entity other than Romarco, and 2 contemplated that the parties would negotiate a definitive merger agreement. The exclusivity period expired without Romarco providing the requisite financing to the Company. Following consummation of the agreement with Mr. McEwen discussed above, the Company terminated negotiations for a merger as well. Item 2.01 Completion of Acquisition or Disposition of Assets In conjunction with the Termination Agreements discussed above, in consideration of prior uncompensated services and termination of stock options, the Company agreed to distribute an aggregate of 5,191,352 shares of Gold Resource Corporation to the outgoing officers. The shares of GRC to be distributed to the existing officers were valued at $0.118 each, or $612,580 in total, for purposes of the transaction, based on a written report estimating the fair market value obtained by the Company from an independent appraiser. Item 3.02 Unregistered Sales of Equity Securities In conjunction with the agreements discussed under Item 1.01 above, the Company issued to Mr. McEwen 11,100,000 shares of its common stock for payment of $4,000,000 in cash in a transaction that was not registered under the Securities Act of 1933, as amended (the "Act"). The Shares issued to Mr. McEwen were issued pursuant to the exemption from registration provided by Rule 506 of Regulation D of the Act. No discounts or commissions were paid by the Company in connection with the issuance of the Shares, as no underwriter was involved in the transactions. Item 5.01 Changes in Control of Registrant As a result of the stock purchase and sale described in Item 1.01 above, it is anticipated that the Company will undergo a change in control. Mr. McEwen has become the largest shareholder of the Company, owning approximately 33% of the issued and outstanding voting stock. Following the resignation of the existing Chief Executive Officer, it is planned that Mr. McEwen will also become the new Chief Executive Officer of the Company. Finally, pursuant to the terms of the Letter Agreement, Mr. McEwen has the right to nominate a majority of the Company's Board of Directors. It is anticipated that the appointment of the new board members will be effective not less than 10 days following the Company's filing of necessary documents with the SEC. In addition to his affiliation with the Company, Mr. McEwen is also the Chairman of the Board of Directors of Goldcorp Inc., a position he has occupied for the last 18 years. Goldcorp is a corporation incorporated under the laws of the Province of Ontario, Canada, with securities traded on the Toronto and New York Stock Exchanges. In a development unrelated to the stock purchase and sale described above, NovaGold Resources Inc. reportedly became the Company's second-largest shareholder. In a transaction reported July 29, 2005, NovaGold purchased 5,374,544 shares of the Company's common stock, representing approximately 16% of the outstanding voting stock after the McEwen transaction, in a private transaction from one or more former stockholders. NovaGold is a corporation incorporated under the laws of the Province of Nova Scotia, Canada, with securities traded on the American and Toronto Stock Exchanges. The Company is unaware whether NovaGold intends to exert efforts to take an active part in management of the Company. 3 Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers As described under Item 1.01 above, in connection with the Letter Agreement executed with Mr. McEwen, all of the Company's existing officers and four of the six existing members of its Board of Directors, including Messrs. William and David Reid, have agreed to resign their positions as such. The Company's Chief Executive Officer and Principal Financial Officer have agreed to remain in their positions pending filing of the quarterly report for the second quarter, due to be filed with the SEC not later than August 15, 2005. It is presently uncertain exactly when the changes contemplated by the Letter Agreement will occur. As noted above, it is expected that the appointment of the new directors will be effective not less than 10 days following the filing of a Schedule 14f-1 by the Company as required by the SEC. Item 9.01 Financial Statements and Exhibits (c) Exhibits. 2.1 Letter Agreement of Private Placement between the Company and Robert M. McEwen dated July 29, 2005. 2.2 Stock Subscription Agreement between the Company and Robert M. McEwen dated July 29, 2005. 10.1 Termination Agreement between the Company and William W. Reid dated July 28, 2005. 10.2 Termination Agreement between the Company and David C. Reid dated July 28, 2005. 10.3 Termination Agreement between the Company and William F. Pass dated July 28, 2005. CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR "PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. The matters discussed in this report on Form 8-K, when not historical matters, are forward-looking statements that involve a number of risks and uncertainties that could cause actual results to differ materially from projected results. Such factors include, among others, the willingness and ability of third parties to honor their contractual obligations, the decisions of third parties over which the Company has no control, commodity prices, environmental and government regulations, availability of financing, judicial proceedings, force majeure events, and other risk factors as described from time to time in the Company's filings with the SEC. Many of these factors are beyond the Company's ability to control or predict. The Company disclaims any intent or obligation to update its forward-looking statements, whether as a result of receiving new information, the occurrence of future events, or otherwise. 4 SIGNATURE Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. U.S. GOLD CORPORATION Date: August 4, 2005 By: /s/ William F. Pass ---------------------------------- William F. Pass Vice President, Chief Financial Officer and Secretary 5 EX-2 2 exh2_1.txt Exhibit 2.1 July 29, 2005 U.S. Gold Corporation 2201 Kipling Street, Suite 100 Lakewood, Colorado 80215-1545 Attention: Richard F. Mauro, Chairman of Independent Committee of Board of Directors Re: Private Placement into U. S. Gold Dear Mr. Mauro: Subject to the terms and conditions hereof and of the Stock Subscription Agreement referenced below, Robert R. McEwen, or an affiliate ("McEwen") hereby agrees to acquire 11,100,000 shares of Common Stock (representing at least 33.3% of the total outstanding Common Stock, on a fully diluted basis, after the transaction) of U.S. Gold Corporation, a Colorado corporation ("U.S. Gold") for a price of US$0.36036 per share for an aggregate purchase price of US$4,000,000.00, as provided in the attached Stock Subscription Agreement (the "Stock Acquisition "). This letter agreement ("Agreement"), together with the Stock Subscription Agreement, supersedes all prior agreements and understandings regarding the subject matter hereof and forms a binding agreement between McEwen and U.S. Gold regarding the terms and conditions of the proposed Stock Acquisition. Upon signing this Agreement, the parties will also execute the Stock Subscription Agreement and close the transaction (the "Closing"). U.S. Gold represents, warrants and agrees that (i) the Shares (as defined below), when issued hereunder and under the Stock Subscription Agreement, will be fully paid and non-assessable, (ii) subject to the Required Board Approval described below, it is authorized to sell the Shares to McEwen hereunder and under the Stock Subscription Agreement, and (iii) the Shares represent at least 33.3% of the total outstanding Common Stock, on a fully diluted basis, after the transaction. The following sets forth the Parties' understandings and agreements concerning the terms and conditions of the Stock Acquisition: Offering Terms - -------------- Issuance of Stock: Subject to the terms hereof and the Stock Subscription Agreement, U.S. Gold agrees to issue and sell 11,100,000 shares of its Common Stock (the "Shares") to McEwen, and McEwen agrees to purchase the Shares from U.S. Gold. The Shares shall constitute at least 33.3% of the total Common Stock outstanding, on a fully diluted basis, immediately following the consummation of the issuance of the Shares to McEwen (the "Closing") and the other transactions contemplated hereby. Consideration: As consideration for the Stock Acquisition , McEwen shall pay the amount of US$4,000,000.00 in immediately available funds to U.S. Gold at the Closing. Board Vote The Board of U.S. Gold shall vote to approve or reject this Agreement on or before August 1, 2005. Covenants and Conditions to Closing - ----------------------------------- McEwen's obligation to close the Stock Acquisition will be conditioned upon satisfaction of the following conditions: Required Approvals and Consents: The Board of Directors of U.S. Gold will have approved the Stock Acquisition (the "Required Board Approval"). Stock Subscription Agreement U. S. Gold shall have executed and delivered to McEwen the Stock Subscription Agreement. All of U.S. Gold's representations and warranties hereunder and thereunder shall be true and correct, and U.S. Gold shall have performed and complied with all of its agreements and obligations hereunder and thereunder (to the extent required to be performed or complied with at or prior to Closing). Settlement With Management: The employment contracts of the current management team of U.S. Gold and its subsidiaries, consisting of William W. Reid, David C. Reid, and William F. Pass (collectively, "Management"), shall have been terminated (and Management shall have resigned all Board positions at U. S. Gold and its subsidiaries) effective at the Closing (provided, that Management shall continue to serve (as at-will employees or consultants) as officers of U. S. Gold and its subsidiaries for as long as necessary to allow the current CEO and CFO of U. S. Gold to sign and file the second quarter Report on Form 10-Q for U. S. Gold and to make the Sarbanes-Oxley certifications required in connection therewith and, if mutually agreed, such later time as determined by the new Board of Directors) and shall have released U.S. Gold from all liabilities to them except those set forth under "Management Payments" below and except pursuant to the indemnification provisions of the Articles of Incorporation, -2- as amended, and indemnification agreements between U.S. Gold and members of Management (copies of which have been provided to McEwen). No payments or obligations of U.S. Gold to Management shall exceed those set forth under "Management Payments" below. Board Representation: Effective at Closing, William W. Reid and David C. Reid shall have resigned as members of the Board of Directors of U.S. Gold, as shall two (2) of the remaining four (4) independent directors. All directors (including those resigning and those remaining on the board) shall have agreed to cancel their respective stock option agreements; and the four (4) independent directors shall be entitled to receive an aggregate of 450,000 shares of U.S. Gold Common Stock issued as stock grants under U.S. Gold's Non-Qualified Stock Option and Stock Grant Plan and those directors shall have cancelled for no other consideration all stock option agreements with U.S. Gold. The Board of Directors of U. S. Gold shall have (i) irrevocably appointed four new members to the Board of Directors, as nominated by McEwen (or more, to the extent an increase in the size of the Board is required (which shall also be effected by resolution of the Board) because any or all of the four incumbent directors referenced above do not choose to resign; provided, that, in any case, McEwen's nominees shall comprise two-thirds of the Board), effective at Closing or as soon as allowed under requirements of Rule 14f-1 of the Securities Exchange Act of 1934, as amended. U.S. Gold's obligation to Close the Stock Acquisition will be conditioned upon: Required Approvals and Consents: The Required Board Approval will have been obtained. Stock Subscription Agreement McEwen shall have executed and delivered to McEwen the Stock Subscription Agreement. All of McEwen's representations and warranties hereunder and thereunder shall be true and correct, and McEwen shall have performed and complied with all of his or its agreements and obligations hereunder and thereunder (to the extent required to be performed or complied with at or prior to Closing). Management Payments Management shall have received (or have the right to receive) no more than the following in full satisfaction of all existing employment, severance and other agreements with -3- U.S. Gold (including without limitation cancellation of all existing options and other rights of Management to shares of U.S. Gold): (1) U.S. Gold shall have transferred (or be obligated to transfer) to Management all shares of Gold Resource Corporation owned by U.S. Gold, at a valuation determined to be fair to U.S. Gold by Behre Dohlbear, an independent valuation expert. (2) U.S. Gold shall pay (or be obligated to pay) to Management in cash at the Closing $1,000,000. (3) U.S. Gold shall have transferred (or be obligated to transfer) to Management the following automobile by individual, and those persons will assume the remaining installment purchase obligations with respect to such vehicle and shall obtain the release of U.S. Gold's guaranty of such installment purchase obligations. William W. Reid: 2005 Ford Explorer (purchased 12/04), Vin # 1FMDU75W65UA31678; David C. Reid: 2005 Ford Explorer (purchased 12/04), Vin # 1FMDU75W05ZA37625, and William F. Pass: 2005 Volkswagon Passat (purchased 12/04), VIN # WVWWU63B75E048152 (4) Management will have received (or have the right to receive), in aggregate, 1,025,000 shares of Common Stock of U.S. Gold under the existing U.S. Gold Non-Qualified Stock Option and Stock Grant Plan and Management shall have terminated for no other consideration all stock option agreements with U.S. Gold. In aggregate, the payments and obligations of Management and U.S. Gold referenced in this Management Payments section shall be termed the "Management Transaction". -4- Other Terms - ----------- U.S. Gold and McEwen further agree as follows: Indemnification: U.S. Gold will indemnify, defend and hold harmless McEwen and his respective representatives and agents, from and against any liabilities, losses, or claims resulting from the breach of any representation, warranty, covenant, or agreement of U.S. Gold contained in this Agreement or in the Stock Subscription Agreement, and advance to such persons, as incurred, all expenses and costs relating thereto and to the defense therefrom. At his or its option, McEwen shall have the option of being indemnified in cash or in shares of Common Stock, or any combination thereof (in each case, adjusted to take into account McEwen's stock ownership percentage). These indemnities will survive for 18 months after the Closing. McEwen will indemnify U.S. Gold against a breach of any representation or warranty of McEwen contained in this Agreement or the Stock Subscription Agreement, and advance to U.S. Gold, as incurred, all expenses and costs relating thereto and to the defense therefrom, in this Agreement. These indemnities will survive for 18 months after the Closing. Expenses: Each party will pay its own legal, accounting, and other expenses, and all other costs incurred by such party or its advisors or consultants in connection with the negotiation, preparation, execution and delivery of this Agreement and the Stock Subscription Agreement, whether or not the Stock Acquisition is consummated. Registration Rights: Demand Right: U.S. Gold will use its commercially reasonable efforts to cause the Shares to be registered for resale by McEwen as promptly as practicable after Closing. Company Registration. McEwen shall be entitled to "piggy-back" registration rights on all registrations of U.S. Gold (other than an initial public offering or any S-4 and S-8 registrations) or on any demand registrations of any other investor subject to the right, however, of U.S. Gold and its underwriters to reduce the number of shares proposed to be registered by McEwen (proportionately to other investors) in view of market conditions. -5- Expenses. U.S. Gold shall bear registration expenses (exclusive of underwriting discounts and commissions) of any such demand and piggy-back registrations (including the expense of one special counsel to McEwen not to exceed $50,000). Transfer of Rights: The registration rights may be transferred to (i) any family member or trust for the benefit of any individual initial holder, or (ii) any transferee who acquires at least 200,000 of the Shares from McEwen. Non-Competition Agreements: U.S. Gold will cause each of the departing Management employees of U.S. Gold to sign agreements with U.S. Gold which will provide, among other things that, for a period of one (1) year from the Closing Date, he or she will not directly or indirectly (i) engage or have ownership in or otherwise participate in the financing, operation, management or control of any entity engaged in, or contemplated to be engaged in, any business owning or seeking properties in Eureka County, Nevada, or (ii) solicit any of the employees of U.S. Gold for the purpose of obtaining their employment services. Other Agreements of the Parties - ------------------------------- Conduct of Business: From and after the date hereof, U.S. Gold will (i) preserve and protect its assets, including without limitation the Tonkin Springs property, to the extent of its available working capital, (ii) preserve its existing relations with employees, suppliers and others with whom it has a business relationship, (iii) not sell, abandon, release or otherwise dispose of or encumber any of its assets, including without limitation any mining claim or lease of property and (iv) conduct its business in compliance with all applicable laws and regulations and orders or requirements of governmental agencies. Securities Filings U.S. Gold shall make in a timely manner all filings required by applicable securities laws and rules, and such filings shall be accurate in all material respects. Confidentiality: This Agreement and any related correspondence is to be held in strict confidence and not disclosed to any party other than the legal counsel and financial advisors of parties hereto without prior approval of the non-disclosing party or unless required by applicable law. -6- All information furnished by any party or its representatives will be held in strict confidence by the party receiving such information and will not be disclosed to any third party except representatives who need access to the information in order to work on the Stock Acquisition. All information furnished by either party to the other will be deemed to be proprietary in nature and shall be kept confidential unless (i) the party providing the information consents to disclosure to third persons, (ii) the information is already in the public domain, (iii) disclosure of the information is compelled by process of law, or (iv) the party receiving the information already had such information in its possession prior to disclosure to such party as evidenced by its files. If the Stock Acquisition is not consummated each party and its representatives will not use to its commercial advantage any information (whether or not contained in hard copy, database or other physical form) concerning products, customers, proprietary technology or otherwise provided by the other party. Without consent of McEwen, U.S. Gold agrees not to issue a press release or otherwise publicize the Stock Acquisition or the existence of this Agreement or the Stock Subscription Agreement, except as required by law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Colorado without giving effect to the conflict of laws provisions thereof. This Agreement may be executed by facsimile signature and in one or more counterparts, each of which shall be deemed to be an original, and all of which, when taken together, shall constitute one and the same instrument. /s/ Robert R. McEwen Robert R. McEwen ACCEPTED U.S. GOLD CORPORATION ROBERT R. MCEWEN By: /s/ John W. Goth /s/ Robert R. McEwen Name: John W. Goth Title: Director -7- EX-2 3 exh2_2.txt Exhibit 2.2 STOCK SUBSCRIPTION AGREEMENT To: U.S. Gold Corporation 2201 Kipling Street, Suite 100 Lakewood, Colorado U.S.A. 80215-1545 The undersigned (the "Purchaser") hereby (subject to the terms and conditions hereof and the Letter Agreement between the parties as of even date herewith (the "Letter Agreement")) subscribes for and agrees to purchase from U.S. Gold Corporation (the "Company") on the terms and conditions set forth in this subscription agreement ("Agreement") that number of shares of par value US$0.10 common stock of the Company (the "Shares") set forth in Clause 13 below. Each Share will be issued at a price of $0.36036 per Share. 1. Conditions of Purchase The Purchaser acknowledges that the Company's obligation to sell the Shares to the Purchaser is subject to, among other things, the conditions that: (a) the Purchaser executes and returns to the Company all documents required by this Agreement, including Schedule B, demonstrating that the Purchaser is an "accredited investor", as such term is defined in Regulation D promulgated by the United States Securities and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended (the "1933 Act"); (b) all necessary regulatory approvals, if any, being obtained by the Company prior to the Closing; (c) the representations and warranties of the Purchaser remain true and correct as at the Closing, and (d) the Company has reviewed the completed Subscription Agreement submitted by the Purchaser and accepts the subscription. 2. Delivery and Payment The Purchaser agrees that the following shall be delivered to the Company prior to the Closing: (a) one completed and duly signed copy of this Agreement; (b) all other documentation as may be required by applicable securities legislation, including a duly completed Accredited Investor certificate in the form of Schedule "B" hereto; and (c) evidence of a wire transfer in the full amount in United States dollars payable to U.S. Gold Corporation. Details concerning the payment procedure are set out in Schedule "A". Delivery by the Company of the certificates representing the Shares, and payment for the Shares by the Purchaser, shall be completed at a closing (the "Closing") to be held at such time and place as may be mutually agreed upon by the Company and the Purchaser (the date of the Closing being hereinafter called the "Closing Date"). If the Purchaser chooses not to attend the Closing to receive the Share certificate(s), then the Company shall deliver such certificates to the Purchaser at the address set forth below, promptly after the Closing. 3. Purchaser's Acknowledgements The Purchaser acknowledges and agrees that: (a) the sale and delivery of the Shares to the Purchaser is conditional upon such sales being made pursuant to the exemption from registration under the 1933 Act as set forth in Regulation D or Regulation S promulgated thereunder; (b) the Company may be required to disclose to the SEC, and thereby though public access to Edgar filing, the identity of the beneficial purchaser(s) of the Shares; (c) the Shares have not been registered under the 1933 Act, by reason of their issuance in a transaction that does not require registration under the 1933 Act (based in part on the accuracy of the representations and warranties of Purchaser hereto), and that such Shares must be held unless a subsequent disposition is registered under the 1933 Act or is exempt from such registration. (d) the Shares shall bear the following legend, unless same shall have been included in an effective registration statement under the 1933 Act: "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THESE SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED; (e) it has sufficient knowledge and experience in investing in companies similar to the Company in terms of the Company's stage of development so as to be able to evaluate the risks and merits of its investment in the Company (based on the Company's representations and warranties to Purchaser) and it is able financially to bear the risks thereof; (f) no agency, governmental authority, regulatory body, stock exchange or other entity has made any finding or determination as to the merits for investment of, nor have any such agencies or governmental authorities made any recommendation or endorsement with respect to the Shares; (g) the Purchaser has been provided copies of and has reviewed to the extent he deems necessary, copies of the Company's Form 10-KSB for the year ended December 31, 2004 as filed with the SEC, together with all subsequently filed Forms 10-QSB, 8-K, Proxy Statements, Registration Statement on Form SB-2 and all amendments thereto and other publicly available filings made with the SEC and has received from the Company the Company's representations and warranties to Purchaser concerning its operations, financial condition and other matters as requested of the Company, and Purchaser has considered these representations and warranties in deciding on the advisability of investing in the Shares; (h) the Shares are being offered for sale only on a "private placement" basis; (i) the Shares are being acquired by the Purchaser in good faith solely for the Purchaser's own account, for investment purposes only, and are not being purchased with a view to, or for the resale or distribution thereof; (j) the representations, warranties and covenants contained in this Agreement made by Purchaser are made by the Purchaser with the intent that they may be relied upon by the Company in determining the Purchaser's eligibility to purchase the Shares, and the Purchaser hereby agrees to indemnify the Company against all losses, claims, costs, expenses and damages or liabilities which it may suffer or incur caused or arising from its reliance thereon. The Purchaser further agrees that by accepting the Shares, the Purchaser represents and warrants that the foregoing representations and warranties are true as at the Closing with the same force and effect as if they had been made by the Purchaser at the Closing and that they shall survive the Closing Date and shall continue in full force and effect notwithstanding any subsequent disposition of the Shares; and (j) the offer to sell the Shares was directly communicated to the Purchaser and at no time was the Purchaser presented with or solicited by any leaflet, newspaper or magazine article, radio or television advertisement, or any other form of general advertising or solicited or invited to attend a promotional meeting otherwise than in connection and concurrently with such communicated offer. 4. Purchaser's Representations and Warranties The Purchaser hereby represents, warrants and covenants to the Company (which representations, warranties and covenants shall survive Closing and continue in full force and effect) that: (a) the Purchaser is a resident of the Province of Ontario, Canada, and was offered the Shares outside of the United States of America; (b) the Purchaser is an "accredited investor" as that term is defined in Regulation D promulgated by the 1933 Act by virtue of satisfying the indicated criterion in paragraph 1 of Schedule "B"; (c) the Purchaser acknowledges that in addition to compliance with the restrictions on resale applicable under applicable rules of the SEC, the Purchaser may be subject to various reporting requirements with the SEC if Purchaser is the owner of 5% or more of a class of the issued and outstanding stock of the Company; (d) the Purchaser will execute and deliver all documentation to the Company as may be required by applicable rules, regulations and policies of the SEC and to permit the purchase of the Shares on the terms herein set forth; (e) this agreement has been duly authorized, executed and delivered by, and constitutes a legal, valid and binding agreement of, the Purchaser subject to: (i) any applicable bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally; and (ii) general principles of equity, including that the granting of equitable remedies is within the discretion of a court of competent jurisdiction; (f) the Purchaser is not, directly or indirectly, the holder of any common shares in the capital of the Company other than the number of common shares of the Company disclosed in Clause 13(d). (g) the Purchaser is not an investment club; and (h) the representations, warranties and covenants of the Purchaser set forth herein shall survive the closing of the transaction contemplated hereby. 6. Company's Representations and Warranties The Company represents and warrants and agrees with the Purchaser (which representations, warranties and covenants shall survive Closing and continue in full force and effect) that: (a) Due Incorporation. The Company has been organized under the laws of the State of Colorado, United States of America. The Company and each of its subsidiaries, if any, is a corporation, limited partnership or limited liability company duly organized, validly existing and in good standing under the laws of the respective jurisdictions of their incorporation or registration and have the requisite corporate or other power to own their properties and to carry on their business as now being conducted. The Company and each of its subsidiaries is duly qualified as a foreign corporation to do business and is in good standing in each jurisdiction where the nature of the business conducted or property owned by it makes such qualification necessary, other than those jurisdictions in which the failure to so qualify would not have a material adverse effect on the business, operations or financial condition of the Company. (b) Outstanding Stock. All issued and outstanding shares of common stock of the Company and each of its subsidiaries has been duly authorized and validly issued and are fully paid and non-assessable. (c) Authority; Enforceability. This Agreement and other agreements delivered together with this Agreement or in connection herewith have been duly authorized, executed and delivered by the Company and are valid and binding agreements enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights generally and to general principles of equity; and the Company has full corporate power and authority necessary to enter into this Agreement, and such other agreements and to perform its obligations hereunder and under all other agreements entered into by the Company relating hereto. (d) Additional Issuances. There are no outstanding preemptive or similar rights (or phantom stock or stock appreciation rights) affecting the Company's common stock or equity and no outstanding rights, warrants or options to acquire, or instruments convertible into or exchangeable for, common stock or equity of the Company or other equity interest in any of the subsidiaries of the Company except as described explicitly in the Commission Reports (as defined below) or referenced specifically in the Letter Agreement. To the knowledge of the Company, there are no agreements among shareholders regarding the voting of the shares of capital stock of the Company. (e) Consents. No consent, approval, authorization or order of any court, governmental agency or body or arbitrator having jurisdiction over the Company, or any of its affiliates, the National Association of Securities Dealers, Inc. ("NASD") or the Company's Shareholders is required for execution of this Agreement, and all other agreements entered into by the Company relating thereto, including, without limitation, the issuance and sale of the Shares, and the performance of the Company's obligations hereunder. (f) No Violation or Conflict. Assuming the representations and warranties of the Purchaser in this Agreement are true and correct and the Purchaser complies with its obligations under this Agreement, the issuance and sale of the Shares and the performance of the Company's obligations under this Agreement will not: (i) violate, conflict with, result in a breach of, or constitute a default (or an event which with the giving of notice or the lapse of time or both would be reasonably likely to constitute a default) under (A) the articles of incorporation, charter or bylaws of the Company, (B) any decree, judgment, order, law, treaty, rule, regulation or determination applicable to the Company of any court, governmental agency or body, or arbitrator having jurisdiction over the Company or any of its affiliates or over the properties or assets of the Company or any of its affiliates, (C) the terms of any bond, debenture, note or any other evidence of indebtedness, or any agreement, stock option or other similar plan, indenture, lease, mortgage, deed of trust or other instrument to which the Company or any of its affiliates is a party, by which the Company or any of its affiliates is bound, or to which any of the properties of the Company or any of its affiliates is subject, or (D) the terms of any "lock-up" or similar provision of any underwriting or similar agreement to which the Company, or any of its affiliates is a party except the violation, conflict, breach, or default of which would not have a material adverse effect on the Company or Purchaser; or (ii) result in the creation or imposition of any lien, charge or encumbrance upon the Shares or any of the assets of the Company, its subsidiaries or any of its affiliates. (g) Litigation. There is no pending or, to the best knowledge of the Company, threatened action, suit, proceeding or investigation before any court, governmental agency or body, or arbitrator having jurisdiction over the Company, or any of its affiliates that would affect the execution by the Company or the performance by the Company of its obligations under this Agreement, and all other agreements entered into by the Company relating hereto. To the best knowledge of the Company, there is no threatened action, suit, proceeding or investigation before any court, governmental agency or body, or arbitrator having jurisdiction over the Company, or any of its affiliates which litigation if adversely determined could have a material adverse effect on the Company. (h) Information Concerning Company. (i) The Company has filed all forms, reports, statements, schedules and other documents with the SEC required to be filed by it since and including January 1, 2004 pursuant to the federal securities laws and the SEC rules and regulations thereunder (the "Commission Reports"). The Commission Reports (i) were prepared in all material respects in accordance with the requirements of the 1933 Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the published rules and regulations of the SEC thereunder, each as applicable to such Commission Reports and (ii) did not as of the time they were filed contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were and will be made, not misleading. No subsidiary of the Company is subject to the periodic reporting requirements of the Exchange Act. As of the date hereof, there are no investigations or material unresolved comments issued by the staff of the SEC with respect to any of the Commission Reports. (ii) Each of the consolidated financial statements (including, in each case, any notes thereto) of the Company included in the Commission Reports has been prepared in all material respects in accordance with the published rules and regulations of the SEC (including Regulation S-X) and in accordance with United States generally accepted accounting principles applied on a consistent basis throughout the periods indicated (except as otherwise stated in such financial statements, including the related notes) and each fairly presents, in all material respects, the consolidated financial position, results of operations and cash flows of the Company and its consolidated subsidiaries as of the respective dates thereof and for the respective periods indicated therein, except as otherwise set forth in the notes thereto (subject, in the case of unaudited statements, to the inclusion of full notes thereto and to normal and recurring year-end adjustments). (iii) At the date of the most recent interim (March 31, 2005) financial statements of the Company included in the Commission Reports, neither the Company nor any of its subsidiaries had, and since such date neither the Company nor any of its subsidiaries has incurred, any liabilities or obligations of any nature (whether accrued, absolute, contingent, determinable or otherwise) which, individually or in the aggregate, are material to the Company or which have had or could have, individually or in the aggregate, a material adverse effect on the Company or its assets. (iv) Except as disclosed in the next sentence, none of the Company or any of its subsidiaries is indebted to any director or officer of the Company or any of its subsidiaries (except for amounts due as normal salaries and bonuses, in reimbursement of ordinary business expenses and directors' fees) and no such person is indebted to the Company or any of its subsidiaries, and there have been no other transactions of the type required to be disclosed pursuant to Items 402 or 404 of Regulation S-K promulgated by the SEC. As a result of the termination of the Management (as defined in the Letter Agreement), the Company will owe, in aggregate, the following amount to the Management as severance and for other obligations, all as required by currently existing contractual obligations of the Company that have been explicitly disclosed in the Commission Reports: $2,0123,331. (v) The Company has heretofore furnished or made available to McEwen a complete and correct copy of any amendments or modifications which have not yet been filed with the SEC to Commission Reports which previously had been filed by the Company with the SEC pursuant to the 1933 Act and the rules and regulations promulgated thereunder or the Exchange Act and the rules and regulations promulgated thereunder. (vi) Since the date of the most recent financial statements included in the Commission Reports, there has been no material adverse change in the Company's business, financial condition or affairs not explicitly disclosed to the Purchaser. The Company has good and unencumbered title to all assets attributed to it in the Commission Reports (except to the extent encumbered as disclosed explicitly in the Commission Reports). The Company, directly or through its direct and indirect wholly-owned subsidiaries, owns 100% of all economic and voting interests in Tonkin Springs LLC. (vii) Except as disclosed in writing to the Purchaser on the date hereof, the transactions contemplated by this Agreement and the Letter Agreement will not constitute a "change of control" under, require the consent from or the giving of notice to a third party pursuant to, permit a third party to terminate or accelerate vesting or repurchase rights, or create any other material detriment under the terms, conditions or provisions of any contract or obligation to which the Company or any of its subsidiaries is a party or by which any of them or any of their properties or assets may be bound. (viii) Since January 1, 2004, the Company and each of its subsidiaries has had in place "disclosure controls and procedures" (as defined in Rules 13a-14(c) and 15d-14(c) of the Exchange Act) designed and maintained to ensure in all material respects that (a) transactions are executed in accordance with management's general or specific authorizations, (b) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principals and to maintain accountability for assets, (c) access to assets is permitted only in accordance with management's general or specific authorization, (d) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences, (e) all information (both financial and non-financial) required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and (f) all such information is accumulated and communicated to the Company's management as appropriate to allow timely decisions regarding required disclosure and to make the certifications of the Chief Executive Officer and Chief Financial Officer of the Company required under the Exchange Act with respect to such reports. The Company's disclosure controls and procedures ensure that information required to be disclosed by the Company in the reports filed with the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. None of the Company's or its subsidiaries' records, systems, controls, data or information are recorded, stored, maintained, operated or otherwise wholly or partly dependent on or held by any means (including any electronic, mechanical or photographic process, whether computerized or not) which (including all means of access thereto and therefrom) are not under the exclusive ownership and direct control of the Company or its subsidiaries or accountants. As of the date of this Agreement, to the knowledge of the Company, (i) there is no reason that it will not be able, on a timely basis, to complete and include in the Company's Annual Report on Form 10-K for the year ending December 31, 2005, management's assessment of the Company's internal controls and procedures for financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act and (ii) there is no material weakness, significant deficiency or control deficiency, in each case as such term is defined in PCAOB Auditing Std. No. 2. (ix) The Company has not granted any other person the right (whether or not contingent or inchoate) to merge with, or purchase assets from, the Company, and is not obligated to continue negotiations with any other person with respect to any such transaction or with respect to any issuance of the Company's capital stock. All previously announced merger, acquisition or capital-raising transactions have been terminated without any liability to the Company. Any earnest money and other amounts paid to the Company in connection with the foregoing have been forfeited to the Company. (i) Defaults. Neither the Company nor any of its subsidiaries is in violation of its Articles of Incorporation or ByLaws, except that no annual meeting of shareholders has yet been held for 2005 and none was held in 2004. Other than as explicitly disclosed in the Commission Reports, neither the Company nor any of its subsidiaries is (i) in default under or in violation of any other material agreement or instrument to which it is a party or by which it or any of its properties are bound or affected, which default or violation would have a material adverse effect on the Company, (ii) in default with respect to any order of any court, arbitrator or governmental body or subject to or party to any order of any court or governmental authority arising out of any action, suit or proceeding under any statute or other law respecting antitrust, monopoly, restraint of trade, unfair competition or similar matters, or (iii) in violation of any statute, rule or regulation of any governmental authority which violation would have a material adverse effect on the Company. (j) No General Solicitation. Neither the Company, nor any of its affiliates, nor to its knowledge, any person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the Act) in connection with the offer or sale of the Shares. (k) Reliance on Representation and Warranties. The representations, warranties and covenants contained in this Agreement and in the Letter Agreement made by the Company are made by the Company with the intent that they may be relied upon by the Purchaser (without regard to its own investigations, if any) in determining the whether or not to purchase the Shares, and the Company hereby agrees to indemnify the Purchaser against all losses, claims, costs, expenses and damages or liabilities which it may suffer or incur caused or arising from its reliance thereon in accordance with the indemnity terms of the Letter Agreement. The Company further agrees that by issuing the Shares, the Purchaser represents and warrants that the foregoing representations and warranties are true as at the Closing with the same force and effect as if they had been made by the Company at the Closing and that they shall survive the Closing Date and shall continue in full force and effect notwithstanding any subsequent disposition of the Shares. (l) Capitalization. The authorized capital stock of the Company as of the date of this Agreement is 35,000,000 common shares, of which 22,196,810 common shares are outstanding as of July 29, 2005 and prior to the issuance of Shares hereunder, and no warrants nor stock option agreements are outstanding. Except as explicitly set forth in the Commission Reports, there are no other options, warrants, or rights to subscribe to, securities, rights or obligations (including without limitation phantom stock or stock appreciation rights) convertible into or exchangeable for or giving any right to subscribe for any shares of capital stock of the Company. All of the outstanding shares of Common Stock of the Company have been duly and validly authorized and issued and are fully paid and nonassessable. 7. Governing Law This agreement shall be governed by and construed in accordance with the laws of the State of Colorado and the federal laws of the United States applicable therein. The Purchaser hereby irrevocably attorns to the non-exclusive jurisdiction of the courts of the State of Colorado with respect to any matters arising out of this agreement. 8. Assignment This agreement is not transferable or assignable by the parties hereto. 9. Entire Agreement This agreement, together with the Letter Agreement, contains the entire agreement of the parties hereto relating to the subject matter hereof and there are no representations, covenants or other agreements relating to the subject matter hereof except as stated or referred to herein or therein. 10. Successors and Assigns This agreement shall be binding upon and enure to the benefit of the parties hereto and their respective successors and permitted assigns, subject to the hold period restrictions that may be applicable to the Shares. 11. Currency All amounts in this agreement are stated and shall be paid in United States dollar currency. 12. Time of Essence Time shall be of the essence of this agreement. 13. Headings The headings contained herein are for convenience only and shall not affect the meaning or interpretation of this agreement. 14. Subscription Particulars (a) The Purchaser hereby agrees to purchase Shares as set forth below: Number of Shares: 11,100,000 Aggregate Purchase Price: $0.36036 ($0.36036 x 11,100,000 Shares): $4,000,000 Name of Purchaser: Rob McEwen Federal Tax ID No. or SS No:__________________________________________ Street Address: ______________________________________________________ City and Country: ____________________________________________________ Postal Code: _________________________________________________________ Contact Name: ________________________________________________________ Alternate Contacts Name: _____________________________________________ Phone No.: ___________________________________________________________ Fax No.: _____________________________________________________________ E-mail:________________________________________________________________ (b) Registration of the certificates representing the Shares should be made as follows (if space is insufficient, attach a list) - or leave blank if registration is to be as detailed in sub-clause (a) above. Name: _______________________________________________________________ Registration Address: _______________________________________________ City and Country: ___________________________________________________ Postal Code: ________________________________________________________ (c) Number of common shares of the Company owned by the Purchaser: ________________________ 15. Signature of Purchaser Signature of Purchaser (on its own behalf and, if applicable, on behalf of each principal for whom it is contracting hereunder). _______________________________________________________________________ (Signature or Authorized Signature) _______________________________________________________________________ (Name and Official Capacity - please print) 16. Confirmation and Acceptance This agreement is confirmed and accepted by the Company. DATED as of the 29th day of July, 2005 U.S. GOLD CORPORATION By: /s/ John W. Goth --------------------------------- Name: John W. Goth Title: Director EX-10 4 exh10_1.txt Exhibit 10.1 TERMINATION AGREEMENT This Termination Agreement ("Agreement"), dated as of July 28, 2005, is made and entered into by and between U.S. Gold Corporation, a corporation organized and existing under the laws of the State of Colorado ("U.S. Gold" or "Employer") and William W. Reid, an individual ("W. Reid" or "Employee")(Employer and Employee may hereafter be collectively referred to as "Parties"). RECITALS WHEREAS, U.S. Gold and W. Reid entered into that certain Employment Agreement dated January 1, 1994, as amended June 1, 1995, July 21, 1998 and January 1, 2003 ("Employment Agreement"); and WHEREAS, the terms of the Employment Agreement, including provisions for ongoing compensation and a potential cash severance payment, appear to be an impediment to completion of certain corporate transactions that may be in the best interests of the shareholders of U.S. Gold, including a contemplated transaction; and WHEREAS, W. Reid is willing to terminate the Employment Agreement and compromise the form and amount of compensation provided for in the Employment Agreement, as well as any other obligations that Employer may have to Employee, in return for certain payments described below; and WHEREAS, the Parties agree that it is in their mutual best interests to terminate the Employment Agreement effective as of the date of this Agreement; and WHEREAS, it is the desire of both parties that W. Reid continue as an employee of Employer on an at-will basis following termination of the Employment Agreement, maintaining, for the duration of the at-will employment, the current level of salary and health and dental insurance coverage presently in effect for the benefit of the Employee, and the parties agree to a mutual one month notice requirement to terminate the contemplated at-will employment. NOW, THEREFORE, in consideration of the foregoing Recitals, which shall be considered an integral part of this Agreement, and the mutual covenants and agreements set forth below, the parties hereby agree as follows: COVENANTS 1) Termination of Employment Agreement and Stock Option Agreement. --------------------------------------------------------------- a) The Employment Agreement is terminated effective immediately and Employee shall have no further rights thereunder. All payment or compensation to which Employee is entitled from Employer from this time forward is set forth in this Agreement. b) Notwithstanding the termination of the Employment Agreement, W. Reid will continue in the employ of U.S. Gold subsequent to this date as an at-will employee with a mutual one month notice requirement to terminate the at-will employment. As such, his employment may be terminated for no reason or any reason not prohibited by law. c) That certain Stock Option Agreement between the Employer and Employee dated November 6, 2003 is terminated as of the date of this Agreement for the consideration as set forth only in this Agreement. d) In connection with the termination of the Employment Agreement, Employee agrees, by way of example, and not by way of limitation, that: i) Employee is no longer entitled to monthly compensation under Section 3.1 of the Employment Agreement; ii) Employee is not entitled to any severance payment under Section 4.1.4 of the Employment Agreement; iii) Employee is no longer entitled to any employment benefits as described under Section 3.2 of the Employment Agreement; and iv) Employee is not entitled to payment for any other past, present or future obligations that the Employer may have had under the Employment Agreement. 2) Consideration to Employee. -------------------------- a) In consideration of the cancellation of the Employment Agreement, Employer agrees to pay Employee Four Hundred Sixty Nine Thousand Nine Hundred Thirty Six Dollars ($469,936.00) as a cash payment simultaneous with the execution of this Agreement. Payment may be made by electronic wire transfer, check, or any other cash arrangement acceptable to both parties. b) Employer agrees to grant and issue to Employee Five Hundred Thirty Four Thousand Nine Hundred Sixty Eight (534,968) shares of common stock of U.S. Gold issued under and pursuant to Employer's Non-Qualified Stock Option and Stock Grant Plan valued at Forty Cents ($0.39) per share simultaneous with the execution of this agreement. c) Employer agrees to transfer 2,439,606 shares of Gold Resource Corporation ("GRC") stock (presently owned by Employer; the "GRC 2 Shares") to Employee simultaneous with the execution of this Agreement. For purposes of this Agreement, the Shares shall be valued at fair market value, as determined by Behre Dolbear & Company, Inc., in that certain fairness opinion prepared for Employer and dated July 25, 2005, and as discussed with tax counsel, the tax basis of the portion of the consideration related to the GRC Shares reported by Employer to the Internal Revenue Service shall be $143,936.76. d) In connection with the transfer of the GRC Shares to Employee, Employee represents and warrants as follows: i) Employee is acquiring the stock for its own account for the purpose of investment, and not with a view toward, or for sale in connection with, any distribution thereof. ii) Employee (i) has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of a proposed investment in GRC stock, or (ii) has been advised by attorneys, accountants, or other representatives having such knowledge and experience. iii) Employee understands and acknowledges that all of the GRC Shares will be "restricted securities" within the meaning of the Securities Act of 1933, as amended, (the "Securities Act") and applicable state securities law and agrees that the Certificate(s) shall bear the following or a substantially equivalent legend: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED UNLESS COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT, A "NO ACTION" LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION WITH RESPECT TO SUCH TRANSFER, OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY SUCH TRANSFER IS EXEMPT FROM SUCH REGISTRATION. Employee further understands and acknowledges that stop transfer instructions will be issued by GRC to its transfer agent with respect to the GRC Shares. iv) Employee understands and acknowledges that the GRC Shares will not be registered under the Securities Act, and accordingly, Employee recognizes that it may be required to bear the economic risk of its investment until such GRC Shares are registered. Employee agrees that it will only sell, transfer, pledge or hypothecate any of the GRC Shares pursuant to an effective 3 registration statement under the Securities Act or in a transaction wherein registration of the securities is not required. Neither GRC nor U.S. Gold has any obligation to register the GRC Shares to allow resale. v) The undersigned is an accredited investor within the meaning of Rule 501 of Regulation D of the Securities Act of 1933. 3) General Release and Indemnification. ------------------------------------ a) Release by Employee. -------------------- On behalf of his heirs, executors, administrators and assigns, Employee releases and forever discharges Employer, its subsidiaries, affiliates, successors, assigns, directors, officers, managers, representatives, shareholders, agents, employees and volunteers and their respective heirs, personal representatives, administrators and assigned (hereinafter collectively referred to as the "Employer Releasees"), from any and all Causes of Action (as defined below) arising from or relating to (1) termination of the Employment Agreement, and (2) Employer's obligations pursuant to the Employment Agreement. "Causes of Action" means any and all claims, demands, obligations, actions, lawsuits, judgments, liens or liabilities arising out of the numerous laws and regulations regulating employment, including, without limitation, the Civil Rights Act of 1866, 1871, 1964, and 1991; the Employee Retirement Income Security Act; the Equal Pay Act; the Fair Labor Standards Act; the National Labor Relations Act; the Occupational Safety and Health Act; the Older Workers Benefit Protection Act of 1990; the Consolidated Omnibus Budget Reconciliation Act; the Rehabilitation Act of 1973; Executive Order 11246; state anti-discrimination statutes; the Americans with Disabilities Act; the Age Discrimination in Employment Act; the Family Medical Leave Act; the state and federal Constitutions; municipal ordinances; as well as other statutes and the laws of contract, tort and any theory under common law or in equity. Notwithstanding the foregoing, Employee does not waive any rights conferred by statute to vested rights (if any) under any qualified retirement plan nor that certain Indemnification Agreement dated September 21, 2004. b) Waiver by Employee. ------------------- Employee agrees that the payments made to him pursuant to this Agreement are made in full and complete settlement and in full accord and satisfaction of all Causes of Action he has against the Employer Releasees relating to the termination of the Employment Agreement or Employer's obligations under the Employment Agreement. Employee waives all such Causes of Action he may have against the Employer Releasees 4 and covenants not to sue the Employer Releasees except for and to the extent of any obligations of Employer contained in this Agreement that are not performed. c) Employee's Rights Under the Older Workers Benefit Protection Act. ----------------------------------------------------------------- On July 2, 2005, Employee was advised in writing (i) to consult with an attorney before signing this Agreement; (ii) that he has twenty one (21) days in which to consider this Agreement; (iii) that he has seven (7) days after signing this Agreement to revoke the Agreement; (iv) that this Agreement will not be effective or enforceable until seven (7) days after the date Employee signs it; and (v) that Employee will not receive the monies payable pursuant to this Agreement until after the expiration of the revocation period referred to above. Employee understands and agrees that any revocation of this Agreement by him must be in writing and delivered to a duly authorized representative of the Employer during the revocation period. 4) Miscellaneous. -------------- a) No Admission of Liability. -------------------------- Employee understands and agrees that the acceptance of the above-mentioned payment is not to be construed in any way as an admission of liability on the part of the Employer Releasees, but, on the contrary, the Employer Releasees specifically deny any liability to Employee and the Parties recognize that this Agreement is a compromise of the Employer's obligations under the Employment Agreement. b) Backup Withholding. ------------------ Employee represents that he is not subject to backup withholding requirements and agrees to indemnify Employer for any liability incurred as a result of not withholding for payments made under the terms of this Agreement. c) Reliance on Representations. ---------------------------- Employee acknowledges that in executing this Agreement, he has not relied upon any representation or statement not set forth herein. d) Governing Law. -------------- This Agreement shall be deemed to have been made in the County of Jefferson, State of Colorado, and shall be interpreted and construed 5 and enforced in accordance with the laws of the State of Colorado and before the courts of the State of Colorado. e) Severability. ------------- If one or more paragraphs of this Agreement shall be ruled unenforceable, the remaining portions shall remain in full force and effect. f) Employee Acknowledgements. -------------------------- Employee has had an opportunity to consult an attorney before signing this Agreement. The terms of this Agreement are the result of a negotiated settlement. Employee has read this Agreement and understands its terms. Employee has had sufficient time in which to consider this Agreement. Employee enters into and signs this agreement knowingly, voluntarily, freely, of his own volition and with such consultation with counsel as he deemed appropriate. Employee is of lawful age and legally competent to enter into this Agreement. g) Entire Agreement. ----------------- The Parties understand and agree that this Agreement constitutes the entire agreement between them and supersedes and replaces any and all understandings, obligations, representations and agreements, whether written or oral, express or implied. I HAVE READ THE FOREGOING TERMINATION AGREEMENT AND GENERAL RELEASE. I FULLY UNDERSTAND THAT THIS AGREEMENT HAS IMPORTANT LEGAL CONSEQUENCES. I HAVE HAD AN OPPORTUNITY TO HAVE THE AGREEMENT FULLY EXPLAINED TO ME BY MY ATTORNEY AND I UNDERSTAND THE AGREEMENTS FINAL AND BINDING EFFECT, AND I AGREE THAT THE ONLY PROMISES TO ME TO SIGN THIS AGREEMENT ARE THOSE STATED ABOVE. /s/ William W. Reid July 28, 2005 William W. Reid ------------- Date U.S. GOLD CORPORATION, a Colorado corporation By: s/s John W. Goth July 28, 2005 Title: Director Date 6 EX-10 5 exh10_2.txt Exhibit 10.2 TERMINATION AGREEMENT This Termination Agreement ("Agreement"), dated as of July 28th, 2005, is made and entered into by and between U.S. Gold Corporation, a corporation organized and existing under the laws of the State of Colorado ("U.S. Gold" or "Employer") and David C. Reid, an individual ("D. Reid" or "Employee")(Employer and Employee may hereafter be collectively referred to as "Parties"). RECITALS WHEREAS, U.S. Gold and D. Reid entered into that certain Employment Agreement dated January 1, 1994, as amended June 1, 1995 and July 21, 1998 ("Employment Agreement"); and WHEREAS, the terms of the Employment Agreement, including provisions for ongoing compensation and a potential cash severance payment, appear to be an impediment to completion of certain corporate transactions that may be in the best interests of the shareholders of U.S. Gold, including a contemplated transaction; and WHEREAS, D. Reid is willing to terminate the Employment Agreement and compromise the form and amount of compensation provided for in the Employment Agreement, as well as any other obligations that Employer may have to Employee, in return for certain payments described below; and WHEREAS, the Parties agree that it is in their mutual best interests to terminate the Employment Agreement effective as of the date of this Agreement; and WHEREAS, it is the desire of both parties that D. Reid continue as an employee of Employer on an at-will basis following termination of the Employment Agreement, maintaining, for the duration of the at-will employment, the current level of salary and health and dental insurance coverage presently in effect for the benefit of the Employee, and the parties agree to a mutual one month notice requirement to terminate the contemplated at-will employment. NOW, THEREFORE, in consideration of the foregoing Recitals, which shall be considered an integral part of this Agreement, and the mutual covenants and agreements set forth below, the parties hereby agree as follows: COVENANTS 1) Termination of Employment Agreement and Stock Option Agreement. --------------------------------------------------------------- a) The Employment Agreement is terminated effective immediately and Employee shall have no further rights thereunder. All payment or compensation to which Employee is entitled from Employer from this time forward is set forth in this Agreement. b) Notwithstanding the termination of the Employment Agreement, D. Reid will continue in the employ of U.S. Gold subsequent to this date as an at-will employee with a mutual one month notice requirement to terminate the at-will employment. As such, his employment may be terminated for no reason or any reason not prohibited by law. c) That certain Stock Option Agreement between the Employer and Employee dated November 6, 2003 is terminated as of the date of this Agreement for the consideration as set forth only in this Agreement. d) In connection with the termination of the Employment Agreement, Employee agrees, by way of example, and not by way of limitation, that: i) Employee is no longer entitled to monthly compensation under Section 3.1 of the Employment Agreement; ii) Employee is not entitled to any severance payment under Section 4.1.4 of the Employment Agreement; iii) Employee is no longer entitled to any employment benefits as described under Section 3.2 of the Employment Agreement; and iv) Employee is not entitled to payment for any other past, present or future obligations that the Employer may have had under the Employment Agreement. 2) Consideration to Employee. -------------------------- a) In consideration of the cancellation of the Employment Agreement, Employer agrees to pay Employee Three Hundred One Thousand Five Hundred Sixty Seven Dollars ($301,567.00) as a cash payment simultaneous with the execution of this Agreement. Payment may be made by electronic wire transfer, check, or any other cash arrangement acceptable to both parties. b) Employer agrees to grant and issue to Employee Two Hundred Seventy Five Thousand Seven Hundred Eighty Four (275,784) shares of common stock of U.S. Gold issued under and pursuant to Employer's Non-Qualified Stock Option and Stock Grant Plan valued at Forty Cents ($0.39) per share simultaneous with the execution of this agreement. c) Employer agrees to transfer 1,565,539 shares of Gold Resource Corporation ("GRC") stock (presently owned by Employer; the "GRC 2 Shares") to Employee simultaneous with the execution of this Agreement. For purposes of this Agreement, the Shares shall be valued at fair market value, as determined by Behre Dolbear & Company, Inc., in that certain fairness opinion prepared for Employer and dated July 25, 2005, and as discussed with tax counsel, the tax basis of the portion of the consideration related to the GRC Shares reported by Employer to the Internal Revenue Service shall be $92,366.80. d) In connection with the transfer of the GRC Shares to Employee, Employee represents and warrants as follows: i) Employee is acquiring the stock for its own account for the purpose of investment, and not with a view toward, or for sale in connection with, any distribution thereof. ii) Employee (i) has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of a proposed investment in GRC stock, or (ii) has been advised by attorneys, accountants, or other representatives having such knowledge and experience. iii) Employee understands and acknowledges that all of the GRC Shares will be "restricted securities" within the meaning of the Securities Act of 1933, as amended, (the "Securities Act") and applicable state securities law and agrees that the Certificate(s) shall bear the following or a substantially equivalent legend: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED UNLESS COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT, A "NO ACTION" LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION WITH RESPECT TO SUCH TRANSFER, OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY SUCH TRANSFER IS EXEMPT FROM SUCH REGISTRATION. Employee further understands and acknowledges that stop transfer instructions will be issued by GRC to its transfer agent with respect to the GRC Shares. iv) Employee understands and acknowledges that the GRC Shares will not be registered under the Securities Act, and accordingly, Employee recognizes that it may be required to bear the economic risk of its investment until such GRC Shares are registered. Employee agrees that it will only sell, transfer, pledge or hypothecate any of the GRC Shares pursuant to an effective 3 registration statement under the Securities Act or in a transaction wherein registration of the securities is not required. Neither GRC nor U.S. Gold has any obligation to register the GRC Shares to allow resale. v) The undersigned is an accredited investor within the meaning of Rule 501 of Regulation D of the Securities Act of 1933. 3) General Release and Indemnification. ------------------------------------ a) Release by Employee. -------------------- On behalf of his heirs, executors, administrators and assigns, Employee releases and forever discharges Employer, its subsidiaries, affiliates, successors, assigns, directors, officers, managers, representatives, shareholders, agents, employees and volunteers and their respective heirs, personal representatives, administrators and assigned (hereinafter collectively referred to as the "Employer Releasees"), from any and all Causes of Action (as defined below) arising from or relating to (1) termination of the Employment Agreement, and (2) Employer's obligations pursuant to the Employment Agreement. "Causes of Action" means any and all claims, demands, obligations, actions, lawsuits, judgments, liens or liabilities arising out of the numerous laws and regulations regulating employment, including, without limitation, the Civil Rights Act of 1866, 1871, 1964, and 1991; the Employee Retirement Income Security Act; the Equal Pay Act; the Fair Labor Standards Act; the National Labor Relations Act; the Occupational Safety and Health Act; the Older Workers Benefit Protection Act of 1990; the Consolidated Omnibus Budget Reconciliation Act; the Rehabilitation Act of 1973; Executive Order 11246; state anti-discrimination statutes; the Americans with Disabilities Act; the Age Discrimination in Employment Act; the Family Medical Leave Act; the state and federal Constitutions; municipal ordinances; as well as other statutes and the laws of contract, tort and any theory under common law or in equity. Notwithstanding the foregoing, Employee does not waive any rights conferred by statute to vested rights (if any) under any qualified retirement plan nor that certain Indemnification Agreement dated September 21, 2004. b) Waiver by Employee. ------------------- Employee agrees that the payments made to him pursuant to this Agreement are made in full and complete settlement and in full accord and satisfaction of all Causes of Action he has against the Employer Releasees relating to the termination of the Employment Agreement or Employer's obligations under the Employment Agreement. Employee waives all such Causes of Action he may have against the Employer Releasees 4 and covenants not to sue the Employer Releasees except for and to the extent of any obligations of Employer contained in this Agreement that are not performed. c) Employee's Rights Under the Older Workers Benefit Protection Act. ----------------------------------------------------------------- On July 2, 2005, Employee was advised in writing (i) to consult with an attorney before signing this Agreement; (ii) that he has twenty one (21) days in which to consider this Agreement; (iii) that he has seven (7) days after signing this Agreement to revoke the Agreement; (iv) that this Agreement will not be effective or enforceable until seven (7) days after the date Employee signs it; and (v) that Employee will not receive the monies payable pursuant to this Agreement until after the expiration of the revocation period referred to above. Employee understands and agrees that any revocation of this Agreement by him must be in writing and delivered to a duly authorized representative of the Employer during the revocation period. 4) Miscellaneous. -------------- a) No Admission of Liability. -------------------------- Employee understands and agrees that the acceptance of the above-mentioned payment is not to be construed in any way as an admission of liability on the part of the Employer Releasees, but, on the contrary, the Employer Releasees specifically deny any liability to Employee and the Parties recognize that this Agreement is a compromise of the Employer's obligations under the Employment Agreement. b) Backup Withholding. ------------------- Employee represents that he is not subject to backup withholding requirements and agrees to indemnify Employer for any liability incurred as a result of not withholding for payments made under the terms of this Agreement. c) Reliance on Representations. ---------------------------- Employee acknowledges that in executing this Agreement, he has not relied upon any representation or statement not set forth herein. d) Governing Law. -------------- This Agreement shall be deemed to have been made in the County of Jefferson, State of Colorado, and shall be interpreted and construed 5 and enforced in accordance with the laws of the State of Colorado and before the courts of the State of Colorado. e) Severability. ------------- If one or more paragraphs of this Agreement shall be ruled unenforceable, the remaining portions shall remain in full force and effect. f) Employee Acknowledgements. -------------------------- Employee has had an opportunity to consult an attorney before signing this Agreement. The terms of this Agreement are the result of a negotiated settlement. Employee has read this Agreement and understands its terms. Employee has had sufficient time in which to consider this Agreement. Employee enters into and signs this agreement knowingly, voluntarily, freely, of his own volition and with such consultation with counsel as he deemed appropriate. Employee is of lawful age and legally competent to enter into this Agreement. g) Entire Agreement. ----------------- The Parties understand and agree that this Agreement constitutes the entire agreement between them and supersedes and replaces any and all understandings, obligations, representations and agreements, whether written or oral, express or implied. I HAVE READ THE FOREGOING TERMINATION AGREEMENT AND GENERAL RELEASE. I FULLY UNDERSTAND THAT THIS AGREEMENT HAS IMPORTANT LEGAL CONSEQUENCES. I HAVE HAD AN OPPORTUNITY TO HAVE THE AGREEMENT FULLY EXPLAINED TO ME BY MY ATTORNEY AND I UNDERSTAND THE AGREEMENTS FINAL AND BINDING EFFECT, AND I AGREE THAT THE ONLY PROMISES TO ME TO SIGN THIS AGREEMENT ARE THOSE STATED ABOVE. /s/ David C. Reid July 28, 2005 David C. Reid ------------- Date U.S. GOLD CORPORATION, a Colorado corporation By: /s/ John W. Goth July 28, 2005 Title: Director Date 6 EX-10 6 exh10_3.txt Exhibit 10.3 TERMINATION AGREEMENT This Termination Agreement ("Agreement"), dated as of July 28, 2005, is made and entered into by and between U.S. Gold Corporation, a corporation organized and existing under the laws of the State of Colorado ("U.S. Gold" or "Employer") and William F. Pass, an individual ("W. Pass" or "Employee")(Employer and Employee may hereafter be collectively referred to as "Parties"). RECITALS WHEREAS, U.S. Gold and W. Pass entered into that certain Employment Agreement dated January 1, 1994, as amended June 1, 1995 and July 21, 1998 ("Employment Agreement"); and WHEREAS, the terms of the Employment Agreement, including provisions for ongoing compensation and a potential cash severance payment, appear to be an impediment to completion of certain corporate transactions that may be in the best interests of the shareholders of U.S. Gold, including a contemplated transaction; and WHEREAS, W. Pass is willing to terminate the Employment Agreement and compromise the form and amount of compensation provided for in the Employment Agreement, as well as any other obligations that Employer may have to Employee, in return for certain payments described below; and WHEREAS, the Parties agree that it is in their mutual best interests to terminate the Employment Agreement effective as of the date of this Agreement; and WHEREAS, it is the desire of both parties that W. Pass continue as an employee of Employer on an at-will basis following termination of the Employment Agreement, maintaining, for the duration of the at-will employment, the current level of salary and health and dental insurance coverage presently in effect for the benefit of the Employee, and the parties agree to a mutual one month notice requirement to terminate the contemplated at-will employment. NOW, THEREFORE, in consideration of the foregoing Recitals, which shall be considered an integral part of this Agreement, and the mutual covenants and agreements set forth below, the parties hereby agree as follows: COVENANTS 1) Termination of Employment Agreement and Stock Option Agreement. --------------------------------------------------------------- a) The Employment Agreement is terminated effective immediately and Employee shall have no further rights thereunder. All payment or compensation to which Employee is entitled from Employer from this time forward is set forth in this Agreement. b) Notwithstanding the termination of the Employment Agreement, W. Pass will continue in the employ of U.S. Gold subsequent to this date as an at-will employee with a mutual one month notice requirement to terminate the at-will employment. As such, his employment may be terminated for no reason or any reason not prohibited by law. c) That certain Stock Option Agreement between the Employer and Employee dated November 6, 2003 is terminated as of the date of this Agreement for the consideration as set forth only in this Agreement. d) In connection with the termination of the Employment Agreement, Employee agrees, by way of example, and not by way of limitation, that: i) Employee is no longer entitled to monthly compensation under Section 3.1 of the Employment Agreement; ii) Employee is not entitled to any severance payment under Section 4.1.4 of the Employment Agreement; iii) Employee is no longer entitled to any employment benefits as described under Section 3.2 of the Employment Agreement; and iv) Employee is not entitled to payment for any other past, present or future obligations that the Employer may have had under the Employment Agreement. 2) Consideration to Employee. -------------------------- a) In consideration of the cancellation of the Employment Agreement, Employer agrees to pay Employee Two Hundred Twenty Eight Thousand Four Hundred Ninety Seven Dollars ($228,497.00) as a cash payment simultaneous with the execution of this Agreement. Payment may be made by electronic wire transfer, check, or any other cash arrangement acceptable to both parties. b) Employer agrees to grant and issue to Employee Two Hundred Fourteen Thousand Two Hundred Forty Nine (214,249) shares of common stock of U.S. Gold issued under and pursuant to Employer's Non-Qualified Stock Option and Stock Grant Plan valued at Forty Cents ($0.39) per share simultaneous with the execution of this agreement. c) Employer agrees to transfer 1,186,207 shares of Gold Resource Corporation ("GRC") stock (presently owned by Employer; the "GRC 2 Shares") to Employee simultaneous with the execution of this Agreement. For purposes of this Agreement, the Shares shall be valued at fair market value, as determined by Behre Dolbear & Company, Inc., in that certain fairness opinion prepared for Employer and dated July 25, 2005, and as discussed with tax counsel, the tax basis of the portion of the consideration related to the GRC Shares reported by Employer to the Internal Revenue Service shall be $69,986.22. d) In connection with the transfer of the GRC Shares to Employee, Employee represents and warrants as follows: i) Employee is acquiring the stock for its own account for the purpose of investment, and not with a view toward, or for sale in connection with, any distribution thereof. ii) Employee (i) has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of a proposed investment in GRC stock, or (ii) has been advised by attorneys, accountants, or other representatives having such knowledge and experience. iii) Employee understands and acknowledges that all of the GRC Shares will be "restricted securities" within the meaning of the Securities Act of 1933, as amended, (the "Securities Act") and applicable state securities law and agrees that the Certificate(s) shall bear the following or a substantially equivalent legend: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED UNLESS COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT, A "NO ACTION" LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION WITH RESPECT TO SUCH TRANSFER, OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY SUCH TRANSFER IS EXEMPT FROM SUCH REGISTRATION. Employee further understands and acknowledges that stop transfer instructions will be issued by GRC to its transfer agent with respect to the GRC Shares. iv) Employee understands and acknowledges that the GRC Shares will not be registered under the Securities Act, and accordingly, Employee recognizes that it may be required to bear the economic risk of its investment until such GRC Shares are registered. Employee agrees that it will only sell, transfer, pledge or hypothecate any of the GRC Shares pursuant to an effective registration statement under the Securities Act or in a 3 transaction wherein registration of the securities is not required. Neither GRC nor U.S. Gold has any obligation to register the GRC Shares to allow resale. v) The undersigned is an accredited investor within the meaning of Rule 501 of Regulation D of the Securities Act of 1933. 3) General Release and Indemnification. ------------------------------------ a) Release by Employee. -------------------- On behalf of his heirs, executors, administrators and assigns, Employee releases and forever discharges Employer, its subsidiaries, affiliates, successors, assigns, directors, officers, managers, representatives, shareholders, agents, employees and volunteers and their respective heirs, personal representatives, administrators and assigned (hereinafter collectively referred to as the "Employer Releasees"), from any and all Causes of Action (as defined below) arising from or relating to (1) termination of the Employment Agreement, and (2) Employer's obligations pursuant to the Employment Agreement. "Causes of Action" means any and all claims, demands, obligations, actions, lawsuits, judgments, liens or liabilities arising out of the numerous laws and regulations regulating employment, including, without limitation, the Civil Rights Act of 1866, 1871, 1964, and 1991; the Employee Retirement Income Security Act; the Equal Pay Act; the Fair Labor Standards Act; the National Labor Relations Act; the Occupational Safety and Health Act; the Older Workers Benefit Protection Act of 1990; the Consolidated Omnibus Budget Reconciliation Act; the Rehabilitation Act of 1973; Executive Order 11246; state anti-discrimination statutes; the Americans with Disabilities Act; the Age Discrimination in Employment Act; the Family Medical Leave Act; the state and federal Constitutions; municipal ordinances; as well as other statutes and the laws of contract, tort and any theory under common law or in equity. Notwithstanding the foregoing, Employee does not waive any rights conferred by statute to vested rights (if any) under any qualified retirement plan nor that certain Indemnification Agreement dated September 21, 2004. b) Waiver by Employee. ------------------- Employee agrees that the payments made to him pursuant to this Agreement are made in full and complete settlement and in full accord and satisfaction of all Causes of Action he has against the Employer Releasees relating to the termination of the Employment Agreement or Employer's obligations under the Employment Agreement. Employee waives all such Causes of Action he may have against the Employer Releasees 4 and covenants not to sue the Employer Releasees except for and to the extent of any obligations of Employer contained in this Agreement that are not performed. c) Employee's Rights Under the Older Workers Benefit Protection Act. ----------------------------------------------------------------- On July 2, 2005, Employee was advised in writing (i) to consult with an attorney before signing this Agreement; (ii) that he has twenty one (21) days in which to consider this Agreement; (iii) that he has seven (7) days after signing this Agreement to revoke the Agreement; (iv) that this Agreement will not be effective or enforceable until seven (7) days after the date Employee signs it; and (v) that Employee will not receive the monies payable pursuant to this Agreement until after the expiration of the revocation period referred to above. Employee understands and agrees that any revocation of this Agreement by him must be in writing and delivered to a duly authorized representative of the Employer during the revocation period. 4) Miscellaneous. -------------- a) No Admission of Liability. -------------------------- Employee understands and agrees that the acceptance of the above-mentioned payment is not to be construed in any way as an admission of liability on the part of the Employer Releasees, but, on the contrary, the Employer Releasees specifically deny any liability to Employee and the Parties recognize that this Agreement is a compromise of the Employer's obligations under the Employment Agreement. b) Backup Withholding. ------------------ Employee represents that he is not subject to backup withholding requirements and agrees to indemnify Employer for any liability incurred as a result of not withholding for payments made under the terms of this Agreement. c) Reliance on Representations. ---------------------------- Employee acknowledges that in executing this Agreement, he has not relied upon any representation or statement not set forth herein. d) Governing Law. -------------- This Agreement shall be deemed to have been made in the County of Jefferson, State of Colorado, and shall be interpreted and construed 5 and enforced in accordance with the laws of the State of Colorado and before the courts of the State of Colorado. e) Severability. ------------- If one or more paragraphs of this Agreement shall be ruled unenforceable, the remaining portions shall remain in full force and effect. f) Employee Acknowledgements. -------------------------- Employee has had an opportunity to consult an attorney before signing this Agreement. The terms of this Agreement are the result of a negotiated settlement. Employee has read this Agreement and understands its terms. Employee has had sufficient time in which to consider this Agreement. Employee enters into and signs this agreement knowingly, voluntarily, freely, of his own volition and with such consultation with counsel as he deemed appropriate. Employee is of lawful age and legally competent to enter into this Agreement. g) Entire Agreement. ----------------- The Parties understand and agree that this Agreement constitutes the entire agreement between them and supersedes and replaces any and all understandings, obligations, representations and agreements, whether written or oral, express or implied. I HAVE READ THE FOREGOING TERMINATION AGREEMENT AND GENERAL RELEASE. I FULLY UNDERSTAND THAT THIS AGREEMENT HAS IMPORTANT LEGAL CONSEQUENCES. I HAVE HAD AN OPPORTUNITY TO HAVE THE AGREEMENT FULLY EXPLAINED TO ME BY MY ATTORNEY AND I UNDERSTAND THE AGREEMENTS FINAL AND BINDING EFFECT, AND I AGREE THAT THE ONLY PROMISES TO ME TO SIGN THIS AGREEMENT ARE THOSE STATED ABOVE. /s/ William F. Pass July 28, 2005 William F. Pass Date U.S. GOLD CORPORATION, a Colorado corporation By: /s/ John W. Goth July 28, 2005 Title: Director Date 6 -----END PRIVACY-ENHANCED MESSAGE-----