http://biz.yahoo.com/e/090512/slglf.ob8-k.html
12-May-2009
Entry into a Material Definitive Agreement, Unregistered Sale of Equity
Item 1.01 Entry into a Material Definitive Agreement
On May 6, 2009, Silverado Gold Mines Ltd. (the "Registrant") entered into an Equity Line Of Credit Agreement (the "Equity Line Agreement") with Ashborne Finance Ltd., a British Virgin Islands corporation ("Ashborne").
Pursuant to the Equity Line Agreement, the Registrant may issue and sell to Ashborne, at the Registrant's sole option, shares of the Registrant's restricted common stock in an aggregate amount equal to at least US $3,000,000 and up to US $100,000,000, subject to certain terms and conditions. The Equity Line Agreement allows the Registrant to deliver an Advance Notice to Ashborne at any time during the Commitment Period setting forth the amount of the Advance requested by the Registrant. The number of shares of common stock to be issued to Ashborne in respect of a particular Advance shall be determined by dividing the amount of the Advance by the Purchase Price (i.e., 70% of the Market Price if same is less than $1.00, or 80% of the Market Price if same exceeds $1.00) . An Advance Notice may not (i) set forth an amount that exceeds the Maximum Advance Amount (i.e., 15% of the aggregate daily trading volume of the Registrant's common stock for the 20 consecutive Trading Days immediately preceding a particular Advance Notice Date), (ii) be delivered less than 20 Trading Days after the delivery of the preceding Advance Notice, or (iii) require an issuance of shares that would cause the aggregate number of shares of the Registrant's common stock owned by Ashborne and its affiliates to exceed 9.99% of the then total number of issued and outstanding shares of the Registrant's common stock.
Upon execution of the Equity Line Agreement, the parties immediately effected an Initial Advance pursuant to which the Registrant issued 25,000,000 shares of its restricted common stock to Ashborne at a per share purchase price of $0.01, resulting in aggregate proceeds to the Registrant of US $250,000. The Registrant also issued to Ashborne, as payment of the Commitment Fee under the Equity Line Agreement, 100,000,000 shares of its restricted common stock. The Equity Line Agreement grants the Registrant certain buyback rights with respect to the 125,000,000 shares issued to Ashborne. Both of the foregoing issuances were made under Rule 903 of Regulation S of the Securities Act of 1933 (the "Act").
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