AGREEMENT TO CONVERT DEBT  

 

 

THIS AGREEMENT is made and entered into effective the 24 ^TH day of July, 2018, by and between MAGELLAN GOLD CORPORATION, a Nevada corporation ("Magellan" or the "Company"), and W. PIERCE CARSON (Claimant").

 

WITNESSETH  

 

WHEREAS, the Company, or an affiliate of the Company, has an outstanding debt with Claimant in the particulars hereinbelow set forth; and

 

WHEREAS, the Company desires to satisfy that obligation by the issuance to Claimant of shares of common stock of the Company ("Shares"); and

 

WHEREAS, Claimant is willing to accept said Shares in lieu of cash or money in payment of Magellan’s obligation to Claimant;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinbelow set forth, and for such good and other valuable consideration, the receipt and sufficiency whereof is hereby acknowledged, the parties agree as follows:

 

SECTION I.:     CONVERSION OF DEBT

 

A. Claimant and Magellan affirm and agree that as of the date of this Agreement, Magellan is indebted to Claimant for $90,000.00 in accrued but unpaid executive compensation for the fiscal quarters ending December 31, 2017, March 31, 2018 and June 30, 2018 and a cash advance of $8,100 made by Claimant to the Company. 

 

B. Claimant, for his successors in interest and assigns, agrees to accept, as payment in full of $90,000 in accrued but unpaid executive compensation for the periods stated in Section I(A) above and in repayment of the cash advance of $8,100 made to the Company (the "Indebtedness"), an aggregate of 4,905,000 Shares of Common Stock, valued at $0.02 per Share.  It is understood that Claimant's acceptance of the Shares in payment of the Indebtedness shall not discharge or otherwise satisfy the outstanding indebtedness and obligation of Magellan to Claimant in excess of the Indebtedness.  . 

 

C. Claimant agrees that upon delivery to Claimant by Magellan of a certificate or certificates representing 4,905,000 Shares, said Shares being validly issued, fully paid and non-assessable, and Claimant's acceptance of such Shares, Claimant, for its successors in interest and assigns, agrees to release and forever discharge Magellan, its officers, directors, shareholders, affiliates, employees and agents, from any liability, payment or obligation whatsoever in connection with or arising out of the Indebtedness.  Claimant's acceptance of such Shares shall constitute a full and complete release, settlement and discharge of any of Magellan’s obligation to Claimant, in connection with the Indebtedness, without the necessity of Claimant executing any further documentation, release or settlement agreement; it being the express understanding of the parties hereto that this Agreement, upon its performance, shall constitute such evidence of release and discharge. 

 

D. With respect to accepting the Shares in lieu of other forms of payment of the Indebtedness, Claimant represents and warrants as follows: 

 

1. Claimant fully understands and agrees that the Shares are offered by Magellan at a price which was arbitrarily determined without regard to any value of the Shares. 

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2. Claimant fully understands that Magellan has a limited net worth. 

 

3. Claimant acknowledges receipt of such information as he deems necessary or appropriate as a prudent and knowledgeable investor in evaluating the conversion of the obligation.  The Claimant acknowledges that Magellan has made available to him the opportunity to obtain additional information to evaluate his status as an unsecured creditor and the alternatives available to him.  The Claimant acknowledges that he had an opportunity to ask questions of Magellan and to the extent he availed himself of such opportunity, he received satisfactory answers from Magellan, or its affiliates. 

 

4. Claimant understands that there exist inherent risks in accepting the Shares in lieu of payment of the obligation, which risks include, but are not limited to, the lack of liquidity of the Shares, and the Company's history of unprofitable operations.  Claimant agrees to accept all risks associated with converting the Indebtedness and accepting the Shares in lieu of payment thereof. 

 

SECTION II:     REPRESENTATIONS AND WARRANTIES BY MAGELLAN:

 

Magellan represents and warrants to Claimant that, as of the date of this Agreement, and as of the date of closing:

 

A. Organization and Corporation Power . 

 

The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Nevada; and has all required corporate power and authority to own its property and to carry on its business as now being conducted, and to carry out the transactions contemplated hereby.

 

B. Authorization . 

 

1. The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated hereby will not, violate any provision of any charter, articles of incorporation, by-law, mortgage, lien, lease, agreement, contract, instrument, order judgment, or decree to which the Company is a party, or by which it is bound, and will not violate any other restriction of any other kind or character of which Company is subject. 

 

2. The Directors of the Company have taken or will take all action required by law, the Company's Articles of Incorporation and Bylaws, or otherwise, to authorize execution and delivery of this Agreement, the shares and the consummation of the transactions described herein. 

 

3. This Agreement, upon execution and delivery in accordance herewith, is the valid and binding obligation of the Company, enforceable in accordance with its terms, subject to the terms of bankruptcy and similar laws, and any rules and regulations adopted thereunder.  The execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate and other action. 

 

C. Capitalization . 

 

 

There are sufficient authorized Shares of the Company to cover the issuance of all shares to be issued and sold pursuant to this Agreement.  There are no restrictions on the transferability of shares of the Company's Shares imposed by or pursuant to the Company's Articles of Incorporation, or the Company's Bylaws, or by agreement to which the Company is a party, except for restrictions imposed by or on account of federal and state securities laws.  

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SECTION III.: REPRESENTATIONS AND WARRANTIES BY CLAIMANT  

 

    Claimant represents and warrants to Magellan that, as of the date of this Agreement, and as of the date of closing, the following are true and accurate to its knowledge and belief: 

 

    A. No Other Information Relied Upon . 

 

Claimant represents, warrants and agrees that he has been afforded the opportunity to make, and has made, all such investigation of Magellan and its financial condition, business, affairs and prospects as he deems appropriate.  Claimant acknowledges receipt of such information as he deems necessary or appropriate as a prudent and knowledgeable investor in evaluating the exchange of the shares.  Claimant acknowledges that Magellan has made available to him the opportunity to obtain additional information to evaluate the merits and risks of this exchange.  Claimant acknowledges that he has had the opportunity to ask questions of Magellan, and, to the extent he availed himself such opportunity, he received satisfactory answers from Magellan, its affiliates, associates, officers and directors.

 

    B. Nature of the Risk . 

 

Claimant represents, warrants and agrees that he understands that Magellan’s business  is, by its nature, speculative; that Claimant is aware that the financial resources of Magellan are extremely limited and that it is very likely that the Company will require additional capital, and there is no assurance that such capital will be available if necessary; that Claimant is familiar with the high degree of risk that is involved in the Company's business, and that Claimant is financially able and willing to accept the substantial risk involved in such investment, including the risk of loss of the entire amount invested.

 

    C. Unregistered Shares . 

 

Claimant represents that he understands that the Magellan shares of common stock have not been registered for sale under federal or state securities laws and that said securities are being issued to Claimant pursuant to a claimed exemption from the registration requirements of such laws which is based upon the fact that said securities are not being offered to the public.  Claimant understands that in order to satisfy such requirement he must be acquiring the shares with no view to making a public distribution of said securities and the representations and warranties contained in this Section III are given with the intention that Magellan may rely thereon for purposes of claiming such exemption; and that he understands that he must bear the economic risk of his investment in the securities for a substantial period of time, because the securities have not been registered under the federal or state securities laws, and cannot be sold unless subsequently registered under such laws, or unless an exemption from such registration is available.

 

 

    D. Securities Acquired for Investment; Limitations on Dispositions . 

 

Claimant represents that he is acquiring the securities for his own account and for investment and not with a view to, or for sale in connection with, any distribution thereof in violation of the Securities Act of 1933, as amended. Claimant agrees that the stock will not be offered for sale, sold or otherwise transferred for value and that no transfer thereof will be made by the Claimant unless (a) a registration statement with respect thereto has become effective under the Securities Act of 1933, as amended, or (b) there is presented to the Company an opinion of counsel for Claimant reasonably satisfactory to the Company that such registration is not required, or (c) there is presented to the Company a letter from the Securities and Exchange Commission (said Commission having been informed of all relevant circumstances) to the effect that in the event either the securities are transferred by Claimant

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without such registration the Commission or the staff will not recommend any action.  Claimant further agrees that the securities will not be offered for sale, sold or otherwise transferred unless, in the opinion of legal counsel for Magellan, such sale or disposition does not and will not violate any provisions of any federal or state securities law or regulation.  Claimant consents that any transfer agent of the Company may be instructed not to transfer any of the securities unless it receives satisfactory evidence of compliance with the foregoing provisions and that there may be endorsed upon any certificates (or instruments issued in substitution therefor), the Company's regular legend regarding the sale of restricted securities.

 

SECTION IV.: MISCELLANEOUS  

 

    A. Payment of Expenses of Prevailing Party in Dispute . 

 

Unless otherwise specifically provided for herein, in the event that there is a dispute concerning this Agreement, including, without limitation, the issue of compliance with any term of this Agreement, the court may in its discretion, direct that the prevailing party shall be entitled to reimbursement from the other party of reasonable attorneys' fees and other expenses incurred in resolving the said dispute.

 

    B. Survival and Incorporation of Representations . 

 

The representations, warranties, covenants and agreements made herein or in any certificates or documents executed in connection herewith shall survive the execution and delivery thereof, and all statements contained in any certificate or other document delivered by the Company hereunder or in connection herewith shall be deemed to constitute representations and warranties made by the Company in this Agreement.

 

    C. Amendments and Waivers . 

 

This Agreement may not be amended, nor may compliance with any term, covenant, agreement, condition or provision set forth herein be waived (either generally or in a particular instance and either retroactively or prospectively) unless such amendment or waiver is agreed to in writing by all parties hereto.

 

    D. Governing Law . 

 

This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Colorado.

 

 

    E. Counterparts . 

 

This Agreement may be executed by telex, telecopy or other facsimile transmission, and such facsimile transmission shall be valid and binding to the same extent as if it were an original.  Further, this Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall together constitute one agreement.

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    F. Severability . 

 

Wherever there is any conflict between any provision of this Agreement and any statute, law, regulation or judicial precedent, the latter shall prevail, but in such event the provisions of this Agreement thus affected shall be curtailed and limited only to the extent necessary to bring it within the requirement of the law.  In the event that any part, section, paragraph or clause of this Agreement shall be held by a court of proper jurisdiction to be invalid or unenforceable, the entire Agreement shall not fail on account thereof, but the balance of the Agreement shall continue in full force and effect unless such construction would clearly be contrary to the intention of the parties or would result in unconscionable injustice.

 

    G. Entire Agreement . 

 

This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof.  There are no representations, warranties, conditions, or obligations except as herein specifically provided.  Any amendment or modification hereof must be in writing.

 

    IN WITNESS WHEREOF , the parties have signed the Agreement the date and year first above written. 

 

 

MAGELLAN GOLD CORPORATION

A Nevada corporation

 

 

By: /s/ John C. Power  

John C. Power, Director 

 

 

CLAIMANT:

 

By:   /s/ W. Pierce Carson

W. Pierce Carson 

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AGREEMENT FOR RESTRICTED STOCK AWARD

 

THIS AGREEMENT FOR RESTRICTED STOCK AWARD is made and entered into effective this 24 ^TH  day of July, 2018, by and between MAGELLAN GOLD CORPORATION , a Nevada corporation (the “Company”), and W. Pierce Carson (“Employee”). 

 

1. Background of Agreement .  The undersigned Employee is a key Employee of the Company serving as President and Chief Executive Officer.  Employee is currently providing and intends to continue to provide services to the Company.  This Agreement is entered into for the purposes of: 

 

a. Vesting stock ownership in the hands of persons such as Employees who are active in the affairs of the Company; and 

 

b. Protecting the Company and its shareholders against Key personnel turnover, which would be detrimental to the Company’s development. 

 

The parties agree that they shall have the rights and obligations described herein and that Employee shall not transfer, sell or assign any of the shares of the Company’s common stock now owned or hereafter acquired except as set forth in this Agreement and as set forth in the Shareholders’ Agreement executed by the undersigned Employee as a condition to this Agreement.

 

2. Restricted Stock Award .  The Company agrees to issue to Employee as of the date of this Agreement a number of shares of the Company’s common stock, $.001 par value (the “Common Stock”), set forth below (“Stock Award”), which shares shall be “restricted securities” under the Securities Act of 1933, as amended (the “Securities Act”) and subject to the following vesting: 

 

Number of Shares	Vesting Schedule
1,000,000	Fully vested upon the execution of an agreement to purchase the El Dorado mine on or before August 31, 2018
1,000,000	Fully vested six months from the date of this Agreement
1,000,000	Fully vested 12 months from the date of this Agreement
1,000,000	Fully vested 18 months from the date of this Agreement

 

To be vested, Employee must be in continuing service as an employee of the Company on each vesting date. All shares granted in this Stock Award shall be fully vested in the event the Company consummates a Change in Control transaction, as defined in Section 8 below.  It is understood and agreed that when granted and issued, all shares of the Company’s Common Stock awarded to Employee shall be fully paid and nonassessable shares of the Company’s authorized capital stock. Should any condition to vesting of any of the foregoing grant tranches be unsatisfied, all Shares granted within such tranche shall be forfeited without proration. 

 

It is agreed that all Shares subject to vesting shall remain uncertificated until fully vested, whereupon the vested Shares shall be evidenced by a certificate registered in the name of Employee. 

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3. Restrictions on Transfer.  

         (a)     Employee agrees that the Company (or a representative of the underwriters) may, in connection with the first underwritten registration of the offering of any securities of the Company under the Securities Act, require that Employee not sell, dispose of, transfer, pledge, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, any shares of Common Stock or other securities of the Company held by Employee under the Award, for a period of time specified by the underwriter(s) (not to exceed one hundred eighty (180) days) following the effective date of the registration statement of the Company filed under the Securities Act (or such longer period, not to exceed eighteen (18) days after expiration of the one hundred eighty (180) day period, as the Company or the underwriters shall request in order to facilitate compliance with NASD Rule 2711).

         (b)     Employee agrees to execute and deliver such other agreements as may be reasonably requested by the Company and/or the underwriter(s) that are consistent with the foregoing or that are necessary to give further effect thereto. In addition, if requested by the Company or the representative of underwriters of Common Stock of the Company, Employee shall provide, within ten (10) days of such request, such information as may be required by the Company or such representative in connection with the completion of any public offering of the Company's securities pursuant to a registration statement filed under the Securities Act. The obligations described in this Section shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a Commission Rule 145 transaction on Form S-4 or similar forms that may be promulgated in the future. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to your Common Stock until the end of such lock-up period.

4. Restrictive Legends .     The shares issued under this Award shall be endorsed with the legends set forth below or legends substantially equivalent thereto, as determined by the Company it its sole discretion, together with any other legends that may be required by the Company or by state or federal securities laws:  

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF A RESTRICTED STOCK AWARD AGREEMENT, DATED AS OF JULY __, 2018, BETWEEN THE COMPANY AND THE HOLDER OF THIS STOCK.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.

THE HOLDER OF THIS STOCK MAY NOT SELL, TRANSFER OR DISPOSE OF THIS STOCK (EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "ACT")) WITHOUT FIRST DELIVERING TO THE COMPANY AN OPINION OF COUNSEL (REASONABLY ACCEPTABLE IN FORM AND SUBSTANCE TO THE COMPANY) THAT NEITHER REGISTRATION NOR QUALIFICATION

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UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS IS REQUIRED IN CONNECTION WITH SUCH TRANSFER.

5. Payroll Tax Considerations .  The Company and Employee acknowledge and agree that the Stock Award issued to Employee pursuant to the provisions of this Agreement shall represent a bonus to Employee for valuable services rendered to the Company to the extent of the fair market value of such shares of Common Stock on the date of award.  Employee agrees and affirms that the determination of the fair market value of such shares of Common Stock shall be made by the Company, in consultation with its accountants, and that such determination of fair market value by the Company shall be conclusive, final and binding upon Employee.  It shall be a condition precedent to Employee’s right to receive the Stock Award that the Company be permitted to withhold or make appropriate arrangement, to the satisfaction of the Company, to withhold all federal, state and other payroll taxes which are customarily deducted by the Company from other compensation payable to Employee in the ordinary course of business.  At the Company’s election, the Company may, but shall be under no obligation, make arrangements to loan to Employee an amount sufficient to pay the payroll taxes which may be due and owing in connection with the Stock Award, and to secure the repayment of such loan by pledge of collateral, including shares of the Company’s Common Stock issued in the Stock Award as the Company may determine is necessary and commercially reasonable. 

 

6. Arbitration .  Any dispute arising from or related to this Agreement shall be resolved by arbitration before a representative of the Judicial Arbiter Group of Denver, Colorado, or such other arbitrator as the parties may select.  Should the parties be unable to select an arbitrator themselves from those available through the Judicial Arbiter Group, they shall each select an arbitrator from those available through the Judicial Arbiter Group, and those arbitrators shall select another arbitrator and that arbitrator shall then arbitrate the dispute between the parties.  Any award issued in connection with such arbitration shall be binding and final upon the parties.  In any such proceeding, the prevailing part shall be entitled to their costs incurred in connection with such proceeding, including their attorneys’ fees. 

7. Miscellaneous.  

         (a)    The rights and obligations of the Company under this Award shall be transferable to any one or more persons or entities, and all covenants and agreements hereunder shall inure to the benefit of, and be enforceable by the Company's successors and assigns. Employee’s rights and obligations under this Award may only be assigned with the prior written consent of the Company.

         (b)     Employee agrees upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of this Award.

         (c)     Employee acknowledges and agrees that Employee has reviewed this Award in its entirety, has had an opportunity to obtain the advice of counsel prior to executing and accepting this Award and fully understands all provisions of this Award.

         (d)     The interpretation, performance and enforcement of this Award shall be governed by the laws of the State of Colorado without resort to that State's conflict-of-laws rules.

8. Change in Control .   For the purposes of this Agreement, a “Change in Control” means: (a) the consummation of a merger or consolidation of the Company with or into another entity or any other transaction, the stockholders of the Company immediately prior to such merger, consolidation or other transaction own or beneficially own immediately after such  

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merger, consolidation or other transaction 50% or more of the voting power of the outstanding securities of each of (i) the continuing or surviving entity and (ii) any direct or indirect parent entity of such continuing or surviving entity; (b) the sale, transfer or other disposition of all or substantially all of the Company’s assets to a Person which is not owned or controlled by the Company or its stockholders immediately prior to such sale, transfer or other disposition; (c) individuals who, immediately following the effective date of this Agreement, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director thereafter whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board; or (d) any transaction as a result of which any Person is the “Beneficial Owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing at least 20% of the total voting power represented by the Company’s then outstanding voting securities.  For purposes of this definition of Change in Control, the term “Persons” means, acting individually or as a group, an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, association, government agency or political subdivision thereof or other entity.

 

IN WITNESS WHEREOF , the parties have duly executed this Agreement as of the date and year first above written. 

 

MAGELLAN GOLD CORPORATION  

a Nevada corporation 

 

 

 

By: /s/ John C. Power  

Its: Director 

 

EMPLOYEE:  

 

 

/s/ W. Pierce Carson  

W. Pierce Carson 

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