Initial Public Offering (IPO): Registration Statement (General Form) — Form S-1 Filing Table of Contents
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number,
including area code, of agent for
service)
Approximate date of commencement of
proposed sale to the public: As soon as practicable after this
Registration Statement becomes effective.
If
any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box:
[X]
If
this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering.
[ ]
If
this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering.
[ ]
If
this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering.
[ ]
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer”,
“accelerated filer” and “smaller reporting company in Rule 12b-2 of the
Exchange Act.
Non-accelerated
filer [ ] (Do not check if a smaller
reporting
company) Smaller
reporting company [
X ]
Page
- 1
CALCULATION
OF REGISTRATION FEE
Title
of Each Class of
Securities
To Be Registered
Amount
to be
registered
Proposed
Maximum
Offering
Price
per
Unit [1]
Proposed
Maximum
Aggregate
Offering
Price [1]
Amount
of
Registration
Fee
Units,
each consisting of one share of Common Stock,
$0.001
par value, and one Warrant, to be registered by issuer
15,000,000
Units
$0.10
$1,500,000
$58.95
Shares
of Common Stock included as part of the Units,
to
be registered by issuer
15,000,000
shares
-
-
-
[3]
Warrants
included as part of the Units, to be registered by issuer
15,000,000
Warrants
-
-
-
[3]
Shares
of Common Stock underlying the Warrants included in the Units, to be
registered by issuer [2]
15,000,000
shares
$0.15
$2,250,000
$88.43
Shares
of Common Stock: $0.001 par value,
to
be registered by selling shareholders
64,630,000
shares
$0.10
$6,463,000
$254.00
Total
-
-
$10,213,000
$401.38
[1] Estimated
in accordance with Rule 457(c) solely for the purpose of calculating the
registration fee based on a bona fide estimate of the maximum offering
price.
[2] These
are the maximum number of shares of common stock that can be issued if all
of the share purchase warrants underlying the unit offering are
exercised. The maximum offering price is based upon the
exercise price of the warrants.
[3] No
fee pursuant to Rule 457(g).
THE
REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS
MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A
FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
Page
- 2
The
information in this prospectus is not complete and may be changed.
Wolverine and the selling shareholders may not sell these securities until
the registration statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these securities and it is
not soliciting an offer to buy these securities in any state where the offer or
sale is not permitted.
Subject
to Completion
Dated
*, 2008
Prospectus
WOLVERINE
EXPLORATION INC.
15,000,000
Units
and
64,630,000
Shares Common Stock
Wolverine
Exploration Inc. (“Wolverine”) is offering up to
15 million units which as of this date have not been issued. Each
unit consists of one share of common stock in the capital of Wolverine and one
non-transferable share purchase warrant. Each warrant enables the
subscriber to purchase one additional share of common stock at a price of
US$0.15 per warrant for a period of two years from the date the units are
issued.
Additionally,
the selling shareholders named in this prospectus are offering to sell up to
64,630,000 shares of Wolverine’s common stock held by them. Wolverine will not
receive any proceeds from the sale of the shares of common stock being offered
by the selling shareholders. However, Wolverine will pay for the
expenses of this offering and the selling stockholders’ offering, except for any
selling shareholder’s legal or accounting costs or commissions.
Wolverine
is offering a maximum 15 million units on a self underwritten
basis. The offering price is $0.10 per unit. There is no minimum
number of units that Wolverine will sell. All proceeds will be
deposited to Wolverine’s operating account and there will be no refunds. The
offering will be open until (Effective Date + 180 days). There are no
minimum unit purchase requirements for individual investors.
Wolverine
is a startup exploration stage company with no operations.
Wolverine’s
shares of common stock are not quoted on any national securities
exchange. The selling shareholders are required to sell Wolverine’s
shares at $0.10 per share until Wolverine’s shares are quoted on the
Over-the-Counter Bulletin Board (OTCBB), and thereafter at prevailing market
prices or privately negotiated prices.
This
investment involves a high degree of risk. See “Risk
Factors” beginning on page 7 for a discussion of certain risk factors and
uncertainties you should carefully consider before making a decision to purchase
any shares of Wolverine’s common stock.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is
truthful or complete. Any representation to the contrary is a
criminal offense.
Page
- 3
Table
of Contents
Prospectus
Summary
5
Risk
Factors
7
Use of
Proceeds
9
Determination of Offering
Price
10
Dilution
10
Selling
Shareholders
11
Plan of
Distribution
15
Description of Securities to be
Registered
17
Interests of Named Experts and
Counsel
19
Description of
Business
19
Description of
Property
26
Legal
Proceedings
26
SEC
Filings
26
Market for Common Equity and
Related Stock Matters
Management Discussion and
Analysis of Financial Condition
32
Changes in Disagreements With
Accountants on Accounting and Financial Disclosure
38
Directors, Officers, Promoters,
and Control Persons
38
Executive
Compensation
39
Security Ownership of Certain
Beneficial Owners and Management
40
Transactions with Related
Persons, Promoters, and Certain Control Persons
41
Disclosure of Commission
Position of Indemnification for Securities Act
Liabilities
42
You
should rely only on the information contained in this prospectus. Wolverine has
not authorized anyone to provide you with information different from that
contained in this prospectus. Wolverine and the selling stockholders
are offering to sell shares of Wolverine’s common stock and seeking offers to
buy shares of Wolverine’s common stock only in jurisdictions where such offers
and sales are permitted. You should assume that the information
appearing in this prospectus is accurate only as of the date on the front cover
of this prospectus. Wolverine’s business, financial condition,
results of operations and prospects may have changed since that
date.
Page
- 4
Prospectus Summary
The
following summary is a shortened version of more detailed information, exhibits
and financial statements appearing elsewhere in this
prospectus. Prospective investors are urged to read this prospectus
in its entirety.
Wolverine
is a startup company in the business of base and precious metal
exploration. There is no assurance that a commercially viable deposit
exists on Wolverine’s mineral claims. Exploration will be required
before a final evaluation as to the economic and legal feasibility of
Wolverine’s mineral claims is determined.
On
February 28, 2007 Wolverine acquired a 90% interest in 516 mineral claims from
Shenin Resources Inc. for the aggregate cost of $374,000.
On May17, 2007, Wolverine acquired an additional six mineral claims from Richard
Haderer for the cost of $360.
All 522
mineral claims are in the Province of Newfoundland and Labrador in Canada (the
“Labrador
Claims”). The Labrador Claims are located about 120 kilometres
(76 miles) west of Goose Bay, Labrador, which is near the Atlantic Coast in
northern Canada. Infrastructure required for exploration, advanced
exploration and even mining are excellent given the proximity of the property to
Goose Bay, Labrador, which has an international airport and a number of
exploration outfitters.
Wolverine’s
consulting geophysicist has written a report dated May 25, 2007, providing
management with recommendations of how Wolverine should explore the Labrador
Claims. From the work conducted on the Labrador Claims to date, there
is indication of possible gold and copper mineralization, but additional work
needs to be conducted on the Labrador Claims to prove such
mineralization.
Wolverine’s
objective is to conduct exploration activities on the Labrador Claims to assess
whether the property possesses any commercially viable
deposits. Until Wolverine can validate otherwise, the Labrador Claims
are without known reserves. Management is planning a five phase
exploration program to explore the Labrador Claims. Access to the
Labrador Claims is restricted to the period of May to November of each year due
to snow in the area. This means that Wolverine’s exploration
activities are limited to a period of about six to seven months per
year. Wolverine completed Phase One and Phase Two of its exploration
program in October of 2007. The following table summarizes the next
three phases of Wolverine’s proposed exploration program:
Phase
Number
Planned
Exploration Activities
Time
Table
Three
Ground
Review
Summer
2008
Four
Excavating,
Surface Trenching and an Induced Polarization Survey
Summer-Fall
2008
Five
Drill
Program
Fall
2008
To date
Wolverine has raised $759,400 via offerings completed between April 2006 and
June 2008. The following table summarizes the date of offering, the
price per share paid, the number of shares sold, and the amount raised for these
three offerings.
Wolverine
has no revenues, has achieved losses since inception, has no operations, has
been issued a going concern opinion by its auditor and relies upon the sale of
its shares of common stock to fund its operations.
The
following is a brief summary of this offering.
Securities
being offered to new and current investors:
Up
to a maximum of 15 million units with no minimum purchase. Each
unit consists of one share of common stock and one warrant exercisable at
$0.15 per warrant for a period of two years.
Securities
being offered by selling shareholders:
64,630,000
shares of common stock
(These
shares are being registered by Wolverine for resale on behalf of existing
shareholders.)
Offering
price:
$0.10
Offering
period:
The
shares are being offered for a period not to exceed 180 days following the
effective date of this registration statement.
Net
proceeds to Wolverine
(assuming
that all units are sold
and
no warrants exercised):
Up
to a maximum of $1,432,000.
Use
of proceeds:
To
fund exploration work, ongoing operations, and to pay for offering
expenses.
Number
of shares outstanding before the offering:
68,630,000
Number
of shares outstanding after the offering
(assuming
that all units are sold
and
no warrants exercised):
83,630,000
Summary
Financial Information
The
tables and information below are derived from Wolverine’s audited financial
statements for the year-ended May 31, 2007 and the period ended May 31, 2006 and
from Wolverine’s unaudited financial statements for the nine months ended
February 29, 2008. Wolverine had a working capital deficit of $92,277
and $105,874 as at February 29, 2008 and May 31, 2007 respectively.
The
book value of Wolverine’s outstanding common stock is $0.01 per share as at May31, 2007.
Page
- 6
Risk Factors
An
investment in the common stock of Wolverine involves a number of very
significant risks. You should carefully consider the following known
material risks and uncertainties in addition to other information in this
prospectus in evaluating Wolverine and its business before purchasing shares of
Wolverine‘s common stock. Wolverine’s business, operating results and
financial condition could be seriously harmed due to any of the following known
material risks. The risks described below are not the only ones
facing Wolverine. Additional risks not presently known to Wolverine
may also impair its business operations. You could lose all or part
of your investment due to any of these risks.
If
Wolverine does not obtain additional financing, the business plan will
fail.
Wolverine’s
current operating funds are insufficient to complete the next phases of its
proposed exploration program on its Labrador mineral
claims. Wolverine will need to obtain additional financing in order
to complete its business plan and its proposed exploration
program. Wolverine’s business plan calls for significant expenses in
connection with the exploration of the Labrador Claims. Wolverine has
not made arrangements to secure any additional financing.
Wolverine’s
failure to make required expenditures could cause us to lose title to the
mineral claim.
Under the
terms of the Vend-In Agreement with Shenin Resources Inc., Wolverine is required
to incur the following expenditures on the claims (i) CDN $150,000 on or before
March 1, 2008; (ii) CDN $200,000 on or before March 1, 2009, and (iii) CDN
$250,000 on or before March 1, 2010; provided that (iv) any excess amount spent
in one year may be carried forward and applied towards fulfillment of the
expenditure required in the later year. As a result of its completion
of Phase One and Phase Two of the proposed exploration program, Wolverine has
met its March 1, 2008 expenditure requirements. However, there is no
assurance that Wolverine can fulfill the other expenditure requirements and may
lose title to the Labrador Claims.
Because
Wolverine has only recently commenced business operations, Wolverine faces a
high risk of business failure and this could result in a total loss of your
investment.
Wolverine
has recently begun the initial stages of exploration of the Labrador Claims, and
thus has no way to evaluate the likelihood whether Wolverine will be able to
operate its business successfully. Wolverine was incorporated on
February 23, 2006 and to date has been involved primarily in organizational
activities, obtaining financing and preliminary exploration of the Labrador
Claims. Wolverine has not earned any revenues and Wolverine has never
achieved profitability as of the date of this prospectus. Potential
investors should be aware of the difficulties normally encountered by new
mineral exploration companies and the high rate of failure of such
enterprises. The likelihood of success must be considered in the
light of problems, expenses, difficulties, complications and delays encountered
in connection with the exploration of the mineral properties that Wolverine
plans to undertake. These potential problems include, but are not
limited to, unanticipated problems relating to exploration and additional costs
and expenses that may exceed current estimates. Wolverine has no
history upon which to base any assumption as to the likelihood that its business
will prove successful, and Wolverine can provide no assurance to investors that
Wolverine will generate any operating revenues or ever achieve profitable
operations. If Wolverine is unsuccessful in addressing these risks
its business will likely fail and you will lose your entire investment in this
offering.
Because
Wolverine has only recently commenced business operations, Wolverine expects to
incur operating losses for the foreseeable future.
Wolverine
has never earned any revenue and Wolverine has never been
profitable. Prior to completing exploration on the Labrador Claims,
Wolverine may incur increased operating expenses without realizing any revenues
from the Labrador Claims, this could cause Wolverine to fail and you will lose
your entire investment in this offering.
If
Wolverine does not find a joint venture partner for the continued development of
its mineral claims, Wolverine may not be able to advance exploration
work.
If the
results of the exploration program are successful, Wolverine may try to enter
into a joint venture agreement with a partner for the further exploration and
possible production of the Labrador Claims. Wolverine would face
competition from other junior mineral resource exploration companies who have
properties that they deem to be attractive in terms of potential return and
investment cost. In addition, if Wolverine entered into a joint
venture agreement, Wolverine would likely assign a percentage of its interest in
the Labrador Claims to the joint venture partner. If Wolverine is
unable to enter into a joint venture agreement with a partner, Wolverine may
fail and you may lose your entire investment in this offering.
Page
- 7
Because
of the speculative nature of mineral property exploration, there is substantial
risk that no commercially viable deposits will be found and the business of
Wolverine will fail.
Exploration
for base and precious metals is a speculative venture involving substantial
risk. Wolverine can provide investors with no assurance that the
Labrador Claims contain commercially viable mineral deposits. The
exploration program that Wolverine will conduct on the Labrador Claims may not
result in the discovery of commercial viable mineral
deposits. Problems such as unusual and unexpected rock formations and
other conditions are involved in base and precious metal exploration and often
result in unsuccessful exploration efforts. In such a case, Wolverine
may be unable to complete its business plan and you could lose your entire
investment in this offering.
Because
of the inherent dangers involved in base and precious metal exploration, there
is a risk that Wolverine may incur liability or damages as Wolverine conducts
its business.
The
search for base and precious metals involves numerous hazards. As a
result, Wolverine may become subject to liability for such hazards, including
pollution, cave-ins and other hazards against which Wolverine cannot insure or
against which Wolverine may elect not to insure. Wolverine currently
has no such insurance nor does Wolverine expect to get such insurance in the
foreseeable future. If a hazard were to occur, the costs of
rectifying the hazard may exceed Wolverine’s asset value and cause Wolverine to
liquidate all of its assets resulting in the loss of your entire investment in
this offering.
Because
access to Wolverine’s mineral claims is often restricted by inclement weather,
Wolverine will be delayed in exploration and any future mining
efforts.
Access to
the Labrador mineral claims is restricted to the period between May and November
of each year due to snow in the area. As a result, any attempts to
visit, test, or explore the property are largely limited to these few months of
the year when weather permits such activities. These limitations can
result in significant delays in exploration efforts, as well as mining and
production in the event that commercial amounts of minerals are
found. Such delays can result in Wolverine’s inability to meet
deadlines for exploration expenditures as defined by the Province of
Newfoundland and Labrador or by the Vend-In Agreement with Shenin Resources
Inc. This could cause the business venture to fail and the loss of
your entire investment in this offering unless Wolverine can meet the
deadlines.
As
Wolverine undertakes exploration of the Labrador Claims, Wolverine will be
subject to compliance with government regulation that may increase the
anticipated time and cost of its exploration program.
There are
several governmental regulations that materially restrict the exploration of
minerals. Wolverine will be subject to the mining laws and
regulations as contained in the Mineral Act of the Province of Newfoundland and
Labrador as Wolverine carries out its exploration program. Wolverine
may be required to obtain work permits, post bonds and perform remediation work
for any physical disturbance to the land in order to comply with these
regulations. While Wolverine’s planned exploration program budgets
for regulatory compliance, there is a risk that new regulations could increase
Wolverine’s time and costs of doing business and prevent Wolverine from carrying
out its exploration program.
Because
market factors in the mining business are out of Wolverine’s control, Wolverine
may not be able to market any minerals that may be found.
The
mining industry, in general, is intensely competitive and we can provide no
assurance to investors even if minerals are discovered that a ready market will
exist from the sale of any base or precious metals found. Numerous
factors beyond Wolverine’s control may affect the marketability of base or
precious metals. These factors include market fluctuations, the
proximity and capacity of natural resource markets and processing equipment,
government regulations, including regulations relating to prices, taxes,
royalties, land tenure, land use, importing and exporting of minerals and
environmental protection. The exact effect of these factors cannot be
accurately predicted, but the combination of these factors may result in
Wolverine not receiving an adequate return on invested capital and you may lose
your entire investment in this offering.
Because
Wolverine holds a significant portion of its cash reserves in United States
dollars, Wolverine may experience weakened purchasing power in Canadian dollar
terms.
Wolverine
holds a significant portion of its cash reserves in United States
dollars. Due to foreign exchange rate fluctuations, the value of
these United States dollar reserves can result in both translation gains or
losses in Canadian dollar terms. If there was to be a significant
decline in the United States dollar versus the Canadian Dollar, Wolverine’s US
dollar purchasing power in Canadian dollars would also significantly
decline. Wolverine has not entered into derivative instruments to
offset the impact of foreign exchange fluctuations.
Wolverine’s
auditors have expressed substantial doubt about Wolverine’s ability to continue
as a going concern.
The
accompanying financial statements have been prepared assuming that Wolverine
will continue as a going concern. As discussed in Note 3 to the
financial statements, Wolverine was recently incorporated on February 23, 2006,
and does not have a history of earnings, and as a result, Wolverine’s auditor
has expressed substantial doubt about the ability of Wolverine to continue as a
going concern. Continued operations are dependent on Wolverine’s
ability to complete equity or debt financings or generate profitable
operations. Such financings may not be available or may not be
available on reasonable terms. Wolverine’s financial statements do
not include any adjustments that may result from the outcome of this
uncertainty.
Page
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There
is no liquidity and no established public market for Wolverine’s common stock
and it may prove impossible to sell your shares.
There is
presently no public market in Wolverine’s shares. While Wolverine
intends to contact an authorized OTC Bulletin Board market maker for sponsorship
of its common stock, Wolverine cannot guarantee that such sponsorship will be
approved nor that Wolverine’s common stock will be listed and quoted for
sale. Even if Wolverine’s shares are quoted for sale, buyers may be
insufficient in numbers to allow for a robust market, and it may prove
impossible to sell your shares.
If
the selling shareholders sell a large number of shares all at once or in blocks,
the value of Wolverine’s shares would most likely decline.
The
selling shareholders are offering 64,630,000 shares of Wolverine’s common stock
through this prospectus. They must sell these shares at a fixed price
of $0.10 until such time as they are quoted on the OTC Bulletin Board or other
quotation system or stock exchange. Wolverine’s common stock is
presently not traded on any market or securities exchange, but should a market
develop, shares sold at a price below the current market price at which the
common stock is trading will cause that market price to
decline. Moreover, the offer or sale of large numbers of shares at
any price may cause the market price to fall. The outstanding shares of common
stock covered by this prospectus represent approximately 94.2% of the common
shares currently outstanding.
Wolverine’s
common stock is subject to the “penny stock” rules of the SEC and the trading
market in Wolverine’s securities is limited, which makes transactions in
Wolverine’s stock cumbersome and may reduce the value of an investment in
Wolverine’s stock.
The
Securities and Exchange Commission has adopted Rule 15g-9 which establishes the
definition of a “penny stock,” for the purposes relevant to Wolverine, as any
equity security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless
exempt, the rules require:
·
that
a broker or dealer approve a person’s account for transactions in penny
stocks; and
·
the
broker or dealer receive from the investor a written agreement to the
transaction, setting forth the identity and quantity of the penny stock to
be purchased.
In order
to approve a person’s account for transactions in penny stocks, the broker or
dealer must:
·
obtain
financial information and investment experience objectives of the person;
and
·
make
a reasonable determination that the transactions in penny stocks are
suitable for that person and the person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks.
The
broker or dealer must also deliver, prior to any transaction in a penny stock, a
disclosure schedule prepared by the Commission relating to the penny stock
market, which, in highlight form:
·
sets
forth the basis on which the broker or dealer made the suitability
determination; and
·
that
the broker or dealer received a signed, written agreement from the
investor prior to the transaction.
Generally,
brokers may be less willing to execute transactions in securities subject to the
“penny stock” rules. This may make it more difficult for investors to dispose of
Wolverine’s common stock and cause a decline in the market value of Wolverine’s
common stock.
Disclosure
also has to be made about the risks of investing in penny stocks in both public
offerings and in secondary trading and about the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks.
Use of Proceeds
The
following table indicates the use of proceeds based on the percentage of the
financing that is successfully sold.
Sale
Of
100%
Sale
of
75%
Sale
of
50%
Sale
Of
25%
Gross
Proceeds
$1,500,000
$1,125,000
$750,000
$375,000
Number
of Shares Sold
15,000,000
11,250,000
7,500,000
3,750,000
Page
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Less
expenses of offering:
Legal
and Registration Fees
$30,500
$30,500
$30,500
$30,500
Accounting
and Auditing
31,500
31,500
31,500
31,500
Electronic
Filing and Printing
3,000
3,000
3,000
3,000
Transfer
Agent
3,000
3,000
3,000
3,000
Net
Proceeds
$1,432,000
$1,057,000
$682,000
$307,000
Use
of net proceeds
Exploration
of Labrador Claims
$824,849
$824,849
$292,974
$26,174
Payment
of Accounts Payable
$125,000
$125,000
$125,000
$125,000
Working
Capital
$482,151
$107,151
$264,026
$
155,826
Analysis
of Financing Scenarios
After
deduction $68,000 for estimated offering expenses including legal and
registration fees, accounting and auditing, electronic filing and printing, and
transfer agent, the net proceeds from this offering may be as much as
$1,432,000, assuming all 15 million units are sold. However, there
can be no assurance that any of these shares will be sold. Wolverine
will use the proceeds to fund its next three phases of its proposed exploration
program.
In all
four scenarios Wolverine will complete exploration on its Labrador
Claims. Wolverine will increase its exploration efforts if it is able
to sell a higher percentage of this offering as described in the above
table. The proposed exploration program on the Labrador Claims will
consist of a ground review, excavating, surface trenching, an induced
polarization survey, and a drill program. See “Description of
Business – Plan of Operation” below for more details. If Wolverine
does not sell at least 7% of this offering Wolverine will not be able to fund
Phase Three of its proposed exploration program. If Wolverine does
not sell at least 25% of this offering Wolverine will be not be able to fund
Phase Four of its proposed exploration program.
Determination of Offering
Price
The
offering price was determined by using a number of
factors. Management considered the price of the most recent
financing. Additionally, management estimated the cost of this
offering plus the amount Wolverine needs to operate its business for the next 12
months. Management determined the offering price by assessing
Wolverine’s capital requirements against the price management thinks investors
are willing to pay for Wolverine’s common stock.
Dilution
Prior to
this offering, Wolverine had 67,530,000 shares of common stock issued and
outstanding as at February 29, 2008. The net tangible book value of
Wolverine as at February 29, 2008 was $255,944 or $0.004 per
share. Net tangible book value per share is determined by dividing
Wolverine’s tangible net worth, consisting of tangible assets less total
liabilities, by the number of shares outstanding. The average price
paid by the present shareholders is $0.016. The following tables
summarize the difference between the average price paid by present shareholders
and the price to be paid by subscribers to this offering for 25%, 50%, 75% and
100% subscription rates.
Analysis
for 25% Subscription
Shareholder
Type
Price
Paid
$
Number
of Shares Held
Amount
of Consideration Paid
Percentage
of
Consideration
Percentage
of
Shares
Held
Present
Shareholders
$0.016
68,630,000
$1,099,400
74.6%
94.8%
Investors
in
this
Offering
$0.10
3,750,000
$375,000
25.4%
5.2%
Analysis
for 50% Subscription
Shareholder
Type
Price
Paid
$
Number
of Shares Held
Amount
of Consideration Paid
Percentage
of
Consideration
Percentage
of
Shares
Held
Present
Shareholders
$0.016
68,630,000
$1,099,400
59.4%
90.1%
Investors
in
this
Offering
$0.10
7,500,000
$750,000
40.6%
9.9%
Page
- 10
Analysis
for 75% Subscription
Shareholder
Type
Price
Paid
$
Number
of Shares Held
Amount
of Consideration Paid
Percentage
of
Consideration
Percentage
of
Shares
Held
Present
Shareholders
$0.016
68,630,000
$1,099,400
49.4%
85.9%
Investors
in
this
Offering
$0.10
11,250,000
$1,125,000
50.6%
14.1%
Analysis
for 100% Subscription
Shareholder
Type
Price
Paid
$
Number
of Shares Held
Amount
of Consideration Paid
Percentage
of
Consideration
Percentage
of
Shares
Held
Present
Shareholders
$0.016
68,630,000
$1,099,400
42.3%
82.1%
Investors
in
this
Offering
$0.10
15,000,000
$1,500,000
57.7%
17.9%
“Dilution”
means the difference between Wolverine’s public offering price ($0.10 per unit)
and its proforma net tangible book value per share after implementing this
offering and accounting for the cost of the offering. Net tangible
book value per share is determined by dividing Wolverine’s tangible net worth,
consisting of tangible assets less total liabilities, by the number of shares
outstanding. The following table will show the net tangible book
value of Wolverine’s shares both before and after the completion of this
offering for 25%, 50%, 75% and 100% subscription rates.
25%
50%
75%
100%
Public
offering price per unit
$0.10
$0.10
$0.10
$0.10
Net
tangible book value per share before offering
$0.004
$0.004
$0.004
$0.004
Proforma
net tangible book value per share after offering
$0.008
$0.012
$0.016
$0.020
Increase
per share attributable to public investors
$0.004
$0.008
$0.012
$0.016
Dilution
per share to public investors
$0.092
$0.088
$0.084
$0.080
Selling Shareholders
The
selling shareholders named in this prospectus are offering all of their
64,630,000 shares of the common stock offered through this
prospectus. These shares were acquired from Wolverine in the
following private placements and acquisition of mineral claims:
1.
27,480,000
shares of Wolverine common stock that the selling shareholders acquired
from Wolverine in offerings that were exempt from registration under
Regulation S of the Securities Act of 1933 and were completed between June13, 2006 and June 25, 2008.
2.
34,000,000
shares of common stock issued on February 28, 2007 to seven non-affiliate
Canadian residents pursuant to a Vend-In Agreement dated February 28, 2007
with Shenin Resources Inc., a non-affiliate Canadian company, at a deemed
price of $0.01 per share for the acquisition of the Labrador mineral
claims.
3.
3,150,000
shares of Wolverine common stock that the selling shareholders acquired
from Wolverine in offerings that were exempt from registration under
Regulation D of the Securities Act of 1933 and were completed between
April 30, 2007 and June 25, 2008.
The
shares of common stock were sold to investors under exemptions provided in
Canada and Regulation S and accredited investors under exemptions provided in
the United States and Regulation D.
The
following table provides as of the date of this prospectus information regarding
the beneficial ownership of Wolverine’s common stock held by each of the selling
shareholders, including:
1.
the
number of shares owned by each before the
offering;
2.
the
total number of shares that are to be offered for
each;
3.
the
total number of shares that will be owned by each upon completion of the
offering; and
4.
the
percentage owned by each upon completion of the
offering.
Page
- 11
Name
of Selling Shareholder
Shares
Owned Before the Offering
Total
Number of Shares to be Offered for the Security Holder’s
Account
Total
Shares Owned After the Offering is Complete
Percentage
of Shares Owned After the Offering is Complete
Mitchell
Adam
300,000
300,000
Nil
Nil
Anchor
Equipment (2005) Ltd. (1)
100,000
100,000
Nil
Nil
H.
Roderick Anderson
1,300,000
1,300,000
Nil
Nil
Margaret
Archibald
100,000
100,000
Nil
Nil
Daryl
M. Auwai
50,000
50,000
Nil
Nil
Balch
Research Corp. (2)
1,850,000
1,850,000
Nil
Nil
Salvatore
Basile
50,000
50,000
Nil
Nil
John
Bevilacqua
200,000
200,000
Nil
Nil
Ralph
Biggar
5,000,000
5,000,000
Nil
Nil
Dr.
J. Andrew Birch
400,000
400,000
Nil
Nil
Mike
Birch
100,000
100,000
Nil
Nil
Birch
Living Trust (3)
2,150,000
2,150,000
Nil
Nil
Tim
Bokenfohr
100,000
100,000
Nil
Nil
Don
Bossert
50,000
50,000
Nil
Nil
Don
Bowins
100,000
100,000
Nil
Nil
Paulo
Branco
300,000
300,000
Nil
Nil
Donald
& Pamela Brewer,
joint
tenants
100,000
100,000
Nil
Nil
Art
Brown
100,000
100,000
Nil
Nil
J.
Frank Callaghan
100,000
100,000
Nil
Nil
Don
J. Carroll
100,000
100,000
Nil
Nil
Alan
Carter
400,000
400,000
Nil
Nil
Robin
Chandler
250,000
250,000
Nil
Nil
Steve
Chios
100,000
100,000
Nil
Nil
Chuch
Choo
200,000
200,000
Nil
Nil
Clark
David Chul Christie
100,000
100,000
Nil
Nil
David
Christie
100,000
100,000
Nil
Nil
James
Douglas Christie
100,000
100,000
Nil
Nil
Song
Sook Byun Christie
100,000
100,000
Nil
Nil
Randy
Contoli
200,000
200,000
Nil
Nil
Greg
Corcoran
200,000
200,000
Nil
Nil
Angeline
Wong Cordero
100,000
100,000
Nil
Nil
Anriza
Wong Cordero
1,000,000
1,000,000
Nil
Nil
Debbie
Coventry
50,000
50,000
Nil
Nil
Melvin
Crocker
50,000
50,000
Nil
Nil
Crystalwood
Holdings Ltd. (4)
200,000
200,000
Nil
Nil
Joao
DaCosta
300,000
300,000
Nil
Nil
DaCosta
Management Corp. (5)
700,000
700,000
Nil
Nil
Maria
Da Silva
1,000,000
1,000,000
Nil
Nil
Page
- 12
Name
of Selling Shareholder
Shares
Owned Before the Offering
Total
Number of Shares to be Offered for the Security Holder’s
Account
Total
Shares Owned After the Offering is Complete
Percentage
of Shares Owned After the Offering is
Complete
Marilyn
Dilgenti-Smith
50,000
50,000
Nil
Nil
James
F. Dixon
100,000
100,000
Nil
Nil
Eva
Dudas
50,000
50,000
Nil
Nil
Art
Den Duyf
5,375,000
5,375,000
Nil
Nil
John
Dyck
100,000
100,000
Nil
Nil
Slade
Dyer
200,000
200,000
Nil
Nil
Keith
Elliot
50,000
50,000
Nil
Nil
Cherie
Federau
450,000
450,000
Nil
Nil
Dennis
& Cindy Federighi,
joint
tenants
100,000
100,000
Nil
Nil
Rick
Finlayson
100,000
100,000
Nil
Nil
Paul
Fong
50,000
50,000
Nil
Nil
Peter
Gommerud
50,000
50,000
Nil
Nil
David
Grandy
300,000
300,000
Nil
Nil
Vincent
Grant Gough
300,000
300,000
Nil
Nil
Feliberto
Gurat
300,000
300,000
Nil
Nil
Allan
Haderer
50,000
50,000
Nil
Nil
Richard
Haderer
5,250,000
5,250,000
Nil
Nil
Hunter
Henley
50,000
50,000
Nil
Nil
Peter
J. Hoyle
100,000
100,000
Nil
Nil
Stanlie
Hunt
100,000
100,000
Nil
Nil
Peter
Keegan
100,000
100,000
Nil
Nil
Ron
Keegan
50,000
50,000
Nil
Nil
Jack
A. Kleman
100,000
100,000
Nil
Nil
Amin
Ladha
100,000
100,000
Nil
Nil
Laurel
Lee
50,000
50,000
Nil
Nil
Ng
Liang
100,000
100,000
Nil
Nil
Gary
Liu
100,000
100,000
Nil
Nil
Deirdre
Lynch
5,250,000
5,250,000
Nil
Nil
R.
Hector MacKay-Dunn
200,000
200,000
Nil
Nil
Alastair
MacLennan
100,000
100,000
Nil
Nil
Teresa
Mallam
50,000
50,000
Nil
Nil
Joseph
R. Martin
250,000
250,000
Nil
Nil
Terry
Mathers
50,000
50,000
Nil
Nil
Kyle
Stanley McClay
100,000
100,000
Nil
Nil
Stanley
McClay
200,000
200,000
Nil
Nil
Stan
McDonald
100,000
100,000
Nil
Nil
Patrick
McGrath
50,000
50,000
Nil
Nil
Gerald
T. McGuire
100,000
100,000
Nil
Nil
Page
- 13
Name
of Selling Shareholder
Shares
Owned Before the Offering
Total
Number of Shares to be Offered for the Security Holder’s
Account
Total
Shares Owned After the Offering is Complete
Percentage
of Shares Owned After the Offering is
Complete
Derrick
McKinnon
100,000
100,000
Nil
Nil
John
McLachlan
100,000
100,000
Nil
Nil
Cindy
Mitchell
250,000
250,000
Nil
Nil
Mario
Morrison
300,000
300,000
Nil
Nil
Robert
R. Morrison
100,000
100,000
Nil
Nil
Dave
Neale
200,000
200,000
Nil
Nil
Deanna
Neale
200,000
200,000
Nil
Nil
Greg
Neale
500,000
500,000
Nil
Nil
Jill
Neale
750,000
750,000
Nil
Nil
Thian
Yew Ng
5,225,000
5,225,000
Nil
Nil
Linda
Nichols
500,000
500,000
Nil
Nil
Neil
Nichols
5,000,000
5,000,000
Nil
Nil
Byron
L. Novosad
400,000
400,000
Nil
Nil
George
Shigeru Okamoto
400,000
400,000
Nil
Nil
Christopher
Thomas Oliver
50,000
50,000
Nil
Nil
Otter
Crique Ventures Limitee (6)
1,000,000
1,000,000
Nil
Nil
Angelo
S. Paris
100,000
100,000
Nil
Nil
Enrica
Paris
250,000
250,000
Nil
Nil
Franco
Pederzini
100,000
100,000
Nil
Nil
Don
Peterson
400,000
400,000
Nil
Nil
Lawrence
Leroy Pickens and Mary Annette Pickens, joint tenants
50,000
50,000
Nil
Nil
Prote
Poker
5,000,000
5,000,000
Nil
Nil
Dale
B. Pope
200,000
200,000
Nil
Nil
Vincent
and Miriam Puccio 2007 Trust (7)
300,000
300,000
Nil
Nil
Wade
Pugh
200,000
200,000
Nil
Nil
Carla
Radiuk
50,000
50,000
Nil
Nil
Russel
Renneberg
100,000
100,000
Nil
Nil
Anthony
Ricci
1,000,000
1,000,000
Nil
Nil
Patricia
N. Ritchie
100,000
100,000
Nil
Nil
Robert
Ruff
100,000
100,000
Nil
Nil
Bruce
E. Rutherford
50,000
50,000
Nil
Nil
Brent
Shaw
100,000
100,000
Nil
Nil
Chris
Sherry
300,000
300,000
Nil
Nil
Lambros
Siamos
100,000
100,000
Nil
Nil
Signature
Holdings L.L.C. (8)
50,000
50,000
Nil
Nil
Terry
Sklavenitis
200,000
200,000
Nil
Nil
Adam
Strauts
50,000
50,000
Nil
Nil
Page
- 14
Name
of Selling Shareholder
Shares
Owned Before the Offering
Total
Number of Shares to be Offered for the Security Holder’s
Account
Total
Shares Owned After the Offering is Complete
Percentage
of Shares Owned After the Offering is
Complete
Daniel
Strauts
50,000
50,000
Nil
Nil
Katherine
Strauts
50,000
50,000
Nil
Nil
Matthew
Strauts
50,000
50,000
Nil
Nil
Dr.
Z. Strauts Inc. (9)
100,000
100,000
Nil
Nil
Douglas
H. Stroyhan
100,000
100,000
Nil
Nil
Michael
Sweeney
100,000
100,000
Nil
Nil
Tequila
Sunset Ltd. (10)
250,000
250,000
Nil
Nil
Derrick
Townsend
200,000
200,000
Nil
Nil
Anreas
Tsonis
100,000
100,000
Nil
Nil
Steve
Van Dalen
300,000
300,000
Nil
Nil
VP
Bank (Switzerland) Ltd. (11)
100,000
100,000
Nil
Nil
Dale
Weeres
180,000
180,000
Nil
Nil
Kelvin
Williams
50,000
50,000
Nil
Nil
Christian
Wirth
500,000
500,000
Nil
Nil
David
Wolfin
100,000
100,000
Nil
Nil
Anthony
Wttewaall
250,000
250,000
Nil
Nil
1628240
Ontario Inc. (12)
400,000
400,000
Nil
Nil
Total
64,630,000
64,630,000
0
0
(1)
John
Dyck is the beneficial owner of Anchor Equipment (2005)
Ltd.
(2)
Steve
Balch is the beneficial owner of Balch Research
Corp.
(3)
Dennis
Birch is the beneficial owner of Birch Living
Trust.
(4)
Leon
Nowek is the beneficial owner of Crystalwood Holdings
Ltd.
(5)
John
daCosta is the beneficial owner of DaCosta Management
Corp.
(6)
Verlee
Webb is the beneficial owner of Otter Crique Ventures
Limitée.
(7)
Vincent
Puccio and Miriam Puccio are the beneficial owners of the Vincent and
Miriam Puccio 2007 Trust.
(8)
Fred
Avery is the beneficial owner of Signature Holdings
L.L.C.
(9)
Zigart
Strauts is the beneficial owner of Dr. Z. Strauts
Inc.
(10)
Neil
Nichols is the beneficial owner of Tequila Sunset
Ltd.
(11)
Mario
Salviti is the beneficial owner of VP Bank (Switzerland)
Ltd.
(12)
Wally
Boyko is the beneficial owner of 1628240 Ontario
Inc.
Plan of Distribution
This is a
self-underwritten offering. In general Wolverine will have two types
of shares that will be available for distribution:
1.
New
shares related to its Initial Public
Offering.
2.
Non-affiliate
shares owned by selling
shareholders.
New
Shares Related to Wolverine’s Initial Public Offering
Wolverine
will attempt to sell a maximum of 15 million units to the public on a self
underwritten basis. There can be no assurance that any of these units
will be sold. Wolverine’s gross proceeds will be $1,500,000 if all
the units offered are sold. Neither Wolverine nor its President, nor
any other person, will pay commissions or other fees, directly or indirectly, to
any person or firm in connection with solicitation of the sales of the
shares.
The
following discussion addresses the material terms of the plan of
distribution.
Page
- 15
Wolverine
is offering up to 15 million units at a price of $0.10 per
unit. Since this offering is conducted as a self-underwritten
offering, there can be no assurance that any of the units will be
sold. If Wolverine fails to sell all the units it is trying to sell,
Wolverine’s ability to implement its business plan will be materially affected,
and you may lose all or substantially all of your investment.
There is
currently no market for any of Wolverine’s shares of common stock and little
likelihood that a public market for such securities will develop after the
closing of this offering or be sustained if developed. As such,
investors may not be able to readily dispose of any shares purchased in this
offering.
The legal
opinion with respect to Wolverine’s stock is included as an exhibit to this
registration statement.
Lee
Costerd, Wolverine’s President and sole director, and current shareholders may
purchase securities in this offering upon the same terms and conditions as
public investors. If any purchase by a current shareholder triggered
a material change, Wolverine would promptly file a post effective amendment to
this registration statement. Any of these purchasers would be
purchasing Wolverine’s common stock for investment and not for
resale.
No broker
or dealer is participating in this offering. If, for some reason,
Wolverine’s sole director or shareholders were to determine that the
participation of a broker or dealer is necessary, this offering will be promptly
amended by a post effective amendment to disclose the details of this
arrangement, including the fact that the broker or dealer is acting as an
underwriter of this offering. This amendment would also detail the
proposed compensation to be paid to any such broker or dealer. The
post effective amendment would also extend an offer of rescission to any
investors who subscribed to this offering before the broker or dealer was
named. In addition to the foregoing requirements; Wolverine would be
required to file any such amendment with the Corporate Finance Department of the
National Association of Securities Dealers, Inc. and to obtain from them a “no
objection” position from that organization on the fairness of the underwriting
compensation.
The
offering will remain open for a period 180 days from the date Wolverine is
legally allowed to commence selling shares based on this prospectus, unless the
entire gross proceeds are earlier received or Wolverine decides, in its sole
discretion, to cease selling efforts.
Non-Affiliate
Shares Owned by Selling Shareholders
The
selling shareholders who currently own 64,630,000 shares of common stock in the
capital of Wolverine may sell some or all of their common stock in one or more
transactions, including block transactions.
The
selling shareholders will sell the shares at $0.10 per share until Wolverine’s
shares are quoted on the OTC Bulletin Board, and thereafter at prevailing market
prices or privately negotiated prices.
The
shares may also be sold in compliance with the Securities and Exchange
Commission’s Rule 144. A description of the selling limitations
defined by Rule 144 can be located on page 27 of this prospectus.
The
selling shareholders may also sell their shares directly to market makers acting
as principals or brokers or dealers, who may act as agent or acquire the common
stock as a principal. Any broker or dealer participating in such
transactions as agent may receive a commission from the selling shareholders,
or, if they act as agent for the purchaser of such common stock, from such
purchaser. The selling shareholders will likely pay the usual and
customary brokerage fees for such services. Brokers or dealers may agree with
the selling shareholders to sell a specified number of shares at a stipulated
price per share and, to the extent such broker or dealer is unable to do so
acting as agent for the selling shareholders, to purchase, as principal, any
unsold shares at the price required to fulfill the respective broker’s or
dealer’s commitment to the selling shareholders.
Brokers
or dealers who acquire shares as principals may thereafter resell such shares
from time to time in transactions in a market or on an exchange, in negotiated
transactions or otherwise, at market prices prevailing at the time of sale or at
negotiated prices, and in connection with such re-sales may pay or receive
commissions to or from the purchasers of such shares. These
transactions may involve cross and block transactions that may involve sales to
and through other brokers or dealers. If applicable, the selling
shareholders may distribute shares to one or more of their partners who are
unaffiliated with Wolverine. Such partners may, in turn, distribute
such shares as described above. Wolverine can provide no assurance that all or
any of the common stock offered will be sold by the selling
shareholders.
Wolverine
is bearing all costs relating to the registration of the common stock owned by
the selling shareholders. The selling shareholders, however, will pay
any commissions or other fees payable to brokers or dealers in connection with
any sale of the common stock.
The
selling shareholders must comply with the requirements of the Securities Act and
the Securities Exchange Act in the offer and sale of the common
stock. In particular, during such times as the selling shareholders
may be deemed to be engaged in a distribution of the common stock, and therefore
be considered to be an underwriter, they must comply with applicable law and
may, among other things:
·
Not
engage in any stabilization activities in connection with Wolverine’s
common stock;
·
Furnish
each broker or dealer through which common stock may be offered, such
copies of this prospectus, as amended from time to time, as may be
required by such broker or dealer;
and
·
Not
bid for or purchase any of Wolverine’s securities or attempt to induce any
person to purchase any of Wolverine’s securities other than as permitted
under the Securities Exchange Act.
Page
- 16
The
Securities Exchange Commission has also adopted rules that regulate
broker-dealer practices in connection with transactions in penny
stocks. Penny stocks are generally equity securities with a price of
less than $5.00 (other than securities registered on certain national securities
exchanges or quoted on the NASDAQ system, provided that current price and volume
information with respect to transactions in such securities is provided by the
exchange or system).
The penny
stock rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from those rules, deliver a standardized risk disclosure
document prepared by the Commission, which:
·
contains
a description of the nature and level of risk in the market for penny
stocks in both public offerings and secondary
trading;
·
contains
a description of the broker’s or dealer’s duties to the customer and of
the rights and remedies available to the customer with respect to a
violation of such duties;
·
contains
a brief, clear, narrative description of a dealer market, including “bid”
and “ask” prices for penny stocks and the significance of the spread
between the bid and ask price;
·
contains
a toll-free telephone number for inquiries on disciplinary
actions;
·
defines
significant terms in the disclosure document or in the conduct of trading
penny stocks; and
·
contains
such other information and is in such form (including language, type,
size, and format) as the Commission shall require by rule or
regulation;
The
broker-dealer also must provide, prior to proceeding with any transaction in a
penny stock, the customer:
1.
with
bid and offer quotations for the penny
stock;
2.
details
of the compensation of the broker-dealer and its salesperson in the
transaction;
3.
the
number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the market
for such stock; and
4.
monthly
account statements showing the market value of each penny stock held in
the customer’s account.
In
addition, the penny stock rules require that prior to a transaction in a penny
stock not otherwise exempt from those rules; the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser’s written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability
statement. These disclosure requirements will have the effect of
reducing the trading activity in the secondary market for Wolverine’s stock
because it will be subject to these penny stock rules. Therefore,
stockholders may have difficulty selling those securities.
Regulation
M
During
such time as Wolverine may be engaged in a distribution of any of the shares
Wolverine is registering by this registration statement, Wolverine is required
to comply with Regulation M. In general, Regulation M precludes any
selling security holder, any affiliated purchasers, and any broker-dealer or
other person who participates in a distribution from bidding for or purchasing,
or attempting to induce any person to bid for or purchase, any security which is
the subject of the distribution until the entire distribution is
complete. Regulation M defines a “distribution” as an offering
of securities that is distinguished from ordinary trading activities by the
magnitude of the offering and the presence of special selling efforts and
selling methods. Regulation M also defines a “distribution participant” as
an underwriter, prospective underwriter, broker, dealer, or other person who has
agreed to participate or who is participating in a distribution.
Regulation
M under the Exchange Act prohibits, with certain exceptions, participants in a
distribution from bidding for or purchasing, for an account in which the
participant has a beneficial interest, any of the securities that are the
subject of the distribution. Regulation M also governs bids and
purchases made in order to stabilize the price of a security in connection with
a distribution of the security. Wolverine has informed the selling
shareholders that the anti-manipulation provisions of Regulation M may apply to
the sales of their shares offered by this prospectus, and Wolverine has also
advised the selling shareholders of the requirements for delivery of this
prospectus in connection with any sales of the common stock offered by this
prospectus.
Description of Securities to be
Registered
General
Wolverine’s
authorized capital stock consists of 200,000,000 shares of common stock at a par
value of $0.001 per share. On February 26, 2007, the authorized
capital was increased from 75 million shares of common stock.
Page
- 17
Common
Stock
As at the
date of this prospectus, 68,630,000 shares of common stock are issued and
outstanding and held by 132 shareholders of record. All of this common stock has
been validly issued, is fully paid and is non-assessable.
Holders
of Wolverine’s common stock are entitled to one vote for each share on all
matters submitted to a stockholder vote. Holders of common stock do
not have cumulative voting rights. Therefore, holders of a majority
of the shares of common stock voting for the election of directors can elect all
of the directors. Holders of one-third of shares of common stock
issued and outstanding, represented in person or by proxy, are necessary to
constitute a quorum at any meeting of Wolverine’s stockholders. A
vote by the holders of a majority of Wolverine’s outstanding shares is required
to effectuate certain fundamental corporate changes such as liquidation, merger
or an amendment to Wolverine’s Articles of Incorporation.
Holders
of common stock are entitled to share in all dividends that the board of
directors, in its discretion, declares from legally available
funds. In the event of a liquidation, dissolution or winding up, each
outstanding share entitles its holder to participate pro rata in all assets that
remain after payment of liabilities and after providing for each class of stock,
if any, having preference over the common stock. Holders of
Wolverine’s common stock have no preemptive rights, no conversion rights and
there are no redemption provisions applicable to Wolverine’s common
stock.
Dividend
Policy
Wolverine
has never declared or paid any cash dividends on its common
stock. Wolverine currently intends to retain future earnings, if any,
to finance the expansion of its business. As a result, Wolverine does
not anticipate paying any cash dividends in the foreseeable future.
Share
Purchase Warrants
As of the
date of this prospectus, there are no outstanding warrants to purchase
Wolverine’s securities. Wolverine may, however, in addition to the
warrants to be issued in this unit offering, issue warrants to purchase its
securities in the future.
Options
As of the
date of this prospectus, there are no options to purchase Wolverine’s
securities. Wolverine may, however, in the future grant such options
and/or establish an incentive stock option plan for its directors, employees and
consultants.
Convertible
Securities
As of the
date of this prospectus, Wolverine has not issued and does not have outstanding
any securities convertible into shares of Wolverine’s common stock or any rights
convertible or exchangeable into shares of Wolverine’s common
stock. Wolverine may, however, issue such convertible or exchangeable
securities in the future.
Nevada
Anti-Takeover Laws
The
provisions of the Nevada Revised Statutes (NRS) sections 78.378 to 78.3793 apply
to any acquisition of a controlling interest in an certain type of Nevada
corporation known as an “Issuing Corporation”, unless the articles of
incorporation or bylaws of the corporation in effect on the 10th day
following the acquisition of a controlling interest by an acquiring person
provide that the provisions of those sections do not apply to the corporation,
or to an acquisition of a controlling interest specifically by types of existing
or future stockholders, whether or not identified.
The
provisions of NRS 78.378 to NRS 78.3793 do not restrict the directors of an
“Issuing Corporation” from taking action to protect the interests of the
corporation and its stockholders, including, but not limited to, adopting or
signing plans, arrangements or instruments that deny rights, privileges, power
or authority to a holders of a specified number of shares or percentage of share
ownership or voting power.
An
“Issuing Corporation” is a corporation organized in the State of Nevada and
which has 200 or more stockholders of record, with at least 100 of who have
addresses in the State of Nevada appearing on the stock ledger of the
corporation and does business in the state of Nevada directly. As
Wolverine currently has less than 200 stockholders and no shareholders in the
State of Nevada the statute does not currently apply to Wolverine.
If
Wolverine does become an “Issuing Corporation” in the future, and the statute
does apply to Wolverine, its sole director Mr. Costerd on his own will have the
ability to adopt any of the above mentioned protection techniques whether or not
he owns a majority of Wolverine’s outstanding common stock, provided he does so
by the specified 10th day
after any acquisition of a controlling interest.
Page
- 18
Interests of Named Experts and
Counsel
No expert
or counsel named in this prospectus as having prepared or certified any part of
this prospectus or having given an opinion upon the validity of the securities
being registered or upon other legal matters in connection with the registration
or offering of the common stock was employed on a contingency basis, or had, or
is to receive, in connection with the offering, a substantial interest exceeding
$50,000, directly or indirectly, in the registrant or any of its parents or
subsidiaries. Nor was any such person connected with the registrant
or any of its parents or subsidiaries as a promoter, managing or principal
underwriter, voting trustee, director, officer, or employee.
Conrad C.
Lysiak, Attorney at Law of Spokane, Washington has provided the legal opinion
regarding the legality of the shares being registered.
The
financial statements included in this prospectus have been audited by Mendoza
Berger and Company, L.L.P., Certified Public Accountants, of Irvine, California
to the extent and for the periods set forth in their report appearing elsewhere
herein, and are included in reliance upon such report given upon the authority
of said firm as experts in auditing and accounting.
The
geological report for the Labrador Claims was prepared by Stephen Balch, B.Sc.,
and the summary information from the geological report disclosed in this
prospectus is in reliance upon the authority and capability of Mr. Balch as a
Professional Geophysicist.
Description of Business
Wolverine
is a mineral exploration company and was incorporated on February 23,2006. Wolverine is a startup company in the business of base and
precious metal exploration.
On
February 28, 2007 Wolverine entered into a Vend-In Agreement with Shenin
Resources Inc. (“Shenin”), a private Canadian
corporation, for the purchase of a 90% interest 516 mineral claims located in
Labrador Canada (the “Shenin
Claims”). The purchase price paid to Shenin was $374,000
satisfied by the issuance of 34,000,000 shares of Wolverine’s common stock at a
deemed price of $0.01 per share and a note payable of $34,000. Under
the terms of the Vend-In Agreement Wolverine is required to incur the following
expenditures on the claims: (i) CDN $150,000 on or before March 1,2008; (ii) CDN $200,000 on or before March 1, 2009, and (iii) CDN $250,000 on or
before March 1, 2010; provided that (iv) any excess amount spent in one year may
be carried forward and applied towards fulfillment of the expenditure required
in the later year. Shenin has also granted Wolverine a first right of
refusal to purchase a 90% interest in all further property in Labrador Canada
that Shenin may obtain an interest in from time to time. See Exhibit
10.1 – Vend-In Agreement for more details.
Also, on
May 17, 2007 Wolverine acquired six mineral claims from Richard Haderer for $360
(the “Haderer Claims”),
which are contiguous to the Shenin Claims. See Exhibit 10.3 –
Additional Property Agreement for more details.
On August15, 2007, Wolverine extra-provincially registered in the Province of
Newfoundland and Labrador for the purpose of being able to register the Shenin
Claims and the Haderer Claims in the name of Wolverine and for the purpose of
being able to conduct its business in the Province of Newfoundland and
Labrador. See Exhibit 3.4 – Certificate of Registration for more
details.
Location
and Means of Access to the Claims
The
Shenin Claims and the Haderer Claims (collectively, the “Labrador Claims”) are located
about 120 kilometres (75 miles) west of Goose Bay, Labrador, a small town of
9,000 people on the Atlantic Coast of northern Canada. It takes
approximately one and a half to two hours to drive to the Labrador Claims from
Goose Bay.
The
Labrador Claims lie within NTS map sheets 13E/01 and 13F/04 and extends
approximately from 53o 11’ 08’’
N latitude and 62o 11’ 56’’
W longitude to 53o 06’ 34’’
N latitude and 61o 57’ 02’’
W longitude.
Goose Bay
features an international airport. From there, the Labrador Claims
can be accessed directly from the Trans-Labrador Highway. The
Labrador Claims are easily accessible by the Trans-Labrador Highway, which runs
through the central portion of the Labrador Claims. The
Trans-Labrador Highway is a well maintained Provincial Highway with a gravel
surface. There are no gas stations between Goose Bay and Churchill Falls, the
next major community located 290 kilometres (180 miles) to the west of Goose Bay
and 160 kilometres (105 miles) to the west of the Labrador Claims.
Access to
the Labrador Claims is possible for most of the year given the proximity to
Goose Bay and the fact that the highway is well maintained. Airborne
geophysical surveys are best performed either in late winter (March-April) or
during the summer (June-August). Ground geophysical surveys should be
scheduled to avoid freeze-up (November-December) and breakup (late April to
early June). Ground geological surveys are best conducted with no
snow cover (mid June to mid November).
Page
- 19
Figure
1. The Claims are located approximately 120 kilometres (75 miles) west of Goose
Bay, Labrador.
Description
of Labrador Claims
The
Labrador Claims are unencumbered and in good standing and there are no third
party conditions which affect the Labrador Claims other than conditions defined
by the Province of Newfoundland and Labrador described below. The
Labrador Claims together make up an aggregate area of 33,482
acres. Wolverine has no insurance covering the Labrador
Claims. Management believes that no insurance is necessary since the
Labrador Claims are unimproved and contain no buildings or
improvements. The Labrador Claims cover an area with approximate
dimensions of 20 kilometers east-west (12.5 miles) and 10 kilometers north-south
(6.25 miles).
The
Labrador Claims consist of a total of 522 mineral claims covering five separate
licenses as described in Table 1 below. A layout of the Labrador
Claims is shown in Figure 2 below.
Number
#
of Claims
NTS
Area
(acres)
Good
to Date
013472M
6
13F/04
371
17-05-2012
012427M
20
13E/01
1,235
18-08-2011
012425M
82
13E/01
5,065
18-08-2011
013039M
254
13E/01
& 13F/04
16,927
05-02-2012
013187M
160
13E/01
& 13F/04
9,884
14-03-2012
Table
1. Summary of the Claims.
Figure 2. The Claims extend
for a distance of approximately 20 kilometers (12.5 miles) along the
Trans-Labrador Highway.
There is
no assurance that a commercially viable mineral deposit exists on the Labrador
Claims. Further exploration will be required before an evaluation as
to the economic feasibility of the Labrador Claims is
determined. Wolverine’s consulting geophysicist has written a report
and provided Wolverine with recommendations of how Wolverine should explore the
Labrador Claims. Until management can validate otherwise, the
Labrador Claims are without known reserves. Management is planning a
five phase exploration program as recommended by its consulting
geophysicist. Wolverine has completed the first two phases of the
exploration program on the Labrador Claims.
Conditions
to Retain Title to the Labrador Claims
The
Labrador Claims have varying expiry dates. In order to maintain the
Labrador Claims in good standing it will be necessary for Wolverine to
coordinate an agent to perform and record valid exploration work with value of
CDN$200 per claim in anniversary year 1, CDN$250 per claim in anniversary year
2, CDN$300 per claim in anniversary year 3, CDN$350 per claim in anniversary
year 4, CDN$400 per claim in anniversary year 5, CDN$600 per claim in
anniversary years six to ten inclusive, CDN$900 per claim in anniversary years
11 to 15 inclusive and CDN$1,200 per claim in anniversary years 16 to 20
inclusive. Failure to perform and record valid exploration work on
the anniversary dates will result in forfeiture of title to the Labrador
Claims.
History
of Labrador and the Labrador Claims
According
to the report prepared by Wolverine’s consulting geophysicist, the geologic
setting is based on information available from the Geological Survey of Canada
(DNR Open File 013F/0055) and the Government of Newfoundland and Labrador (Open
File 013F/0061). The regional geology as described by both Government
Reports contains very little detail because the Trans-Labrador Highway was under
construction during much of the mapping initiative, opening in
1992.
Also, the
area has seen only limited geologic mapping on a regional scale, in part due to
the remoteness of the area and the timing of the Federal and Provincial mapping
initiatives that preceded construction of the Trans-Labrador
Highway. The mapped geology within the area is part of a regional
1:500,000 compilation undertaken by the Newfoundland and Labrador Provincial
Government during the early 1990’s. The survey area is located
outside of the area of detailed mapping, in which case geologic mapping has been
taken from previous publications, most notably a Federal Government regional
mapping program from 1990-1994. During the period 1990 to 1994 the
area was regionally mapped by the Geological Survey of Canada and by the Mines
and Energy Branch of the Newfoundland and Labrador
Government. Geologic mapping was performed on a very regional scale,
due in part to the remoteness of the area (away from the Trans-Labrador Highway)
and the lack of outcrop. In summary there is very little geological
mapping within the survey area and there has never been a detailed mapping
program.
In 2002
the Labrador Claims were visited by Roderick Mercer on behalf of Tundra
Properties. Mr. Mercer spent several days reviewing mineral showings
along the Trans-Labrador Highway in an attempt to rediscover a mineralized
sub-crop that had been exposed during road construction but later
buried. The sub-crop was described as a gabbro containing pyrite,
chalcopyrite and bornite mineralization. One sample returned 2% Cu
and 0.5 g/t Au. Prospecting by Mr. Mercer did not find any similar
mineralized showings in the area but did uncover several other showings along
the Trans-Labrador Highway that returned significant values for copper when
assayed.
Page
- 20
During
the period October 15, 2004 and October 19, 2004 the Labrador Claims were
revisited by Mr. Mercer on behalf of Tundra Properties. During this
re-visit to the Labrador Claims, a trench was blasted to establish the extent of
copper mineralization that had returned high assay values (3.3% Cu) during the
2002 program. Trenches were located in outcrop approximately 100
meters from the roadside mineralization. The trench area was grubbed
off using an excavator. Holes were drilled to a maximum 4 meters
below surface and were loaded with explosives and blasted. In total
three separate areas were excavated and blasted. The trenches were
inspected and sampled with assays returning up to 0.42% Cu. It could
not be determined whether the area sampled was linked to the mineralization
exposed along the roadside.
Mr.
Mercer concluded that the trenching program had failed to prove an extension to
the roadside mineralization. It is also apparent, from reviewing Mr.
Mercer’s Prospecting Report, that the lack of outcrop made it difficult to
advance the prospect through a trenching program.
Present
Condition of the Labrador Claims
The
mineralization found to date on the Labrador Claims consists primarily of copper
and gold mineralization in sulphide with associated pyrite (a non-economic
sulphide mineral). There are also a number of malachite veins (and
malachite stained outcrops).
The
country rocks have been identified as meta-sedimentary
gneiss. Locally gabbros and diorites have been identified by surface
prospecting.
Based on
the mineralization and the known geologic rock types, there appear to be three
possible deposit types that could host mineralization within the Labrador
Claims; 1) porphyry copper-gold in sulphide, 2) volcanogenic (Cu-Pb-Zn) massive
sulphide, or 3) magmatic nickel-copper sulphide.
Copper-gold
(Cu-Au) deposits occur within sedimentary rocks when a stock intrudes into the
sediments and heats up the ground water. The heated fluids pick up
copper and other metals as they percolate through fractures opened up within the
sediments. Mineralization is mostly disseminated, but significant
veins of chalcopyrite, rich in gold, are also present. The presence
of chalcopyrite in meta-sediment and malchite staining are excellent indicators
for a copper-gold system.
VMS
deposits are commonly formed by deposition of hot metals into seawater from
volcanic vents on the seafloor. The main metals include copper, zinc, lead, gold
and silver. Within the Labrador Claims there are no mapped volcanic
rocks, although the known mineralization has been found within gabbro and
diorite.
Magmatic
nickel-copper sulphide deposits are hosted in mafic to ultramafic rocks such as
gabbro, norite, and troctolite. Other rock types commonly associated
with these host rocks are diorites and anorthosites. Within the
Labrador Claims chalcopyrite mineralization was identified in a gabbro and
separately associated with a diorite dyke.
The
Labrador Claims are almost completely covered by overburden and tree
cover. Rock outcrops are best observed along the highway where they
have been uncovered.
The
climate within the area is typically northern with short hot summers and long
cold winters. Winter temperatures can range from -15o C to
-35o
C and occasionally fall to below -42o
C.
There is
no equipment, infrastructure or electricity currently on the Labrador
Claims.
There
have been no previous airborne surveys in this area that are within 35
kilometers (22 miles) of the Labrador Claims. The area would have
been covered as part of the Federal Government regional airborne magnetic
survey, but this survey would not have the sufficient resolution to identify
magnetic units less than 1 kilometer in size and could not detect any conductive
mineralization.
Geology
of the Labrador Claims
Geologically
the area is mapped as early to late Proterozoic meta-sediments that have been
metamorphosed to gneisses. Major gabbroic and anorthositic intrusives
have intruded the gneisses several kilometers to the east and local gabbros and
diorites occur throughout the area along with several quartz
veins. Large tourmaline crystals have also been identified on the
Labrador Claims. The area has little outcrop and is covered by
overburden, generally sand and gravel. Spruces trees are abundant but
are not very tall.
Limited
prospecting and surface trenching in 2002 and again in 2004 failed to define a
source of the copper mineralization, although additional sub-crop samples were
identified containing some copper and gold values. The presence of
several copper showings and malachite staining in the limited outcrop suggests
that a mineralizing event of copper and gold has intruded into the
meta-sedimentary rocks. The nature of the mineralization is likely to
be copper veins and disseminations with associated gold. It is also
possible that magmatic nickel and copper mineralization could be present with
associated platinum group elements within gabbros.
Page
- 21
Plan
of Operation
Exploration
Plan
Wolverine’s
plan of operation for the next 12 months is to complete the following five phase
exploration program within the time periods specified, subject to Wolverine
obtaining the additional funding necessary for the continued exploration of the
Labrador Claims. Currently, Wolverine does not have enough funds to
complete Phase Three or Phase Four or its proposed exploration program in the
spring-summer of 2008. The following is a brief summary of
Wolverine’s five phase exploration program.
1.
Phase
One – This phase of Wolverine’s proposed exploration program was completed
in October 2007 at a cost of $7,500. Phase One consisted of
prospecting, rock sampling, and assaying the rock samples. As a
result of the favorable results from this phase of the proposed
exploration program, management decided to proceed with Phase
Two.
2.
Phase
Two - This phase of Wolverine’s proposed exploration program was completed
in October 2007 at a cost of $201,000. Phase Two consisted of
an airborne survey of the Labrador Claims. As a result of the
favorable results from this phase of the proposed exploration program,
management has decided to proceed with Phase
Three
3.
Phase
Three will consist of a ground review by a geologist, a guide familiar
with the Labrador Claims and the area, and Steve Balch, the geophysicist,
will make the trenching and drilling recommendations. This
on-site visit would take place in the summer of 2008. The total
estimated cost for this on-site review is US$22,760. If
Wolverine is able to identify favorable rock formations and structures
with elevated metal values Wolverine will plan and proceed with Phase Four
of the proposed exploration
program.
4.
Phase
Four will consist of excavating, surface trenching and an induced
polarization survey at a total estimated cost of at least
US$232,000. The depth of any identified conductors should be
estimated and the priority shallow conductors would be the subject of a
surface trenching program. Such a program could be initiated
during late spring or early fall of 2008. If the results of
Phase Four are favorable, Wolverine will plan and proceed with Phase Five
of the proposed exploration
program.
5.
Phase
Five will consist of a drill program. Deeper conductors could
be the subject of a Phase Five fall 2008 drill program at a total
estimated cost of $462,500. Areas around the conductors could
be excavated and mapped to determine the likely geologic setting of the
target.
As at
February 29, 2008, Wolverine had a cash balance of $18,945. Wolverine
will need to raise additional financing to fund Phase Three of the proposed
exploration program to commence in summer 2008 and the Phase Four of the
proposed exploration program to commence in late summer or early fall of
2008.
During
the next 12 months, management does not anticipate generating any
revenue. Any additional funding required will come from equity
financing from the sale of Wolverine’s common stock or from the sale of part of
its interest in the Labrador Claims. If Wolverine is successful in
completing an equity financing, existing shareholders will experience dilution
of their interest in Wolverine. Management does not have any
financing arranged and cannot provide investors with any assurance that
Wolverine will be able to raise sufficient funding from the sale of its common
stock to fund the last three phases of its proposed exploration
program. In the absence of such financing, Wolverine’s business will
fail.
Management
may consider entering into a joint venture partnership by linking with a major
resource company to provide the required funding to complete Phase Five of the
proposed exploration program. Management has not undertaken any
efforts to locate a joint venture partner for Phase Five. If
Wolverine enters into a joint venture arrangement, Wolverine will assign a
percentage of its interest in the Labrador Claims to the joint venture
partner.
Based on
the nature of its business, Wolverine anticipates incurring operating losses in
the foreseeable future. Wolverine bases this expectation, in part, on
the fact that very few mineral claims in the exploration stage ultimately
develop into producing, profitable mines. Wolverine’s future financial results
are also uncertain due to a number of factors, some of which are outside its
control. These factors include, but are not limited to:
·
Wolverine’s
ability to raise additional
funding;
·
the
market price for minerals;
·
the
results of the exploration programs on the Labrador Claims;
and
·
Wolverine’s
ability to find joint venture partners for the development of its property
interests.
Due to
Wolverine’s lack of operating history and present inability to generate
revenues, Wolverine’s auditors have stated their opinion that there currently
exists substantial doubt about Wolverine’s ability to continue as a going
concern.
Page
- 22
Exploration
Commitments
Also,
under the terms of the Vend-In Agreement Wolverine is required to incur the
following expenditures on the Labrador Claims: (i) CDN $150,000 on or before
March 1, 2008; (ii) CDN $200,000 on or before March 1, 2009, and (iii) CDN
$250,000 on or before March 1, 2010; provided that (iv) any excess amount spent
in one year may be carried forward and applied towards fulfillment of the
expenditure required in the later year. As a result of its completion
of Phase One and Phase Two of the proposed exploration program, Wolverine has
met its March 1, 2008 expenditure requirements. Management expects
that the final three phases of the proposed exploration program will satisfy all
exploration expenditure requirements under the Vend-In Agreement up to March 1,2009.
Transportation
Costs
The
initial ground review program in Phase Three will require mobilization of a crew
from Toronto, Ontario and Goose Bay, Labrador. The cost of this
mobilization has been taken into account in the cost estimate of
$18,000.
The
excavating and trenching program in Phase Four will require mobilization from
Goose Bay. The cost of equipment mobilization has been accounted for
in the excavating and trenching cost estimate of
$75,000. Transportation costs will be incurred from time to time from
Goose Bay, Labrador and occasionally from Toronto, Ontario. These
costs are estimated at $8,000 up to and including the drilling
phase.
During
drilling in Phase Five the drill-core will be transported from the drill-site to
Goose Bay for logging, sample preparation and temporary storage. An
estimated 2,000 metres (6,562 feet) of drill-core will require up to 400 core
boxes. The cost of transporting this core is estimated to be
$7,500.
Equipment
Costs
A ground
review in Phase Three will require the use of a high accuracy GPS unit estimated
to cost $760.
Trenching
and excavating equipment costs in Phase Four are contained within the estimated
cost of $75,000. There are no expected equipment costs for the
drilling as the cost estimate as provided is an all-in cost (including drill
etc) of $200 per meter.
During
Phase Five, a temporary core logging facility will be required in Goose
Bay. Equipment costs will include purchase of a core saw, laptop
computer, digital camera and manufacturing of core benches and core
racks. The estimated total cost for this is $25,000.
Consumable
Costs
During
the final three phases of the proposed exploration program consumable costs are
expected to be minor other than during drill core and sample
preparation. Estimated cost for consumables during Phase Five is
$4,000.
Labor
Costs
On-site
supervision will be required for the excavating & trenching in Phase Four
and for the drilling in Phase Five, including core logging, core transportation,
and sample preparation. Excavating & trenching will require a
senior geologist for 5 days at $800 per day ($4,000). Core logging
will require a junior geologist for 40 days at $600 per day
($24,000). Core transportation and sample preparation will require a
geo-technician for 40 days at $400 per day ($16,000). Total labor
costs are estimated to be $44,000 ($4,000 + $24,000 + $16,000) for the three
remaining phases of the proposed exploration program.
Sample Analysis
Costs
In Phase
Five, selected samples will be sent for assaying over approximate 1 meter
intervals. The assay costs are approximately $200 per sample and
includes transportation. Wolverine estimates it will have 50 samples
to assay from the drill program in Phase Five. The total
estimated cost for sample analysis is $10,000.
Exploration Program
Costs
The costs
described above, which include the ground review, excavating and surface
trenching, drilling, transportation, equipment, consumables, labor, and sample
analysis, make up the entire cost of the final three phases of Wolverine’s
proposed exploration program. All the costs described above are
estimated so management will provide a 15% contingency allowance for
unanticipated and wrongly estimated costs. The table below summarizes
the cost estimate for the final three phases of the proposed exploration
program.
Page
- 23
Exploration
Items
Cost
Estimate
US$
Phase
Three - Ground Review
$18,000
Phase
Four - Excavating and Surface Trenching
$75,000
Phase
Four - Induced Polarization Survey
$125,000
Phase
Five - Drill program
$400,000
Phase
Four and Phase Five - Transportation
$15,500
Phase
Three and Phase Five - Equipment
$25,760
Phase
Five - Consumables
$4,000
Phase
Three, Phase Four, and Phase Five - Labor
$44,000
Phase
Five - Sample Analysis
$10,000
Contingency
at 15%
$107,589
Total
$824,849
Accounting and Audit
Plan
Wolverine
intends to continue to have its outside consultant assist in the preparation of
Wolverine’s quarterly and annual financial statements and have these financial
statements reviewed or audited by Wolverine’s independent
auditor. Wolverine’s outside consultant is expected to charge
Wolverine approximately $67,500 to prepare Wolverine’s quarterly financial
statements and approximately $22,500 to prepare Wolverine’s annual financial
statements. Wolverine’s independent auditor is expected to charge
approximately $15,000 to review Wolverine’s quarterly financial statements and
approximately $15,000 to audit Wolverine’s annual financial
statements. In the next twelve months, Wolverine anticipates spending
approximately $120,000 to pay for its accounting and audit
requirements.
SEC Filing
Plan
Wolverine
intends to become a reporting company in 2008 after its registration statement
is declared effective. This means that Wolverine will file documents
with the US Securities and Exchange Commission on a quarterly
basis. Wolverine expects to incur filing costs of approximately
$4,000 per quarter to support its quarterly and annual filings. In
the next 12 months, Wolverine anticipates spending approximately $16,000 for
legal costs to pay for three quarterly filings, one annual filing, a 424B4 final
prospectus filing, and a Form 8-A filing in order to complete registration of
Wolverine’s common stock.
Competitive
Conditions
The
mineral exploration business is an extremely competitive
industry. Wolverine is competing with many other mineral exploration
companies. As a junior mineral exploration company, Wolverine
competes with other junior companies for financing and joint venture
partners. Additionally, Wolverine competes for resources such as
professional geologists, camp staff, helicopters and mineral exploration
supplies.
Raw
Materials
The raw
materials for Wolverine’s exploration program will be items including camp
equipment, sample bags, first aid supplies, groceries and
propane. All of these types of materials are readily available in
Goose Bay, Labrador, Canada from a variety of
suppliers. Infrastructure required for exploration, advanced
exploration and even mining are readily available given the proximity of the
Labrador Claims to Goose Bay, which has an international airport and a number of
exploration outfitters and supply stores, open all year round.
Page
- 24
Government
Approvals and Regulations
Wolverine
will be required to comply with all regulations defined in the Mineral Act for
the Province of Newfoundland and Labrador. The Act is well defined by
the Province of Newfoundland and Labrador and is available from Wolverine upon
request.
The
effect of these existing regulations on Wolverine’s business is that it is able
to carry out its exploration program as Wolverine has described in this
prospectus. However, it is possible that a future government could
change the regulations that could limit Wolverine’s ability to explore the
Labrador Claims, but management believes this is highly unlikely.
Employees
Wolverine
does not have any employees other than Mr. Costerd. Wolverine intends
to retain the services of independent geologists, prospectors and consultants on
a contract basis to conduct the exploration programs on the Labrador
Claims.
Description of Property
Wolverine’s
executive offices are located at 4055 MacLean Road, Quesnel, British Columbia,
Canada, V2J 6V5. Wolverine’s President, Lee Costerd, currently provides this
space to Wolverine free of charge. This space may not be available to Wolverine
free of charge in the future. Wolverine’s administrative office is
located at 1450 Palmerston Avenue, West Vancouver, British Columbia, V7T
1H7. Wolverine is renting the administrative office for $1,000 per
month.
Wolverine
has mineral claims located in central Labrador, Canada as described in the
section “Description of Business”.
Legal Proceedings
Wolverine
has no legal proceedings that have been or are currently being undertaken for or
against Wolverine nor are any contemplated.
SEC
Filings
This
prospectus and exhibits will be contained in a Form S-1 registration statement
that will be filed with the Securities and Exchange
Commission. Wolverine will become a reporting company after this
registration statement has been declared effective by the Securities and
Exchange Commission (“SEC”). As a
reporting company Wolverine will file quarterly, annual, beneficial ownership
and other reports with the SEC. However, unless Wolverine has the
requisite number of shareholders it is only obliged to report to the SEC for one
year.
You may
read and copy any materials Wolverine files with the SEC at the SEC’s Public
Reference Room at 100 F Street, N.E., Washington, D.C., 20549. You
may obtain information from the Public Reference Room by calling the SEC at
1-800-SEC-0330. Since Wolverine is an electronic filer, the easiest
way to access its reports is through the SEC’s Internet website that contains
reports, proxy and information statements, and other information regarding
issuers that file electronically with the SEC.
Market for Common Equity and Related
Stockholder Matters
Market
Information
There is
presently no public market for Wolverine’s common stock. Wolverine
anticipates applying for trading of its common stock on the Over the Counter
Bulletin Board (OTCBB) upon the effectiveness of the registration statement of
which this prospectus forms a part. However, Wolverine can provide no
assurance that its shares will be traded on the OTCBB or, if traded, that a
public market will materialize.
Wolverine
has no common stock that is subject to outstanding warrants to purchase or
securities that are convertible to Wolverine common stock, with the exception of
the warrants being issued as part of the units in this offering.
As of
July 10, 2008 Wolverine had 68,630,000 shares of its common stock outstanding of
which 64,630,000 shares are owned by non-affiliate shareholders and 4,000,000
shares are owned by Wolverine’s sole Director and Officer who is an
affiliate.
Subject
to the Rule 144 volume limitations and the “shell company” trading restrictions
described in the paragraph below, there are a total of 67,530,000 shares of
Wolverine’s common stock that can be sold pursuant to Rule 144 as
follows:
2,750,000
shares of Wolverine’s common stock owned by 12 non-affiliates since
December 13, 2006.
·
2,150,000
shares of Wolverine’s common stock owned by 20 non-affiliates since July31, 2007.
·
36,600,000
shares of Wolverine’s common stock owned by 17 non-affiliates since August28, 2007.
·
1,600,000
shares of Wolverine’s common stock owned by 10 non-affiliates since
September 30, 2007.
·
4,000,000
shares of Wolverine’s common stock owned by 20 non-affiliates since
October 30, 2007
·
1,100,000
shares of Wolverine’s common stock owned by two non-affiliates since
November 30, 2007.
·
6,890,000
shares of Wolverine’s common stock owned by 25 non-affiliates since
December 30, 2007.
·
2,550,000
shares of Wolverine’s common stock owned by 10 non-affiliates since
January 31, 2008.
·
2,000,000
shares of Wolverine’s common stock owned by eight non-affiliates since
March 7, 2008.
·
2,890,000
shares of Wolverine’s common stock owned by 19 non-affiliates since March8, 2008.
·
1,000,000
shares of Wolverine’s common stock owned by 10 non-affiliates since April5, 2008.
Page
- 25
Rule
144 Shares
Subject
to Wolverine’s status as a “shell company” as defined by the SEC and discussed
below, under Rule 144 a shareholder, including an affiliate of Wolverine, may
sell shares of common stock after at least six months have elapsed since such
shares were acquired from Wolverine or an affiliate of
Wolverine. Rule 144 further restricts the number of shares of common
stock which may be sold within any 90 day period to the greater of one percent
of the then outstanding shares of common stock or the average weekly trading
volume in the common stock during the four calendar weeks preceding the date on
which notice of such sale was filed under Rule 144. Certain other
requirements of Rule 144 concerning availability of public information, manner
of sale and notice of sale must also be satisfied. In addition, a shareholder
who is not an affiliate of Wolverine, and who has not been an affiliate of
Wolverine for 90 days prior to the sale, and who has beneficially owned shares
acquired from Wolverine or an affiliate of Wolverine for more than one year may
resell the shares of common stock without compliance with the foregoing
requirements under Rule 144.
If
Wolverine is classified as a “shell company” for having (1) no or nominal
operations and (2) no or nominal assets, then Rule 144 will not be available to
the shareholders of Wolverine and they would not be able to sell their shares
until Wolverine is no longer classified as a “shell company” or the shares are
registered. Shareholders would only be able to rely on Rule 144 and
to sell their shares (a) once the shares are registered or (b) one year after
Wolverine files the required information once it ceases to be a “shell
company”.
Holders
of Wolverine’s Common Stock
As of
July 10, 2008 Wolverine had 132 holders of its common stock.
Equity
Compensation Plans
Wolverine
has no equity compensation program including no stock option plan and none are
planned for the foreseeable future.
Registration
Rights
Wolverine
has not granted registration rights to the selling shareholders or to any other
person.
Dividends
There are
no restrictions in Wolverine’s articles of incorporation or bylaws that restrict
Wolverine from declaring dividends. The Nevada Revised Statutes,
however, do prohibit Wolverine from declaring dividends where, after giving
effect to the distribution of the dividend:
1.
Wolverine
would not be able to pay its debts as they become due in the usual course
of business; or
2.
Wolverine’s
total assets would be less than the sum of its total liabilities, plus the
amount that would be needed to satisfy the rights of shareholders who have
preferential rights superior to those receiving the
distribution.
Wolverine
has not declared any dividends. Wolverine does not plan to declare
any dividends in the foreseeable future.
We have
audited the accompanying balance sheets of Wolverine Exploration Inc. (an
exploration stage company) as of May 31, 2007 and 2006, and the related
statements of operations, stockholders’ equity and cash flows for the years then
ended and for the period from inception (February 23, 2006) through May 31,2007. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. The
Company is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s internal control
over financial reporting. Accordingly, we express no such opinion. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Wolverine Exploration Inc. as of
May 31, 2007 and 2006, and the results of its operations and its cash flows for
the years then ended and for the period from inception (February 23, 2006)
through May 31, 2007 in conformity with accounting principles generally accepted
in the United States of America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As more fully described in Note 3,
the Company has incurred recurring operating losses and has an accumulated
deficit. These conditions raise substantial doubt about the Company’s
ability to continue as a going concern. Management’s plans in regard
to these matters are also described in Note 3. The financial
statements do not include any adjustments to reflect the possible future effects
on the recoverability and classification of assets or the amounts and
classification of liabilities that may result from the outcome of this
uncertainty.
Wolverine
Exploration Inc. (“Wolverine”) was incorporated on February 23, 2006, under the
laws of the State of Nevada. Wolverine’s principal business is the acquisition
and exploration of mineral resources in central Labrador,
Canada. Wolverine has not presently determined whether its properties
contain mineral reserves that are economically recoverable. Wolverine
has not commenced significant operations and is considered an Exploration Stage
Company, as defined by Statement of Financial Accounting Standard (“SFAS”) No.7
Accounting and Reporting by
Development Stage Enterprises. In these notes,
the terms “Company”, “we”, “us” or “our” mean Wolverine.
Basis
of Presentation
These
financial statements and related notes are presented in accordance with
accounting principles generally accepted in the United States, and are expressed
in US dollars.
NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Accounting
Estimates
The
preparation of the financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
The
Company’s financial statements are based on a number of estimates, including
accruals for estimated accounting, auditing, legal and administrative
expenses.
Cash
and Cash Equivalents
Wolverine
considers all highly liquid instruments with an original maturity or remaining
maturity at the date of purchase of three months or less to be cash
equivalents. At May 31, 2006 and 2007, the Company did not have any
cash equivalents.
Long-lived Assets
At May31, 2006 and 2007, the Company’s only long-lived assets were its mineral
properties. Mineral properties whose costs are individually
significant are assessed individually. Where it is not practicable to
assess individually, such properties may be grouped for an assessment of
impairment. Impairment of mineral properties is estimated based on
primary lease terms, geologic data and average holding periods. The
Company’s mineral properties are evaluated quarterly for the possibility of
potential impairment. The Company has no other long-lived assets and has not
recognized any impairment losses with respect to its mineral
properties. See related disclosures under the caption “Mineral
Property Costs.”
NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES, continued
Mineral
Property Costs
The
Company has been in the exploration stage since its inception on February 23,2006 and has not yet realized any revenues from its planned
operations. It is primarily engaged in the acquisition and
exploration of mining properties. Mineral property exploration costs
are expensed as incurred. Mineral property acquisition costs are
initially capitalized when incurred using the guidance in the Emerging Issues
Task Force (“EITF”) 04-02, Whether Mineral Rights are Tangible
or Intangible Assets. The Company assesses the carrying costs
for impairment under SFAS No. 144, Accounting for Impairment or
Disposal of Long Lived Assets at each fiscal quarter end. An
impairment is recognized when the sum of the expected undiscounted future cash
flows is less than the carrying amount of the mineral
property. Impairment losses, if any, are measured as the excess of
the carrying amount of the mineral property over its estimated fair
value.
When it
has been determined that a mineral property can be economically developed as a
result of establishing proven and probable reserves, the costs then incurred to
develop such property, are capitalized. Such costs will be amortized
using the units-of-production method over the estimated life of the probable
reserves. If mineral properties are subsequently abandoned or
impaired, any capitalized costs will be charged to operations.
Asset
Retirement Obligations
SFAS No.
143 (“SFAS 143”), Accounting
for Asset Retirement Obligations addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement
costs. Specifically, SFAS 143 requires that the fair
value of a liability for an asset retirement obligation be recognized in the
period in which it is incurred if a reasonable estimate of fair value can be
made. In addition, the asset retirement cost is capitalized as part
of the asset’s carrying value and subsequently allocated to expense over the
asset’s useful life. At May 31, 2006 and 2007, the Company did not
have any asset retirement obligations.
Foreign
Currency Translation
The
Company’s functional and reporting currency is the United States
dollar. Monetary assets and liabilities denominated in foreign
currencies are translated in accordance with SFAS No. 52 Foreign Currency Translation,
using the exchange rate prevailing at the balance sheet date. Gains and losses
arising on settlement of foreign currency denominated transactions or balances
are included in the determination of income. Foreign currency
transactions are primarily undertaken in Canadian dollars. The
Company has not to the date of these financial statements, entered into
derivative instruments to offset the impact of foreign currency
fluctuations.
Comprehensive
Income (Loss)
Comprehensive
income (loss) reflects changes in equity that results from transactions and
economic events from non-owner sources. At May 31, 2006 and 2007 the
Company had no items that represented comprehensive income (loss) other than net
loss and therefore, did not include a schedule of comprehensive income (loss) in
the financial statements.
NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES, continued
Financial
Instruments
Foreign Exchange Risk
The
Company is subject to foreign exchange risk for transactions denominated in
foreign currencies. Foreign currency risk arises from the fluctuation
of foreign exchange rates and the degree of volatility of these rates relative
to the United States dollar. The Company does not believe that it has
any material risk due to foreign currency exchange.
Fair
Value of Financial Instruments
The
Company’s financial instruments include cash and accrued
liabilities. The fair value of these financial instruments
approximate their carrying values due to their short maturities.
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to significant concentrations
of credit risk consist principally of cash deposits. At May 31, 2006 and 2007,
the Company had approximately $37,000 and $10,000, respectively in cash that was
not insured. This cash is on deposit with a large chartered Canadian
bank. As part of its cash management process, the Company performs
periodic evaluations of the relative credit standing of this financial
institution. The Company has not experienced any losses in cash
balances and does not believe it is exposed to any significant credit risk on
its cash.
Income
Taxes
Income
tax expense is based on pre-tax financial accounting income. Deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax bases.
Deferred tax assets, including tax loss and credit carryforwards, and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date. Deferred income tax expense represents the change
during the period in the deferred tax assets and deferred tax liabilities. The
components of the deferred tax assets and liabilities are individually
classified as current and non-current based on their characteristics. Deferred
tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized.
NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES, continued
Basic
and Diluted Net Income (Loss) Per Common Share (“EPS”)
Basic net
income (loss) per share is computed by dividing the net income (loss)
attributable to the common stockholders by the weighted average number of common
shares outstanding during the reporting period. Diluted net income
per common share includes the potential dilution that could occur upon exercise
of the options and warrants to acquire common stock computed using the treasury
stock method which assumes that the increase in the number of shares is reduced
by the number of shares which could have been repurchased by the Company with
the proceeds from the exercise of the options and warrants (which were assumed
to have been made at the average market price of the common shares during the
reporting period).
Potential
common shares are excluded from the diluted loss per share computation in net
loss periods as their inclusion would be anti-dilutive.
At May31, 2006 and 2007, 7,350,000 and 52,300,000 respectively, of the Company’s
common stock was issued or subscribed for. The Company did not have
any options or warrants outstanding.
Stock-Based
Compensation
In
December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
123(R), Share-Based
Payment (“SFAS 123(R)”), which is a revision of SFAS No. 123, Accounting for Stock-Based
Compensation. SFAS 123(R) was effective for public companies
for the first fiscal year beginning after June 15, 2005, supersedes Accounting
Principles Board Opinion No. 25 (“APB 25”), Accounting for Stock Issued to
Employees, and amends SFAS 95, Statement of Cash
Flows. SFAS 123(R) eliminates the option to use APB 25’s
intrinsic value method of accounting and requires recording expense for stock
compensation based on a fair value based method.
The
adoption of SFAS 123(R) did not have a material effect on the Company’s
financial condition or results of operations.
Recent
Accounting Pronouncements
In
February 2007, the FASB issued SFAS No. 159 (“SFAS 159”), The Fair Value Option for Financial
Assets and Financial Liabilities – including an amendment of
SFAS No. 115, Accounting for
Certain Investments in Debt and Equity Securities, which applies to all
entities with available-for sale and trading securities. This
Statement permits entities to choose to measure many financial instruments and
certain other items at fair value. The objective is to improve
financial reporting by providing entities with the opportunity to mitigate
volatility in reported earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting
provisions. This Statement is effective as of the beginning of an
entity’s first fiscal year that begins after November 15, 2007. Early
adoption is permitted as of the beginning of a fiscal year that begins on or
before November 15, 2007, provided the entity also elects to apply the
provisions of FASB Statement No. 157, Fair Value Measurements. We
plan to adopt SFAS 159 effective June 1, 2008. We are in the process
of determining the effect, if any, the adoption of SFAS 159 will have on our
financial statements.
NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES, continued
Recent
Accounting Pronouncements, continued
In
December 2006, the FASB issued FASB Staff Position (“FSP”) EITF 00-19-2,
Accounting for Registration
Payment Arrangements. This FSP specifies that the contingent obligation
to make future payments or otherwise transfer consideration under a registration
payment arrangement should be separately recognized and measured in accordance
with FASB Statement No. 5, Accounting for Contingencies.
This FSP is effective immediately for registration payment arrangements and the
financial instruments subject to those arrangements that are entered into or
modified subsequent to December 21, 2006. For registration payment
arrangements and financial instruments subject to those arrangements that were
entered into prior to December 21, 2006, the guidance in the FSP was
effective for the Company during the third quarter of 2007. Adoption
of this FSP had no impact on our financial position or results of
operations.
In
September 2006, the FASB issued SFAS 158 (“SFAS 158”), Employers’ Accounting for Defined
Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements
No. 87, 88, 106, and 132(R). This statement requires an
employer to recognize the over funded or under funded status of a defined
benefit postretirement plan as an asset or liability in its statement of
financial position and to recognize changes in that funded status in the year in
which the changes occur through comprehensive income of a business entity. This
statement also requires an employer to measure the funded status of a plan as of
the date of its year end statement of financial position, with limited
exceptions. The Company will be required to initially recognize the funded
status of a defined benefit postretirement plan and to provide the required
disclosures as of the end of the fiscal year ending after December 15,2006. The requirement to measure plan assets and benefit obligations
as of the date of the employer’s fiscal year end statement of financial position
is effective for fiscal years ending after December 15, 2008, or June 1,2009 for the Company. We do not have a defined benefit postretirement plan and
thus the Adoption of SFAS 158 is not expected to have a material impact on our
financial statements.
In
September 2006, the FASB issued SFAS No. 157 (“SFAS 157”), Fair Value
Measurements. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosure requirements about
fair value measurements. SFAS 157 will be effective for the CompanyJune 1,2007. Adoption of SFAS 157 is not expected to have a material impact on our
condensed financial statements.
In
September 2006, the Securities and Exchange Commission staff published
Staff Accounting Bulletin SAB No. 108 (“SAB 108”), Considering the Effects of Prior
Year Misstatements when Quantifying Misstatements in Current Year Financial
Statements. SAB 108 addresses quantifying the financial statement effects
of misstatements, specifically, how the effects of prior year uncorrected errors
must be considered in quantifying misstatements in the current year financial
statements. SAB 108 is effective for fiscal years ending after November 15,2006. The adoption of SAB 108 did not have a material impact on our financial
statements.
NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES, continued
Recent
Accounting Pronouncements, continued
In June
2006, the FASB issued FASB Interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income
Taxes, and Interpretation of FASB Statement No. 109 (“SFAS
109”). FIN 48 clarifies the accounting for uncertainty in income
taxes recognized in a company’s financial statements and prescribes a
recognition threshold and measurement attribute for the financial statement
recognition and measurement of a tax position taken or expected to be taken in
an income tax return. FIN 48 also provides guidance on derecognition,
classification, interest and penalties, accounting in interim periods,
disclosure and transition. FIN 48 is effective for the Company
beginning June 1, 2007. Adoption of FIN 48 is not expected to have a material
impact on our financial statements.
In March
2006, the FASB issued SFAS No. 156 (“SFAS 156”), Accounting for Servicing of
Financial Assets – an amendment of FASB Statement No.
140. SFAS 156 amends SFAS No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities, with
respect to accounting for separately recognized servicing assets and servicing
liabilities. SFAS 156 is effective for fiscal years that begin after
September 15, 2006, with early adoption permitted as of the beginning of an
entity’s fiscal year. SFAS 156 is effective for the Company beginning
June 1, 2007. The Company does not have any servicing assets or
servicing liabilities and, accordingly, the adoption of SFAS 156 is not expected
to have a material impact on our financial statements.
In
February 2006, the FASB issued SFAS No. 155 (“SFAS 155”) Accounting for Certain Hybrid
Financial Instruments - an amendment of FASB Statements No. 133 and
140. This Statement amends FASB Statements No. 133, Accounting for Derivative
Instruments and Hedging Activities, and No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of
Liabilities. This Statement resolves issues addressed in
Statement 133 Implementation Issue No. D1, Application of Statement 133 to
Beneficial Interests in Securitized Financial Assets. This
statement is effective for all financial instruments acquired or issued after
the beginning of an entity’s first fiscal year that begins after September 15,2006. SFAS 156 is effective for the Company beginning June 1,2007. We do not expect adoption of SFAS 155 to have a material impact
on our financial statements.
In May
2005, the FASB issued SFAS No. 154 (“SFAS 154”), Accounting Changes and Error
Corrections. This statement, which replaces APB Opinion No.
20, Accounting Changes,
and FASB Statement No. 3, Reporting Accounting Changes in
Interim Financial Statements, requires that a voluntary change in
accounting principle be applied retrospectively to all prior period financial
statements presented, unless it is impracticable to do so. SFAS 154
also provides that a change in method of depreciating or amortizing a long-lived
non-financial asset be accounted for as a change in estimate effected by a
change in accounting principle, and also provides that correction of errors in
previously issued financial statements should be termed a
“restatement”. SFAS 154 was effective for fiscal years beginning
after December 15, 2005. The adoption of SFAS 154 did not have a
material impact on our financial statements.
These
financial statements have been prepared on a going concern basis, which implies
the Company will continue to realize its assets and discharge its liabilities in
the normal course of business. The Company has not generated any revenues since
inception and has never paid any dividends and is unlikely to pay dividends or
generate earnings in the immediate or foreseeable future. The continuation of
the Company as a going concern is dependent upon the continued financial support
from its shareholders, the ability of the Company to obtain necessary equity
financing to continue operations, confirmation of the Company’s interests in the
underlying properties, and the attainment of profitable operations. The
Company’s ability to achieve and maintain profitability and positive cash flows
is dependent upon its ability to locate profitable mineral properties, generate
revenues from its mineral production and control production costs. Based upon
current plans, the Company expects to incur operating losses in future
periods. At May 31, 2007, the Company had working capital deficit of
$131,974 and had accumulated losses of $244,653 since
inception. These factors raise substantial doubt regarding the
Company’s ability to continue as a going concern. There is no assurance that the
Company will be able to generate revenues in the future. These financial
statements do not give any effect to any adjustments that would be necessary
should the Company be unable to continue as a going concern and therefore be
required to realize its assets and discharge its liabilities in other than the
normal course of business and at amounts different from those reflected in the
accompanying financial statements.
The
following amounts were due to related parties at May 31, 2006 and
2007:
2006
2007
Due
to a relative of the director (a)
$
4,361
$
467
Consulting
fees due to a company controlled
by
a major shareholder (b)
-
38,081
Consulting
fees due to a company controlled
by
a major shareholder (c)
-
59,529
Consulting
fees due to the director (d)
333
-
Total
Related Party Payables
$
4,694
$
98,077
(a)
During
the years ended May 31, 2006 and 2007, the Company paid or accrued $3,000
and $17,527 in consulting fees and $1,362 and $3,304 in rent respectively,
to a relative of the director.
(b)
During
the year ended May 31, 2007, the Company paid or accrued $51,229 in
consulting fees to company controlled by a major shareholder of the
Company.
(c)
During
the year ended May 31, 2007, the Company paid or accrued $92,500 in
consulting fees and $3,739 in rent to a company controlled by a major
shareholder of the Company.
(d)
During
the years ended May 31, 2006 and 2007, the Company paid or accrued $333
and $12,793 respectively, in consulting fees to its
director. During the year ended May 31, 2006, the Company
issued 4,000,000 common shares to this director. (Note
6)
Note
Payable to Related Party
On
February 28, 2007, the Company issued had a promissory note for $34,000 to a
company controlled by a major shareholder as part of the vend-in
agreement. The note is unsecured and payable on demand after May 31,2007. The note will not bear interest until it is demanded, once the
note is demanded interest will be payable at an annual rate of ten per cent,
compounded semi-annually. At May 31, 2007, the Company was indebted
in the amount of $28,414 on this note. (Notes 5 and
9)
On
February 27, 2007, the Company entered into a vend-in agreement whereby
they agreed to acquire a 90% interest in four mineral licenses in central
Labrador, Canada, comprised of 516 mineral claims covering an area of
33,111 acres. On March 27, 2007the Company issued a $34,000
promissory note and 34,000,000 in common shares to acquire this 90%
interest. Included in the purchase price is $26,100 in staking
security deposits that will be refunded to the Company upon submission and
acceptance of a report covering the first year work
requirements. (Notes 4, 6, 7 and
9)
Under the
terms of the vend-in agreement, the Company is committed to spend approximately
$140,000 (CDN$150,000) on or before March 1, 2008, $187,000 (CDN$200,000) on or
before March 1, 2009, and $234,000 (CDN$250,000) on or before March 1, 2010 with
the provision that any excess amount spent in one year may be carried forward
and applied towards fulfilment of the expenditure requirements of a later
year.
(b)
On
May 17, 2007, the Company purchased a 90% interest in one mineral license
in central Labrador, Canada, comprised of 6 claims covering an area of 371
acres for cash of $321
(CDN$360).
Mineral
Exploration Licenses
The
mineral exploration licenses on the Companies properties are for a term of five
years commencing at various dates from August 18, 2006 to May 17,2007. These licenses may be renewed every five years for up to a
maximum of twenty years provided annual assessment work is completed and
reported, and license renewal fees of $35, $50 and $100 per claim are paid after
five, ten and fifteen years respectively. In order to maintain the property in
good standing the Company is required to spend from $200 per claim in the first
year to $1,200 per claim in the twentieth year. (Notes 7 and
9)
The
Company’s mineral properties are evaluated quarterly for the possibility of
potential impairment. At May 31, 2007, no impairment charges were
recorded against our mineral properties.
NOTE
6 - COMMON STOCK
On April3, 2006, the Company issued 4,000,000 common shares at $0.001 per share for cash
of $4,000 to its Director. (Note 4)
On June13, 2006the Company issued 2,750,000 common shares at $0.01 per share by way of
private placements for cash of $27,500.
During
April and May 2006, 850,000 of the Company’s common shares were subscribed for
at $0.01 per share for cash of $8,500. Subsequent to May 31, 2006,
these share subscriptions were cancelled and the $8,500 was refunded to the
subscribers.
On
January 31, 2007the Company issued 2,150,000 common shares at $0.01 per share
by way of private placements for total proceeds of $21,500.
On
February 26, 2007, the Company increased their authorized shares of common stock
from 75,000,000 to 200,000,000.
On
February 28, 2007the Company issued 2,600,000 common shares at $0.01 per share
by way of private placements for cash of $26,000.
On
February 28, 2007the Company issued 34,000,000 common shares at a deemed fair
value of $340,000 or $0.01 per share in partial payment for a 90% interest in
mineral licences. (Note 5)
On March30, 2007the Company issued 1,600,000 common shares at $0.01 per share by way of
private placements for cash of $16,000.
On April30, 2007the Company issued 4,000,000 common shares at $0.01 per share by way of
private placements for cash of $40,000.
On May31, 2007the Company issued 1,100,000 common shares at $0.01 per share by way of
private placements for cash of $11,000.
On March30, 2007, 100,000 of the Company’s common shares were subscribed for at $0.01
per share for cash of $1,000. (Note 9)
NOTE
7 – COMMITMENTS
Under the
terms of the vend-in agreement and the mineral exploration licenses the Company
is required to spend the following minimum amounts on exploration:
Future
minimum payments
Vend-in
Agreement
Mineral
Exploration Expenditures*
Mineral
Exploration Licences
2008
$
140,200
$
-
$
-
2009
186,933
-
-
2010
233,667
-
-
2011
-
170,764
-
2012
-
195,158
17,076
After
2012
-
6,586,597
73,184
Total
future minimum payments
$
560,800
$
6,952,519
$
90,260
*Minimum
expenditures required under the terms of the vend-in agreement also qualify as
minimum exploration expenditures under the terms of the license
agreements. (Notes 5 and 9)
Income
tax expense has not been recognized for the period from February 23, 2006
(inception) to May 31, 2006 and the year ended May 31, 2007 and no taxes were
payable at May 31, 2006 or 2007, because the Company has incurred net operating
losses (“NOL’s”) since its inception.
At May31, 2006 and 2007the Company had the following deferred tax assets related to
NOL’s. A 100% valuation allowance has been established as management
believes it is more likely than not that the deferred tax assets will not be
realized.
2006
2007
Federal
loss carryforwards
$
6,707
83,182
Less:
valuation allowance
(6,707
)
(83,182
)
$
-
$
-
The
Company’s valuation allowance increased during 2006 and 2007 by $6,707 and
$76,475 respectively.
The
Company had the following NOL carryforwards at May 31:
2006
2007
$
19,727
$
244,653
The
federal NOL’s expire through May 31, 2027. The Company is a Nevada
corporation and is not subject to state taxes.
Subsequent
to May 31, 2007, the Company entered into a Geophysical Survey Agreement whereby
they contracted for airborne geophysical surveys to be conducted on their
mineral properties in central Labrador for a cost of $200,892. These
surveys were conducted subsequent to May 31, 2007 and the survey costs qualify
as exploration expenditures under the terms of the Company’s mineral exploration
license and vend-in agreement. (Notes 5 and 7)
Note
Payable to Related Party
Subsequent
to May 31, 2007, the note payable to a related party in the amount of $28,414
was paid in full. (Note 4)
Common
Stock
On June30, 2007the Company issued 6,890,000 common shares at $0.01 per share by way of
private placements for cash of $68,900.
On July31, 2007the Company issued 2,550,000 common shares at $0.01 per share by way of
private placements for cash of $25,500.
On
September 7, 2007the Company issued 2,000,000 common shares at $0.01 per share
by way of private placements for cash of $20,000.
On
September 8, 2007the Company issued 1,890,000 common shares at $0.10 per share
by way of private placements for cash of $189,000.
On
September 8, 2007the Company issued 1,000,000 common shares at $0.10 per share
by way of private placements for cash of $100,000.
On
October 5, 2007the Company issued 1,000,000 common shares at $0.10 per share by
way of private placements for cash of $100,000.
On March30, 2007, 100,000 of the Company’s common shares were subscribed for at $0.01
per share for cash of $1,000. On November 2, 2007, these share
subscriptions were cancelled and the $1,000 refunded to the
subscriber. (Note 6)
Wolverine
Exploration Inc. (“Wolverine”) was incorporated on February 23, 2006, under the
laws of the State of Nevada. Wolverine’s principal business is the acquisition
and exploration of mineral resources in central Labrador,
Canada. Wolverine has not presently determined whether its properties
contain mineral reserves that are economically recoverable. Wolverine
has not commenced significant operations and is considered an Exploration Stage
Company, as defined by Statement of Financial Accounting Standard (SFAS) No.7
Accounting and Reporting by
Development Stage Enterprises. In these notes,
the terms “Company”, “we”, “us” or “our” mean Wolverine.
Basis
of Presentation
The
unaudited financial statements included herein have been prepared in conformity
with accounting principles generally accepted in the United States for interim
financial information and pursuant to the rules and regulations of the
Securities and Exchange Commission. They do not include all information
and notes required by generally accepted accounting principles for complete
financial statements. However, except as disclosed herein, there have been no
material changes in the information disclosed in the notes to the financial
statements for the year ended May 31, 2007. In the opinion of
management, all adjustments (including normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three and nine months ended February 29, 2008 are not necessarily indicative of
the results that may be expected for any other interim period or the entire
year. For further information, these unaudited financial statements and the
related notes should be read in conjunction with the Company’s audited financial
statements for the year ended May 31, 2007.
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reclassifications
Certain
prior period amounts in the accompanying financial statements have been
reclassified to conform to the current period’s presentation. These
reclassifications had no effect on the results of operations or financial
position for any period presented.
Long-lived Assets
At
February 29, 2008, the Company’s only long-lived assets were its mineral
properties. Mineral properties whose costs are individually
significant are assessed individually. Where it is not practicable to
assess individually, such properties may be grouped for an assessment of
impairment. Impairment of mineral properties is estimated based on
primary lease terms, geologic data and average holding periods. The
Company’s mineral properties are evaluated quarterly for the possibility of
potential impairment. The Company has no other long-lived assets and has not
recognized any impairment losses with respect to its mineral
properties. See related disclosures under the caption “Mineral
Property Costs.”
NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES, continued
Mineral
Property Costs
The
Company has been in the exploration stage since its inception on February 23,2006 and has not yet realized any revenues from its planned
operations. It is primarily engaged in the acquisition and
exploration of mining properties. Mineral property exploration costs
are expensed as incurred. Mineral property acquisition costs are
initially capitalized when incurred using the guidance in the Emerging Issues
Task Force (EITF) 04-02, Whether Mineral Rights are Tangible
or Intangible Assets. The Company assesses the carrying costs
for impairment under SFAS No. 144, Accounting for Impairment or
Disposal of Long Lived Assets at each fiscal quarter end. An
impairment is recognized when the sum of the expected undiscounted future cash
flows is less than the carrying amount of the mineral
property. Impairment losses, if any, are measured as the excess of
the carrying amount of the mineral property over its estimated fair
value.
When it
has been determined that a mineral property can be economically developed as a
result of establishing proven and probable reserves, the costs then incurred to
develop such property, are capitalized. Such costs will be amortized
using the units-of-production method over the estimated life of the probable
reserves. If mineral properties are subsequently abandoned or
impaired, any capitalized costs will be charged to operations.
Asset
Retirement Obligations
SFAS No.
143 (SFAS 143), Accounting for
Asset Retirement Obligations addresses financial accounting and reporting
for obligations associated with the retirement of tangible long-lived assets and
the associated asset retirement costs. Specifically, SFAS
143 requires that the fair value of a liability for an asset retirement
obligation be recognized in the period in which it is incurred if a reasonable
estimate of fair value can be made. In addition, the asset retirement
cost is capitalized as part of the asset’s carrying value and subsequently
allocated to expense over the asset’s useful life. At February 29,2008, the Company did not have any asset retirement obligations.
Financial
Instruments
Foreign Exchange Risk
The
Company is subject to foreign exchange risk for transactions denominated in
foreign currencies. Foreign currency risk arises from the fluctuation
of foreign exchange rates and the degree of volatility of these rates relative
to the United States dollar. The Company does not believe that it has
any material risk due to foreign currency exchange.
Fair
Value of Financial Instruments
The
Company’s financial instruments include cash and accrued
liabilities. The fair value of these financial instruments
approximate their carrying values due to their short maturities.
NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES, continued
Financial
Instruments, continued
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to significant concentrations
of credit risk consist principally of cash deposits. At February 29, 2008, the
Company had approximately $19,000 in cash that was not insured. This
cash is on deposit with a large chartered Canadian bank. As part of
its cash management process, the Company performs periodic evaluations of the
relative credit standing of this financial institution. The Company
has not experienced any losses in cash balances and does not believe it is
exposed to any significant credit risk on its cash.
Recent
Accounting Pronouncements
In
February 2006, the Financial Accounting Standards Board (FASB) issued SFAS No.
155 (SFAS 155) Accounting for
Certain Hybrid Financial Instruments - an amendment of FASB Statements No. 133
and 140. This Statement amends FASB Statements No. 133, Accounting for Derivative
Instruments and Hedging Activities, and No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of
Liabilities. This Statement resolves issues addressed in
Statement 133 Implementation Issue No. D1, Application of Statement 133 to
Beneficial Interests in Securitized Financial Assets. This
statement is effective for all financial instruments acquired or issued after
the beginning of an entity’s first fiscal year that begins after September 15,2006. SFAS 156 was effective for the Company beginning June 1,2007. The adoption of SFAS 155 did not have a material impact on our
financial statements.
In March
2006, the FASB issued SFAS No. 156 (SFAS 156), Accounting for Servicing of
Financial Assets – an amendment of FASB Statement No.
140. SFAS 156 amends SFAS No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities, with
respect to accounting for separately recognized servicing assets and servicing
liabilities. SFAS 156 is effective for fiscal years that begin after
September 15, 2006, with early adoption permitted as of the beginning of an
entity’s fiscal year. SFAS 156 was effective for the Company
beginning June 1, 2007. The Company does not have any servicing
assets or servicing liabilities and, accordingly, the adoption of SFAS 156 did
not have a material impact on our financial statements.
NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES, continued
Recent
Accounting Pronouncements, continued
In July
2006, the FASB issued FASB Interpretation No. 48 (Interpretation No. 48 or FIN
48), Accounting for
Uncertainty in Income
Taxes. Interpretation No. 48 clarifies the accounting for uncertainty in
income taxes recognized in an enterprise's financial statements in accordance
with SFAS No. 109, Accounting
for Income Taxes. Interpretation No. 48 prescribes a recognition
threshold and measurement attribute for the financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax return.
Interpretation No. 48 also provides guidance on derecognition, classification,
interest and penalties, accounting in interim periods, disclosure and
transition. Interpretation No. 48 was effective for the Company beginning June1, 2007.
The
Company adopted the provisions of FIN 48 on June 1, 2007. FIN 48 provides
detailed guidance for the financial statement recognition, measurement and
disclosure of uncertain tax positions recognized in the financial statements in
accordance with SFAS 109. Tax positions must meet a “more-likely-than-not”
recognition threshold at the effective date to be recognized upon the adoption
of FIN 48 and in subsequent periods. The adoption of FIN 48 had an immaterial
impact on the Company’s financial position and did not result in unrecognized
tax benefits being recorded. Accordingly, no corresponding interest or penalties
have been accrued. The Company is required to file income tax returns in the
U.S. federal and state jurisdictions. There are currently no federal or
applicable state income tax examinations underway for these jurisdictions. The
Company does have prior year net operating losses which remain open for
examination.
In
September 2006, the FASB issued Statement of Financial Accounting Standards
(SFAS) No. 157 (SFAS 157), Fair Value Measurements. SFAS
157 defines fair value, establishes a framework for measuring fair value and
enhances disclosures about fair value measures required under other accounting
pronouncements, but does not change existing guidance as to whether or not an
instrument is carried at fair value. SFAS 157 was effective for the Company on
June 1, 2007. The adoption of SFAS 157 did not have a significant
impact on our financial statements.
In June
2007, the EITF of the FASB reached a consensus on Issue No. 07-3 (EITF 07-3),
Accounting for Nonrefundable
Advance Payments for Goods or Services Received for Use in Future Research and
Development Activities. EITF 07-3 requires that non-refundable
advance payments for goods or services that will be used or rendered for future
research and development activities should be deferred and capitalized. As the
related goods are delivered or the services are performed, or when the goods or
services are no longer expected to be provided, the deferred amounts would be
recognized as an expense. This Issue is effective for financial statements
issued for fiscal years beginning after December 15, 2007 and earlier
application is not permitted. This consensus is to be applied prospectively for
new contracts entered into on or after the effective date. We plan to adopt EITF
07-3 on June 1, 2008. The adoption of EITF 07-3 is not expected to have a
material impact on our financial statements.
In
February 2008 the FASB staff issued Staff Position No. 157-2 (FSP FAS 157-2)
Effective date of FASB
Statement No.157. FSP FAS 157-2 delayed the effective date of
SFAS 157 for non-financial assets and non-financial liabilities, except for
items that are recognized or disclosed at fair value in the financial statements
on a recurring basis. The provisions of FSP FAS 157-2 will be
effective for the Company on June 1, 2009.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Recent
Accounting Pronouncements
In March
2008, the FASB issued SFAS No. 161 (SFAS 161), Disclosures about Derivative
Instruments and Hedging Activities – An Amendment of FASB Statement No. 133
(SFAS 133). This statement is intended to improve financial
reporting of derivative instruments and hedging activities by requiring enhanced
disclosures about (a) how and why an entity uses derivative instruments, (b) how
derivative instruments and related hedged items are accounted for under SFAS 133
and its related interpretations and (c) how derivative instruments and related
hedged items affect an entity’s financial position, financial performance and
cash flows. The provisions of SFAS 161 are effective for fiscal years beginning
after November 15, 2008. SFAS 161 will be effective for the Company
on June 1, 2009. The Company is currently evaluating the impact
adoption of SFAS 161 may have on its financial statement
disclosures.
NOTE
3 – GOING CONCERN
These
financial statements have been prepared on a going concern basis, which implies
the Company will continue to realize its assets and discharge its liabilities in
the normal course of business. The Company has not generated any revenues since
inception and has never paid any dividends and is unlikely to pay dividends or
generate earnings in the immediate or foreseeable future. The continuation of
the Company as a going concern is dependent upon the continued financial support
from its shareholders, the ability of the Company to obtain necessary equity
financing to continue operations, and the attainment of profitable operations.
The Company’s ability to achieve and maintain profitability and positive cash
flows is dependent upon its ability to locate profitable mineral properties,
generate revenues from its mineral production and control production costs.
Based upon current plans, the Company expects to incur operating losses in
future periods. At February 29, 2008, the Company had working capital
deficit of $92,277 and had accumulated losses of $763,456 since
inception. These factors raise substantial doubt regarding the
Company’s ability to continue as a going concern. There is no assurance that the
Company will be able to generate revenues in the future. These financial
statements do not give any effect to any adjustments that would be necessary
should the Company be unable to continue as a going concern and therefore be
required to realize its assets and discharge its liabilities in other than the
normal course of business and at amounts different from those reflected in the
accompanying financial statements.
During
the nine months ended February 29, 2008 and February 28, 2007, the Company
paid or accrued $0 and $14,527 in consulting fees and $0 and $3,393 in
rent respectively, to a relative of the
director.
(b)
During
the nine months ended February 29, 2008 and February 28, 2007, the Company
paid or accrued $92,201 and $65,650 in consulting fees and $9,026 and $0
in rent respectively, to a company controlled by a major shareholder of
the Company. (Note 7)
During
the nine months ended February 29, 2008 and February 28, 2007, the Company
paid or accrued $0 and $40,728 in consulting fees to a company controlled
by a major shareholder of the
Company.
(e)
During
the nine months ended February 29, 2008 and February 28, 2007, the
Company paid $0 and $5,128 in professional fees to a company
controlled by a major shareholder of the
Company.
Note
Payable to Related Party
At
February 29, 2008 and May 31, 2007the Company had a note payable to a company
controlled by two major shareholders in the amounts of $0 and $28,414,
respectively. (Note 5)
On
February 27, 2007, the Company entered into a vend-in agreement whereby
they agreed to acquire a 90% interest in four mineral licenses in central
Labrador, Canada, comprised of 516 mineral claims covering an area of
33,111 acres. On March 27, 2007the Company issued a $34,000
promissory note and 34,000,000 in common shares to acquire this 90%
interest. The purchase price included a total of $26,100 in
staking security deposits. These deposits were refunded to the
Company in February 2008. (Notes 4, 6 and
7)
Under the
terms of the vend-in agreement, the Company is committed to spend approximately
$153,000 (CDN$150,000) on or before March 1, 2008 (spent), $204,000
(CDN$200,000) on or before March 1, 2009, and $255,000 (CDN$250,000) on or
before March 1, 2010 with the provision that any excess amount spent in one year
may be carried forward and applied towards fulfilment of the expenditure
requirements of a later year.
(b)
On
May 17, 2007, the Company purchased a 90% interest in one mineral license
in central Labrador, Canada, comprised of 6 claims covering an area of 371
acres for cash of $321.
Mineral
Exploration Licenses
The
mineral exploration licenses on the Company’s properties are for a term of five
years commencing at various dates from August 18, 2006 to May 17,2007. These licenses may be renewed every five years for up to a
maximum of twenty years provided annual assessment work is completed and
reported, and license renewal fees of $36 (CDN$35), $51 (CDN$50) and $102
(CDN$100) per claim are paid after five, ten and fifteen years respectively. In
order to maintain the property in good standing the Company is required to spend
from $204 (CDN$200) per claim in the first year to $1,225 (CDN$1,200) per claim
in the twentieth year.
At
February 29, 2008, the Company had spent $233,365 on qualified exploration and
development expenditures. These expenditures qualify as exploration
expenditures under the terms of the Company’s mineral exploration license and
vend-in agreement.
The
Company’s mineral properties are evaluated quarterly for the possibility of
potential impairment. At February 29, 2008, no impairment charges
were recorded against our mineral properties.
On June30, 2007the Company issued 6,890,000 common shares at $0.01 per share by way of
private placements for cash of $68,900.
On July31, 2007the Company issued 2,550,000 common shares at $0.01 per share by way of
private placements for cash of $25,500.
On
September 7, 2007the Company issued 2,000,000 common shares at $0.01 per share
by way of private placements for cash of $20,000.
On
September 8, 2007the Company issued 2,890,000 common shares at $0.10 per share
by way of private placements for cash of $289,000.
On
October 5, 2007the Company issued 1,000,000 common shares at $0.10 per share by
way of private placements for cash of $100,000.
On March30, 2007, 100,000 of the Company’s common shares were subscribed for at $0.01
per share for cash of $1,000. On November 2, 2007, these share
subscriptions were cancelled and the $1,000 refunded to the
subscriber.
On
February 5, 2008 100,000 common shares were subscribed for at $0.10 per share by
way of private placement for cash of $10,000.
On
February 6, 2008 100,000 common shares were subscribed for at $0.10 per share by
way of private placement for cash of $10,000.
On
February 29, 2008 100,000 common shares were subscribed for at $0.10 per share
by way of private placement for cash of $10,000.
NOTE
7 – COMMITMENTS
Mineral
Property Commitments
Under the
terms of the vend-in agreement and the mineral exploration licenses the Company
is required to spend the following minimum amounts on exploration:
Future
minimum payments
Vend-in
Agreement
Mineral
Exploration Expenditures*
Mineral
Exploration Licenses
2009
$
-
$
-
$
-
2010
123,850
-
-
2011
255,154
-
-
2012
-
119,005
12,717
2013
-
285,773
5,930
After
2013
-
6,974,280
79,914
Total
future minimum payments
$
379,004
$
7,379,058
$
98,561
*Minimum
expenditures required under the terms of the vend-in agreement also qualify as
minimum exploration expenditures under the terms of the license
agreements. (Note 5)
On
January 31, 2007, the Company entered into a consulting agreement with a company
controlled by a major shareholder. Under the terms of the contractthe Company has agreed to pay $10,000 per month for three years and one month,
commencing on February 1, 2007. The contract automatically renews
after one year and can be cancelled at anytime upon agreement by both
parties. The Company has the following future obligations under this
contract at February 29, 2008:
Future
minimum payments
2009
$
120,000
2010
120,000
Total
future minimum payments
$
240,000
NOTE
8 – SUBSEQUENT EVENT
Shares
Subscribed
Subsequent
to February 29, 2008, a total of 800,000 of the Company’s common shares were
subscribed for at $0.10 per share by way of private placements for cash of
$80,000 to eight investors. (Note 6)
F
- 13
Management’s Discussion and Analysis of
Financial Condition
General
This
discussion should be read in conjunction with the May 31, 2007 audited financial
statements, the February 29, 2008 unaudited financial statements, the notes, and
the tables included elsewhere in this registration
statement. Management’s discussion and analysis contains
forward-looking statements that are provided to assist in the understanding of
anticipated future performance. However, future performance involves
risks and uncertainties that may cause actual results to differ materially from
those expressed in the forward-looking statements. See
“Forward-looking Statements” below for more details.
Wolverine’s
principal business is the acquisition and exploration of base and precious metal
mineral properties. Wolverine is focused on exploration of the
Labrador Claims. Wolverine has not presently determined whether the
Labrador Claims contain mineral reserves that are economically
recoverable. Wolverine has not commenced significant operations and
is considered an Exploration Stage Company, as defined by Statement of Financial
Accounting Standard (“SFAS”) No.7 Accounting and Reporting by
Development Stage Enterprises.
Critical
Accounting Policies and Estimates
An
appreciation of Wolverine’s critical accounting policies is necessary to
understand its financial results. These policies may require that
Wolverine to make difficult and subjective judgments regarding uncertainties; as
a result, the estimates may significantly impact its financial
results. The precision of these estimates and the likelihood of
future changes depend on a number of underlying variables and a range of
possible outcomes. Other than its accounting for mineral property
costs, Wolverine’s critical accounting policies do not involve the choice
between alternative methods of accounting. Wolverine has applied its
critical accounting policies and estimation methods consistently.
Financial
Instruments
Concentration
of Credit Risk
Financial
instruments that potentially subject Wolverine to significant concentrations of
credit risk consist principally of cash.
At
February 29, 2008, Wolverine had approximately $19,000 in cash that was not
insured. Wolverine’s cash is on deposit with a major chartered
Canadian bank. As part of Wolverine’s cash management process,
management performs periodic evaluations of the relative credit standing of
these financial institutions. Wolverine has not suffered any losses
of cash and management does not believe that Wolverine’s cash is exposed to any
significant credit risk.
Revenue
Recognition
Wolverine
will record revenues from the sale of minerals when pervasive evidence of an
arrangement exists, delivery to the customer has occurred, risk of ownership or
title has transferred, and collectibility is reasonably assured.
Interest
income is recognized at the end of each month.
Unproved
Mineral Property Costs and Exploration and Development Costs
Wolverine
has been in the exploration stage since inception on February 23, 2006 and has
not yet realized any revenues from its operations. Wolverine is
primarily engaged in the acquisition and exploration of mineral exploration
properties. Wolverine expenses mineral property exploration costs as
they are incurred. Mineral property acquisition costs are initially
capitalized, when incurred, using the guidance in the Emerging Issues Task Force
(“EITF”) 04-02, whether
Mineral Rights are Tangible or Intangible Assets. Wolverine assesses
the carrying costs for impairment under SFAS No. 144, Accounting for Impairment or
Disposal of Long Lived Assets at each fiscal quarter end. An
impairment is recognized when the sum of the expected undiscounted future cash
flows is less than the carrying amount of the mineral
property. Impairment losses, if any, are measured as the excess of
the carrying amount of the mineral property over its estimated fair
value. During the nine month period ended February 29, 2008,
Wolverine did not have any mineral property acquisition costs.
When it
has been determined that a mineral property can be economically developed as a
result of establishing proven and probable reserves, the costs then incurred to
develop such property, are capitalized. Such costs will be amortized
using the units-of-production method over the estimated life of the proven and
probable reserves. If mineral properties are subsequently abandoned
or impaired, any capitalized costs will be charged to operations.
Long-Lived
Assets
Wolverine
accounts for long-lived assets under SFAS Nos. 142 and 144, Accounting for Goodwill and Other
Intangible Assets” and “Accounting for Impairment or
Disposal of Long-Lived Assets. In accordance with SFAS 142 and
144, Wolverine reviews its long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. Wolverine recognizes impairment when the sum of the
expected undiscounted future cash flows is less than the carrying amount of the
asset. Impairment losses, if any, are measured as the excess of the
carrying amount of the asset over its estimated fair
value. Wolverine’s only long-lived assets are its unproven mineral
interests in the Labrador Claims. At February 29, 2008, Wolverine had
no impairment losses with respect to its unproven mineral
interests.
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Asset
Retirement Obligations
Wolverine
will record the fair value of an asset retirement obligation as a liability in
the period in which it incurs a legal obligation associated with the retirement
of tangible long-lived assets that result from the acquisition, construction,
development, or normal use of its long-lived assets. Wolverine will
record a corresponding asset and will amortize it over the life of the
asset. Wolverine will adjust the obligation at the end of each period
to reflect the passage of time (accretion expense) and changes in the estimated
future cash flows underlying the obligation (asset retirement
cost). At February 29, 2008 Wolverine had no asset retirement
obligations.
Recent
Accounting Pronouncements
In
February 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 155
(“SFAS 155”) Accounting for Certain Hybrid
Financial Instruments - an amendment of FASB Statements No. 133 and
140. This Statement amends FASB Statements No. 133, Accounting for Derivative
Instruments and Hedging Activities, and No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of
Liabilities. This Statement resolves issues addressed in
Statement 133 Implementation Issue No. D1, Application of Statement 133 to
Beneficial Interests in Securitized Financial Assets. This
statement is effective for all financial instruments acquired or issued after
the beginning of an entity’s first fiscal year that begins after September 15,2006. SFAS 156 was effective for Wolverine beginning June 1,2007. The adoption of SFAS 155 did not have a material impact on
Wolverine’s financial statements.
In March
2006, the FASB issued SFAS No. 156 (“SFAS 156”), Accounting for Servicing of
Financial Assets – an amendment of FASB Statement No.
140. SFAS 156 amends SFAS No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities, with
respect to accounting for separately recognized servicing assets and servicing
liabilities. SFAS 156 is effective for fiscal years that begin after
September 15, 2006, with early adoption permitted as of the beginning of an
entity’s fiscal year. SFAS 156 was effective for Wolverine beginning
June 1, 2007. Wolverine does not have any servicing assets or
servicing liabilities and, accordingly, the adoption of SFAS 156 did not have a
material impact on its financial statements.
In July
2006, the FASB issued FASB Interpretation No. 48 (“Interpretation No. 48” or
“FIN 48”), Accounting for Uncertainty
in Income
Taxes. Interpretation No. 48 clarifies the accounting for
uncertainty in income taxes recognized in an enterprise's financial statements
in accordance with SFAS No. 109, Accounting for Income Taxes.
Interpretation No. 48 prescribes a recognition threshold and measurement
attribute for the financial statement recognition and measurement of a tax
position taken or expected to be taken in a tax
return. Interpretation No. 48 also provides guidance on
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure and transition. Interpretation No. 48 was
effective for Wolverine beginning June 1, 2007.
Wolverine
adopted the provisions of FIN 48 on June 1, 2007. FIN 48 provides
detailed guidance for the financial statement recognition, measurement and
disclosure of uncertain tax positions recognized in the financial statements in
accordance with SFAS 109. Tax positions must meet a
“more-likely-than-not” recognition threshold at the effective date to be
recognized upon the adoption of FIN 48 and in subsequent periods. The
adoption of FIN 48 had an immaterial impact on Wolverine’s financial position
and did not result in unrecognized tax benefits being
recorded. Accordingly, no corresponding interest or penalties have
been accrued. Wolverine is required to file income tax returns in the
U.S. federal and state jurisdictions. There are currently no federal
or applicable state income tax examinations underway for these
jurisdictions. Wolverine does have prior year net operating losses
that remain open for examination.
In
September 2006, FASB issued SFAS No. 157, Fair Value
Measurements. SFAS No. 157 defines fair value, establishes a
framework for measuring fair value and enhances disclosures about fair value
measures required under other accounting pronouncements, but does not change
existing guidance as to whether or not an instrument is carried at fair
value. The adoption of SFAS 157 did not have a material impact on
Wolverine’s financial statements.
In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities - including an amendment of
SFAS No. 115, Accounting for
Certain Investments in Debt and Equity Securities, which applies to all
entities with available-for-sale and trading securities. This
statement permits entities to choose to measure many financial instruments and
certain other items at fair value. The objective is to improve
financial reporting by providing entities with the opportunity to mitigate
volatility in reported earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting
provisions. This statement is effective as of the beginning of an
entity’s first fiscal year that begins after November 15, 2007. Early
adoption is permitted as of the beginning of a fiscal year that begins on or
before November 15, 2007, provided the entity also elects to apply the
provisions of FASB Statement No. 157, Fair Value
Measurements. Wolverine does not expect the adoption of SFAS
159 to have a material impact on its financial statements as Wolverine did not
elect the fair value option for any of its financial assets or
liabilities.
In June
2007, the EITF of the FASB reached a consensus on Issue No. 07-3, Accounting for
Nonrefundable Advance Payments for Goods or Services Received for Use in Future
Research and Development Activities (“EITF 07-3”). EITF 07-3
requires that non-refundable advance payments for goods or services that will be
used or rendered for future research and development activities must be deferred
and capitalized. As the related goods are delivered or the services
are performed, or when the goods or services are no longer expected to be
provided, the deferred amounts must be recognized as an expense. This
issue is effective for financial statements issued for fiscal years beginning
after December 15, 2007 and earlier application is not
permitted. This consensus is to be applied prospectively for new
contracts entered into on or after the effective date. Wolverine does
not expect the adoption of EITF 07-03 to have a material effect on its unaudited
financial statements.
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In
February 2008 the FASB staff issued Staff Position No. 157-2 (“FSP FAS 157-2”) Effective date of FASB Statement
No.157. FSP FAS 157-2 delayed the effective date of SFAS 157
for non-financial assets and non-financial liabilities, except for items that
are recognized or disclosed at fair value in the financial statements on a
recurring basis. The provisions of FSP FAS 157-2 will be effective
for Wolverine on June 1, 2009.
In March
2008, the FASB issued SFAS No. 161 (“SFAS 161”), Disclosures about Derivative
Instruments and Hedging Activities – An Amendment of FASB Statement No.
133 (“SFAS
133”). This
statement is intended to improve financial reporting of derivative instruments
and hedging activities by requiring enhanced disclosures about (a) how and why
an entity uses derivative instruments, (b) how derivative instruments and
related hedged items are accounted for under SFAS 133 and its related
interpretations and (c) how derivative instruments and related hedged items
affect an entity’s financial position, financial performance and cash flows.
The provisions of SFAS 161 are effective for fiscal years beginning after
November 15, 2008. SFAS 161 will be effective for Wolverine on June1, 2009. Wolverine is currently evaluating the impact adoption of
SFAS 161 may have on its financial statement disclosures.
Foreign
Currency Translation
Wolverine’s
functional and reporting currency is the United States
dollar. Wolverine determined that its functional currency is the
United States dollar for the following reasons:
·
Wolverine’s
current and future financings are and will be in United States
dollars;
·
Wolverine
maintains cash holdings primarily in United States
dollars;
·
Any
potential sales of minerals recovered from the Labrador Claims will be
undertaken in United States
dollars;
·
Wolverine’s
administrative expenses are undertaken in United States
dollars;
·
All
of Wolverine’s cash flows are generated in United States dollars;
and
·
Even
though the Labrador Claims are located in Canada, and the exploration
expenses are usually billed in Canadian dollars, Wolverine can request
that these expenses be billed in United States
dollars
Monetary
assets and liabilities denominated in foreign currencies are translated in
accordance with SFAS No. 53 Foreign Currency Translation,
using the exchange rate prevailing at the balance sheet date. Gains
and losses arising on settlement of foreign currency denominated transactions or
balances are included in the determination of income. Foreign
currency transactions are primarily undertaken in Canadian
dollars. Wolverine has not to the date of these financial statements,
entered into derivative instruments to offset the impact of foreign currency
fluctuations.
Related
Party Transactions
Texada
Consulting Inc. (Texada), a company controlled by a major shareholder, provides
consulting services to Wolverine. Texada is paid a fee of $10,000 per
month plus expenses and rent.
Wolverine’s
president and sole director, Lee Costerd, is paid a consulting fee of $2,500 per
month, but is not a salaried employee.
During
the nine months ended February 29, 2008 related parties billed $112,981 in
consulting fees and $9,026 in office rent. In relation to these fees,
Wolverine was indebted to Texada in the amount of $9,794 at February 29,2008. The amount due to Texada does not bear interest or have any
fixed terms of repayment.
Wolverine
does not have any loans or advances payable to its president and sole director,
Mr. Costerd.
Net Loss. During
the three month period ended February 29, 2008, Wolverine had a net loss of
$116,706 or $0.00 per share, which is an increase of $50,631 from its net loss
of $66,075 or $0.01 per share for the three month period ended February 28,2007. The increase in Wolverine’s loss was primarily due to an
increase in professional fees and administration expenses.
During
the nine month period ended February 29, 2008, Wolverine had a net loss of
$518,803 or $0.01 per share, which is an increase of $367,306 from its net loss
of $151,497 or $0.02 per share for the nine month period ended February 28,2007. The increase in Wolverine’s loss was primarily due to an
increase in exploration costs, professional fees and administration
expenses.
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Revenue. Wolverine
has had no operating revenues since its inception on February 23, 2006, through
to February 29, 2008. Wolverine’s activities have been financed from
the proceeds of share subscriptions.
Operating
Expenses. Wolverine’s operating expenses increased by $50,631
from $66,075 for the three month period ended February 28, 2007 to $116,706 for
the three month period ended February 29, 2008. The increase was
primarily due to: an approximate increase of $29,000 in professional fees and an
approximate increase of $22,500 in administrative expenses associated with the
preparation of this registration statement. These costs were offset
by an approximate decrease in consulting expenses of
$10,000. Management anticipates that Wolverine’s operating costs will
increase over the next 12 months due to increased exploration
expenditures.
Wolverine’s
operating expenses increased by $367,306 from $151,497 for the nine month period
ended February 28, 2007 to $518,803 for the nine month period ended February 29,2008. The increase was primarily due to: an approximate increase of
$208,000 in exploration and development costs associated with the aerial survey
of the Labrador Claims, $70,000 in professional fees and $69,000 in
administrative fees associated with the preparation of this registration
statement. Management anticipates that Wolverine’s operating costs
will increase over the next 12 months due to increased exploration
expenditures.
Net Loss. During
the year ended May 31, 2007, Wolverine had a net loss of $224,926 or $0.01 per
share, which is an increase of $205,199 from its net loss of $19,727 or $0.01
per share for the period from February 23, 2006 (inception) to May 31,2006. The increase in Wolverine’s loss was primarily due to increases
in consulting fees, professional fees, exploration and development costs and
administration expenses.
Revenue. Wolverine
had no operating revenues since its inception on February 23, 2006, through to
May 31, 2007. Wolverine’s activities have been financed from the
proceeds of share subscriptions.
Operating
Expenses. Wolverine’s operating expenses increased by $205,199
from $19,727 for the period from February 23, 2006 (inception) to May 31, 2006,
to $224,926 for the year ended May 31, 2007. The increase was
primarily due to the increased time of operations from the three and one half
month period ended May 31, 2006 to the full year ended May 31, 2007 and the
general increase in activity as Wolverine acquired properties and established
its business plan. Approximate increases were incurred of
$153,000 in consulting fees for the raising of funds and negotiating of mineral
license contracts, $16,000 in exploration and development costs due to
preliminary exploration on Wolverine’s properties, $13,000 in professional fees
due to negotiating contracts, and $10,000 in administrative expenses for the
operation of Wolverine.
Liquidity,
Capital Resources and Financial Position
Liquidity
is the ability of a company to generate funds to support its current and future
operations, satisfy its obligations, and otherwise operate on an ongoing
basis At February 29, 2008, Wolverine had a cash balance of $18,945
and negative cash flows from operations of $495,407 for the nine months ended
February 29, 2008.
For the
nine months ended February 29, 2008 Wolverine funded its operation through the
issuance or subscription of $533,400 in common stock. From its
inception, on February 23, 2006 to February 29, 2008 Wolverine has raised a
total of $679,400 from private offerings of its common stock. Since
March 1, 2008 Wolverine has raised an additional $80,000 from private offerings
of its common stock.
The notes
to Wolverine’s unaudited financial statements as of February 29, 2008, disclose
its uncertain ability to continue as a going concern. Wolverine has
not and does not expect to generate any revenues to cover its expenses while it
is in the exploration stage and as a result Wolverine has accumulated a deficit
of $763,456 since inception. As of February 29, 2008, Wolverine had
$128,366 in current liabilities. When its current liabilities are
offset against its current assets of $36,089 Wolverine is left with a negative
working capital of $92,277. While Wolverine has successfully
generated sufficient working capital through the sale of common stock to the
date of this filing and management believes that Wolverine can continue to do so
for the next year, there are no assurances that Wolverine will succeed in
generating sufficient working capital through the sale of common stock to meet
its ongoing cash needs.
Net Cash Used In
Operating Activities. Net cash used in
operating activities during the nine month period ended February 29, 2008, was
$495,407. This amount was made up of $518,803 to cover operating
costs, an increase of $17,144 in accounts receivable and a decrease of $88,283
in due to related parties. These uses of cash were offset by a
decrease in prepaid expenses and deposit of $27,674, increases of $74,478 in
accounts payable, $24,671 in accrued professional fees and $2,000 in accrued
regulatory fees.
Net Cash Used in
Investing Activities. Wolverine did not
have any investing activities during the nine months ended February 29,2008.
Net Cash Provided
By Financing Activities. During the nine months ended February29, 2008 Wolverine issued $503,400 in common stock and had a further $30,000 in
common stock subscriptions. This was offset by the rejection and
return of subscription funds in the amount of $1,000 and the payment of $28,414
on a note payable to a related party.
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Off-balance
sheet arrangements
Wolverine
has no off-balance sheet arrangements including arrangements that would affect
its liquidity, capital resources, market risk support and credit risk support or
other benefits. Wolverine does not have any non-consolidated,
special-purpose entities.
Wolverine
had the following long term commitments at February 29, 2008:
·
On
January 31, 2007 Wolverine entered into a consulting agreement with Texada
Consulting Inc. The contract is for a period of three years and
one month ending on February 28, 2010. Under the terms of the
agreement Wolverine will pay Texada $10,000 per month plus expenses for
consulting services. The parties may by mutual consent
terminate the consulting agreement at anytime for any
reason. Wolverine has agreed not to terminate the consulting
agreement without cause prior to February 28, 2010 for any reason
whatsoever. If Wolverine does terminate the consulting
agreement without cause it will have to pay liquidated damages to Texada
Consulting Inc. See Exhibit 10.2 – Consulting Agreement for
more details.
·
On
February 27, 2007 Wolverine entered into a vend-in agreement with Shenin
Resources Inc. Under the terms of the vend-in agreement
Wolverine is required to perform minimum exploration work on the Shenin
Claims. In the first year of the agreement, ending March1, 2008, Wolverine was required to spend CDN$150,000 (US$153,092) in
mineral exploration on the Shenin Claims. By March 1, 2009 an
additional CDN$200,000 (US$204,123) must be spent and by March 1, 2010
another CDN$250,000 (US$255,154). Any extra money spent on
exploration in one year may be applied to the minimum payments due in
following years. As of February 29, 2008 Wolverine has spent
CDN$228,651 (US$233,365) on exploration and development on the Shenin
Claims. See Exhibit 10.1 – Vend-in Agreement for more
details.
·
The
government of Newfoundland and Labrador also requires minimum exploration
work to be done on the Labrador Claims in order to keep the mineral lease
agreements for the claims current. Wolverine currently holds
522 claims covering 33,482 acres in central Labrador. Minimum
expenditures of $200 CDN per claim in the first year, $250 CDN per claim
in the second year, $300 CDN per claim in the third year, $350 CDN per
claim in the fourth year, $400 CDN per claim in the fifth year, $600 CDN
per claim in each of the sixth through tenth years, $900 CDN per claim in
each of the eleventh through fifteenth years and $1,200 CDN per claim in
each of the sixteenth through twentieth years of the claim are
required. Exploration expenditures that are applicable to the
vend-in agreement are also applicable to the mineral lease agreements with
the government of Newfoundland and
Labrador.
·
As
well, the government of Newfoundland and Labrador require a $25 CDN per
claim renewal fee in year five of a claim, $50 CDN per claim renewal fee
in year ten of the claim and a $100 CDN per claim renewal fee in year
fifteen of a claim. These fees are not covered by the mineral
exploration expenditures incurred on the Labrador Claims and will have to
be paid by Wolverine in the respective
years.
Contractual
Obligations
Wolverine’s
commitments under the consulting agreement with Texada, the vend-in agreement
with Shenin, and the mineral license agreements with the government of
Newfoundland and Labrador are the only contractual obligations that Wolverine
has and are as follows:
Contractual
Obligations
Total
Less
than 1 year
1
-3 years
3 –
5 years
More
than 5 years
Consulting
fees
US$ 240,000
US$ 120,000
US$ 120,000
US$ -
US$ -
Exploration
expenditures
(Vend-in
agreement)
379,004(1)
-
379,004
-
-
Exploration
expenditures
(Mineral
lease agreements)
7,379,058
-
-
404,778
6,974,280
Renewal
fees
98,561
-
-
18,647
79,914
Total
US$
8,069,623
US$ 120,000
US$ 499,004
US$ 423,425
US$
7,054,194
(1)
Under
the vend-in agreement, Wolverine is required to spend an aggregate
$612,369 in exploration expenditures. As of February 29, 2008,
Wolverine had spent $233,365 in exploration expenditures on the Shenin
Claims.
Minimum
expenditures required under the terms of the vend-in agreement also qualify as
minimum exploration expenditures under the terms of the license
agreements.
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In order
to maintain the property in good standing with the government of Newfoundland
and Labrador over the next 19 years, Wolverine will be required to spend a total
of $8,329,988 on exploration and development of the properties, of which
Wolverine has already spent $ US$233,365 (CDN$228,651).
Internal
and External Sources of Liquidity
To date
Wolverine has funded its operations from the sale of its common
stock.
Foreign
Exchange
Wolverine
is subject to foreign exchange risk for transactions denominated in foreign
currencies. Foreign currency risk arises from the fluctuation of
foreign exchange rates and the degree of volatility of these rates relative to
the United States dollar. Management does not believe that Wolverine
has any material risk due to foreign currency exchange.
Inflation
Management
does not believe that inflation will have a material impact on Wolverine’s
future operations.
Forward-looking
Statements
This
registration statement contains forward-looking statements within the meaning of
the federal securities laws that involve risks and uncertainties.
Statements that are not historical facts, including statements about
management’s beliefs and expectations, are forward-looking
statements. Forward-looking statements include statements preceded
by, followed by, or that include the words “may,”“could,”“would,”“should,”“believe,”“expect,”“anticipate,”“plan,”“estimate,”“target,”“project,”“intend,” or similar expressions. These statements include, among
others, statements regarding Wolverine’s current expectations, estimates and
projections about future events and financial trends affecting the financial
condition and operations of its business. Forward-looking statements
are only predictions and not guarantees of performance and speak only as of the
date they are made. Wolverine undertakes no obligation to update any
forward-looking statement in light of new information or future
events.
Although
management believes that the expectations, estimates and projections reflected
in the forward-looking statements are based on reasonable assumptions when they
are made, Wolverine can give no assurance that these expectations, estimates and
projections can be achieved. Management believes the forward-looking
statements in this registration statement are reasonable; however, you
should not place undue reliance on any forward-looking statement, as they are
based on current expectations. Future events and actual results may
differ materially from those discussed in the forward-looking
statements. Factors that could cause actual results to differ
materially from Wolverine’s expectations include, but are not limited
to:
·
fluctuating
prices of mineral resources, including gold and
copper,
·
the
impact of weather conditions and alternative energy sources on Wolverine’s
sales volumes,
·
changes
in federal or state laws and regulations to which Wolverine is subject,
including tax, environmental, and employment laws and
regulations,
·
conditions
of the capital markets that Wolverine utilizes to access
capital,
·
the
ability to raise capital in a cost-effective
way,
·
the
effect of changes in accounting policies, if
any,
·
the
ability of Wolverine to manage its
growth,
·
the
ability to control costs,
·
Wolverine’s
ability to achieve and maintain effective internal controls in accordance
with Section 404 of the Sarbanes-Oxley Act of
2002,
·
Wolverine’s
ability to obtain governmental and regulatory approval of various
expansion or other projects,
·
changes
in general economic conditions in the United States and in Canada and
changes in the industries in which Wolverine conducts its
business,
·
the
costs and effects of legal and administrative claims and proceedings
against Wolverine,
For a
more detailed discussion of these and other risks that may impact Wolverine’s
business, see “Risk Factors” beginning on page 7.
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Changes In and Disagreements With
Accountants on Accounting and Financial Disclosure
Since
inception on February 23, 2006, there were no disagreements with Wolverine’s
accountants on any matter of accounting principle or practices, financial
statement disclosure or auditing scope or procedure. In addition,
there were no reportable events as described in Item 304 of Regulation S-K that
occurred within Wolverine’s two most recent fiscal years and the subsequent
interim periods.
Directors, Executive Officers,
Promoters and Control Persons
The sole
Director and Officer currently serving Wolverine is as follows:
Name
Age
Positions
Held and Tenure
Lee
Costerd
55
President,
Secretary, Treasurer and Director since February 23,2006
The sole
Director named above will serve until the next annual meeting of the
stockholders. Thereafter, directors will be elected for one-year
terms at the annual stockholders’ meeting. Officers will hold their
positions at the pleasure of the board of directors, absent any employment
agreement, of which none currently exists or is contemplated.
Biographical
information
Lee
Costerd
Mr.
Costerd has acted as Wolverine’s sole Director and Officer since its inception
on February 23, 2006. Mr. Costerd has been involved in the mining
industry for the past 20 years. Mr Costerd was the mine manager
for a placer mining operation in British Columbia and a supervisor at a
hard rock mining operation also in British Columbia.
Conflicts
of Interest
Though
Mr. Costerd does not work with any other mineral exploration companies other
than Wolverine, he may in the future. Wolverine does not have any
written procedures in place to address conflicts of interest that may arise
between its business and the future business activities of Mr.
Costerd.
Audit
Committee Financial Expert
Wolverine
does not have a financial expert serving on an audit
committee. Wolverine does not have an audit committee because it is a
start-up exploration company and has no revenue.
Significant
Employees and Consultants
Wolverine
has no significant employees other than Mr. Costerd who is the sole Director and
Officer.
Wolverine
entered into a Consulting Agreement dated January 31, 2007 with Texada
Consulting Inc. (“Texada”), a private Canadian
corporation owned by Deirdre Lynch, a related party. Texada provides
Wolverine with consulting services and receives compensation of $10,000 per
month. See Exhibit 10.1 – Consulting Agreement for more
details.
Stephen
Balch will act as consulting geophysicist for Wolverine. Mr. Balch
graduated with a B.Sc. (honours), Applied Geophysics, University of Western
Ontario in 1985. Mr. Balch is currently chief geophysicist of
Aeroquest International Limited (“Aeroquest”) and was President
and a director of Aeroquest between 2004 and 2007. Aeroquest is an
airborne survey company that services the mining, oil & gas, and UXO
industries. Aeroquest trades on the TSX Venture Exchange under the
trading symbol AQL. Mr. Balch is currently President of Balch
Exploration Consulting Inc. (“BECI”). BECI
provides consulting services to major mining and junior exploration companies in
the areas of geophysical survey design, geophysical interpretation, and data
integration. Between 1995 and 2001 Mr. Balch was senior geophysicist
with Inco Limited. In 2007, Wolverine retained the services of BECI
to provide geological consulting services. Pursuant to the terms of
an oral agreement, Wolverine paid BECI $3,000 per month up to March 31, 2008 for
providing geological consulting services. The oral agreement has been
modified so that BECI will be retained, if required, on a project-by-project
basis for field related activities. There is no term to this oral
agreement and it can be terminated with 30 days’ notice.
For
accounting requirements Wolverine utilizes the consulting services of DaCosta
Management Corp. of Vancouver, British Columbia, Canada to assist in the
preparation of the financial statements in accordance with accounting principles
generally accepted in the United States.
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Family
Relationships
There are
no family relationships among the directors, executive officers or persons
nominated or chosen by Wolverine to become directors or executive
officers.
Involvement
in Certain Legal Proceedings
(1)
No
bankruptcy petition has been filed by or against any business of which any
director was a general partner or executive officer either at the time of
the bankruptcy or within two years prior to that
time.
(2)
No
director has been convicted in a criminal proceeding and is not subject to
a pending criminal proceeding (excluding traffic violations and other
minor offences).
(3)
No
director has been subject to any order, judgement, or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring, suspending or
otherwise limiting his involvement in any type of business, securities or
banking activities.
(4)
No
director has been found by a court of competent jurisdiction (in a civil
action), the Securities Exchange Commission or the Commodity Futures
Trading Commission to have violated a federal or state securities or
commodities law, that has not been reversed, suspended, or
vacated.
Executive Compensation
Summary
Compensation Table
The table
below summarizes all compensation awarded to, earned by, or paid to Wolverine’s
Officer for all services rendered in all capacities to Wolverine for the fiscal
periods indicated.
Name
and principal position
(a)
Year
(b)
Salary
($)
(c)
Bonus
($)
(d)
Stock
Awards
($)
(e)
Option
Awards
($)
(f)
Non-Equity
Incentive Plan
($)
(g)
Non-qualified
Deferred Compen-
sation
Earnings ($)
(h)
All
other compen-sation
($)
(i)
Total
($)
(j)
Lee
Costerd
CEO
Feb
2006 - present
2006
2007
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
12,357
(1)
nil
12,357
(1)
Mr.
Costerd received an aggregate $11,815 in management fees and $542 for
reimbursement of expenses in the fiscal year ended May 31,2007.
Wolverine’s
director has not received any monetary compensation as a director since
Wolverine’s inception to the date of this prospectus. Wolverine currently does
not pay any compensation to its director serving on its board of
directors.
Stock
Option Grants
Wolverine
has not granted any stock options to the executive officer since its inception
on February 23, 2006.
Employment
Agreements
Currently,
Wolverine does not have an employment agreement with Lee
Costerd. However, Wolverine pays Mr. Costerd a monthly management fee
as consideration for Mr. Costerd acting as the sole officer of Wolverine
pursuant to the terms of an oral agreement between the
parties. Wolverine is currently paying Mr. Costerd a management fee
of $2,500 per month. Wolverine also reimburses Mr. Costerd for all
reasonable expenses incurred by Mr. Costerd while providing such services to
Wolverine. In the terms and conditions of the oral agreement, there
was no specified term of service during which Mr. Costerd has to provide the
consulting services. As a result, either party may terminate the
agreement on 30 days’ notice. Mr. Costerd has received an aggregate
$33,964 in management fees and $1,020 for reimbursement of expenses from
inception to the date of this prospectus.
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There are
no other agreements between Wolverine and any named executive officer, and there
are no employment agreements or other compensating plans or arrangements with
regard to any named executive officer that provide for specific compensation in
the event of resignation, retirement, other termination of employment or from a
change of control of Wolverine or from a change in a named executive officer’s
responsibilities following a change in control.
Security Ownership of Certain
Beneficial Owners and Management
The
following table sets forth, as of the date of this prospectus, the number of
shares of common stock owned of record and beneficially by executive officers,
directors, and persons who hold 5% or more of the outstanding common stock of
Wolverine.
Title
of Class
Name
and Address of Beneficial Owner
Number
of Shares Owned Beneficially
Percent
of Class Owned Prior To This Offering (1)
Common
Stock
Lee
Costerd
4055
McLean Road
Quesnel,
British Columbia
V2J
6V5 Canada
4,000,000
5.8%
Common
Stock
Ralph
Biggar
PH
1403
819
Hamilton Street
Vancouver,
British Columbia
V6B
6M2 Canada
5,000,000
7.3%
Common
Stock
Art
Den Duyf
7194
Nancy Green Drive
Whistler,
British Columbia
V0N
1B0 Canada
5,375,000
7.8%
Common
Stock
Richard
Haderer
103
Huntcroft Place NE
Calgary,
Alberta
T2K
4E6 Canada
5,250,000
7.6%
Common
Stock
Deirdre
Lynch
1450
Palmerston Ave
West
Vancouver, British Columbia
V7T
1H7 Canada
5,250,000
7.6%
Common
Stock
Neil
Nichols
#307A,
15252-32 Ave
Surrey,
British Columbia
V3S
0R7 Canada
5,250,000
(2)
7.6%
Common
Stock
Prote
Poker
35
Katshinak Street
P.O.
Box 57
Natuashish,
Newfoundland Labrador
A0P
1AO Canada
5,000,000
7.3%
Common
Stock
Ng
Thian Yew
4462
Cambie Street
Vancouver,
British Columbia
V6B
2Z6 Canada
5,225,000
7.6%
Common
Stock
All
executive officers
and
directors as a group
4,000,000
5.8%
(1)
The
percent of class is based on 68,630,000 shares of common stock issued and
outstanding as of July 10, 2008.
(2)
250,000
of these shares are registered in the name of Tequila Sunset Ltd., which
is owned by Neil Nichols.
Each
person listed above has full voting and investment power with respect to the
shares indicated. Under the rules of the Securities and Exchange
Commission, a person (or a group of persons) is deemed to be a “beneficial
owner” of a security if he or she, directly or indirectly, has or shares power
to vote or to direct the voting of such security. Accordingly, more
than one person may be deemed to be a beneficial owner of the same
security. A person is also deemed to be a beneficial owner of any
security, which that person has the right to acquire within 60 days, such as
options or warrants to purchase Wolverine’s common stock.
Page
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Transactions with Related Persons,
Promoters and
Certain Control Persons
(a) Transactions
with Related Persons
During
Wolverine’s last three fiscal years, no director, executive officer, security
holder, nor any immediate family of such director, executive officer, nor
security holder owning 5% or more has had any direct or indirect material
interest in any transaction or currently proposed transaction, which Wolverine
was or is to be a participant, that exceeded the lesser of (1) $120,000 or (2)
one percent of the average of Wolverine’s total assets at year-end for the last
two completed fiscal years, except for the following:
1.
Vend-in
of Property
On
February 28, 2007 Wolverine entered into a Vend-In Agreement with Shenin
Resources Inc. for the purchase of a 90% interest in 516 mineral claims located
in Labrador Canada. The purchase price paid to Shenin was $34,000 and
the purchase price paid to the prospectors and grubstakers was satisfied by the
issuance of 34 million restricted shares of Wolverine’s common stock at a deemed
price of $0.01 per share. Each of the prospectors and grubstakers is
a 5% shareholder in Wolverine. The 34 million shares were issued to
the seven prospectors and grubstakers as follow:
a.
Ralph
Biggar – 4,000,0000 restricted
shares
b.
Arthur
Den Duyf – 5,000,000 restricted
shares
c.
Richard
Haderer – 5,000,000 restricted
shares
d.
Deirdre
Lynch – 5,000,000 restricted shares
e.
Thain
Yew Ng – 5,000,000 restricted
shares
f.
Neil
Nichols – 5,000,000 restricted
shares
g.
Prote
Poker – 5,000,000 restricted shares
See
Exhibit 10.1 – Vend-in Agreement for more details.
Also, on
May 17, 2007, Wolverine paid Richard Haderer an additional $360 for additional
mineral claims staked on behalf of Wolverine. The $360 represented a
reimbursement of the staking costs for the additional mineral
claims. The additional mineral claims were staked on behalf of
Wolverine pursuant to the terms and conditions of the Vend-In
Agreement. Mr. Haderer is also the president of
Shenin. See Exhibit 10.3 – Additional Property Agreement for more
details.
Wolverine
pays Lee Costerd a management fee of $2,500 per month as consideration for Mr.
Costerd acting as the sole officer of Wolverine pursuant to the terms of an oral
agreement between the parties. Wolverine also reimburses Mr. Costerd
for all reasonable expenses incurred by Mr. Costerd while providing such
services to Wolverine. In the terms and conditions of the oral
agreement, there was no specified term of service during which Mr. Costerd has
to provide the consulting services. As a result, either party may
terminate the agreement on 30 days’ notice. Mr. Costerd has received
management fees of $34,984 from inception to February 29, 2008.
3.
Consulting
Agreement with Texada Consulting
Inc.
On
January 31, 2007, Wolverine entered a consulting agreement with Texada
Consulting Inc., which is 100% owned by Deidre Lynch, a 5% shareholder of
Wolverine. Pursuant to the terms of the consulting agreement, Texada,
through its designated person, Bruce Costerd, provides Wolverine with
consulting, management and labor supply services. For those services,
Wolverine pays Texada Consulting Inc. a monthly consulting fee of $10,000, plus
any approved reasonable expense claims and any applicable
taxes. Wolverine is also obliged to provide or pay for non-exclusive
office space with parking for Texada to provide the services under the
agreement. The term of the consulting agreement is one year and will
renew automatically for successive one year terms, unless amended or
terminated. The parties may by mutual consent terminate the
consulting agreement at anytime for any reason. Wolverine has agreed
not to terminate the consulting agreement without cause prior to February 28,2010 for any reason whatsoever. If Wolverine does terminate the
consulting agreement without cause it will have to pay liquidated damages to
Texada Consulting Inc. Finally, Texada will receive a bonus of an
issuance of shares of common stock in the capital of Wolverine equal to 5% of
the issued and outstanding shares on a non-diluted basis as of the date of the
issuance of the bonus shares if Wolverine discovers a major mineral resource
deposit on any mineral property that Texada was involved with, which is
currently the Labrador Claims. The payment of the bonus shares will
survive the termination of this consulting agreement. Texada has
received consulting fees of $183,850, reimbursement of expenses of $2,363, and
rent of $8,688 from inception to February 29, 2008, and has also accrued $9,400
in consulting fees. See Exhibit 10.2 – Consulting Agreement for more
details.
4.
Consulting
Agreement with PubCo Services Inc.
From
February 2006 to February 2007, Wolverine paid PubCo Services Inc. a total of
$51,229 for providing various services to Wolverine in the early stages of
Wolverine’s development. Richard Haderer is the owner of PubCo
Services Inc. and a 5% shareholder of Wolverine. Currently, there is
no agreement between Wolverine and PubCo Services Inc. for the provision of any
further services or any further payments. PubCo was and will be, if
required, retained on a project-by-project basis.
Page
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5.
Consulting
Agreement with Bruce Costerd
From
February 2006 to February 2007, Wolverine paid Bruce Costerd, the brother of Lee
Costerd, a total of $17,527 in consulting fees and $3,404 for rent payments for
providing various services to Wolverine in the early stages of Wolverine’s
development. Currently, there is no agreement between Wolverine and
Mr. Costerd for the provision of any further services or any further
payments. Mr. Costerd was and will be, if required, retained on a
project-by-project basis.
(b) Review,
approval or ratification of transactions with related persons
Currently
Wolverine does not have any policies and procedures for the review, approval, or
ratification of transactions with related persons.
(c) Promoters
and certain control persons
During
the past two fiscal years, Lee Costerd has been the only promoter of Wolverine’s
business, but Mr. Costerd has not received anything of value from Wolverine nor
is any person entitled to receive anything of value from Wolverine for services
provided as a promoter of the business of Wolverine.
(d) Director
independence
Wolverine’s
board of directors currently solely consists of Lee Costerd. Pursuant
to Item 407(a) of Regulation S-K of the Securities Act, Wolverine’s board of
directors has adopted the definition of “independent director” as set forth in
Rule 4200(a)(15) of the NASDAQ Manual. In summary, an “independent
director” means a person other than an executive officer or employee of
Wolverine or any other individual having a relationship which, in the opinion of
Wolverine’s board of directors, would interfere with the exercise of independent
judgement in carrying out the responsibilities of a director, and includes any
director who accepted any compensation from Wolverine in excess of $200,000
during any period of 12 consecutive months with the three past fiscal
years. Also, the ownership of Wolverine’s stock will not preclude a
director from being independent.
In
applying this definition, Wolverine’s board of directors has determined that Mr.
Costerd does not qualify as an “independent director” pursuant to the same
Rule.
As of the
date of the prospectus, Wolverine did not maintain a separately designated
compensation or nominating committee.
Wolverine
has also adopted this definition for the independence of the members of its
audit committee. Lee Costerd is the sole member of Wolverine’s audit
committee. Wolverine’s board of directors has determined that Mr.
Costerd is not “independent” for purposes of Rule 4200(a)(15) of the NASDAQ
Manual, applicable to audit, compensation and nominating committee members, and
is not “independent” for purposes of Section 10A(m)(3) of the Securities
Exchange Act.
Disclosure of Commission Position of
Indemnification for Securities Act Liabilities
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers or persons controlling Wolverine pursuant to
provisions of the State of Nevada, Wolverine has been informed that, in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in that Act and is, therefore,
unenforceable.
Page
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Dealer
Prospectus Delivery Obligation
Until
[180 days from the effective date of this prospectus], all dealers that effect
transactions in these securities, whether or not participating in this offering,
may be required to deliver a prospectus. This is in addition to the
dealers’ obligation to deliver a prospectus when acting as underwriters and with
respect to their unsold allotments or subscriptions.
Page
- 70
Part
II - Information Not Required In Prospectus
Other
Expenses of Issuance and Distribution
The
estimated costs of this offering are as follows:
SEC
Registration Fee
500
Legal
Fees and Expenses
30,000
Accounting
Fees and Expenses
7,500
Auditor
Fees and Expenses
24,000
Electronic
Filing Fees
2,000
Printing
Costs
500
Courier
Costs
500
Transfer
Agent Fees
3,000
Total
68,000
All
amounts are estimates. Wolverine is paying all expenses listed
above. None of the above expenses of issuance and distribution will
be borne by the selling shareholders. The selling shareholders,
however, will pay any other expenses incurred in selling their common stock,
including any brokerage commissions or costs of sale.
Indemnification
of Directors and Officers
As
permitted by Nevada law, Wolverine’s Articles of Incorporation provide that it
will indemnify Wolverine’s directors and officers against expenses and
liabilities they incur to defend, settle or satisfy any civil or criminal action
brought against them on account of their being or having been directors or
officers of Wolverine, unless, in any such action, they are adjudged to have
acted with gross negligence or willful misconduct.
Exclusion
of Liabilities
Pursuant
to the laws of the State of Nevada, Wolverine’s Articles of Incorporation
exclude personal liability for its directors for monetary damages based upon any
violation of their fiduciary duties as directors, except as to liability for any
breach of the duty of loyalty, acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, acts in violation
of Section 7-106-401 of the Nevada Business Corporation Act, or any transaction
from which a director receives an improper personal benefit. This
exclusion of liability does not limit any right, which a director may have to be
indemnified, and does not affect any director’s liability under federal or
applicable state securities laws.
Disclosure
of Commission position on Indemnification for Securities Act
Liabilities
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers or persons controlling Wolverine pursuant to
provisions of the State of Nevada, Wolverine has been informed that, in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in that Act and is, therefore,
unenforceable.
Recent
Sales of Unregistered Securities
As of
July 10, 2008 Wolverine has sold 68,630,000 shares of unregistered securities.
All of these 68.630,000 shares were acquired from Wolverine in private
placements and the acquisition of mining claims that were exempt from
registration under Regulation S of the Securities Act of 1933 and were sold to
non-US residents and private placements that were exempt from registration under
Regulation D of the Securities Act of 1933 and were sold to US
residents.
The
shares include the following:
1.
On
April 3, 2006, Wolverine issued 4,000,000 shares of common stock at a
price of $0.001 per share for cash proceeds of $4,000 to its President;
and
2.
On
June 13, 2006, Wolverine issued 2,750,000 shares of common stock to 11
non-affiliate Canadian residents and one non-affiliate International
resident at a price of $0.01 per share for cash proceeds of
$27,500;
Page
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3.
On
January 31, 2007, Wolverine issued 2,150,000 shares of common stock to 19
non-affiliate Canadian residents and one non-affiliate International
resident at a price of $0.01 per share for cash proceeds of
$21,500;
4.
On
February 28, 2007, Wolverine issued 34,000,000 shares of common stock to
seven non-affiliate Canadian residents pursuant to a Vend-In Agreement
dated February 28, 2007 with Shenin Resources Inc., a non-affiliate
Canadian company, at a deemed price of $0.01 per share for the acquisition
of the majority of the Labrador
Claims.
5.
Also,
on February 28, 2007, Wolverine issued 2,600,000 shares of common stock to
10 non-affiliate Canadian residents at a price of $0.01 per share for cash
proceeds of $26,000;
6.
On
March 30, 2007, Wolverine issued 1,600,000 shares of common stock to 10
non-affiliate Canadian residents at a price of $0.01 per share for cash
proceeds of $16,000;
7.
On
April 30, 2007, Wolverine issued 4,000,000 shares of common stock to 18
non-affiliate Canadian residents and two non-affiliate U.S. residents at a
price of $0.01 per share for cash proceeds of
$40,000;
8.
On
May 31, 2007, Wolverine issued 1,100,000 shares of common stock to two
non-affiliate Canadian residents at a price of $0.01 per share for cash
proceeds of $11,000;
9.
On
June 30, 2007, Wolverine issued 6,890,000 shares of common stock to 24
non-affiliate Canadian residents and one non-affiliate U.S. resident at a
price of $0.01 per share for cash proceeds of
$68,900;
10.
.On
July 31, 2007, Wolverine issued 2,550,000 shares of common stock to 10
non-affiliate Canadian residents at a price of $0.01 per share for cash
proceeds of $25,500;
11.
On
September 7, 2007, Wolverine issued 2,000,000 shares of common stock to
eight non-affiliate Canadian residents, two non-affiliate International
residents, and one non-affiliate U.S. Resident at a price of $0.01 per
share for cash proceeds of $20,000;
12.
On
September 8, 2007, Wolverine issued 2,890,000 shares of common stock to 16
non-affiliate Canadian residents, one non-affiliate International
resident, and two non-affiliate U.S. residents at a price of $0.10 per
share for cash proceeds of
$289,000;
13.
On
October 5, 2007, Wolverine issued 1,000,000 shares of common stock to 11
non-affiliate Canadian residents at a price of $0.10 per share for cash
proceeds of $100,000; and
14.
On
June 25, 2008, Wolverine issued 1,100,000 shares of common stock to six
non-affiliate Canadian residents, two non-affiliate International
residents, and three non-affiliate U.S. residents at a price of $0.10 per
share for cash proceeds of
$110,000;
With
respect the above offerings to Canadian and International residents, Wolverine
completed the offerings of the common stock pursuant to Rule 903 of Regulation S
of the Act on the basis that the sale of the common stock was completed in an
“offshore transaction”, as defined in Rule 902(h) of Regulation
S. Wolverine did not engage in any directed selling efforts, as
defined in Regulation S, in the United States in connection with the sale of the
shares. Each investor represented to Wolverine that the investor was
not a U.S. person, as defined in Regulation S, and was not acquiring the shares
for the account or benefit of a U.S. person. The subscription
agreement executed between Wolverine and the investor included statements that
the securities had not been registered pursuant to the Act and that the
securities may not be offered or sold in the United States unless the securities
are registered under the Act or pursuant to an exemption from the
Act. The investor agreed by execution of the subscription agreement
for the common stock: (i) to resell the securities purchased only in accordance
with the provisions of Regulation S, pursuant to registration under the Act or
pursuant to an exemption from registration under the Act; (ii) that Wolverine is
required to refuse to register any sale of the securities purchased unless the
transfer is in accordance with the provisions of Regulation S, pursuant to
registration under the Act or pursuant to an exemption from registration under
the Act; and (iii) not to engage in hedging transactions with regards to the
securities purchased unless in compliance with the Act. All
securities issued were endorsed with a restrictive legend confirming that the
securities had been issued pursuant to Regulation S of the Act and could not be
resold without registration under the Act or an applicable exemption from the
registration requirements of the Act.
With
respect to the above offerings to U.S. residents, Wolverine completed the
offerings of the common stock pursuant to Rule 506 of Regulation D of the
Act. The subscription agreement executed between Wolverine and the
investor included statements that the securities had not been registered
pursuant to the Act and that the securities may not be offered or sold in the
United States unless the securities are registered under the Act or pursuant to
an exemption from the Act. The investor agreed by execution of the
subscription agreement for the common stock: (i) to resell the securities
purchased only in accordance with the provisions of Regulation D, pursuant to
registration under the Act or pursuant to an exemption from registration under
the Act; (ii) that Wolverine is required to refuse to register any sale of the
securities purchased unless the transfer is in accordance with the provisions of
Regulation D, pursuant to registration under the Act or pursuant to an exemption
from registration under the Act; and (iii) not to engage in hedging transactions
with regards to the securities purchased unless in compliance with the
Act. All securities issued were endorsed with a restrictive legend
confirming that the securities had been issued pursuant to Regulation D of the
Act and could not be resold without registration under the Act or an applicable
exemption from the registration requirements of the Act.
Page
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Each
investor was given adequate access to sufficient information about Wolverine to
make an informed investment decision. None of the securities were
sold through an underwriter and accordingly, there were no underwriting
discounts or commissions involved. No registration rights were
granted to any of the purchasers.
To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement
to:
a)
include
any prospectus required by Section 10(a)(3) of the Securities Act of
1933;
b)
reflect
in Wolverine’s prospectus any facts or events arising after the effective
date of this registration statement, or most recent post-effective
amendment, which, individually or in the aggregate, represent a
fundamental change in the information set forth in this registration
statement. Notwithstanding the foregoing, any increase or
decrease if the securities offered (if the total dollar value of
securities offered would not exceed that which was registered) any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate
offering price set forth in the “Calculation of Registration Fee” table in
the effective registration
statement.
c)
include
any material information with respect to the plan of distribution not
previously disclosed in this registration statement or any material change
to such information in this registration
statement.
2.
That,
for the purpose of determining any liability under the Securities Act,
each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
3.
To
remove from registration by means of a post-effective amendment any of the
securities being registered hereby which remain unsold at the termination
of the offering.
4.
For
determining liability of the undersigned registrant under the Securities
Act to any purchaser in the initial distribution of the securities, the
undersigned registrant undertakes that in a primary offering of securities
of the undersigned registrant pursuant to this registration statement,
regardless of the underwriting method used to sell the securities to the
purchaser, if the securities are offered or sold to such purchaser by
means of any of the following communications, the undersigned registrant
will be a seller to the purchaser and will be considered to offer or sell
such securities to such purchaser:
a.
any
preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule
424;
b.
any
free writing prospectus relating to the offering prepared by or on behalf
of the undersigned registrant or used or referred to by the undersigned
registrant;
Page
- 73
c.
the
portion of any other free writing prospectus relating to the offering
containing material information about the undersigned registrant or its
securities provided by or on behalf of the undersigned registrant;
and
d.
any
other communication that is an offer in the offering made by the
undersigned registrant to the
purchaser.
5.
That
each prospectus filed pursuant to Rule 424(b) as part of a registration
statement relating to an offering, other than registration statements
relying on Rule 430B or other than prospectuses filed in reliance on Rule
340A, will be deemed to be part of and included in this registration
statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a
registration statement or prospectus that is part of this registration
statement or made in a document incorporated or deemed incorporated by
reference into this registration statement or prospectus that is a part of
this registration statement will, as to a purchaser with a time of
contract of sale prior to such first use, supersede or modify any
statement that was made in this registration statement or prospectus that
was part of this registration statement or made in any such document
immediately prior to such date of first
use.
Insofar
as indemnification for liabilities arising under that Securities Act may be
permitted to Wolverine’s directors, officers and controlling persons pursuant to
the provisions above, or otherwise, we have been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act, and is, therefore,
unenforceable.
In the
event that a claim for indemnification against such liabilities, other than the
payment by Wolverine of expenses incurred or paid by one of its directors,
officers or controlling persons in the successful defense of any action, suit or
proceeding, is asserted by one of Wolverine’s directors, officers or controlling
persons in connection with the securities being registered, Wolverine will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification is against the public policy as expressed in the Securities
Act, and a will be governed by the final adjudication of such issue
Signatures
Pursuant
to the requirements of the Securities Act of 1933, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereto, duly authorized in the City of Quesnel, Province of
British Columbia on July 11, 2008.
Director,
President (Principal Executive Officer), Principal Financial Officer and
Principal Accounting Officer
Pursuant
to the requirements of Securities Act of 1933, this registration statement was
signed by the following persons in the capacities and the dates
stated:
Section
1. The
registered office of this corporation is in the city of Henderson,
Nevada.
Section
2. The
corporation may also have offices at other places both within and without the
State of Nevada as the directors may determine or the business of the
corporation may require.
ARTICLE
2
Meetings
of Stockholders
Section
1. Annual
meetings of the stockholders must be held at the registered office of the
corporation or at any other place within or without the State of Nevada as the
directors may decide. Special meetings of the stockholders may be
held at the time and place within or without the State of Nevada as is stated in
the notice of the meeting, or in a duly executed waiver of notice.
Section
2. Annual
meetings of the stockholders must be held on the anniversary date of
incorporation each year if it is not a legal holiday and, and if it is a legal
holiday, then on the next secular day following, or at another time as the
directors may decide, at which the stockholders will elect the directors and
transact any other business that is properly before the meeting.
Section
3. The
president or the secretary may, by resolution of the directors or on the written
request of the stockholders owning a majority of the issued and outstanding
shares and entitled to vote, call special meetings of the stockholders for any
purpose unless otherwise prescribed by statute or by the articles of
incorporation. A request must state the purpose of the proposed
meeting.
Section
4. Notices
of meetings must be written and signed by the president or vice-president or the
secretary or an assistant secretary or by any other person designated by the
directors. The notice must state the purpose for which the meeting is
called and the time and the place, which may be within or without the
State, where it is to be held. A copy of the notice must be either
delivered personally or mailed, postage prepaid, to each stockholder of record
entitled to vote at the meeting not less than 10 and not more than 60 days
before the meeting. If it is mailed, it must be directed to a
stockholder at the address that appears upon the records of the corporation and
is deemed to be delivered to the stockholder when it is deposited into the
mail. If a stockholder is a corporation, association or partnership,
the notice is deemed to have been delivered to the stockholder it is delivered
personally to an officer of the corporation or association, or to any member of
a partnership. A transferee is not entitled to notice of a meeting if
the stock is transferred after the notice is delivered and before the meeting is
held.
Section
5. Business
transactions at any special meeting of stockholders is limited to the purpose
stated in the notice.
Section
6. The
holders of one-third of the stock issued and outstanding and entitled to vote
and present in person or represented by proxy, constitutes a quorum at all
meetings of the stockholders for the transaction of business except as otherwise
provided by statute or by the articles of incorporation. If a quorum
is not present or represented at any meeting of the stockholders, the
stockholders who are entitled to vote and present in person or represented by
proxy may adjourn the meeting from time to time, without notice other than
announcements at the meeting. At such adjourned meeting, the quorum
shall be equal to the number of issued and outstanding shares of the corporation
present in person or by proxy and any business may be transacted at the
adjourned meeting as originally notified. The shareholders present at
a duly organized meeting may continue to transact business until adjournment of
the meeting, notwithstanding the withdrawal of shareholders from the meeting so
that less than a quorum remains.
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Section
7. When
a quorum is present or represented at any meeting, the vote of the holders of
10% of the stock having voting power present in person or represented by proxy
is sufficient to elect directors or to decide any question brought before the
meeting unless the statute or the articles of incorporation specify that the
question requires that a different percentage is required to decide
the question.
Section
8. Each
stockholder of record of the corporation is entitled at each meeting of the
stockholders to one vote for each share standing in his name on the books of the
corporation. Any stockholder may demand that the vote for directors
and any question before the meeting be by ballot.
Section
9. At
any meeting of the stockholders any stockholder may be represented and vote by a
proxy or proxies appointed by in writing. If the written proxy
designates two or more persons to act as proxies, a majority of the designated
persons present at the meeting, or one if only one is present, has the powers
conferred by the written instruction. No proxy or power of attorney
to vote may be voted at a meeting of the stockholders unless it has been filed
with the secretary of the meeting when required by the inspectors of
election. All questions regarding the qualifications of voters, the
validity of proxies, and the acceptance or rejection of votes must be decided by
the inspectors of election who are appointed by the directors, or if not
appointed, then by the officer presiding at the meeting.
Section
10. Any
action that may be taken by the vote of the stockholders at a meeting may be
taken without meeting if it is authorized by the written consent of stockholders
holding at least a majority of the voting power, unless the provisions of the
statute or the articles of incorporation require a greater proportion of voting
power to authorize the action, in which case the greater proportion of written
consents is required.
ARTICLE
3
Directors
Section
1. The
directors must manage business of the corporation and they may exercise all the
powers of the corporation and do any lawful thing unless the statute or the
articles of incorporation or these bylaws specify that the stockholders have the
power to do the thing.
Section
2. The
number of directors that constitutes the whole board may not be less than one
or more than eight. The directors at any time may increase
or decrease the number of directors to not less than one and not more than
eight. The stockholders will elect the directors at the annual
meeting of the stockholders and, except as provided in section 3 of this
article, each director’s term of office will be one year or until a successor is
elected and qualified. Directors may be re-elected for successive
annual terms. Directors need not be stockholders.
Section
3. A
majority of the remaining directors, even if they are less than a quorum, or a
sole remaining director may fill any vacancies in the board of directors,
including those caused by an increase in the number of directors, and each
director so elected holds office until a successor is elected at the annual or a
special meeting of the stockholders. The holders of a two-thirds of
the outstanding shares of stock entitled to vote may at any time peremptorily
terminate the term of office of all or any of the directors by voting at a
meeting called for the purpose or by a written statement filed with the
secretary or, if the secretary is absent, with any other officer. The
removal is effective immediately even if successors are not elected
simultaneously, and the resulting vacancies on the board of directors may be
filled only from the stockholders.
A vacancy on the board of directors is
deemed to exist if a director dies, resigns or is removed, or if the authorized
number of directors is increased, or if the stockholders fail to elect the
number of directors to be elected t any annual or special meeting of
stockholders at which any director is to be elected.
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The
stockholders may elect a director at any time to fill any vacancy not
filled by the directors. If the directors accept the
resignation of a director tendered to take effect at a future time, the
board or the stockholders may elect a successor to take office when the
resignation becomes effective.
Neither
the directors nor the stockholders can reduce the authorized number of directors
to cause the removal of any director before the expiration of his term of
office.
ARTICLE
4
Meeting
of the Board of Directors
Section
1. Regular
meetings of the board of directors must be held at any place within or without
the State that is designated by a resolution of the board or the written consent
of all members of the board. In the absence of a designation, regular
meetings must be held at the registered office.
Section
2. The
first meeting of each newly elected board of directors should be held
immediately following the adjournment of the meeting of stockholders and at the
place of the meeting. A notice of the meeting is not necessary in
order legally to constitute the meeting if a quorum is present. If
the meeting is not held then, it may be held at the time and place that is
specified in a notice given as these bylaws provide for special meetings of the
directors.
Section
3. Regular
meetings of the board of directors may be held without call or notice at the
time and at the place that is fixed by the directors.
Section
4. Special
meetings of the directors may be called by the chairman or the president or by
the vice-president or by any two directors.
Written
notice of the time and place of special meetings must be delivered personally to
each director, or sent to each director by mail or by other form of written
communication, charges prepaid, addressed to the director at the address as it
is shown upon the records or, if not readily ascertainable, at the place in
which the meetings of the directors are regularly held. If the notice
is mailed or telegraphed, it will be deposited in the postal service or
delivered to the telegraph company at least 48 hours before the meeting is
scheduled to start. If the notice is delivered or faxed, it must be
delivered or faxed at least 24 hours before the meeting is scheduled to
start. Delivery as described in this article is be legal and
sufficient notice to the director.
Section
5. Notice
of the time and place for convening an adjourned meeting need not be given to
the absent directors if the time and place has been fixed at the meeting
adjourned.
Section
6. The
transaction of business at any meeting of the directors, however called and
noticed or wherever held, is as valid as though transacted at a meeting duly
held after regular call and notice if a quorum is present and if, either before
or after the meeting, each of the directors not present signs a written waiver
of notice or a consent to meeting’s being held, or written approvals are filed
with the corporate records or made a part of the minutes of the
meeting.
Section
7. A
majority of the authorized number of directors constitutes a quorum for the
transaction of business, except to adjourn as described in these
bylaws. Every decision made by a majority of the directors present at
a meeting duly held at which a quorum is present is deemed to be the decision of
the board of directors unless a greater number is required by law or by the
articles of incorporation. Any action of a majority, although not at
a regularly called meeting, and the record of it if the other
directors have consented in writing, is as valid and effective in all respects
as if it were passed by the board in regular meeting.
Section
8. A
quorum of the directors may adjourn any directors’ meeting to meet again at a
stated day and hour; but, in the absence of a quorum, a majority of the
directors present at any directors’ meeting, either regular or special, may
adjourn the meeting to the next regular meeting of the board.
Section
9. Any
action required or permitted to be taken by the vote of the directors at a
meeting may be taken without a meeting if, before or after the action, it is
authorized by the written consent of all the directors.
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ARTICLE
5
Committees
of Directors
Section
1. The
directors may, by resolution adopted by all of them, designate one or more
committees of the directors, each to consist of two or more of the
directors. A committee may exercise the power of the whole board in
the management of the business of the corporation and may authorize the fixing
of the seal of the corporation to any document that requires it. The
directors may name the committee. The members of the committee
present at any meeting and not disqualified from voting may, whether or not they
constitute a quorum, unanimously appoint another member of the board to act at
the meeting in the place of any absent or disqualified member. The
consent of a majority of the members or alternate members at any meeting of a
committee that has a quorum is required to approve any act of the
committee.
Section
2. The
committee must keep regular minutes of their proceedings and report them to the
whole board.
Section
3. Any
action that must or may be taken at meetings of the directors or any committee
of them may be taken without a meeting if the directors on the board or
committee consent unanimously in writing and the written consent is filed with
the minutes of the proceedings of the board or committee.
ARTICLE
6
Compensation
of Directors
Section
1. The
directors may be paid their expenses for attending each meeting of the directors
and may be paid a fixed sum for attendance at each meeting of the directors or a
stated salary as director. No payment precludes any
director from serving the corporation in any other capacity and being
compensated for the service. Members of special or standing
committees may be allowed like reimbursement and compensation for attending
committee meetings.
ARTICLE
7
Notices
Section
1. Notices
to directors and stockholders must be written and delivered personally or mailed
to the directors or stockholders at their addresses as they appear on the books
of the corporation. Notices to directors may also be given by fax and
by telegram. Notice by mail, fax or telegram is deemed to be given
when the notice is mailed, faxed or telegraphed.
Section
2. Whenever
all parties entitled to vote at any meeting, whether of directors or
stockholders, consent, either by writing on the records of the meeting or filed
with the secretary, or by their presence at the meeting or oral consent entered
on the minutes, or by taking part in the deliberations at the meeting without
objection, the doings of the meeting are as valid as if they were done at a
meeting regularly called and noticed, and at the meeting any business may be
transacted that is not excepted from the written consent if no objection for
want of notice is made at the time and, if any meeting is irregular for want of
notice or consent and a quorum was present at the meeting, the proceedings of
the meeting may be ratified and approved and rendered valid and the irregularity
or defect is waived
if all
parties having the right to vote at the meeting consent in
writing. The consent or approval of stockholders may be by proxy or
attorney, but all the proxies and powers of attorney must be in
writing.
Section
3. Whenever
any notice is required to be given under the provisions of the statute, the
articles of incorporation or these bylaws, a written waiver signed by the
persons entitled to the notice, whether before or after the time stated, is
deemed to be equivalent.
Page
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ARTICLE
8
Officers
Section
1. The
directors will choose the officers of the corporation. The offices to
be filled are president, secretary and treasurer. A person may hold
two or more offices.
Section
2. The
directors at their first meeting after each annual meeting of stockholders will
choose a chairman of the board of directors from among themselves, and will
choose a president, a secretary and a treasurer, none of whom must be
directors.
Section
3. The
directors may appoint a vice-chairman of the board, vice-presidents and one or
more assistant secretaries and assistant treasurers and other officers and
agents as it deems necessary to hold their offices for the terms and exercise
the powers and perform the duties determined by the directors.
Section
4. The
directors will fix the salaries and compensation of all officers of the
corporation.
Section
5. The
officers of the corporation hold their offices at the pleasure of the
directors. Any officer elected or appointed by the directors may be
removed any time by the directors. The directors will fill any
vacancy occurring in any office of the corporation by the death, resignation,
removal or otherwise.
Section
6. The
chairman of the board
will preside at meetings of the stockholders and of the directors and will see
that the orders and resolutions of the directors are carried into
effect.
Section
7. The
vice-chairman will, if
the chairman is absent or disabled, perform the duties and exercise the powers
of the chairman of the board and will perform other duties as the
directors may prescribe.
Section
8. The
president is the chief
executive officer of the corporation and will manage the business of the
corporation. He will execute on behalf of the corporation all
instruments requiring execution unless the signing and execution of
them is expressly designated by directors to some other officer or agent of the
corporation.
Section
9. The
vice-presidents will act
under the direction of the president and, if the president is absent or
disabled, will perform the duties and exercise the powers of the
president. They will perform the other duties and have the other
powers prescribed by the president or directors. The directors may
designate one or more executive vice-presidents and may specify the order of
seniority of the vice-presidents. The duties and powers of the
president descend to the vice-presidents in the specified order of
seniority.
Section
10. The
secretary will act under
the direction of the president; will attend and record the proceedings at all
meetings of the directors and the stockholders and at the standing committees
when required; will give or cause to be given notice of all meetings of the
stockholders and special meetings of the directors; and will perform other
duties that are prescribed by the president or the directors.
Section
11. The
assistant secretaries
will act under the direction of the president in the order of their seniority
unless the president or the directors decide otherwise, and they will perform
the duties and exercise the powers of the secretary if the secretary is absent
or disabled. They will perform other duties and have the other powers
that are prescribed by the president and the directors.
Section
12. The
treasurer will (I) act
under the direction of the president with custody of the corporate funds and
securities; (ii) keep full and accurate accounts of receipts and disbursements
in books belonging to the corporation; (iii) deposit all money and other
valuable effects in the name and to the credit of the corporation in the
depositories that are designated by the directors; (iv) disburse the funds of
the corporation as ordered by the president or the directors, taking proper
vouchers for the disbursements; and (v) render to the president and the
directors, at their regular meetings or when the directors require, an account
of all the transactions undertaken by the treasurer and of the financial
condition of the corporation.
If the
directors require, the treasurer will give the corporation a bond in the sum and
with the surety that is satisfactory to the directors for the faithful
performance of the duties of his office and for the restoration to the
corporation, if he dies, resigns, retires or is removed from office, of all
books, papers, vouchers, money and other property of whatever kind in his
possession or under his control belonging to the corporation.
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Section
13. The
assistant treasurers in
order of their seniority, or as determined by the president or the directors,
will perform the duties and exercise the powers of the treasurer if the
treasurer is absent or disabled. They will perform the other duties
and have the other powers that are prescribed by the president or the
directors.
ARTICLE
9
Certificates
of Stock
Section
1. Every
stockholder is entitled to have a certificate signed by the president or a
vice-president and the treasurer or an assistant treasurer, or the secretary or
an assistant secretary of the corporation, that certifies the number of shares
owned by him in the corporation. If the corporation is authorized to
issue more than one class of stock or more that one series of any class, the
designations, preferences and relative, participating, optional or other special
rights of the various classes of stock or series and the qualifications,
limitation or restrictions of the rights, must be described in full or
summarized on the face or back of the certificate that the corporation issues to
represent the stock.
Section
2. If
a certificate is signed (a) by a transfer agent other than the
corporation or its employees or (b) by a registrar other than the corporation or
its employees, the signatures of the officers of the corporation may be
facsimiles. If any officer who has signed or whose facsimile
signatures has been placed upon a certificate ceases to be the officer before
the certificate is issued, the certificate may be issued with the same effect as
though the person had not ceased to be the officer. The seal of the
corporation or a facsimile of it may, but need not be, affixed to certificates
of stock.
Section
3. The
directors may direct that a new certificate be issued in place of any
certificate issued by the corporation that is alleged to have been lost or
destroyed if the person claiming the loss or destruction of the certificate
makes an affidavit of that fact. When they authorize the issuance of
a new certificate, the directors may, in their discretion and as a condition
precedent to the issuance of the new certificate, require that the owner of the
lost or destroyed certificate or his legal representative advertise the loss as
it requires or give the corporation a bond in the sum as it may direct as
indemnity against any claim that may be made against the corporation with
respect to the certificate alleged to have been lost or destroyed.
Section
4. When
a certificate for shares, duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, is surrendered to the
corporation or the corporation’s transfer agent, the corporation must, if it is
satisfied that it complies with the laws and regulations applicable to the
corporation regarding the transfer and ownership of shares, issue a new
certificate to the person entitled to it and will cancel the old certificate and
record the transaction upon its books, subject to the provisions of the
corporation’s Articles and these By-laws and to restrictions on transfer, if
any, contained in these By-laws. If the corporation is not a
reporting corporation with its shares listed for trading then no shares can be
transferred without the consent of the directors expressed by a resolution of
the board of directors. The board of directors will not be required
to give any reason for refusing to consent to any such proposed
transfer.
Section
5. The
directors may fix in advance a date not more than 60 days and not less than 10
days before the date of any meeting of stockholders, or the date of the payment
of any dividend, or the date of the allotment of rights, or the date when any
change or conversion or exchange of capital stock is effective, or a date in
connection with obtaining the consent of stockholders for any purpose, as a
record date for the determination of the stockholders entitled to notice of and
to vote at any meeting or adjournment, or entitled to be paid
any dividend, or to consent to any matter for which stockholders’
consent is required, and, in any case, only the stockholders who are
stockholders of record on the date so fixed are entitled to notice of and to
vote as the meeting or any adjournment, or to be paid a dividend, or to be
allotted rights, or to exercise the rights, or to consent, as the case may be,
notwithstanding any transfer of any stock on the books of the corporation after
the record date is fixed.
Section
6. The
corporation is entitled to recognize the person registered on its books as the
owner of the share as the exclusive owner for all purposes including voting and
dividends, and the corporation is not bound to recognize any other person’s
equitable or other claims to or interest in the shares, whether it has express
or other notice of a claim, except as otherwise provided by the laws of
Nevada.
Page
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ARTICLE
10
General
Provisions
Section
1. The
directors may declare dividends upon the capital stock of the corporation,
subject to the provisions of the articles of incorporation, if any, at any
regular or special meeting, pursuant to law. Dividends may be paid in
cash, in property or in shares of the capital stock, subject to the provisions
of the articles of incorporation.
Section
2. Before
it pays any dividend, the corporation may set aside out of any funds of the
corporation available for dividends the sum that the directors, in their
absolute discretion, think proper as a reserve to meet contingencies, or for
equalizing dividends, or for repairing and maintaining any property of the
corporation, or for the another purpose that the directors determine are in the
interests of the corporation, and the directors may modify or abolish any the
reserve in the manner that it was created.
Section
3. All
checks or demands for money and notes of the corporation must be signed by the
officers or other persons that are designated by the directors.
Section
4. The
directors will fix the fiscal year of the corporation.
Section
5. The
directors may resolve to adopt a corporate seal for the
corporation. The name of the corporation must be inscribed on the
seal with the words “Corporate Seal” and “Nevada”. The seal may be
used by causing it or a facsimile of it to be impressed or affixed or in any
manner reproduced.
ARTICLE
11
Acquisition
of Controlling Interested
Section
1. The
provisions of NRS 76.378 to 78.3793 and any amendments to the Private
Corporations Act (Nevada) that pertain to the acquisition of a controlling
interest do not apply to the corporation.
ARTICLE
12
Indemnification
Section
1. Every
person who was or is a party or is a threatened to be made a party to or is
involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, because he or a person whom he legally
represents is or was a director or officer of the corporation or is or was
serving at the request of the corporation or for its benefit as a director or
officer of another corporation, or as its representative in a partnership, joint
venture, trust or other enterprise, is indemnified and held harmless to the
fullest legally permissible under the General Corporation Law of the State of
Nevada from time to time against all expenses, liability and loss (including
attorney’s fees, judgments, fines and amounts paid or to be paid in settlements)
reasonably incurred or suffered by him in connection with his
acting. The expenses of officers and directors incurred in defending
a civil or criminal action, suit or proceeding must be paid by the corporation
as they are incurred and in advance of the final disposition of the action, suit
or proceeding upon receipt of an undertaking by or on behalf of the director or
officer to repay the amount if it is ultimately determined by a court of
competent jurisdiction that he is not entitled to be indemnified by the
corporation. The right of indemnification is a contract right that
may be enforced in any manner desired by the person. The right of
indemnification does not extinguish any other right that the directors, officers
or representatives may have or later acquire and, without limiting the
generality of the statement, they are entitled to their respective rights of
indemnification under any bylaw, agreement, vote of stockholders, provision of
law or otherwise, as well as their rights under this article.
Page
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Section
2. The
directors may cause the corporation to purchase and maintain insurance on behalf
of any person who is or was a director or officer of the corporation, or is or
was serving at the request of the corporation as a director or officer of
another corporation, or as its representative in a partnership, joint venture,
trust or other enterprise against any liability asserted against the person and
incurred in any capacity or arising out of the status, whether or not the
corporation would have the power to indemnify the person.
Section
3. The
directors may adopt other bylaws regarding indemnification and may amend the
bylaws to provide at all times the fullest indemnification permitted by the
General Corporation Law of the State of Nevada.
ARTICLE
13
Amendments
Section
1. The
bylaws may be amended by the majority vote of all the record holders of stock
issued and outstanding and entitled to vote at any annual or special meeting of
the stockholders, if the notice of the meeting contains a notice of the
intention to amend.
Section
2. The
directors by a majority vote of the whole board of directors at any meeting may
amend these bylaws, including bylaws adopted by the stockholders, but the
stockholders may specify particulars of the bylaws that cannot be amended by the
board of directors.
I, Lee
Costerd, certify that I am the secretary of Wolverine Exploration
Inc. and that the foregoing bylaws consisting of 8 pages constitute the code of
bylaws of this corporation as duly adopted at a regular meeting of the directors
of the corporation held on May 7, 2007
Please be
advised that, I have reached the following conclusions regarding the above
offering:
1. Wolverine
Exploration Inc., (the “Company”) is a duly and legally organized and existing
Nevada state corporation, with its registered office located in Henderson,
Nevada and its principal place of business located in Quesnel, British Columbia,
Canada. The Articles of Incorporation and corporate registration fees
were submitted to the Nevada Secretary of State's office and filed with the
office on February 23, 2006. The Company's existence and form is valid and legal
pursuant to Nevada law.
2. The
Company is a fully and duly incorporated Nevada corporate entity. The
Company has one class of Common Stock at this time. Neither the
Articles of Incorporation, Bylaws, and amendments
thereto,
nor subsequent resolutions change the non-assessable characteristics of the
Company's common shares of stock. The 64,630,000 shares of Common
Stock previously issued by the Company and being registered by certain selling
shareholders in this registration statement are in legal form and in compliance
with the laws of the State of Nevada, its Constitution and reported judicial
decisions interpreting those laws and when such stock was issued it was duly
authorized, fully paid for and non-assessable. The common stock and
warrants to be sold under this Form S-1 Registration Statement is likewise legal
under the laws of the State of Nevada, its Constitution and reported judicial
decisions interpreting those laws and when such stock is issued it will be duly
authorized, fully paid for and non-assessable.
3. To
my knowledge, the Company is not a party to any legal proceedings nor are there
any judgments against the Company, nor are there any actions or suits filed or
threatened against it or its officers and directors, in their capacities as
such, other than as set forth in the registration statement. I know
of no disputes involving the Company and the Company has no claim, actions or
inquires from any federal, state
or other
government agency, other than as set forth in the registration
statement. I know of no claims
against
the Company or any reputed claims against it at this time, other than as set
forth in the registration statement.
4. The
Company's outstanding shares are all common shares. There are no
liquidation preference rights held by any of the Shareholders upon voluntary or
involuntary liquidation of the Company.
5. The
directors and officers of the Company are indemnified against all costs,
expenses, judgments and liabilities, including attorney's fees, reasonably
incurred by or imposed upon them or any of them in connection with or resulting
from any action, suit or proceedings, civil or general, in which the officer or
director is or may be made a party by reason of his being or having been such a
director or officer. This indemnification is not exclusive of other
rights to which such director or officer may be entitled as a matter of
law.
6. By
director’s resolution, the Company has authorized the issuance of no units
minimum, 15,000,000 units maximum, each unit consisting of one share of common
stock and one redeemable warrant at an offering price of $0.10 per
unit. Further, the Company has authorized the issuance of no shares
of common stock minimum, 15,000,000 shares of common stock maximum upon the
exercise of the redeemable warrants which are components of the
unit. The exercise price of each redeemable warrant is $0.15 per
share.
The
Company's Articles of Incorporation presently provide the authority to the
Company to issue 200,000,000 shares of common stock, with a par value of $0.001
per share. Therefore, the board of directors’ resolution which
authorized the issuance for sale of up to 15,000,000 units each unit consisting
of one share of common stock, one redeemable warrant, and one share underlying
each redeemable warrant is within the authority of the Company’s directors and
the shares of common stock and warrants, when issued, will be validly issued,
fully paid and non-assessable.
I consent
to filing this opinion as an exhibit to the Company’s Form S-1 registration
statement.
THIS VEND-IN AGREEMENT FOR THE
PURCHASE AND SALE OF RESOURCE EXPLORATION PROPERTY made effective as of February28, 2007 is by and between WOLVERINE EXPLORATION INC.
(“Wolverine”), a Nevada, U.S.A. corporation having an office at 2470
Saint Rose Pkwy, Suite 304, Henderson, NV, U.S.A. 89074 (herein called the
"Buyer"), and SHENIN RESOURCES
INC. (“Shenin”), an Alberta, Canada corporation, having an office at 103
Huntcroft Place NE, Calgary, Alberta, Canada T2K 4E6, acting in a dual
capacity:
(a)Shenin,
as agent, for each of the prospectors and grubstakers set out in Recital D
below, according to their respective interests (herein collectively called
the "Sellers"), and
(b)Shenin,
as principal, whereby Shenin acquires for its own benefit an undivided 10%
carried interest in the Property, all as set out
below:
RECITALS:
A. WHEREAS Buyer
was formed in the State of Nevada, U.S.A. on February 24, 2006 for the purpose
of undertaking mining exploration and mining development worldwide, including in
particular being engaged in the exploration and development of mining prospects
of Minerals in Labrador, Canada;
B. AND WHEREAS
Buyer has authorized capital of 200,000,000 voting common shares, of which
4,000,000 are at present issued and outstanding as fully paid and
non-assessable;
C. AND WHEREAS
Buyer is seeking interests in mining properties with favourable prospects of
exploration which have the potential to yield Minerals in commercial
quantities;
____”LC”_______ __”RH”_____
Initial Initial
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D. AND WHEREAS
Buyer wishes under this Agreement to acquire and Sellers, through Shenin as
their agent, wishes to sell 90% of their Interest in Property from time to time,
such 90% portion of the Interest in Property herein called the "Purchased
Interest";
E. AND WHEREAS
the Sellers comprise the following group of persons each of whom
has either
(i)prospected,
or
(ii)contributed
pursuant to a prior arrangement directly or indirectly by way of material,
advice, guidance, provisions, services or financing for the prospecting
for, exploring for or developing a mining property
for
Minerals in Labrador, including without limitation, the seeking, finding,
staking, exploring, developing or the financing of the undertaking therefor, and
as a result thereof earned an undivided interest in the Property, 90% of which
is being disposed of to Wolverine in consideration for the receipt of common
shares of Wolverine as set out below:
Contributor
Contribution
Wolverine
Common Shares
(Alphabetical
Order)
Biggar,
Ralph
cash,
staking
4,000,000
Den
Duyf, Arthur
cash
5,000,000
Haderer,
Richard
founder,
services
5,000,000
Lynch,
Deirdre
cash
5,000,000
Ng,
Thain Yew
staking
5,000,000
Nichols,
Neil
services
5,000,000
Poker,
Prote
prospector
5,000,000
TOTAL
34,000,000
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F. AND WHEREAS
Shenin is not a shareholder of Wolverine now or as a result of the current
transaction proposed herein;
G. AND WHEREAS
Shenin is controlled by Prote Poker, an Innu individual, and Shenin is eligible
to do business with the Innu Nation in Labrador;
H. AND WHEREAS
Shenin, as principal, wishes under this Agreement
(a)to
acquire and retain and Sellers wish to transfer an undivided 10% carried
interest in their total Interest in Property from time to time, such 10%
portion of the Interest in Property transferred to Shenin herein called
the "Shenin Interest", and
(b)to
receive the sum of USD$34,000, representing ten percent of the aggregate
value of the common shares of Wolverine issued hereunder, payable on
demand after May 31, 2007;
I. AND WHEREAS
for clarity the Sellers’ Interest represents 100% of their rights to the
Property, the Purchased Interest represents 90% and the Shenin Interest
represents 10%, the latter being a net carried interest such that Wolverine will
bear 100% of the costs of exploration and development.
J. AND WHEREAS
the Buyer will commit to performing certain exploration or development work on
the Property over the next three years;
K. AND WHEREAS
this is an ongoing contractual relationship by which the Parties wish to have
this Agreement govern Interests in other Property in Labrador which they may
acquire from time to time;
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NOW
WITNESS THEREFORE in consideration of the mutual covenants, agreements and
warranties herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereto
agree as follows:
DEFINITIONS
The
following terms shall have the meanings set forth above or herein for the
purposes of the transactions described in this Agreement:
Affiliate of
any Person shall mean any corporation, proprietorship, partnership, trust
or entity which, directly or indirectly, owns or controls, is under common
ownership or control with, or is owned or controlled by, such Person or
group of Persons with whom the Person deals at non-arm’s length as
defined in the Canadian Tax Act.
Agreement shall
mean this Agreement for the Purchase and Sale of Resource Property,
including all Schedules hereto, as it may be amended from time to time in
accordance with its terms.
Applicable
Law shall mean any domestic or foreign law, statute, guideline,
ordinance, bylaw (zoning or otherwise), order, judgment, decree or similar
restriction of any kind applicable to Seller or to any of the Purchased
Interest.
Assumed
Obligations shall have the meaning given to that term in Section 1.2
hereof, and shall include all Permitted
Encumbrances.
Canadian
Tax Act shall mean the Income Tax Act (Canada), as amended, and the
regulations made pursuant thereto.
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Closing shall
mean the consummation of the transactions contemplated
herein.
Closing
Document shall mean any document delivered in the process of
Closing as provided in or pursuant to this
Agreement.
Confidential
Information shall have the same meaning as Wolverine
Confidential Information set out in Schedule C,
the
Confidentiality Agreement.
Contract shall
mean any contract or commitment pertaining to the Purchased Interest
listed on Schedule
2.11
Encumbrance
shall mean any encumbrance of any kind including, without limitation, any
option, pledge, charge, lien, mortgage, trust, deemed trust, lease,
sublease, claim, covenant, condition or restriction (whether on sale,
transfer or disposition or otherwise), all limitations, conditions,
offsets, reservations, withholding, charges and government assessment or
work requirements and contractual commitments whether imposed by
agreement, law or otherwise, whether of record or
otherwise.
Governmental
Authority shall mean:
(a) the
Government of Canada or any provincial, territorial, regional, municipal,
local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory, or administrative functions
of or pertaining to government, and
(b) the
Government of the United States of America or any state, territorial,
regional, municipal, local or other political subdivision thereof and any
entity exercising executive, legislative, judicial, regulatory, or
administrative functions of or pertaining to
government.
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Interest
shall mean the following legal and beneficial interest in a
Property, subject to Assumed
Obligations:
(a) the
Purchased Interest of 90% of the whole interest,
and
(b) the
Shenin Interest of 10% of the whole
interest,
and shall
include all proceeds from the exploitation or sale or other disposition of the
Property.
Licence shall
mean the licences referred to on Schedule
2.7 Resource
Property, including without limitation any permit, approval, right,
privilege, or concession issued, granted, conferred or otherwise created
by a Governmental Authority that relate to the Purchased Interest, at
Closing or added to the Schedule in relation to a subsequent transaction
for further Property.
Minerals shall
mean all minerals, metals and industrial minerals
whatever.
Permitted
Encumbrance shall mean at the time of Closing any encumbrance of
any kind including, without limitation,
(a) any
option, pledge, charge, lien, mortgage, trust, deemed trust, lease,
sublease, claim, covenant, condition or restriction (whether on sale,
transfer or disposition or otherwise),
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(b) all
limitations, conditions, offsets, reservations, withholding,
charges;
(c) government
assessment or work requirements and contractual commitments, including
without limitation the Work Commitments, whether imposed by agreement, law
or otherwise, whether of record or otherwise,
and
(d) the
security interest granted by and as evidenced in the Promissory
Note.
Person shall
mean any individual, body corporate, partnership, joint venture, trust,
association, unincorporated organization, Indian Band, the Crown, any
Governmental Authority or any other entity recognized by
law.
Promissory
Note shall mean the negotiable bill of exchange in the sum of
USD$34,000.00, substantially in the form of Schedule 1.4
hereto, which shall also contain the grant of the security
interest in the Purchased Interest set out
therein.
Property shall
mean the rights or territory in Labrador in respect of which Licences have
issued to or for the benefit of the Sellers, or may issue to or for the
benefit of the Sellers from time to time, to explore and take Minerals of
any nature whatever from the licenced claims, staked area or otherwise
acquired property interest described in the Schedule
2.7 Resource Property, to the extent permitted by
Governmental Authority and the particular
Licences.
Purchased
Interest shall mean in respect of a particular Property, an
undivided 90% interest in and to Sellers’ Interest in any particular
Property.
Seller shall
mean Shenin Resources Inc.
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Sellers’
Interest shall mean in respect of a particular Property, the whole
of the legal and beneficial right, title to and interest in the particular
Property, subject to all Assumed
Obligations.
Shenin
Interest shall mean
(a) an
undivided 10% of Sellers’ Interest in any particular Property, 90% of
which was sold to Buyer pursuant hereto;
(b) an
undivided 10% of Wolverine’s Interest in any particular Property owned in
any respect by it situated in Labrador which was not acquired from
Sellers, and
(c) an
undivided 100% of Seller’s Interest in any other Property of the
Sellers.
Staking
Records shall mean all staking, claim and licence records in
respect of the Purchased Interest, including without limitation, all
Confidential Information in relation
thereto.
Taxes shall
mean all taxes, charges, fees, duties, levies or other assessments,
including (without limitation) income, gross receipts, net proceeds,
capital, ad valorem, turnover, real and personal property (tangible and
intangible), sales, use, franchise, excise, value added, goods and
services, stamp, leasing, lease, user, transfer, fuel, excess profits,
occupational, interest equalization, windfall profits, severance and
employees' income withholding, unemployment, employer health and Social
Security taxes, which are imposed by Canada or any province, territory,
region, municipality or local or foreign government or any agency thereof,
and such term shall include any interest, penalties or additions to tax
attributable to such Taxes.
USD shall
mean dollars of the currency of The United States of
America.
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Work
Commitments shall have the meaning set out in section 1.2(c)
hereof.
ARTICLE
I
PURCHASE
AND SALE
ASSUMPTION
OF CERTAIN LIABILITIES
1.1 Purchase and
Sale:
(a) Purchase and Sale of
Purchased Interest. Subject to the terms and conditions set forth
in this Agreement, as of the Effective Date the Sellers shall and do
hereby sell, assign, transfer and deliver to the Buyer, and the Buyer
shall purchase, accept, acquire and take assignment and delivery of the
Purchased Interest. The purchase price for the Purchased Interest shall be
THREE HUNDRED FORTY
THOUSAND (USD$340,000.00) US DOLLARS (the "Purchase Price");
(b) Fee to
Shenin: Buyer shall pay to Shenin the sum of THIRTY FOUR THOUSAND (USD$34,000.00)
DOLLARS, plus applicable goods and services taxes, considered to
have been earned for services rendered in respect of the within
transactions; and
(c) Transfer of 10%
Beneficial Interest to Shenin. Subject to the terms and conditions
set forth in this Agreement, as of the Effective Date, the Sellers shall
and do hereby sell, assign, transfer and deliver to Shenin for its own
benefit, and Shenin shall purchase, accept, acquire and take assignment
and delivery of, the 10% beneficial Shenin Interest. The purchase price
for the Shenin Interest shall be ONE (USD$1.00) US
DOLLAR, the receipt and sufficiency of which is hereby acknowledged
by each of the Sellers.
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1.2 Assumed Obligations.
The Buyer assumes, and agrees to pay, perform, fulfil and discharge, from and
after the Effective Date, the obligations arising with respect to the Contracts
or Licences and otherwise as set out on or incorporated by reference
in Schedule
1.2, including without limitation, the following:
(a) the
payment of 100% of all assessment work and Work Commitments required by
any Governmental Authority or Contract or Licence in respect of each
Property in accordance with the terms of such Contract or from the time of
the grant of such Licence, and
(b) the
following commitments to perform work, assessment work, field exploration,
geophysical exploration or other improvements on the Property of
reasonably acceptable value to Shenin, or reasonably allocated to the
Property with the approval of Shenin, (herein called the “Work
Commitments”) as follows:
(iii) CAD$250,000 on
or before March 1, 2010; provided
that
(iv) any
excess amount spent in one year may be carried forward and applied towards
fulfilment of the expenditure required in a later
year.
1.3 Excluded
Obligations. There are no excluded obligations.
1.4 Payment of Purchase Price,
etc. As of the Effective Date:
(a) Wolverine
Shares. The Buyer shall pay and satisfy the Purchase
Price due to the Sellers by means of issuance and delivery to the Persons
comprising the Sellers, according to their respective interests as set out
in Recital E above, the total of 34,000,000 voting common shares of the
Buyer, at an issue price of USD$.01 (one cent) each, as fully paid and
non-assessable, and
(b) Promissory
Note. The Buyer shall pay to Shenin for its own account the sum of
USD$34,000.00 at a future date and as of the Effective Date shall deliver
to Shenin for its own account the delay-demand Promissory Note in the
amount of USD$34,000.00, plus applicable taxes and the grant of the
security interest therein
described.
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ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF SELLERS
The
Sellers hereby represent and warrant to the Buyer as set out in the following
subsections of this Section and acknowledge that the Buyer is relying on such
representations and warranties in entering into this Agreement.
2.1 Due Incorporation.
The agent for the Sellers, Shenin Resources Inc., is a corporation duly
established, organized and validly existing in accordance with the laws of the
Province of Alberta, Canada with all requisite power and authority to be, and
is, the duly and irrevocably authorized agent of the Sellers, who are the legal
and beneficial owners of the Property.
2.2 Due Authorization.
Shenin, on behalf of the Sellers, has full power and irrevocable authority from
each of the Sellers to enter into this Agreement and to carry out the
transactions contemplated hereby, and this Agreement has been duly and validly
executed and delivered by Shenin for itself and on behalf of the Sellers and
constitutes the legal, valid and binding obligation of Shenin and each of the
Sellers, enforceable against them in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or other laws from time to time in effect that affect creditors'
rights generally, and by legal and equitable limitations on the availability of
specific remedies.
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2.3 Absence of Conflicting
Agreements. Except for the Assumed Obligations, to the knowledge of
Shenin, on behalf of the Sellers, none of the execution and delivery of this
Agreement, or the observance and performance by Shenin, on behalf of the
Sellers, of any covenant or obligation under this Agreement or any Closing
Document to which it is a party, or the Closing:
(a) contravenes or
results in, or will contravene or result in, a violation of or a default
under (with or without the giving of notice or lapse of time, or both) or
in the acceleration of any obligation under any Applicable Law, any
Contract or Licence, the constating documents of Shenin, and
the provisions of any agreement, lease, mortgage, security document,
obligation or instrument to which the Sellers are a party, or by which the
Sellers or the Sellers’ Interest is bound or
affected.
(b) relieve
any other party to any Contract, of that party's obligations thereunder or
enable it to terminate its obligations thereunder;
or
(c) result
in the creation or imposition of any Encumbrance, other than an Assumed
Obligation, on the Sellers’ Interest or any of the Purchased
Interest.
2.4 Consents. Except as
set forth on Schedule
2.4, no notice to, registration, declaration or filing with,
authorization of, exemption by, or consent, approval or order of any person,
entity or Governmental Authority is required in order for the Sellers to
consummate the transactions contemplated hereby or to avoid the loss of any
Licence relating to the Sellers’ Interest.
2.5 Title to and Condition of
Purchased Interest. The Sellers have good and marketable title to and are
the legal and beneficial owner of the Sellers’ Interest, including the Purchased
Interest listed on Schedule 2.5, and the
Sellers have the full right to sell, convey, transfer, assign and deliver the
Purchased Interest, free and clear of any Encumbrance, other than Assumed
Obligations. As of the Effective Date, the Sellers shall convey the
Purchased Interest to the Buyer by declarations of trust, deeds, bills of sale,
documents of title and instruments of assignment and transfer effective to vest
in the Buyer, and the Buyer will have, good and marketable title to all of the
Purchased Interest, free and clear of all Encumbrances, other than the Assumed
Obligations.
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2.6 No Defaults or
Violations. Except as set forth on Schedule 2.6, the
Sellers have not materially breached any provision of, nor are in material
default under the terms of, any Contract or Licence to which the Sellers are a
party or by which the Sellers are bound and which relates to the Sellers’
Interest and to the knowledge of Shenin, on behalf of the Sellers, no other
party to any such Contract or Licence is in breach or default thereunder in any
material respect.
2.7 Licences. The Sellers
hold all of the Licences described on Schedule
2.7. The Sellers have not received any notice of
revocation or modification of any such Licences and all Licences are assignable
or transferable to the Buyer to the extent of the Purchased
Interest.
2.8 Litigation. Except as
disclosed in Schedule
2.8, there are no actions, suits, labour disputes or other litigation,
proceedings or governmental investigations pending or, to the knowledge of the
Sellers, threatened against or affecting the Sellers or the Sellers’ Interest,
or relating to the transactions contemplated by this Agreement. The Sellers are
not subject to any order, judgment, decree, stipulation or consent of or with
any court or Governmental Authority which has or may have a material adverse
effect on the Sellers’ Interest.
2.9 Taxes. Each of the
Sellers is a resident of Canada within the meaning of the Canadian Tax Act. To
the best of the Sellers’ knowledge, there are no Encumbrances, other than
Assumed Obligations, against the Sellers’ Interest in respect of Taxes, and
there are no Taxes due and owing or that will become due and owing that shall
give rise to any such Encumbrance.
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2.10 Holding and Use of
Sellers’ Interest. The
holding and use of the Sellers’ Interest has been conducted in all material
respects in compliance with all Applicable Laws and the Sellers have not
received any notice of any alleged breach of any such Applicable
Laws.
2.11Contracts. Schedule 2.11 is an
accurate and complete list of all Contracts relating to the Sellers’
Interest.
2.12 Disclosure. Neither
this Agreement nor any other agreement, statement, list, certificate or other
information furnished or to be furnished by or on behalf of the Sellers or to
the Buyer in connection with this Agreement or any of the transactions
contemplated hereby contains any untrue statement of a material fact regarding
the Sellers, or the Sellers’ Interest, or omits or will omit to state a material
fact necessary to make the statements regarding the Sellers, or the Sellers’
Interest contained herein or therein, in light of the circumstances in which
they are made, not misleading.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF BUYER WOLVERINE
The Buyer
represents and warrants to the Sellers as set out the following subsections of
this Section and acknowledges that the Sellers are relying on such
representations and warranties in entering into this Agreement.
3.1 Due Incorporation.
The Buyer is a corporation duly organized and validly existing under the laws of
the State of Nevada, U.S.A., with all requisite corporate power and authority to
own, lease and operate its properties and to carry on its business as now being
conducted and as contemplated upon the acquisition of the Sellers’
Interest.
3.2 Corporate Authority.
The Buyer has all requisite corporate power and authority to enter into this
Agreement and to carry out its obligations under this Agreement. The execution,
delivery and performance of this Agreement by the Buyer has been duly authorized
by all necessary corporate action on the part of the Buyer. This Agreement
has been duly executed and delivered by the Buyer and constitutes the legal,
valid and binding obligation of the Buyer, enforceable against the Buyer in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium, reorganization or other laws from
time to time in effect that affect creditors' rights generally, and by legal and
equitable limitations on the availability of specific remedies.
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3.3 Consents. No notice
to, registration, declaration or filing with, authorization of, exemption by, or
consent, approval or order of any person, entity or Governmental Authority is
required in order for the Buyer to consummate the transactions contemplated
hereby.
ARTICLE
IV
COVENANTS
OF THE SELLERS AND SHENIN
Shenin,
on behalf of the Sellers, and for itself hereby covenants:
4.1 Security Deposits.
Subject to offset, Shenin shall pay and transfer the net amount of any refund of
security deposits made with any Governmental Authority to the Buyer if, as and
when received, and shall cooperate with Buyer at Buyer’s expense to secure such
refunds. From the Effective Date, Shenin shall hold, subject to
offset, the net amount of such refund of security deposits to and for the sole
use and benefit of the Buyer.
4.2 Confidentiality.
Except as required by any Governmental Authority, securities commission or stock
exchange, all information supplied to Shenin and the Sellers by Buyer shall be
maintained in strict confidence by Shenin and the Sellers and, in the event that
this Agreement is terminated, Shenin and the Sellers shall make no further use
of such information whatever, subject to the provisions of Schedule “C” Confidentiality
Provisions mutatis
mutandis.
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ARTICLE
V
COVENANTS
OF THE BUYER WOLVERINE
The Buyer
hereby covenants:
5.1 Confidentiality.
Except as required by any Governmental Authority, securities commission or stock
exchange, all information supplied to Buyer by Shenin and the Sellers shall be
maintained in strict confidence by Buyer and, in the event that this Agreement
is terminated, Buyer shall make no further use of such information whatever,
subject to the provisions of Schedule “C” Confidentiality
Provisions mutatis
mutandis.
5.2 Shared Information. Buyer
shall at all times without request therefor share with Shenin all information of
whatever nature respecting the Purchased Interest, or affecting the Sellers’
Interest, including without limitation its exploration, exploitation, nature and
disposition.
5.3 Property in Good
Standing. Buyer shall at all times keep the Property in good
standing with all Governmental Authority. Except with the prior
written consent of Shenin, which consent may be arbitrarily withheld without
disclosing any grounds therefor, Buyer shall not let any right or interest in
any Property lapse or otherwise terminate for want of fulfilment of assessment
work or similar obligation or bond or payment in lieu thereof as required by any
Governmental Authority.
5.4 Shenin’s 10% Carried
Interest. The Buyer shall from and after the Effective Date
pay 100% of all costs and expenses in relation to the ownership of the Property
and the exploration and development thereof without
(a) charge
to Shenin,
(b) contribution by
Shenin,
(c) liability to
Shenin, or
(d) Encumbrance of
the Shenin Interest in the
Property,
whatever.
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Without
limitation as to time, the Buyer shall, and hereby does, indemnify and save
harmless Shenin and the Sellers from all such charges, costs, liability or
Encumbrance and the Indemnity Provisions of Schedule D shall apply.
5.5 Transferees Bound by
Agreement. If Buyer sells or transfers its Purchased Interest,
or any part thereof, then it shall only do so provided that the Person acquiring
the Purchased Interest, or any part thereof, shall be bound by the provisions of
this Agreement.
ARTICLE
VI
CONDITIONS
PRECEDENT TO OBLIGATIONS OF BUYER WOLVERINE
The
obligations of the Buyer under this Agreement are subject to satisfaction of the
following conditions precedent and such conditions precedent are for the
exclusive benefit of the Buyer and the Buyer may waive compliance with any such
term or condition in whole or in part in the sole discretion of the Buyer and
such waiver shall not prejudice any of its rights under this Agreement or
otherwise:
6.1 Warranties True as of the
Effective Date. The representations and warranties of Shenin and the
Sellers contained herein shall be true in all material respects on and as of the
Effective Date of this Agreement.
6.2 Compliance with Agreements
and Covenants; Certificate. The Sellers shall have performed in all
material respects all of their respective obligations and agreements and
complied in all material respects with all of the covenants contained in this
Agreement to be performed and complied with on or prior to the Effective Date;
and Shenin, on behalf of the Sellers, shall have delivered to Buyer a
certificate dated as of the Effective Date, signed by a director or officer of
Shenin certifying as to compliance with Section 6.1 and this
Section
6.2.
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6.3 Consents, Authorizations and
Registrations. Any required consents, approvals, orders or
authorizations, or assurances satisfactory to the Buyer regarding the
transactions contemplated by this Agreement shall have been obtained as of the
Effective Date.
6.4 Actions or
Proceedings. No action or proceeding by any Governmental Authority shall
have been instituted or threatened which enjoins, restrains or prohibits or
would enjoin, restrain or prohibit, or might result in substantial damages in
respect of, and no court order shall have been entered which enjoins, restrains
or prohibits, or resulted in substantial damages in respect of, this Agreement
or the consummation of the transactions contemplated by this
Agreement.
6.5 Receipt of Closing
Documentation. All documentation relating to the sale and purchase of the
Purchased Interest, the assumption of the Assumed Obligations, and assignments
of the Contracts and Licences, transfers and conveyances and resolution of
Shenin, on behalf of the Sellers, relating to the due authorization and
completion of such sale and purchase and all actions and proceedings taken in
connection with the performance by Shenin, on behalf of the Sellers of their
obligations under this Agreement, shall be satisfactory to the Buyer and its
counsel acting reasonably. The Buyer shall have received duly executed copies of
the Closing Documents and all such documentation or other evidence as it may
reasonably request in form (as to certification and otherwise) and substance
satisfactory to the Buyer and its counsel.
6.6 Authorization. The
Buyer shall have received a certified resolution duly adopted by Shenin, on
behalf of the Sellers, approving this Agreement and the transactions
contemplated hereby as true and complete and not having been amended or
supplemented and as being of full force and effect as of the Effective
Date.
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6.7 Board Approval. The
Buyer shall have obtained the requisite approval of its board of directors to
purchase the Purchased Interest as of the Effective Date.
6.8 In
Trust. As of the Effective Date, Shenin, on behalf of the
Sellers, shall hold the Purchased Interest and all proceeds in respect thereof
in trust for the sole use and benefit of Buyer and shall cooperate at any time
to cause such interest to be transferred, subject to Assumed Obligations, to
Buyer and at no cost to Buyer other than the cost of the actual fee paid or
payable to the Government Authority for the transfer to Buyer of the Purchased
Interest.
ARTICLE
VII
CONDITIONS
PRECEDENT TO OBLIGATIONS OF SELLER SHENIN
The
obligations of the Sellers under this Agreement are subject to satisfaction of
the following conditions precedent and such conditions precedent are for the
exclusive benefit of the Sellers and Shenin, on behalf of the Sellers, may waive
compliance with any such term or condition in whole or in part in the sole
discretion of the Shenin, on behalf of the Sellers, and such waiver shall not
prejudice any of its rights under this Agreement or otherwise:
7.1 Warranties True as of
Effective Date. The representations and warranties of Buyer contained
herein shall be true in all material respects as of the Effective Date of this
Agreement.
7.2 Compliance with Agreements
and Covenants; Certificate. Buyer
shall have performed in all material respects all obligations and agreements and
complied in all material respects with all covenants contained in this Agreement
to be performed and complied with on or prior to the Effective Date; and Buyer
shall have delivered to Seller a certificate, dated as of the Effective Date,
signed by a director or officer of the Buyer certifying as to its compliance
with Section
7.1 and this Section
7.2.
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7.3 Consents and
Approvals. All consents, approvals, orders and authorizations in writing
reasonably satisfactory to Sellers shall have been received by Buyer from any
lenders, lessors, Governmental Authorities or other persons or entities whose
consent, approval, order or authorization is required to be obtained by Buyer
for the consummation of the transactions contemplated by this
Agreement.
7.4 Actions or
Proceedings. No action or proceeding by any Governmental Authority shall
have been instituted or threatened which enjoins, restrains or prohibits or
would enjoin, restrain or prohibit, or might result in substantial damages in
respect of, and no court order shall have been entered which enjoins, restrains
or prohibits, or resulted in substantial damages in respect of, this Agreement
or the consummation of the transactions as contemplated by this
Agreement.
7.5 Receipt of Closing
Documentation. Shenin shall have received duly executed copies of the
Closing Documents and all such documentation or other evidence as it may
reasonably request in form (as to certificates and otherwise) and substance
satisfactory to Shenin and its counsel.
7.6 Authorization. Shenin
shall have received a certified resolution duly adopted by the Board of
Directors of the Buyer approving this Agreement and the transactions
contemplated hereby as true and complete and not having been amended or
supplemented and as being of full force and effect on the Effective
Date.
ARTICLE
VIII
CLOSING
8.1 Closing. Closing
shall occur by the exchange of duly executed Closing Documents on a priority
basis. The matters relating to Closing shall be in fulfilment of this
Agreement and as agreed between counsel for the Parties, acting reasonably and
in accordance with the terms of this Agreement.
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8.2 Effective
Date: The effective date shall be for all purposes February28, 2007.
ARTICLE
IX
TERMINATION
9.1 Termination. This
Agreement may be terminated at any time on or prior to the completion of the
Closing:
(a)With
the mutual consent of the Seller and
Buyer;
(b)By
Buyer, if any of the conditions provided in Article VI
shall not have been satisfied, and Buyer shall not have waived such
failure of satisfaction;
(c)By
Sellers, if any of the conditions provided in Article VII
shall not have been satisfied, and Sellers shall not have waived such
failure of satisfaction; or
(d)By
Sellers or Buyer, if the Closing shall not have commenced or taken place
on or before March 31, 2007 or such later date as may be mutually approved
in writing by Buyer and Sellers.
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9.2 In the event
of any termination pursuant to Section 9.1 (other
than pursuant to Section 9.1(a)),
written notice setting forth the reasons thereof shall forthwith be given by
Buyer, if Buyer is the terminating party, to Shenin, or by Shenin, if Shenin or
the Sellers are the terminating party, to Buyer.
ARTICLE
X
SURVIVAL
AND REMEDY: INDEMNIFICATION
10.1 Survival of Representations
and Warranties. All representations and warranties made by the Parties
pursuant to this Agreement or any Closing Document shall survive the Closing and
shall expire as of 11:59 p.m., Mountain Standard Daylight Time (Calgary), on the
date which is the second anniversary of the Effective Date, except for the
representation and warranty in:
(a)Section 2.5, as
it relates to title and condition of the Purchased Interest which shall
survive the Closing indefinitely,
and
(b)Section 2.9,
which shall survive the Closing until the expiry of all limitation periods
under applicable tax legislation.
10.2 Survival of
Covenants.
(a)The
covenants of the Sellers, including the Confidentiality
Provisions of Schedule C (¶10), and the indemnification obligations
of the Sellers shall survive forever;
and
(b)The
covenants of the Buyer, including the Confidentiality
Provisions of Schedule C (¶10), and the indemnification obligations
of the Buyer shall survive forever.
10.3 Indemnification bv the
Sellers and Others. The Sellers agree to, and hereby do, indemnify the
Buyer and each of its Affiliates against, and agrees to hold it and them
harmless from, any and all losses incurred or suffered by the Buyer or any of
its Affiliates or any combination thereof arising out of any of the following:
(i) any breach of or any inaccuracy in any representation or warranty made by
Shenin, on behalf of the Sellers, or by the Sellers, pursuant to this Agreement
or any Closing Document, and any breach of or failure by Shenin or the Sellers
to perform any covenant or obligation of the Sellers set out in this Agreement
or any Closing Document; and (ii) the ownership of the Purchased Interest on or
prior to the Effective Date.
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10.4 Indemnification by the
Buyer. The Buyer agrees to indemnify the Seller and each of its
Affiliates against, and agrees to hold it harmless from, any and all losses
incurred or suffered by the Seller or any of its Affiliates, arising out of any
of the following: (i) any breach of or any inaccuracy in any representation or
warranty made by the Buyer pursuant to this Agreement or any Closing Document,
and any breach of or failure by the Buyer to perform any covenant or obligation
of the Buyer set out in this Agreement or any Closing Document; or (ii) the
ownership of the Purchased Interest from and after the Effective Date to the
extent such losses arise in connection with and relate to periods commencing
after the Effective Date.
10.5 The Indemnification Provisions
set out in Schedule D shall apply to this Agreement, including paragraphs
10.3 and 10.4 above.
ARTICLE
XI
GOOD
FAITH AND FULL DISCLOSURE
11.1 The Buyer
agrees to consult with Shenin regarding any exploration and development
activities in Labrador.
11.2 The parties
shall at all times deal in good faith with each other in respect of all matters
pertaining to this Agreement and relevant in the broadest sense to this
Agreement and ongoing matters pertaining to the Property.
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11.3 The parties
shall at all times fully disclose to each other without request
therefor all information pertaining to the Property which is subject of
this Agreement and relevant in the broadest sense to this
Agreement and ongoing matters pertaining to the Property.
11.4 The Buyer
agrees to make such complete and timely disclosures of information to Shenin as
may be required to enable Shenin to consult with Buyer concerning any matters
relating to Buyer's existing or proposed activities, including but not limited
to environmental, engineering and financial studies and data. Buyer commits to
provide reports to Shenin at least on a quarterly basis during times of active
exploration activities which summarize the relevant technical data, and to brief
Shenin as soon as practicable about the results of exploration
activities.
ARTICLE
XII
ADDITIONAL
PROPERTY
12.1 Right of First Refusal for
Additional Property. Shenin, for itself and on behalf of the
Sellers, hereby agrees to Offer to Buyer within ninety (90) days a 90% Purchased
Interest in all further Property in Labrador, Canada which Shenin or any of the
Sellers may acquire from time to time.
12.2 Refusal of Additional
Property. Buyer does not have to accept such Offer in respect
of any particular Property. In such event, Seller is at liberty to
deal with such additional property as it sees fit, subject to the conditions of
Schedule
E Right of
First Refusal Provisions.
12.3 Right of First Refusal
Provisions. The Right of First
Refusal
Provisions of Schedule E shall apply hereto.
12.4 Non-Circumvention. Buyer
shall not acquire any interest in Property in Labrador, Canada except through
Shenin, and if it does so, or purports to do so, then Shenin may seek equitable
relief by way of interim or permanent injunction or temporary or permanent
restraining order pursuant to paragraph B.4.2.4 and other provisions of the
Dispute Resolution
Provisions of Schedule B, adopted in Schedule A paragraph A.7 and
A.21.
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12.5 Deemed Shenin Interest
in
Labrador. Except for Property in which Shenin already has a
10% Interest hereunder, Shenin shall be entitled to receive and shall receive
the Shenin Interest for an unlimited time, being an undivided 10% Interest, in
any Interest of the Buyer in any other Property of the Buyer, or its Affiliate
or any entity in which it has any direct or indirect economic or financial
interest, in Labrador only, where such Property was acquired in any manner
whatever during the term of this Agreement or within a period of THREE (3) years
thereafter in the event of termination of this agreement.
12.6 In
Trust. Buyer shall hold the Shenin Interest and all proceeds
in respect thereof in trust for the sole use and benefit of Shenin and shall
cooperate at any time to cause such interest to be transferred free and clear of
any Encumbrance to Shenin without withholding, reservation, deduction or setoff
whatever, and at no cost to Shenin other than the cost of the actual fee paid or
payable to the Government Authority for the transfer to Shenin of the Shenin
Interest.
ARTICLE
XIII
MISCELLANEOUS
13.1 Schedules Incorporated
Herein. The following Schedules are hereby incorporated herein
by reference as part of this Agreement as if expressly set out herein, it being
agreed that the placement of the matters into discreet schedules is a matter of
convenience and the matters are of equal importance as any other provision of
this Agreement.
Schedule
AGeneral Terms and Conditions
Schedule
BDispute Resolution Provisions
Schedule
CConfidentiality Provisions
Schedule
DIndemnification Provisions
Schedule
ERight of First Refusal Provisions
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered on the date first above written.
Section 2:certain Representations and
Warranties of Sellers.
2. However, if a
Schedule is referred to in a paragraph in the body of the Agreement, but no
Schedule appears at the end of the Agreement, then the exceptions which may have
existed and been referred to in the Schedule are deemed to read “nil”
in all cases.
3. The
following:
Schedule
AGeneral Terms and Conditions
Schedule
BDispute Resolution Provisions
Schedule
CConfidentiality Provisions
Schedule
DIndemnification Provisions
Schedule
ERight of First Refusal Provisions
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SCHEDULE
1.2
ASSUMED
OBLIGATIONS
1. All
Permitted Encumbrances
2. The sum
of THIRTY FOUR THOUSAND
(USD$34,000.00) US DOLLARS, evidenced by the Promissory Note and
security interest granted therein
3. 100% of
all assessment work and work commitments required by any Governmental
Authority or Contract or Licence in respect of each
Property,
4. the
Work Commitments set out herein (see Section
1.2):
FOR VALUE
RECEIVED, the Undersigned Maker hereby promises to pay to or to the order of
SHENIN RESOURCES INC.
(the “Payee”) at 103 Huntcroft Place NE, Calgary, Alberta, Canada T2K
4E6, or at such other place as may be designated in writing by the holder of
this Note, the sum of
THIRTY-FOUR THOUSAND (USD$34,000.00) DOLLARS, without interest until
Demand, and thereafter at the annual rate of TEN (10%) PER CENT from the date of
Demand, compounded semi-annually not in advance, payable in US funds by
certified cheque, money order or other means acceptable in writing by the Payee
from time to time.
The
principal amount of this note shall be due and payable on demand after May 31,2007. The Maker shall have the right to prepay the principal amount
of the Promissory Note in whole or in part from time to time without notice,
bonus or penalty provided that there are no arrears of any payment due and
payable.
The Maker
hereby waives diligence, presentment, protest and demand and also notice of
protest, demand, dishonour and non-payment of this Note.
The Maker
hereby grants to the payee a security interest in the whole of the Purchased
Interest in the Property acquired under the Agreement therefor, effective
February 28, 2007, further to which this Note is issued and all present and
future after-acquired personal property of the Maker.
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The Maker
hereby agrees to pay all applicable costs in relation to this Promissory Note
(“Costs”). “Costs” shall include without limitation all Canadian
goods and services tax on the fees in respect of which this Promissory Note is
issued and all reasonable costs of collection when incurred, including actual
amounts paid to or liabilities incurred in respect of legal fees and costs,
accounting fees and costs, valuators fees and costs and such payment shall be on
a full indemnity basis in respect of all of these and all other related costs of
collection or costs in any manner involved in such realization upon security or
collection.
This note
shall be construed in accordance with the laws of the Province of Alberta,
Canada and the laws of Canada applicable therein. The parties hereby
irrevocably attorn to the jurisdiction of the Courts of the Province of Alberta,
Canada.
WOLVERINE EXPLORATION
INC.
Per:__________________________
Lee P. Costerd, President
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SCHEDULE
2.5
THE
PURCHASED INTEREST
1. NINETY PER
CENT (90%) of all Property at the time of Closing.
2. NINETY
PER CENT (90%) of all additional Property from time to time for additional
consideration.
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SCHEDULE
2.7
PROPERTY
LICENCES
FOR RESOURCE PROPERTY
1. The
following Licences for Mineral claims in the Province of Newfoundland and
Labrador, Canada:
(a)Government
of Newfoundland and Labrador
Map
Staked Licence #012425M, recorded August 18, 2006, comprising 82
Claims
Map
Staked Licence #012427M, recorded August 18, 2006, comprising 20
Claims
(b)Government
of Newfoundland and Labrador
Map
Staked Licence #013039M, recorded January 4, 2007, comprising 254
Claims
(c)Government
of Newfoundland and Labrador
Map
Staked Licence #013187M, recorded February 12, 2007, comprising 160
Claims
2. All
other Interests in property in Labrador, Canada as Shenin may acquire from
time to time.
3. All
other Interests in property in Labrador, Canada as Wolverine may acquire
from time to time.
1. The
Work Commitments in respect of the Property, including as set out in
Section 1.2(c).
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SCHEDULE
A
GENERAL
TERMS AND CONDITIONS
A.1 Interpretation: Wherever
the singular or masculine is used in this Agreement the same shall be
interpreted as including the plural, feminine or neuter wherever the context so
requires. The captions and headings are inserted for convenience of
reference only, form no part of this Agreement and in no way define, describe or
limit the scope or intent of this Agreement or any provision
hereof.
A.2 Further Acts: In
order to fulfil the intent of the Parties hereto, they shall execute from time
to time all reasonable documents and do all such things as may be reasonably
necessary or desirable to more completely and effectively carry out the terms
and intentions of this Agreement, to implement it in all respects, or to fulfil
consequential aspects thereof, which any other Party may request from time to
time at the expense, if any, of the Party so requesting. Further, the
parties shall cause the corporate parties to act in the manner contemplated by
this Agreement and, to the extent permitted by law, cause the Board of Directors
so to act.
A.3 Severability: If a
Court or duly constituted arbitrator would declare that all or any portion of
the provisions of this Agreement are void or unenforceable in the circumstances,
this Agreement shall, automatically and without further act on the part of the
Parties hereto, be reduced in scope to such an extent as to be valid and
enforceable in the circumstances. The invalidity of any provision of
this Agreement or any covenant contained herein on the part of any Party shall
not affect the validity of any other provision or covenant herein, which shall
remain in full force and effect. Further, the Parties shall use their best
efforts to negotiate an alternative provision which achieves the objectives of
the provision so declared to be invalid, unenforceable or otherwise
contrary to law.
A.4 Governing Law and
Jurisdiction: This Agreement shall be governed by and
construed pursuant to and in accordance with, including the enforcement thereof,
the laws of the Province of Alberta and the laws of Canada applicable
therein. The Parties hereby each agree irrevocably to attorn to the
jurisdiction of the Courts of the Province of Alberta, Canada.
A.5 Recitals: The
recitals hereto are incorporated herein as part of this Agreement.
A.6 Entire Agreement; No Oral
Agreements: This written Agreement comprises the entire
agreement and understanding of the parties hereto in respect to the transactions
contemplated hereby and supersedes all prior agreements, arrangements and
understandings relating to the subject matter hereof and is not intended to
confer upon any other person any rights or remedies hereunder. There
are no other applicable verbal or oral or other agreements, memoranda,
understandings, representations, conditions, warranties, statements,
promises or collateral agreement (collectively herein called “Statements”) of
any kind by and between the Parties, except as expressly set forth in this
Agreement. The execution of this Agreement has not been induced by, nor do
any of the Parties hereto rely upon or regard as material, any Statements
whatever except to the extent expressly stated herein in
writing.
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A.7 Default, Equitable Remedies and
Specific Performance: Upon a default under this Agreement,
each nondefaulting party shall have such remedies as may be available at law and
in equity, including specific performance, subject to the Dispute Resolution
Provisions of Schedule B. Seller recognizes and affirms that in the event
of breach of any of the provisions of this Agreement, money damages would be
inadequate and Buyer would have no adequate remedy at law. Accordingly, Seller
agrees that Buyer shall have the right, in addition to any other rights and
remedies existing in its favor, to enforce its rights and Seller's obligations
under this Agreement not only by an action or actions for damages, but also by
an action or actions for specific performance, injunction and/or other equitable
relief in order to enforce or prevent any violations (whether anticipatory,
continuing or future) of the provisions of this Agreement.
A.8 Amendment of this
Agreement: Any amendment or modification of this Agreement or
additional obligation assumed by any Party in connection with this Agreement
shall be binding only if evidenced in writing signed by each Party or an
authorized representative of each Party, provided that all other agreements
referred to herein or contemplated hereby are similarly amended as
appropriate. Any alteration, amendment or qualification of this
Agreement shall be null and void and shall not bind any Party unless made
in writing and signed or initialled by the Parties.
A.9 Notice: All
notices contemplated or required to be given hereunder shall be in writing and
shall be deemed to have been given, (i) when received if given in person, (ii)
on the date of acknowledgement of receipt if sent by telex, facsimile or other
wire transmission or (iii) ten (10) days after being deposited in the mail,
certified or registered mail, postage prepaid, provided that where interruption
of mail services is likely by reason of any strike or other labour dispute,
notice shall be by personal delivery only to the person or to the address as
aforesaid. For purposes hereof the Parties address for service of
notice hereunder is as follows, or at such other address as the Party to whom
such notice is to be given otherwise has prior directed in writing:
A.10 Waiver: Any waiver
of any term, covenant, representation or warranty, provision or condition of
this Agreement to be effective must be in writing and signed by the Party
waiving such term, provision or condition stating with specificity the
particular provision or provisions being waived and for what event or period of
time. No waiver of any one or more provisions shall be deemed to be a
further waiver or continuing waiver of such terms, provisions or conditions or
any other term, provisions or conditions unless the waiver specifically so
states. The failure of a party hereto at any time or times to require
performance of any provision hereof shall in no manner affect its right at a
later time to enforce the same.
A.11 Warranty of
Authority: Any such execution is a representation and warranty
to the other Party that the Party so signing has full authority in all requisite
capacities to do so. In the event of any loss or damage suffered by a
Party due to this representation or warranty being untrue, whether innocent or
otherwise, then the Party causing the harm shall indemnify the other Party in
respect of all loss or damage, and reasonable costs and expenses connected
therewith.
A.12 Time: Time
is of the essence of each provision of this Agreement, including in particular
the Dispute Resolution
Provisions of Schedule B.
A.13 Force Majeure: No right
of any party hereto shall be prejudiced by events beyond a party's reasonable
control including without limitation pressures or delays from outside parties,
labour disputes, the exigencies of nature, governments, regulatory authorities
and acts of God, particularly as they may affect the performance of this
Agreement but excluding the want of funds. All times herein provided
for shall be extended by the period necessary to cure any such event and the
party affected shall use all reasonable means to do so promptly.
A.14 Counterparts and Fax
Copies: This Agreement may be executed in counterparts and may
be delivered by fax or digital copies thereof and when the whole is so executed
and delivered it shall constitute a valid and binding agreement among the
Parties so executing and delivering the agreement effective as of the Effective
Date. Fax and digital signatures (such as by email, pdfs, or scanned
images) shall be deemed to be accepted as original.
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A.15 No Partnership,
etc.: Nothing in this
Agreement, including co-ownership of undivided interests in Property, shall be
deemed in any way or for any purposes to constitute any party a partner of, or a
member of a joint venture or joint enterprise with, any other party to this
Agreement in the conduct of any business, undertaking or
otherwise.
A.16 No Assignment
Permitted: No Party to this
Agreement shall assign, sell or otherwise transfer or encumber this Agreement,
or any of the rights, obligations or interests arising hereunder, without the
prior written consent of all of both Shenin and Buyer.
A.17 Effect of
Investigations: Any due diligence review, audit or other
investigation or inquiry undertaken or performed by or on behalf of Buyer shall
not limit, qualify, modify or amend the representations, warranties and
covenants of, and indemnities by, Sellers and/or any member of the Contributors
made or undertaken pursuant to this Agreement, irrespective of the knowledge and
information received (or which should have been received) therefrom by
Buyer.
A.18 Publicity and Press Releases:
Except as required by Applicable Law, the securities commission or stock
exchange or as compelled by administrative or judicial process (and in any such
event, Seller shall consult with Buyer prior to making any disclosure), Seller
shall not, without the prior written approval of Buyer, disclose the Purchase
Price Ann terms hereunder. No announcement of such Purchase Price and terms
shall be made by the Seller without the prior approval of Buyer as to the
form, timing and manner of such announcement. Except as required by
Applicable Law or as compelled by administrative or judicial process (and, in
any event, Buyer shall consult with Seller prior to making any disclosure) Buyer
shall not, without the prior written approval of Seller, disclose the Purchase
Price and terms hereunder. Except as required by Applicable Law, no announcement
of the Purchase Price and terms shall be made by the Buyer without the prior
written approval of Seller as to the form, timing and manner of such
announcement.
A.19 Money - USD: All
references to money in this Agreement shall be in US Dollars unless expressly
stated to be otherwise, such as with respect to the Work Commitments, which are
expressed in CAD, meaning Canadian Dollars.
A.20 Expenses: The Buyer shall pay
a portion of the fixed fees and costs of the Seller to the extent of USD
$5,000.00 in respect of the Closing; but otherwise, each of the Buyer and Seller
shall bear its own expenses with respect to this transaction.
A.21 Dispute
Resolution: At any time while this Agreement and any of its
provisions are in force, should any dispute or question arise between Wolverine
and Shenin concerning the interpretation of this Agreement or any part thereof
which cannot be amicably resolved by Wolverine and Shenin, then such dispute or
question shall only be resolved by following the Dispute Resolution
Provisions of Schedule B hereto.
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A.22 Enurement: This
Agreement shall be binding upon and enure to the benefit of the Parties and
their respective successors and permitted assigns.
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SCHEDULE
B
DISPUTE
RESOLUTION PROVISIONS INCLUDING BINDING ARBITRATION
(International)
NOTE: THIS
ARTICLE CONTAINS A LIMITATION PERIOD OF SIX MONTHS AND LIMITS ALL REMEDIES FOR
AMOUNTS OVER $25,000 TO THIS DISPUTE RESOLUTION PROCEDURE WITHOUT ANY RIGHT TO
LITIGATE IN COURT
IMPORTANT
SUMMARY OF SCHEDULE B
DISPUTE
RESOLUTION PROVISIONS INCLUDING BINDING ARBITRATION
Summary: This
Dispute Resolution procedure is summarized as follows and requires the initials
and signatures on behalf of the parties before and after and shall be taken as
conclusive proof of the awareness and understanding of the parties to their
rights and obligations:
(Initial)_____________ (Initial)___________
Haderer Costerd
SUMMARY
OF
DISPUTE
RESOLUTION PROVISIONS INCLUDING BINDING ARBITRATION
NOTICE
OF LIMITATION DEADLINE TO RESOLVE DISPUTES
The
following notes are provided as a caution to the Parties and so that they will
know their rights and obligations. They summarize the Dispute
Resolution Provisions below in Schedule B which prevail over this summary in
interpreting the limitation deadline provisions for Dispute Resolution, so
reference ought to be made to them.
THIS
AGREEMENT CONTAINS A LIMITATION DEADLINE WITHIN WHICH TO MAKE CLAIMS AND RESOLVE
DISPUTES:
DISPUTE
RESOLUTION PROVISIONS INCLUDING BINDING ARBITRATION.
The
Dispute Resolution process replaces litigation and seeks fair, reasonable and
expeditious resolution of disputes: it has three steps which must be
done or attempted in order: section B.1, B.2.,
B.4.1(b).
1. The first step is Senior
Level Settlement Negotiation: section B.3 PART I
(a).
The key document WHICH MUST BE DONE
TO START THIS AND ALL LATER STEPS, and which must be done within time, is the
“Dispute Notice Within
The Limitation Time”. This written
Notice also suspends the time limitation deadline while the parties are trying
to resolve the dispute so no advantage can be gained by delaying
tactics: section B.3
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(a). A
sample form of the Notice is in the final attachment to the Agreement at the
last page of the Agreement. Any similar notice will do.
2. The second step is
non-binding Interest-Based Mediation: section B.3 PART I (b) &
(c).
If the
Senior Level Settlement Negotiation does not resolve matters the Claimant may
choose to quit or to mediate.
3. The third step is binding
Arbitration: Part II, section B.4.
Section
B.4.2 provides two deadlines for demanding Arbitration:
(a)within
30 days after the conclusion of the Mediation (B.4.2(a)), which presumably
did not lead to a successful negotiated settlement or Arbitration would
not be necessary; and
(b)not
later than SIX (6) MONTHS after the later
of
(i)when
the claim arose and
(ii)when
it was known OR REASONABLY OUGHT TO HAVE BEEN KNOWN by the
Claimant.
This
six-month period is automatically extended for whatever time it has taken from
the date of service of the “Dispute Notice Within The Limitation Time” to start
Senior Level Settlement Negotiation until the conclusion of the unsuccessful
Mediation.
If a
Claimant misses either one of the Arbitration deadlines, the Claimant's claim is
finished and dismissed, the Claimant has no other avenue for relief and cannot
go to Court to litigate the claim.
If a
Claimant wrongfully attempts to litigate first, then the Claimant is also deemed
thereby to have elected irrevocably to abandon any relief by Arbitration but the
Claimant is still bound by all of the Arbitration provisions which say a
Claimant is not permitted to litigate. In effect, when the Court
dismisses the Claimant's claim because it must do so and cannot hear any such
litigation, then the Claimant has no other avenue for relief and cannot come
back and try Arbitration. Thus a Claimant litigates at the Claimant's
own peril, such that by breaching the covenant not to litigate the Claimant has
given up all other right of recourse.
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THE
UNDERSIGNED HAVE READ, UNDERSTAND AND AGREE WITH THE
FOREGOING DEADLINES AND CONSEQUENCES.
FOR SHENIN AND SELLERS
________________________ ________________________
Witness Richard
Haderer
FOR BUYER
________________________ ________________________
Witness Lee
P. Costerd
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DISPUTE
RESOLUTION PROVISIONS IN DETAIL
B.1 Dispute
Resolution and Binding Arbitration: In the event of dispute the
Parties agree to submit such issues for resolution in accordance with these
Dispute Resolution provisions, and shall proceed through each of the following
three steps in order as far as necessary to resolve the dispute, subject to the
complainant's right at any time to withdraw its complaint; the three successive
steps are:
(a)senior
level settlement negotiation as set out in Part I
below,
(b)mediation
as set out in Part I below, and failing resolution
then
(c)arbitration,
which shall be final and binding upon the Parties without appeal and
without resort to the Court upon any grounds whatever, such as questions
of law or mixed fact and law, including not challenging the jurisdiction
of the arbitrator upon any grounds whatever, such arbitration process to
be in the form and manner set out in Part II
below.
B.2 Limiting
Rights: The Parties acknowledge and agree that they each are limiting
all of their rights of review, interpretation and decision to final and binding
arbitration and have no other recourse to resolve any dispute or controversy
between them arising out of or connected with this Agreement. They do
so knowing that they may be giving up substantial rights in favour of speedy,
inexpensive and certain resolution of any dispute among them, such prompt and
certain resolution being most desirable according to the interests of
each. Further, the language of this provision and that of the Dispute
Resolution provisions shall not be construed or interpreted in favour of or
against any Party on the basis of authorship or draftsmanship, it being agreed
that this provision and the Dispute Resolution provisions comprise an instrument
resulting from the common desire and effort of all of the Parties.
B.3 PART ISenior
Level Settlement Negotiation and Mediation
The
following shall be attempted prior to any arbitration:
Senior Level Settlement
Negotiation
(a) In the event
of any dispute, controversy or claim (a “Dispute”) arising out of or in relation
to this Agreement or any related agreement or subcontract specifically referred
to in this Agreement, or the performance, non-performance, breach, termination,
or invalidity hereof or thereof, the Dispute shall be the subject of an
attempt at an amicable solution, for which purpose any Party may give WRITTEN
AND DATED NOTICE to the other Parties (“DISPUTE NOTICE WITHIN THE LIMITATION
TIME” or “Notice”), setting out:
(i) a
concise description of the Dispute,
(ii) the
position of such Party in respect thereof, and copies of any documents in
support of that position;
(iii) details
proposing a meeting among the principals of the Corporation or
representatives of the shareholders, or their designees (the “Senior
Officers”). Such meeting shall be held in Calgary, Alberta or
such other place as the Parties may agree for the purpose of resolving the
Dispute, and
(iv) the
following LIMITATION
NOTICE, or equivalent:
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THIS
AGREEMENT CONTAINS A LIMITATION DEADLINE WITHIN WHICH TO MAKE CLAIMS AND RESOLVE
DISPUTES IN:
DISPUTE
RESOLUTION PROVISIONS INCLUDING BINDING ARBITRATION
The
Dispute Resolution process replaces litigation and has three steps which must be
done or attempted in order: section B.1, B.2., B.4.1(b).
1. The first step is Senior
Level Settlement Negotiation: section B.3 PART I
(a).
The key
document WHICH MUST BE
DONE TO START THIS AND ALL LATER STEPS, and which must be within time, is
the “Dispute Notice Within The Limitation Time”. This written Notice
also suspends the time limitation deadline while the parties are trying to
resolve the dispute so no advantage can be gained by delaying
tactics: section B.3 (a). A sample form of the Notice is
in the final page of the Agreement.
2. The second step is non-binding
Interest-Based Mediation: section B.3 PART I (b) & (c).
If the
Senior Level Settlement Negotiation does not resolve matters the Claimant may
choose to quit or to mediate.
3. The third step is binding
Arbitration: Part II, section B.4.
Section
B.4.2 provides two deadlines for demanding Arbitration:
(a) within
30 days after the conclusion of the Mediation (B.4.2(a)), which presumably
did not lead to a successful negotiated settlement or Arbitration would
not be necessary; and
(b) not
later than SIX (6) MONTHS after the later of
(i) when
the claim arose and
(ii) when it
was known OR REASONABLY OUGHT TO HAVE BEEN KNOWN by the
Claimant.
This
six-month period is automatically extended for whatever time it has taken from
the date of service of the “Dispute Notice Within The Limitation Time” to start
Senior Level Settlement Negotiation until the conclusion of the unsuccessful
Mediation.
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Within 15
days after delivery of the Notice, each receiving Party shall submit to the
other Parties a written response, setting forth the position of the receiving
Party in respect of the Dispute and providing copies of any supporting
documentation.
(b) If such
meeting is called, the meeting shall take place within 30 days of its being
requested. If such meeting does not take place within such 30 days or
if within 15 days after such meeting the Senior Officers have not resolved the
Dispute, then the Dispute shall, upon the written request of any Party, be
referred to mediation in accordance with subsection (c) hereof or, failing any
such resolution by mediation, settled by arbitration in accordance with the
remaining provisions of this Article.
Interest-Based Non-Binding
Mediation
(c) If a Party
requests that a Dispute be referred to mediation, there shall be one qualified,
experienced mediator who shall be impartial and shall be independent of and have
had no financial connection with any Party. Should the services of an
appointing authority be necessary, the appointing authority shall be a Justice
of the Court of Queen's Bench of Alberta.
The
Parties shall have 15 days from the date of the request of mediation to agree
among themselves on the appointment of the mediator. If, after such
15 day period, the Parties have not agreed on such appointment then a Justice of
the Court of Queen's Bench of Alberta shall appoint the mediator. The
mediator may not serve as an arbitrator in any arbitration of the
Dispute. The mediation result, if any, is not binding unless and
until such agreement is reduced to writing signed by all Parties
thereto.
(d) All
negotiations, including any offers of settlement or compromise, undertaken
pursuant to this Part I shall be on a “without prejudice” basis and shall not be
admissible in any subsequent arbitration or other
proceeding.
B.4 Part
IIBinding Arbitration
No matter
maybe submitted to arbitration until Part I has been complied with and mediation
has either failed or been waived expressly in writing or by necessary
implication from the conduct of the party adverse in interest to the party
seeking arbitration.
B.4.1 Matters to be
Submitted to Arbitration:
(a) One or more
Parties may demand arbitration or answer the demand for
arbitration. All disputes and controversies of every kind and nature
between the Parties to this Agreement arising out of an occurrence or event or
omission in respect of this Agreement, including matters of jurisdiction,
questions of fact, law or mixed fact and law and as to the existence,
construction, validity, interpretation or meaning, performance,
non-performance, enforcement, operation, breach, continuance or termination
thereof shall be decided by arbitration in accordance with the rules of the
Alberta Arbitration Act
or applicable legislation and as such rules may be modified by this
Agreement.
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(b) Each Party
shall not have or retain any right to appeal any question whatever to the
courts, including matters of jurisdiction or questions of law or mixed fact and
law, even if the award appears in the opinion of one Party to be wholly
perverse, it being the intent that the arbitrators award is final and binding in
respect of all legal or equitable action or proceeding of any nature whatever,
without appeal or resort to the court.
(c) The agreement
to arbitrate shall be specifically enforceable under the prevailing arbitration
law. The award rendered by the arbitrator shall be final and judgment
may be entered upon it in any court having jurisdiction thereof.
B.4.2 Procedure
B.4.2.1 Demand for
Arbitration: Notwithstanding any provision of this Agreement, any
Party may demand such arbitration in writing
(a) within thirty
(30) days after the conclusion of interest-based mediation pursuant to Part I,
and provided that
(b) it is not
later than six (6) months after the later of when the claim arose and when it
was known or reasonably ought to have been known, which demand shall include
1. the
name and curriculum vitae of the arbitrator nominated by the Party
demanding arbitration,
2. a
statement of the matter in
controversy,
3. a
statement of the detailed issues to be
resolved,
4. a
statement of the relief or result sought from the
arbitrator,
5. a
summary of the evidence, both documentary (with copies) and verbal reduced
to writing, plus the time elapsed since giving the Notice,
6. the
reasons therefor, and
7. a
summary of the law relied upon and copies of all authorities and
references.
B.4.2.2 Answer and
Selection of Arbitrators: Within fifteen (15) days after such demand,
the other Party shall answer, which answer shall include:
1. the
name and curriculum vitae of the arbitrator nominated by the Party
answering the demand for
arbitration,
2. a
statement of the matter and any additional matter in
controversy,
3. a
statement of the detailed issues and any additional issues to be resolved,
4. a
statement of the relief or result sought from the
arbitrator,
5. a
summary of the evidence, both documentary and verbal reduced to
writing,
6. the
reasons therefor, and
7. a
summary of the law relied upon and copies of all authorities and
references;
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or
in default of such nomination of an arbitrator, such arbitrator shall
be selected by a Justice of the Court of Queen's Bench of
Alberta. The two arbitrators selected shall thereafter name a third
arbitrator within ten (10) days or, in lieu of such agreement on a third
arbitrator by the two arbitrators so appointed, a third arbitrator shall be
selected by a Justice of the Court of Queen's Bench of Alberta.
B.4.2.3 Costs: The
arbitration costs and expenses of each Party shall be borne by each Party
initially, and upon rendering their award, the arbitrators may in their
discretion include a provision for payment of costs and expenses of arbitration
to be paid by one or both of the Parties as the arbitrators deem
just.
B.4.2.4 Hearing,
Interim Relief and Award: The arbitration hearing shall be held at
Calgary, Alberta upon ten (10) days notice to the Parties, and the arbitrators
shall make an award within forty-five (45) days after the hearing has completed
and the arbitrators are hereby given authority by the Parties to prescribe the
terms of any interim order respecting the standstill of the Parties or any
action which would have the effect of preserving the assets or matters pending
the making of an award, and such interim order shall be valid without
appeal the same as extraordinary relief of a court enforceable in any manner,
including without limitation by way of interim or permanent injunction,
temporary or permanent injunction or mandamus once entered as an order or
judgment of the court.
B.4.2.5 Arbitrator
Not Bound by Strict Rules of Evidence: The Alberta rules of evidence
shall govern the presentation of evidence at such hearing, except that the
arbitrators are not bound by the strict rules of evidence at such
hearing.
B.4.2.6 Purpose: The
arbitrators shall make their rulings and decisions in order to enforce the
Agreement by its language, equity and fair dealing in matters of trade and
commerce, irrespective of technicalities but not so as to modify the Agreement,
other than the construction and interpretation thereof, and with the least
possible delay and expenditure consistent with the comprehensive investigation
of such controversy presented.
B.4.2.7 Witnesses: The
Parties shall be entitled to be heard in person or through counsel, and may
produce witnesses for examination; and the arbitrators may, by subpoena, require
any person to attend before them as a witness and to bring with him or her
books, papers or information in any form whatever.
B.4.2.8 Records: At
the request and expense of any Party so requesting, the arbitrators may keep a
complete record of all of the proceedings.
B.4.2.9 Private
Matter: The arbitration proceedings shall not be public.
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B.4.3 Award is
Final and Binding: An award rendered by a majority of the arbitrators
appointed under and pursuant to this Agreement shall be final and binding on all
Parties to the proceeding during the period of this Agreement or thereafter to
the extent that the Agreement has covenants which survive the
Agreement.
B.4.4 Award
Enforceable as Judgment: Judgment on such award or interim order may
be entered by either Party in a court of competent jurisdiction, state or
federal, and jurisdiction for such is hereby agreed to and conferred to the
extent necessary, without any right of appeal therefrom whatever.
B.4.5 Agreement to
Arbitrate is Bar to Suit or Action: The Parties stipulate that this
arbitration provision shall be a complete defense to any suit, action or
proceeding instituted in any federal, provincial or local court or before any
administrative tribunal with respect to any controversy or dispute arising
during the period of this Agreement or thereafter to the extent that
the Agreement has covenants which survive the Agreement and which
is arbitrable as set forth in this Agreement, it being the intent of the
Parties hereto that no suit at law or in equity based on such dispute or
controversy shall be instituted by either Party, except to enforce the award of
the arbitrators.
B.4.6 Arbitration
Provisions Survive Termination: The arbitration provisions hereof
shall, with respect to such controversy or dispute, survive the termination or
expiration of this Agreement.
B.4.7 Lack of
Arbitrators' Authority to Modify Agreement: Nothing contained in this
arbitration provision shall be deemed or construed so as to give the arbitrators
any authority, power, or right to alter, change, amend, modify, add to, or
subtract from any of the provisions of this Agreement, other than to construe
and interpret them. This Agreement was drafted and reviewed by the
mutual effort of both Parties and shall not be interpreted or construed against
either Party on account of drafting.
B.4.8 Governing
Law: It is agreed
that this arbitration provision, like the whole of this
Agreement, shall be governed by and construed pursuant to and in
accordance with, including the enforcement thereof, the laws of the Province of
Alberta and the laws of Canada applicable therein.
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SAMPLE
THIS
SHALL BE THE LAST PAGE OF THE AGREEMENT
SAMPLE
DISPUTE NOTICE WITHIN THE LIMITATION TIME
WRITTEN
NOTICE MADE THIS ___ DAY OF ________, 200_
TO: name other party
THE
LIMITATION DEADLINE IS DETERMINED AS FOLLOWS: describe calculation of limitation
deadline in accordance with information below
TAKE
NOTICE THAT the Undersigned Claimant hereby requests Senior Level Settlement
Negotiation: section B.3 PART I (a) for the following
matter:
(i)a
concise description of the Dispute,
(ii)the
position of such Party in respect thereof, and copies of any documents in
support of that
position;
(iii)details
proposing a meeting among the principals of the Corporation or
representatives of the shareholders, or their designees (the “Senior
Officers”). Such meeting shall be
held _____________[insert time and place at least 15 days after
service of this notice]_________________ ,
and
(iv)the
following LIMITATION NOTICES, or clear equivalent
information:
THE
AGREEMENT CONTAINS A LIMITATION DEADLINE WITHIN WHICH TO MAKE CLAIMS AND RESOLVE
DISPUTES
DISPUTE
RESOLUTION PROVISIONS INCLUDING BINDING ARBITRATION.
The
Dispute Resolution process requires that the Parties first attempt Senior Level
Settlement Negotiation: section B.3 PART I (a), failing that then the
second step is to attempt non-binding Interest-Based Mediation: section B.3 PART
I (b) & (c). Failing this, the third step is binding
Arbitration: Part II, section B.4. Section B.4.2 provides
two deadlines for demanding Arbitration:
(a) within
30 days after the conclusion of the Mediation (B.4.2(a)), which presumably
did not lead to a successful negotiated settlement or Arbitration would
not be necessary; and
(b) not
later than SIX (6) MONTHS after the later
of
(i) when
the claim arose, and
(ii) when it
was known OR REASONABLY OUGHT TO HAVE BEEN KNOWN by the Claimant.
This
six-month period is automatically extended for whatever time it has taken from
the date of service of the “Dispute Notice Within The Limitation Time” to start
Senior Level Settlement Negotiation until the conclusion of the Mediation.
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YOU
MUST within 15 days after delivery of this Notice, submit to the other Parties a
written response, setting forth your position in respect of the Dispute and
providing copies of any supporting documentation.
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SCHEDULE
C
CONFIDENTIALITY
PROVISIONS
C.1 Wolverine and
Shenin covenant and agree to treat information received from the other party or
developed in the course of dealings with the other party as confidential, and to
not use any such information for its private commercial advantage or to disclose
such information to any third party without the prior consent of the other
party. For greater certainty, such consent in respect of the reporting of
factual data shall not be unreasonably withheld, and shall not be withheld in
respect of information required to be publicly disclosed by Wolverine
pursuant to applicable securities or corporation laws, regulations or policies.
Wolverine and Shenin further agree to cause and require any representatives,
directors, officers, and employees of Wolverine or Shenin who have reviewed the
legal terms of this Agreement to respect and be bound by the confidentiality
provisions of this Agreement.
C.2 Further to
the above, the parties each agree to be bound by the following Confidentiality
Agreement, as if they were the Receiving Party in favour of the other party
hereto, without further execution or delivery of the document.
C.3 The parties
each agree to require the following Confidentiality Agreement to be obtained
from all Persons to whom confidential information is disclosed at any
time.
CONFIDENTIALITY
AGREEMENT
THIS CONFIDENTIALITY
AGREEMENT, made by and between WOLVERINE EXPLORATION INC. of
Las Vegas, Nevada, U.S.A, and
SHENIN RESOURCES INC. of Calgary, Alberta, Canada
(hereinafter together called "Wolverine") and THE UNDERSIGNED (hereinafter
called "Receiving
Party")
WHEREAS:
A. Wolverine
Proprietary & Confidential Information includes all information
belonging to Wolverine, including, without limitation:
1. All
information relating to resource property and mineral exploration in
Labrador, Canada, or anywhere in the world, including any samples, assays,
drawings, maps, layouts, exploration data, subsequent expansion,
exploration, developments and improvements thereof, any information,
knowledge or ideas created, contributed or developed by Receiving
Party using or springing from or relating to Wolverine or its business
opportunities, the mineral exploration business and expansion plans,
opportunities and methods of Wolverine for all purposes whatever;
2. Any
development, improvement, enhancement or combination of any resource
property, mineral exploration, or intellectual property which in any way
relates to the business of Wolverine or may constitute a future business
opportunity of Wolverine made or discovered by Receiving Party in whole or
in part during the applicability of this Confidentiality Agreement;
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3. All
project costing, supplier arrangements, alliances, financial and fiscal
information related thereto or to the business, holdings and structure of
Wolverine;
4. Any
trade secret or other secret including, but not limited to all customer
and prospect lists, shareholder lists, patents, patent applications
pending, technical information, raw material data, product specifications,
processes and designs, operating and production data, marketing strategies
and data, calculations, instructions, manuals, techniques and know-how,
and
5. All
information and know-how used by Wolverine which is being, has been or may
be used in or developed for use in its business carried on by Wolverine
now or hereafter or which arises in connection with a business opportunity
of Wolverine, including resource property, mineral exploration, mining and
extraction, financial or marketing information and customer or contact
lists or shareholder lists of whatever nature in whatever
form.
B. Receiving Party
acknowledges that Wolverine Proprietary & Confidential Information has
and is being acquired and developed by Wolverine through the expenditure
of substantial time, effort, and money, and is a valuable and necessary
asset which Wolverine must retain in confidence and withhold from
disclosure and availability to others;
C. It is
desirable that Wolverine disclose certain of the Wolverine Proprietary
& Confidential Information to Receiving Party for the sole purpose of
evaluation, development, expansion, improvement, exploitation by or on
behalf of Wolverine or marketing thereof;
and
D. It is
the mutual desire of both parties hereto to preserve the secrecy and
confidentiality of Wolverine Proprietary & Confidential Information;
NOW,
THEREFORE, in consideration of the disclosure, the undertakings giving rise to
such disclosure, and the mutual promises, it is hereby agreed as
follows:
1. Wolverine, by
its servants or agents, has delivered or will deliver and/or disclose certain
Wolverine Proprietary & Confidential Information to Receiving Party to
enable the Receiving Party to assess, evaluate or otherwise investigate or be
involved with the mineral exploration opportunity, and use the Wolverine
Proprietary & Confidential Information for such purpose, but neither for
Receiving Party's other use nor further
disclosure.
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2. Except as
authorized by this Agreement or as otherwise authorized in writing by Wolverine
and for the benefit of Wolverine, Receiving Party agrees that with respect to
Wolverine Proprietary & Confidential Information which is disclosed orally
or otherwise identified in writing or physical embodiment form:
(a) It
shall not disclose Wolverine Proprietary & Confidential Information to
any other person or entity, including, without limitation, any parent,
subsidiary or affiliated corporations of the Receiving Party, independent
contractors, and other third parties
whatever;
(b) It
shall not use Wolverine Proprietary & Confidential Information for its
own account or purposes, or for the purposes of any other person or
entity, except as permitted under this Agreement;
(c) It
shall not make, photocopy, or otherwise reproduce or disclose any
documents or copies of documents containing disclosures of Wolverine
Proprietary & Confidential Information and any portion thereof;
(d) Except
as required by law and under oath, it shall not communicate or disclose to
others that Wolverine Proprietary & Confidential Information has been
disclosed to Receiving Party or that Receiving Party is utilizing the
Wolverine Proprietary & Confidential Information; and in the event
that disclosure is intended under this exception, then it shall at least
thirty (30) days beforehand advise Wolverine in writing with sufficient
detail that Wolverine at its own expense may obtain a Court Order
preventing or limiting such disclosure;
and
(e) It
shall not combine Wolverine Proprietary & Confidential Information
with other information nor disregard its obligations of confidence and use
by selecting a series of items of knowledge from unconnected sources and
fitting them together through its knowledge or use of Wolverine
Proprietary & Confidential Information and any portion thereof so as
to attempt to justify use thereof for its own account or purposes or that
of any other person or entity.
3. The
obligations in this Agreement shall not apply to:
(a) Information
which is in the public domain as of six (6) months before the date of
execution of this agreement or which later comes into the public domain
from a source other than the Receiving Party;
(b) Information
which as a matter of record Receiving Party had in its possession in
written or physical embodiment form prior to the date of execution of this
agreement from a source other than Wolverine; and
(c) Information
which comes to Receiving Party from a bona fide third party source having
the right to disclose such information to Receiving
Party.
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4. Receiving
Party agrees that:
(a) It
shall at no time solicit or induce any servant or agent of Wolverine to
form a commercial or employment relationship of any nature which would not
be exclusively in favour of
Wolverine;
(b) It
shall disclose Wolverine Proprietary & Confidential Information and
any portion thereof only to such of Receiving Party’s employees or agents
as are reasonably necessary to carry out the purposes of this Agreement
and make such employees or agents bound in writing by the obligations of
confidentiality and use contained in this Agreement before disclosure to
them;
(c) It
shall, upon request of Wolverine or its representatives or contractors,
forthwith return to Wolverine, any and all documents and or materials
containing Wolverine Proprietary & Confidential Information disclosed
to it, together with all copies
thereof.
(d) It
shall take all measures necessary in the circumstances to prevent
unauthorized disclosure of Wolverine Proprietary & Confidential
Information and it shall handle such information in accordance with
absolutely strict procedures which are intended to protect the Wolverine
Proprietary & Confidential Information from unauthorized use or
disclosure and in the event of such use or
disclosure
(i) to
immediately advise Wolverine in writing with all relevant details of any
unauthorized use or disclosure, and
(ii) to take
necessary action to recover the Wolverine Proprietary & Confidential
Information and to enjoin the use or further disclosure by the
third party.
(e) During
the term hereof and during any subsequent applicable non-competition term
and subject to the law protecting exploration, drilling or assay
information, proprietary rights and intellectual property as may be
applicable to Wolverine Proprietary & Confidential Information,
including the law of staked mineral claims, licences in respect thereof,
Receiving Party shall not register, record or apply for registration of
any mineral claim, or licence in respect thereof, within 10 kilometres of
any resource property staked by or on behalf of Wolverine, discovered,
identified or in which it has an expression of interest or which is
connected with, derived from or reasonably foreseeable as relating to
Wolverine Proprietary & Confidential Information imparted to the
Receiving Party.
5.Receiving
Party acknowledges and agrees:
(a) to
indemnify and hold harmless Wolverine from all loss, damages and expenses,
including reasonable lawyer's fees, which Wolverine may sustain as a
result of any unauthorized disclosure by Receiving Party hereunder;
and
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(b)that
by virtue of any prohibited disclosure of any Wolverine Proprietary &
Confidential Information, Wolverine shall be presumed to have suffered
irreparable harm and loss and that may and shall be quantified in monetary
terms, and further, notwithstanding any Dispute Resolution provisions such
as arbitration, Wolverine shall be entitled to injunctive or other
extraordinary relief as also being appropriate in the circumstances, with
such loss or damage being presumed and such relief granted without bond,
surety or indemnification whatever.
6. Receiving
Party agrees that all Wolverine Proprietary & Confidential Information,
including any information, knowledge or ideas created, contributed or developed
by Receiving Party using or springing from any Wolverine Proprietary &
Confidential Information, shall be legended: "Property of Wolverine" or as
otherwise directed by Wolverine. Copies thereof shall be forthwith
forwarded to Wolverine upon request.
7. Receiving
Party hereby acknowledges that no license rights, user rights or ownership
interest whatever in respect of the Wolverine Proprietary & Confidential
Information is hereby granted or transferred, either directly or by
implication.
8. Receiving
Party hereby acknowledges that it owes a fiduciary duty to Wolverine in respect
of Wolverine Proprietary & Confidential Information and its use, and further
hereby acknowledges that any financial gain, except where permitted in writing
by Wolverine, which it now or hereafter derives from the Wolverine Proprietary
& Confidential Information are held by the Receiving Property in trust for
the sole use and benefit of Wolverine, without reservation or offset
whatever.
9. Any
proprietary rights which Receiving Party has or purports to have which
constitute a discovery, expansion, development, improvement, enhancement or
combination of any of Wolverine Proprietary & Confidential Information shall
be held in trust for the sole use and benefit of Wolverine, without reservation
or offset whatever. The Receiving Party hereby assigns all such
rights to Wolverine royalty free and in perpetuity and hereby irrevocably
constitutes Wolverine to be its lawful attorney to execute all such assignments
and other documents necessary or desirable to implement such assignment of
rights for the purposes set out herein.
10. The
obligations of the Receiving Party created hereunder in respect of Wolverine
Proprietary & Confidential Information shall continue indefinitely beyond
the termination of any of the other agreements between the parties or any of the
parties.
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11. This
agreement shall be interpreted and enforced according to the laws of the
Province of Alberta, Canada. The Receiving Party hereby irrevocably
attorns to the jurisdiction of the Courts of that Province. The
recitals are incorporated herein. There are no permissions, consents
or authorizations in favour of the Receiving Party, except to the extent written
herein and including TEXADA
CONSULTING INC. Facsimile and digital signatures are as
effective as original signatures. This Agreement may not be changed,
modified, or amended except by the express written agreement of the parties
hereto. This Agreement shall be binding upon the heirs, successors and permitted
assigns.
WHEREFORE,
the Undersigned has hereby entered into this Confidentiality Agreement on the
_____ day of __________________, 2007.
Witness Receiving Party (Corporation,
if also representing it)
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Instructions: Make
copies to be signed: one per person, and make extras to have on hand
for others to sign, if permitted
1.Initial
each page
2.Date
and Sign in your Individual capacity at the bottom of page 4 and print
your name
Have
the witness sign and print his/her
name
3.If
you also represent a corporation or other entity, then insert the
corporate name or entity name and sign again, this time on behalf of the
corporation or other entity.
5.Obey
the Agreement: even if you are permitted to disclose the information,
the other person must sign a copy of this first.
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SCHEDULE
D
INDEMNIFICATION
PROVISIONS
D.1 Notice of
Claims: Assumption of Defence: The party entitled to indemnification
pursuant to the Agreement (the "Indemnified Party") shall give prompt notice to
the party who is obligated to indemnify (the "Indemnifying Party") of the
assertion of any claim or the commencement of any suit, action or proceeding by
any Person, in respect of which indemnity may be sought hereunder, specifying
with reasonable particularity the basis therefor and giving the Indemnifying
Party such information with respect thereto as the Indemnifying Party may
reasonably request (but the giving of such notice shall not be a condition
precedent to indemnification hereunder). The Indemnifying Party may, at its own
expense, participate in and, upon notice to the Indemnified Party and the
Indemnifying Party's written agreement that the Indemnified Party is entitled to
indemnification pursuant to this Article for losses arising out of such claim,
suit, action or proceeding, at any time during the course of any such claim,
suit, action or proceeding, assume the defence thereof; provided that the
Indemnifying Party's counsel is reasonably satisfactory to the Indemnified
Party, and the Indemnifying Party shall thereafter consult with the Indemnified
Party upon the Indemnified Party's reasonable request for such consultation from
time to time with respect to such claim, suit, action or proceeding. If the
Indemnifying Party assumes such defense, the Indemnified Party shall have the
right but not the duty to participate in the defense thereof and to employ
counsel, at its own expense, separate from the counsel employed by the
Indemnifying Party. Whether or not the Indemnifying Party chooses to defend
or prosecute any such claim, suit, action or proceeding, all of the parties
hereto shall cooperate in the defense or prosecution thereof.
D.2 Settlement or
Compromise: Any settlement or compromise made or caused to be made by
the Indemnified Party or the Indemnifying Party, as the case may be, of any such
claim, suit, action or proceeding shall also be binding upon the Indemnifying
Party or the Indemnified Party, as the case may be, in the same manner as if a
final judgment or decree had been entered by a court of competent jurisdiction
in the amount of such settlement or compromise. No party shall settle or
compromise any claim, suit, action or proceeding without the prior written
consent of the other party.
D.3 Failure to
Give Timely Notice: A failure to give timely notice as provided in
this Schedule shall not affect the rights or obligations of any Party except and
only to the extent that, as a result of such failure, any Party which was
entitled to receive such notice was deprived of its right to recover any payment
under its applicable insurance coverage or was otherwise directly and materially
damaged as a result of such failure.
D.4 Failure of
Indemnifying Party to Act: In the event that the Indemnifying Party
does not elect to assume the defense of any claim, suit, action or proceeding,
then any failure of the Indemnified Party to defend or to participate in the
defense of any such claim, suit, action or proceeding or to cause the same to be
done, shall not relieve the Indemnifying Party of its obligations
hereunder.
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D.5 Reductions
and Subrogation: If the amount of any loss at any time subsequent to
the time of making any payment under this section is reduced by
(a) any net
tax benefit to the Indemnified Party, or
(b) any
recovery, settlement or otherwise under or pursuant to any non-life
insurance coverage,
the
amount of such reduction (less any costs, expenses (including taxes) or premiums
incurred in connection therewith) together with interest thereon from the date
of payment thereof at Prime Rate shall promptly be repaid by the Indemnified
Party to the Indemnifier. Upon making a full payment under this section, the
Indemnifying Party shall, to the extent of such indemnity, be subrogated to all
rights of the Indemnified Party against any third party that is not an Affiliate
of the Indemnified Party in respect of the loss to which the payment made under
this section relates but only if the Indemnifying Party shall then be in
compliance with its obligations under this Agreement in respect of such
loss.
D.6 Interest: All
losses shall bear interest at a rate per annum equal to the Prime Rate plus two
(2%) per cent per annum, calculated and payable monthly, both before and after
judgment, with interest on overdue interest at the same rate, from the date that
the Indemnified Party disbursed funds, suffered damages or losses or incurred a
loss, liability or expense in respect of a loss, to the date of payment by the
Indemnifying Party to the Indemnified Party.
D.7 Rights in
Addition: The rights of indemnity set forth in this section are in
addition and supplemental to any other rights, actions, claims or causes of
action which may arise in respect of this Agreement and the transaction
contemplated hereby.
D.8 Set-Off: The
Indemnifying Party may set off against any amount due hereunder or otherwise to
Indemnified Party. The right to obtain payment on account of the liability of
Indemnified Party for losses by setting off all or part of such losses against
amounts otherwise due to such parties, shall not relieve the Indemnifying Party
of its continuing liability to indemnify the Indemnified Party in the event that
the amounts otherwise due to such parties at any time are not sufficient to pay
off and discharge completely the losses suffered or incurred by the Indemnified
Party.
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SCHEDULE
E
RIGHT
OF FIRST REFUSAL PROVISIONS
E.1 Offer: If Shenin acquires
additional Property, it shall offer in writing to the Buyer at least a 90%
undivided interest in the Property (the “Offer”) at whatever price it chooses
and the Offer shall remain open for acceptance for ninety (90)
days.
E.2 Contents of Offer: The Offer
shall include all of the following:
(a) it
shall be for not less than an undivided 90% interest in the Property; if
it is for more, the Buyer may elect to purchase only the undivided 90%
interest and such shall not be considered a counteroffer, but an
acceptance of the Offer to purchase an undivided 90% interest
in the Property;
(b) have
attached thereto a summary of the features of the Property, supported by a
copy of all information material and relevant to the Property in the
possession or control of the Shenin at the time of the Offer, and if such
information is no longer in the possession or control of Shenin, then
advice as to its last known whereabouts;
and
(c) contain
a bona fide cash equivalent as determined by Shenin of any consideration
proposed to be paid to Shenin which is other than cash, and shall set
forth the method of computing such cash
equivalent.
E.3 Alternatives for
Buyer: The Buyer may accept the Offer to the extent of an
undivided 90% interest in the Property or to the extent of more if more is
offered, reject the Offer, make a counteroffer in which case the Offer dies, or
do nothing and let the Offer expire.
E.4 Acceptance: If the
Offer is accepted, it shall close in accordance with its terms within thirty
(30) days of the date of acceptance.
E.5 No
Acceptance: If the Offer is not accepted by the Buyer in time,
then Shenin is free to sell the whole 100% of its Interest, or any portion of
its Interest, for a price and upon terms no less favourable than that made in
the Offer or upon price and terms commercially equivalent thereto or greater
than the Offer in the commercially reasonable opinion of Shenin. If
the price and terms are not identical to the Offer, they must be disclosed to
the Buyer. Such disclosure does not constitute an Offer, but may
afford grounds to invoke the Dispute Resolution
Provisions of Schedule
B. If the proposed third party purchaser is not at arm’s
length (within the meaning of the Canadian Tax Act) with Shenin, then Shenin
shall disclose fully the relationship with the proposed third party purchaser,
and such third party purchaser may only purchase if it covenants not to resell
the whole or the portion of the Interest acquired for less than it paid for one
year from the date of acquisition.
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E.6 Renewed Offer: If Shenin
wishes to sell or dispose of or effect the transfer of the Shenin Interest in
the Property, for a lower amount or different price and terms, then these
provisions shall again apply to any subsequent sale, transfer or disposition of
the Interest and so on from time to time.
THIS
SHALL BE THE LAST PAGE OF THE AGREEMENT
SAMPLE
DISPUTE NOTICE WITHIN THE LIMITATION TIME
WRITTEN
NOTICE MADE THIS ___ DAY OF ________, 200_
TO: name the other
party
THE
LIMITATION DEADLINE IS DETERMINED AS FOLLOWS: describe calculation of limitation
deadline in accordance with information below
TAKE
NOTICE THAT the Undersigned Claimant hereby requests Senior Level Settlement
Negotiation: section B.3 PART I (a) for the following
matter:
(i) a
concise description of the Dispute,
(ii) the
position of such Party in respect thereof, and copies of any documents in
support of that
position;
(iii) details
proposing a meeting among the principals of the Corporation or
representatives of the shareholders, or their designees (the “Senior
Officers”). Such meeting shall be
held _____________[insert time and place at least 15 days after
service of this notice]_________________ ,
and
(iv) the
following LIMITATION NOTICES, or clear equivalent
information:
THE
AGREEMENT CONTAINS A LIMITATION DEADLINE WITHIN WHICH TO MAKE CLAIMS AND RESOLVE
DISPUTES
DISPUTE
RESOLUTION PROVISIONS INCLUDING BINDING ARBITRATION.
The
Dispute Resolution process requires that the Parties first attempt Senior Level
Settlement Negotiation: section B.3 PART I (a), failing that then the
second step is to attempt non-binding Interest-Based Mediation: section B.3 PART
I (b) & (c). Failing this, the third step is binding
Arbitration: Part II, section B.4. Section B.4.2 provides
two deadlines for demanding Arbitration:
(a) within
30 days after the conclusion of the Mediation (B.4.2(a)), which presumably
did not lead to a successful negotiated settlement or Arbitration would
not be necessary; and
(b) not
later than SIX (6) MONTHS after the later
of
(i) when
the claim arose, and
(ii) when it
was known OR REASONABLY OUGHT TO HAVE BEEN KNOWN by the Claimant.
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This
six-month period is automatically extended for whatever time it has taken from
the date of service of the “Dispute Notice Within The Limitation Time” to start
Senior Level Settlement Negotiation until the conclusion of the Mediation.
YOU
MUST within 15 days after delivery of this Notice, submit to the other Parties a
written response, setting forth your position in respect of the Dispute and
providing copies of any supporting documentation.
THIS CONSULTING AGREEMENT made
as of the 31st day of January, 2007 BY AND BETWEEN WOLVERINE EXPLORATION INC., a
Nevada, U.S.A. corporation, (hereinafter called the “Master Corporation”)
and TEXADA
CONSULTING INC., a British Columbia, Canada corporation, (hereinafter
called the “Consultant”)
RECITALS:
A. WHEREAS the
Master Corporation is a body corporate duly incorporated pursuant to the laws of
the State of Nevada, U.S.A., is validly subsisting and in good standing in its
constating jurisdiction, and has an office at or near Vancouver, British
Columbia, Canada;
B. AND WHEREAS
Consultant has represented to the Master Corporation that it is qualified to
provide to the Master Corporation such services as an independent contractor as
are hereinafter set forth;
C. AND WHEREAS
the Master Corporation wishes to obtain the services of Consultant as an
independent contractor for undertaking mining exploration in Labrador and
elsewhere in Canada for an open-ended term as set out herein;
NOW
THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
subject to the terms and conditions herein set out, the parties hereto covenant
and agree as follows:
1.1 The Master
Corporation hereby engages Consultant, and Consultant hereby accepts the
engagement, to provide for the Master Corporation, or at its direction to other
corporations or entities in which it has a direct or indirect financial interest
(“Affiliate”), to the extent that the Master Corporation reasonably and lawfully
directs, consulting, management and labour supply services in the mining
exploration industry in Canada (the “Services”), including without limitation
the following for the Master Corporation or its Affiliates:
(a) Advise
and manage the overall business and organizational
policies;
(b) Develop,
recommend and implement programs through
subordinates;
(c) Advise
and approves annual and long term company policies and
goals;
(d) Advise
and manage company financial, organizational and operational planning
activities and growth of the Company, including serving as banking
signatories or mandatories;
(e) Advise
and establish budgetary and operational
objectives;
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(f) Monitoring
performance relative to established objectives and systematically monitor
and evaluate operating results;
(g) Advise
and establish operating and capital expenditure budgets to go to the Board
of Directors for approval;
(h) Advise
and formulate the strategic plans and submits them to the Board of
Directors for approval;
(i) Advise
and direct consultants and others in matters concerning the exploration,
development, production, and promotion of the
business;
(j) Promoting
positive relations with suppliers, customers, stakeholders and the general
public;
(k) Advise
and establish fair and appropriate policies for labour supply and human
resources management; and
(l) Respond
and report to the Board of
Directors.
1.2 The
relationship between the Master Corporation and Consultant is that of
independent contractor.
1.3 Such Services
shall be rendered by Consultant at locations in
(a) British
Columbia, Canada, and
(b) elsewhere in
Canada, Nevada, U.S.A. or at such other locations as the Master
Corporation may reasonably require for itself or an Affiliate and
Consultant accept.
1.4 The
Consultant shall assign or designate at least one competent employee or agent of
the Consultant approved upon commencement of this Agreement by the Master
Corporation to fulfil the obligations of the Consultant hereunder, which person
shall be herein called the “designated person”. The Consultant hereby
designates Bruce E. Costerd as one of the persons to fulfil the terms of this
engagement and to provide the Services.
1.5 Consultant
shall have reasonable discretion as to the manner in and the time within which
the Services are performed.
1.6 Consultant
shall, during the term of this Agreement, provide the Services on a commercially
reasonable priority but non-exclusive basis to the Master Corporation and in
furtherance of the Master Corporation's commercially reasonable best interests,
or for the Affiliate which the Master Corporation directs and the Consultant
accepts.
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1.7 Consultant is
at liberty to carry on for its own benefit such other business, management or
other engagements, even if in direct or indirect competition to that of the
Master Corporation or its Affiliates.
1.8 On behalf of
the Consultant, the designated person shall devote his time and attention on a
non-exclusive basis to the provision of the Services to the Master Corporation
during regular business hours in reasonable priority to other commercial
obligations of the designated person on behalf of the Consultant.
ARTICLE
II - TERM
2.1 The Master
Corporation hereby engages Consultant for the purposes aforesaid commencing as
of 1st day of February, 2007 and such engagement shall continue until
termination in accordance with the provisions of this Agreement, subject to any
early termination only in any applicable circumstances set out herein or any
extension or commutation of this arrangement to which the parties may
agree.
2.2The
Agreement shall renew automatically on the same terms and conditions, unless
amended as herein provided, for successive one (1) year periods after the expiry
of the initial term, unless terminated as herein provided.
ARTICLE
III - STANDARD OF CONDUCT
3.1 Consultant
agrees that it shall provide the Services in a manner which is honest, orderly,
competent and skillful, shall employ only orderly, competent and skillful
individuals with the necessary qualifications, experience and ability to enable
it to perform the Services, shall use its commercially reasonable best efforts
to promote the interests of the Master Corporation and shall act in accordance
with the Master Corporation’s direction respecting its reasonable and lawful
policies and procedures as may be in effect from time to time.
3.2 Nothing
herein contained shall require the Consultant to do or refrain from doing
anything which constitutes conduct in contravention of the provisions of any
statute or regulation by which it is bound or which would result in Consultant
committing a breach of any of the provisions of applicable statutes and
regulations.
3.3 All of the
Services shall be provided only on a best efforts basis.
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ARTICLE
IV - OFFICE SPACE
4.1 Master
Corporation shall provide or pay for non-exclusive office space with parking
(the “Resources”) to Consultant for use by its employees in providing the
Services, including necessary office space and secretarial and support
staff.
4.2 Consultant
will not use any of the Resources provided by Master Corporation for other than
the performance of the Services unless Consultant has agreed to pay reasonable
rates or rents therefor.
4.3 Consultant
shall otherwise provide all staff or necessary supplies and equipment to Master
Corporation at the cost of Master Corporation.
ARTICLE
V - CONSULTANT FEES
5.1 For the
provision by Consultant of the Services, Master Corporation shall pay a fixed
monthly base fee to Consultant as set out below, which fee shall become due and
payable on the last day of each and every month of the Term.
5.2 Such base fee
shall be for provision of the Services only and not in lieu of any finders fees,
commissions or professional fees.
5.3 Upon the last
day of each month during the term commencing with February 28, 2007 (for the
month of February 2007) and ending with July 31, 2007, and upon the first day of
each month during the term commencing with August 1, 2007 (for the month of
August 2007), the Master Corporation shall pay to Consultant, NET OF ANY
WITHHOLDING, DEDUCTION, RESERVATION OR OFFSET:
(a) based
on ONE HUNDRED TWENTY THOUSAND (USD$120,000) US DOLLARS per annum, a fixed
monthly base fee of TEN THOUSAND (USD$10,000) US DOLLARS per
month, which fee shall become due and payable on the last day of each
month, and shall pay such amount without deduction, setoff, reservation or
withholding,
(b) the
accountable advances of CAD$10,000 in total: January 31, CAD$3,000,
February 20, CAD$5,000 and March 2, 2007
CAD$2,000,
(c) approved
reasonable expense claims submitted in the month,
and
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(d) any
applicable taxes, rates or duties which Consultant is obliged to charge
from time to time.
5.4Interest
on unpaid accounts for fees and expenses shall be charged at the annual rate of
12 per cent or such other rate as is mutually agreed upon from time to
time. In lieu of monthly payments, at the request of the Master
Corporation and with the consent of the Consultant, such payments may be made in
advance.
(a) a fixed
amount for principals of the Manager as agreed from time to
time;
(b) 115% of
labour supply; and
(c) 115% of
approved space and supplies and equipment charges, excluding furniture and
equipment provided under separate lease and set out on separate schedules
therefor.
5.5 Subject to
the other provisions of this Agreement, on each successive anniversary of this
Agreement, the parties shall fix the annual contract fees for the next ensuing
year of this Agreement, having regard to the Master Corporation's financial
position and current market conditions for like positions with the intention of
increasing the base fee in recognition of performance in achieving business
objectives and market comparable rates for like positions.
5.6 The
Consultant may receive annual or other bonuses based on performance criteria or
other criteria, to be determined and paid by the Corporation in its sole and
unfettered discretion.
ARTICLE
VI - INCENTIVE OR BONUS FOR COMMERCIAL MINE
6.1 Consultant
shall receive a bonus (the “Bonus”) of the issuance of 5% of the Common Shares
of the Master Corporation issued and outstanding on a non-diluted basis as of
the date of the payment of the bonus upon and only in the event of the discovery
by the Corporation of a major mineral resource deposit in any of the
properties currently held or acquired in the future that is of a sufficient size
and value to support the commercial extraction and shipment of ore for the
purpose of earning revenue (but excluding the extraction and shipment of ore for
testing purposes). This provision does not apply to properties
acquired in the future and which have been identified, acquired, explored and
commercialized without any involvement on the part of the Consultant or its
servants or agents in any of those steps
6.2 The
determination of whether the threshold for the Bonus as set out in this Article
has been met will be by mutual agreement between the parties, failing which the
Dispute Resolution Provisions shall apply.
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6.3 This
provision shall survive the termination of this Agreement.
6.4 The Parties
acknowledge and agree that the Bonus is subject to receiving all necessary
regulatory approvals for the issuance of the stock.
ARTICLE
VII - CONSULTANT BENEFITS
7.1 Consultant
shall be designated as an affiliate of the Master Corporation by way of
endorsement or otherwise under any insurance plan or other benefit plan such
that employees of Consultant and her or his family members shall be covered by
the plan at the expense of the Master Corporation.
ARTICLE
VIII - EXPENSES
8.1 Master
Corporation will fully reimburse Manager for all reasonable expenses incurred by
Manager which are necessary or incidental to the discharge of the Services or
have been made as agent for and on behalf of Master Corporation, excluding any
expenses by Manager for costs reasonably allocated to Master Corporation in
relation to providing the Services.
8.2 Master
Corporation shall pay Consultant for expenses incurred by Consultant
in relation to the services of senior representatives of Consultant and the cost
of additional staff to provide the Services shall increase the monthly fee as
set out above or shall be included in the base management fee by an amount to be
agreed upon by the Parties.
8.3 For greater
certainty, Master Corporation shall pay directly those specified costs agreed
upon by the Parties hereto from time to time, particularly in relation to the
costs of telecommunications, office, vehicle, business travel and related
expenses for Consultants’ employees who are providing services to Master
Corporation.
8.4 Consultant
agrees to keep an accurate record of disbursements spent on the matters and
affairs of the Master Corporation and it shall submit such reports or expense
claims to the Master Corporation as it may direct or require at the times and in
the manner prescribed by the Master Corporation from time to time.
8.5 The Master
Corporation shall reimburse Consultant for all expenses reasonably incurred with
respect to the provision of the Services as set forth in this
Agreement. Such expenses may include the following:
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(a) Operating
Expenses, including telecommunications, office and
vehicle,
(b) Travel
Expenses;
(b) Expenses for
development of the business of the Master
Corporation;
and
Consultant shall submit supporting vouchers as evidence of such
expenses.
8.6. The Master
Corporation agrees to pay all fees and do all such things as may be required for
it to obtain and maintain such licences or permits, if any, as are necessary to
carry on business in the Province of Newfoundland and Labrador or elsewhere in
Canada and the U.S.A.
8.7 Master
Corporation shall arrange Worker’s Compensation coverage to the extent necessary
for Consultant (as an affiliate or otherwise) and designated persons performing
this Agreement within the Province of Newfoundland and Labrador (or wherever
work is to be performed), at Master Corporation’s cost or reimbursement to
Consultant of such costs.
ARTICLE
IX - CONFIDENTIALITY
9.1 Wolverine
Proprietary & Confidential Information includes all information
belonging to Wolverine, including, without limitation:
1. All
information relating to Wolverine, whether disclosed or received by
conversation, written or document form, object or sample form, or by
observation and inspection, and whether or not such information is
expressly marked as "confidential", and regardless of the form or medium
in which such information is
contained;
2. All
information relating to resource property and mineral exploration in
Labrador, Canada, or anywhere in the world, by Wolverine, including
without limitation mineral locations and finds, ground and aerial
exploration results, drill results, assays, topographical information, ore
body delineations, exploration programs, subsequent expansion,
exploration, developments and improvements thereof; and the mineral
exploration business and expansion plans, opportunities and methods of
Wolverine for all purposes
whatever;
3. Any
development, improvement, enhancement or combination of any resource
property, mineral exploration, or intellectual property which in any way
relates to the business of Wolverine or may constitute a future business
opportunity of Wolverine made or discovered by Receiving Party in whole or
in part during the applicability of this Confidentiality
Agreement;
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4. All
project costing, supplier arrangements, alliances, business plans,
budgets, unpublished financial statements, licences, prices and costs,
suppliers and customers, business advisors, business counsel, business
partners, business agents and business contacts financial and fiscal
information related thereto or to the business, holdings and structure of
Wolverine;
5. Any
trade secret or other secret including, but not limited to all customer
and prospect lists, shareholder lists, patents, patent applications
pending, technical information, raw material data, product specifications,
processes and designs, operating and production data, marketing strategies
and data, calculations, instructions, manuals, techniques and know-how,
and
6. All
information and know-how used by Wolverine which is being, has been or may
be used in or developed for use in its business carried on by Wolverine
now or hereafter or which arises in connection with a business opportunity
of Wolverine, including resource property, mineral exploration, mining and
extraction, financial or marketing information and customer or contact
lists or shareholder lists of whatever nature in whatever
form.
For
greater certainty, Wolverine Proprietary & Confidential Information
does not include:
7. information
that the recipient can show by written evidence was in the public domain
at the date hereof otherwise then through an act or omission of the
recipient; or
8. information
that the recipient can show by written evidence has entered the public
domain after the date hereof otherwise then through an act or omission of
the recipient.
9.2 Wolverine
Proprietary & Confidential Information shall not be excluded by virtue of
the foregoing merely because individual elements of the Confidential Information
are within the above noted exceptions;
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9.3 The
Consultant hereby undertakes and agrees:
(a) not to
use the Wolverine Proprietary & Confidential Information for any
purpose other than the performance of its obligations
hereunder;
(b) not to
disclose the Wolverine Proprietary & Confidential Information to any
Party, except as may be necessary or incidental to the performance of its
obligations hereunder;
(c) to hold
the Wolverine Proprietary & Confidential Information in trust for the
Master Corporation and to keep the Wolverine Proprietary &
Confidential Information in absolute and strictest confidence;
and
(d) to
protect the Wolverine Proprietary & Confidential Information from
inadvertent or unauthorized disclosure, access or
use.
9.4 The
provisions of this Article shall survive termination of this
Agreement.
ARTICLE
X - ASSIGNMENT
10.1 Master
Corporation is not entitled to assign or transfer the whole or any part of this
Agreement, without the written consent of the Consultant.
10.2 Consultant
may subcontract all or any portion of the Services without the consent of Master
Corporation.
ARTICLE
XI - TERMINATION
Termination
By Agreement
11.1 The parties
may by mutual consent terminate this Agreement at any time for any
reason.
No
Termination Until After Minimum Term
11.2 The Master
Corporation hereby covenants and agrees that it shall not terminate this
Agreement prior to February 28, 2010 for any reason whatever.
11.3 If the Master
Corporation purports to do so it shall forthwith pay for such termination
(exclusive of and always subject to the survival of the grant of stock options
and warrants to the Consultant and its representatives and the Bonus) as
liquidated damages and not as a penalty the aggregate of all amounts, which are
hereby accelerated as immediately due and payable, hereunder for the period to
and including February 28, 2010 or such later date as the parties may have
agreed to extend the minimum term of this Agreement. All stock which
is the subject matter of options granted or to be granted shall be issued to the
Consultant or to its representatives according to their respective interests, as
fully paid and non-assessable without further cost to them, and where the stock
is not, for whatever reason, not able to be issued forthwith, then the Master
Corporation shall hold same or an equivalent value in cash or other assets in
trust for the sole use and benefit of the Consultant or its representatives, and
a security interest is hereby granted in all assets of the Master Corporation
and its Affiliates for the due payment hereof.
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11.4 At the
option of the Master Corporation, after February 28, 2010, and not before,
the Master Corporation, subject to the grant of stock options and warrants
to the Consultant and its representatives and the Bonus, has the option to
terminate this Agreement and the Consultant shall be entitled to the sum
of $180,000 as liquidated damages but no further payment in respect of
termination or otherwise and all obligations of the Master Corporation
shall then cease and terminate.
Automatic
Termination by Master Corporation Without Notice
11.5 The Master
Corporation at any time shall be entitled to terminate this Agreement forthwith
for any of the following reasons, without prior notice, on the basis
that it is detrimental to the well being, reputation, and goodwill of
the Master Corporation or its Affiliates, and in such event the Consultant shall
be entitled to the base fee and reimbursement of expenses, and no other amounts,
calculated up to the date of termination as provided in this Agreement, and the
Consultant shall not be entitled to any further notice or
compensation:
(a) a final
conviction for dishonesty of, or theft or fraud by, any designated person
representing the Consultant, whether related to the business of the Master
Corporation or not; or
(b) a final
conviction or determination by a third party tribunal having jurisdiction
in respect of sexual harassment or discrimination by the Consultant in
respect of her employment.
Termination
Upon Default After Notice to Cure
11.6 Subject to
the other provisions hereof respecting termination, if there is an alleged
breach of this Agreement by either Party, the other Party, if it chooses to rely
on such alleged breach, shall give written notice to the breaching Party of
termination by reason of such breach with particulars of the alleged breach and
what specific corrective or curative action is required of the Party allegedly
in breach, and this Agreement shall terminate thirty (30) days after delivery of
the notice, provided such breach or default has not then been cured by the Party
receiving the notice in the reasonable and objective opinion of the Party giving
the notice.
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11.7 In
particular, the Consultant shall have the right to terminate this Agreement at
any time upon the failure of the Master Corporation after the above notice to
cure a default in respect of any one or more of the following:
(a) upon
the failure of the Master Corporation to obtain and maintain
any permits or licences required by law;
or
(b) upon
the failure of the Master Corporation to make any proper payment to
Consultant, if as and when
required.
11.8 Failure by a
Party to rely on the provisions of any above paragraph respecting termination in
any given instance or instances shall not constitute or be deemed a waiver in
any circumstance whatever unless expressly in writing to that
effect.
ARTICLE
XII - PROPERTY
12.1 The
Consultant acknowledges that all items of property belonging to the Master
Corporation of every nature or kind created or used by the Consultant pursuant
to this Agreement, or furnished by the Master Corporation to the Consultant,
including all equipment, credit cards, customer and contact lists, books,
records, reports, files, manuals, computer discs, literature, confidential
information or other material, and also including all copies thereof or
summaries or information derived therefrom, and in paper, electronic or any
other medium whatever, shall remain and be considered the exclusive property of
the Master Corporation at all times and shall be surrendered to the Master
Corporation, in complete and good condition, promptly on the termination of this
Agreement irrespective of the time, manner or cause of the
termination.
12.2 All property
belonging to or furnished by or on behalf of the Consultant shall remain and be
considered the exclusive property of the Consultant.
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ARTICLE
XIII - INDEMNITY
13.1. Subject to
paragraph 13.2, the Consultant:
(a)is
and shall be liable for; and
(b)does
indemnify and save harmless the Corporation and its Affiliates of, from
and against,
any and
all losses, which the Corporation may suffer, sustain, incur, pay or be liable
for, arising out of, relating to, in consequence of or in any way connected to
breaches of the terms of this Agreement by the Consultant.
13.2 Consultant
hereby agrees to indemnify the Master Corporation against all direct loss or
damage, excluding consequential or punitive damages, arising from any breach of
the Consultant’s covenants set out herein, not exceeding the amount paid
hereunder to Consultant in the calendar month in which the loss occurred and any
purported continuing or series of loss shall be deemed only to have occurred in
and for the first month of occurrence and no longer.
13.3. The
Corporation:
(a) is and shall
be liable for; and
(b) does
indemnify and save harmless the Consultant, from and against,
any and
all Losses, which the Consultant may suffer, sustain, incur, pay or be liable
for, arising out of, relating to, in consequence of or in any way connected to
breaches of the terms of this Agreement by the Corporation.
ARTICLE
XIV - GENERAL TERMS AND CONDITIONS
14. The General
Terms and Conditions of Schedule A shall apply as if set out
herein.
ARTICLE
XV - DISPUTE RESOLUTION
Dispute
Resolution Provisions Including Binding Arbitration
15. In the event
of dispute the Parties agree to submit such issues for resolution in accordance
with AND SUBJECT TO THE DEADLINES OF the Dispute Resolution provisions set out
in Schedule B hereto, and shall proceed through each of the following three
steps in order as far as necessary to resolve the dispute, subject to the
complainant’s right at any time to withdraw its complaint; the three successive
steps are:
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(a) senior
level settlement negotiation as set out in Part I of Schedule B
below,
(b) interest-based
mediation as set out in Part I of Schedule B below, and failing
resolution, then
(c) arbitration,
which shall be final and binding upon the Parties without appeal and
without resort to the Court upon any grounds whatever, such as questions
of law or mixed fact and law, including not challenging the jurisdiction
of the arbitrator upon any grounds whatever, such arbitration process to
be in the form and manner set out in Part II of Schedule B
below.
IN
WITNESS WHEREOF the Master Corporation has hereunder affixed its seal by its
proper officer duly authorized in that behalf and Consultant has hereunto
affixed its hand and seal the day first written above.
A.1 Interpretation: Wherever
the singular or masculine is used in this Agreement the same shall be
interpreted as including the plural, feminine or neuter wherever the context so
requires. The captions and headings are inserted for convenience of
reference only, form no part of this Agreement and in no way define, describe or
limit the scope or intent of this Agreement or any provision
hereof.
A.2 Further Acts: In
order to fulfill the intent of the Parties hereto, they shall execute from time
to time all reasonable documents and do all such things as may be necessary or
desirable to more completely and effectively carry out the terms and intentions
of this Agreement, to implement it in all respects, or to fulfil consequential
aspects thereof, which any other Party may request from time to time at the
expense, if any, of the Party so requesting. Further, the parties
shall cause the corporate parties to act in the manner contemplated by this
Agreement and, to the extent permitted by law, cause the Board of Directors so
to act.
A.3 Severability: If a
Court or duly constituted arbitrator would declare that all or any portion of
the provisions of this Agreement are void or unenforceable in the circumstances,
this Agreement shall, automatically and without further act on the part of the
Parties hereto, be reduced in scope to such an extent as to be valid and
enforceable in the circumstances. The invalidity of any provision of
this Agreement or any covenant contained herein on the part of any Party shall
not affect the validity of any other provision or covenant herein, which shall
remain in full force and effect.
A.4 Governing Law: This
Agreement shall be governed by and construed pursuant to and in accordance with,
including the enforcement thereof, the laws of the Province of British Columbia
and the laws of Canada applicable therein. The Parties hereby
irrevocably exclude the jurisdiction of the courts anywhere in respect of the
interpretation of this agreement in favour of exclusive
arbitration. The enforcement of an arbitral award may be in the
courts of any jurisdiction where the judgment debtor has assets.
A.5 Recitals: The
recitals hereto are incorporated herein as part of this Agreement.
A.6 Entire Agreement; No Oral
Agreements: This written Agreement comprises the entire
agreement. There are no verbal or oral or other agreements,
memoranda, understandings, representations, conditions, warranties, statements,
promises or collateral agreement (collectively herein called “Statements”) of
any kind by and between the Parties, except as expressly set forth in
this Agreement, and if there are any such Statements, they are superseded and
wholly replaced by whatever appears in this Agreement. The execution of this
Agreement has not been induced by, nor do any of the Parties hereto rely upon or
regard as material, any Statements whatever except to the extent expressly
stated herein in writing.
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A.7 Default: Upon a
default under this Agreement, each nondefaulting party shall have such remedies
as may be available at law and in equity, including specific performance,
subject to the Dispute Resolution provisions of Schedule B.
A.8 Amendment of this
Agreement: Any amendment or modification of this Agreement or
additional obligation assumed by any Party in connection with this Agreement
shall be binding only if evidenced in writing signed by each Party or an
authorized representative of each Party. Any alteration, amendment or
qualification of this Agreement shall be null and void and shall not bind any
Party unless made in writing and signed or initialled by the Parties.
A.9 Notice: All notices
contemplated or required to be given hereunder shall be effective if sent by
prepaid mail, facsimile transfer or delivered personally to any of the Parties
at the address of that Party last known to the other Party from time to time, or
at such other address as the Party to whom such notice is to be given otherwise
directs in writing. Any notice delivered aforesaid shall be effective on the
date of facsimile transfer or delivery and any notice mailed as aforesaid shall
be effective three (3) business days after the mailing thereof, provided that
where interruption of mail services is likely by reason of any strike or other
labour dispute, notice shall be by personal delivery only to the person or to
the address as aforesaid. For purposes hereof the Parties address for
service of notice hereunder is as follows:
Wolverine
Exploration Inc.
Attention: Lee
P. Costerd, President
Texada
Consulting Inc.
1450
Palmerston Avenue
West
Vancouver, BC V7T 1H7
Attention: Deirdre
Lynch, President
A.10 Waiver: Any waiver
of any term, provision or condition of this Agreement to be effective must be in
writing and signed by the Party waiving such term, provision or condition
stating with specificity the particular provision or provisions being waived and
for what event or period of time. No waiver of any one or more
provisions shall be deemed to be a further waiver or continuing waiver of such
terms, provisions or conditions or any other term, provisions or conditions
unless the waiver specifically so states.
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A.11 Warranty of
Authority: Any such execution is a representation and warranty
to the other Party that the Party so signing has full authority in all requisite
capacities to do so. In the event of any loss or damage suffered by a
Party due to this representation or warranty being untrue, whether innocent or
otherwise, then the Party causing the harm shall indemnify the other Party in
respect of all loss or damage, and reasonable costs and expenses connected
therewith.
A.12 Time: Time is of
the essence of each provision of this Agreement, including the Dispute
Resolution Provisions of Schedule B.
A.13 Force Majeure: No
right of any party hereto shall be prejudiced by events beyond a party’s
reasonable control including without limitation pressures or delays from outside
parties, labour disputes, the exigencies of nature, governments, regulatory
authorities and acts of God, particularly as they may affect the performance of
this Agreement but excluding the want of funds. All times herein
provided for shall be extended by the period necessary to cure any such event
and the party affected shall use all reasonable means to do so
promptly.
A.14 Counterparts and Fax
Copies: This Agreement may be executed in counterparts and may
be delivered by fax copies thereof and when the whole is so executed and
delivered it shall constitute a valid and binding agreement among the Parties so
executing and delivering the agreement effective as of the Effective
Date. Fax Signatures shall be deemed to be accepted as original.
A.15 No Partnership,
etc.: Nothing in this Agreement shall be deemed in any way or
for any purposes to constitute any party a partner of, or a member of a joint
venture or joint enterprise with, any other party to this Agreement in the
conduct of any business or otherwise.
A.16 No Assignment
Permitted: No Party to this
Agreement shall assign, sell or otherwise transfer or encumber this Agreement,
or any of the rights, obligations or interests arising hereunder, without the
prior written consent of all of the other Parties.
A.17 Enurement: This
Agreement shall be binding upon and enure to the benefit of the Parties and
their respective heirs, representatives, successors and permitted
assigns.
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SCHEDULE
B
DISPUTE
RESOLUTION PROVISIONS INCLUDING BINDING ARBITRATION
NOTE: THIS
ARTICLE CONTAINS LIMITATION PERIODS AND LIMITS ALL REMEDIES TO THIS DISPUTE
RESOLUTION PROCEDURE WITHOUT ANY RIGHT TO LITIGATE IN COURT
B.1 Dispute Resolution Provisions
Including Binding Arbitration: In the event of dispute in
respect of any matter between the Parties in respect of
(a) this
Agreement
(b) or any
collateral agreement pertaining to or materially affecting the Parties,
or
(c) the
business of the Master Corporation,
they
agree to submit such issues for resolution in accordance with AND SUBJECT TO THE
DEADLINES OF the Dispute Resolution Provisions set out in this Schedule B, and
shall proceed through each of the following three steps in order as far as
necessary to resolve the dispute, subject to the complainant’s right at any time
to withdraw its complaint. The three successive steps
are:
(a)senior
level settlement negotiation as set out in Part I of this Schedule
B,
(b )mediation as
set out in Part I of this Schedule B, and failing resolution
then
(c) arbitration,
which shall be final and binding upon the Parties without appeal and
without resort to the Court upon any grounds whatever, such as questions
of law or mixed fact and law, including not challenging the jurisdiction
of the arbitrator upon any grounds whatever, such arbitration process to
be in the form and manner set out in Part II of this Schedule
B.
B.2 Limiting
Rights: The Parties acknowledge and agree that they each are limiting
all of their rights of review, interpretation and decision to final and binding
arbitration and have no other recourse to resolve any dispute or controversy
between them arising out of or connected with this Agreement. They do
so knowing that they may be giving up substantial rights in favour of speedy,
inexpensive and certain resolution of any dispute among them, such prompt and
certain resolution being most desirable according to the interests of
each. Further, the language of this provision and that of the Dispute
Resolution provisions shall not be construed or interpreted in favour of or
against any Party on the basis of authorship or draftsmanship, it being agreed
that this provision and the Dispute Resolution provisions comprise an instrument
resulting from the common desire and effort of all of the Parties.
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B.3 PART ISenior Level Settlement Negotiation
and Mediation
The
following shall be attempted prior to any arbitration:
Senior Level Settlement
Negotiation
(a )In the
event of any dispute, controversy or claim (a “Dispute”) arising out of or
in relation to this Agreement or any related agreement or subcontract
specifically referred to in this Agreement, or the performance,
non-performance, breach, termination, or invalidity hereof or thereof, the
Dispute shall be the subject of an attempt at an amicable solution, for
which purpose any Party may give WRITTEN AND DATED NOTICE to the other
Parties (“DISPUTE NOTICE WITHIN THE LIMITATION TIME” or “Notice”), setting
out:
(i) a
concise description of the Dispute,
(ii) the
position of such Party in respect thereof, and copies of any documents in
support of that position;
(iii) details
proposing a meeting among the principals of the Corporation or
representatives of the shareholders, or their designees (the “Senior
Officers”). Such meeting shall be held in Edson, British
Columbia or such other place as the Parties may agree for the purpose of
resolving the Dispute, and
(iv) the
following LIMITATION
NOTICE, or equivalent:
THIS
AGREEMENT CONTAINS A LIMITATION DEADLINE WITHIN WHICH TO MAKE CLAIMS AND RESOLVE
DISPUTES IN:
DISPUTE
RESOLUTION PROVISIONS INCLUDING BINDING ARBITRATION.
The
Dispute Resolution process replaces litigation and has three steps which must be
done or attempted in order: section B.1, B.2., B.4.1(b).
1. The first step is Senior
Level Settlement Negotiation: section B.3 PART I
(a).
The key
document WHICH MUST BE
DONE TO START THIS AND ALL LATER STEPS, and which must be within time, is
the “Dispute Notice Within The Limitation Time”. This written Notice
also suspends the time limitation deadline while the parties are trying to
resolve the dispute so no advantage can be gained by delaying
tactics: section B.3 (a). A sample form of the Notice is
in the final Exhibit to the Agreement at the last page of the
Agreement.
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2. The second step is
non-binding Interest-Based Mediation: section B.3 PART I (b) &
(c). If the Senior Level Settlement Negotiation does not
resolve matters the Claimant may choose to quit or to mediate.
3. The third step is binding
Arbitration: Part II, section B.4.
Section
B.4.2 provides two deadlines for demanding Arbitration:
(a) within
30 days after the conclusion of the Mediation (B.4.2(a)), which presumably
did not lead to a successful negotiated settlement or Arbitration would
not be necessary; and
(b) not
later than SIX (6) MONTHS after the later
of
(i) when
the claim arose and
(ii) when it
was known OR REASONABLY OUGHT TO HAVE BEEN KNOWN by the
Claimant.
This
six-month period is automatically extended for whatever time it has taken from
the date of service of the “Dispute Notice Within The Limitation Time” to start
Senior Level Settlement Negotiation until the conclusion of the unsuccessful
Mediation.
Within
15 days after delivery of the Notice, each receiving Party shall submit to
the other Parties a written response, setting forth the position of the
receiving Party in respect of the Dispute and providing copies of any
supporting documentation.
(b) If such
meeting is called, the meeting shall take place within 30 days of its
being requested. If such meeting does not take place within
such 30 days or if within 15 days after such meeting the Senior Officers
have not resolved the Dispute, then the Dispute shall, upon the written
request of any Party, be referred to mediation in accordance with
subsection (c) hereof or, failing any such resolution by mediation,
settled by arbitration in accordance with the remaining provisions of this
Article.
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Interest-Based Mediation
(c) If a
Party requests that a Dispute be referred to mediation, there shall be one
qualified, experienced mediator who shall be impartial and shall be
independent of and have had no financial connection with any
Party. Should the services of an appointing authority be
necessary, the appointing authority shall be a Justice of the Supreme
Court of British Columbia.
The
Parties shall have 15 days from the date of the request of mediation to
agree among themselves on the appointment of the mediator. If,
after such 15 day period, the Parties have not agreed on such appointment
then a Justice of the Supreme Court of British Columbia shall appoint the
mediator. The mediator may not serve as an arbitrator in any
arbitration of the Dispute. The mediation result, if any, is
not binding unless and until such agreement is reduced to writing signed
by all Parties thereto.
(d) All
negotiations, including any offers of settlement or compromise, undertaken
pursuant to this Part I shall be on a “without prejudice” basis and shall
not be admissible in any subsequent arbitration or other
proceeding.
B.4 Part IIBinding
Arbitration
No matter
maybe submitted to arbitration until Part I has been complied with and mediation
has either failed or been waived expressly in writing or by necessary
implication from the conduct of the party adverse in interest to the party
seeking arbitration.
B.4.1 Matters to be Submitted to
Arbitration:
(a) One or
more Parties may demand arbitration or answer the demand for
arbitration. All disputes and controversies of every kind and
nature between the Parties to this Agreement arising out of an occurrence
or event or omission in respect of this Agreement and the matters set out
in Article XV hereof, including matters of jurisdiction, questions of
fact, law or mixed fact and law and as to the existence, construction,
validity, interpretation or meaning, performance, non-performance,
enforcement, operation, breach, continuance or termination thereof shall
be decided by arbitration. The arbitration shall be conducted
under the Arbitration Rules of the United Nations Commission on
International Trade Law Model Law ("UNCITRAL - Model Law" or "Arbitration
Rules") as they read on the date of this Agreement except to the extent
that the rules are inconsistent with or in conflict with any terms of this
provision, in which event such terms of this provision shall
prevail. The arbitration shall be the sole and exclusive forum
for resolution of the Dispute. Judgment on the arbitral award
may be entered by any court having jurisdiction over a Party or any of a
Party's assets.
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(b) Each
Party shall not have or retain any right to appeal any question whatever
to the courts, including matters of jurisdiction or questions of law or
mixed fact and law, even if the award appears in the opinion of one Party
to be wholly perverse, it being the intent that the arbitrators award is
final and binding in respect of all legal or equitable action or
proceeding of any nature whatever, without appeal or resort to the
court.
(c) The
agreement to arbitrate shall be specifically enforceable under the
prevailing arbitration law. The award rendered by the
arbitrator shall be final and judgment may be entered upon it in any court
having jurisdiction thereof.
B.4.2 Procedure
B.4.2.1 Demand for
Arbitration: Notwithstanding any provision of this Agreement,
any Party may demand such arbitration in writing
(a) within
thirty (30) days after the conclusion of interest-based mediation pursuant
to Part I, and provided that
(b) it is
not later than six (6) months after the later of when the claim arose and
when it was known or reasonably ought to have been known, which demand
shall include
1. the
name and curriculum vitae of the arbitrator nominated by the Party
demanding arbitration,
2. a
statement of the matter in
controversy,
3. a
statement of the detailed issues to be
resolved,
4. a
statement of the relief or result sought from the
arbitrator,
5. a
summary of the evidence, both documentary (with copies) and verbal reduced
to writing, plus the time elapsed since giving the
Notice,
6. the
reasons therefor, and
7. a
summary of the law relied upon and copies of all authorities and
references.
B.4.2.2 Answer and Selection of
Arbitrators: Within fifteen (15) days after such demand, the
other Party shall answer, which answer shall include:
1. the
name and curriculum vitae of the arbitrator nominated by the Party
answering the demand for
arbitration,
2. a
statement of the matter and any additional matter in
controversy,
3. a
statement of the detailed issues and any additional issues to be
resolved,
4. a statement of the relief
or result sought from the
arbitrator,
5. a
summary of the evidence, both documentary and verbal reduced to
writing,
6. the
reasons therefor, and
7. a
summary of the law relied upon and copies of all authorities and
references;
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or
in default of such nomination of an arbitrator, such arbitrator shall
be selected by a Justice of the Supreme Court of British
Columbia. The two arbitrators selected shall thereafter name a third
arbitrator within ten (10) days or, in lieu of such agreement on a third
arbitrator by the two arbitrators so appointed, a third arbitrator shall be
selected by a Justice of the Supreme Court of British Columbia.
B.4.2.3 Costs: The
arbitration costs and expenses of each Party shall be borne by each Party
initially, and upon rendering their award, the arbitrators may in their
discretion include a provision for payment of costs and expenses of arbitration
to be paid by one or both of the Parties as the arbitrators deem
just.
B.4.2.4 Hearing, Interim Relief and
Award: The arbitration hearing shall be held at Edmonton,
British Columbia upon ten (10) days notice to the Parties, and the arbitrators
shall make an award within forty-five (45) days after the hearing has completed
and the arbitrators are hereby given authority by the Parties to prescribe the
terms of any interim order respecting the standstill of the Parties or any
action which would have the effect of preserving the assets or matters pending
the making of an award, and such interim order shall be valid without appeal the
same as extraordinary relief of a court enforceable by way of temporary or
permanent injunction or mandamus once entered as an order or judgment of the
court.
B.4.2.5 Arbitrator Not Bound by Strict Rules
of Evidence: The British Columbia rules of evidence shall
govern the presentation of evidence at such hearing, except that the arbitrators
are not bound by the strict rules of evidence at such hearing.
B.4.2.6 Purpose: The
arbitrators shall make their rulings and decisions in order to enforce the
Agreement by its language, equity and fair dealing in matters of trade and
commerce, irrespective of technicalities but not so as to modify the Agreement,
other than the construction and interpretation thereof, and with the least
possible delay and expenditure consistent with the comprehensive investigation
of such controversy presented.
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B.4.2.7 Witnesses: The
Parties shall be entitled to be heard in person or through counsel, and may
produce witnesses for examination; and the arbitrators may, by subpoena, require
any person to attend before them as a witness and to bring with him or her
books, papers or information in any form whatever.
B.4.2.8 Records: At the
request and expense of any Party so requesting, the arbitrators may keep a
complete record of all of the proceedings.
B.4.2.9 Private Matter: The
arbitration proceedings shall not be public.
B.4.3 Award is Final and
Binding: An award rendered by a majority of the arbitrators
appointed under and pursuant to this Agreement shall be final and binding on all
Parties to the proceeding during the period of this Agreement or thereafter to
the extent that the Agreement has covenants which survive the
Agreement.
B.4.4 A ward Enforceable as
Judgment: Judgment on such award or interim order may be
entered by either Party in a court of competent jurisdiction, state or federal,
and jurisdiction for such is hereby agreed to and conferred to the extent
necessary, without any right of appeal therefrom whatever.
B.4.5 Agreement to Arbitrate is Bar to Suit
or Action: The Parties stipulate that this arbitration
provision shall be a complete defense to any suit, action or proceeding
instituted in any federal, provincial or local court or before any
administrative tribunal with respect to any controversy or dispute arising
during the period of this Agreement or thereafter to the extent that
the Agreement has covenants which survive the Agreement and which is arbitrable
as set forth in this Agreement, it being the intent of the Parties hereto that
no suit at law or in equity based on such dispute or controversy shall be
instituted by either Party, except to enforce the award of the
arbitrators.
B.4.6 Arbitration Provisions Survive
Termination: The arbitration provisions hereof shall, with
respect to such controversy or dispute, survive the termination or expiration of
this Agreement.
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B.4.7 Lack of Arbitrators’ Authority to
Modify Agreement: Nothing contained in this arbitration
provision shall be deemed or construed so as to give the arbitrators any
authority, power, or right to alter, change, amend, modify, add to, or subtract
from any of the provisions of this Agreement, other than to construe and
interpret them. This Agreement was drafted and reviewed by the mutual
effort of both Parties and shall not be interpreted or construed against either
Party on account of drafting.
B.4.8 Governing Law: It is agreed that this
arbitration provision, like the whole of this Agreement, shall be
governed by and construed pursuant to and in accordance with, including the
enforcement thereof, the laws of the Province of British Columbia and the laws
of Canada applicable therein.
THIS TRANSFER OF ADDITIONAL PROPERTY
made as of May 17, 2007, pursuant to the VEND-IN AGREEMENT FOR THE
PURCHASE AND SALE OF RESOURCE EXPLORATION PROPERTY made effective as of February28, 2007 by and between WOLVERINE EXPLORATION INC.
(“Wolverine”), a Nevada, U.S.A. corporation having an office at 2470
Saint Rose Pkwy, Suite 304, Henderson, NV, U.S.A. 89074 (herein called the
"Buyer"), and SHENIN RESOURCES
INC. (“Shenin”), an Alberta, Canada corporation, having an
office at 103 Huntcroft Place NE, Calgary, Alberta, Canada T2K 4E6 AND RICHARD HADERER (“Haderer”)
of Calgary, Alberta, Canada.
RECITALS:
WHEREAS
Haderer is a Director of Shenin and is an additional party hereto.
WHEREAS
Haderer, for and on behalf of Shenin, staked 6 claims in Labrador as shown on
Map Staked Licence No. 013472M on May 17, 2007 (the “Additional Property”), as
shown on the licence, attached hereto as Schedule
“A”.
WHEREAS
it was contemplated that additional Property would be acquired as part and
parcel of the original vend-in agreement and made available to the extent of a
90% interest therein at no additional cost to Wolverine.
WHEREAS
the Vend-In Agreement provides for such additional Property to be acquired and
governed by the provisions of the Agreement, in particular paragraph 12.1, as
follows:
ARTICLE
XII
ADDITIONAL
PROPERTY
12.1Right of First Refusal for
Additional Property. Shenin, for itself and on behalf of the
Sellers, hereby agrees to Offer to Buyer within ninety (90) days a 90% Purchased
Interest in all further Property in Labrador, Canada which Shenin or any of the
Sellers may acquire from time to time.
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WHEREAS
Property is defined as follows:
Property shall mean
the rights or territory in Labrador in respect of which Licences have
issued to or for the benefit of the Sellers, or may issue to or for the
benefit of the Sellers from time to time, to explore and take Minerals of
any nature whatever from the licenced claims, staked area or otherwise
acquired property interest described in the Schedule
2.7 Resource Property, to the extent permitted by
Governmental Authority and the particular
Licences.
WHEREAS
Property is described as follows, and includes Map Staked Licence No. 013472M
(comprising 6 claims):
SCHEDULE
2.7
PROPERTY
LICENCES
FOR RESOURCE PROPERTY
1....
2.All
other Interests in property in Labrador, Canada as Shenin may acquire from
time to time.
3....
NOW
WITNESS THEREFORE THAT IN CONSIDERATION of the sum of ONE (US$1.00) US DOLLAR
now paid by Wolverine to Shenin and the sum of THREE HUNDRED SIXTY (CAD$360.00)
CA DOLLARS now paid to Haderer, (the receipt and sufficiency of which in each
case is hereby acknowledged), the parties hereto agree as follows:
1. The above
Recitals are incorporated herein.
2. Haderer
acknowledges that he has no beneficial interest in and to the Additional
Property, and that at all material times he held the beneficial interest therein
in trust for the sole use and benefit of Shenin, and Haderer shall be reimbursed
the sum of CAD$360.00, receipt of which is hereby acknowledged.
3. Shenin hereby
transfers an undivided 90% Purchased Interest, being an undivided
90% beneficial interest in and to the Additional Property to
Wolverine.
4. Haderer
hereby transfers all legal right title to and interest in the Additional
Property to Wolverine.
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5. Wolverine
hereby confirms that it holds an undivided 10% beneficial interest in and to the
Additional Property in trust for the sole use and benefit of Shenin, and that
this Additional Property shall be governed by the Vend-In
Agreement.
6. The Parties
hereby waive compliance with the right of first refusal mechanism, and Schedule
E of the Vend-In Agreement, and acknowledge that this agreement is in lieu
thereof.
7. Further Acts: In order to
fulfill the intent of the Parties hereto, they shall execute from time to time
all reasonable documents and do all such things as may be necessary or desirable
to more completely and effectively carry out the terms and intentions of this
Agreement, to implement it in all respects, or to fulfil consequential aspects
thereof, which any other Party may request from time to time at the expense, if
any, of the Party so requesting. Further, the parties shall cause the
corporate parties to act in the manner contemplated by this Agreement and, to
the extent permitted by law, cause the Board of Directors so to act.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered on the date first above written.
CANADA ) I,
___________________, of the City of)___________________, in the Province of
Alberta,
PROVINCE
OF
ALBERTA )
) MAKE OATH AND
SAY:
TO
WIT:
)
1. I
was personally present and did see RICHARD HADERER named in the within
instrument, who is personally known to me to be the person named therein, duly
sign and execute the same for the purposes named therein.
2. That
I am the subscribing witness thereto.
3. That
I know the said person and he is in my belief of the full age of eighteen (18)
years.
SWORN
BEFORE ME at the City
of )
___________,
in the Province of
Alberta, ) ____________________________
Wolverine
has adopted a code of ethics (the “Code”) that is applicable to
every officer, director, employee and consultant of the company and its
affiliates (collectively the “Employee” or “Employees”). The
Code reaffirms the high standards of business conduct required of all
Employees. The Code is part of Wolverine’s continuing efforts to (1)
ensure that it complies with all applicable laws, (2) have an effective program
in place to prevent and detect violations of law, and (3) educate and train its
Employees to be aware and understand ethical business practices. In
most circumstances, the Code sets standards that are higher than the law
requires.
Wolverine
has also adopted eight corporate values: Focus, Respect, Excellence,
Accountability, Teamwork, Integrity, Open Communications and Positive
Attitude. See Schedule “A” for a statement on each
value. The values have been adopted to provide a framework for all
Employees in conducting themselves in their jobs. These values are
not intended to substitute for the Code, but will serve as guidelines in helping
the Employees to conduct Wolverine’s business in accordance with the
Code.
The Code
is not intended to cover every possible situation in which an Employee may find
himself or herself. It is meant to give each Employee the boundaries
within which Wolverine expects each Employee to conduct himself or herself while
representing Wolverine. An Employee may find himself or herself in a
situation where there is no clear guidance given by the Code. If that
occurs, return to the objective stated below: common sense, good judgment, high
ethical standards and integrity, and refer to Wolverine‘s values. In
addition, there are many resources upon which an Employee may rely, including
the President and other Wolverine officers and management. Together
all Employees can continue to make Wolverine a company that sets a standard for
fashion service companies.
Objective
One of
Wolverine’s objectives is to conduct all business operations in the utmost
ethical manner utilizing common sense, good judgment, high ethical standards and
integrity. Wolverine cares about its Employees, shareholders,
clients, suppliers, and the communities in which it conducts its business
operations. In the course of meeting its business objectives,
Wolverine considers it essential that all Employees understand and comply with
the Code and therefore share and participate in Wolverine’s way of conducting
business.
Standard
of Conduct
Wolverine
insists that all aspects of its business operations are conducted with honesty,
integrity and fairness, and with respect for the interests of those affected by
its business and activities. Wolverine also expects the same in its
relationships with all those with whom it does business.
Each
Employee must maintain and foster integrity and honesty in all dealings with
clients and all business transactions. Each Employee must commit to
act according to the highest ethical standards and is expected to apply ethical
business practices in administrative and financial aspects of the business
operations of Wolverine.
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No code
of conduct can hope to lay down appropriate behavior for every situation, nor
should it seek to do so. Each Employee is required to make a careful
and considered judgment of what is right and proper in any particular
situation.
It is the
obligation of every Employee in conducting the business operations of Wolverine
to be responsible, honest, trustworthy, conscientious, and dedicated to the
highest standards of ethical business practices. Accordingly, all
Employees are required to avoid not only impropriety, but also the appearance of
impropriety in conducting the business operations of Wolverine.
Obeying
the Law
All
Employees of Wolverine are required to comply with (1) the letter and the spirit
of laws and regulations of the countries in which Wolverine conducts business
operations, (2) the accepted business practices in commercial markets, and (3)
any contractual terms and conditions applicable to any business
transaction.
It is
expected that each Employee will use common sense, good judgment, high ethical
standards and integrity in all the Employee’s business dealings.
Each
Employee must commit to know and abide by all applicable laws and
regulations. Employees are expected to be familiar with the Code as
it applies to their duties. Each Employee is required to follow and
to comply with the Code. A refusal by any Employee to agree to be
bound by the Code will be grounds for discipline up to and including
dismissal.
A breach
of any law, regulation or ethical standard by any Employee will not be justified
by the pursuit of profit or the departure from acceptable practice by
competitors.
Enforcement
of Code
The Code
will be enforced at all levels fairly and without prejudice. Any
breach of any standard of the Code may result in disciplinary action, up to and
including termination.
Lee
Costerd, Wolverine’s chief executive officer, has been appointed as Compliance
Officer of Wolverine, responsible for overseeing compliance with, and
enforcement of, the Code. Lee Costerd, Wolverine’s chief financial
officer, has also been appointed as Assistant Compliance Officer of Wolverine,
responsible for overseeing compliance with, and enforcement of, the
Code. If an Employee encounters a situation that the Employee is not
able to resolve by reference to the Code, the Employee should ask for help from
the Compliance Officer or the Assistant Compliance Officer if they need
assistance in understanding or interpreting any part of the Code.
Any
Employee who, in good faith, has reason to believe any operation or activity of
Wolverine is in violation of the law or of the Code must call the matter to the
attention of the Compliance Officer. See Schedule “B” for a
non-exhaustive list of reportable violations.
If the
Employee has reason to believe that it would be inappropriate to report the
operation or activity to the Compliance Officer, the Employee should report it
to the Assistant Compliance Officer. All reports will be reviewed and
investigated and as necessary under the circumstances, and the reporting
Employee should provide sufficient information to enable a complete
investigation to be undertaken.
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- 193
Any
Employee who makes an allegation in good faith reasonably believing that a
person has violated the law or the Code will be protected against
retaliation.
Violations
of the law or the Code will subject Employees to disciplinary action, up to and
including termination of employment. In addition, Employees involved
may subject themselves and Wolverine to severe penalties, including fines and
possible imprisonment. Compliance with the law and high ethical
standards in the conduct of Wolverine’s business should be a top priority for
each Employee.
Insider
Trading, Securities Compliance and Public Statements
Securities
laws prohibit anyone who is in possession of material, non-public information
(“Insider Information”)
about a company from purchasing or selling stock of that company, or
communicating the information to others. Information is considered
“material” if a
reasonable investor would consider it to be important in making a decision to
buy or sell that stock. Some examples include financial results and
projections, new products, acquisitions, major new contracts or alliances prior
to the time that they are publicly announced. Employees who become
aware of such Inside Information about Wolverine must refrain from trading in
the shares of Wolverine until the Inside Information is publicly
announced.
Employees
must also refrain from disclosing the insider Information to persons who do not
have a need to know, whether they are inside Wolverine or outside, such as
spouses, relatives or friends.
Wolverine
makes regular formal disclosures of its financial performance and results of
operations to the investment community. Wolverine also regularly
issues press releases. Other than those public statements, which go
through official channels, Employees are prohibited from communicating outside
Wolverine about Wolverine’s business, financial performance or future
prospects. Such communications include questions from securities
analysts, reporters or other news media, but also include seemingly innocent
discussions with family, friends, neighbors or acquaintances.
Financial
Reporting
Wolverine
is required to maintain a variety of records for purposes of reporting to the
government. Wolverine requires all Employees to maintain full
compliance with applicable laws and regulations requiring that its books of
account and records be accurately maintained. Specifics of these
requirements are available from the Compliance Officer.
Accuracy
of Records
Wolverine’s
accounting records and supporting documents must accurately describe and reflect
the nature and result of Wolverine’s business operations. All
activities and results of Wolverine’s business operations must be presented in a
fair and balanced manner.
All
business transactions must be properly authorized as well as completely and
accurately recorded on Wolverine’s books. Procedures for doing so
must comply with Wolverine’s financial policy and follow Wolverine’s policy for
authorization and documentation, as well as follow generally accepted accounting
practices. Budget proposals and other financial evaluations and
forecasts must fairly represent all information relevant to the business
transaction. In addition, no unrecorded cash funds or other asset
accounts will be established or maintained for any
purpose. Misapplication or improper use of corporate or property or
false entry to records by any Employee or by others must be reported to
Wolverine’s Board of Directors.
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Record
Keeping and Retention
To help
maintain the integrity of Wolverine’s record-keeping and reporting systems, each
Employee must know his or her area’s records retention procedures, including how
data is stored and retrieved. It is that person’s responsibility to
know how to document and transact any entries or records that he or she is
responsible for. All Employees are expected to comply fully and
accurately with all audits, including responding in a timely fashion to requests
for records or other material from or on behalf of Wolverine’s auditors or
management.
Communicating
Accurate and Timely Information
In all
interactions and communications, whether with shareholders, the public, clients,
government agencies, or others inside or outside of Wolverine, each Employee is
expected to be truthful and forthright. This includes making accurate
statements, not misrepresentations or statements intended to mislead or
misinform; and responding promptly, accurately, and with full disclosure to
requests from governmental agencies for information or documents.
Confidentiality
Employees
must respect the confidentiality of information received in the course of
business dealings and must never use such information for personal
gain. Information given by Employees in the course of business
dealings must be true and fair and never designed to mislead.
Confidential
information can only be revealed upon written authorization of
management.
Employees
must not use or disclose Wolverine’s trade secrets, proprietary, or confidential
information, or any other confidential information gained in the performance of
Wolverine as a means of making private profit, gain or benefit.
Employees
must not use Internet bulletin boards or chat rooms to discuss matters or
opinions related to Wolverine or any of its industries, or to respond to
comments about Wolverine. In today’s electronic age, posting
information on Internet bulletin boards or even communicating in chat rooms is
the same as “speaking to the media”.
Health
and Safety
Wolverine
is committed to protecting the health and safety of its
Employees. Wolverine expects employees to obey all laws and
regulations designed to protect the health and safety of all employees, and to
obtain and fully observe all permits necessary to do business. At the
very least, all Employees should be familiar with and comply with safety
regulations applicable to their work areas. Wolverine will make, to
the extent possible, reasonable accommodations for the known physical or mental
limitations of its Employees. Employees who require an accommodation
should contact the Compliance Officer. Wolverine will then engage in
an interactive process to determine what reasonable accommodations may
exist.
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Declaration
of Interest
Each
Employee is expected to avoid any activity, investment or association that
interferes with the independent exercise of his or her judgment in Wolverine’s
best interests (“Conflicts of
Interest”). Conflicts of Interest can arise in many situations and occur
most often in cases where the Employee or the Employee’s family obtains some
personal benefit at the expense of Wolverine’s best interests.
No
Employee, or any member of Employee’s immediate family, is allowed to accept
money, gifts of other than nominal value, unusual entertainment, loans, or any
other preferential treatment from any customer or supplier of Wolverine where
any obligation may be incurred or implied on the giver or the receiver or where
the intent is to prejudice the recipient in favor of the
provider. Likewise, no Employee is allowed to give money, gifts of
other than nominal value, unusual entertainment or preferential treatment to any
customer or supplier of Wolverine, or any employee or family members thereof,
where any obligation might be incurred or implied, or where the intent is to
prejudice the recipient in favor of Wolverine. No Employee is allowed
to solicit or accept kickbacks, whether in the form of money, goods, services or
otherwise, as a means of influencing or rewarding any decision or action taken
by a foreign or domestic vendor, customer, business partner, government employee
or other person whose position may affect Wolverine’s business.
No
Employee will use Wolverine’s property, services, equipment or business for
personal gain or benefit.
Each
Employee is required to reveal any personal interest that may impinge or might
reasonably be deemed by others to impinge on the Employee’s business dealings
with any industry partners of Wolverine.
Employees
may not: (1) act on behalf of, or own a substantial interest in, any company or
firm that does business, or competes, with Wolverine; (2) conduct business on
behalf of Wolverine with any company or firm in whom the Employee or a family
member has a substantial interest or affiliation. Exceptions require
advance written approval from Wolverine’s Board of Directors.
Employees
should not create the appearance that they are personally benefiting in any
outside Wolverine as a result of their employment by Wolverine, or that
Wolverine is benefiting by reason of their outside interests. Any
Employee who is not sure whether a proposed action would present a conflict of
interest or appear unethical should consult with the Compliance
Officer.
Wolverine
expects its Employees to avoid (1) personal activities and financial interests
that could conflict with their responsibilities and obligations and (2) giving
assistance to competitors, which could be in conflict with the interests of
Wolverine or its clients. All Employees are required to seek the
consent of Wolverine management if they intend to become partners or
shareholders in companies outside Wolverine’s corporate structure.
Fair
Competition
Wolverine’s
policy is to comply fully with competition and antitrust laws throughout the
world. Wolverine is committed to vigorous yet fair competition and
supports the development of appropriate competition laws. Each
Employee must avoid any business arrangement that might prevent the effective
operation of fair competition. It is advised that each Employee
consult with the Compliance Officer before attending a meeting with a party who
may be viewed as a competitor.
Page
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International
Trade
Wolverine
must comply with a variety of laws around the world regarding its
activities. In some cases, the law prohibits the disclosure of
information, whether the disclosure occurs within the U.S. or elsewhere, and
whether or not the disclosure is in writing.
U.S. law
and the Code prohibits giving, offering, or promising anything of value to any
public official in the U.S. or any foreign country to influence any official
act, or to cause an official to commit or omit any act in violation of his or
her lawful duty. The Foreign Corrupt Practices Act precludes payments
to non-U.S. government officials for the purpose of obtaining or retaining
business, even if the payment is customary in that country. This law
applies anywhere in the world to U.S. citizens, nationals, residents, businesses
or employees of U.S. businesses. Because Wolverine is a U.S. company,
this law applies to Wolverine and all of its subsidiaries. Any
questions on this policy should be directed to the Compliance
Officer.
Government
Relations
Wolverine
is prohibited by law from making any contributions or expenditures in connection
with any U.S. national election. This includes virtually any activity
that furnishes something of value to an election campaign for a federal
office. Use of Wolverine’s name in supporting any political position
or ballot measure, or in seeking the assistance of any elected representative,
requires the specific approval of the President of Wolverine. Political
contributions or expenditures are not to be made out of Wolverine’s funds in any
foreign country, even if permitted by local law, without the consent of the
President of Wolverine.
Vendors,
Contractors, Consultants and Temporary Workers
Vendors,
contractors, consultants or temporary workers who are acting on Wolverine’s
behalf, or are on Wolverine’s property, are expected to follow the law, the
Code, and honor Wolverine’s values. Violations will subject the
person or firm to sanctions up to and including loss of the contract, the
contracting or consulting agreement, or the discharge from temporary
assignment.
Compliance
with the Code
It is the
responsibility of Wolverine’s Board of Directors to ensure that the standards
embodied in the Code are communicated to, understood and observed by all
Employees. Wolverine’s Board of Directors will not criticize
management for any loss of business resulting from adherence to the
Code. Equally, Wolverine’s Board of Directors undertakes that no
Employee will suffer as a consequence of bringing to their attention, or that of
senior management, a breach or suspected breach of the Code.
The
standards set out in the Code directly reflect Wolverine’s high ethical
standards. Wolverine expects and requires each and every Employee, as
a representative of Wolverine, to fulfill Wolverine’s ethical commitment in a
way that is visible to the outside world with which Wolverine conducts its
business operations.
Each
Employee is responsible for complying with the standards set out in the Code and
must ensure that their personal conduct is above reproach.
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Each
Employee has an obligation to assure that the conduct of others around him or
her complies with the Code.
All
Employees have a legal, moral, and ethical duty to report to Wolverine’s Board
of Directors and the appropriate authorities any known or suspected violations
of law, regulations or corporate policy, including the Code.
Breaches
of law, regulations and the standards of conduct listed above may lead to
serious consequences for the Employee concerned.
Annual
Acknowledgement
Each
Employee will be required to sign a statement annually that he or she has
read and understands Wolverine’s Code of Ethics. This statement will
also require that the Employee state that he or she is in full compliance with
the Code. The form of statement is attached as Schedule
“C”.
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Schedule
“A”
VALUES
FOCUS: We
exist only because we are in the mineral exploration business.
RESPECT:
We value all people, treating them with dignity at all times.
EXCELLENCE:
We strive for “Best in Class” in everything we do.
ACCOUNTABILITY:
We do what we say we will do and expect the same from others.
TEAMWORK:
We believe that cooperative action produces superior results.
INTEGRITY:
We are honest with each other, our customers, our partners, our shareholders and
ourselves
OPEN
COMMUNICATION: We share information, ask for feedback, acknowledge good
work, and encourage diverse ideas.
POSITIVE
ATTITUDE: We work hard, are rewarded for it, and maintain a positive
attitude with a good sense of perspective, humor and enthusiasm.
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Schedule
“B”
Reportable
Violations - Anonymous Reporting Program
Accounting
Error
Accounting
Omissions
Accounting
Misrepresentations
Auditing
Matters
Compliance/Regulation
Violations
Corporate
Scandal
Domestic
Violence
Discrimination
Embezzlement
Environmental
Damage
Ethics
Violation
Fraud
Harassment
Industrial
Accidents
Misconduct
Mistreatment
Poor
Customer Service
Poor
Housekeeping
Sabotage
Securities
Violation
Sexual
Harassment
Substance
Abuse
Theft
Threat of
Violence
Unfair
Labor Practice
Unsafe
Working Conditions
Vandalism
Waste
Waste of
Time and Resources
Workplace
Violence
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Schedule
“C”
Acknowledgement
and Certification Statement
I
acknowledge and certify that I have read and understand the information set
forth in the Code of Ethics of Wolverine Exploration Inc. and will comply with
these principles in my daily work activities. I am not aware of any violation of
the standards of Wolverine’s Code of Ethics.
CONSENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We
consent to the reference in this Registration Statement on Form S-1
(Registration No. 333-XXXXXX) of our report dated January 8, 2008 relating to
the financial statements of Wolverine Exploration, Inc. for the fiscal years
ended May 31, 2007 and 2006, and to the reference to our firm under the caption
“Interests of Named Experts and Counsel” in the Prospectus.
I HEREBY CONSENT to the inclusion of my
name in connection with the Form S-1 Registration Statement filed with the
Securities and Exchange Commission as attorney having passed on the legality of
the units, warrants, and shares of common stock being offered for sale by
Wolverine Exploration Inc. and 64,630,000 shares of common stock being offered
by certain selling shareholders named therein.
DATED this 11th day of
July, 2008.
Yours truly,
The Law Office of Conrad C. Lysiak,
P.S.
By: /s/ Conrad C.
Lysiak
Conrad C. Lysiak
Page
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Dates Referenced Herein and Documents Incorporated by Reference