LOAN AGREEMENT
This
Loan
Agreement is entered into this 8th day of March, 2007, by and between
GOLDEN
EAGLE MINERAL HOLDINGS, INC. (“GEMH” or the “Lender”),
a
Colorado Corporation with its principal place of business located at 000 Xxxxxx
Xxxxx Xxxx., Xxxxxx, Xxxxxxx 00000; and GOLDEN
EAGLE INTERNATIONAL, INC. (“GEII” or the “Borrower”),
a
Colorado Corporation, with its principal place of business located at 0000
Xxxxx
000 Xxxx, Xxxx Xxxx Xxxx, Xxxx 00000.
WHEREAS,
GEMH is
interested in, and is willing and able to, loan GEII a minimum of $1 million
dollars (loan proceeds) within the 60-day period following the execution of
this
Agreement for the incremental expansion of the C Zone pilot plant into a
full-scale production plant with an eventual capacity of 500 cubic meters
(approximately 1,000 tons) per day on GEII’s Precambrian mining concessions
located in eastern Bolivia; to provide needed operating capital during the
construction and shake-out periods; and for any other business purpose at the
discretion of GEII’s management, all contingent on GEMH’s satisfactory due
diligence and its receipt of a Certification Regarding Final Feasibility from
GEII regarding the development of the C Zone; and
WHEREAS,
the
60-day period referred to above (“due diligence period”) shall be construed to
be a period of due diligence during which GEMH shall conduct its due diligence
into the C Zone pilot plant operations, previous C Zone exploration, and will
receive a Certification Regarding Final Feasibility from GEII; and
WHEREAS,
GEII is
desirous of borrowing the loan proceeds for the purposes set out above in
accordance with the terms and conditions set forth below.
NOW,
THEREFORE,
in
consideration of the mutual covenants made herein, and the exchange of good
and
valuable consideration, the sufficiency of which is acknowledged by the parties
hereto, GEMH, the Lender, and GEII, the Borrower, agree as follows:
1. LOAN.
The
Loan
shall be in the principal amount of $1,000,000.00 (Principal). The Principal
shall be payable to GEII as follows:
| a. | $100,000, which has been received by GEII; |
| b. | $100,000 to be received by GEII by March 21, 2007; |
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c.
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$800,000
to be received by GEII at any time within the due diligence period,
in
which due diligence shall be conducted by GEMH and during which GEII
shall
promptly provide any and all information requested by GEMH for the
purpose
of determining the feasibility of expanding GEII’s pilot plant at its C
Zone Project into a full-scale production plant with an eventual
capacity
of 500 cubic meters (approximately 1,000 tons) per day on GEII’s
Precambrian mining concessions located in eastern Bolivia; to provide
needed operating capital during the construction and shake-out periods;
and for any other business purpose at the discretion of GEII’s management.
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2. TERM
AND INTEREST RATE.
The
Principal shall be due and payable to the holder hereof twelve (12) months
from
the date of the receipt of each individual payment by the Lender to the Borrower
with respect to each individual payment amount described in Paragraph 1 above.
For example: Borrower shall owe Lender $100,000, plus the respective accrued
interest on that amount, on March 2, 2008. This payment of principal and
interest by Borrower to Lender will constitute the first repayment due pursuant
to this Agreement. The holder hereof may at its election extend the term of
this
Note for successive twelve (12) month periods upon written notice thereof to
the
Borrower, or may aggregate all of the separate payment and interest amounts
into
one renewal with one expiration date, but only upon the written request of
the
Lender.
Interest
on this Note shall accrue from the date of payment of each individual payment
amount within the total of the Principal paid to the Borrower at the rate of
ten
percent (10%) per annum, calculated and compounded monthly, until paid. Interest
shall be due and payable to the Lender at the end of the term of this Note.
However, in the event of default, interest shall accrue at the rate of fourteen
percent (14%) per annum, calculated and compounded monthly, from the date of
default.
3.
NEGOTIABILITY.
This
Loan Agreement, and the underlying debt obligation, shall be saleable,
transferable, assignable or otherwise negotiable, by the holder hereof for
value, to a Holder in Due Course as defined by the Uniform Commercial Code,
upon
written notification to Borrower of the new holder and its address. The Borrower
hereby makes an unconditional promise to repay the principal and accrued
interest of this Convertible Promissory Note on or before the date due to any
such Holder in Due Course. Furthermore, it is agreed that all rights, benefits,
representations and warranties made by the Borrower shall survive any sale,
transfer, assignment, or other negotiation by Lender to a Holder in Due Course.
Additionally, Lender and Borrower agree that all rights, benefits,
representations and warranties made by the Lender shall survive any sale,
transfer, assignment, or other negotiation by Lender to a Holder in Due Course.
The Borrower acknowledges that repayment to a Holder in Due Course is not
subject to any claims or defenses the Borrower may have against the Lender.
4. DEFAULT.
Each of
the following events shall be and shall constitute an event of default under
this Agreement:
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(a)
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Any
default by the Borrower in the punctual payment of the principal
and
accrued interest hereunder when, and as, the same shall become due
and
payable;
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(b)
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Any
default by the Borrower under, or breach by the Borrower in the
performance of, any covenant, agreement, warranty, representation
or
condition contained in this
Agreement;
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(c)
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If
the Borrower shall:
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(i)
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apply
for, or consent to, the appointment of a receiver, trustee, or liquidation
of the Borrower for all or substantially all assets of the Borrower;
(ii)
file or be served with any petition for relief under the Bankruptcy
Code
or any similar federal or state law or admit in writing its inability
to
pay its debts as they become due; (iii) make a general assignment
to
creditors;
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(d)
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If
any pleading shall be filed in any court or other forum seeking the
adjudication of the Borrower as bankrupt or insolvent, the appointment
of
a receiver, trustee, or liquidation of the Borrower or of all or
substantially all of their assets which pleading shall not be dismissed
within thirty (30) days; or
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(e)
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The
filing of any tax lien respecting any of the assets of the
Borrower;
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(f)
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The
failure to file timely any and all reports of the Borrower with the
U.S.
Securities and Exchange Commission;
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(g)
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The
foregoing notwithstanding, the Borrower shall have ten (10) days
from the
date of notice of such default to cure said default. Upon such cure
the
terms of this Note shall continue in
effect.
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5. REMEDIES
UPON DEFAULT. Upon
the
occurrence of any one or more of the events of
default
described in Paragraph 4 of this Loan Agreement and subject solely to the
Borrower's actual cure of the default pursuant to Section 5(g), the holder
of
this Note at its option, and in its sole discretion, may declare the unpaid
balance of the principal and accrued interest immediately due and payable as
fully and as completely as if said aggregate sum were originally agreed to
be
paid at such time, all without notice or demand, which are hereby expressly
waived by the Borrower.
6. LOCATION
OF TRANSACTION. The
offer
and acceptance of this Loan Agreement shall be deemed concluded at the office
of
the Borrower, 0000 Xxxxx 000 Xxxx, Xxxx Xxxx Xxxx, Xxxx 00000.
7. REPRESENTATIONS
AND WARRANTIES OF BORROWER.
Borrower
represents and warrants to the Lender as follows:
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(a)
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The
Borrower shall maintain accurate records and books of account, in
accordance with generally acceptable accounting principles, consistently
applied throughout the periods included herein, and the Lender shall
have
the right to receive and review Borrower's SEC filings and financial
statements contained therein;
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(b)
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The
Borrower shall pay and discharge when due all taxes, levies and other
charges which are or, if they remain unpaid, may become a lien against
its
properties or assets;
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(c)
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The
Borrower shall notify the Lender if, at any time, it changes the
address
of the office where it keeps its books and
records.
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(d)
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The
Borrower shall maintain its corporate existence and comply with all
valid
and applicable statutes, rules, ordinances, regulations or orders,
federal, state and local, and maintain its properties in good operating
conditions;
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(e)
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The
Borrower is a corporation duly organized, validly existing and in
good
standing under the laws of the State of Colorado and is qualified
or
authorized to do business as a foreign corporation and is in good
standing
in all jurisdictions in which qualification or authorization may
be
required and has all requisite corporate power and authority, licenses
and
permits to own or lease and operate its properties and any of its
business
as presently being conducted and to execute, deliver and perform
this
Agreement and consummate the transactions contemplated
hereby.
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(f)
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The
Borrower is a Reporting Company whose common stock is registered
with the
U.S.
Securities and Exchange Commission pursuant to the Securities Exchange
Act
of 1934 as amended. The Borrower represents and warrants that it
will file
all such reports as required and that the information contained
therein
does not and will not contain any misstatement of material information
or
any omission of information necessary to make the information provided
not
misleading.
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(g)
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Borrower
shall provide Lender with any and all information, on a timely and
expedient basis, necessary for Lender’s due diligence regarding Borrower’s
intentions to expand its pilot plant into a full-scale production
plant at
a rate that will eventually reach 500 m3 per day of ore processing
capacity at the C Zone of Borrower’s Precambrian properties in eastern
Bolivia.
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8. REPRESENTATIONS
AND WARRANTIES OF LENDER.
The
Lender represents and warrants to the Borrower as follows:
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(a)
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Lender
is an accredited investor within the definition set out in Section
2(15)
of the Securities Act of 1933, including Securities Act of 1933 Rule
501,
which definition has been provided to
Lender.
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(b)
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Lender
has sought legal, accounting and investment advice before making
its loan
to Borrower, and understands the risk inherent in Borrower’s
business.
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(c)
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Lender
understands that any loan to a public company may be construed as
a
security, and as such, Lender represents that it is an accredited
investor.
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(d)
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Lender
has performed its due diligence relative to GEII as a company; however,
GEMH will deliberately and with all speed perform its due diligence
relative to the expansion of the C Zone pilot plant into a full-scale
production plant, and will not unduly delay loaning the balance of
the
funds contemplated under this
Agreement.
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9. COMMISIONS
AND OTHER EXPENSES.
The
Borrower and Lender agree that there are no commissions due for arranging this
loan or Loan Agreement and that each shall bear its own incidental expenses
of
the transaction including any attorneys’ fees. In addition, the Borrower and
Lender agree that there is no finder fee or other payment due to any third
party
as result of this transaction.
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10. SURVIVAL
OF REPRESENTATIONS AND WARRANTIES.
The
Representations and Warranties set forth above shall survive the execution
of
this Agreement and may be relied upon by either Party so long as the relying
Party does not have actual knowledge of the invalidity or inaccuracy of said
Representations and Warranties.
11. INDEMNIFICATION.
Borrower
agrees to indemnify and hold harmless Lender for any liability arising to Lender
after closing from Lender’s reliance on Borrower’s Representations and
Warranties.
Lender also agrees to indemnify and hold harmless Borrower for any liability
arising to Borrower after closing from Borrower’s reliance on Lender’s
Representations and Warranties.
12. COUNTERPARTS/FACSIMILE
SIGNATURES.
This
Loan Agreement may be executed in counterpart signatures and the Parties agree
that a facsimile signature transmitted from a known telephone number of either
Party shall be deemed to be an original signature.
13. GOVERNING
LAW.
This
Loan Agreement shall be construed and enforced in accordance with the laws
of
the United States and the State of Utah. In the event that any dispute should
arise pertaining to this Agreement, the Parties agree that jurisdiction shall
vest only in the State or Federal Courts located in Salt Lake City, Utah in
order to resolve such dispute.
14. ATTORNEYS’
FEES AND OTHER COSTS IN THE EVENT OF DEFAULT, ENFORCEMENT OR COLLECTION.
In
the
event of default, or if either party is compelled to take legal action to
enforce this Agreement, or Lender is compelled to seek collection pursuant
to
the terms of this Agreement, the prevailing party shall be entitled to its
reasonable attorneys’ fees, costs associated with the litigation, and other
reasonable costs.
15. NOTICES.
All
notices, requests, consents and other communications hereunder shall be in
writing and shall be deemed to have been duly given (a) on date of delivery
if
delivered personally or (b) on the fifth day after being sent by certified
mail,
return receipt requested, with postage prepaid, or by courier service, return
receipt requested, as follows:
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Borrower:
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GOLDEN
EAGLE INTERNATIONAL, INC.
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0000
Xxxxx 000 Xxxx
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Xxxx
Xxxx Xxxx, Xxxx 00000
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Lender:
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GOLDEN
EAGLE MINERAL HOLDING, INC.
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000
Xxxxxx Xxxxx Xxxx.
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Xxxxxx,
Xxxxxxx 00000
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16. ENTIRE
AGREEMENT.
This
Loan Agreement constitutes the entire agreement between the parties hereto
and
supersedes all prior agreements, understandings and arrangements, oral or
written, between the parties hereto with respect to the subject matter hereof.
This Loan Agreement may not be amended or modified, except by a written
agreement signed by all parties hereto.
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EXECUTED
AND ACKNOWLEDGED THIS 8th DAY OF March, 2007.
| GOLDEN EAGLE INTERNATIONAL, INC. | GOLDEN EAGLE MINERAL HOLDING, INC. |
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By:
/s/
Xxxxx X.
Xxxxxx
Xxxxx
X. Xxxxxx,
President
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By:
/s/
Xxxxx X.
Xxxxxx
Xxxxx
X. Xxxxxx,
President
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