GOLDEN EAGLE
INTERNATIONAL, INC.
SERIES B CONTINGENT
CONVERTIBLE PREFERRED
STOCK SUBSCRIPTION
AGREEMENT
THE
SERIES B STOCK BEING OFFERED BY GOLDEN EAGLE INTERNATIONAL, INC. HEREUNDER HAS NOT
BEEN REGISTERED UNDER THE SERIES A STOCK ACT OF 1933 OR APPLICABLE STATE BLUE SKY OR
SECURITIES LAWS AND IS OFFERED UNDER AN EXEMPTION FROM THE REGISTRATION PROVISIONS OF SUCH
LAWS. THESE SECURITIES CANNOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF
EXCEPT IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER CONTAINED IN THIS STOCK
SUBSCRIPTION AGREEMENT AND APPLICABLE FEDERAL AND STATE SECURITIES LAWS.
NOTE:
By considering an investment in Golden Eagle International, Inc., as described herein, you
are representing, and by executing this Subscription Agreement, you represent and warrant,
that you are an “accredited investor” as that term is defined in Section
2(a)(15) of the Federal Securities Act of 1933 (the “1933 Act”) and Rule 215
thereunder, and in Rule 501(a) of Regulation D under the 1933 Act.
This
Subscription Agreement (“Subscription Agreement” or “Agreement”) is
for the completion of an offering of securities (the “Offering”) by Golden Eagle
International, Inc. (the “Company”) to the Xxxxxx X. Xxxxxxx Trust, FBO, Xxxxx
X. Xxxxxxx (the “Xxxxxxx Trust” or “you”), pursuant to
Sections 4(2) and 4(6) of the 1933 Act and Rule 506 of Regulation D thereunder. The
following summarizes the Offering to the Investor:
| |
• |
Offering: 25,000
shares of Series B Contingent Convertible Preferred Stock for a price of $1.00 per share,
of which the full purchase price of $25,000, will be invested on the date that this
Agreement is executed. |
| |
• |
Series
B Stock: Each share of the Company’s Series B Contingent Convertible Preferred
Stock (“Series B Stock”), is convertible into the Company’s Common Stock
in accordance with the provisions contained in the Certificate of Designation of
Preferences and Rights of the Series B Stock (“Designation”). The Series B
Stock has significant transferability restrictions imposed by SEC Rule 144. |
| |
• |
Total
offering: $25,000, which is the amount of the purchase price of this Series B
Contingent Convertible Preferred Stock, is the maximum (there is no minimum total
investment). The Company may use all funds as invested in its own discretion, regardless
of whether the Company has sufficient funds to pursue its proposed operations (as
described in the Company’s reports filed under the Stock Exchange Act of 1934 (the
“1934 Act Reports”) available on the SEC’s electronic filing system,
XXXXX, at the SEC’s website, xxx.xxx.xxx, or available through Golden Eagle’s
website, xxx.xxxx.xxx. |
| |
• |
Use
of Proceeds: The entire Offering proceeds, which result from the purchase price set
out above in the Offering of the Series B Contingent Convertible Preferred Stock, have
been used by the Company for working capital and general corporate expenses. |
This
Subscription Agreement is offered for the purpose of the Xxxxxxx Trust considering the
ramifications of its investment in the Offering as described above. If after reviewing
this Subscription Agreement and other relevant documents with the your legal, financial,
tax and investment advisors as you deem appropriate you elect to purchase Securities,
please complete the following:
By
executing this Agreement and returning it to the Company, you further agree that your
investment is being made entirely on the terms and conditions stated herein and in the
documents attached hereto. You understand that this Subscription Agreement is not binding
until the Company accepts it in writing.
Caveat: Certain statements
contained herein and included in other documents which have been given to you (including
the Company’s reports filed pursuant to the requirements of the 0000 Xxx) using the
terms “may,” “expects to” and other terms denoting future
possibilities, are forward-looking statements. We cannot guarantee the accuracy of these
statements as they are subject to a variety of risks, which are beyond our ability to
predict or control. These risks may cause actual results to differ materially from the
projections or estimates given to you. These risks include, but are not limited to, the
possibility that the described operations or other activities will not be completed on
economic terms, if at all. Our contemplated operations are attendant with high risk. There
can be no assurance that we will succeed in operating our contemplated business, and it is
important that each person considering and investment pursuant to this Subscription
Agreement understands the significant risks, which accompany the proposed conduct of our
future operations.
In
connection with your proposed purchase of the Series B Stock, you further represent as
follows:
| 1. |
You understand that an investment in the Series B Stock is one of significant
risk, and there can be no assurance that the Series B Stock, or the common stock
into which it is convertible, will ever be valuable, or that the Company will
ever be able to actually receive the support and favorable vote of a majority of
its shareholders to authorize the increase of its common stock. You understand
that currently the Company has no available common stock and that it has reached
the limits of its currently authorized common stock. You further understand that
the Company will make its best efforts to seek and receive the approval of a
majority of its shareholders for an increase in its authorized common stock
sufficient to allow you to convert your Series B Stock into common stock of the
Company, but that the Company cannot guarantee such an outcome. If the Company
is unable to secure the approval of a majority of its shareholders for an
increase in its authorized stock, then you will remain the holder of Series B
Stock only. The risks associated with an investment of the Series B Stock are
those set out in this paragraph, as well as those that are set forth in the
Company’s 1934 Act Reports filed with the U.S. Securities and Exchange
Commission and available on its XXXXX electronic filing service, or also
available through the Company website, xxx.xxxx.xxx, or have been made available
to you from the Company upon request. By signing this Subscription Agreement,
you represent and warrant to the Company that you are familiar with, and are
willing to accept, all such risks. |
| 2. |
You acknowledge that you may lose your entire investment in the Series B Stock.
You hereby represent that an investment in the Series B Stock is a suitable
investment for you, taking into consideration the restrictions on
transferability and the other considerations affecting the Series B Stock and
the Company as described herein, and in the documents included with this
Subscription Agreement and in the due diligence investigation that you have
made. |
| 3. |
You will acquire the Series B Stock for your own account and not on behalf of
any other person or entity. You will acquire the Series B Stock for investment
purposes and not for resale or distribution to any other person. |
| 4. |
You are not aware of the payment of any commission or other remuneration to any
person in connection with the execution of this transaction or the purchase of
the Series B Stock. |
| 5. |
We have provided you with access to the Company’s 1934 Act Documents,
disclosure on the Company’s website, press releases, and updated
information. You are aware that, unless the Company is able to raise a
substantial amount of money, the Company may not be able to continue in
business. Currently the Company is not able to pay all of its debts as they have
become due. We have given you the opportunity to ask questions of and to receive
answers from us about the terms and conditions of this Offering, and we also
have given you the opportunity to obtain any additional information regarding
the Company, which we possess or can acquire without unreasonable effort or
expense including (without limitation) all minutes of meetings of our Board of
Directors or committees, and other relevant documents you have requested. We
have also given you the opportunity to speak with our independent auditors, and
you have done so to the extent you have deemed it to be necessary or
appropriate. In addition, you have made such other financial or other inquiry as
you have deemed necessary or appropriate in the conduct of your due diligence
investigation. You have not relied on due diligence of any other party in
connection herewith. |
| 6. |
You acknowledge and understand, however, that we have not authorized any person
to make any statements on our behalf, which would in any way contradict any of
the information that we have provided to you in writing, including the
information set forth in this Subscription Agreement or in the 1934 Act
Documents. You further represent to the Company that you have not relied upon
any such representations regarding the Company, its business or financial
condition or this transaction in making any decision to acquire the Series B
Stock. If you become aware of conflicting information, you will discuss this
with us. |
| 7. |
Your present financial condition is such that it is unlikely that it would be
necessary for you to dispose of the Series B Stock in the foreseeable future.
You further understand and agree that: |
| a. |
Neither the Series B Stock nor the shares of common stock issuable upon
conversion of the Series B Stock have been registered under the Series A Stock
Act of 1933 or any state or foreign securities laws and, consequently are and
will continue to be restricted securities within the meaning of Rule 144
promulgated under the 1933 Act and applicable state statutes; |
| b. |
You cannot resell the Series B Stock or the shares of common stock issuable upon
conversion of the Series B Stock unless they are registered under the 1933 Act
and any applicable state securities laws or unless an exemption from the
registration requirements is available; |
| c. |
As a result, you must bear the economic risks of the investment in the Series B
Stock and the shares of common stock issuable upon conversion of the Series B
Stock for an indefinite period of time; |
| d. |
The Company is the only person that may register the Series B Stock or the
shares of common stock issuable upon conversion of the Series B Stock under the
1933 Act and state securities statutes, and we have not made any representations
to you regarding any possible future registration of the Series B Stock or
compliance some exemption under the 1933 Act; |
| e. |
You will not sell or attempt to sell the Series B Stock or the shares of common
stock issuable upon conversion of the Series B Stock without registration under
the 1933 Act and any applicable state securities laws, unless exemptions from
such registration requirements are available and the undersigned has satisfied
the Company that an exemption is available for such sale; |
| f. |
The Company has the right to issue instructions to its transfer agent to bar the
transfer of any of the certificates representing the Series B Stock and the
shares of common stock issuable upon conversion of the Series B Stock except in
accordance with the 1933 Act; and |
| g. |
You consent to the placement of an appropriate restrictive legend or legends on
any certificates evidencing the Series B Stock and any certificates issued in
replacement or exchange therefor, as well as any certificates issued
representing the shares of common stock issuable upon conversion of the Series B
Stock. |
| 8. |
You have reviewed this Subscription Agreement and all information you have
obtained regarding the Company, its proposed business, assets, management,
financial condition, capitalization and share ownership and plan of operations
with your legal, financial, tax and investment advisors to the extent that you
have determined that it is appropriate or necessary for you to do so prior to
committing to make an investment herein. Your review has included (without
limitation) the following documents: |
| a. |
The Company’s articles of incorporation, including amendments thereto, and
bylaws; |
| c. |
Minutes of meetings or Statements of Consents of the Company’s Board of
Directors; |
| d. |
The Company’s 1934 Act Documents; and |
| e. |
Such other documents as you or your advisors have determined appropriate. |
| 9. |
You represent and warrant that you understand that the use of your proceeds is
at the sole and exclusive discretion of the Company and that you will not have
any say in how those proceeds that you are now paying for Series B Stock in the
Company are later used, and that you have no objections to this concept. |
| 10. |
We may amend or modify this Agreement only in writing signed by both you and the
Company. No evidence shall be admissible in any court concerning any alleged
oral amendment hereof. |
| 11. |
This Agreement binds and inures to the benefit of our respective
representatives, successors and permitted assigns. |
| 12. |
Each of us hereto agrees for ourselves and our successors and permitted assigns
to execute any and all further instruments necessary for the fulfillment of the
terms of this Agreement. |
| 13. |
You acknowledge that the Company is relying on the accuracy of the
representations and warranties you are making in this Agreement, and you agree
to indemnify the Company, and to hold us harmless from and against any and all
liability that may result to us (including court costs and attorneys’ fees)
as a result of any of your representations or warranties being materially
inaccurate, incomplete or misleading. |
| 14. |
You acknowledge that you have reviewed the definition of the term
“accredited investor” as set forth following your signature and you
represent and warrant to us that you are an “accredited investor.” |
| 15. |
This Agreement is made under, shall be construed in accordance with and shall be
governed by the laws of the State of Colorado. |
| 16. |
This Agreement is not effective unless and until it is accepted in writing by
the Company, regardless whether the Company has received or deposited the
subscription amount. |
IN
WITNESS WHEREOF, subject to our acceptance, you have completed this Subscription Agreement
and tendered payment as set forth above to evidence your commitment to purchase the Series
B Stock on the terms, and with the representations and warranties set forth above.
|
|
| |
(Investor) The Xxxxxx X. Xxxxxxx Trust, FBO, Xxxxx X. Xxxxxxx |
| Date: 1-31-07 |
/s/ Xxxxx X. Xxxxxxx |
|
|
| Name: Xxxxxx X. Xxxxxxx Trust, FBO, Xxxxx X. Xxxxxxx |
|
| Address: 0000 X. Xxxxxxx Xxx. |
Xxxxx:Xxxxxxx |
| Xxxxxx, XX 00000 |
|
| ____________________________ |
Tax ID #:___________________ |
Form (circle one): individual
corporation partnership xxx.xxxx.xx. (trust) other_______________
SUBSCRIPTION ACCEPTED AND RECEIPT OF
CONSIDERATION ACKNOWLEDGED:
|
|
GOLDEN EAGLE INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxx
——————————————
Xxxxx X. Xxxxxx, President
Date: 2-5-07 |
DEFINITION OF
“ACCREDITED INVESTOR”
Section 2(15) of the 1933
Act:
(15)
The term “accredited investor” shall mean B
| (i) |
a bank as defined in section 3(a)(2) of the Act whether acting in its
individual or fiduciary capacity; an insurance company as defined in section
2(13) of the Act; an investment company registered under the Investment Company
Act of 1940 or a business development company as defined in section 2(a)(48) of
that Act; a Small Business Investment Company licensed by the Small Business
administration; or an employee benefit plan, including an individual retirement
account, which is subject to the provisions of the Employee Retirement Income
Security Act of 1974, if the investment decision is made by a plan fiduciary, as
defined in section 3(21) of such Act, which is either a bank, insurance company,
or registered investment advisor; or |
| (ii) |
any person who, on the basis of such factors as financial sophistication, net
worth, knowledge, and experience in financial matters, or amount of assets under
management qualifies as an accredited investor under rules and regulations which
the Commission shall prescribe. |
Rule 215. Accredited
Investor
The
term “accredited investor” as used in section 2(15)(ii) of the Securities Act of
1933 shall include the following persons:
| (a) |
Any savings and loan association or other institution specified in section
3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity;
any broker or dealer registered pursuant to section 15 of the Securities and
Exchange Act of 1934; any plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such plan has total
assets in excess of $5,000,000; any employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974, if the
investment decision is made by a plan fiduciary, as defined in section 3(21) of
such Act, which is a savings and loan association, or if the employee benefit
plan has total assets in excess of $5,000,000 or, if a self-directed plan, with
investment decisions made solely by persons that are accredited investors; |
| (b) |
Any private business development company as defined in section 202(a)(22) of
the Investment Advisors Act of 1940; |
| (c) |
Any organization described in section 501(c)(3) of the Internal Revenue Code,
corporation, Massachusetts or similar business trust, or partnership, not formed
for the specific purpose of acquiring the securities offered, with total assets
in excess of $5,000,000; |
| (d) |
Any director, executive officer, or general partner of the issuer of the
securities being offered or sold, or any director, executive officer, or general
partner of a general partner of that issuer; |
| (e) |
Any natural person whose individual net worth, or joint net worth with that
person’s spouse, at the time of his purchase exceeds $1,000,000; |
| (f) |
Any natural person who had an individual income in excess of $200,000 in each
of the two most recent years or joint income with that person’s spouse in
excess of $300,000 in each of those years and has a reasonable expectation of
reaching the same income level in the current year; |
| (g) |
Any trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the securities offered, whose purchase is directed
by a sophisticated person as described in Rule 506(b)(2)(ii); and |
| (h) |
Any entity in which all of the equity owners are accredited investors. |
Guidelines for
Calculating Net Worth:
Any
valuation of a residence included in the calculation of net worth must be based on an
appraisal obtained by the Investor in connection with obtaining a loan secured by such
residence.
Marketable
securities owned by the Investor included in the calculation of net worth must be based on
a recent market value, with appropriate discounts for lack of marketability if the
securities represent greater than a 10% interest in the issuer, if the securities are
“restricted shares” or subject to any contractual or other restriction, if the
securities are thinly traded, or for other appropriate reasons.
Any
valuation of any other asset with a value in excess of $100,000 must be based on an
independent valuation or appraisal.
Guidelines for
Calculating Net Income:
For
the purposes of determining whether an Investor is an “accredited investor,” net
income must be calculated based on its adjusted gross income as reported to the Internal
Revenue Service (for U.S. taxpayers) or other similar measure (for non-U.S. taxpayers).
Substantiation of Net
Worth and Net Income:
Golden
Eagle International, Inc. (the “Company”) is relying on the accuracy of each
Investor’s representations and warranties with respect to its status as an accredited
investor. The Company is aware that personal financial matters are private and
confidential, and will endeavor to maintain all information contained in the subscription
agreement or otherwise obtained confidential. In case of any question, however, the
Company may request substantiation of the Investor’s status by discussing the issue
with the Investor’s banker, attorney, accountant, or investment advisor. If questions
develop, the Company will contact the Investor before seeking any independent
confirmation.
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