GOLDEN EAGLE INTERNATIONAL, INC. SERIES B CONTINGENT CONVERTIBLE PREFERRED STOCK SUBSCRIPTION AGREEMENT
GOLDEN
EAGLE INTERNATIONAL, INC.
SERIES
B CONTINGENT CONVERTIBLE PREFERRED
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 Xxxx X. Xxxxxxxx (“Xx.
Xxxxxxxx” 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:
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Offering:
25,960 shares of Series B Contingent Convertible Preferred Stock
for a
price of $1.00 per share, of which $25,959.65 will be invested
on the date
that this Agreement is executed by the satisfaction of Xx. Xxxxxxxx’x loan
to the Company in that amount, and is exchanged for Series B Contingent
Convertible Preferred Stock.
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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.
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Total
offering:
$25,959.65 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”).
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Use
of Proceeds:
The entire Offering proceeds, which result from the exchange of
currently
existing debt owed by the Company to Xx. Xxxxxxxx, have been used
by the
Company for working capital and general corporate expenses.
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This
Subscription Agreement is offered for the purpose of Xx. Xxxxxxxx considering
the ramifications of her 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.
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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. Your debt is an example of
this
problem. 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:
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a.
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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;
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b.
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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;
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c.
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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;
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d.
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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;
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e.
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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;
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f.
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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
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g.
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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.
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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:
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a.
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The
Company’s articles of incorporation, including amendments thereto, and
bylaws;
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b.
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The
Designation;
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c.
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Minutes
of meetings or Statements of Consents of the Company’s Board of
Directors;
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d.
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The
Company’s 1934 Act Documents; and
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e.
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Such
other documents as you or your advisors have determined
appropriate.
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9. You
represent and warrant that you have reviewed the way in which your original
loan
proceeds were used, which loan you are now exchanging for Series B Stock
in the
Company, and are satisfied with the use of proceeds and have no objections
thereto.
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.
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Date:
December 29, 2006
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By:
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/s/
Xxxx X. Xxxxxxxx
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Xxxx
X. Xxxxxxxx
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Name:
Xxxx
X. Xxxxxxxx
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Address:
___________________
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Title:______________________
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____________________________
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____________________________
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Tax
ID #:___________________
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Form
(circle one): individual corporation partnership xxx.xxxx.xx. trust
other_______________
SUBSCRIPTION
ACCEPTED AND RECEIPT OF CONSIDERATION ACKNOWLEDGED:
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GOLDEN
EAGLE INTERNATIONAL, INC.
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December
29, 2006
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By:
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/s/
Xxxxx X. Xxxxxx
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Xxxxx
X. Xxxxxx, President
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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.
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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.
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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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