SUBSCRIPTION AGREEMENT FOR PROMISSORY NOTE AND SHARES
OF GOLD RUN INC.
(Date)
GOLD RUN INC.
c/o Berns & Berns
767 Third Avenue
New York, New York 10017
Gentlemen:
The Undersigned hereby offers to purchase from Gold Run Inc. (the
"Company") (i) a Non-transferable 10% Promissory Note ("Note") in the principal
amount of $______, and (ii) ______ shares of the Company's common stock, par
value $.000001 per share ("Share"), at a price of $0.001 per Share, for an
aggregate purchase price of $_________ U.S. The form of the Note is set forth at
Appendix I. Instructions on how to subscribe are set forth at Appendix II.
In order to induce the Company to sell you the Notes and the Shares
(collectively, the "Securities"), the Undersigned, for himself and for his legal
representatives, successors and assigns, hereby makes the following
representations, warranties, acknowledgments and certifications, intending that
the Company rely hereon, to the Company, and covenants with the Company, as
follows:
1. The Undersigned acknowledges that the Company is a reporting issuer in
the United States, and files reports with the Securities and Exchange Commission
("SEC"), file no. 333-139412. The Undersigned further acknowledges that on
December 31, 2007 the Company filed a Registration Statement on Form SB-2with
the SEC, which has not been declared effective.
2. The Company has made available to the Undersigned all requested
documents and records in its possession, and has offered the Undersigned an
opportunity to discuss this investment with the Company and/or representatives
of the Company and obtain any additional information necessary to verify the
accuracy of any information furnished. The Undersigned acknowledges that he has
not been provided with an offering memorandum or any other offering literature
relating to this private offering of the Company's Securities and is relying
solely on the publicly available information set forth in paragraph 1 hereof in
making his investment decision.
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3. The Undersigned acknowledges that no information furnished by the
Company constitutes investment, accounting, legal or tax advice. The Undersigned
is relying solely upon himself and his professional advisors, if any, for such
advice.
4. The Undersigned has relied solely upon his own independent
investigation in making a decision to purchase the Securities. The Securities
are a speculative investment which involves a substantial degree of risk with no
assurance of any income from such investment and the possibility that the
Securities may become worthless. The Undersigned acknowledges that both the
Notes and Shares are restricted securities for which there is no market. The
Undersigned acknowledges that he must therefore be prepared to bear the economic
risks for an indefinite period, and the total loss of his investment.
5. The Undersigned acknowledges that (i) this offer and sale of the
Securities is being done pursuant to the provisions of Regulation S, promulgated
under the United States Securities Act of 1933, as amended (the "Securities
Act"), (ii) is not being registered under the laws of any jurisdiction, (iii)
the Securities are being acquired solely for the account of the Undersigned,
solely for investment purposes and not with a view to resale or distribution,
and (iv) no other person has any direct or indirect interest in the Securities.
The Undersigned has no contract, undertaking, agreement or arrangement with any
person to sell, transfer or pledge to such person, or anyone else, the
Securities, or any interest therein, and the Undersigned has no plans to enter
into any such contract, undertaking, agreement or arrangement.
6. The Undersigned understands that he may not dispose of the Securities,
or any interest therein, unless and until legal counsel for the Company shall
have determined that the intended disposition does not violate the law of any
jurisdiction. The Undersigned acknowledges that the Securities are
non-transferable, that both the Notes and Shares will bear legends describing
the limitations on transfers, and that it will not be possible for the
Undersigned to liquidate his investment in case of an emergency. The Undersigned
agrees to only resell such Securities pursuant to registration under the
Securities Act, pursuant to the resale provisions promulgated under Regulation
S, under the Securities Act, or pursuant to an available exemption from
registration, and agrees not to engage in hedging transactions with regard to
such securities unless in compliance with the Securities Act.
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Gold Run Inc. Page 3
7. The Undersigned represents and warrants that he is not a "U.S. Person"
as such term is defined in Rule 902(k), promulgated under the Securities Act,
and that he is not acquiring the Securities for the account or benefit of a U.S
Person. The Undersigned represents and warrants that he is not a resident of the
United States and that he was outside of the United States when (i) the
agreement was negotiated, (ii) he received this agreement, and (iii) this
agreement was executed.
8. The Undersigned represents that he is knowledgeable and experienced in
making and evaluating investments. The investments of the Undersigned in, and
his commitments to, all non-liquid investments (including an investment in the
Company) are reasonable in relation to his net worth, and the Undersigned has
the ability to bear the financial risk of an investment in the Company.
9. The Undersigned represents, warrants, and acknowledges that (a) the
Securities were not offered or distributed to the Undersigned through an
advertisement in printed media of general and regular paid circulation, radio or
television, and (b) he did not attend any seminars or meetings regarding this
offering, in which the attendees were invited by any general solicitation or
general advertising.
10. The Undersigned acknowledges that no governmental authority,
regulatory body, stock exchange or any other entity has made any finding or
determination as to the merits of this investment.
11. The Undersigned acknowledges that the Company, in its sole discretion,
reserves the unconditional right to accept or reject, in whole or in part, this
subscription, with or without cause, and to waive any requirements of this
subscription. The Undersigned acknowledges that the Company has the
unconditional right to refund to the Undersigned all funds so tendered, or any
portion thereof, to the Company, within one hundred twenty days of receipt, even
if the Company has already utilized the funds. To the extent this subscription
may ultimately be rejected, subscriptions received by the Company shall be
refunded, without interest. The Undersigned acknowledges that the Company may
utilize the subscription funds received from the Undersigned immediately upon
receipt by the Company.
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Gold Run Inc. Page 4
12. The Undersigned represents that he is an "accredited investor" as such
term is defined in Rule 501(a) under the Securities Act, as set forth at
Appendix III hereto, and has checked the applicable category of "accredited
investor" on Appendix III.
The Undersigned will indemnify and hold the Company, its affiliates, and
representatives, harmless from and against any and all loss, liability, cost,
damage, expense (including attorney's fees and expenses) and claims arising out
of, in connection with or resulting (i) from the sale or distribution of the
Shares by the Undersigned in violation of any applicable law, rule or
regulation, and (ii) any misrepresentation by the Undersigned or any breach of
any warranties herein or any covenants or agreements set forth herein.
The foregoing is not, and will not be, revocable by the Undersigned at any
time. The Undersigned gives this document to the Company intending to be legally
bound hereby.
Very truly yours,
__________________________
Print Name
__________________________
Signature
Date: ___________________
__________________________
Address
__________________________
Address
(date)
Gold Run Inc. Page 5
APPENDIX I
THIS NON-TRANSFERABLE PROMISSORY NOTE MAY NOT BE OFFERED, SOLD, OR OTHERWISE
TRANSFERRED, EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT, (II) ,
THE RESALE PROVISION PROMULGATED UNDER REGULATION S, OR (II) AN OPINION OF
COUNSEL, SATISFACTORY TO COUNSEL FOR THE MAKER, THAT AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IS AVAILABLE.
NON-TRANSFERABLE PROMISSORY NOTE
GOLD RUN INC.
Note No. _____
$_____ Toronto, Ontario [Date]
FOR VALUE RECEIVED, the undersigned, GOLD RUN INC., a Delaware corporation (the
"Maker") having an address at 330 Bay Street, Suite 820, Toronto, Ontario M5H
2S8, CANADA, hereby promises to pay to the order of [Name], having an address at
[Address] (such person being herein referred to individually as "Holder"), in
lawful money of the United States of America, the principal sum of $______,
together with interest thereon at the rate of 10% per annum, based on a year of
360 days, which principal shall be payable in one installment on the EARLIER of
(i) the date of the final closing of the Maker's public offering of shares of
its common stock, described in the Maker's Registration Statement on Form SB-2,
filed with the United States Securities and Exchange Commission on December 31,
2007, as amended from time to time, and (ii) the first anniversary of the date
of this Note. Interest shall accrue thereon from and after the date hereof and
shall be payable on the date the Note is repaid.
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Gold Run Inc. Page 6
1) COLLECTION COSTS.
If, after any default hereunder, Holder expends any effort or expense in
any attempt to enforce or collect payment of all or any part or installment of
any sum due Holder hereunder, or if this Note is placed in the hands of an
attorney for collection, or if it is collected through any legal proceedings,
Maker will bear and pay all reasonable costs and fees incurred by Holder in
connection with the investigation and collection hereof, including but not
limited to reasonable fees and expenses of counsel.
2. PREPAYMENT.
The Maker has the right to prepay the Note, at any time, in whole or in
part, without penalty.
3. CERTAIN WAIVERS.
Maker and each surety, guarantor, endorser and other party ever liable for
payment of any sums of money payable on this Note jointly and severally waive
presentment and demand for payment, protest, notice of protest and non-payment
or dishonor, notice of acceleration or intent to accelerate, notice of intent to
demand, and diligence in collecting, and consent to all extensions without
notice for any period or periods of time and partial payments, before or after
maturity, without prejudice to Holder. Holder shall similarly have the right to
deal in any way, at any time, with one or more of the foregoing parties without
notice to any other party, and to grant any such party any extensions of time
for payment of any of said indebtedness, or to release part or all of any
collateral at any time securing this Note, or to grant any other indulgences or
forbearances whatsoever, without notice to any other party and without in any
way affecting the personal liability of any party hereunder.
4. GOVERNING LAW.
This Note shall be governed by and construed and enforced in accordance
with the laws of the State of New York applicable to promissory notes issued and
delivered within such State and without giving effect to choice of law
principles of such State. Notwithstanding the place where any liability
originates or arises or is to be paid, any suit, action or proceeding arising
out of or relating to this promissory note may be instituted in, or if
instituted elsewhere may be removed to, any Court of the United States of
America or of the State of New York sitting in the County, City and State of New
York. Maker hereby irrevocably waives any objection Maker may now or hereafter
have to the laying of venue of any such suit, action or proceeding in the
above-described courts and any claim that any suit, action or proceeding has
been brought in an inconvenient forum. Nothing in this Section shall affect the
right of any party to serve process in any other manner permitted by law or
limit the right of any party to bring any suit, action or proceeding against any
other party in the courts of any other jurisdiction.
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5. NOTICES.
Any and all notices or other communications required or permitted to be
given under any of the provisions of this Note shall be in writing and shall be
deemed to have been duly given when personally delivered or five days after the
date mailed, postage prepaid, by first class certified mail, return receipt
requested, addressed to the parties at the addresses set forth above (or at such
other address as a party may specify by notice to all other parties given as
aforesaid), together with copies, and if possible by telecopy as well, if to the
Maker, to Mr. John Pritchard, President, Gold Run Inc., 330 Bay Street, Suite
820, Toronto, Ontario M5H 2S8, CANADA, (telecopy number: (416-364-2292).
IN WITNESS WHEREOF, the undersigned has caused this Note to be executed
and delivered as of the day and year first above written.
GOLD RUN INC.
By______________________________
John Pritchard
Chief Executive Officer
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Gold Run Inc. Page 8
APPENDIX II
HOW TO SUBSCRIBE
1. This Subscription Agreement must be completed, signed, dated and
faxed to:
Gold Run Inc.
c/o Berns & Berns
767 Third Avenue
23rd Floor
New York, New York 10017
Telephone: (212) 332-3320
Telecopier: (212) 332-3315
2. Also, please mail an original signed copy to this address.
3. Payment for the Shares must be made by wire transfer in U.S. dollars
to the following account:
ACCOUNT NAME: Gold Run Inc.
BANK: JP Morgan Chase
ADDRESS: 401 Madison Avenue, New York, NY 10017
ACCOUNT NUMBER: 907 0868385 65
ABA ROUTING NUMBER: 021000021
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Gold Run Inc. Page 9
APPENDIX III
The Undersigned hereby certifies that it is an Accredited Investor as that term
is defined in Rule 501(a) of Regulation D, promulgated pursuant to the
Securities Act of 1933, as amended. THE SPECIFIC CATEGORY OF ACCREDITED INVESTOR
APPLICABLE TO THE UNDERSIGNED IS CHECKED BELOW. ALL REFERENCES TO DOLLAR AMOUNTS
IN THIS APPENDIX III ARE IN U.S. CURRENCY.
_____ a) Any bank as defined in Section 3(a)(2) of the Securities Act, or
any savings and loan association or other institution as defined in
Section 3(a)(5)(A) of the Securities Act whether acting in its
individual or fiduciary capacity; any broker or dealer registered
pursuant to Section 15 of the Securities Exchange Act of 1934;
insurance company as defined in Section 2(13) of the Securities Act;
investment company registered under the Investment Company Act of
1940 or a business development company as defined in Section
2(a)(48) of the Securities Act; Small Business Investment Company
licensed by the U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act of 1958; 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; 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 either a bank,
savings and loan association, insurance company, or registered
investment adviser, 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 Advisers 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;
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Gold Run Inc. Page 10
_____ 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
Section 230.506(b)(2)(ii); and
_____ h) Any entity in which all of the equity owners are accredited
investors.
_________________________
Name of Investor
By: ____________________
Name:
Title:
Date: ___________________