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Drawdown Equity Financing Agreement

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Exhibit 10.1








DRAWDOWN EQUITY FINANCING AGREEMENTnone







THIS AGREEMENT dated as of the day of January 4, 2010 (the " Agreementnone" ) between Auctus Private Equity Fund, LLC a Massachusetts corporation (the " Investornone" ), and Eagle Oil Holding Company, Inc. a corporation organized and existing under the laws of the Nevada (the " Companynone" ).







WHEREAS , the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall issue and sell to the Investor, from time to time as provided herein, and the Investor shall purchase from the Company up to Ten Million Dollars ($10,000,000) of the Company' s common stock, par value $0.001 per share (the " Common Stocknone" ); and







WHEREAS , such investments will be made in reliance upon the provisions of Regulation D (" Regulation Dnone" ) of the Securities Act of 1933, as amended, and the regulations promulgated thereunder (the " Securities Actnone" ), and or upon such other exemption from the registration requirements of the Securities Act as may be available with respect to any or all of the investments to be made hereunder.







WHEREAS, contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights Agreement substantially in the form attached hereto (the "Registration Rights Agreement") pursuant to which the Company has agreed to provide certain registration rights under the 1933 Act, and the rules and regulations promulgated thereunder, and applicable state securities laws.







NOW , THEREFORE , the parties hereto agree as follows:







ARTICLE I.

Certain Definitions







Section 1.1. " Advancenone" shall mean the portion of the Commitment Amount requested by the Company in the Drawdown Notice.







Section 1.2. " Advance Datenone" shall mean the first (1 st ) Trading Day after expiration of the applicable Pricing Period for each Advance.









Section 1.3. " Drawdown Noticenone" shall mean a written notice in the form of Exhibit Anone attached hereto to the Investor executed by an officer of the Company and setting forth the Advance amount that the Company requests from the Investor.







Section 1.4. " Drawdown Notice Datenone" shall mean each date the Company delivers (in accordance with Section 2.2(b) of this Agreement) to the Investor a Drawdown Notice requiring the Investor to advance funds to the Company, subject to the terms of this Agreement. No Drawdown Notice Date shall be less than five (5) Trading Days after the prior Drawdown Notice Date.







Section 1.5. " Bid Pricenone" shall mean, on any date, the closing bid price (as reported by Bloomberg L.P.) of the Common Stock on the Principal Market or if the Common Stock is not traded on a Principal Market, the highest reported bid price for the Common Stock, as furnished by the National Association of Securities Dealers, Inc.



















Section 1.6. " Closingnone" shall mean one of the closings of a purchase and sale of Common Stock pursuant to Section 2.3.







Section 1.7. " Commitment Amountnone" shall mean the aggregate amount of up to Ten Million Dollars ($10,000,000) which the Investor has agreed to provide to the Company in order to purchase the Company' s Common Stock pursuant to the terms and conditions of this Agreement.







Section 1.8. " Commitment Periodnone" shall mean the period commencing on the earlier to occur of (i) the Effective Date, or (ii) such earlier date as the Company and the Investor may mutually agree in writing, and expiring on the earliest to occur of (x) the date on which the Investor shall have made payment of Advances pursuant to this Agreement in the aggregate amount of the Commitment Amount, (y) the date this Agreement is terminated pursuant to Section 10.2 or (z) the date occurring thirty-six (36) months after the Effective Date.







Section 1.9. " Common Stocknone" shall mean the Company' s common stock, par value $0.001 per share.







Section 1.10. " Condition Satisfaction Datenone" shall have the meaning set forth in Section 7.2.







Section 1.11. " Damagesnone" shall mean any loss, claim, damage, liability, costs and expenses (including, without limitation, reasonable attorney' s fees and disbursements and costs and expenses of expert witnesses and investigation).







Section 1.12. " Effective Datenone" shall mean the date on which the SEC first declares effective a Registration Statement registering the resale of the Registrable Securities as set forth in Section 7.2(a).







Section 1.13. " Exchange Actnone" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.







Section 1.14. " Floornone" shall mean the Investor shall immediately cease selling any shares within the Drawdown Notice if the price falls below a predetermined level (" Floor Price" ). The Floor Price is defined as Seventy-Five (75%) of the average closing bid price of the stock over the preceding ten (10) trading days prior to the Drawdown Notice Date. The " Floor" can be waived at the discretion of the Company.







Section 1.15. " Material Adverse Effectnone" shall mean any condition, circumstance, or situation that would prohibit or otherwise materially interfere with the ability of the Company to enter into and perform any of its obligations under this Agreement or the Registration Rights Agreement in any material respect.







Section 1.16. " Market Pricenone" shall mean the lowest closing Bid Price of the Common Stock during the Pricing Period.







Section 1.17. " Maximum Advance Amountnone" shall not exceed One Hundred Fifty Thousand Dollars ($150,000) or the value of two hundred (200%) percent of the average daily volume based on the trailing twenty (20) days preceding the Drawdown Notice date whichever is of a larger value.







Section 1.18. " FINRAnone" shall mean the Financial Industry Regulatory Authority.







Section 1.19. " Personnone" shall mean an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.



















Section 1.20. " Pricing Periodnone" shall mean the five (5) consecutive Trading Days after the Drawdown Notice Date.







Section 1.21. " Principal Marketnone" shall mean the Nasdaq National Market, the Nasdaq Capital Market, the American Stock Exchange, the OTC Bulletin Board, OTC Pink Sheets or the New York Stock Exchange, whichever is at the time the principal trading exchange or market for the Common Stock.







Section 1.22. " Purchase Pricenone" shall be set at Ninety-Three percent (93%) of the lowest closing bid price of the common stock during the Pricing Period.







Section 1.23. " Registrable Securitiesnone" shall mean the shares of Common Stock to be issued hereunder (i) in respect of which the Registration Statement has not been declared effective by the SEC, (ii) which have not been sold under circumstances meeting all of the applicable conditions of Rule 144 (or any similar provision then in force) under the Securities Act (" Rule 144none" ) or (iii) which have not been otherwise transferred to a holder who may trade such shares without restriction under the Securities Act, and the Company has delivered a new certificate or other evidence of ownership for such securities not bearing a restrictive legend.







Section 1.24. " Registration Rights Agreementnone" shall mean the Registration Rights Agreement dated the date hereof, regarding the filing of the Registration Statement for the resale of the Registrable Securities, entered into between the Company and the Investor.







Section 1.25. " Registration Statementnone" shall mean a registration statement on Form S-1 (if use of such form is then available to the Company pursuant to the rules of the SEC and, if not, on such other form promulgated by the SEC for which the Company then qualifies and which counsel for the Company shall deem appropriate, and which form shall be available for the resale of the Registrable Securities to be registered thereunder in accordance with the provisions of this Agreement and the Registration Rights Agreement, and in accordance with the intended method of distribution of such securities), for the registration of the resale by the Investor of the Registrable Securities under the Securities Act.







Section 1.26. " Regulation Dnone" shall have the meaning set forth in the recitals of this Agreement.







Section 1.27. " SECnone" shall mean the United States Securities and Exchange Commission.







Section 1.28. " Securities Actnone" shall have the meaning set forth in the recitals of this Agreement.







Section 1.29. " SEC Documentsnone" shall mean Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and Proxy Statements of the Company as supplemented to the date hereof, filed by the Company for a period of at least twelve (12) months immediately preceding the date hereof or the Advance Date, as the case may be, until such time as the Company no longer has an obligation to maintain the effectiveness of a Registration Statement as set forth in the Registration Rights Agreement.







Section 1.30. " Trading Daynone" shall mean any day during which the New York Stock Exchange shall be open for business.



















ARTICLE II.

Advances







Section 2.1. Advancesnone .







(a) Subject to the terms and conditions of this Agreement (including, without limitation, the provisions of Article VII hereof), the Company, at its sole and exclusive option, may issue and sell to the Investor, and the Investor shall purchase from the Company, shares of the Company' s Common Stock by the delivery, in the Company' s sole discretion, of Drawdown Notices. The number of shares of Common Stock that the Investor shall purchase pursuant to each Advance shall be determined by dividing the amount of the Advance by the Purchase Price. No fractional shares shall be issued. Fractional shares shall be rounded to the next higher whole number of shares. The aggregate maximum amount of all Advances that the Investor shall be obligated to make under this Agreement shall not exceed the Commitment Amount.







(b) The Investor shall immediately cease selling any shares within the Drawdown Notice if the price falls below the Floor Price. The Company, in its sole and absolute discretion, may waive its right with respect to the Floor and allow the Investor to sell any shares below the Floor Price.







Section 2.2. Mechanicsnone .







(a)) Drawdown Noticenone . At any time during the Commitment Period, the Company may request the Investor to purchase shares of Common Stock by delivering a Drawdown Notice to the Investor, subject to the conditions set forth in Section 7.2; provided, however, the amount for each Advance as designated by the Company in the applicable Drawdown Notice shall not be more than the Maximum Advance Amount and the aggregate amount of the Advances pursuant to this Agreement shall not exceed the Commitment Amount. The Company acknowledges that the Investor may sell shares of the Company' s Common Stock corresponding with a particular Drawdown Notice after the Drawdown Notice is received by the Investor. There shall be a minimum of five (5) Trading Days between each Drawdown Notice Date.







(b)) Date of Delivery of Drawdown Noticenone . A Drawdown Notice shall be deemed delivered on: (i) the Trading Day it is received by email to louposner@auctusfund.com and als@auctusfund.com if such notice is received prior to 5:00 pm Eastern Time; or (ii) the immediately succeeding Trading Day if Drawdown Notice is received by facsimile or otherwise after 5:00 pm Eastern Time on a Trading Day or at any time on a day which is not a Trading Day. No Drawdown Notice may be deemed delivered on a day that is not a Trading Day or if positive receipt is not acknowledged by Auctus.







Section 2.3. Closingsnone . On each Advance Date (i) the Company shall deliver to the Investor such number of shares of the Common Stock registered in the name of the Investor as shall equal (x) the amount of the Advance specified in such Drawdown Notice pursuant to Section 2.1 herein, divided by (y) the Purchase Price and (ii) upon receipt of such shares, the Investor shall deliver to the Company the amount of the Advance specified in the Drawdown Notice by wire transfer of immediately available funds. In addition, on or prior to the Advance Date, each of the Company and the Investor shall deliver to the other all documents, instruments and writings required to be delivered by either of them pursuant to this Agreement in order to implement and effect the transactions contemplated herein. To the extent the Company has not paid the fees, expenses, and disbursements of the Investor in accordance with Section 12.4, the amount of such fees, expenses, and disbursements may be deducted by the Investor (and shall be paid to the relevant party) directly out of the proceeds of the Advance with no reduction in the amount of shares of the Company' s Common Stock to be delivered on such Advance Date.



















(a) Company' s Obligations Upon Closingnone .







(i) The Company shall deliver to the Investor, through the use of a Deposit/Withdrawal at Custodian from a Deposit Trust Company method or commonly referred to as " DWAC/DTC" of the Investor' s choosing, the shares of Common Stock applicable to the Advance in accordance with Section 2.3. The certificates evidencing such shares shall be free of restrictive legends. Upon receipt, Investor will perform a wire transfer on the same business day provided that the shares have been received in sufficient time to perform such transfer. In the event that the Investor is no longer able, due to time constraints beyond his control, to perform a wire on the day of receipt, the wire will be promptly executed the following business day. In the event that the Company shall not be DWAC eligible, the Company agrees to use it best efforts to establish DWAC/DTC eligibility.







(ii) the Company' s Registration Statement with respect to the resale of the shares of Common Stock delivered in connection with the Advance shall have been declared effective by the SEC;







(iii) the Company shall have obtained all material permits and qualifications required by any applicable state for the offer and sale of the Registrable Securities, or shall have the availability of exemptions therefrom. The sale and issuance of the Registrable Securities shall be legally permitted by all laws and regulations to which the Company is subject;







(iv) the Company shall have filed with the SEC in a timely manner all reports, notices and other documents required of a " reporting company" under the Exchange Act and applicable Commission regulations;







(v) the fees as set forth in Section 12.4 below shall have been paid or can be withheld as provided in Section 2.3; and







(vi) The Company' s transfer agent shall be DWAC eligible.







(b) Investor' s Obligations Upon Closingnone . Upon receipt of the shares referenced in Section 2.3(a)(i) above and provided the Company is in compliance with its obligations in Section 2.3, the Investor shall deliver to the Company the amount of the Advance specified in the Drawdown Notice by wire transfer of immediately available funds.





Section 2.4. Hardshipnone . In the event the Investor sells shares of the Company' s Common Stock after receipt of an Drawdown Notice and the Company fails to perform its obligations as mandated in Section 2.3, and specifically the Company fails to deliver to the Investor on the Advance Date the shares of Common Stock corresponding to the applicable Advance pursuant to Section 2.3(a)(i), the Company acknowledges that the Investor shall suffer financial hardship and therefore shall be liable for any and all losses, commissions, fees, interest, legal fees or any other financial hardship caused to the Investor.



The Company understands that a delay in the delivery of the securities in the form required pursuant to this registration statement beyond the Closing could result in economic loss to the Investor. After the Effective Date, as compensation to the Investor for late issuance of such shares (delivery of securities after the applicable closing), the Company agrees to make payments to the Investor in accordance with the schedule below where the number of days overdue is defined as the number of business days beyond the close with amount due being cumulative.



The Company shall pay any payments incurred under this Section in immediately available funds upon demand. Nothing herein shall limit the right of the Investor to pursue damages for the Company' s failure to comply with the issuance and delivery of securities to the Investor.

















Payments for Each Number of Days Overdue $10,000 Worth of Common Stock 1 $100 2 $200 3 $300 4 $400 5 $500 6 $600 7 $700 8 $800 9 $900 10 $1000 Over 10 $1000 + $200 for each Business Day beyond the tenth day





ARTICLE III.

Representations and Warranties of Investor







Investor hereby represents and warrants to, and agrees with, the Company that the following are true and correct as of the date hereof and as of each Advance Date:







Section 3.1. Organization and Authorizationnone . The Investor is duly incorporated or organized and validly existing in the jurisdiction of its incorporation or organization and has all requisite power and authority to purchase and hold the securities issuable hereunder. The decision to invest and the execution and delivery of this Agreement by such Investor, the performance by such Investor of its obligations hereunder and the consummation by such Investor of the transactions contemplated hereby have been duly authorized and requires no other proceedings on the part of the Investor. The undersigned has the right, power and authority to execute and deliver this Agreement and all other instruments (including, without limitations, the Registration Rights Agreement), on behalf of the Investor. This Agreement has been duly executed and delivered by the Investor and, assuming the execution and delivery hereof and acceptance thereof by the Company, will constitute the legal, valid and binding obligations of the Investor, enforceable against the Investor in accordance with its terms.







Section 3.1.1. Evaluation of Risksnone . The Investor has such knowledge and experience in financial, tax and business matters as to be capable of evaluating the merits and risks of, and bearing the economic risks entailed by, an investment in the Company and of protecting its interests in connection with this transaction. It recognizes that its investment in the Company involves a high degree of risk.







Section 3.2. No Legal Advice From the Companynone . The Investor acknowledges that it had the opportunity to review this Agreement and the transactions contemplated by this Agreement with his or its own legal counsel and investment and tax advisors. The Investor is relying solely on such counsel and advisors and not on any statements or representations of the Company or any of its representatives or agents for legal, tax or investment advice with respect to this investment, the transactions contemplated by this Agreement or the securities laws of any jurisdiction.



















Section 3.3. Investment Purposenone . The securities are being purchased by the Investor for its own account, and for investment purposes. The Investor agrees not to assign or in any way transfer the Investor' s rights to the securities or any interest therein and acknowledges that the Company will not recognize any purported assignment or transfer except in accordance with applicable Federal and state securities laws. No other person has or will have a direct or indirect beneficial interest in the securities. The Investor agrees not to sell, hypothecate or otherwise transfer the Investor' s securities unless the securities are registered under Federal and applicable state securities laws or unless, in the opinion of counsel satisfactory to the Company, an exemption from such laws is available.







Section 3.4. Accredited Investornone . The Investor is an " Accredited Investornone" as that term is defined in Rule 501(a)(3) of Regulation D of the Securities Act.







Section 3.5. Informationnone . The Investor and its advisors (and its counsel), if any, have been furnished with all materials relating to the business, finances and operations of the Company and information it deemed material to making an informed investment decision. The Investor and its advisors, if any, have been afforded the opportunity to ask questions of the Company and its management. Neither such inquiries nor any other due diligence investigations conducted by such Investor or its advisors, if any, or its representatives shall modify, amend or affect the Investor' s right to rely on the Company' s representations and warranties contained in this Agreement. The Investor understands that its investment involves a high degree of risk. The Investor is in a position regarding the Company, which, based upon employment, family relationship or economic bargaining power, enabled and enables such Investor to obtain information from the Company in order to evaluate the merits and risks of this investment. The Investor has sought such accounting, legal and tax advice, as it has considered necessary to make an informed investment decision with respect to this transaction.







Section 3.6. Receipt of Documentsnone . The Investor and its counsel have received and read in their entirety: (i) this Agreement and the Exhibits annexed hereto; (ii) all due diligence and other information necessary to verify the accuracy and completeness of such representations, warranties and covenants; and (iii) answers to all questions the Investor submitted to the Company regarding an investment in the Company; and the Investor has relied on the information contained therein and has not been furnished any other documents, literature, memorandum or prospectus.







Section 3.7. Registration Rights Agreementnone . The parties have entered into the Registration Rights Agreement dated the date hereof.







Section 3.8. No General Solicitationnone . Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with the offer or sale of the shares of Common Stock offered hereby.







Section 3.9. Not an Affiliatenone . The Investor is not an officer, director or a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with the Company or any " Affiliatenone" of the Company (as that term is defined in Rule 405 o
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