CONVERTIBLE LOAN AGREEMENT
Exhibit
10.1
THIS
LOAN
AGREEMENT MADE AS OF THE 8th
DAY OF
MARCH 2007 AND EFFECTIVE 1ST
DAY
JANUARY 2006 (the "Effective Date").
BETWEEN:
ALTUS
EXPLORATIONS INC.,
a
company duly incorporated under the laws of Nevada, having its registered and
records office at 880 - 00 Xxxx Xxxxxxx Xxxxxx, Xxxx, Xxxxxx 00000
(hereinafter
referred to as the "Company")
AND:
CODEAMERICA
INVESTMENTS, LLC,
a
limited liability company duly incorporated under the laws of Nevada, located
at
0000 Xxxxxxxxxx Xxxx, Xxxxx 000, Xxxxx Xxxxxx, Xxxxxxxxxxx 00000.
(hereinafter
referred to as the "Lender")
WHEREAS:
A.
The
Lender has made cash advances to Company during the twelve month period ending
December 31, 2006 as required by Company to meet its operating and working
capital requirements (the “Funds”). Such funds exclude amounts due Lender
associated with trade payables;
B.
At
December 31, 2006, the Company owes Funds to Lender an amount totalling $54,050
(the “Loan”); and
C.
Company
and Lender wish to document and confirm the terms and conditions associated
with
the Funds loaned to Company by Lender, as set forth herein;
NOW
THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual covenants
and agreements herein contained, the receipt of which is hereby acknowledged
by
each of the parties hereto, the parties hereto agree each with the other (the
"Agreement") as follows:
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1.
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The
Loan
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1.1 The
Loan
matures December 31, 2007 and is due in full on January 2, 2008, unless Lender
agrees at its sole discretion to extend the Loan maturity.
1.2 The
Loan
shall bear interest at a rate of 12% per annum, commencing January 1, 2007
with
accrued interest for the twelve month period ending December 31, 2007 payable
in
arrears on January 2, 2008, unless Lenders agrees at its sole discretion to
extend the Loan maturity and the associated accrued interest payment date.
Although Funds were advanced to Company during the year ending December 31,
2006, the Lender agrees to forego interest that accrued during such period
with
interest commencing January 1, 2007.
1.3 Payment(s)
of principal and accrued interest by Company to Lender shall be in good and
immediately available funds by certified check, money order or wire transfer,
on
the date the payment is due to Lender by Company.
1.4 The
Loan
maturity and payment of accrued interest shall be accelerated upon the
occurrence of any one of the following events: i) successful completion of
financing by the Company, ii) acquisition, merger or change in control of
Company; iii) reverse stock split or similar adjustment to stake holdings in
company, and /or iv) payment of principal or interest on any other outstanding
loans of the Company.
1.5 At
any
time prior to maturity or in the occurrence of an event identified in 1.4 above,
Lender at its sole option may convert all or a portion of the outstanding
principal and/or interest into common stock of the Company at the lower of
the
10 day average share price immediately preceding the date that this Agreement
is
made or the ten day average share price immediately preceding the date that
a
Notice of Conversion is provided to Company. Upon conversion by Lender, Company
will promptly deliver the common shares certificate issued in connection with
the conversion to Lender, and Company will be responsible for any and all costs
or fees required to effect the conversion and issuance of the common shares.
1.6 At
any
time prior to maturity of the Loan, the Company may repay the full principal
amount of the Loan and all outstanding accrued interest on the Loan without
penalty or bonus, unless Lender has previously provided Notice of Conversion
to
the Company; in which case, the Notice of Conversion will have priority over
the
Company’s election to repay the Loan and accrued interest.
1.7 As
security for repayment of Loan, Company grants Lender a general security
interest in all present and after acquired assets of the Company, and Lender’s
secured interest shall be equal in priority to all other loans made to Company,
and documented contemporaneously with the Loan under this Loan Agreement.
Security will be shared proportionately to the outstanding balance of this
Loan
and the total of all other loans documented contemporaneously with this Loan.
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2.
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Default
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2.1 If
one or
more of the following events shall occur (“Default”), namely:
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(a)
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the
Company fails to repay the Loan and accrued interest on maturity,
and
repayment remains unremedied for a period of five (5) or more days;
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(b)
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the
Company makes an assignment for the benefit of its creditors or files
a
petition in bankruptcy or is adjudicated insolvent or bankrupt or
petitions or applies to any tribunal for any receiver, receiver manager,
trustee, liquidator or sequestrator of or for the Company or any
of the
Company's assets or undertaking, or the Company makes a proposal
or
compromise with its creditors or if an application or a petition
similar
to any of the foregoing is made by a third party creditor and such
application or petition remains unstayed or undismissed for a period
of
thirty (30) days;
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(c)
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an
order of execution against any of the Company's assets remains unsatisfied
for a period of ten (10) days; and
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(d)
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the
Company fails to observe and comply with any material term, condition
or
provision of this Agreement or any other agreement or document delivered
hereunder, and such failure continues unremedied for a period of
five (5)
or more days.
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2.2 In
the
event of Default, Lender at its sole discretion may provide Notice of Conversion
to Company, and Lender shall have the right to convert all or a portion of
the
unpaid Loan and accrued interest into common shares of the Company at a discount
of 50% of the conversion rate identified in section 1.5 of this Agreement.
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3.
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General
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3.1 For
the
purpose of this Agreement, time is of the essence.
3.2 The
parties hereto shall execute and deliver all such further documents and
instruments and do all such acts and things as may either before or after the
execution of this Agreement be reasonably required to carry out the full intent
and meaning of this Agreement.
3.3 This
Agreement shall be construed in accordance with the laws of the State of
Texas.
3.4 Company
represents that there are no current holder(s) of any mortgage, charge or
encumbrance on any of the Company's assets, and that there are no known claims
or potential claims to enforce, effect or realize on any claim.
3.5 This
Agreement may be assigned by Lender without Company consent.
3.6 This
Agreement may be signed by the parties in as many counterparts as may be deemed
necessary, each of which so signed shall be deemed to be an original, and all
such counterparts together shall constitute one and the same
instrument.
3.7 All
notices, requests, demands or other communications hereunder shall be in writing
and shall be "deemed delivered" to a party on the date it is hand delivered
to
such party's address first above written, or to such other address as may be
given in writing by the parties hereto.
IN
WITNESS WHEREOF the undersigned have executed this Agreement.
ALTUS
EXPLORATIONS, INC.
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/s/
Xxxx Xxxxxxxx
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By:
Xxxx Xxxxxxxx
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Its:
President
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CODEAMERICA
INVESTMENTS, LLC :
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/s/
Xxxxxxx X. Xxx
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By:
Xxxxxxx X. Xxx
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Its:
President
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