EXHIBIT 10.14
LOAN AGREEMENT
This Loan Agreement ("Agreement") is entered into by and between FIRST
COLONY MERCHANT and XXXXXX TRADING LIMITED (collectively "Lender") and CAN CAL
RESOURCES LIMITED ("Borrower").
RECITALS
WHEREAS, Borrower owns certain unimproved real property located in San
Bernardino, California (the "Property").
WHEREAS, Borrower seeks financing from Lender in the original principal
amount of $300,000 for working capital and/or to acquire a mineral processing
facility.
WHEREAS, Borrower has entered into a Mining Lease Agreement ("Mining
Lease") with Twin Mountain Rock Venture, a California general partnership ("Twin
Mountain"), for the purpose of permitting Twin Mountain to mine certain minerals
from the Property for certain consideration.
NOW, THEREFORE, in consideration of the mutual obligations of the
parties herein, and other good and valuable consideration, the parties agree as
follows:
1. Terms of Payment. Subject to the following terms and conditions,
Lender agrees to lend Borrower $300,000 ("principal) with interest at 16% per
annum. Interest is payable semi-annually on May 24 and November 24 of each
consecutive year throughout the term of this Agreement beginning May 24, 2001
and principal plus accrued interest is all due and payable on November 24, 2005.
2. Representation and Warranties. In order to induce Lender to enter into
this Agreement, the Borrower, for itself and for its heirs, personal
representatives, successors, and assigns, hereby acknowledges, represents, and
warrants to Lender as follows:
(a) This Agreement when executed by the Borrower shall constitute the
legal, valid, and binding obligations of such party, enforceable in accordance
with their respective terms.
(b) There is no litigation, at law or in equity, nor any proceeding
before any federal, state, or other governmental or administrative agency or any
arbitration pending or, to the knowledge of the Borrower, threatened against the
Borrower nor any other litigation or proceeding pending or, to the knowledge of
the Borrower, threatened affecting any collateral in favor of Lender.
(c) All documents, reports, certificates, and statements furnished to
Lender by or on behalf of Borrower in connection with the transactions
contemplated hereby are true, correct, and complete; do not contain any untrue
statement of material fact; and do not omit any fact necessary to make the
information contained therein not misleading.
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(d) All taxes, assessments, levies, license fees, permit fees and all
other charges heretofore levied, assessed, confirmed, or imposed upon, or in
respect of, or which might become a lien upon, any collateral in favor of Lender
under the Loan Agreement or its exhibits have been paid in full unless otherwise
agreed to by Lender.
(e) The Borrower consents to allow Lender to communicate with Twin
Mountain regarding the Mining Lease and consents to allow Lender to receive the
income and profits from the Mining Lease directly from Twin Mountain. Borrower
agrees that should it receive any monies from Twin Mountain pursuant to the
Mining Lease, it will immediately deliver such monies to Lender subject to the
rights of Xxxx Sequoia Corp., a senior lender. All monies received by Lender
shall be credited towards the obligation owed to Lender, first to interest, then
to principal.
The continued validity in all respects of all representations and
warranties made in this Agreement and all other documents delivered by the
Borrower in connection with this Agreement will be a condition precedent to
Lender obligations and agreements created by this Agreement.
3. Prepayment. The privilege is reserved of prepaying in full or in part
any amount of the outstanding principal balance due hereunder on any interest
date.
4. Late Payment Penalties. While any default exists in the making of any
of the payments, agreements or conditions of this Agreement or the Deed of
Trust, the undersigned recognizes that such default will result in the loss and
additional expenses to the Lender of this Agreement in servicing the
indebtedness evidenced hereby, handling such delinquent payments and meeting its
other financial obligations. Therefore, if any installment of principal and/or
interest due hereunder is not paid when due, and Lender of this Agreement does
not accelerate this Agreement as provided in Paragraph 8 below, then a
reasonable late charge in an amount equal to six percent (6%) of the delinquent
payment may be charged by the Lender of this Agreement, at its option, for the
purpose of defraying such losses and expenses. If applicable law requires a
lesser such charge, however, then the maximum charge permitted by such law may
be charged by the Lender of this Agreement for said purposes. The late charges
that accrue during any month shall be payable on the next monthly payment date.
Failure to assert or collect a late charge for any particular month or months
shall not waive Lender's right to assert and collect late charges in subsequent
months.
5. Default. The occurrence of any one or more of the following shall
constitute an "Event of Default" under this Agreement:
(a) Failure of Borrower to make any payment to Lender on or before the
date on which such payment is due or failure to pay all remaining principal and
interest and all other charges and costs due Lender.
(b) Entry of a judgment or filing of a lien against Borrower or any its
properties, which remains unpaid, unstayed, unbonded, undischarged, or
undismissed for a period longer than thirty (30) days.
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(c) Failure of Borrower to execute and/or deliver any of the documents
provided for in this Agreement or any other documents required by Lender.
(d) Failure of Borrower to observe or perform any covenant, agreement,
term, or condition of this Agreement as and when provided herein.
(e) If any representation or warranty made herein, or in any report,
certificate, financial statement or other instrument or document furnished in
connection with this Agreement or contemplated hereby, shall prove to have been
materially false or misleading on the date as of which it was made.
(f) If Borrower shall: (U) apply for or consent to or suffer the
appointment of a receiver, trustee, or liquidator for its properties; (V) admit
in writing an inability to pay its debts as they mature; (W) make a general
assignment for the benefit of creditors; (X) file a voluntary petition or a
petition or answer seeking reorganization or an arrangement with creditors or
take advantage of any bankruptcy, reorganization, insolvency, readjustment of
debt, dissolution, or liquidation statute or law, or make or file an answer
admitting material allegations of a petition filed against it in any proceeding
under any such law; (Y) fail to cause to be dismissed any bankruptcy proceedings
commenced against it within sixty (60) days after commencement of the same; or
(Z) have entered against it an order, judgment, or decree of any court of
competent jurisdiction, approving a petition seeking reorganization of assets or
appointing a receiver, trustee, or liquidator for any assets.
6. Additional Interest. Borrower agrees that any installment not paid
within fifteen days of the date that such installment was due shall be subject
to the late charge discussed in Paragraph 4 and shall bear interest from the
date such payment was due which shall be compounded monthly on the first day of
each calendar month at that rate of interest equal to the rate of interest under
this Agreement, or the maximum amount allowed by law, whichever is the lesser.
7. Additional Consideration. Borrower shall issue to XXXXXX TRADING
LIMITED 45,000 common voting shares which are fully paid and non-assessable.
Borrower has full power to issue these shares without obtaining the consent or
approval of any other person or governmental authority.
8. Application of Payments. While any default exists in the making of any
of said payments or in the performance or observance of any of the covenants,
agreements or conditions of this Agreement or the Deed of Trust, the Lender of
this Agreement may apply payments received on any amounts due hereunder or under
the terms of any instrument now or hereafter evidencing or securing said
indebtedness as said Lender may determine and if the Lender of this Agreement so
elects, notice of election being expressly waived, the principal remaining
unpaid with accrued interest shall at once become due and payable.
9. Attorneys' Fees. If amounts due under this Agreement are not paid when
due, whether at maturity or by acceleration, the undersigned promises to pay all
costs of collection, including, but not limited to, reasonable attorneys' fees,
and all expenses incurred in connection with the protection or realization of
any collateral or enforcement of any guaranty, incurred by the Lender
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hereof, on account of any such collection, whether or not suit is filed hereon
or on any instrument granting a security interest or on any guaranty related
to this Agreement.
10. Assignment of Rights. Borrower, as additional consideration for the
financing referenced above, agrees that, effective upon an Event of Default, all
right, title and interest Borrower has regarding that certain Interim Agreement
attached hereto as Exhibit "C" will be assigned to Lender.
11. Waiver of Rights. The Borrower expressly waives presentment, protest
and demand, notice of protest, demand and dishonor and nonpayment of this
Agreement and all other notices of any kind, and expressly agrees that this
Agreement, or any payment thereunder, may be extended from time to time without
in any way affecting the liability of the Borrower. To the fullest extent
permitted by law, the defense of the statute of limitations in any action on
this Agreement is waiver by the undersigned. This Agreement is to be governed by
the laws of the State of Nevada and venue for any action brought regarding the
interpretation or enforcement of this Agreement shall lie exclusively in Xxxxx
County, Nevada.
12. Waiver of Remedies. No single or partial exercise of any power
hereunder shall preclude any other or further exercise thereof or the exercise
of any other power. No delay or omission on the part of the Lender hereof in
exercising any right hereunder shall operate as a waiver of such right or of any
other right under this Agreement shall not operate to release any other party
liable hereon.
13. Interest Savings Clause. All agreements between the undersigned and
the Lender hereof are expressly limited so that in no contingency or event
whatsoever, whether by acceleration of maturity of the unpaid principal balance
hereof or otherwise, shall the amount paid or agreed to be paid to the Lender
hereof for the use, forbearance or detention of the money to be advanced
hereunder exceed the highest lawful rate permissible under applicable usury
laws. If, for any circumstances whatsoever, fulfillment of any provision hereof
at the time performance of such provision shall be due, shall involve
transcending the limit of validity prescribed by law which a court of competent
jurisdiction may deem applicable hereto, then ipso facto, the obligation to be
fulfilled shall be reduced to the limit of such validity, and if from any
circumstances the Lender hereof shall ever receive as interest an amount which
would exceed the highest lawful rate, such amount which would be excessive
interest shall be applied to the reduction of the unpaid principal balance due
hereunder and not to the payment of interest. This provision shall control every
other provision of all agreements between the undersigned and the Lender hereof.
14. Conditions. The obligations of Lender to perform its obligations
hereunder is subject to Lender having received from Borrower each of the
following documents:
(a) The Deed of Trust, Security Agreement, Financing Statement and
Fixture Filing with Assignment of Rents attached hereto as Exhibit "A" executed
in recordable form by Borrower.
(b) The Option Agreement attached hereto as Exhibit "B" executed by
Borrower.
15. Waiver of Jury by Trial. Each party to this Agreement agrees that any
suit, action, or proceeding brought or instituted by any party hereto or any
successor or assign of any party on or
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with respect to this Agreement, any of the documents executed in connection
with this Agreement, or any event, transaction or occurrence arising out of
or in any way connected therewith, or the dealings of the parties with respect
thereto, shall be tried only by a court and not a jury. EACH PARTY HEREBY
EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION, OR
PROCEEDING. Borrower acknowledges and agrees that this provision is a specific
and material aspect of this Agreement between the parties and that Lender would
not agree to provide the financing referenced herein if this waiver of jury
trial provision were not a part of this Agreement.
16. Extension or Renewal. This Agreement may from time to time be extended
or renewed, with notice to and acceptance by the undersigned and any related
right may be waived, exchanged, surrendered or otherwise dealt with, all without
affecting the liability of the undersigned hereon.
17. Security. The obligations referenced in this Agreement are secured by
a Deed of Trust.
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be executed on the date referenced below.
LENDER:
FIRST COLONY MERCHANT
By: /s/ X. X. Xxxxxxx
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November 23, 2000
-----------------
Date
XXXXXX TRADING LIMITED
By: /s/ X. X. Xxxxxxx
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November 23, 2000
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Date
BORROWER:
CAN CAL RESOURCES LIMITED
By: /s/ Xxxxxx X. Xxxxx
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November 23, 2000
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Date
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