LOAN AGREEMENT
Exhibit
10.1
This
Loan
Agreement is hereby made
between,
(hereinafter collectively the "Lender") and Renewable
Energy Resources, Inc. (hereinafter the "Borrower"), and Mercatech Private
Equity Management, Ltd., and Mercatech, Inc., (“Guarantor”) as of this 31 day of
July 2007 (the “Loan Date”)
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LOAN
AMOUNT:
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Seven
Hundred Fifty Thousand U.S. Dollars ($750,000.00)
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TERM:
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Five
Years
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PAYMENT
OF INTEREST:
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Interest
on the unpaid principal amount of this Note shall accrue monthly,
at a
rate equal to eighteen percent (18%) per annum. Accrued interest
shall be
paid to the Lender quarterly based on a calendar year and shall be
cumulative.
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REPAYMENT:
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Repayment
on the principal may begin after two (2) years at which time the
Lender
may elect to call for the repayment of up to twenty five percent
{25%} of
the original principal. On subsequent anniversaries, the Lender may,
upon
180 days notice, elect to call for the repayment of the outstanding
principal by not more than twenty five percent (25%) of the original
principal amount. The unpaid principal balance under this Note with
all
accrued and unpaid interest on the unpaid principal balance shall
be paid
in full on the fifth anniversary of the date of this Note.
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PREPAYMENT:
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Borrower
shall have the right to prepay at any time and from time to time,
without
penalty or premium, all or any portion of the outstanding principal
of
this Note. All prepayments of outstanding principal of this Note
shall be
applied first to accrued interest, and second to unpaid
principal.
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SHARES
IN BORROWER:
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Borrower
shall grant to Lender shares of its common stock, subject to SEC
Rule 144,
equal to Five percent (5%) of the value of the loan on the Loan Date
at
the closing price.
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REGISTRATION
RIGHTS:
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None,
other than those granted to other shareholders in general.
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USE
OF FUNDS AND GUARANTEE:
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The
Lender’s funds will be used solely to fund the Springfield Energy Project,
LLC (“SEP”). SEP will guarantee this Note.
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LENDING
GUARANTOR:
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Mercatech
Private Equity Management, Ltd., and Mercatech, Inc., hereby guarantee
the
loan to be made
by to
Renewable Energy Resources, Inc., which is being invested into the
Springfield Energy Project, LLC (SEP) as described in this loan agreement.
Mercatech hereby agrees that the funds, in the amount of seven hundred
and
fifty thousand dollars ($750,000) under the loan shall be secured
by the
Secured Medium Term Revolving facility, in the amount of one hundred
fifty
million euros (150,000,000) which has been arranged through Banca
IMI,
SpA, and underwritten by Intesasanpalo SpA, to Mercatech. Such guarantee
shall be enforceable as an interest against the credit facility above,
with all rights and obligations of RENW and SEP under the loan agreement
to be undertaken by Mercatech and enforceable against them as a secondary
guarantor, if such default shall occur under the loan agreement between
RENW
and
. This guarantee is made for the purpose of securing the interest
that
Mercatech has in the success of RENW through the SEP project.
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EVENTS
OF DEFAULT:
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An
"Event of Default" shall occur if at any time: (a) the Borrower becomes
insolvent, commits any act of bankruptcy; makes a general
assignment for the benefit of creditors, liquidates or takes any
step
looking toward liquidation, makes or gives any notice of a bulk sale,
or
admits in writing the inability to pay debts as they mature; or (b)
any
petition, bankruptcy or insolvency or for any form of reorganization.
composition. extension, appointment of a receiver or other similar
relief
of debtors under state or federal law is filed by or against Borrower;
or
(c) any preceding, procedure or remedy supplementary to or in enforcement
of a judgment is resorted to or is commenced against Borrower or
with
respect to any property of Borrower; or (d) any committee of creditors
of
Borrower is appointed or any meeting of Borrower's creditors is called;
or
(e) any receiver. court or governmental authority takes possession
or
control of any substantial part of the property of Borrower or Borrower's
affairs: or (f) any of the events described in (a) through (e) above
occurs with respect to any endorser, guarantor, surety or other person
liable upon or for this Note: or (g) any warranty or order of attachment
of any property of Borrower is served on Lender: or (h) the Lender
deems
itself insecure.
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REMEDIES:
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In
the event an Event of Default shall occur and be continuing for 60
days
after delivery of a written notice of default then in the sole discretion
of the Lender and without further notice to the Borrower, the unpaid
principal amount and the accrued interest hereunder, at the applicable
rate specified above, and all other sums due from Borrower
under this Note, shall become immediately due and payable without
presentment, demand, protestor other requirements of any
kind.
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COLLECTION
FEES:
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If
this Loan is placed with an attorney for collection, then the prevailing
party shall be entitled to fees and costs pursuant to Florida
law.
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VENUE/JURISDICTION:
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This
Note and all questions relating to its validity. interpretation or
performance and enforcement shall be governed by and construed in
accordance with the laws of the State of Florida. Venue for all actions
seeking enforcement of this Note's terms shall be the State Court
for
Hillsborough County, Florida.
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RIGHT
OF FIRST REFUSAL ON FUTURE PROJECTS:
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Lender,
shall for a period of five years, from the date of execution of this
loan
agreement, have a right or first refusal to be a lender for future
renewable energy projects that RENW, or SEP, or any related entity
to them
shall enter into. Such projects shall include similar coal reclamation,
bio-fuels, low impact hydro, and other areas. RENW agrees that they
shall
supply Lender with a term sheet, and that Lender shall have ten days
from
transmission of the term sheet to agree or decline investment in
such
projects, with notice to RENW. This exclusivity shall include the
right to
information from RENW or SEP for such projects similar to those supplied
within the negotiations which occurred related to this agreement.
Such
exclusivity shall be limited to one million dollars in investment
or
lending for the lender in such projects, unless agreed to be increased
by
RENW or SEP.
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IN
WITNESS WHEREOF, Borrower and Lender, intending to be legally bound have caused
their duly authorized representatives to execute and deliver this Note on the
date first written above.
BORROWER:
| RENEWABLE ENERGY RESOURCES, INC. | MERCATECH PRIVATE EQUITY | |||
| MANAGEMENT and MERCATECH, INC. | ||||
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/s/
Xxxxxxx X.
Xxxxx
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/s/
Xxxx
Xxxx
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Xxxxxxx
X.
Xxxxx, Chief Executive Officer
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Xxxx
Xxxx,
President and Officer
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Mercatech Initials /s/
CM RENW
Initials /s/ KB
3
