EXHIBIT 10.2
LOAN AGREEMENT
THIS AGREEMENT is dated as of the 26th day of November, 2001
BETWEEN:
GEOALERT INC.,
--------------
of 000 X. Xxxxxx Xxxx, Xxxxx 000, Xxxxx, Xxxx 00000
(hereinafter called the "Borrower")
OF THE FIRST PART
AND:
SWORDFISH CAPITAL CORP.,
------------------------
x/x X.X. Xxx 000, Xxxx Xxxxxxxx, Xxxx Xxxx, Xxxxxxx, B.V.I.
(hereinafter called the "Lender")
OF THE SECOND PART
WHEREAS:
A. The Borrower has requested that the Lender lend US$120,000 to the
Borrower;
B. The Lender has agreed to lend such sum to the Borrower subject to the
terms and upon the conditions hereinafter set forth.
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the sum of $1.00
paid by each party to the other (the receipt of which is hereby acknowledged)
the parties hereto mutually covenant and agree as follows:
1. INTERPRETATION
--------------
1.1 Definitions. Where used herein or in any amendment hereto each of the
-----------
following words and phrases shall have the meanings set forth as follows:
(a) "Agreement" means this Loan Agreement including Schedule "A" together
with any amendments;
(b) "Closing Date" means November 26, 2001;
(c) "Event of Default" means any event set forth in paragraph 6.1;
(d) "Loan" means the loan of US$120,000 made by the Lender to the Borrower
in accordance with this Agreement;
(e) "Maturity Date" means the 26th day of November, 2002;
(f) "Mortgaged Property" means all of the properties, assets and
undertaking of the Borrower, for the time being, present and future,
real and personal, legal or equitable, tangible or intangible, and of
whatsoever nature and kind and wheresoever situate;
2
(g) "Principal Sum" means the sum of US$120,000; and
(h) "Promissory Note" means the promissory note dated November 26, 2001
granted by the Borrower to the Lender attached as Schedule "A".
1.2 Number and Gender. Wherever the singular or the masculine are used
-----------------
herein the same shall be deemed to include the plural or the feminine or the
body politic or corporate where the context or the parties so require.
1.3 Headings. The headings to the articles, paragraphs, subparagraphs or
--------
clauses of this Agreement are inserted for convenience only and shall not affect
the construction hereof.
1.4 References. Unless otherwise stated a reference herein to a numbered
----------
or lettered article, paragraph, subparagraph or clause refers to the article,
paragraph, subparagraph or clause bearing that number or letter in this
Agreement. A reference to this Agreement or herein means this Loan Agreement,
including the Schedules hereto, together with any amendments thereof.
1.5 Currency. All dollar amounts expressed herein refer to lawful currency
--------
of the United States.
2. TERMS OF LOAN
-------------
2.1 Loan and Repayment. The Lender hereby agrees to lend the Borrower the
------------------
Principal Sum. The Loan shall be made in U.S. currency and shall be repaid by
the Borrower on the earlier of demand and the Maturity Date.
2.2 Interest. The Borrower shall, before and after demand and before and
--------
after the Maturity Date and judgment, pay on the amount of the Principal Sum
remaining unpaid from time to time interest at a rate of 10% per year, payable
on the first day of each month with the balance, if any, due on the Maturity
Date. The Borrower shall pay interest at the aforesaid rate on all overdue
interest.
2.3 Alteration of Share Capital. In the event of:
---------------------------
(a) any subdivision, consolidation or reclassification of the Borrower's
issued shares;
(b) any reorganization of the share capital of the Borrower affecting in
any manner its issued shares;
(c) the amalgamation of the Borrower with any other company or companies;
or
(d) the declaration of a stock dividend or other distribution of the
assets of the Borrower to the shareholders of the Borrower, other than
a stock dividend of up to but not in excess of 5% of the number of
outstanding common shares of the Borrower, then the number of shares
which may be but are not yet issued pursuant to the Lender's right of
conversion at the time when such event occurs shall be adjusted, if
required, so that the Lender will be in no less favourable position
than if the Lender had received, prior to the date of such event, the
shares which it would otherwise be entitled to receive under this
Agreement upon exercise of its right of conversion.
2.4 Pre-Payment. The Borrower may pre-pay all or any portion of the Loan
-----------
at any time prior to the Maturity Date.
3
3. SECURITY
--------
3.1 Security. To secure the repayment of the Loan and the payment of all
--------
other monies due hereunder, the Borrower agrees to grant the Lender the
Promissory Note.
3.2 Extensions. The Lender may grant extensions, take and give up
----------
securities, accept compositions, grant releases and discharges and otherwise
deal with the Borrower and with other parties, sureties or securities as the
Lender may see fit without prejudice to the liability of the Borrower or to the
Lender's rights under this Agreement.
3.3 No Merger. The grant of the Promissory Note or of any other security
---------
in replacement thereof shall not operate so as to create any merger or discharge
of any indebtedness or liability of the Borrower hereunder, nor of any
assignment, transfer, guarantee, lien, contract, promissory note, xxxx of
exchange or security of any form held or which may hereafter be held by the
Lender from the Borrower or from any other person whomsoever.
3.4 Waiver. The Lender may waive any breach by the Borrower of this
------
Agreement or of any default by the Borrower in the observance or performance of
any covenant or condition required to be observed or performed by the Borrower
hereunder or under the Promissory Note. No failure or delay on the part of the
Lender to exercise any right, power or remedy given herein or by statute or at
law or in equity or otherwise shall operate as a waiver thereof, nor shall any
single or partial exercise of any right preclude any other exercise thereof or
the exercise of any other right, power or remedy, nor shall any waiver by the
Lender be deemed to be a waiver of any subsequent similar or other event.
4. REPRESENTATIONS AND WARRANTIES
------------------------------
4.1 Representations. The Borrower represents and warrants to the Lender,
---------------
and acknowledges that the Lender is relying upon such representations and
warranties in entering into this Agreement, as follows:
(a) this Agreement has been duly authorized by all required corporate
action on the part of the Borrower;
(b) the Borrower has the capacity to enter into this Agreement, and the
execution of this Agreement and the completion of the transactions
contemplated hereby shall not be in violation of the articles or
memorandum of the Borrower or any agreement to which the Borrower is a
party; and
(c) the Promissory Note has been duly authorized and executed by the
Borrower and is enforceable against the Borrower in accordance with
its terms.
4.2 Survival. All representations and warranties made hereunder shall
--------
survive the delivery of the Promissory Note to the Lender and shall continue in
full force and effect for the benefit of the Lender.
5. CLOSING ARRANGEMENTS
--------------------
5.1 Conditions Precedent. The Lender's obligation to advance the Principal
--------------------
Sum to the Borrower shall be subject to the satisfaction of the following
conditions:
(a) the representations and warranties of the Borrower shall be true as of
the date hereof and as of the Closing Date;
4
(b) the Borrower shall have complied with all of its obligations
hereunder; and
(c) the Borrower shall have caused to be delivered to the Lender an
opinion of the Borrower's solicitors confirming that:
(i) the Borrower was duly incorporated, organized, validly existing
and in good standing with respect to the filing of annual
returns under the laws of its jurisdiction of domicile;
(ii) this Agreement and the Promissory Note have been duly
authorized, validly executed and delivered by the Borrower; and
The foregoing conditions precedent are inserted for the benefit of the Lender
and may be waived in whole or in part by the Lender at any time prior to closing
by delivering to the Borrower written notice to that effect.
5.2 Time of Closing. The closing of the Loan shall take place at 9:00 a.m.
---------------
Vancouver time on the Closing Date.
5.3 Deliveries by the Lender. On the Closing Date the Lender shall deliver
------------------------
or cause to be delivered to the Borrower a certified cheque, bank draft or
solicitors' trust check for the Principal Sum.
5.4 Deliveries by the Borrower. On the Closing Date the Borrower shall
--------------------------
deliver to the Lender:
(a) the Promissory Note;
(b) certified resolutions of the directors of the Borrower approving the
transactions contemplated hereby and reserving sufficient shares to
satisfy the Borrower's obligations under this Agreement; and
(c) the opinion of the Borrower's solicitors referred to in subparagraph
5.1(c).
6. EVENTS OF DEFAULT AND REMEDIES
------------------------------
6.1 Events of Default. Any one or more of the following events, whether or
-----------------
not any such event shall be voluntary or involuntary or be effected by operation
of law or pursuant to or in compliance with any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body, shall constitute an Event of Default:
(a) if the Borrower defaults in the payment of any monies due hereunder as
and when the same is due;
(b) if the Borrower defaults in the observance or performance of any other
provision hereof;
(c) if an order is made or a resolution is passed or a petition is filed
for the liquidation or winding-up of the Borrower;
(d) if the Borrower commits an act of bankruptcy or makes a general
assignment for the benefit of its creditors or otherwise acknowledges
its insolvency;
5
(e) if execution, sequestration, extent or other process of any court
becomes enforceable against the Borrower or a distress or analogous
process is levied upon the Mortgaged Property or any part thereof
unless the process is in good faith disputed by the Borrower and the
Borrower gives security to pay the full amount claimed to the
satisfaction of the Lender;
(f) if the Borrower permits any sum which is not disputed to be due by the
Borrower and which forms or is capable of forming a charge upon any of
the Mortgaged Property in priority to the Promissory Note to remain
unpaid after proceedings have been taken to enforce the same;
(g) if the Borrower ceases or demonstrates an intention to cease to carry
on its business;
(h) if a receiver or receiver-manager or receiver and manager is appointed
for any of the Mortgaged Property;
(i) if the Borrower makes default in the due payment, performance or
observance, in whole or in part, of any debt, liability or obligation
of the Borrower to the Lender, whether secured hereby or otherwise; or
(j) if the Borrower makes default in the due payment, performance or
observance, in whole or in part, of any charge or encumbrance upon the
Mortgaged Property which ranks or may rank in priority to or pari
passu with the mortgages and charges created hereunder.
6.2 Remedies Upon Default. Upon the occurrence of any Event of Default and
---------------------
at any time thereafter, provided that the Borrower has not by then remedied such
Event of Default, the Lender may, in its discretion, by notice to the Borrower,
declare this Agreement to be in default. At any time thereafter, while the
Borrower shall not have remedied such Event of Default, the Lender, in its
discretion, may:
(a) declare the Loan and other monies owing by the Borrower to the Lender
to be immediately due and payable;
(b) demand payment from the Borrower and exercise any or all of its
remedies under the Promissory Note.
6.3 Other Security. The rights and powers conferred by subparagraph 6.2
--------------
are in addition to and not in substitution for the Promissory Note or any other
security which the Lender now or from time to time may hold or take from the
Borrower in relation to this Agreement.
6.4 Remedies Non-Exclusive. No remedy conferred on the Lender hereby
----------------------
or in the Promissory Note is intended to be exclusive. Each and every remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or under the Promissory Note or now or hereafter existing at law or in
equity or by statute or otherwise. The exercise or commencement of exercise by
the Lender of any one or more of such remedies shall not preclude the
simultaneous or later exercise by the Lender of any or all other such remedies.
6.5 Inconsistency. In the event of any inconsistency between the terms and
-------------
provisions of this Agreement and the terms and provisions of the Promissory
Note, the terms and provisions of this Agreement shall prevail.
6
7. MISCELLANEOUS
-------------
7.1 Notices. Any notice required or permitted to be given under this
-------
Agreement shall be in writing and may be given by delivering same or mailing
same by registered mail or sending same by telegram, telex, telecopier or other
similar form of communication to the following addresses:
The Borrower: GeoAlert, Inc.
Xxxxx 000, 000 X. Xxxxxx Xxxx
Xxxxx, Xxxx 00000
Facsimile No. (000)000-0000
The Lender: Swordfish Capital Corp.
X.X. Xxx 000, Xxxx Xxxxxxxx
Xxxx Xxxx, Xxxxxxx B.V.I.
Facsimile No. (000)000-0000
Any notice so given shall:
(a) if delivered, be deemed to have been given at the time of delivery;
(b) if mailed by registered mail, be deemed to have been given on the
fourth business day after and excluding the day on which it was so
mailed, but should there be, at the time of mailing or between the
time of mailing and the deemed receipt of the notice, a mail strike,
slowdown or other labour dispute which might affect the delivery of
such notice by the mails, then such notice shall be only effective if
actually delivered; and
(c) if sent by telegraph, telex, telecopier or other similar form of
communication, be deemed to have been given or made on the first
business day following the day on which it was sent.
Any party may give written notice of a change of address in the aforesaid
manner, in which event such notice shall thereafter be given to such party as
above provided at such changed address.
7.2 Amendments. Neither this Agreement nor any provision hereof may be
----------
amended, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against whom enforcement of the amendment, waiver,
discharge or termination is sought.
7.3 Entire Agreement. This Agreement embodies the entire agreement and
----------------
understanding between the parties hereto and supersedes all prior agreements and
undertakings, whether oral or written, pertaining to the subject matter hereof.
7.4 Action on Business Day. If the date upon which any act or payment
----------------------
hereunder is required to be done or made falls on a day which is not a business
day, then such act or payment shall be performed or made on the first business
day next following.
7.5 No Merger of Judgment. The taking of a judgment on any covenant
---------------------
contained herein or on any covenant set forth in any other security for payment
of any indebtedness hereunder or performance of the obligations hereby secured
shall not operate as a merger of any such covenant or affect the Lender's right
to interest at the rate and times provided in this Agreement on any money owing
to the Lender under any covenant herein or therein set forth and such judgment
shall provide that interest
7
thereon shall be calculated at the same rate and in the same manner as herein
provided until such judgment is fully paid and satisfied.
7.6 Severability. If any one or more of the provisions of this Agreement
------------
should be invalid, illegal or unenforceable in any respect in any jurisdiction,
the validity, legality or enforceability of such provision shall not in any way
be affected or impaired thereby in any other jurisdiction and the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
7.7 Successors and Assigns. This Agreement shall enure to the benefit of
----------------------
and be binding upon all parties hereto and their respective heirs, personal
representatives, successors and assigns, as the case may be.
7.8 Governing Law. This Agreement shall be governed by and be construed in
-------------
accordance with the laws of the State of Ohio and the parties hereto agree to
submit to the jurisdiction of the courts of Ohio with respect to any legal
proceedings arising herefrom.
7.9 Time. Time is of the essence of this Agreement.
----
7.10 Headings. The headings of the paragraphs of this Agreement are
--------
inserted for convenience only and do not define, limit, enlarge or alter the
meanings of any paragraph or clause herein.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first written above.
GEOALERT, INC.
Per:
/s/ Xxxxxxx X. Xxxxxxxx, President
--------------------------------------------
Xxxxxxx Xxxxxxxx, President
SWORDFISH CAPITAL CORP.
Per:
_____________________________________________
Authorized Signatory
