LOAN AGREEMENT
THIS
LOAN
AGREEMENT is made as of the 23`d
day of
November, 2005.
BETWEEN:
RODINIA
MINERALS INC., a
body
corporate, having an office located at Xxxxx 000, 000 Xxxx Xxxxxx, in the City
of Vancouver, in the Province of British Columbia, V6C 2T5
(the "Lender")
OF
THE
FIRST PART AND:
PATRIOT
POWER CORP., a
body
corporate, having an office located at 000 Xxxx Xxxx
Xxxxxx,
Xxxxxx Xxxx, Xxxxxx, 00000
(the
"Borrower")
OF
THE
SECOND PART
WHEREAS
the Borrower is party to the Letter Agreement dated November 2, 2005 with
Xxxxxx-May Minerals, Inc. ("Xxxxxx-May") attached hereto as Exhibit I (the
"Letter Agreement") pursuant to the terms
of
which the Borrower can exercise the Option (as that term is defined in the
Letter Agreement) by, inter
alia, making
the payments, issuing the securities and incurring the exploration expenditures
at the times and in the amounts provided for in the Letter
Agreement;
AND
WHEREAS, by agreement between the Lender and the Borrower, the Borrower has
granted to the Lender the right and option to acquire up to a 40% interest
in
the Claims (as that term is defined in the Letter Agreement), subject to various
royalties, exercisable after the Option is exercised (the "Lender's
Right");
AND
WHEREAS the Letter Agreement provides that, except for the Lender's Right,
the
Borrower's interest in the Letter Agreement, the Option Agreement (as that
term
is defined in the Letter Agreement) and the Claims is not assignable, in whole
or in part, without the prior written consent of Xxxxxx-May;
AND
WHEREAS there are now payments totalling US$390,000 due under the Letter
Agreement to maintain the Option (the "Payments");
AND
WHEREAS the Borrower has advised the Lender that the Borrower does not, at
the
present time, have sufficient funds to make the Payments but anticipates
receiving up to US$2,000,000 by way of a financing to be carried out by it
within 30 days of the date hereof;
AND
WHEREAS the Lender is concerned that the Borrower's failure to make the Payments
will impair the Option and, therefore, the Lender's Right and, to protect the
Lender's Right, the Lender is prepared to Iend
the
Borrower US$390,000 upon the terms and subject to the conditions hereinafter
set
forth to enable
the
Borrower to make the Payments;
NOW
THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the premises and
of
the mutual covenants and agreements hereinafter set forth, the parties do hereby
agree as follows:
ARTICLE
I
DEFINITIONS
L.1 Where
used in this Agreement, in addition to any words and phrases defined in the
Recitals to this Agreement, the following words and phrases shall have the
following meanings:
| (a) |
"Agreement"
means this Agreement and the Schedules hereto, as at any time amended
or
modified and in effect;
|
| (b) |
"Assignment"
means the assignment of the Borrower's interest in the Letter Agreement,
the Option Agreement and the Claims to be executed by the Borrower
and
delivered to the Lender pursuant to paragraph 3.2, which shall be
substantially in the form set forth in Schedule "B"
hereto;
|
| (c) |
"Due
Date" means the earlier of i) the date upon which the Borrower receives
the proceeds of a Financing and (ii) the last day of the
Term;
|
| (d) | "Event of Default" means any event specified in paragraph 7; |
| (e) | "Interest" means US$19,000; |
| (f) | "Financing" means any financing carried out by the Borrower after the date of this Agreement; |
| (g) | "Lender's Security" means the Note and the Assignment; |
| (h) | "Loan" means the loan established pursuant to paragraph 3.1; |
| (i) |
"Note"
means the demand promissory note to be executed by the Borrower and
delivered to
the Lender pursuant to paragraph 3.2, which shall be substantially
in the
form set forth
in
Schedule "A" hereto; and
|
| (j) |
"Term"
means the period commencing on the date of advancement of thean
and ending on December 23, 2005.
|
ARTICLE
2
INTERPRETATION
2.1 Governing
Law
This
Agreement shall in all respects be construed in accordance with and governed
by
the laws of the Province of British Columbia.
2.2 Severability
If
any
one or more of the provisions contained in this Agreement should be invalid,
illegal or unenforceable in any respect the validity, legality and
enforceability of the remaining provisions contained herein shall not
in
any
way
be affected or impaired thereby.
23 Parties
in Interest
This
Agreement shall enure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns.
2.4 Headings
and MarQinat References
The
division of this Agreement into articles, paragraphs, sub-paragraphs and other
subdivisions and the insertion of headings are for convenience of reference
only
and shall not affect the construction or interpretation of this
Agreement.
2.5 Currency
All
statements of, or references to, dollar amounts in
this
Agreement mean lawful currency of the United States of America, unless indicated
otherwise.
ARTICLE
3
THE
LOAN
3.1 Establishment
of the Loan
The
Lender agrees, on the terms and subject to the conditions set forth
in
this
Agreement, to advance by way of loan to the Borrower the principal amount of
US$390,000.
3.2 Delivery
of Lender's Security
The
Note
and the Assignment shall be delivered to the Lender at the time the Lender
advances the principal amount of the Loan to the Borrower.
3.3 Interest
The
Borrower shall pay the Interest to the Lender.
3.4 Repayment
of the Loan
The
Borrower shall repay the principal amount of the Loan, and shall pay the
Interest, on demand; provided however that, unless there is an Event of Default,
the Lender will not make demand for the immediate repayment of the principal
amount of the Loan outstanding and payment of the Interest, including, without
limitation, a demand under the Note, until the Due Date.
3.5 Upon
repayment by the Borrower prior to an Event of Default of the principal amount
of the Loan outstanding and payment of the Interest, together with all other
costs, charges and expenses payable by the Borrower hereunder, the Lender shall
re-deliver the Note and the Assignment to the Borrower.
ARTICLE
4
COMPENSATION
FOR THE LOAN
4.1 Costs,
Charges and Expenses
The
Borrower shall assume and pay all costs, charges and expenses which may be
incurred by the Lender in respect of this Agreement or the Lender's Security
or
which may be incurred by the Lender in respect of any proceedings taken or
things done by the Lender or on its behalf in connection therewith to collect,
protect, realize or enforce the Lender's Security.
ARTICLE
5
REPRESENTATIONS
AND WARRANTIES
5.1 Representations
and Warranties
The
Borrower represents
and warrants to the Lender as hereinafter set forth:
| (a) |
the
Borrower is a corporation duly incorporated, validly existing and
in good
standing under the laws of its jurisdiction of
incorporation;
|
| (b) |
the
Borrower has all requisite corporate power and authority to enter
into
this Agreement and to grant the Lender's Security and to carry
out the
obligations contemplated herein and in the Lender's
Security;
|
| (c) |
this
Agreement and the Lender's Security have been duly and validly authorized,
executed and delivered by the Borrower and are valid obligations
of it;
and
|
| (d) |
no
Event of Default and no event which, with the giving of notice or
lapse of
time would become an Event of Default, has occurred or is
continuing.
|
5.2 Survival
of Representations and Warranties
All
representations and warranties made herein shall survive the delivery of this
Agreement to the Lender
and no
investigation at any time made by or on behalf of the Lender shall diminish
in
any respect whatsoever its rights to rely thereon. All statements contained
in
any certificate or other instrument delivered by or on behalf of the Borrower
under or pursuant to this Agreement shall constitute representations and
warranties made by the Borrower hereunder.
ARTICLE
6
COVENANTS
OF THE BORROWER
6.1The
Borrower covenants and agrees with the Lender that at all times during the
currency
of this
Agreement it will:
| (a) |
pay
the principal amount of the Loan outstanding, interest and all other
monies required to be paid to the Lender pursuant to this Agreement
in the
manner set forth herein;
|
| (b) |
duly
observe and perform each and every of its covenants and agreements
set
forth in this Agreement and the Lender's
Security;
|
| (b) |
provide
the Lender with immediate notice of any Event of
Default;
|
| (d) |
obtain,
within 5 business days of the date hereof, Xxxxxx-May's consent,
in
writing, to the Assignment; and
|
| (e) |
do
all things necessary to obtain and maintain the Lender's Security
in good
standing and make payment of all fees and charges in respect
thereto.
|
ARTICLE
7
EVENT
OF DEFAULT
7.1 Definition
of Event of Default
The
principal balance of the an outstanding, the Interest, costs and any other
money
owing to the Lender under this Agreement shall immediately become due and
payable upon demand by the Lender, unless otherwise waived in writing by the
Lender, in any of the following events:
| (d) | if the Borrower shall default in any payment when the same is due under this Agreement; |
| (d) | if the Borrower commits any default under any of the Lender's Security; |
| (c) |
if
the Borrower shall become insolvent or shall make a general assignment
for
the benefit of its creditors, or if an order be made or an effective
resolution be passed for the winding-up, merger or amalgamation of
the
Borrower or if the Borrower
shall be declared bankrupt or if a custodian or receiver be appointed
for
the Borrower under any bankruptcy
legislation, or if a compromise or arrangement is proposed by the
Borrower
to
its creditors or any class of its creditors, or if a receiver or
other
officer with like powers shall be appointed for the
Borrower;
|
| (d) |
if
the Borrower defaults in observing or performing any other covenant
or
agreement of this Agreement on its part
to
be observed or performed.
|
ARTICLE
8
GENERAL
8.1 Waiver
or Modification
No
failure or delay on the part of the Lender in exercising any power or right
hereunder shall operate as a
waiver
thereof nor shall any single or partial exercise of such right or power preclude
any other right or power hereunder. No amendment, modification or waiver of
any
condition of this Agreement or consent to any departure by
the
Borrower
therefrom shall in any event be effective unless the same shall be in writing
signed by the Lender. No notice to or demand on the Borrower shall in any case
entitle the Borrower to any other or further notice or demand in similar or
other circumstances unless specifically provided for in this Agreement. Time
shall be of the essence hereof.
8.2 Further
Assurances
The
parties hereto
will do, execute and deliver or will cause to be done, executed and delivered
all such further acts, documents and things as may be reasonably required for
the purpose of giving effect to this Agreement.
8.3 Assignment
The
Borrower shall not assign this Agreement or its interest herein or any part
hereof except with the prior written consent of the Lender. This Agreement
and
any interest herein shall be freely assignable by the Lender.
8.4 Notices
Any
notice, demand or other document required or permitted to be given under the
provisions of this Agreement
shall be
in
writing
and may
be
given by
delivering same or mailing same by registered
mail or
sending
same by telecopier or other similar form of communication addressed as set
forth
herein. Any
notice,
demand or document shall, if delivered, be deemed to have been given or made
at
the time of delivery; if mailed by registered mail and properly addressed be
deemed to have been given or made on the third day following the day on which
it
was so mailed, provided that if at the time of mailing or between the time
of
mailing and the actual receipt of the notice, a mail strike, slowdown or other
labour dispute which might affect the delivery of such notice by Canada Post
occurs, then such notice shall only be effective if actually delivered; and
if
sent by telecopier or other similar form of communication, be deemed to have
been given or made on the day following the day an which it was sent. Any party
may give written notice of change of address in the same manner, in which event
such notice shall thereafter be given to it as above provided at such changed
address.
8.5 Amendments
Neither
this Agreement nor any provision hereof may be amended, waived, discharged
or
terminated orally, but only by instrument in writing signed by the party against
whom enforcement of the amendment, waiver, discharge or termination is
sought.
IN
WITNESS WHEREOF the Lender and the Borrower have executed this Agreement under
their corporate seals and the hands of their proper officers in that behalf
as
of the day and year first above written.
| THE COMMON SEAL of RODINIA |
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| MINERALS INC. was hereunto |
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| THE COMMON SEAL of PATRIOT |
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| POWER CORP. was hereunto |
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c/s
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SCHEDULE
"A"
PROMISSORY
NOTE
BORROWER:
PATRIOT POWER CORP.
LENDER: RODINIA
MINERALS INC.,
Xxxxx
000, 000 Xxxx
Xxxxxx,
Xxxxxxxxx,
X.X. X0X
0X0
AMOUNT: US$390,000
DATE: November
23, 2005
FOR
VALUE
RECEIVED, the
Borrower promises to pay, on demand, to
the
Lender at the address set out above, or at such other address as the Lender
may
direct the Borrower in writing, the principal amount of Three Hundred and Ninety
Thousand United States Dollars (US$390,000) (hereinafter the "principal sum"),
together with
interest
in the amount of Nineteen Thousand United States Dollars (US$19,000)
(hereinafter the "interest"), all in lawful money of the United States of
America.
The
Borrower
shall have the right, upon 24 hours' prior notice to the Lender, to prepay
in
whole
or
in part at any time, from time to time, the amounts due hereunder without bonus
or penalty.
The
Borrower
shall keep, at its head office, a register of the holder of this promissory
note
setting forth the name, address and description of the Lender. The Lender will
be treated as the owner and holder hereof for all purposes, and the payment
to,
and receipt of, the Lender, as the case may be, of any of the principal sum
or
interest payable hereunder shall be a good and sufficient discharge to the
Borrower for the same.
The
Borrower
hereby waives demand, notice of dishonour and presentment for payment, protest,
and notice of protest of this promissory note,
SIGNED,
SEALED AND DELIVERED this
23rd
day of
November, 2005 by:
| PATRIOT POWER CORP. | ||
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| By: | /s/ | |
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Name: |
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| Title: | ||
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| By: | /s/ | |
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Name: |
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| Title | ||
SCHEDULE
"B"
Assignment
dated November 23, 2005 between:
PATRIOT
POWER CORP., a
body
corporate, having an office located at 000
Xxxx
Xxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxx, 00000
(the
"Assignor")
OF
THE FIRST
PART
AND:
RODINIA
MINERALS
INC., a body corporate, having an office located at Xxxxx
000, 000 Xxxx Xxxxxx, in the City of Vancouver, in the Province of
British
Columbia, V6C 2T5
(the
"Assignee")
OF
THE SECOND
PART
For
valuable consideration, the receipt and sufficiency of which are hereby
expressly acknowledged by each of the Assignor
and the Assignee, the Assignor hereby sells, transfers, assigns, conveys and
quit claims to and in favour of
the
Assignee all of the Assignor's right, title and interest in and to that certain
Letter Agreement dated November 2, 2005 between Assignor, as "Optionee", and
Xxxxxx-May Minerals, Inc., as "Optionor",
a true
copy of which is attached hereto as Schedule "A" (the "Letter Agreement"),
and
the Assignee hereby accepts the same and agrees to be
bound
by the terms of the Letter Agreement, as "Optionee" thereunder; PROVIDED HOWEVER
THAT, as long
as there
is no "Event of Default"
prior to
repayment by the Assignor of the "Loan" (as those words and phrases in
quotation
marks are defined in that certain Loan Agreement dated November 23, 2005 between
the Assignor and the
Assignee
and to which this Assignment is attached as a Schedule), the Assignee shall
re-deliver this Assignment to the Assignor when the principal amount of the
Loan
outstanding, interest, costs, charges and expenses are repaid or paid
by
the Assignor under the said Loan Agreement, whereupon this Assignment shall
be
considered null and void ab
initia.
| THE COMMON SEAL of RODINIA |
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| MINERALS INC. was hereunto |
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c/s
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| THE COMMON SEAL of PATRIOT |
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| POWER CORP. was hereunto |
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c/s
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Consented
to
this______ day
of
_______2005
XXXXXX
MAY MINERALS,
INC.
Per:
________________________________
Authorized
Signatory
