Exhibit 10.12
TREND MINING COMPANY
000 Xxxxx Xxxxxx
Xxxxx 0
Xxxxx X'Xxxxx, Xxxxx 00000
August 16, 2001
Xxxxxxx X. Xxxxxx
0000 Xxxx Xxxx Xxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxx 00000
Re: Loan Facility
Dear Xxx. Xxxxxx:
1) By this letter agreement, you hereby agree to loan to Trend Mining Company
("Trend") an aggregate amount of NINETY THOUSAND DOLLARS ($90,000) (the
"Loan").
2) Trend, for value received, hereby unconditionally promises to pay to you in
U.S. dollars and immediately available funds the entire outstanding
principal amount of the remitted Loan immediately after completion of a
private placement of any shares of Trend and concurrently with any amounts
repaid to Electrum LLC of its loans to Trend (the "Loan Repayment Date"),
and such outstanding amount shall be paid in proportion to the total
amounts owed to Electrum LLC and others having provided loan facilities of
this type to Trend. Trend further promises to pay interest on such
outstanding principal amount at a rate equal to EIGHT PERCENT (8%) per
annum, payable semi-annually in arrears. All computations of interest shall
be based on a 365-day year and actual days elapsed. (The monies loaned to
Trend under the Loan plus the interest provided for in this paragraph 2 are
sometimes referred to herein as the "Loan Amount").
3) In consideration for you providing the Loan to Trend, concurrent with the
execution of this letter agreement Trend agrees to issue you warrants to
purchase 90,000 shares of common stock of Trend at $1.50 per share
exercisable until June 9, 2004.
4) Notwithstanding Trend's unconditional obligation to pay the Loan Amount
when due instead of receiving repayment of the Loan Amount in U.S. dollars,
you may elect in a notice sent to Trend on or before the Loan Repayment
Date to require Trend to issue to you one "unit" of Trend securities for
each $1.25 of the Loan Amount being converted (inclusive of interest
thereon). Each "unit" will consist of one (1) share of Trend common stock
and one (1) warrant to acquire a share of Trend common stock at a purchase
price of $1.50 per share exercisable by you (and/or his assignee(s)) at any
time on or before September 30, 2006. You may make the election described
in this paragraph 4 with respect to all or any part of the Loan Amount.
5) Trend hereby agrees that it will cause the shares of common stock described
herein and the warrants and the shares of common stock receivable upon
exercise of the warrants described in paragraphs 3 and 4 hereof, to be
registered under the Securities Act of 1933 and the "Blue Sky" laws of
appropriate jurisdictions at the same time as the shares received by
Electrum LLC and others who having provided loan facilities of this type to
Trend and received shares of common stock, warrants and common stock
receivable upon exercise of those warrants are registered under the
Securities Act of 1933 and the "Blue Sky" laws of appropriate
jurisdictions.
6) The provisions of this letter agreement and the rights and obligations of
the parties hereunder shall be governed by, and construed and interpreted
in accordance with the laws of the State of New York without reference to
conflicts or choice of law provisions thereof, and may not be amended or
waived without the express written consent of the parties hereto.
7) Trend hereby agrees that all costs for obtaining this Loan Facility,
including for the preparation of this letter agreement and the side letter
agreements and the legal costs thereof, shall be borne entirely by Trend.
8) This letter agreement may be signed in counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the
same instrument.
Sincerely,
TREND MINING COMPANY
By: /s/ Xxxx Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title President
AGREED TO:
_______________________________
Xxxxxxx X. Xxxxxx
