Exhibit 10.1
LOAN AGREEMENT
Agreement made this 28 day of February 2004, by and between Life Energy
Technology Holdings, Inc., 0000 Xxxxx Xxxxxxxxxx Xxx, Xxxxx 0X-0 , Xxx Xxxxxxx,
XX 00000, a Delaware Corporation ("Life Energy") and Diamond Ridge Advisors, Inc
000 Xxxxxx Xxxx, Xxxxxxx Xxxx, Xxxxx Xxxxxxxx 00000 ("Diamond Ridge") a Delaware
corporation,
Whereas Life Energy wishes to borrow and Diamond Ridge Advisors wishes to lend
to Life Energy or to Life Energy's Joint Venturer ("Joint Venturer") the amount
of two hundred and fifty million ($250,000,000) million dollars USD bearing
interest of 6% per annum( the "Note"),for seven years.
Now therefore, in consideration as set forth below and for good and other
valuable consideration, the parties agree as follows:
1. Life Energy agrees to issue the Note to Diamond Ridge Advisors at the
closing which shall occur on March 11, 2004 or as postponed by mutual consent
specified date. The Note is for a period of seven years from the date of
issuance and shall bear interest at 6% per annum payable monthly, such interest
being accrued until first three biosphere units have been manufactured.
2. As at the closing of this Loan Agreement scheduled for March 11, 2004,
Life Energy and /or its Joint Venturer grants to Diamond Ridge Advisors an
irrevocable right of first refusal for the funding of all biosphere units to be
installed in the United States. This right of first refusal will remain in full
force and effect for five years from the date hereof. It is understood between
the parties hereto that certain criteria for the installation of to be funded
biosphere units will be presented Diamond Ridge. Attached hereto as Exhibit A is
a list of such criteria upon presentation to Diamond Ridge, Diamond Ridge shall
have 10 business days to exercise its right of first refusal for such funding.
Should Diamond Ridge select not to fund any such biosphere units which meets the
criteria set forth in Exhibit A, then Diamond Ridge's right of first refusal
shall be null and void and ceases to have any force of effect as to the
presented transaction and does not absolve Life from submitting all additional
projects to Diamond Ridge. Diamond Ridge has the right to act, by mutual
agreement as lead syndicator in those cases when Diamond Ridge is not the direct
lender.
3. As at the closing of this Loan Agreement scheduled for March 11, 2004,
Life Energy and /or its Joint Venturer grants to Diamond Ridge Advisors an
irrevocable right of first refusal for the funding of all biosphere units to be
installed internationally. This right of first refusal will remain in full force
and effect for five years from the date hereof. It is understood between the
parties hereto that certain criteria for the installation of to be funded
biosphere units will be presented to Diamond Ridge. Attached hereto as Exhibit B
is a list of such criteria upon presentation to Diamond Ridge, Diamond Ridge
shall have 10 business days to exercise its right of first refusal for such
funding. Should Diamond Ridge select not to fund any such biosphere units which
meets the criteria set forth in Exhibit B, then Diamond Ridge's right of first
refusal shall be null and void and ceases to have any force of effect as to the
presented transaction and does not absolve Life from submitting all additional
projects to Diamond Ridge. Diamond Ridge has the right to act, by mutual
agreement as lead syndicator in those cases when Diamond Ridge is not the direct
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lender. Terms and conditions for international transactions will have different
terms and conditions then those biosphere units funded in the United States.
4. Attached hereto and made a part hereof as Exhibit C is the form of the
Note
5. Attached hereto and made a part hereof as Exhibit D is a Profit
Participation Understanding by and between the parties hereto which grants to
Diamond Ridge for a period commencing on the installation of the first biosphere
unit and continuing until such time as such biosphere units is no longer
operational the following:
a. 6.5% of Life Energy's interest in an operational biosphere unit Such
profit participation as above said forth above shall include net
profits as determined in accordance GAAP and shall include a sale any
such biosphere unit if ever. Distribution of the profit participation
as above set forth shall occur within 30 days of the closing of yearly
accounting.
b. 6.5% from the Joint Venturer interest in an operational biosphere
unit. Such profit participation as above said forth above shall
include net profits as determined in accordance GAAP and shall include
a sale any such biosphere unit if ever. Distribution of the profit
participation as above set forth shall occur within 30 days of the
closing of yearly accounting.
6. Life Energy and/or its joint venturer agree to execute and cause to be
filed a Uniform Commercial Code (UCC) lien against any installed biosphere unit
funded by the Note or thereafter by exercise of the right of first refusal to so
fund.
7. Representations and Warranties of the Borrower
In order to induce Diamond Ridge enter into this transaction, Life Energy
makes the following representations and warranties. Such representations and
warranties shall survive the closing of the transactions contemplated hereby.
a. Life Energy has all requisite power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby.
b. Life Energy warrants and represents that it is not now insolvent,
bankrupt, or contemplating bankruptcy, that there are no legal claims
filed or to its knowledge threatened against Life Energy.
c. This Agreement, when executed and delivered, will constitute a valid
binding agreement, enforceable in accordance with the terms, except
such as may be limited by bankruptcy, insolvency, reorganization, or
other laws affecting creditors' rights generally.
d. Neither the execution nor delivery of this Agreement to be executed
and delivered by Life Energy pursuant hereto, nor the consummation by
Life Energy of the transaction contemplated hereby, will require any
authorization, consent, approval, exemption or any other action by, or
notice to, any governmental entity.
e. Life Energy does not have material tax deficiencies, federal, state,
foreign, county, local, or other, that would or could affect the
solvency, final status of, or otherwise compromise Life Energy in its
ability to enter into this agreement
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f. Within 90 days of the closing date, the Life Energy shall obtain Key
Man Dr. Xxxxx XxXxxxxxx life insurance, naming the Diamond Ridge as
beneficiary, and shall cause the insurer to notify Diamond Ridge of
same, with the amount(s) of the insurance matching the principal
balance of the loan [i.e., amount may decrease as principal balance
decreases]. If the proceeds of the policy are paid while any part of
the principal or interest on the Loan remains unpaid, a portion of the
proceeds, up to the whole thereof, will be used to repay the unpaid
principal and interest due on the Loan, unless otherwise agreed to in
writing by the Lender.
g. Within 30 days of closing date, the Borrower shall obtain D & O
insurance on the Company and its officers up to five ($5,000,000)
million dollars.
8. Amendment and Waiver
This Agreement may be amended, or the terms hereof waived, only in writing
and having been executed by all of the parties to this Agreement.
9. Notices
All notices and other communications hereunder shall be delivered in
writing and shall be deemed to have been given if delivered by hand [with
receipt] or facsimile transmission [with transmission confirmation report], or
if deposited with a recognized overnight delivery service [with receipt],
addressed as follows:
If to: Life Energy & Technology Holdings Inc.
0000 Xxxxx Xxxxxxxxxx Xxx, Xxxxx 0X-0 ,
Xxx Xxxxxxx, XX 00000,
If to : Diamond Ridge Advisors, Inc
000 Xxxxxx Xxxx
Xxxxxxx Xxxx, Xxxxx Xxxxxxxx 00000
Or, at such other address as may hereafter be designated by either party by
written notice given hereunder.
Loan principal balance and must provide 30 days written notice of such
intent to terminate.
11. Governing Law and Sites for Litigation
This Agreement shall be governed by the laws of the State of Delaware
without regard to any provisions or conflict of law. The parties agree that any
differences shall be filed and adjudicated in this Governing Country.
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a. Any dispute, controversy or claim arising out of or in relation to or
in connection with this Agreement or the activities carried out under
this Agreement, including without limitation any disputes as to
construction, validity, interpretation, enforceability or breach of
this Agreement shall be exclusively and finally settled by
arbitration, under the rules of Conciliation and Arbitration of the
International Chamber of Commerce, and the American Arbitration Act,
as such states as than enacted by three(3) Arbitrator. Each side shall
appoint (1) arbitrator within thirty (30 days of the submission of a
Notice of Arbitration. The Party-appointed arbitrators shall in turn
appoint a presiding arbitrator within 30 days following the
appointment of the Party-appointed arbitrators.
b. The arbitration proceedings shall be held in Delaware, USA. The
arbitrators shall have at all times no financial interest I the
Parties, dispute, controversy or claim.
c. Awards shall be final and not subject to appeal. Judgments upon the
award may be entered in any court having jurisdiction over the Party
or the assets of the Party owing the Judgment or application may be
made to such court for a judicial acceptance of the award and an order
of enforcement, as the case may be.
13. Counterparts, Facsimile and Signatures.
This Agreement may be signed in any number of counterparts, and such shall
be deemed an original together as one and the same document. The parties agree
that facsimile signatures which copy shall show the sender's date and time of
transmission shall be deemed an original.
14. Entire Agreement
This base Agreement and the associated Exhibits constitute the entire
agreement of the parties with respect to the subject matter hereto and supersede
any prior or contemporaneous understandings or agreements.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties have
executed this Agreement as of the day and year last below written.
ACCEPTED ON BEHALF DIAMOND RIDGE ADVISORS, INC:
By: /s/ Xxxx X. Xxxxxxx
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Title: Chief Executive Officer
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Date: February 28, 2004
ACCEPTED ON BEHALF OF LIFE ENERGY & TECHNOLOGY HOLDINGS INC.:
By: /s/ Dr CA XxXxxxxxx
---------------------------
Dr CA XxXxxxxxx,
X.Xx., Ph.D., N.I.H.C., X.XX., M.ARVO., F.F., Ful.S.,
Title: Chief Executive Officer,
Life Energy & Technology Holdings Inc
for and on behalf of Life Energy & Technology Holdings Inc.
Date: February 28, 2004
