EXHIBIT 10.45
INTERIM LOAN AND SECURITY AGREEMENT
THIS INTERIM LOAN AND SECURITY AGREEMENT
(this "Agreement") is dated as of April
16, 1998 between U.S. Bancorp Leasing & Financial,
an Oregon corporation having an office and place
of business located at 0000 XX Xxxxxx Xxxxxx,
Xxxxxxxx, XX 00000 ("Lender") and Alta Gold Co. a
corporation organized and existing under the laws
of the the state of Nevada and having its
principal place of business at Suite 10, 000
Xxxxxxx Xxxxx Xxxxx Xxxxxxxxx, XX 00000
("Borrower").
RECITALS:
WHEREAS Borrower desires to purchase the
equipment more particularly described in Exhibit A
hereto (the "Equipment") pursuant to a purchase
order contract, agreement and/or other document,
copies of which have been attached hereto as
Exhibit C (the "Purchase Agreement"), with Xxxxxx
("Supplier");
WHEREAS, Borrower desires to borrow from
Lender, on the terms and conditions hereinafter
provided, the purchase price and acquisition costs
of the Equipment;
WHEREAS, to induce Lender to lend to Borrower
the purchase price and acquisition costs of the
Equipment, Borrower desires to assign to Lender,
as security for all of Borrower's obligations
hereunder, all of Borrower's right, title and
interest in and to the Equipment and the Purchase
Agreement.
NOW, THEREFORE, in consideration of these
premises and of the covenants contained herein and
other good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, the
parties hereto agree as follows:
Section 1. Definitions. All capitalized
terms used but not otherwise defined herein shall
have the meanings ascribed to them in the Loan
Schedule attached hereto as Exhibit D (the "Loan
Schedule").
Section 2. Agreement to Make Loans. Subject
to the terms and conditions hereof, and provided
no Default (as defined in Section 8), or event
which with the passing of time or giving of notice
or both would constitute a Default, has occurred
and is continuing, Lender agrees to advance to
Borrower, on the date hereof the amount of Four
million seven hundred eight thousand U.S. Dollars
($4,708,000.00), and, upon five (5) days written
notice, from time to time hereafter until close of
business on the Cut-Off Date to make such
additional advances in such amounts as Borrower
may request, but limited in all events in the
aggregate to the Maximum Loan Commitment amount
stated in the Loan Schedule. (Each day on which a
loan is made is hereinafter referred to as a
"Funding Date", each advance a "Loan Funding".)
Lender shall not be required or obligated to make
any Loan Funding if such Loan Funding, when added
to all previous Loan Fundings, would cause Lender
to advance to Borrower any sum in excess of the
Maximum Loan Commitment set forth in the Loan
Schedule. Lender shall have no obligation to make
any Loan Funding to any person or entity other
than Borrower, and shall have no obligation to
make any Loan Funding to Borrower if control of
Borrower shall change in any material respect.
Section 3. Promissory Note(s).
(a) Each Loan Funding shall be evidenced by
a separate demand Promissory Note, at such
interest rate as the parties may hereafter
agree,in the form of Exhibit E.
(b) Subject to the terms hereof, upon the
earlier of the (i) Cut-Off Date or (ii) the
Funding Date on which the total Loan Fundings
made as of that date total in the aggregate
the Maximum Loan Commitment, Borrower shall
(x) pay all unpaid interest due and owing
under any Promissory Note issued pursuant
hereto; and (y) execute a Consolidated
Promissory Note ("Consolidated Note") in the
form of Exhibit F in a principal amount
equal to the aggregate amount of all Loan
Fundings (Each Demand Promissory Note and the
Consolidated Promissory Note shall
hereinafter be referred to, individually or
collectively, as the "Note(s)".).
Section 4. Conditions Precedent to Loan
Fundings. The obligation of Lender to make any
Loan Funding to Borrower on the applicable Funding
Date is subject to the performance by Borrower of
all of its agreements and covenants under this
Agreement and the fulfillment of the following
conditions precedent:
(a) Borrower shall have paid to Supplier the
Borrower's Down Payment, if any, specified on
the Loan Schedule.
(b) No Default, or event which with the
passing of time or the giving of notice or
both would constitute a Default, has occurred
and is continuing on such Funding Date under
this Agreement, any Note or any other
agreement or instrument then existing between
Borrower and Lender.
(c) Lender has received such executed
financing statements, fixture filings and
other documents as it may reasonable request
to perfect a first priority security interest
in the Collateral, as that term is defined in
Section 5 below, (including, without
limitation, any lien, mortgages, landlord or
similar waivers).
(d) Borrower has executed and delivered to
Lender a Demand Promissory Note, in the form
of Exhibit E, in the principal amount of the
Loan Funding, executed by an authorized
officer of the Borrower.
(e) Lender has received such other
documents, certificates and opinions,
including but not limited to opinions of
Borrower's counsel and invoices and receipts
in connection with the Equipment, as it shall
reasonably request.
(f) There has not occurred any adverse
change in Borrower's financial situation from
the date of execution hereof to the date of
the Loan Funding which materially impairs
Borrower's ability to perform its obligations
hereunder, or under any of the Notes, or
materially impairs Lender's interest in the
Collateral.
Section 5. Grant of Security Interest.
(a) As security for the punctual payment and
performance of Borrower's obligations under
each and all of the Note(s), whether now
existing or hereinafter arising, whether the
same be totally repaid and extinguished and
thereafter reincurred or otherwise, direct or
indirect, liquidated or contingent, whether
as primary obligor or as endorser,
indemnitor, or otherwise, including any
obligation arising in connection with or
resulting from any amendment to or extension
of any Note and, further, as security for the
performance and observance by Borrower of all
representations, warranties and covenants
made by it in this Agreement, any amendment
or extension hereof or in any other
agreement, document or certificate delivered
in connection with this Agreement or any
Note, Borrower hereby gives, sets over,
assigns, transfers and grants to Lender a
security interest in and to (i) the
Equipment, (ii) the Purchase Agreement, (iii)
any and all additions, attachments,
accessories, accessions, and all
substitutions, replacements or exchanges to
the Equipment, (iv) the property described on
Schedule 1 attached hereto together with all
additions, attachments, accessories, and
accessions thereto and any substitutions,
replacements, or exchanges therefore, and (v)
any and all proceeds of any of the foregoing,
including insurance and lease proceeds ((i) -
(v) are hereinafter referred to, from time to
time, individually and collectively as
"Collateral"). Borrower warrants that such
security interest shall be the only security
interest granted by Borrower or retained by
any other person or entity other than Lender
(excluding only such security interest of
Supplier in the Equipment as Supplier may
retain to secure payment of the purchase
price of the Equipment as specifically
provided for in the Purchase Agreement) and
Borrower shall, at its own cost and expense,
promptly take such action as may be necessary
to duly discharge all liens on the Collateral
which result from claims against Borrower not
related to the transactions contemplated by
this Agreement.
(b) Additions to, reductions or exchanges
of, or substitutions for, the Collateral,
payments on account of any obligation or
liability secured hereby, or increases in the
obligations and liabilities secured hereby,
or the creation of additional obligations and
liabilities secured hereby, may from time to
time be made or occur without affecting the
provisions of this Agreement or the
provisions of any obligation or liability
which is secured hereby.
(c) Borrower hereby appoints Lender its true
and lawful attorney, with full power of
substitution, to take such action as Lender
may deem necessary to protect and preserve
its security interest in the Collateral, and
Borrower waives its right of notice, demand,
dishonor, marshalling of Collateral, place
and time of sale, advertising, statutory
method of foreclosure and all bonds,
securities and rights of redemption.
Section 6. Representations, Warranties and
Covenants of Borrower With Respect to
Organization.
Borrower hereby represents, warrants and
covenants, as of the date hereof and at all
times during the term hereof:
(a) Borrower has adequate power and capacity
to enter into each Note and this Agreement,
and any document or certificate delivered in
connection with this Agreement or any Note.
(Together the Notes, this Agreement and any
document or certificate delivered in
connection with this Agreement or any Note,
shall constitute the "Documents".)
(b) The Documents have been duly authorized,
executed and delivered by Borrower and
constitute valid, legal and binding
agreements, enforceable in accordance with
their terms, except to the extent that the
enforcement of remedies therein provided may
be limited under applicable bankruptcy and
insolvency laws.
(c) No approval, consent or withholding of
objections is required from any federal,
state, local or municipal governmental
authority or instrumentality with respect to
the entry into or performance by Borrower of
the Documents except such as have already
been obtained.
(d) The entry into and performance by
Borrower of the Documents will not: (i)
violate any judgment, order, law or
regulation applicable to Borrower or any
provision of Borrower's Certificate of
Incorporation or By-Laws or (ii) result in
any breach of, constitute a default under or
result in the creation of any charge,
security interest or other encumbrance upon
any unit of Equipment pursuant to any
indenture, mortgage, deed of trust, bank loan
or credit agreements or other instrument to
which Borrower is a party.
(e) There are no suits or proceedings
pending or threatened in court or before any
regulatory commission, board or other
administrative governmental agency against or
affecting Borrower, which will have a
material adverse effect on the ability of
Borrower to fulfill its obligations under the
Documents.
(f) The Borrower is, and will remain during
the term hereof, a corporation organized,
existing and in good standing, under the laws
of the State of NV. The persons executing
any of the Documents are acting with the full
authority of the Board of Directors of
Borrower and hold the offices indicated in
the Documents below their signatures which
signatures Borrower hereby acknowledges to be
genuine.
Section 7. Representations, Warranties and
Covenants of Borrower With Respect To The
Collateral.
Borrower hereby represents, warrants and
covenants, as of the date hereof and at all
times during the term hereof:
(a) Borrower is and will remain during the
term of this Agreement the sole and lawful
owner and in possession of the Equipment and
is or will become upon delivery and
installation and remain during the term of
this Agreement the sole and lawful owner and
in possession of the Collateral; Borrower
shall at all time during the term hereof keep
and maintain the Collateral in good operating
condition and repair, in accordance with
Manufacturer's recommendations therefore.
(b) The Collateral is and will remain during
the term of this Agreement free and clear of
all liens and encumbrances of every kind,
nature and description except for security
interest granted in this Agreement. Borrower
will warrant and defend the Collateral and
Lender against all claims by all persons
adverse to Lender's interest in and to the
Collateral. Borrower shall not sell, rent,
lend, mortgage, grant a security interest in
or otherwise encumber or transfer any of the
Collateral during the term hereof. Borrower
shall not remove the Equipment from the
location designated on the Loan Schedule.
(c) Borrower shall pay promptly when due all
taxes, license fees, assessments and public
and private charges levied or assessed on any
of the Collateral or on the use thereof or on
this Agreement or any Note. At its option,
Lender may discharge taxes, liens, security
interests or other encumbrances at any time
levied or placed on the Collateral and may
pay for the maintenance, insurance and
preservation of the Collateral or to effect
compliance with the terms of this Agreement.
Borrower agrees to reimburse Lender on
demand, for any payment made or any expense
incurred by Lender pursuant to the foregoing
authorization.
(d) The Collateral shall at all times during
the term hereof be held at Borrower's risk,
and Borrower shall keep it insured against
loss or damage by fire and extended coverage
perils, theft, burglary, and for any or all
Collateral which are vehicles, for risk of
loss by collision, and where requested by
Lender, against other risks as required
thereby, for the full replacement value
thereof, with companies, in amounts and under
policies acceptable to Lender, with losses
payable to Lender and Borrower as their
interests may appear. Borrower shall, if
Lender so requires, deliver to Lender policy
or certificates of insurance evidencing such
coverage. Each policy shall provide for
coverage to Lender regardless of the breach
by Borrower of any warranty or representation
made therein and shall provide for ten (10)
days written notice to Lender of the
cancellation or material modification
thereof.
Section 8. Events of Default.
Borrower shall be in Default under this
Agreement and under each Note upon the
occurrence of any of the following;
(a) Failure in the payment or performance of
any Note, or any extension or amendment
thereto by Borrower;
(b) Failure in the performance of any
obligation by Borrower of any covenant or
warranty made by it in this Agreement, any
amendment or extension hereof or in any other
agreement, document or certificate delivered
in connection with this Agreement;
(c) Any warranty, representation or
statement made or furnished to Lender by or
on behalf of Borrower, in any Note or in this
Agreement, any amendment or extension thereof
or hereof or in any other agreement, document
or certificate delivered in connection with
this Agreement or any Note, or furnished to
Lender in order to induce Lender to make any
Loan Funding hereunder, proving to be false
in any material respect;
(d) (i) Any of the Collateral being
subjected to, or threatened with,
attachment, execution, levy or seizure in any
legal proceeding, or (ii) the entry of any
judgment against, or the assessment and/or
filing of any tax lien against, or the
issuance of any writ of garnishment or
attachment against any property of Borrower;
(e) The death, incompetence, dissolution,
termination of existence, any change in
corporate structure or of controlling
ownership, insolvency, or business failure of
Borrower;
(f) The appointment of a receiver for all or
of any part of the property of Borrower, the
assignment for the benefit of creditors by or
the commencement of any proceeding under any
bankruptcy or insolvency law by or against
Borrower or any guarantor of Borrower's
obligation hereunder or under any Note; or
(g) Lender's determination, in good faith,
that the security interest granted hereunder
or the Collateral is unsafe or insecure, or
that the prospect of payment or other
performance by Borrower under any Note or
this Agreement is impaired.
Section 9. Remedies on Default.
Upon the occurrence of a Default under this
Agreement, Lender, at its option, may declare all
of the obligations and liabilities secured by this
Agreement, including without limitation the Notes,
to be immediately due and payable, without demand
or notice to Borrower or any guarantor of any
obligations of Borrower. The obligations and
liabilities accelerated thereby shall bear
interest at the lower of 18% per annum or the
maximum rate allowed by applicable law. Upon such
declaration of default, Lender shall have all of
the rights and remedies of a secured party under
the Uniform Commercial Code, or under any other
applicable law, including without limitation the
right to (i) notify any account debtor of Borrower
or any obligor on any instrument which constitutes
part of the Collateral to make payment to Lender,
(ii) with or without legal process, to enter any
premises where the Collateral may be and take
possession and/or remove said Collateral from said
premises, (iii) sell the Collateral at public or
private sale, in whole or in part, and have the
right to bid and purchase at said sale, (iv) lease
or otherwise dispose of all or part of the
Collateral, applying proceeds therefrom to the
obligations then in default. Proceeds from any
sale or lease or other disposition shall be
applied first to all costs of repossession,
storage, and disposition including without
limitation attorneys', appraisers', and
auctioneers' fees, second to discharge the
obligations then in default, third to discharge
any other obligations of Borrower to Lender under
this Agreement or any Note, whether as obligor,
endorsor, or otherwise, fourth to expenses
incurred in paying or settling liens and claims
against the Collateral, fifth to Borrower, if
there exists any surplus. Any notice which Lender
is required to give to Borrower under the Uniform
Commercial Code of the time and place of any
public sale or the time after which any private
sale or other intended disposition of the
Collateral is to be made shall be deemed to
constitute reasonable notice if such notice is
mailed by registered or certified mail to the last
known address of Borrower at least five (5) days
prior to such action.
Section 10. Miscellaneous.
(a) Borrower shall, upon request of Lender,
furnish to Lender such further information,
execute and deliver to Lender such documents,
including without limitation Uniform
Commercial Code Financing Statements, and do
such other acts and things, as Lender may at
any time reasonable request relating to the
perfection or protection of the security
interest created by this Agreement or for
the purpose of carrying out the intent of
this Agreement.
(b) Lender's rights and remedies hereunder
are cumulative. Neither the failure nor any
delay on the part of Lender to exercise any
right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any
single or partial exercise thereof or the
exercise of any other right, power or
privilege.
(c) Lender shall not be deemed to have
waived any of its rights hereunder or under
any other agreement, instrument or paper
signed by Borrower unless such waiver be in
writing and signed by Lender.
(d) Lender may correct patent errors herein
and fill in all blanks herein or in any
document provided in connection herewith or
now or hereafter attached hereto consistent
with the agreement of the parties.
(e) All notices from Lender to Borrower
shall be sufficiently given if sent by
first-class mail, postage prepaid or
delivered in hand to Borrower at Borrower's
address shown above.
(f) Time is of the essence hereof. This
Agreement shall be binding, jointly and
severally, upon all parties described as
"Borrower" and their respective heirs,
executors, representatives, successors and
assigns, and shall inure to the benefit of
Lender, its successors and assigns. If any
provision of this Agreement is in conflict
with any statute, rule or law applicable
hereto, then such provision shall be deemed
null and void to the extent that it may
conflict therewith, but without invalidating
any other provision(s) hereof. This
Agreement shall not be changed or terminated
orally, but only by a writing signed by both
parties hereto. This Agreement and the Notes
or any other document or certificate given in
connection herewith or therewith may be
assigned without notice to Borrower and
Borrower hereby waives any defense,
counterclaim or cross-complaint by Borrower
against any assignee, agreeing that Lender
shall be solely responsible therefor.
(g) Borrower hereby grants to Lender the
power to sign Borrower's name and generally
to act on behalf of Borrower to execute and
file applications for title, transfers of
title, financing statements, notices of lien
and other documents pertaining to any or all
of the Collateral. Borrower shall, if any
certificate of title be required or permitted
by law for any of the Collateral, obtain such
certificate showing the lien hereof with
respect to the Collateral and promptly
deliver same to Lender.
(h) In the event this Agreement and any Note
are placed in the hands of an attorney for
collection of money due or to become due or
to obtain performance of any provision
hereof, Borrower agrees to pay attorney's
fees actually incurred by Lender.
(i) Borrower agrees to furnish its annual
financial statements and such interim
statements as Lender may require in form
satisfactory to Lender. Any and all
financial statements submitted and to be
submitted to Lender have and will have been
prepared on a basis of generally accepted
accounting principles, and are and will be
complete and correct and fairly present
Borrower's financial condition as at the date
thereof. Lender may at any reasonable time
examine the books and records of Borrower and
make copies thereof.
(j) This Agreement and any and all
obligations and liabilities secured hereby
shall be governed by and construed under the
laws of the State of Oregon, without regard
to choice of law principles thereof, and any
provision of this Agreement or of the
obligations and liabilities secured by this
Agreement which may prove to be unenforceable
shall not affect the validity of any other
provision of this Agreement or of the said
obligations and liabilities. Borrower
acknowledges receipt of a true copy hereof
and waives acceptance hereof.
(k) This Agreement shall continue in full
force and effect for so long as there shall
remain in existence obligations or
liabilities from Borrower to Lender hereunder
or under the Notes.
(l) BORROWER HEREBY UNCONDITIONALLY WAIVES
ITS RIGHTS TO A JURY TRIAL OF ANY CAUSE OF
ACTION BASED UPON OR ARISING OUT OF, DIRECTLY
OR INDIRECTLY, THIS AGREEMENT, ANY OF THE
RELATED DOCUMENTS, ANY DEALINGS BETWEEN
BORROWER AND LENDER RELATING TO THE SUBJECT
MATTER OF THIS TRANSACTION OR ANY RELATED
TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS
BEING ESTABLISHED BETWEEN BORROWER AND
LENDER. The scope of this waiver is intended
to be all encompassing of any and all
disputes that may be filed in any court
(including, without limitation, contract
claims, tort claims, breach of duty claims,
and all other common law and statutory
claims). THIS WAIVER IS IRREVOCABLE MEANING
THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR
IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT, ANY
RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS
OR AGREEMENTS RELATING TO THIS TRANSACTION OR
ANY RELATED TRANSACTION. In the event of
litigation, this Agreement may be filed as a
written consent to a trial by the court.
Time is of the essence of this Agreement.
Lender's failure at any time to require
strict performance by Borrower of any of the
provisions hereof shall not waive or diminish
Lender's right thereafter to demand strict
compliance therewith. Borrower agrees, upon
Lender's request, to execute any instrument
necessary or expedient for filing, recording
or perfecting the interest of Lender. All
notices required to be given hereunder shall
be deemed adequately given if sent by
registered or certified mail to the addressee
at its address stated herein, or at such
other place as such addressee may have
designated in writing. This Agreement and
any, Exhibits or Annexes thereto constitute
the entire agreement of the parties with
respect to the subject matter hereof. NO
VARIATION OR MODIFICATION OF THIS AGREEMENT
OR ANY WAIVER OF ANY OF ITS PROVISIONS OR
CONDITIONS, SHALL BE VALID UNLESS IN WRITING
AND SIGNED BY AN AUTHORIZED REPRESENTATIVE OF
THE PARTIES HERETO.
IN WITNESS WHEREOF, Borrower and Lender,
intending to be legally bound hereby, have
caused their duly authorized representatives
to execute this Agreement, as of the day and
year first above-written.
LENDER
U.S. Bancorp Leasing & Financial
By:
Title: Assistant Vice President
BORROWER
Alta Gold Co.
By: Xxxx X. Xxxxxx
Title: Senior Vice President and CFO
(Exhibits not included).
