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EXHIBIT 10-vii - HUMBOLDT CAPITAL(RELATED PARTY) LOAN AGREEMENT
DATED MARCH 27, 1998
LOAN AGREEMENT
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THIS LOAN AGREEMENT is made as of March 27, 1998.
BETWEEN:
XXXXXX ENERGY LTD., a company incorporated under the laws
of British Columbia, of 220 - 5995 Greenwood Plaza
Boulevard, Orchard Place One, Xxxxxxxxx, Xxxxxxxx, X.X.X.
00000;
(the "Borrower")
AND:
HUMBOLDT CAPITAL CORPORATION, a body corporate, having an
office at #0000, 000 - Xxxxx Xxxxxx XX, Xxxxxxx, XX X0X
0X0;
(the "Lender")
WHEREAS the Borrower desires to borrow and the Lender is willing to lend to
the Borrower $300,000 upon and subject to the terms and conditions
hereinafter set forth;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
the mutual covenants and agreements hereinafter set forth, the parties hereto
agree as follows:
ARTICLE ONE
DEFINITIONS
1. Where used in this Agreement the following words and phrases shall have the
following meaning:
1.1 "Agreement" means this Agreement and the Schedules hereto, as at any
time amended or modified and in effect;
1.2 "Event of Default" means any event specified in paragraph 7.1;
1.3 "Loan" means the loan by the Lender to the Borrower established
pursuant to paragraph 3.1;
1.4 "Maturity Date" means March 27, 1999;
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1.5 "Note" means the promissory note to be made by the Borrower to the
Lender as evidence of the Loan which shall substantially be in the
form set forth in Schedule "A".
ARTICLE TWO
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.
2.3 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 MARGINAL REFERENCES
The division of this Agreement into articles, paragraphs, subparagraphs 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 Canada.
ARTICLE THREE
THE LOAN
3.1 ESTABLISHMENT OF THE LOAN
The Lender agrees, on the terms and conditions set forth in this Agreement, to
advance by way of a loan to the Borrower the amount of $300,000.
3.2 EVIDENCE OF INDEBTEDNESS
Indebtedness of the Borrower to the Lender in respect of the Loan shall be
evidenced by the Note, which shall be made by the Borrower to the Lender at the
time of executing the Agreement.
3.3 INTEREST
The Borrower shall pay interest to the Lender both before as well as after the
Maturity Date on the principal advanced under the Loan from the date of
disbursement at an annual rate of 10%. Interest shall be calculated monthly in
arrears and shall be payable to the Lender on the Maturity Date of the Loan.
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3.4 REPAYMENT OF THE LOAN
The Borrower shall repay the Loan on the Maturity Date.
3.5 PREPAYMENT OF THE LOAN
The Borrower may prepay the Loan in whole or in part at any time, without notice
or penalty.
ARTICLE FOUR
FURTHER CONSIDERATION
4. As further consideration for providing the Loan, subject to Vancouver Stock
Exchange approval, the Borrower agrees to issue a warrant to the Lender for the
acquisition of 480,000 common shares of the Borrower at $0.25 per share, which
warrant shall be exercisable by the Lender until March 27, 1999.
ARTICLE FIVE
REPRESENTATIONS AND WARRANTIES
5.1 REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender as hereinafter set forth:
5.1.1 the Borrower is a corporation duly incorporated, validly existing
and in good standing under the laws of British Columbia;
5.1.2 the Borrower has all requisite corporate power and authority to
enter into this Agreement and to carry out the obligations
contemplated herein and therein;
5.1.3 the Vancouver Stock Exchange has granted approval to the Borrower
to enter into this Agreement and to carry out the obligations
contemplated herein and therein;
5.1.3 this Agreement and the Note have been duly and validly
authorized, executed and delivered by the Borrower and are valid
obligations of it; and
5.1.4 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.
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ARTICLE SIX
COVENANTS OF THE BORROWER
6. The Borrower covenants and agrees with the Lender that at all times during
the currency of this Agreement it will:
6.1 pay the principal sum, interest and all other monies required to be
paid to the Lender pursuant to this Agreement in the manner set forth
herein;
6.2 duly observe and perform each and every of its covenants and
agreements set forth in this Agreement; and
6.3 provide the Lender with immediate notice of any Event of Default.
ARTICLE SEVEN
EVENT OF DEFAULT
7.1 DEFINITION OF EVENT OF DEFAULT
The principal balance of the Loan and any other money owing to the Lender under
this Agreement shall immediately become payable, unless otherwise waived in
writing by the Lender, in any of the following events:
7.1.1 if the Borrower shall default in any payment when the same is due
under this Agreement;
7.1.2 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 the BANKRUPTCY ACT, 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; and
7.1.3 if the Borrower defaults in observing or performing any other
covenant or agreement of this Agreement on its part to be
observed or performed and such default shall have continued for
a period of seven (7) days after notice in writing has been given
by the Lender to the Borrower specifying such default.
ARTICLE EIGHT
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
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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.
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 telegram, telex,
telecopier, telecommunication device 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
be only effective if actually delivered; and if sent by telegraph, telex,
telecopier, telecommunication device or other similar form of communication, be
deemed to have been given or made on the day following the day on 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.
HUMBOLDT CAPITAL CORPORATION
Per:
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Authorized Signatory
XXXXXX ENERGY LTD.
Per:
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Authorized Signatory
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SCHEDULE "A"
PROMISSORY NOTE
CDN$300,000 March 27, 1998
FOR VALUE RECEIVED, Xxxxxx Energy Ltd. (the "COMPANY"), with offices at 220
-5995 Greenwood Plaza Boulevard, Orchard Place One, Englewood, Colorado, DOES
HEREBY PROMISE TO PAY, ON MARCH 27, 1999, to the order of HUMBOLDT CAPITAL
CORPORATION, at #1760, 000 - Xxxxx Xxxxxx XX, Xxxxxxx, Xxxxxxx, the sum of
CDN$300,000 as well as the interest accrued thereon at an annual rate of
interest of 10%. The Company does hereby waive presentment for payment,
notice of protest and notice of non-payment.
XXXXXX ENERGY LTD.
Per:
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Authorized Signatory
