PHREADZ USA, LLC. CORPORATE LOAN AGREEMENT
PHREADZ
USA, LLC.
| $______________ | NEVADA | April __, 2010 |
FOR VALUE
RECEIVED, the undersigned, Phreadz USA, LLC., a Nevada
Corporation (referred to herein as the “Borrower” or “FRDZ”), with
offices at 00 Xxxx Xxxxxx, Xxxxxxxxxx, XX 00000, hereby unconditionally promises
to pay to the order of ____________, his endorsees, successors and assigns (the
“Lender”), in lawful money of the United States, at 00 Xxxxxx Xxxx Xxxx,
Xxxxxxxx XX 00000, or such other address as the Lender may from time to time
designate, the principal sum of Fifty Thousand Dollars ($50,000USD) (the
“Loan”). This Note shall mature and become due and payable in full on
June 30, 2010 (the “Maturity Date”).
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1.
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Terms
of Repayment. Interest on this Note shall be calculated
as follows:
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(a)
Simple
Interest at the rate of eight percent (8%) per annum from the date funds
received hereof through the Maturity Date or until the reverse
merger.
(b)
Interest
shall be due and payable as follows:
Interest
as described in (a) will accrue on receipt of funds by FRDZ until June 30, 2010.
Beginning on the date funds are received and on the last day of each month
thereafter, unless deferred by Lender under the Deferral Right, defined below,
interest will be accrued on the principal amount as an interest payable
amount.
In the alternative this loan
may be repaid immediately after the close of a reverse merger transaction, (The
“close” being defined section 13) and as immediately after the filing of a Form
8-k with the SEC (“Securities and Exchange Commission”) formalizing and
disclosing the details and definitative closing documents of a reverse merger
transaction.
(c)
As
per the preceding paragraph and in the alternative of 1.(a) and 1.(b)
above the Note may be repayable with $12,500.00USD in cash.
If any
payment made by the Borrower or any other person is applied to this Note and is
at any time annulled, set aside, rescinded, invalidated, declared to be
fraudulent or preferential or otherwise required to be refunded or repaid, or
the proceeds of any property hereafter pledged as security for this Note is
required to be returned by Lender to the Borrower, its estate, trustee, receiver
or any other party, including, without limitation, under any bankruptcy law,
state or federal law, common law or equitable cause, then, to the extent of such
payment or repayment, the Borrower’s liability hereunder (and any lien, security
interest or other collateral securing such liability) shall be and remain in
full force and effect, as fully as if such payment had never been made, or, if
prior thereto any such lien, security interest or other collateral hereunder
securing the Borrower’s liability hereunder shall have been released or
terminated by virtue of such cancellation or surrender, this Note (and such
lien, security interest or other collateral) shall be reinstated in full force
and effect, and such prior cancellation or surrender shall not diminish,
release, discharge, impair or otherwise affect the obligations of the Borrower
in respect to the amount of such payment (or any lien, security interest or
other collateral securing such obligation).
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(c) All
computations of interest shall be made by Lender on the basis of a year of 360
days for the actual number of days (including the first day but excluding the
last day) occurring in the period for which such interest is
payable. Whenever any payment to be made hereunder shall be stated to
be due on a day which is not a business day, such payment shall be made on the
next succeeding day and such extension of time shall in such case be included in
the computation of payment of interest.
(d)
The
Borrower may prepay all or any part of the outstanding principal amount of this
Note, together with accrued interest without penalty.
2. Liability
of the Borrower. The Borrower is unconditionally, and without
regard to the liability of any other person, liable for the payment and
performance of this Note and such liability shall not be affected by an
extension of time, renewal, waiver, or modification of this Note or the release,
substitution, or addition of collateral for this Note. Each person
signing this Note consents to any and all extensions of time, renewals, waivers,
or modifications, as well as to release, substitution, or addition of guarantors
or collateral security, without affecting the Borrower’s liabilities
hereunder. Lender is entitled to the benefits of any collateral
agreement, guarantee, security agreement, assignment, or any other documents
which may be related to or are applicable to the debt evidenced by this Note,
all of which are collectively referred to as “Loan Documents” as they now exist,
may exist in the future, have existed, and as they may be amended, modified,
renewed, or substituted.
3. Representations
and Warranties. The Borrower represents and warrants as
follows: (i) the Borrower is a LLC duly organized, validly existing
and in good standing under the laws of the State of Nevada; (ii) the execution,
delivery and performance by the Borrower of this Note are within the Borrower's
powers, have been duly authorized by all necessary action, and do not contravene
(A) the Borrower's certificate of incorporation or by-laws or (B) (x) any law or
(y) any agreement or document binding on or affecting the Borrower, (iii) no
authorization or approval or other action by, and no notice to or filing with,
any governmental authority, regulatory body or third person is required for the
due execution, delivery and performance by the Borrower of this Note; (iv) this
Note constitutes the legal, valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its terms except as
enforcement hereof may be limited by bankruptcy, insolvency or other similar
laws affecting the enforcement of creditors' rights generally and subject to the
applicability of general principles of equity; (v) the Borrower has all
requisite power and authority to own and operate its property and assets and to
conduct its business as now conducted and proposed to be conducted and to
consummate the transactions contemplated hereby; (vi) the Borrower is
duly qualified to conduct its business and is in good standing in each
jurisdiction in which the character of the properties owned or leased by it, or
in which the transaction of its business makes such qualification necessary;
(vi) there is no pending or, to the Borrower 's knowledge, threatened action or
proceeding affecting the Borrower before any governmental agency or arbitrator
which challenges or relates to this Note or which may otherwise have a material
adverse effect on the Borrower; (viii) after giving effect to the transactions
contemplated by this Note, the Borrower is Solvent; (ix) the Borrower is not in
violation or default of any provision of (A) its certificate of incorporation or
by-laws, each as currently in effect, or (B) any instrument, judgment, order,
writ, decree or contract, statute, rule or regulation to which the Borrower is
subject, and (x) this Note is validly issued, free of any taxes, liens, and
encumbrances related to the issuance hereof and is not subject to preemptive
right or other similar right of members of the Borrower.
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4.
Covenants. So
long as any principal or interest is due hereunder and shall remain unpaid, the
Borrower will, unless the Lender shall otherwise consent in
writing:
(a)
Maintain
and preserve its existence, rights and privileges;
(b)
The
Company will not incur any indebtedness, other than indebtedness incurred in the
ordinary course of business, bank financing (ie. revolving credit facility, note
payable), borrowings that are security by the current assets of the Company (ie.
receivables financing), investment margin agreements, or debt that is
outstanding on the date hereof, unless such indebtedness is subordinated to the
prior payment in full of this Note on terms reasonably satisfactory to the
Lender;
(c)
Not (i)
directly or indirectly sell, lease or otherwise dispose of (A) any of its
property or assets other than in its ordinary course of business or (B)
substantially all of its properties and assets, in the aggregate, to any
person(s), whether in one transaction or in a series of transactions over any
period of time, (ii) merge into or with or consolidate with any other person or
(iii) adopt any plan or arrangement for the dissolution or liquidation of the
Borrower;
(d) Give
written notice to Lender upon the occurrence of an Event of Default (as defined
below) or any event but for the giving of notice or lapse of time, or both,
would constitute an Event of Default within five (5) Business Days of such
event;
(e) Comply in
all material respects with all applicable laws (whether federal, state or local
and whether statutory, administrative or judicial or other) and with every
applicable lawful governmental order (whether administrative or
judicial).
(f)
Not
redeem or repurchase any of its capital stock;
(g)
Not (i)
make any advance or loan to any person, firm or corporation, except for
reasonable travel or business expenses advanced to the Company's employees or
independent contractors in the ordinary course of business, or (ii) acquire all
or substantially all of the assets of another entity;
(h)
Not
prepay any indebtedness, except for trade payables incurred in the ordinary
course of the Borrower's business; and
(i) Not take
any action which would impair the rights and privileges of this Note set forth
herein or the rights and privileges of the holder of this Note; and
(j)
Deliver
to the Lender quarterly financial statements within thirty (30) days after the
end of each quarter in form, scope and substance satisfactory to the Lender and
annual audited financial statements within ninety (90) days after the end of
each fiscal year.
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5.
Events of
Default. Each and any of the following shall constitute a
default and, after expiration of a grace period, if any, shall constitute an
“Event of Default” hereunder:
(a)
the
nonpayment of principal, late charges or any other costs or expenses promptly
when due of any amount payable under this Note;
(b) an Event
of Default under this Note (other than a payment default described above), [or
any other failure of the Borrower to observe or perform any present or future
agreement of any nature whatsoever with Lender], including, without limitation,
any covenant set forth in this Note;
(c)
if
Borrower shall commence any case, proceeding or other action: (i) under any
existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate it
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
liquidation, dissolution, composition or other relief with respect to it or its
debts; or (ii) seeking appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial part of its property, or
the Borrower shall make a general assignment for the benefit of its creditors;
or (iii) there shall be commenced against the Borrower any case, proceeding or
other action of a nature referred to above or seeking issuance of a warrant of
attachment, execution, distrait or similar process against all or any
substantial part of its property, which case, proceeding or other action results
in the entry of any order for relief or remains undismissed, undischarged or
unbonded for a period of sixty (60) days; or (iii) the Borrower shall take any
action indicating its consent to, approval of, or acquiescence in, or in
furtherance of, any of the acts set forth; or (iv) the Borrower shall generally
not, or shall be unable to, pay its debts as they become due or shall admit in
writing its inability to pay its debts;
(d) any
representation or warranty made by the Borrower or any other person or entity
under this Note or under any other Loan Documents shall prove to have been
incorrect in any material respect when made; or
(e)
an event
of default or default shall occur and be continuing under any other material
agreement, document or instrument binding upon the Borrower including, without
limitation, any instrument for borrowed money in excess of fifty thousand
dollars ($50,000) (whether or not any such event of default or
default is waived by the holder thereof).
(f)
the entry
of any judgment against Borrower or any of its property for an amount in excess
of fifty thousand dollars ($50,000) that remains unsatisfied for thirty (30)
days;
(g)
any
material adverse change in the condition or affairs (financial or otherwise) of
the Borrower shall occur which, in the sole opinion of the Lender, increases its
risk with respect to loans evidenced by this Note;
(h)
the sale
of all or substantially all of the assets, or change in ownership or the
dissolution, liquidation, merger, consolidation, or reorganization of Borrower
without the Lender’s written consent.
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6. Lender’s
Rights Upon Default. Upon the occurrence of any Event of
Default, the Lender may, at its sole and exclusive option, do any or all of the
following, either concurrently or separately: (a) accelerate the maturity of
this Note and demand immediate payment in full, whereupon the outstanding
principal amount of the Note and all obligations of Borrower to Lender, together
with accrued interest thereon and accrued charges and costs, shall become
immediately due and payable without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived; and (b) exercise
all legally available rights and privileges.
7.
Usury. In
no event shall the amount of interest paid or agreed to be paid hereunder exceed
the highest lawful rate permissible under applicable law. Any excess
amount of deemed interest shall be null and void and shall not interfere with or
affect the Borrower’s obligation to repay the principal of and interest on the
Note. This confirms that the Borrower and, by its acceptance of this
Note, the Lender intend to contract in strict compliance with applicable usury
laws from time to time in effect. Accordingly, the Borrower and the
Lender stipulate and agree that none of the terms and provisions contained
herein shall ever be construed to create a contract to pay, for the use or
forbearance of money, interest in excess of the maximum amount of interest
permitted to be charged by applicable law from time to time in
effect.
8.
Costs of
Enforcement. Borrower hereby covenants and agrees to indemnify, defend
and hold Lender harmless from and against all costs and expenses, including
reasonable attorneys’ fees and their costs, together with interest thereon at
the Prime Rate, incurred by Lender in enforcing its rights under this Note; or
if Lender is made a party as a defendant in any action or proceeding arising out
of or in connection with its status as a lender, or if Lender is requested to
respond to any subpoena or other legal process issued in connection with this
Note; or reasonable disbursements arising out of any costs and expenses,
including reasonable attorneys’ fees and their costs incurred in any bankruptcy
case; or for any legal or appraisal reviews, advice or counsel performed for
Lender following a request by Borrower for waiver, modification or amendment of
this Note or any of the other Loan Documents.
9.
Governing
Law. This Note shall be binding upon and inure to the benefit
of the Borrower and the Lender and their respective successors and assigns;
provided that the Borrower may not assign this Note, in whole or in part, by
operation of law or otherwise, without the prior written consent of the
Lender. The Lender may assign or otherwise participate out all or
part of, or any interest in, its rights and benefits hereunder and to the extent
of such assignment or participation such assignee shall have the same rights and
benefits against the Borrower as it would have had if it were the
Lender. This Note, and any claims arising out of relating to this
Note, whether in contract or tort, statutory or common law, shall be governed
exclusively by, and construed in accordance with the laws of the State of Nevada
without regard to principles of conflicts of laws.
10. Jurisdiction. THE
BORROWER CONSENTS THAT ANY LEGAL ACTION OR PROCEEDING AGAINST IT UNDER, ARISING
OUT OF OR IN ANY MANNER RELATING TO THIS NOTE, OR ANY OTHER INSTRUMENT OR
DOCUMENT EXECUTED AND DELIVERED IN CONNECTION HEREWITH SHALL BE BROUGHT
EXCLUSIVELY IN ANY COURT OF NEW YORK. THE BORROWER, BY THE EXECUTION
AND DELIVERY OF THIS NOTE, EXPRESSLY AND IRREVOCABLY CONSENTS AND SUBMITS TO THE
PERSONAL JURISDICTION OF ANY OF SUCH COURTS IN ANY SUCH ACTION OR
PROCEEDINGS. THE BORROWER AGREES THAT PERSONAL JURISDICTION OVER IT
MAY BE OBTAINED BY THE DELIVERY OF A SUMMONS BY PERSONAL DELIVERY OR OVERNIGHT
COURIER AT THE ADDRESS PROVIDED IN SECTION 11 OF THIS NOTE. ASSUMING
DELIVERY OF THE SUMMONS IN ACCORDANCE WITH THIS PROVISION, THE BORROWER HEREBY
EXPRESSLY AND IRREVOCABLY WAIVES ANY ALLEGED LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE OF FORUM NON-CONVENIENS OR ANY SIMILAR BASIS.
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11.
Miscellaneous.
(a) Borrower hereby waives protest, notice of protest, presentment, dishonor,
and demand. (b) Time is of the essence for each of Borrower’s
covenants under this Note. (c) The rights and privileges of Lender
under this Note shall inure to the benefit of its successors and
assigns. All obligations of Borrower in connection with this Note
shall bind Borrower’s successors and assigns, and Lender’s conversion rights
shall succeed to any successor securities to Borrower’s common
stock. (d) If any provision of this Note shall for any reason be held
to be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provision hereof, but this Note shall be construed as if such
invalid or unenforceable provision had never been contained
herein. (e) The waiver of any Event of Default or the failure of
Lender to exercise any right or remedy to which it may be entitled shall not be
deemed a waiver of any subsequent Event of Default or Lender’s right to exercise
that or any other right or remedy to which Lender is
entitled. No delay or omission by Lender in exercising, or
failure by Lender to exercise on any one or more occasions, shall be construed
as a waiver or novation of this Note or prevent the subsequent exercise of any
or all such rights. (f) This Note may not be waived, changed, modified, or
discharged orally, but only in writing.
12.
Notice,
Etc. Any notice required by the provisions of this Note will
be in writing and will be deemed effectively given: (a) upon personal
delivery to the party to be notified; (b) when sent by confirmed telex or
facsimile if sent during normal business hours of the recipient; if not, then on
the next business day; (c) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid; or (d) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt, and delivered as
follows:
If to the
Borrower:
Phreadz
USA, LLC.
00 Xxxx
Xxxxxx
Xxxxxxxxxx,
XX 00000
If to
Lender:
Xxxxx XxXxxxxx
00 Xxxxxx Xxxx Xxxx
Xxxxxxxx XX 00000
or, as to
each party, at such other address as shall be designated by such party in a
written notice to the other parties
13.
Definitions. As
used herein, the term "Solvent" shall mean, with respect to any person or entity
on a particular date, that on such date (i) the fair value of the property of
such person or entity is not less than the total amount of the liabilities of
such person or entity, (ii) the present fair salable value of the assets of such
person or entity is not less than the amount required to pay (E) the probable
liability on such person's existing debts as they become absolute and matured,
(iii) such person or entity is able to realize upon its assets and pay its debts
and other liabilities, (iv) such person or entity does not intend to, and does
not believe that it will, incur debts or liabilities beyond such person or
entity's ability to pay as such debts and liabilities mature and (v) such person
or entity is not engaged in business or a transaction, and is not about to
engage in a business or a transaction, for which such person's or entity's
property would constitute unreasonably small capital. The term
“Reverse Merger” shall be defined as upon the filing of the 8K concerning the
merger between Phreadz LLC and Xxxxxx Mining and Mineral.
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IN
WITNESS WHEREOF, the undersigned has executed this CORPORATE LOAN
AGREEMENT as of the date first set forth above.
By the Borrower:
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SIGNED:_______________________________
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Xxxxx
Xxxx
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in
the presence of:
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Witness
Signature:_________________________
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SIGNED:_______________________________
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Xxxxxxxx
Xxxxxxxx
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in
the presence of:
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Witness
Signature:_________________________
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By the
Lender:
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SIGNED:_______________________________
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_________________________________________
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in
the presence of:
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Witness
Signature:_________________________
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)
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