EXHIBIT 10.1
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ANDRESMIN GOLD CORPORATION
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CONVERTIBLE DEBENTURE
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(the "Debenture")
PRINCIPAL:
$500,000 (USD)
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INTEREST:
Eight percent
(8%)
per annum calculated and paid
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semi-annually in arrears
ISSUE DATE:
Effective Issue Date of February 21, 2005
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LENDER:
Financiera Dacorey S.A.
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LENDER ADDRESS:
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Montevideo, Uruguay
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WITH THE TERMS AS FOLLOWS:
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FOR VALUE RECEIVED, ANDRESMIN GOLD CORPORATION (the "Company"), a Montana
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company having its address for service of all notices and process hereof at
Calle Jose Gonzales 671-675, Miraflores, Lima 18, Peru, HEREBY ACKNOWLEDGES
ITSELF INDEBTED TO THE AFORESTATED
LENDER (the "Lender"
and also referred to as
the "Holder", both of which includes any assignee properly effected in
accordance with law and the terms hereof),
AND THE COMPANY
PROMISES TO PAY TO
THE LENDER, in the manner and at the times set
forth herein in accordance with
the stated terms, the aggregate Principal (the "Principal", also called the
"Loan") sum, in the amount above set forth,
and Interest, and other costs as set
forth herein.
The effective
date and issue date (the "Effective Date" and "Issue Date")
of this Debenture is the above
stated issue date, and the due date (the "Due
Date") for the payment of all Principal,
with interest then
outstanding unless
otherwise specifically stated hereafter, shall be as set forth below,
unless
accelerated due to default not cured or waived by the terms
hereof, and such
accelerated date shall thereupon be the Due
Date.
This Debenture
is enforceable and actionable in accordance with the laws of
and in the jurisdiction of the Company and the Company waives any and all
defenses or set-offs or counterclaims to the enforcement hereof and attorns
without reservation or defense to execution hereof (except the defense of
payment) and to any judgment, reciprocating
or otherwise.
<PAGE>
SECURITIES DECLARATION AND
ENFORCEABILITY
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The parties hereto acknowledge that this security, or any resultant
securities, has not been registered under the securities laws of any
jurisdiction and is being issued pursuant
to an exemption from registration.
This
Debenture is
specifically
acknowledged
to be enforceable without
impedance or reference to any rights of
set-off, counterclaim, counter-pleading,
or any other reason or excuse for non-payment on the Due Date or the date of
legal execution prior to or after process,
excepting solely for
any claim as to
Principal or Interest paid on or prior to the Due Date
or on or prior to legal
execution hereof.
This Debenture
is specifically acknowledged to be a continuing security for
all indebtedness of the Company outstanding
from time-to-time, including for all
re-advances after any payments of Principal, partial or otherwise, until
discharged by the Lender in writing.
1. Interest
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This
Debenture will bear interest (the "Interest") on the Principal
outstanding, from time to time, at a rate of
eight percent (8%), calculated and
paid semi-annually in arrears, commencing the Issue Date and
continuing until
payment of all outstanding Principal,
Interest and any costs. After the Due Date
(as defined below) or in the event of
failure of payment of Interest at any time
and waiver of default by the Lender, Interest shall continue at the said
Interest rate and shall be capitalized
monthly, and added to Principal, and bear
Interest when unpaid.
2. Payment of Principal
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The Principal will be due and payable by the
Company to the Lender on the
second anniversary of the Issue Date, being
February 21, 2007 ("Due Date").
The Principal will be due and payable by the
Company to the Lender in the
following manner:
(a) the Principal shall be paid on the Due
Date, and any acceleration
thereof; and
(b) in the event that any of the
Principal and Interest has been reduced
by an exercise of the
Conversion Option (as
defined below) then
the
reduced
Principal and
Interest shall be considered paid and
discharged.
<PAGE>
The Company may prepay any amount of outstanding Principal, and any
Interest accrued, without bonus or penalty. The
Lender shall have the right and
priority to require the below Conversion Option by election within ten days
of
notice of pre-payment by the Company.
3. Conversion Terms of this
Debenture
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The Lender shall
have the option, while
this Debenture is outstanding, to
convert (the "Conversion Option") some or all of the Principal and Interest
unpaid into units ("Units") of the Company at a conversion price (the
"Conversion Price") of $.80 per Unit. Each
Unit sonsists of one share of common
stock (the "Shares" or singularly the "Share") of the Company and one
non-transferable share purchase warrant (each a "Warrant" or
"Warrants" as the
context requires). Each Warrant entitles the holder thereof to acquire one
additional Share at a price of $.1.25
per share for a period
of two years from
the date of issuance of the Warrants.
The Shares
received upon exercise
of the
Conversion Option will have a hold period of at
least twelve
months from the
date of payment. In addition, the shares received upon exercise
of the Warrants
(the "Warrant Shares") will have a hold period of at
least 12 months from the
date of exercise of the Warrants.
Furthermore, the Shares received upon exercise
of the Conversion Option and upon exercise of the Warrants shall not be
exercisable until the Company's authorized capital has been increased by
that
number of shares necessary to accommodate
the conversaion.
Fractional
Shares will not be issued on any conversion but, in lieu
thereof, the Company will make a cash
payment.
The right to
convert this Debenture
may be exercised by
the Lender by the
delivery of a notice of exercise of the Conversion Option, which must be
exercised as to not less than $100,000 of
unpaid Principal and
Interest (except
as to the last remaining portion) of this Debenture which is tendered for
conversion. Subject to regulatory delays,
the Shares and/or Warrant Shares shall
be delivered within ten (10) days of notice
of exercise.
Subject to the
Company not being in default of any part of this Debenture,
the Company being a reporting and trading issuer listed in good standing on
a
public trading forum and the Company's common shares trading at an average
volume of no less than 100,000 shares per day for the
previous 30 days and
at
$1.70US or more, the Company may require that some or all of the
Principal
amount and Interest be converted (the "Put") under the Conversion Option,
employing the above Conversion Price, commencing one year after the
Effective
Date. The Company shall give the Lender notice of
the Put by notice in writing
accompanied by an appropriate certificate for Shares in the name of the
Lender
(or any proper assignee of which the Company has
been given notice)
and, upon
delivery of the same and acceptance by the Lender,
firstly, Interest and then
Principal shall be diminished and absolutely
considered paid and
discharged as
to such converted amount by employment of
the Put.
4. Subordinated Charge and
Registration Rights
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This
Debenture shall be a floating charge security on the assets of the
Company subordinate to commercial
borrowing by the
Company with banks or other
<PAGE>
major lending institutions. The Lender shall provide the Company with such
subordination instruments as a commercial
lender may
reasonably
require from
time to time.
Regardless of
whether default has
occurred and prior to the Due Date, the
Company agrees, immediately at the request of the Lender,
to register
this
Debenture in all governmental or public registries as the Lender may
consider
advisable and, further, to make all such
publications as the Lender may consider
advisable to effect public notice of the charge herein created (the "Fixed
Charge Mortgaged Property"), all at the
cost of the Company.
5. Fixed Charge Security
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At such
time as this
Debenture shall be in default which has not been
waived or upon the Due Date and full
payment not being made, this security shall
crystallize and become a fixed charge security
for payment of the Principal and
Interest and all other moneys owing by the Company and for the
performance
of
the obligations and other covenants of the Company, and to that purpose the
Company hereby grants, mortgages, pledges, charges, assigns and
conveys to and
in favour of the Lender (subject to exception as to the
last day of the term of
any lease), as and by way of a fixed
charge, all of the
interest of the Company
in its assets (the "Assets") and hereby covenants and agrees to cause,
at the
Company's cost, the within Debenture to be
registered against the
Assets to the
extent available in the relevant jurisdictions or, at the Lender's sole
discretion and at the cost of the Company
in the event of the Company's failure
or omission to so register, hereby permits
the Lender to register this Debenture
as security on and to the Assets.
For the
purposes of this
Debenture,
the assets to which
the Fixed Charge
Mortgaged Property refers are hereinafter collectively referred to as the
"Mortgaged Property".
The last day of
any term reserved by any lease agreement is excepted out of
the Mortgaged Property and charges hereby
created and does not form any part of
the Mortgaged Property; but if any sale is made under or
pursuant to the powers
herein contained of any lease forming part
of the Mortgaged Property the Company
will hold the same in trust for the
purposes hereof to
assign to any person who
may acquire such term or any part
thereof.
6. Replacement of Prior Encumbrances, Continuing Security and Release of
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Security
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It is hereby
agreed and
acknowledged
by the Company and the Lender that
this security shall replace and supersede
any preceding agreements and contracts
of security or payment respecting the
Principal and Interest.
The parties
hereto acknowledge that this security is a continuing security
for all advances and re-advances by the Lender to the Company and
the parties
acknowledge that should the above stated Principal be increased by the
Lender
that the new and greater Principal shall be the Principal and shall
be secured
by this Debenture without further act of the Parties, even should such
<PAGE>
additional advance cause the aggregate
loans under this Series "A" to exceed the
above authorized stated limit.
Upon payment of
the Principal and
payment of Interest
(whether by payment
of cash or by conversion to Units), the
Lender shall provide the Company, at its
request, with all such discharges,
releases and
acknowledgments of
payment as
the Company may reasonably require and request to evidence
such payment and to
discharge the within security and any
registration in respect thereto.
TO HAVE AND TO
HOLD the same unto the use of the Lender, and the Lender's
lawful successors and assigns, upon and subject to the terms and
conditions
herein set forth.
This
Debenture is issued
subject to and with the benefit of the conditions
annexed hereto, which are to be deemed part
of it.
IN WITNESS
WHEREOF the Company
has caused its duly
authorized officer
to
execute these terms effective on the
Effective Date.
ANDRESMIN GOLD CORPORATION
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Per: /s/
Ian Brodie
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Authorized Signatory
<PAGE>
CONDITIONS REFERRED TO IN THE 2005 SERIES "A" DEBENTURE
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OF ANDRESMIN GOLD
CORPORATION
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The Company hereby covenants and agrees
with the Lender as follows, namely:
1. This Debenture is issued in accordance
with resolutions of the Directors
(and of the
members, if
applicable)
of the Company and all
other matters
and things,
including approval of
relevant regulatory
authorities,
have
been do
