LOAN
AGREEMENT
THIS AGREEMENT
, dated for reference the 2nd day of
February, 2006, is made
BETWEEN:
CARNAVON TRUST REG. , a domiciled discretionary trust of
Liechtenstein, having an address of Aeulestrasse 5, FL-9490 Vaduz,
Liechtenstein
(the
“Lender”);
AND:
DIGITAL ECOSYSTEMS CORP. , a Nevada company having an office address of
1313 East Maple Street, Suite 223, Bellingham, Washington, USA,
98225
(the
“Borrower”).
WHEREAS
the Borrower wishes to borrow and
the Lender is willing to lend to the Borrower the sum of Fifty
Thousand Dollars in US funds (US$50,000) on the terms hereinafter
set out.
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:
1.
DEFINITIONS
Where used in this Agreement, the
following words and phrases shall have the following
meaning:
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(a)
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“Agreement” means
this Agreement and the schedules hereto, as at any time amended or
modified and in effect;
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(b)
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“Charter” means the
Memorandum and Articles, the Articles and By-Laws or other
constating documents of the Borrower, as at any time amended or
modified and in effect;
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(c)
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“Event of Default”
means any event specified in subsection 7.1;
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(d)
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“Lender’s
Security” means the Note;
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(e)
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“Loan” means the loan
by the Lender to the Borrower established pursuant to subsection
3.1; and
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(f)
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“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
out in Schedule “A”.
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2.
INTERPRETATION
2.1 Governing
Law
This Agreement is governed by the
laws of the State of Washington and the parties attorn to the
non-exclusive jurisdiction of the courts of Washington for the
resolution of all disputes under this Agreement.
2.2
Severability
If any one or more of the
provisions contained in this Agreement is found to be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein will
not in any way be affected or impaired thereby.
2.3 Parties in
Interest
This Agreement enures to the
benefit of and is binding on the parties hereto and their
respective successors and permitted assigns.
2.4 Headings and Marginal
References
The division of this Agreement
into sections, subsections, paragraphs and subparagraphs and the
insertion of headings are for convenience of reference only and do
not affect the construction or interpretation of this
Agreement.
2.5
Currency
All statements of, or references
to, dollar amounts in this Agreement means lawful currency of the
United States of America.
3. THE
LOAN
3.1 Establishment of the
Loan
The Lender agrees, on the terms
and conditions set forth in this Agreement, to lend to the Borrower
the sum of Fifty Thousand Dollars ($50,000).
3.2 Evidence of
Indebtedness
Indebtedness of the Borrower to
the Lender in respect of the Loan will be evidenced by the Note,
which will be made by the Borrower to the Lender at the time funds
are advanced, a copy of which form is attached hereto as Schedule
“A”.
3.3 Repayment of the
Loan
The Borrower will repay the Loan
on or before February 2, 2007. The Loan will be subject to interest
payable to the Lender at maturity at a rate of Twelve Percent (12%)
per annum. The interest will be payable concurrently with repayment
of the principal amount of the Loan. In the event the Loan is
repaid on a date prior to the date of Maturity, interest will be
paid on the principal amount up to the date the Loan is
repaid.
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3.4
Repayment of Loan
The Borrower may repay the Loan
at any time without penalty, bonus or charges.
3.5 Conversion into
Shares
During the term of the Agreement
or upon maturity, the Lender will have the option to convert the
Loan, or any portion thereof, into shares of the Company at a price
per share equal to the closing price of the Company’s shares
on the OTC.BB market on the day preceding notice from the Lender of
its intent to convert the Loan, or any portion thereof, into shares
of the Company. A Notice of Conversion is attached hereto as
Schedule “B”.
4. SECURITY FOR THE
LOAN
4.1 Costs, Charges and
Expenses
The Borrower will assume and pay
all costs, charges and expenses, including reasonable
solicitors’ costs, charges and expenses on a special costs
basis, which may be incurred by the Lender in respect of this
Agreement or the Lender’s Security or which may be incurred
by the Lender in respect of any proceedings taken or things done by
the Lender in connection therewith to collect, protect, realize or
enforce the Lender’s Security.
5. REPRESENTATIONS AND
WARRANTIES
5.1 Representations and
Warranties
The Borrower represents and
warrants to the Lender that:
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(a)
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the Borrower is a corporation
duly incorporated, validly existing and in good standing under the
laws of the State of Nevada;
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(b)
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the Borrower has all requisite
corporate power and authority to enter into this Agreement and to
grant the Lender’s Security and to carry out the obligations
contemplated herein and therein;
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(c)
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this Agreement and the
Lender’s Security have been duly and validly authorized,
executed and delivered by the Borrower and
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