EXHIBIT 10.1
LOAN AGREEMENT WITH FALCON
OIL & GAS LTD.
DATED OCTOBER 1, 2008
LOAN AGREEMENT
THIS LOAN
AGREEMENT is made this 1st day of October, 2008, by and between
PETROHUNTER ENERGY CORPORATION , a Maryland corporation
(“ Borrower ”), and FALCON OIL & GAS
LTD. , a British Columbia corporation (“ Lender
”).
WHEREAS, Borrower and Lender have entered into
(i) a Purchase and Sale Agreement among Borrower, Sweetpea
Petroleum Pty Ltd., Lender and Falcon Oil & Gas Australia Pty
Ltd dated August 22, 2008 (the “ Beetaloo PSA ”)
providing for the sale of a 50% working interest in the Beetaloo
Basin properties, and (ii) a Purchase and Sale Agreement among
Borrower, PetroHunter Operating Company, Lender and Falcon Oil
& Gas USA, Inc. dated August 22, 2008 ((the “ Buckskin
Mesa PSA ”) providing for the sale of a 25% working
interest in 5 wells and applicable spacing units (the “
Buckskin Mesa Wells ”); and
WHEREAS,
Borrower is desirous of borrowing US$5,000,000 to pay certain
indebtedness, liabilities and obligations, all as more particularly
outlined in Schedule “A ” attached hereto;
and
WHEREAS, Lender
is willing to provide the above-described loan to Borrower on the
terms and conditions hereinafter set forth.
NOW, THEREFORE,
in consideration of the foregoing and the mutual covenants herein
contained, the parties agree as follows:
1.
Terms of Loan. Subject to the terms and conditions of this
Agreement, Lender hereby agrees to loan to Borrower the amount of
US$5,000,000 (the “ Loan ”).
a. The
Loan shall be repaid on the earlier of: (i) that date that is 45
days after the receipt for the (final) prospectus qualifying the
distribution of the common shares in the capital of Lender
underlying the convertible securities issued to Borrower as partial
consideration under the Beetaloo PSA; (ii) the occurrence of an
Event of Default (as hereinafter defined); and (iii) 120 days from
the date of this Agreement.
b. Concurrently
herewith, Borrower shall execute a Promissory Note in favor of
Lender in the face amount of US$5,000,000 (the “ Note
”), in the form attached hereto as Exhibit
“B” and incorporated by reference
herein.
c. The
Loan proceeds shall be advanced directly to the creditors listed on
Schedule “A”.
d. The
unpaid principal amount of the Loan shall bear interest at the rate
of 10% per annum, with interest on overdue interest at the same
rate as on principal, computed on the daily balance outstanding,
both before and after the occurrence of an Event of Default and/or
judgment (the “ Interest ”). Interest
shall be payable monthly on the last business day (being any day
other than a Saturday, Sunday or statutory holiday in Denver,
Colorado), with the first payment of interest due on the last
business day of the month in which this Agreement is
signed.
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e. Borrower
may prepay under the Note at any time in any amount without premium
or penalty.
2.
Security. As further and continuing collateral
security for all of Borrower’s indebtedness, liabilities and
obligations owed to Lender under this Loan, including any Interest
owing (collectively, the “ Indebtedness ”),
Borrower shall executed and deliver to Lender, in form and content
satisfactory to Lender, the following (collectively, the “
Security ”):
a. The Loan shall be
secured by a first charge/mortgage in favor of Lender on the
Buckskin Mesa Wells, as evidenced by a Mortgage, Assignment,
Security Agreement, Fixture Filing and Financing Statement (the
“ Mortgage ”) in the form attached hereto as
Exhibit “C” and incorporated by reference
herein.
b. Borrower shall
pledge shares of Lender’s capital stock or securities
convertible into shares of Lender’s capital stock
(collectively, the “ Pledge Shares ”), which it
has acquired in connection with the closing of the Beetaloo PSA in
accordance with the following and in the following
priority:
i) Pledge
Shares with a value equivalent to US$7,500,000 (calculated based on
the closing trading price of the Lender’s common shares on
the TSX Venture Exchange on the trading day immediately prior to
the closing of the Loan) shall be deposited in a brokerage account
designated by Lender, with the proceeds of sale irrevocably
directed to Lender to be applied on account of the Indebtedness,
with the pledge evidenced by a Pledge and Security Agreement in the
form attached hereto as Exhibit “D” and
incorporated by this reference;
ii) Up to
US$6,000,000 worth of Pledge Shares (calculated based on the
closing trading price of the Lender’s common shares on the
TSX Venture Exchange on the trading day immediately prior to the
closing of the Loan) shall be available to Borrower as collateral
for loans from third parties, and if Borrower obtains any such
third party loans, the proceeds thereof shall be applied as
follows: the first US$3,000,000 shall be for
Borrower’s use as working capital in the normal course of
business, the next US$3,000,000 shall be paid to Lender to reduce
the outstanding balance on the Loan, the next US$1,000,000 shall be
available to Borrower, and thereafter proceeds of US$1,000,000 or
lesser amounts shall be distributed successively 50% to each party
until the earlier of being fully applied or until all accrued and
unpaid interest and principal under the Loan is fully paid;
and
iii) All
remaining Pledge Shares shall be unpledged and may be sold by
Borrower, in which case the proceeds of any such sale shall be
divided equally (50/50) between Borrower and Lender until the
earlier of being fully applied or until all accrued and unpaid
interest and principal under the Loan is fully paid.
As the Pledge Shares are being held in escrow
pursuant to the terms of the Beetaloo PSA, Borrower and Lender
shall advise the Escrow Agent (as defined in the Beetaloo PSA) of
this Loan Agreement and the security interest created in the Pledge
Shares by sending a notice in the form attached hereto as
Exhibit “E” .
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3.
Covenants . During such time as the Indebtedness
is outstanding, Borrower shall:
a. Pay when due all
amounts owing to all of its creditors and the creditors of its
subsidiaries, Sweetpea Petroleum Pty Ltd. and PetroHunter Operating
Company;
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Pay to Lender
all amounts owing hereunder when due;
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c.
