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LOAN NOTE INSTRUMENT CONSTITUTING TRILLIANT EXPLORATION LOAN NOTES 2009

Promissory Note

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TRILLIANT EXPLORATION CORP

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Title: LOAN NOTE INSTRUMENT CONSTITUTING TRILLIANT EXPLORATION LOAN NOTES 2009
Date: 7/9/2009

LOAN NOTE INSTRUMENT CONSTITUTING TRILLIANT EXPLORATION LOAN NOTES 2009, Parties: trilliant exploration corp
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Exhibit 10.5

 

DATE                        1 July 2009

 

 

 

 

 

 

 

TRILLIANT EXPLORATION CORP

 

 

 

 

 

 

 

 

 

 

 

 

______________________________________________________________

 

LOAN NOTE INSTRUMENT

CONSTITUTING

TRILLIANT EXPLORATION LOAN NOTES 2009

______________________________________________________________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GSC Solicitors

31-32 Ely Place

London  EC1N 6TD

Tel:  020 7822 2222

Fax:  020 7822 2211

 

 

 


 

 

 

CONTENTS

 

 

3         INTEREST

4         REDEMPTION OF LOAN NOTES

5         VOLUNTARY EARLY REPAYMENT

6         CHANGE OF CONTROL

7         DEFAULT EVENTS

8         TRANSFER

9         CERTIFICATES

12         MEETINGS

13         NO SET-OFF  

14         AMENDMENT OF INSTRUMENT

15         COSTS AND EXPENSES

16         THIRD PARTY RIGHTS

 

 

 


 

 

 

 

THIS INSTRUMENT is made by way of deed poll on 1 July 2009

 

BY:

Trilliant Exploration Corp a company registered under the laws of Nevada USA with company registration number 0001378948 and having its registered office at 2300 West Sahara Avenue Suite 800, Las Vegas, NV 89102 United States of America the " Company ").

 

RECITAL:

 

The Company has agreed to create up to £1,500,000 loan notes (the " Loan Notes ") identifiable as the Trilliant Exploration Loan Notes 2009 and has determined to constitute and issue the same on the terms set out below.

 

1

DEFINITIONS AND INTERPRETATION

 

1.1

Definitions

 

The following words have these meanings in this Instrument unless a contrary intention appears;

 

Adjustment Event ” means any or all of the following, at any time, or by reference to any record date, while the Notes remain in issue:

 

 

(a)

any allotment or issue of Equity Securities by the Company by way of capitalisation of profits or reserves;

 

 

(b)

any cancellation, purchase or redemption of Equity Securities, or any reduction or repayment of Equity Securities, by the Company;

 

 

(c)

any sub-division or consolidation of Equity Securities by the Company; and

 

 

(d)

any issue of securities or other instruments convertible into shares in, or Equity Securities of, the Company or any grant of options, warrants or other rights to subscribe for, or call for the allotment or issue of, shares in, or Equity Securities of, the Company,

 

but excluding any issue of Equity Securities of the Company pursuant to the exercise of any options granted to employees or directors of the Company.

 

Aggregate Principal Amount ” means, in respect of the Loan Notes in issue at any time, the aggregate nominal amount of the Loan Notes outstanding at that time together with all accrued and/or capitalised interest;

 

Business Day ” means a day other than a Saturday or a Sunday on which banks are open for business in London and times of such days shall be construed in accordance with the time then prevailing in London;

 

Certificate ” means a certificate evidencing title of the Loan Notes, in the form, or substantially the form, set out in Schedule 1;

 

 

 


 

 

 

Change of Control Event ” means a person or group of persons acting in concert (the “ Bidder ”) making an offer for 50% or more of the issued Shares of the Company and such offer being declared unconditional or the Bidder otherwise acquiring more than or controlling the voting rights attached to 50% or above of the issued Shares of the Company.

 

Commencement Date ” means the date of this Instrument;

 

 “ Conversion Date ” means the date within 5 Business Days of receipt of Notice of Conversion by the Company;

 

Conversion Price ” means the price of 45 cents per Share;

 

Default Event” has the meaning given to that term in Clause 6.1;

 

Directors” means the Board of Directors of the Company from time to time;

 

Equity Securities ” has the meaning given in section 94 of the Companies Act 1985;

 

Extraordinary Resolution ” has the meaning given to that term in paragraph 16 of Schedule 4;

 

 “ Group Company” means the Company, any parent company of the Company, and any subsidiary or subsidiary undertakings of the Company or any such parent company, each of its parent undertakings and each of its and their respective subsidiary undertakings and “ Group ” shall be construed accordingly;

 

 “ Instrumen t” means this loan note instrument;

 

Interest Rate ” means 12% per annum (or part thereof) for the remainder of the Term to be paid in accordance with the provisions of paragraph 3 below;

 

Heads of Agreement ” means the heads of agreement entered into between the Charms Investments Limited and Benbrack Charkit Limited whereby Benbrack Charkit Limited agreed to subscribe for Loan Notes constituted under the terms of this Instrument to the value of £1,500,000 in the Company;

 

“Investor” means Benbrack Charkit Limited being a party to the Heads of Agreement;

 

Loan Notes” means, as the context requires:

 

 

(a)

the secured loan notes of the Company constituted by this Instrument pursuant to the terms of the Investment Agreement;

 

 

(b)

the amount of the secured loan notes of the Company constituted by this Instrument then issued and outstanding and fully paid up (whether in one or more tranches); or

 

 

 


 

 

 

 

(c)

a specific portion of the secured loan notes of the Company constituted by this Instrument or the monies represented by the secured loan notes of the Company constituted by this Instrument;

 

Loan Note Subscription Date ” means the date on which the Loan Notes (or any of them) are subscribed and paid for in cash by the Investor;

 

Noteholders” means the person(s) for the time being entered in the Register as the holders of the Loan Notes;

 

“Notice of Conversion” means notice of Conversion of Loan Notes in writing to be given at any time prior to the expiry of the Term to the Company by Noteholders requiring conversion of Loan Notes into Shares at the Conversion Price.

 

Register” means the register of Noteholders maintained by the Company as provided for in Clause 9;

 

Registered Office” means the registered office of the Company from time to time;

 

Repayment Date” means the date fixed for repayment by the Noteholder(s) being 24 June 2010;

 

“Share Charge” means the share charge to be granted by the Company on or before the Commencement Date securing the aggregate of the Loan Notes to be issued pursuant to the terms of this Loan Note Instrument.

 

Shares” means the shares in the capital of the Company in issue from time to time; and

 

Term ” means the period from the Commencement Date to the Repayment Date (or, if later, the date of repayment of all of the Loan Notes);

 

1.2

Interpretation

 

In this Instrument, unless the contrary intention appears:

 

 

(a)

the singular includes the plural and vice versa and any gender includes any other gender;

 

 

(b)

‘person’ includes a firm, a partnership, a body corporate, an unincorporated association or body, a state or agency of state, a trust or a foundation (whether or not having separate legal personality);

 

 

(c)

a reference to:

 

 

(i)

a person includes that person’s heirs, executors, administrators, successors, and assigns;

 

 

(ii)

a document means that document as amended, replaced or novated;

 

 

 


 

 

 

 

(iii)

a statute or other law means that statute or other law as amended or replaced, whether before or after the date of this deed and includes regulations and other instruments made under it;

 

 

(iv)

a clause or schedule is a reference to a clause or a schedule in this Instrument;

 

 

(v)

a thing or an amount includes the whole and each part of it;

 

 

(vi)

a month means a calendar month; and

 

 

(vii)

a group of persons includes all of the collectively, any two or more collectively and each of them individually;

 

 

(d)

where the word ‘including’ or ‘includes’ is used, it is to be taken to be followed by the words: ‘but not limited to’ or ‘but is not limited to’, as the case requires;

 

 

(e)

where a period of time is expressed to be calculated from or after a specified day, that day is included in the period;

 

 

(f)

“Pounds Sterling” and “£” denote the lawful currency of the United Kingdom;

 

 

(g)

a reference to “date of redemption” means the date on which all the outstanding nominal amount and compounded and/or accrued interest on all the outstanding Loan Notes is finally paid; and

 

 

(h)

The Investment Agreement shall be deemed to be incorporated into this Instrument.

 

1.3

Business Day

 

If a payment is due, or an event should occur, on a day that is not a Business Day, the date for payment or the occurrence of the event is the next succeeding Business Day.

 

1.4

Headings

 

Headings are inserted for convenience and do not affect the interpretation of this Instrument.

 

2

AMOUNT AND STATUS OF LOAN NOTES

 

2.1

The aggregate nominal amount of the Loan Notes constituted by this Instrument is limited to £1,500,000 and shall be referred to as the Trilliant Exploration Loan Notes 2009.

 

2.2

The Company will issue the Loan Notes on the relevant Loan Note Subscription Date for cash at par (being £1.00 per Loan Note) in integral multiples of £1.00 in any number of tranches on the Subscription Date.

 

 

 


 

 

 

2.3

Subject to this Instrument and the Schedules, the whole of the Loan Notes as and when issued shall rank pari passu equally and rateably without discrimination or preference and as an obligation of the Company secured by the grant of the Share Charge.

 

2.4

The Loan Notes issued under the terms of this Instrument shall be subordinated to $1.5m convertible loan notes issued to Trafalgar Capital Advisors and affiliates issued prior to the date of this Instrument save that the Share Charge shall rank as a first charge over the Secured Assets comprising shares in Global Diamond Resources Plc.

 

3

INTEREST

 

3.1

Until the Loan Notes are redeemed or repaid in accordance with this Instrument, interest on the Aggregate Nominal Amount together with capitalised interest shall accrue at the Interest Rate.

 

3.2

All interest shall be capitalised, compounded and payable quarterly or upon payment or redemption of the Loan Notes;

 

3.3

Interest shall be calculated on the basis of the actual number of days elapsed for the relevant period.

 

4

REDEMPTION OF LOAN NOTES

 

4.1

The Company shall repay to the Noteholder the principal amount together with interest on the Loan Notes at the Interest Rate on the Repayment Date provided always that repayment shall not be required if the Loan Notes are converted in accordance with Schedule 3 hereto.

 

4.2

All Loan Notes redeemed by the Company pursuant to the terms of this Instrument will be cancelled and will not be available for reissue.

 

4.3

In the event that any income or other tax is deducted from a payment, the Company will issue to the Noteholder as soon as reasonably practicable a certificate of deduction of tax in respect of the tax deducted or withheld.

 

5

VOLUNTARY EARLY REPAYMENT

 

5.1

The Company may at any time, by giving the Noteholders not less than one month's written notice, repay all or a portion of the Loan Notes (such portion being the amount of £100,000 or integral multiples thereof) and immediately upon the expiration of such notice the Company shall repay the amount to the Noteholders specified in such notice ( Specified Amount ).

 

5.2

The Company shall also pay to the Noteholders all interest accrued due on the Specified Amount to the date of repayment of the Specified Amount.

 

5.3

Any payment in reduction in the amount of the Loan Notes under clause 5.1 shall be made pro rata to all Noteholders in proportion to the outstanding amounts of the Loan Notes held by each of them.

 

6

CHANGE OF CONTROL

 

 

 


 

 

 

6.1

The Company shall immediately notify the Noteholders in writing of a Change of Control Event (the “ Notification” ) and shall promptly disclose to the Noteholder all reasonably requested information in relation thereto.  Within 60 days of receipt of the Notification, each of the Noteholders shall be entitled by giving notice in writing to the Company to demand immediate repayment of the Aggregate Principal Amount of Loan Notes held by the Noteholder.

 

7

DEFAULT EVENTS

 

7.1

Without prejudice to Clauses 4 and 5 each Noteholder shall be entitled to require that all outstanding Loan Notes held by him are immediately repayable at par (with all accrued and/or capitalised interest) on the happening of any of the following events (each a “ Default Event ”):

 

 

(a)

the Company fails to repay any of the Loan Notes within 5 Business Days of the due date for redemption or payment thereof; or

 

 

(b)

if an order is made or an effective resolution passed for winding-up of the Company  (otherwise than for the purposes of or in the course of a solvent re-organisation, reconstruction or amalgamation previously approved by the Noteholder); or

 

 

(c)

if an encumbrancer has taken possession of or if a receiver, administrative receiver, liquidator, judicial factor or other similar officer is appointed to take possession of the whole or any material part of the property or undertaking of the Company and in any such case is not discharged, withdrawn or removed within 14 days of possession being taken or an appointment being made (excluding any period during which the possession or appointment is being contested in good faith); or

 

 

(d)

any administration order or any administration application has been made in respect of the Company; or

 

 

(e)

if the Company (otherwise than in the course of a reorganisation, reconstruction or amalgamation with another company in terms previously approved by the Noteholder) ceases or threatens to cease to carry on its business or a substantial part of its business; or

 

 

(f)

the Company is deemed to be unable to pay its debts as they fall due or is unable to pay its debts pursuant to or for the purposes of any applicable law; or

 

 

(g)

if a material default or breach is made by the Company in the performance or observance of any covenant or provisions (other than any covenant for the payment of the nominal amount on the Loan Notes) binding on it under the Loan Notes which has a material adverse effect on the Company (to be determined by the Noteholder acting reasonably and in good faith ) and, in the case of any default or breach which is capable of remedy, the Company fails to remedy the breach within the period of 10 days after receipt of a written request by the Noteholder; or

 

 

 


 

 

 

 

(h)

if the security constituted by any mortgage, charge or other security document of the Company becomes enforceable as a result of an event of default (other than an event of default arising out of a liability being contested in good faith) and the security holder takes steps to enforce the security;

 

 

(i)

if any warranty given by the Company pursuant to this Instrument proves to have been incorrect in any material respect; or

 

 

(j)

there is a material breach of the terms of this Instrument.

 

The Company will immediately give notice to the Noteholder of the happening of any Default Event upon becoming aware of the same.

 

8

TRANSFER

 

The Loan Notes shall be freely transferable (in multiples of not less than £1,000) in accordance with the terms set out in Schedule 2.

 

9

CERTIFICATES

 

9.1

The Certificates will be in the form or substantially in the form set out in Schedule 1.

 

9.2

Every sole Noteholder is entitled without charge to receive one Certificate for the Loan Notes held by that Noteholder.

 

9.3

Joint Noteholders are entitled to only one Certificate in respect of the Loan Notes held jointly by them.  Such Certificate will be delivered to the joint holder whose name stands first in the Register in respect of the joint holding or to another person as the joint holders direct in writing.

 

9.4

The Company is not bound to register more than 4 persons as joint holders of any Loan Notes.

 

9.5

Where part of a holding of Loan Notes has been transferred or redeemed the Company will issue, free of charge to the relevant Noteholder, a fresh Certificate for the balance of the Loan Notes retained by that Noteholder.

 

9.6

The Company will recognise the registered holder of any Loan Notes as the absolute owner of the Loan Notes.  The Company is not bound to take notice or see to the execution of any trust whether express, implied or constructive to which any Loan Notes may be subject.

 

9.7

The receipt of the registered holder for the time being of any Loan Notes or in the case of joint registered holders the receipt of any of them for any other monies payable in respect of the Loan Note is a good discharge to the Company, despite any notice it may have, whether express or otherwise, of the right, title, interest or claim of any other person to or in such Loan Notes or monies.

 

9.8

Every Noteholder, any of whose Loan Notes is due to be redeemed under any of the provisions of this Instrument, shall, not later than the due date for such redem


 
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