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Exhibit 10.1
PROMISSORY NOTE
FOR
VALUE RECEIVED, Torrent Energy Corporation, a Colorado
corporation ( "Maker"
),
promises to pay to John D. Carlson, an individual ( "Payee"
), in
lawful money of the United States of America, the principal
sum of Fifty Thousand Dollars ($50,000), together with
interest in arrears on the unpaid principal balance at an
annual rate equal to 8.0%, in the manner provided below.
Interest shall be calculated on the basis of a year of 365
days, and charged for the actual number of days elapsed. Each
determination by Payee of an interest rate under this Note
will be conclusive and binding for all purposes, absent
manifest error.
1. Payments
1.1 Principal
and Interest
The
principal amount ofthis Note shall be due and payable in one
payment commencing no later than the third business day
following the completion and funding of a new financing of at
least $100,000. This payment shall be in the amount necessary
to pay in full the unpaid principal amount and all interest
then accrued on this Note. Any payment under this Note, at the
option of the Payee, may be applied first to any costs and
expenses payable by the Maker under this Note, then to
interest then accrued under this Note, and then to
principal.
1.2 Manner
of Payment
All
payments of principal and interest on this Note shall be made
by the Maker's company check, certified or bank cashier's
check delivered to the Payee, or at such other place in the
United States of America as Payee shall designate to Maker in
writing or by wire transfer of immediately available funds to
an account designated by Payee in writing. If any payment of
principal or interest on this Note is due on a day which is
not a Business Day, such payment shall be due on the next
succeeding Business Day, and such extension of time shall be
taken into account in calculating the amount of interest
payable under this Note. "Business Day" means any day other
than a Saturday, Sunday or legal holiday in the State of
Colorado.
1.3 Prepayment
Maker
may, without premium or penalty, at any time and from time to
time, prepay all or any portion of the outstanding principal
balance due under this Note. Any partial prepayments may be
applied first to any costs and expenses payable by the Maker
under this Note, then to interest then accrued under this
Note, and then to installments of principal in inverse order
of their maturity.
2. Defaults
2.1 Events
of Default
The
occurrence of anyone or more of the following events with
respect to Maker shall constitute an event of default
hereunder (" Event of Default
"):
(a)
If Maker
shall fail to pay when due any payment of principal or
interest on this Note and such failure continues for ten (10)
days after Payee notifies Maker thereof in
writing.
(b)
If,
pursuant to or within the meaning of the United States
Bankruptcy Code or any other federal or state law relating to
insolvency or relief of debtors (a " Bankruptcy Law "),
Maker shall (i)
commence a voluntary case or proceeding; (ii) consent to the
entry of an order for relief against it in an involuntary
case; (iii) consent to the appointment of a trustee, receiver,
assignee, liquidator or similar official; (iv) make an
assignment for the benefit of its creditors; or (v) admit in
writing its inability to pay its debts as they become
due.
(c)
If a
court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that (i) is for relief against Maker
in an involuntary case, (ii) appoints a trustee, receiver,
assi
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