EXHIBIT 10.1
PROMISSORY NOTE
To: Pacific Rim Mining Corp.
Suite 410,625 Howe Street
Standard Life Building
PO Box 28
Vancouver, B.C.
Canada V6C 2T6
20 September, 2005
WHEREAS PACIFIC RIM MINING CORP., a British Columbia company, (the "Seller") and
TREND MINING COMPANY, a corporation organized and existing under the laws of
Delaware, (the "Buyer") entered into a share purchase agreement for the issued
share capital of DMC Cayman Inc., a Cayman Islands exempted company, on 20
September, 2005, such agreement as amended is hereinafter referred to as the
"Agreement". The Buyer is required to issue this promissory note to the Seller
pursuant to sub-section 2.4(a) of the Agreement.
1 ACKNOWLEDGEMENT OF DEBT AND PROMISE TO PAY
The Buyer hereby acknowledges that it is indebted to the Seller for the
principal sum of TWO MILLION FOUR HUNDRED THOUSAND UNITED STATES DOLLARS
(US$2,400,000) (the "Principal Sum") and promises to pay to the order of the
Seller, at its principal office in Vancouver, British Columbia as shown above,
the following amounts on or before the following dates in United States dollars:
ONE MILLION UNITED STATES DOLLARS (US$1,000,000) on or before 20 September, 2006
(the "First Payment"); and ONE MILLION FOUR HUNDRED THOUSAND UNITED STATES
DOLLARS (US$1,400,000) on or before 20 September, 2007 (the "Second Payment"),
PROVIDED THAT, if the First Payment is not received by the Seller in cleared
finds by 4.00 pm Vancouver, British Columbia, Canada time on 20 September, 2006,
the Second Payment shall immediately become due and payable.
Interest shall not be payable on the Principal Sum.
2 SET-OFF AND COUNTERCLAIM
All payments made by the Buyer under this promissory note shall be made without
set-off or counterclaim.
3 PARTIAL PAYMENTS
If the Seller receives a payment insufficient to discharge each instalment of
the Principal Sum when due and payable, the Seller shall apply that payment
towards the obligations of the Buyer under this promissory note in the following
order:
3.1 first any amounts payable pursuant to paragraph 8; and
2
3.2 second in or towards the payment of any Principal due and payable but
unpaid under this promissory note.
4 GROSS-UP
All payments by the Buyer under this promissory note shall be made without any
deduction and free and clear of and without any deduction for or on account of
any taxes, except to the extent that the Buyer is required by law to make such a
deduction. If the Buyer is required by law to make such a deduction it shall pay
to the Seller such additional amount as will result in the receipt by the Seller
of the full amount which would otherwise have been due if no such deduction had
been made.
5 ASSIGNMENT
The Buyer shall not be entitled to assign or transfer any of its rights,
benefits or obligations hereunder without the prior written consent of the
Seller.
6 MISCELLANEOUS
6.1 No delay or omission on the part of the Seller in exercising any right
or remedy in respect of this promissory note shall impair that right or
remedy or operate as or be taken to be a waiver of it, nor shall any
single, partial or defective exercise of any such right or remedy
preclude any other or further exercise under this promissory note of
that or any other right or remedy.
6.2 The Seller's rights, powers and remedies in respect of this promissory
note are not, nor are they to be construed as, exclusive of any rights,
powers or remedies provided by law or otherwise and may be exercised
from time to time and as often as the Seller deems expedient.
6.3 Any waiver by the Seller of any terms of this promissory note shall be
effective only if given in writing and then only for the purpose and
upon the terms and conditions (if any) on which it is given.
6.4 If at any time any one or more of the provisions of this promissory
note is or becomes illegal, invalid or unenforceable in any respect
under any law of any jurisdiction neither the legality, validity or
enforceability of the remaining provisions of this promissory note nor
the legality, validity or enforceability of such provision under the
law of any other jurisdiction shall be in any way affected or impaired
as a result.
6.5 Any statement, certificate or determination of the Seller as to the
Principal Sum or Interest due or (without limitation) any other matter
provided for in the promissory note shall, in the absence of manifest
error, be conclusive and binding on the Buyer.
7 LAW AND JURISDICTION
This promissory note shall be governed by, and shall be construed in accordance
with, the laws of the Cayman Islands.
The Buyer irrevocably agrees for the exclusive benefit of the Seller that the
courts of the Cayman Islands shall have jurisdiction to hear and determine any
suit, action or proceeding and to settle any dispute which may arise out of or
in connection with this promissory note and for such purposes irrevocably
submits to the jurisdiction of such courts.
3
8 FEES AND EXPENSES OF SELLER
The Buyer hereby waives any days of grace for payment of this note,
presentation, protest and notice of dishonour. If the Seller employs counsel for
advice with respect to this note, or any default hereunder, or to prepare and
file any petition, suit, action, proceeding, or other pleading or court process
relating to this note or any attempt to collect or enforce payment hereof
against the Buyer or any other party, then, and in each such event, all fees,
costs, expenses and charges (including, without limitation, the fees and
disbursement of legal counsel on a solicitor and own client basis) paid or
incurred by the Seller will be an additional liability owing by the Buyer to the
Seller hereunder with interest thereon at the interest rate specified herein
from the date such fees, costs, expenses or charges were incurred until paid in
full.
4
IN WITNESS WHEREOF, the Buyer has executed this promissory note as a deed on
20 September, 2005.
EXECUTED AS A DEED AND DELIVERED by )
TREND MINING COMPANY )
acting by Thomas A. Loucks )
).....................................
)
)
In the presence of
Witness
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