Document:

exh10-1.htm

Exhibit 10.1

 

THIS AMENDING AGREEMENT dated as of the 1st day of April, 2014

 

BETWEEN:

 

SIDNEY CHAN (herein called the “Lender”)

of 23H Block III Riviera Garden

Tsuen Wan, New Territories

Hong Kong

 

AND:

 

ALR TECHNOLOGIES INC. (herein called the “Company”)

of 7400 Beaufont Springs Drive

Suite 300

Richmond, Virginia  23225

WITNESSES THAT WHEREAS:

 

	
A.  

	
All references to shares means the shares of common stock of ALR Technologies, Inc.

 

	
B.  

	
The Lender and the Company entered into a credit agreement on March 6, 2011 as amended by further agreements dated October 24, 2011, June 15, 2012 and January 8, 2013 (the “Amended Credit Agreements”) whereby the Lender agreed to make available to the Company a line of credit facility equal to $4,000,000 for the Company’s corporate purposes.

 

	
C.  

	
Under a concurrent agreement between the Lender and the Company dated March 6, 2011 (the “Option Agreement”) the Company granted to the Lender, in consideration of the Lender making available the $2,500,000 credit line, the option to purchase 20,000,000 shares of the Company at an exercise price of $0.125 per share, until March 6, 2016, such that the aggregate of advances under the credit line would be equal to the aggregate exercise price of the 20,000,000 shares under option.

 

	
D.  

	
Pursuant to the Amended Credit Agreements the Option Agreement was amended by (i) reducing the exercise price of the 20,000,000 options from $0.125 to $0.07 per share (and subsequently to $0.05 per share on December 28, 2012) (ii) granting the Lender the option to purchase an additional 15,725,000 shares at $0.07 per share (and subsequently reducing the exercise price to $0.05 per share on December 28, 2012) until March 6, 2016, such that the aggregate advances under the credit line would continue to be equal to the aggregate exercise price of the 35,750,000 shares under option as at June 15, 2012 (iii) granting the lender the option to purchase 14,250,000 shares of the Company at $0.05 per share until December 28, 2017, such that the aggregate advances under the credit line would continue to be equal to the aggregate exercise price of the 50,000,000 shares under as at December 28, 2012)

 

  

  

  

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E.  

	
The Lender’s spouse (the “Lender’s Spouse”) entered into a line of credit agreement (the “Lender’s Spouse’s Credit Agreement”) on May 25, 2010 whereby the Lender’s Spouse provided a $1,000,000 line of credit to the Company. As partial consideration for this line of credit, the Company granted the Lender’s Spouse the option to the purchase 10,000,000 shares of common stock at an exercise price of $0.10 per share until December 31, 2011. The Lender’s Spouse’s Credit Agreement was subsequently amended on January 3, 2011 to increase the borrowing limit from $1,000,000 to $2,000,000. As partial consideration for this amendment the Company i) reduced the exercise price of the option to acquire 10,000,000 shares from $0.10 per share to $0.05 per share and extended the expiry date of those options to March 7, 2015 ii) granted an option to acquire 10,000,000 shares at an exercise price of $0.05 per share until March 7, 2015 , such that the aggregate advances under the Lender’s Spouse’s Credit Agreement would continue to be equal to the aggregate exercise price of the option to acquire 20,000,000 shares and iii) granted an option to acquire 20,000,000 shares of at an exercise price of $0.05 per share until November 29, 2015 , such that the aggregate advances of $1,000,000 (the increase of the borrowing limit to the Lender’s Spouse’s Credit Agreement) would be equal to the aggregate exercise price of the option to acquire 20,000,000 shares.

 

	
F.  

	
On August 15, 2012, the Lender’s Spouse exercised her option to acquire 20,000,000 shares of common stock at $0.05 per share that had an exercise price of March 7, 2015.

 

	
G.  

	
On March 24, 2014 the Company’s Board of Directors approved the grant and modification of options at an exercise price of and to reduce the exercise price of certain outstanding options to, $0.03 and further agreed with the Lender, in part consideration of the increased credit line referred to in Recital G,

 

	
a)  

	
to further amend the Option Agreement:

 

	
i.  

	
by reducing the exercise price of the Lender’s options to purchase 50,000,000 shares from $0.05 to $0.03 per share; and

 

	
ii.  

	
granting to the Lender the option to purchase an additional 33,333,400 shares at an exercise price of $0.03 per share until March 24, 2019;

 

	
b)  

	
to amend the options granted to the Lender’s Spouse:

 

	
i.  

	
by reducing the exercise price of the option to purchase 20,000,000 shares from $0.05 per share to $0.03 per share;

 

	
ii.  

	
granting to the Lender’s Spouse, the option to purchase 26,666,700 shares of at a price of $0.03 per share until March 24, 2019

 

  

  

  

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H.  

	
Such that the aggregate of advances under the line of credit with the Lender would be substantially equal to the aggregate exercise price of the 83,333,400 shares under option and the advances under the line of credit with the Lender’s Spouse would be substantially equal to the aggregate exercise price of the of the 66,666,700 shares under option (on the basis of not considering the exercise of the option to acquire 20,000,000 shares in August 2012).

 

The Lender and the Company have agreed to further amend:

 

	
i.  

	
the Amended Credit Agreement by the Lender increasing the borrowing limit of the line of credit by a further $1,500,000 to a total of $5,500,000; and

 

	
ii.  

	
the Option Agreement by the Company, in consideration of the increase of the borrowing limit of the line of credit granting to the Lender options to purchase a further 50,000,000 shares of the Company at a price of $0.03 per share until March 24, 2019; and

 

	
I.  

	
The Company and the Lender have agreed to enter into this agreement in order to give effect to the foregoing:

 

NOW THEREFORE IT IS AGREED AS FOLLOWS:

 

	
1.  

	
At such time as the Company shall have drawn down the full amount of $4,000,000 under the Amended Credit Agreement, the Lender agrees to lend to the Company a further sum of up to $1,500,000 as and when required by the Company but subject to the same terms and conditions, including interest on amounts outstanding from time to time, as contained in the Amended Credit Agreement.

 

	
2.  

	
In consideration of the Lender making available the increased borrowing limit of $1,500,000 to the Company, the Company hereby:

 

	
a)  

	
agrees to reduce the exercise price of the 50,000,000 shares under option to the Lender as at the date hereof from $0.05 to $0.03 and grants to the Lender from and after the date hereof until March 24, 2019, the right and option to purchase an additional 33,333,400 shares of common stock at an exercise price of $0.03; and

 

	
b)  

	
grants to the Lender the right and option to purchase, from and after the date hereof until March 24, 2019, an additional 50,000,000 shares of common stock at a price of $0.03 per share.

 

	
c)  

	
agrees to reduce the exercise price of the 20,000,000 shares of common stock under option to the Lender’s Spouse as at the date hereof from $0.05 to $0.03 and grants to the Lender’s Spouse from and after the date hereof until March 24, 2019, the right and option to purchase an additional 26,666,700 shares of common stock at an exercise price of $0.03; and

  

  

  

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3.  

	
Except as amended by this Agreement, all other terms and conditions of the Amended Credit Agreement and the Option Agreement shall remain in force and unaltered.

 

	
4.  

	
This Amending Agreement may be signed in as many counterparts as may be necessary and delivered by facsimile or electronic transmission.

 

 

IN WITNESS WHEREOF THE PARTIES HAVE EXECUTED THIS AGREEMENT the 1st day of April, 2014

 

 

	  	  	
ON BEHALF OF ALR TECHNOLOGIES INC.

	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	
MR. SIDNEY CHAN

	  	
KENNETH ROBULAK

	
Mr. Sidney Chan

	  	
Name: Kenneth Robulak

	  	  	
Member of the Board of Directors

	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	
ALFONSO SALAS

	  	  	
Name: Alfonso Salas

	  	  	
Member of the Board of DirectorsExhibit 10.1

 

 

Sixth Amendment to Credit Agreement

 

This Sixth Amendment to Credit Agreement
(“Sixth Amendment”), dated as of the 27th day of March 2014, by and between BENJAMIN MARCUS HOMES, L.L.C., a Pennsylvania
limited liability company (“BMH”), INVESTOR’S MARK ACQUISITIONS, LLC (“IMA”), a Delaware limited
liability company (each a “Borrower Party” and collectively, the “Borrower Parties”), and Mark L. Hoskins,
an individual residing in the Commonwealth of Pennsylvania (“Hoskins”),

 

AND

 

SHEPHERD’S FINANCE, LLC, a Delaware
limited liability company (“Lender”).

 

WITNESSETH:

 

WHEREAS, the parties entered into that certain
Credit Agreement dated December 30, 2011 as amended by the First Amendment to Credit Agreement dated December 26, 2012, the Second
Amendment to Credit Agreement dated April 17, 2013, the Third Amendment to Credit Agreement dated July 24, 2013, the Fourth Amendment
to Credit Agreement dated September 27, 2013, and the Fifth Amendment to Credit Agreement dated December 30, 2013 (collectively
known as the “Credit Agreement”); and

 

WHEREAS, the parties wish to further amend
the Credit Agreement and to amend and supersede the Fifth Amendment to Credit Agreement.

 

NOW, THEREFORE, in consideration of the
mutual covenants herein contained and intending to be legally bound hereby, the parties hereto agree as follows:

 

1.Defined Terms. Capitalized terms used
herein and not defined herein shall have the meanings set forth in the Credit Agreement.

2.Modifications. 

 

		a.	The following is hereby added to the Credit Agreement as Section 2.01(d):

 

BMH may draw up to $747,500 from the BMH Loan for the
construction of a home on Lot 5 (“Lot 5”) contained within the Tuscany Land (the “Lot 5 Construction Loan”),
subject to the conditions that (i) the Lot 5 Construction Loan shall not be included when calculating the amount outstanding under
the BMH Loan, the New IMA Loan, or the Existing IMA Loan pursuant to Section 2.05(f); (ii) notwithstanding the terms of Section
2.05, the release price paid for the release of the Lot 5 Construction Loan shall not be applied to the balance of the Interest
Escrow; and (iii) notwithstanding the terms of Section 2.14, interest on the Lot 5 Construction Loan shall not be paid from the
Interest Escrow. At the time of the initial draw on the Lot 5 Construction Loan, Lender funded $102,500, which was applied to debt
related to the Menichi Mortgage, and $137,500, which was applied to the New IMA Loan and served as the release price of Lot 5 as
collateral for such New IMA Loan. Lender will retain as a loan fee five percent (5%) of the full amount of the Lot 5 Construction
Loan, or $37,375.00. Following the initial draw and payment of the loan fee, the remaining funds under the Lot 5 Construction Loan
will be available to BMH based upon the percentage of construction completed on Lot 5, and the percentage completion will be determined
in accordance with the draw schedule attached to this Sixth Amendment as EXHIBIT A. BMH may request up to an additional seven (7)
draws on the Lot 5 Construction Loan using the form attached to this Sixth Amendment as EXHIBIT B. Lot 5 shall serve as collateral
for the Lot 5 Construction Loan. The release price for Lot 5 pursuant to this Lot 5 Construction Loan shall be equal to the principal
balance of the Lot 5 Construction Loan, along with any interest and fees due pursuant thereto. BMH will be billed shortly after
the first of the month, and interest will be due on the 25th of that month.

 

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		b.	The following is hereby added to the Credit Agreement as Section 2.01(e):

 

BMH may draw an additional amount from the BMH Loan
for the construction of a home on Lot 2 (“Lot 2”) contained within the Tuscany Land, of up to the lesser of (i) 60%
of the appraised value of the home to be built on Lot 2, as determined by Lender, or (ii) $750,000, (the “Lot 2 Construction
Loan”), subject to the conditions that (x) the Lot 2 Construction Loan shall not be included when calculating the amount
outstanding under the BMH Loan, the New IMA Loan, or the Existing IMA Loan pursuant to Section 2.05(f); (y) notwithstanding the
terms of Section 2.05, the release price paid for the release of the Lot 2 Construction Loan shall not be applied to the balance
of the Interest Escrow; and (z) notwithstanding the terms of Section 2.14, interest on the Lot 2 Construction Loan shall not be
paid from the Interest Escrow. The initial draw on the Lot 2 Construction Loan will be released upon the execution of this Sixth
Amendment by all parties hereto, and confirmation satisfactory to Lender of unrecorded signed release for Lot 2 being held by Tom
Vreeland. At the time of the initial draw on the Lot 2 Construction Loan, Lender will fund $112,500, which shall be applied to
debt related to the Menichi Mortgage, and $137,500, which shall be applied to the New IMA Loan and shall serve as the release price
of Lot 2 as collateral for such New IMA Loan. Lender will retain as a loan fee five percent (5%) of the full amount of the Lot
2 Construction Loan, minus $5,000. Following the initial draw, payment of the loan fee, and payment of the other amounts set forth
in this Sixth Amendment, the remaining funds under the Lot 2 Construction Loan will be available to BMH based upon the percentage
of construction completed on Lot 2, and the percentage completion will be determined in accordance with the draw schedule attached
to this Sixth Amendment as EXHIBIT C. BMH may request up to an additional seven (7) draws on the Lot 2 Construction Loan using
the form attached to this Sixth Amendment as EXHIBIT D. Lot 2 shall serve as collateral for the Lot 2 Construction Loan. The release
price for Lot 2 pursuant to this Lot 2 Construction Loan shall be equal to the principal balance of the Lot 2 Construction Loan,
along with any interest and fees due pursuant thereto. BMH will be billed shortly after the first of the month, and interest will
be due on the 25th of that month.

 

3.Miscellaneous. This Sixth Amendment
to the Credit Agreement, and all other terms and conditions of the Credit Agreement not specifically amended by this Sixth Amendment
shall continue and remain in full force and effect. No variation, modification or amendment to this Sixth Amendment shall be deemed
valid or effective unless and until it is signed by the parties hereto. This Sixth Amendment may be executed in counterparts, each
of which once so executed shall be deemed to be original and all of which taken together shall constitute one and the same agreement.

 

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IN WITNESS WHEREOF, the parties have caused
this Sixth Amendment to be duly and properly executed as of the date first above written.

 

 

The
Borrower Parties:

 

 

BENJAMIN MARCUS
HOMES, L.L.C.

 

By: /s/
Mark L. Hoskins

Name: Mark L.
Hoskins

Title: Member

 

 

INVESTOR’S
MARK ACQUISITIONS, LLC

 

By: /s/
Mark L. Hoskins

Name: Mark L.
Hoskins

Title: Member

 

 

MARK L. HOSKINS
INDIVIDUALLY:

 

/s/ Mark
L. Hoskins

Mark L. Hoskins

 

 

LENDER:

 

SHEPHERD’S
FINANCE, LLC

 

By: /s/
Daniel M. Wallach

Name: Dan Wallach

Title: Chief Executive
Officer

 

 

 

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The Guarantors join in
the execution of this Sixth Amendment to evidence their agreement to the applicable provisions of this Sixth Amendment.

 

 

GUARANTORS:

 

 

BENJAMIN MARCUS
HOMES, L.L.C.

 

By: /s/
Mark L. Hoskins

Name: Mark L.
Hoskins

Title: Member

 

 

INVESTOR’S
MARK ACQUISITIONS, LLC

 

By: /s/
Mark L. Hoskins

Name: Mark L.
Hoskins

Title: Member

 

 

/s/ Mark
L. Hoskins

Mark L. Hoskins

 

 

 

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