Exhibit 10.2
Promissory Note
FOR VALUE RECEIVED, 1412531 ONTARIO INC. (the "Purchaser") hereby acknowledges
itself indebted and promises to pay to, or to the order of, EIEIHOME.COM INC.
(the "Vendor") at 580 Granite Court, Pickering, Ontario, L1W 3Z4 or at such
place within the Greater Toronto Area as the Vendor in writing designates, the
principal amount of Seven Hundred Eighteen Thousand Eight Hundred Fifty dollars
($718,850.00), subject to adjustment as set out herein, in lawful money of the
United States of America (the "Principal Amount") on the dates and manner
hereinafter provided, together with interest thereon, all in accordance with and
subject to the following provisions:
1. Payment
Subject to section 3 hereof,
(a) $65,350 shall be due and payable on or before 3 p.m. on July 21,
2000; and
(b) the balance of the Principal Amount plus accrued interest shall be
due and payable on or before 3 p.m. November 10, 2000. Up to 153,500
of such Principal Amount may be satisfied by surrender for
cancellation of 8% Senior Subordinated Convertible Debentures of the
Vendor, and delivery of releases from the holders of such debentures.
2. Prepayment Bonus
In the event that the Purchaser prepays $653,500 ($153,500 of which may be
satisfied by surrender for cancellation of 8% Senior Subordinated Convertible
Debentures of the Vendor, and delivery of releases from the holders of such
debentures), on or before 3:00 p.m. on July 21, 2000 the Principal Amount of
this Promissory Note plus interest payable thereon shall be deemed to have been
repaid in full.
3. Other Prepayments
At all other times the Purchaser may prepay all or any portion of the
Principal Amount outstanding at any time and from time to time without notice,
penalty or bonus. Partial repayments of the Principal Amount will be applied in
reduction of such balance in inverse order of maturity.
4. Interest
(a) The portion of the Principal Amount remaining unpaid from time to
time shall bear interest at a rate of interest equal to 24% per annum
accruing from the effective date hereof as well after as before
maturity, default and judgment with interest on overdue interest at
the same rate. Interest accruing as aforesaid shall be calculated and
payable monthly on the 26th day of each month.
(b) For the purposes of this Promissory Note, the Vendor acknowledges
that (i) where the period to which any rate of interest applies is
not a full calendar year, the normal yearly rate of interest shall be
determined such rate by a fraction, the numerator of which is the
number of days in the calendar year in which the last day of such
period falls, and the denominator of which is the actual number of
days in such period; and (ii) all interest calculations shall be made
using the normal rate method and not the effective rate method and
that the deemed re-investment principle shall not apply to such
method; and (iii) where the rate of interest payable under this
Promissory Note is found by a competent court of law to exceed the
maximum rate of interest permitted by law, then during the time that
the rate of interest would exceed the permissible limit, that part of
each interest payment attributable to the portion of the interest
rate that exceeds the permissible limit shall be deemed to be a
prepayment of principal.
4. Application of Payments
Any amount paid in satisfaction of the indebtedness evidenced by this
Promissory Note shall be applied firstly in satisfaction of any accrued and
unpaid interest which is due and payable and any interest thereon, and then the
remaining portion of such amount shall be applied in satisfaction of the
Principal Amount owing hereunder.
5. Events of Default
In the event that any of the following events occur:
(1) the non-payment when due, whether at maturity, by acceleration or
otherwise, of any sum due hereunder; or
(2) eieiHome.Com Inc., an Ontario corporation, fails to observe or
perform any term, covenant or agreement contained in a general
security agreement (the "GSA") dated of even date herewith between
the Purchaser, and the Vendor; or
(3) Paul Dutton or Max Hahne fail to observe or perform any term,
covenant or agreement contained in the pledge agreement (the "Pledge
Agreement") dated of even date herewith between the Vendor and Paul
Dutton and Max Hahne;
then so long as such event shall then be continuing, the Vendor may by notice to
the Purchaser declare all indebtedness of the Purchaser hereunder immediately
due and payable, whereupon the same shall become immediately due and payable,
together with all interest accrued thereon and all other amounts payable
hereunder with respect thereto without any further presentation, demand, protest
or notice of any kind, all of which are expressly waived by the Purchaser;
provided that the Purchaser shall have two business days to remedy any default
unless in the opinion of the Vendor, acting reasonably, it is likely that the
collateral which is the subject matter of the GSA or the Pledge Agreement is
likely to be impaired or otherwise unavailable to satisfy the obligation
hereunder during such notice period.
7. General
(a) Assignment
This Promissory Note may not be assigned, transferred, or negotiated by the
Vendor without the prior written consent of the Purchaser. This Promissory Note
shall be binding upon and shall enure to the benefit of the Purchaser and the
Vendor and their respective successors and assigns.
(b) Severability
Any provision of this Promissory Note which is prohibited or unenforceable in
any jurisdiction shall not invalidate the remaining provisions hereof. Any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
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(c) Notices
Any notice or other communication required or permitted to be given hereunder
shall be in writing and shall only be effectively given if sent by prepaid
registered or certified mail, facsimile or delivered:
To: the Vendor
Address: 580 Granite Court, Pickering, Ontario, L1W 3Z
Facsimile No.: 905-837-1139
To: the Purchaser
Address: 934 The East Mall, Suite 300, Toronto, Ontario,
M9B 6J9
Facsimile No.: 416-352-5960
or to such other address or facsimile number of a party as it shall specify by
notice to the other party pursuant to this section.
Any such communication given by mail will be deemed to have been received on the
5th Business Day after the date of mailing, or if by facsimile it shall be
deemed to be given and received on the day transmitted, provided that such
transmission occurs prior to 4:00 p.m. on a Business Day otherwise it will be
deemed to have been received on the next following Business Day after
transmission, provided further that printed or electronically stored
confirmation of error-free completion and delivery of transmission is produced
by the transmitting facsimile machine, and if delivered it shall be deemed to
have been received on the date of delivery. If the person giving any such
communication knows or ought reasonably to know of any difficulties with the
postal system which might affect the delivery of mail, any such Communication
shall not be mailed but shall be given by personal delivery or by telex or
telecopier transmittal.
(d) Governing Laws
This Promissory Note shall be governed by and construed in accordance with the
laws of the Province of Ontario and the laws of Canada applicable therein.
(e) Waiver of Benefits
The Purchaser hereby waives demand for payment, notice of default, presentment
for payment, notice of dishonour, protest and notice of protest of this
Promissory Note.
(f) Time of the Essence
Time shall in all respects be of the essence of this Promissory Note.
(g) Non-Waiver
The extension of the time for making any payment which is due and payable
hereunder at any time or times or the failure, delay or omission on the part of
the Vendor to exercise or enforce any rights or remedies of the Vendor hereunder
or under any instrument securing payment of the indebtedness evidenced by this
Promissory Note shall not constitute a waiver of the right of the Vendor to
enforce such rights and remedies thereafter.
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IN WITNESS WHEREOF the Purchaser has executed this Promissory Note under
the hand of its proper officer duly authorized in that behalf as of this 26th
day of June, 2000.
1412531 Ontario Inc.
Per: /s/Paul Dutton
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Name: Paul Dutton
Title: Director
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