1
EXHIBIT 10.3
DEMAND NOTE AGREEMENT
(Fixed or Floating Rate, Canadian or U.S. Dollars)
DATE: December 14, 2000
In consideration of BANK ONE CANADA (the "Bank") providing the Borrower with a
DEMAND LOAN FACILITY (the "Loan Facility") in the principal amount of up to
CANADIAN FIVE MILLION DOLLARS (CAD $5,000,000) in lawful currency of CANADA (or
its equivalent in other currencies approved by the Bank), the Borrower agrees
(and each of them, if more than one, jointly and severally agrees) with the Bank
as follows:
1. The Borrower promises to pay to the Bank on demand in accordance with
the terms and conditions required by the Bank from time to time at our
office all amounts outstanding under the Loan Facility, including
principal, which is the aggregate of all advances made, together with
interest thereon at the rate of:
NYL per annum above the rates announced from time to time by the
Bank as its "Canadian Prime Rate" in the case of Canadian
Dollar advances or is "U.S. Prime Rate" in the case of U.S.
Dollar advances (the "Note Rate") and at the rate of 3.00% per
annum above the Note Rate after maturity, whether by
acceleration or otherwise; or such rate or rates as may be
agreed to or confirmed in writing by the Bank from time to
time.
Interest shall be calculated monthly in arrears, both before and after
maturity, default and judgement, on the daily balance outstanding based
on the actual number of days clasped, divided by 365, in the case of a
Canadian Dollar advances, or by 360, in the case of a U.S. Dollar
advances, with interest on overdue interest at the same rate as on the
principal, and shall be payable on the last day of each month.
Any change in the Canadian Prime Rate or U.S. Prime Rate will be
effective on the date such change is established without notice by the
Bank to the Borrower. On the date hereof, Canadian Prime Rate is 7.500%
per annum and U.S. Prime Rate is 9.500% per annum.
2. The Borrower authorizes the Bank, but the Bank is not obliged, from
time to time to debit the account or accounts maintained by the
Borrower with the Bank from time to time (collectively, the "Account")
with the amount of interest accrued and unpaid by the Borrower and any
other fees or charges of any kind.
3. Provided that the Bank has not demanded payment of any amount
outstanding under the Loan Facility, or has not terminated this
agreement, the Borrower may borrow, repay and reborrow up to the amount
available under the Loan Facility at any time and from time to time in
the following manner:
2
a. The Borrower will advise and direct the Bank as to the
individual amounts the Borrower wishes to borrow, repay or
reborrow under the Loan Facility
OR
b. The Borrower authorizes the Bank, daily or otherwise as and
when determined by the Bank from time to time, to ascertain
the position or net position (as the case may be) between the
Borrower and the Bank in respect of the Account and that
i) if such position is a credit in favour of the
Borrower, the Bank will apply the amount of such
credit or any part thereof, rounded to the nearest
integral amount established by the Bank from time to
time, as a repayment of the Loan Facility, and the
Bank will debit the Account with the amount of such
repayment, and
ii) if such position or net position is a debit in favour
of the Bank, the Bank will make an advance under the
Loan Facility of such amount, rounded to the nearest
integral amount established by the Bank from time to
time, as is required to place the Account in such
credit or net credit position as has been agreed
between the Borrower and the Bank from time to time,
provided that no time shall the balance owing exceed
the amount of the Loan Facility.
4. The Bank shall maintain on the books of its unit of account, accounts
and records evidencing the outstanding principal amount of the loan of
the Bank to the Borrower under the Loan Facility together with any
interest in respect thereof. The Bank shall maintain a record of the
amount of the balance, each advance, and each payment of principal and
interest on account of the loan. The Bank's accounts and records
constitute in the absence of manifest error prima facie evidence of the
indebtedness of the Borrower to the Bank under the Loan Facility.
5. Where a statement of account for the Account is to be rendered by the
Bank, it is agreed that:
a. the Borrower will verify the correctness and completeness of
each statement of account received from the Bank.
b. if a statement of account and relevant vouchers are not
received on or before the 10th day after the end of the cycle
agreed on for their preparation, the Borrower shall notify the
Bank in writing not later than 5 days thereafter.
c. the Borrower shall within 30 days and not thereafter following
the end of the cycle agreed on for the statement of account
preparation, notify the Bank in writing, at the branch of
account for the Account, of any alleged omissions from or
inaccurate entries in the Account as so stated.
2
3
d. at the end of the said 30 days, the statement of account for
the Account as kept by the Bank shall be conclusive evidence
without any further proof that, provided that this shall not
apply with respect to any credits to the Account made in
error, any alleged errors of which the Bank has been so
notified or any payments made in error, any alleged errors of
which the Bank has been so notified or any payments made on
forged or unauthorized endorsements, the Account contains all
credits that should be contained therein and no debits that
should not be contained therein and all the entries therein
are correct and, subject to the above exception, the Bank
shall be free from all claims in respect of the Account.
6. The Borrower acknowledges that the terms of this agreement are in
addition to and not in substitution for any terms and conditions of any
other agreements between the Borrower and the Bank.
7. This agreement is delivered in Toronto, Ontario and is governed by the
laws of the Province of Ontario.
ADDRESS: BORROWER:
DAISYTEK CANADA
- ------------------------------
By: /s/
- ------------------------------ --------------------------------
(Authorized Signature)
By: /s/
- ------------------------------ --------------------------------
(Authorized Signature)