Exhibit 10.08
OPERATING LINE OF CREDIT AGREEMENT
Branch: 989 Derry Road, Suite 303, Mississauga, Ontario, L5T 2J8
Date: February 22, 2002
Laurentian Bank of Canada (the "Bank") and the undersigned borrower (the
"Customer") agree as follows:
1. The Bank shall provide to the Customer a revolving credit facility (the
"Loan") available by way of Canadian dollar advances (or in such other forms as
the Bank may from time to time authorize in writing) up to a maximum aggregate
amount of $ CDN 2,500,000.00(the "Credit Limit"), with a sublimit available for
advance in US Dollars to a maximum aggregate amount of $US 1,000,000.00.
2. Whenever the aggregate of amounts debited to any one or more accounts
(each referred to herein as an "Account") maintained by the Bank for the
Customer (including cheques, withdrawals, authorized debit entries, interest,
service charges and fees payable to the Bank) shall exceed the aggregate of all
amounts credited to any such Account (including any credit balance in such
Account), the Bank is hereby authorized, but is not obligated, to credit to any
such Account sufficient funds advanced pursuant to the Loan to cover such
excess, in integral multiples established by the Bank from time to time.
3. Interest shall accrue on the daily closing balance of the Loan and shall
be payable by the Customer monthly, on the first day of every month, both before
and after demand, default and judgment, (i) as to Cdn. Dollars at a variable
rate per annum equal to the Prime Lending Rate plus one half of one percent
(0.5%) percent per annum, and (ii) as to US Dollars at a variable rate per annum
equal to the US Base Rate plus one half of one percent (0.5%) percent per annum,
with interest on overdue interest at the same rate; provided that the rate of
interest hereinbefore mentioned shall be increased by an additional one half
percent (0.50%) per annum if the Borrower fails to support at any time during
the term of this Agreement any portion of the credit facility provided by the
Bank to the Borrower pursuant to an Offer of Finance dated February 15, 2002 by
way of a term deposit or cash equivalent in form acceptable to the Bank, in its
sole discretion; and further provided that that the rate of interest shall be
further increased by a further additional one half percent (0.50%) per annum if
the Borrower fails to maintain deposits with the Bank on or before May 30, 2002
in the aggregate amount of $ Cdn 2,500,000.00. The Prime Lending Rate means the
annual rate of interest which the Bank establishes and quotes from time to time
as the reference rate of interest to determine interest rates it will charge at
such time for variable rate commercial loans in Canadian dollars to its
customers in Canada and to which it may refer as its "prime rate" or "prime
lending rate"; upon any change in the Prime Lending Rate or the US Base Rate,
the rate of interest hereunder shall be adjusted automatically and without the
necessity of any notice to the Customer. For the information of the Customer,
on February 13, 2002, the Prime Lending Rate is Three point Seven-Five (3.75%)
percent per annum and the interest rate applicable to the Loan is Four point
Two-Five (4.25%) percent per annum when based on the Prime Lending Rate, and the
US Base Rate is Five point Two-Five (5.25%) percent per annum. U.S. Base Rate
means the annual variable interest rate announced by the Bank from time to time
as the reference rate in effect to determine the interest rates applicable to
commercial loans in U.S. Dollars granted by the Bank in Canada and based on a
calendar year. Upon any change in the US Base Rate, the rate of interest
hereunder determined with reference to the US Base Rate shall be adjusted
automatically and without the necessity of any notice to the Customer.
4. The Loan shall be repaid by the Customer on demand. The Customer shall
not permit the Loan to exceed the lesser of the Credit Limit and the limit
determined by any applicable margin requirements. The Bank may refuse to honour
any cheque, permit any withdrawal or pay any other item if the Loan exceeds or
would, after such cheque, withdrawal or other item, exceed the lesser of the
Credit Limit or the limit determined by any such margin requirements.
Notwithstanding any such excess which may occur, this Agreement shall continue
to apply to the Loan in its entirety.
5. The Bank may cancel the Loan or reduce the Credit Limit at any time
without notice to the Customer. In addition, the Loan shall, at the option of
the Bank, be cancelled immediately if the Customer defaults in the payment or
performance of any obligation to the Bank or if an event of default occurs under
any agreement between the Bank and the Customer.
6. The Customer shall use the Loan solely for its business purposes.
7. Interest on the Loan, service charges and other fees charged by the Bank
in connection with the operation of any Account as well as other amounts payable
by the Customer pursuant to this Agreement, may be deducted from any Account.
8. All amounts received or held on deposit by the Bank (whether in any
Account or in any other account(s) at any branch(es) of the Bank), before or
after demand or default, may be applied on account of such parts of the
Customer's indebtedness or liability hereunder or under any agreement between
the Bank and the Customer, as the Bank deems appropriate, and any such
application may be changed or varied from time to time.
9. All fees, costs and expenses incurred by the Bank in connection with the
Loan or this Agreement (including without limitation the preparation and
enforcement of this Agreement and of any security held by the Bank to secure the
obligations of the Customer hereunder) shall be immediately due and payable and
shall bear interest from due date at the variable annual rate specified in
Section 3 above, before and after default and judgment.
10. If the Loan at any time exceeds the Credit Limit, the rate of interest
applicable to the excess shall be the Standard Overdraft Protection Rate, with
interest on overdue interest at the same rate. Standard Overdraft Protection
Rate means the annual rate of interest which the Bank establishes and quotes
from time to time as the rate of interest it will charge at such time for a line
of credit by way of overdraft in Canadian dollars to its customers in Canada;
upon any change in the Standard Overdraft Protection Rate, the rate of interest
stated hereunder as the Standard Overdraft Protection Rate shall be adjusted
automatically and without the necessity of any notice to the Borrower. For the
information of the Customer, the Standard Overdraft Protection Rate as of
February 13, 2002 is twenty-one (21%) percent per annum.
11. The Customer shall, at the Bank's request, issue one or more promissory
notes or other acknowledgements of debt with respect to this Agreement
(including, without limitation, a supply of signed, blank promissory notes which
the Bank shall be authorized to complete on behalf of the Customer). No such
note or acknowledgement, whether or not negotiable, shall extinguish any
indebtedness, effect novation or repay the Loan or any portion thereof, but
shall only evidence the same.
12. No act or omission by the Bank in any manner whatsoever shall extend to
or be taken to affect any provision hereof save only express waiver in writing.
A waiver of default shall not extend to, or be taken in any manner whatsoever to
affect the rights of the Bank with respect to, any subsequent default, whether
similar or not. The Customer waives every defence based upon any or all
indulgences that may be granted by the Bank.
13. Nothing herein limits the Bank's right to set off the Loan from time to
time against the credit balance of the Customer in any Account or in any other
account at any branch of the Bank or against any other money which may from time
to time be owing to the Customer by the Bank, regardless of the currency in
which such Account, account or other money may be denominated, which right is
hereby confirmed.
14. Where the undersigned Customers are two or more in number, or where the
Customer is a partnership, the obligations of the undersigned (or of all the
partners, as the case may be) are joint and several (in Quebec, solidary,
waiving the benefits of division and discussion). Nothing herein shall require
the express authority of any one or more of the undersigned Customers or such
partners for the purpose of a particular debit to any Account or a particular
advance under the Loan.
15. Any security for the Loan held by the Bank shall not be released or
extinguished by reason of the Loan being repaid, but shall subsist and secure
future amounts owing under the Loan until such security is returned or released
and discharged in writing by the Bank.
16. Any provision of this Agreement which is invalid or unenforceable under
the laws of any jurisdiction in which this Agreement is sought to be enforced
shall, as to such jurisdiction and to the extent such provision is invalid or
unenforceable, be deemed severable and shall not affect any other provision of
this Agreement.
17. This Agreement shall be governed and construed in accordance with the
laws of the Province in which the branch of the Bank set forth above is located.
18. Whenever the context so requires, the singular number shall be
interpreted as plural, the masculine gender as feminine or neuter and vice
versa.
19. This Agreement binds the Customer, its executors, administrators, heirs,
successors and assigns and shall enure to the benefit of the Bank and its
successors and assigns. The Borrower cannot assign any of its rights or
obligations hereunder.
20. Any notice or statement required or permitted to be given hereunder or
by law may be delivered, served personally, or given by facsimile transmission,
courier or regular mail to the last address of the Customer appearing in the
Bank's records. Any such notice or statement shall be deemed to have been
received by Customer the same day if delivered or served personally, the next
business day if sent by facsimile transmission and on the third business day
next following if sent by courier or mail.
21. The existing agreements, as modified or supplemented, governing the
operation of the Account or other accounts shall continue to apply to the said
Account and other accounts except as modified herein. In the event of any
conflict the provisions of this Agreement shall govern. This Agreement shall be
in addition to any other debt instrument, security or agreement between the Bank
and the Customer.
22. The Customer acknowledges receipt of a duplicate original of this
Agreement.
23. The parties have expressly requested that this Agreement and any
notices, documents or other writings relating hereto be drawn up in English.
Les parties ont express ment exig que la pr sente entente ainsi que tout avis
ou autre document s'y rapportant soient r dig s en anglais.
Given under seal at the Town of Richmond Hill this 22nd day of February, 2002.
1418276 ONTARIO INC.
Name of Company
Address:30 West Beaver Creek Road, Suite
109, Richmond Hill, Ontario L4B 3K1
per:___/s/ Kim Allen ______________________
Name: Kim Allen
Title: President
c/s
per:_____/s/ Angelo Boujos___________________
Name: Angelo Boujos
Title: Chairman
We have authority to bind the Corporation
LAURENTIAN BANK OF CANADA
by: /s/ Bruce Knight_____________________
name:
title:
and: /s/ Karim Habib_____________________
name:
title: