Exhibit 10.12
(ix)
U.S. DOLLAR COMMERCIAL 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
"Borrower") agree as follows:
1. The Bank hereby grants to the Borrower, which in turn accepts, a line of
credit for carrying on his enterprise in the form of a renewable demand loan
(the "Operating Credit") not exceeding at any time the capital for an amount of
ONE MILLION DOLLARS ($1,000,000.00) (hereinafter referred to as the "Credit
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Limit"), subject to the following terms and conditions (the "Agreement").
2. The Borrower promises to pay to the Bank, on demand, any amount owed
under this Agreement including, but without being limited to, the principal,
interest, fees and any incidental expenses of the Operating Credit.
3. Unless the Bank has requested the full payment of any outstanding amount
under the terms and conditions of this Agreement, or has terminated this
Agreement, the Borrower may borrow, repay and reborrow up to the Credit Limit
granted, in compliance with the terms and conditions herein.
Pursuant to the Operating Credit, each advance and each repayment in
reduction of the Operating Credit shall be for the amount of FIVE THOUSAND
DOLLARS ($5,000.00) or any multiple thereof.
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The Borrower authorizes the Bank to determine daily, or at any other
frequency the Bank may decide upon, the position or net position (as the case
may be) of the account opened in the name of the Borrower (the "Account"). The
Borrower hereby authorizes the Bank to establish every day, or at any other
frequency as it may determine, the net position of the Account. If the net
position of the Account is a debit, the Bank shall grant to the Borrower an
advance to cover the overdraft without exceeding the Credit Limit. If the net
position of the Account is a credit, the Bank may apply the full amount of such
credit or a part thereof in full or partial reduction of the Operating Credit.
In addition to debiting the Account with the amount of each cheque, payment
order or other item drawn on the Account, and each withdrawal, the Bank shall
also be entitled to debit the Account with the amount of all interest (including
compound interest) payable by the Borrower to the Bank pursuant to this
Agreement as well as the amount of all administrative fees and other charges
payable by the Borrower, and the amount of any legal costs incurred by the Bank
with respect to the Borrower. The Borrower authorizes the Bank to use any
deposit or other credit on its behalf, in whole or in part, for the repayment of
the following and in such order: interest on the Operating Credit,
administration fees and the Operating Credit itself, the Borrower thus waiving
any other repayment order.
The Borrower shall not permit the Operating Credit to exceed the Credit
Limit and the Bank may refuse to honour any cheque, permit any withdrawal or pay
any other item if the Operating Credit exceeds, or would after such payment
exceed, the Credit Limit on the date such cheque, withdrawal or other item is
presented to the Bank for payment, provided that this Agreement shall continue
to apply to the Operating Credit and to the Borrower notwithstanding any
Operating Credit in excess of the Credit Limit.
The Borrower shall deliver to the Bank from time to time, promptly on
request by the Bank and in form and substance satisfactory to the Bank, a demand
promissory note, security, other acknowledgement of debt or other document with
respect to the indebtedness and liability then owing by the Borrower to the Bank
pursuant to or in respect of the Operating Credit and this Agreement.
4. The Borrower shall pay interest to the Bank calculated on the daily
closing balance of the Operating Credit at a floating annual rate equal to the
Bank's U.S. base rate, plus one half percent (0.50%) per annum; provided that
the rate of interest 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; and such interest shall be payable
monthly, on the 1st day of each and every month, both before and after any
termination of this Agreement, demand, default or judgment, and until payment of
the Operating Credit in full, with interest on overdue interest at the same
rate.
Under this Agreement, the expression "Bank's 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. On the date of this Agreement, the Bank's U.S. base rate is Five
point two five percent (5.25) % per annum. The Bank is not required to inform
the Borrower of any changes to its U.S. base rate.
5. Each time an amount in Canadian Dollars must be converted into or
expressed in U.S. Dollars, the calculation will be based on the appropriate
date, by using the Bank's cash bid price to purchase U.S. Dollars as quoted by
the Bank's Treasury Department at approximately 10:30 a.m. (Montreal time) on
the relevant date.
6. All sums due under this Agreement by the Borrower to the Bank must be
paid in U.S. Dollars. The Borrower shall use the Account (and incur the
Operating Credit) solely for business purposes.
7. The Borrower agrees to indemnify the Bank against any loss incurred by
the Bank as a result of any judgment or order being given or made for the
payment of any amount due hereunder and such judgment or order being expressed
and paid in a currency (the "Judgment Currency") other than United States
currency (the "Operating Credit Currency") and as a result of any variation as
between:
(a) the rate of exchange at which such amount due hereunder is
converted into the Judgement Currency for the purposes of such judgment or
order; and
(b) the Bank's cash bid price as announced by its Treasury Department
at approximately 10:30 a.m. (Montreal time) at the relevant date for the
purchase of the Operating Credit Currency with the amount of the Judgment
Currency when actually received by the Bank.
The foregoing indemnity shall constitute a separate and independent
obligation of the Borrower and shall apply irrespective of any indulgence
granted to the Borrower from time to time and shall continue in full force and
effect notwithstanding any termination of this Agreement or any such judgment or
order as aforesaid.
8. If the Bank is or becomes subject to any withholding tax or any other tax
with respect to payments of principal, interest or other amounts payable in
connection with this Agreement (except taxes on the overall net income of the
Bank), and as a result thereof the cost to the Bank of making or maintaining the
Operating Credit is increased or the income of the Bank therefrom is reduced,
then on demand the Borrower shall pay the Bank the amount (as certified by the
Bank) that shall compensate the Bank for such additional cost or such reduction
in income.
9 The Bank reserves the right to cancel, at any time, the Operating Credit
granted to the Borrower under this Agreement, and the Borrower shall reimburse
the Bank, on demand, for the aggregate outstanding Operating Credit amount
including interest accrued thereon as well as any other amount payable under
this Agreement. Nothing herein contained shall limit the Bank's right to set
off the debit balance of the Account from time to time against the credit
balance of the Borrower in any other account at the Bank or against any other
money which may from time to time be owing to the Borrower form the Bank such
right being expressly affirmed hereby. In the event that the currency of such
other account or such other money owing to the Borrower from the Bank is not
United States currency, the set-off shall be based upon the United States Dollar
equivalent of such non-United States currency calculated at the conversion basis
referred to in paragraph 4 above.
10. Without limiting the Bank's right to demand, in its discretion, the
repayment of the Operating Credit, the Bank may terminate all of its obligations
related to the granting of credit or advances under the Operating Credit and
declare payable all of the Borrower's obligations should one or more of the
following events occur:
(a) the Borrower fails to pay when due the principal, interest, and any
other sums due pursuant hereto;
(b) the Borrower's failure to comply with one of its obligations under
this Agreement or any other agreement between the Borrower and the Bank;
(c) the Borrower becomes insolvent or bankrupt or a bankruptcy petition
is filed against the Borrower, or notifies its intentions to present a proposal
to its creditors, presents a proposal or assigns its assets to its creditors, or
measures are taken to liquidate, reach a compromise, make an arrangement or
adjust its debts, or to appoint a sequestrator, administrator or liquidator of
its assets;
(d) if there occurs any attachment, execution or levy against the
Borrower or any of its assets.
11. If this Agreement modifies a credit facility already granted by the Bank
in favour of the Borrower, it will not effect novation.
12. Under this Agreement, the entries made in the Bank's books, registers
and files relating to the opening of the credit granted to the Borrower
constitute, in the absence of manifest error, prima facie evidence of the
Borrower's indebtedness to the Bank.
13. This Agreement binds the Borrower, 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 under this Agreement.
14. Whenever the context so requires, the singular number shall be
interpreted as plural, the masculine gender as feminine or neuter, and vice
versa.
15. All amounts received or held on deposit by the Bank (whether in any
Account or in any other accounts(s) at any branch(es) of the Bank), before or
after demand or default, may be applied on account of such parts of the
Borrower's indebtedness or liability hereunder or under any agreement between
the Borrower and the Bank as the Bank deems appropriate, and any such
application may be changed or varied from time to time.
16. No act or omission by the Bank or any nature 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 Borrower waives every defence based upon any or all
indulgences that may be granted by the Bank.
17. Nothing herein limits the Bank's rights to set off the Operating Credit
from time to time against the credit balance of the Borrower 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 Borrower by the Bank, regardless of the
currency in which such Account, account or other money may be denominated, which
right is hereby confirmed.
18. Where the undersigned Borrowers are two or more in number, or where the
Borrower is a partnership, the obligations of the undersigned Borrowers (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
Borrowers or such partners for the purpose of a particular debit to any Account
or a particular advance under the Operating Credit.
19. Any security for the Operating Credit held by the Bank shall not be
released or extinguished by reason of the Operating Credit being repaid, but
shall subsist and secure future amounts owing under the Operating Credit until
such security is returned or released and discharged in writing by the Bank.
20. 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.
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 Borrower.
22. This Agreement shall be governed by and construed in accordance with the
laws of the Province in which the branch of the Bank set forth above is located.
23. Any notice or statement required or permitted to be given hereunder or
by law may be delivered or served personally in or given by facsimile
transmission, courier or regular mail to the last address of the Borrower
appearing the Bank's records. Any such notice or statement shall be deemed to
have been received by the Borrower the same day, if served or delivered
personally, the next business day if sent by facsimile transmission and on the
third business day next following if sent by courier or mail.
24. All fees, costs and expenses incurred by the Bank in connection with the
Operating Credit 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 Borrower hereunder) shall be immediately due and payable
and shall bear interest from due date at the variable annual rate specified in
Section 4 above, before and after demand, default and judgment.
25. 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.
26. The Borrower acknowledges receipt of a duplicate original of this
Agreement.
Given under seal at 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