EXHIBIT 10.11
LOAN AGREEMENT
This Loan Agreement is dated as of the 14th day of March, 2003
BETWEEN
Prime Battery Products Limited
A company incorporated under the laws of the Province
of Ontario (hereinafter called "Prime")
OF THE FIRST PART
And
3686469 Canada Inc.
A company incorporated under the laws of Canada
(hereinafter called "3686469")
OF THE SECOND PART
And
Elliot and Xxxxxxx Studios Inc.
A company incorporated under the laws of the Province
of Ontario (hereinafter called "Elliot")
OF THE THIRD PART
WHEREAS 3686469 and Elliot have agreed to extend the term of
the $400,000 loan (agreed to on January 23, 2003) for a period of one month and
increase the loan by up to an additional $250,000.000 to Prime to finance
Prime's business operations;
AND WHEREAS the parties have agreed to enter into this
Agreement for the purpose of setting forth, inter alia, the manner in which
their loans to Prime shall be repaid.
NOW THEREFORE in consideration of the mutual covenants and
agreement hereinafter contained and other good and valuable consideration (the
receipt and adequacy of this consideration are acknowledged by each of the
parties), the parties agree as follows:
1. The parties acknowledge the validity of the above mentioned recitals.
2. 3686469 and Elliot have agreed to forthwith lend Prime up to the sum of
$650,000.00 (hereinafter referred to in total as the "Borrowed Funds").
3. Prime agrees to use the Borrowed Funds for the purpose of purchasing
inventory.
4. Prime does hereby agree to grant to 3686469 and Elliot a first lien
against its inventory and accounts receivables as security for the
repayment of the Borrowed Funds.
5. As consideration for the Borrowed Funds, Prime agrees to pay to 3686469
and Elliot as a one-time fee the combined sum of twelve thousand, five
hundred dollars ($12,500) CDN. It will also continue to pay the
formerly agreed upon 1.5% interest per month on the average daily
amount outstanding during the previous 30 days. Any interest not so
paid shall constitute am advance under the credit.
6. Prime shall repay the Borrowed Funds upon demand and shall have the
right to pay the principal balance owing together with accrued interest
at any time.
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7. If the Borrowed Funds are not paid in full by May 23rd and an extension
has not been granted by the lenders, Prime shall pay the lenders a late
fee of one thousand dollars ($1,000) CDN per week or part thereof. Any
late fees not paid within 7 days of being incurred shall constitute an
advance under the credit. .
8. Prime agrees to grant to 3686469 and Elliot an assignment of whatever
assets they may request in order to secure their loans and/or a first
lien against the assets secured by a security agreement under the
Personal Property Security Act.
9. The parties agree to arbitrate any disagreement arising out of or
relating to this Agreement. All such disagreements shall be submitted
to the arbitration of one person acceptable to the parties hereto.
10. The parties agree to execute, deliver or cause to be done, executed and
delivered, all such further acts, documents and things in connection
with this Agreement to give effect to this Agreement.
11. The Agreement will ensure to the benefit of and be binding upon the
parties to it and their respective heirs, trustees, successors and
assigns.
12. This Agreement may be executed by any party by facsimile and if so
executed shall be legal, valid and binding on any party executing in
such manner.
13. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and all of which, taken together,
shall constitute on and the same instrument.
IN WITNESS WHEREOF the parties have duly executed this
Agreement as of the day first above written.
3686469 Canada Inc. Prime Battery Products Limited
Per:____________________ Per:___________________________
President: Xxxxxx Xxxxx Chairman and CEO: Xxxx Xxxxxxxx
Elliot and Xxxxxxx Studios Inc.
Per:____________________
President: Xxxxxx Xxxxx
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