REVOLVING LINE OF CREDIT AGREEMENT
REVOLVING
LINE OF CREDIT
AGREEMENT
This loan agreement
(the “Agreement”), dated
as of October 15, 2008 (the “Agreement Date”) is made by
and between:
MANTRA VENTURE GROUP LTD., a
company duly incorporated under the laws of the State of Nevada and having its
office located at Suite 1205, 207 West Hastings Street, Vancouver, British
Columbia, V6B 1H7
(the “Borrower”)
AND
XXXXX XXXXXXX, the President,
Chief Executive Officer and a Director of the Borrower
(the “Lender”)
BACKGROUND
A.
The Lender has agreed to make available to the Borrower a revolving line of
credit of up to US $250,000.
B.
As of the Agreement Date, the Lender has previously advanced loans to the
Borrower (the “Prior
Advances”).
AGREEMENT
NOW THEREFORE, for
good and valuable consideration, the receipt and sufficiency of which each of
the parties hereby acknowledges, the parties agree as follows:
PART
1
TERMS
OF LINE OF CREDIT
1.
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Line of
Credit. The Lender will make available to the Borrower
for a period extending to October 14, 2010 (the “Maturity Date”), a
revolving line of credit for the principal amount of up to US $250,000
(the “Credit
Limit”). In connection herewith, the Borrower will execute and
deliver to the Lender a promissory note in the amount of the Credit Limit
attached hereto as “Exhibit A” (the “Promissory Note”). All
sums advanced on the Credit Line pursuant to the Agreement or as Prior
Advances shall become part of the principal of the Promissory
Note.
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2.
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Prior
Advances. The balance of the Line of Credit available to
be advanced to the Borrower will be reduced by the Prior
Advances.
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3.
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Draw Down
Period. The Borrower may draw down funds under the Line
of Credit from the Agreement Date until the Maturity
Date.
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4.
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Notice of Advance by
Borrower. In order to draw down funds under the Line of
Credit, the Borrower must provide written notice to the Lender of the
amount the Borrower wishes to be advanced (the “Notice”), such amount
not to exceed US $25,000 each month (the “Advance
Amount”).
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5.
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Advances by
Lender. Within 30 days of receiving the Notice from the
Borrower, the Lender will provide the Advance Amount to the
Borrower.
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6.
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Method of Payment of
Advances. All advances made by the Lender on account of
the Line of Credit will be made by cheque delivered to the Borrower or by
wire transfer to an account to be designated by the
Borrower.
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7.
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Payment of Outstanding
Balance. The outstanding balance of the Line of Credit,
including the Prior Advances, is repayable on the Maturity Date. The
Borrower may repay the outstanding balance, in whole or in part, at any
time prior to the Maturity Date. Any repayments made by the Borrower prior
to the Maturity Date will be applied toward the outstanding balance of the
Line of Credit. The repaid funds may be re-borrowed by the Borrower at any
time before the Maturity Date. At any particular time during the term of
the agreement, the Borrower may have borrowed in aggregate no more than
the Credit Limit.
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8.
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Fee. The
Borrower will pay to the Lender a one-time fee of US $100 within 10
business days of entering into the Agreement as consideration for the Line
of Credit.
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9.
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Term. The
Agreement shall be effective as of the Agreement Date and will continue in
full force and effect until the later of two years following the Agreement
Date or until the outstanding balance of the Line of Credit has been paid
in full.
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10.
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Costs. The
Borrower will pay the costs of the drawing, execution and delivery of the
Agreement, provided however, that the parties will each be responsible for
their own legal costs in relation to the
Agreement.
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PART
2
GENERAL
11.
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Assignment. Neither
party may assign its rights under the Agreement, in whole or in party,
without the prior written consent of the other
party.
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12.
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Enurement. This
Agreement and all its provisions will enure to the benefit of and be
binding upon the parties, their successors and permitted
assigns.
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13.
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Counterparts. This
Agreement may be executed in any number of counterparts, each of which
when so executed will be considered to be an original and such
counterparts together will constitute one and the same
agreement.
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14.
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Invalidity of Any
Provision. If any covenant, obligation or provision
contained in the Agreement is invalid or unenforceable, the remainder of
the Agreement will not be affected and each covenant, obligation or
provision of the Agreement will separately be valid and enforceable to the
fullest extent permitted by law.
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TO EVIDENCE THEIR
AGREEMENT each of the parties has executed the Agreement on the date appearing
below.
By: /s/
Xxxxxx Xxxxx
Xxxxxx
Xxxxx
CFO and Authorized
Signatory
Date: October
15, 2008
/s/
Xxxxx Xxxxxxx
Xxxxx
Xxxxxxx
Date: October
15, 2008
EXHIBIT
A
NON-INTEREST
BEARING PROMISSORY NOTE
AMOUNT: US $250,000
DATE: October 15, 2008
FOR VALUE RECEIVED,
the undersigned promises to pay to the order of XXXXX XXXXXXX the sum of TWO HUNDRED FIFTY
THOUSAND DOLLARS
(US $250,000), or the aggregate unpaid principal amount of all advances made by
the Lender to the Borrower pursuant to the terms of a Revolving Line of Credit
Agreement. The principal of the loan is non-interest bearing and shall be fully
and immediately payable on October
14, 2010 (the “Maturity Date”).
This note shall
take effect as a sealed instrument and be enforced in accordance with the laws
of the Province of British Columbia. All parties to this note waive
presentment, notice of non-payment, protest and notice of protest, and agree to
remain fully bound notwithstanding the release of any party, extension or
modification of terms, or discharge of any collateral for this
note.
NOTICE TO BORROWER:
THIS IS A DEMAND NOTE AND SO MAY BE COLLECTED BY THE LENDER AT ANY TIME ON OR
AFTER THE MATURITY DATE.
Per: /s/ Xxxxxx
Xxxxx
Name:
Xxxxxx Xxxxx
Title: Chief
Financial Officer