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EXHIBIT 4.11
COMMERCIAL DEMAND LINE OF CREDIT AGREEMENT
THIS AGREEMENT is made as of the 20th day of March, 1998.
BETWEEN:
STRIKER PAPER CANADA, INC.
(hereinafter called the "BORROWER")
OF THE FIRST PART
- and -
CREDIT UNION CENTRAL OF ONTARIO LIMITED
(hereinafter "CUCO")
OF THE SECOND PART
- and -
SO-USE CREDIT UNION LIMITED
(hereinafter the "CREDIT UNION")
OF THE THIRD PART
(collectively, CUCO and the Credit Union shall be referred to as the
"LENDERS")
WHEREAS the Borrower is a Member of the Credit Union;
AND WHEREAS the Borrower has applied to the Lenders for a line of credit to be
advanced;
AND WHEREAS the Lenders are prepared to provide such line of credit upon
certain terms and conditions;
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NOW THEREFORE in consideration of Ten Dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. (1) Subject to the terms and conditions set out in this Agreement
and a commitment letter dated December 23, 1997 (the
"COMMITMENT LETTER"), the Lenders hereby replace the existing
line of credit (if any) previously granted to the Borrower
with a new revolving line of credit (the "LINE OF CREDIT"),
and all advances under this line of credit shall at all times
be subject to the terms and conditions of this Agreement.
(2) Subject to subsection (1) hereof and to any considerations of
precedent lending practice, the Lenders shall advance funds
under the Line of Credit as requested by the Borrower from
time to time, but in no event shall the aggregate amount
advanced and outstanding at one time exceed EIGHT HUNDRED
THOUSAND DOLLARS ($800,000).
(3) Despite subsection (2) hereof, the Lenders and the Borrower
may from time to time enter into negotiations to amend the
Line of Credit, and any such amendment shall be in writing
signed as provided in subsection 8(3) hereof and shall be
subject to the terms and conditions of this Agreement and any
amendments in writing thereto.
(4) All amounts advanced to the Borrower by the Lenders that are
outstanding as of the date hereof under any previous line of
credit agreement between the Lenders and the Borrower shall be
deemed to be demand advances under this Agreement.
(5) The obligations of the Lenders to advance funds or provide
other credit facilities under the terms of this Agreement
shall be conditional upon the Lenders having received:
(a) copies of,
(i) the articles of incorporation and by-laws of
the Borrower, and
(ii) a resolution of the Borrower's Board of
Directors authorizing the Borrower to enter
into and execute this Agreement, and to grant
all security required under it, and
(iii) a list of names, titles and specimen
signatures of the persons authorized to
execute this Agreement or any security
documentation required under this Agreement
on behalf of the Borrower,
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in each case certified by the Chief Executive
Officer or Treasure of the Borrower to be
true and to remain in full force and effect
unamended, as of the date of the certificate;
(b) a General Security Agreement in the Lenders' standard
form;
(c) the most recent minimum review level financial
statements for the Borrower;
(d) the current financial statements of the Borrower,
certified to be accurate by the Chief Financial
Officer of the Borrower, and
(e) a certificate of the Chief Financial Officer of the
Borrower that, after making due inquiry, he has
determined that there has been no material adverse
change since the date of the most recently audited
financial statements of the Borrower.
2. (1) All funds advanced to the Borrower shall be advanced on a
demand loan basis and the following rules shall apply in case
of such advances:
(a) The Borrower shall pay the Lenders interest at an
annual rate of PRIME plus 1.75%, upon any amount
advanced and outstanding, and upon any arrears of
interest.
"PRIME" shall mean the annual rate of interest which
CUCO establishes as the reference rate of interest to
determine interest rates it will charge at such time
for demand loans in Canadian dollars and which it
refers to as its special rate of interest, such rate
to be adjusted automatically and without the
necessity of any notice to the Borrower upon each
change to such rate.
(b) Interest shall be payable under subsection 2. (1) (a)
herein on any amount outstanding hereunder on the
last day of each month, or at the time of repayment,
if repayment is made before an interest payment date.
(c) Interest shall be payable by the Borrower for the day
on which an advance is made but shall not be payable
for the day on which repayment is made, if the
Lenders were notified of the intended repayment by
12:00 noon (Toronto time) on the day prior to the day
on which the repayment is made, provided the advance
is in fact repaid by the close of banking business in
Toronto on the day specified for the repayment.
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(d) The Borrower shall repay the Lenders the amounts
advanced from time to time on demand together with
all interest owing thereon in the manner as provided
in this Agreement, but the Borrower may at any time
repay to the Lenders all or any part of the money due
hereunder.
(e) All interest payable to the Lenders under this
Agreement shall be received by the Lenders free and
clear of all taxes or duties imposed by or under the
laws of Canada, and province thereof or any other
jurisdiction, and without limiting the foregoing any
withholding tax, value added tax, business transfer
tax, sales tax or other tax levied on interest
payable which would adversely affect the net interest
received by the Lenders shall be paid by the Borrower
respectively, and not the Lenders, save and except
for taxes on the income or on the capital of the
Lenders which shall be the Lenders' responsibility.
(f) Advances to the Borrower under this agreement may be
made by way of overdraft in the Borrower's current
account with the Credit Union or by making payment
upon a cheque or other xxxx of exchange drawn by the
Borrower on the Credit Union.
3. (1) All payments to be made by the Borrower to the Lenders shall
be made by depositing the same for credit into the account
maintained by the Borrower with the Credit Union for operating
the line of credit, or with any such other depository at such
other place or places as the Lenders may, by writing, direct.
(2) Where a payment is received by the Lenders from the Borrower,
the Lenders may elect whether to apply that payment first
towards the interest with the remainder, if any, applied to
the line of credit balance, or to apply that payment towards
the reduction of the line of credit balance first.
(3) The records and book maintained by the Lenders in the usual
and ordinary course of its business that touch or concern the
state of accounts between the parties hereto shall be prima
facie evidence of the true state of accounts between the
parties for all purposes including litigation.
4. The Borrower specifically and expressly covenants with the Lenders as
follows:
(a) The Borrower shall provide the Lenders:
(i) with a certified copy of its consolidated (where
applicable) and non-consolidated minimum review level
Year End Financial Statements for each fiscal year
within ninety (90) days of the end of its fiscal
year, including its balance sheet, statement of
income and disbursements, statement of surplus and
statement of changes in financial position; and
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(ii) reasonable access to the offices, books and records
of the Borrower, for the purpose of determining the
value of the security pledged or given to the
Lenders.
(b) Where the amount advanced and outstanding under this Agreement
exceeds seventy percent (70%) of the funds available to the
Borrower, the Borrower shall not:
(i) borrow any additional funds of money from any other
financial institution; or
(ii) make a loan or other advance which will place it in a
deficit which exceeds its available line of credit
under this Agreement;
unless it gives the Lenders prior notice of its intent to do
so.
5. The Borrower shall draw, execute and deliver at its own expense, all
such instruments and documents, and do all such acts and things as the
Lenders may from time to time reasonably consider necessary or
advisable for the purpose of carrying out the intent and provisions of
this Agreement.
6. (1) All advances hereunder shall be secured by a General Security
Agreement in the Lenders' form, executed and delivered by the
Borrower to the Lenders and such General Security Agreement
shall be a first charge in favour of the Lenders except as
otherwise provided for in the Commitment Letter, and the
Borrower shall not enter into any new borrowing with any
creditor after the date of this Agreement which would afford
that creditor priority over the claims of the Lenders under
this Agreement, or grant any creditor any new or further
security in respect of any existing indebtedness, and the
Borrower shall discharge or postpone any security now held by
any other creditor or person that exists or may exist in
priority to the security given under this Agreement, except
for security in favour of Ontario Development Corporation,
Laurentian Bank of Canada and First Ontario Labour Sponsored
Investment Fund.
(2) The Borrower indemnifies the Lenders with interest at the rate
set above for all payments, costs, charges, legal fees and
other expenses paid or incurred by the Lenders in connection
with the authority of this Agreement or in connection with any
claim, suit, action or other proceeding brought against the
Lenders by reason of this Agreement.
7. (1) All money due from the Borrower to the Lenders by reason of
any advances under the revolving line of credit, whether as to
principal, interest or otherwise under this Agreement, and all
money advanced and outstanding, under this or any other
agreement between the Lenders and the Borrower, shall become
due and payable
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upon demand in the event that the Borrower defaults on, or is
otherwise in breach of this Agreement or the General Security
Agreement.
(2) The Borrower shall have seven (7) days from the date of demand
to remedy the breach or default and in the event that the
breach or default is nor remedied within the seven (7) day
period, all money advanced and outstanding, under this or any
other agreement plus the full amount of all interest and other
sums as provided above in subsection (1) shall become due and
payable without further demand.
8. (1) Subject to this section, the term of this Agreement shall be
for a period of one (1) year from the date of this Agreement.
(2) The Borrower may apply to the Lenders to renew this Agreement
for a period of twelve (12) months next following the date on
which this Agreement would otherwise terminate and where the
Lenders agree to such a renewal, this Agreement shall remain
in full force and effect, with the necessary modifications,
for the period of renewal so agreed between the parties.
(3) The renewal of this Agreement may be embodied in the form of
commitment letter addressed by the Lenders to the Borrower and
signed by each of the parties, and that letter,
(a) may contain provisions adding to, deleting or
otherwise modifying any of the terms of this
Agreement; and
(b) need not make any specific reference to this
Agreement,
and where such a letter is delivered by the Lenders to the
Borrower, the Lenders shall be deemed not to have agreed to
the renewal of this Agreement until such time as the Borrower
signs and returns a duplicate copy of the commitment letter
evidencing the consent of the Borrower to any amendment set
out in the commitment letter.
(4) Nothing in this section shall be so construed as to permit or
restrict the rights conferred upon the Lenders under this
Agreement to demand payment of, and recover, any amount
advanced on a demand basis or otherwise due and payable under
any provision of this Agreement.
(5) The expiry or other termination of this Agreement shall not
relieve the Borrower or the Lenders from any obligation that
arose prior to the date on which the Agreement expired.
9. (1) In addition to any interest payable under section 2, the
Borrower agrees to pay to the Lenders on demand all reasonable
legal fees and other reasonable costs or expenses
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incurred in the normal course in connection with or arising
out of the operation of the revolving line of credit, and such
expenses, fees or charges shall be charged to the Borrower
whether or not this creates or increases its indebtedness or
overdraft with the Lenders.
(2) The Borrower shall remain liable to the Lenders in respect of
each amount charged under subsection (1) and promises to pay
on demand all reasonable charges and legal expenses incurred
by the Lenders on behalf of the Borrower in connection with
this Agreement, the line of credit or the enforcement or
realization of any security, together with interest thereon at
the current interest rate and all charges for any overdraft.
10. Where the Borrower, it successors and assigns,
(a) finally and fully pays or causes to be paid to the Lenders the
full amount of their indebtedness to the Lenders together with
all costs and interest payable by the Borrower under this
Agreement;
(b) terminates, in accordance with the terms thereof, any other
lending or other credit agreement between the Borrower and the
Lenders providing for the advance of funds to or to the order
of the Borrower or for the Borrower's benefit, whether or not
that agreement provides for such advances to be made on a
revolving basis or otherwise;
(c) pays in full the amount of any guarantee given by the Borrower
to the Lenders in respect of the debt, default or miscarriage
of any other person; and
(d) observes or performs the terms of every security agreement
granted by the Borrower in favour of the Lenders and all other
agreements to which it relates,
then the security agreements granted by the Borrower to the Lenders
and the rights granted to the Lenders under this Agreement shall cease
and at any time thereafter the Lenders shall, at the request and
expense of the Borrower, it successors or assigns, cancel and
discharge the security held by the Lenders and execute and deliver to
the Borrower, it successors or assigns, such deeds or other
instruments as shall be requisite to cancel and discharge the security
held hereby constituted.
11. This Agreement shall not be deemed to be or construed as having been
amended as a result of any oral communication between the parties or
as a result of any practice of the parties, but all amendments to this
Agreement shall be in writing and shall be signed by both parties,
provided that any such agreement may be executed in counterpart form.
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12. (1) This Agreement is personal to the Borrower and no right or
obligation of the Borrower under this Agreement may be
assigned by the Borrower without the written consent of the
Lenders.
(2) This Agreement may be assigned, deposited, pledged or
hypothecated by the Lenders absolutely or as collateral
security for its present and future primary or contingent
indebtedness and liabilities, and in the event of any such
assignment, deposit or pledge, the person to whom the
Agreement is assigned, deposited, pledged or hypothecated
shall take it free and clear of any right of set-off,
counterclaim or other contra claim that may exist between the
Lenders and the Borrower.
(3) This Agreement and all its provisions shall enure to the
benefit of, and be binding upon, the parties and their
respective successors and assigns.
13. (1) The rights of the Borrower under this Agreement are subject to
the condition that it remain a Member of the Credit Union
until the expiration of the ninety (90) day period next
following the date on which the Borrower gives notice of its
intention to withdraw from membership in the Credit Union, or
on such earlier date as may be specified by the Lenders.
(2) Where the Borrower ceases to be a member of the Credit Union,
the Borrower shall thereupon repay all amounts advanced and
outstanding under this or any other Agreement.
14. (1) Any demand, notice or communication (a "NOTICE") required to
be given in connection with this Agreement or which this
Agreement permits to be given shall be given in writing and
may be given by personal delivery, by registered mail or by
transmittal by facsimile or other form of recorded
communication addressed to the recipient as follows:
To CUCO: Lending Services Department
0000 Xxxxxxxx Xxxx. Xxxx
Xxxxxxxxxxx, Xxxxxxx
X0X 0X0
Attention: Credit Officer
Facsimile No: (000) 000-0000
To the Credit Union: Lending Services Department
0000 Xxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Credit Manager
Facsimile: (000) 000-0000
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To the Borrower: 000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Chief Executive Officer
Facsimile No: (000) 000-0000
and to: c/o Striker Industries, Inc.
Suite 0000
Xxx Xxxxxxxx
Xxxxxxx, Xxxxx
00000
Attention: Chief Executive Officer
Facsimile: (000) 000-0000
with a copy to: First Ontario Labour Sponsored
Investment Fund Inc.
Xxxxx 000
000 Xxxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: The President
Facsimile: (000) 000-0000
or such other address, facsimile number, telex number or
individual as may be designated by notice by either party.
(2) Any notice given by personal delivery shall be conclusively
deemed to have been given on the day of actual delivery
thereof and, if given by registered mail, on the fourth
business day following the deposit thereof tin the mail and,
if given by facsimile or other form of recorded communication,
shall be deemed given and received on the date of such
transmission if received during the normal business hours of
the recipient and on the next business day if received after
the end of such normal business hours on the date of its
transmission. If any notice is given by facsimile or other
form of recorded transmission, such delivery shall be deemed
given and received only if the transmitter retained a proof of
such transmittal. If the party giving any notice knows or
ought reasonably to know of any difficulties with the postal
system which might affect the delivery of mail, any such
notice shall not be mailed but shall be given personal
delivery or by telex or telecopier transmittal. Any delivery
of a notice in accordance with this Section shall be deemed to
constitute proper notice to the Investor receiving the notice.
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15. In this Agreement,
(a) a word importing the masculine, feminine or neuter gender only
includes members of the other genders;
(b) a word defined in or importing the singular number has the
same meaning when used in the plural number, and vice versa;
(c) a reference to any Act, By-law, Rule or regulation or to a
provision thereof shall be deemed to include a reference to
any Act, By-law, Rule or regulation or provision enacted in
substitution therefor or amendment thereof; and
(d) all accounting terms have the same meaning as are applied to
those terms by the Canadian Institute of Chartered
Accountants.
16. This Agreement shall be governed by the laws of the Province of
Ontario and the laws of Canada applicable therein.
17. This Agreement shall enure to the benefit and be binding upon the
parties respective successors and permitted assigns.
18. The Borrower acknowledges receipt of a copy of this Agreement.
19. The parties hereto agree that this Agreement may be signed in
counterparts and the counterparts together shall constitute the entire
Agreement.
IN WITNESS WHEREOF the duly authorized officers of the parties have signed this
Agreement and affixed their corporate seals as of the date first above written.
STRIKER PAPER CANADA, INC.
Per: c/s
---------------------------------
Name:
Title:
Per:
---------------------------------
Name:
Title:
I/we have the authority to bind the
Corporation.
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CREDIT UNION CENTRAL OF ONTARIO
LIMITED
Per:
----------------------------------
Name:
Title:
Per:
----------------------------------
Name:
Title:
I/we have the authority to bind the
Corporation.
SO-USE CREDIT UNION LIMITED
Per:
----------------------------------
Name:
Title:
Per:
----------------------------------
Name:
Title:
I/we have the authority to bind the
Corporation.
