Exhibit 1
MEMORANDUM OF AGREEMENT MADE THE 11TH DAY OF MARCH, 2002.
FOR A DEMAND LOAN AGREEMENT AND CONVERTIBLE DEBENTURE
BETWEEN:
MFI EXPORT FINANCE INC., a company incorporated under the laws of
the Province of Ontario, Canada, having its head office at 156
▇▇▇▇▇▇ Mill Road, Suit 157 ▇▇▇ ▇▇▇▇▇, Ontario M3B 3N2, or a Company
to be incorporated in Barbados (in the event that the main borrower
becomes Mirage Trading Corp.) as represented by ▇▇▇▇▇ ▇▇▇▇▇▇▇ in his
capacity as President, (hereinafter referred to individually as MFI
as "The Lender");
and
COMMERCIAL CONSOLIDATORS CORP., a company incorporated under the
laws of the Province of Alberta, Canada, having its head office at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇, as
represented by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ in his capacity as Chairman,
(hereinafter referred to individually as "CCC" and collectively with
ACC, BSRUS, Play Center, CCC Panama and Mirage as "The Borrowers");
and
BUSINESS SUPPLIES ARE US INC., a company incorporated under the laws
of the Province of Ontario, Canada, having its head office at ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, as represented by ▇▇▇▇▇▇▇
▇▇▇▇▇ in his capacity as President, (hereinafter referred to
individually as "BSRUS" and collectively with ACC, CCC, Nay Center,
CCC Panama and Mirage as "The Borrowers");
and
A.C.C. CORP., a company incorporated under the laws of the Turks and
Caicos Islands, having its head office at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, as represented by- ▇▇▇▇▇▇▇ ▇▇▇▇▇ in his capacity as
President, (hereinafter referred to individually as "ACC" and
collectively with BSRUS, CCC, Play Center, CCC Panama and Mirage as
"The Borrowers");
and
MIRAGE TRADING CORP., a company incorporated under the Companies Act
of Barbados as number 15053, having its head office at Sea Acres
Dover, St. ▇▇▇▇▇▇▇▇ Gap, ▇▇▇▇▇▇ Church, Barbados, as represented by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ in her capacity as Director, (hereinafter referred
to individually as "Mirage" and collectively with ACC, CCC, Play
Center, CCC Panama arid BSRUS as "The Borrowers").
and
COMMERCIAL CONSOLIDATORS CORP. (PANAMA), a company incorporated
under the laws of Panama, having its head office at CALLE 50
EDIFICIO FONTANAC, P150 3, OFICINA ▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
IDE PANAMA, Panama (hereinafter referred to individually as "CCC
Panama" and collectively with ACC, CCC, Play Center, Mirage and
BSRUS as "The Borrowers").
and
PLAY CENTER INC., a company incorporated under the laws of Barbados,
having its head office at Sea Acres Dover, St ▇▇▇▇▇▇▇▇ Gap,
ChristChurch, Barbados (hereinafter referred to individually as
"Play Center" and collectively with ACC, CCC, Mirage, CCC Panama and
BSRUS as "The Borrowers").
and
1058199 ONTARIO INC., a company incorporated under the laws of the
Province of ONTARIO, Canada, having its head office at ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇, as represented
by ▇▇▇▇▇▇▇ ▇▇▇▇▇ in his capacity as President, (hereinafter referred
to individually as "1058199" and collectively with CCC, ACC, BSRUS,
Play Center. CCC Panama and Mirage as "The Borrowers");
and
LA SOCIETE DESIG INC., a company incorporated under the laws of
Quebec, Canada, having its head office at 9300 bout ▇▇▇▇▇-▇▇▇▇▇▇▇▇
O. Suite 280, Montreal, Quebec 1145 1L5, as represented by ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ in his capacity as Director, (hereinafter referred to
individually as "Desig" and collectively with Yam, Central Point,
Tri Vu; and Max as "The Guarantors");
and
YAM WIRELESS INC., a company incorporated under the laws of the
State of Florida, United States of America, having its head office
at ▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred
to individually as "Yam" and collectively with Desig, Central Point,
Tri Vu; and Max as "The Guarantors");
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and
CENTRAL POINT TECHNOLOGIES INC., a company incorporated under the
laws of the State of Florida, United States of America, having its
bead office at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇-▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇, (hereinafter referred to individually as "Central
Point" and collectively with Desig, Yam, Tri Viz, and Max as "The
Guarantors");
and
TRI VU INTERACTIVE CORPORATION, a company incorporated under the
laws of Ontario, Canada having its head office at ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ #▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (hereinafter referred to
individually as "Tri Vu" and collectively with Desig, Yam, Central
Point, and Max as "The Guarantors");
and
MAX SYSTEMS GROUP INC., a company incorporated under the laws of
Alberta, Canada, having its head office at ▇▇▇▇-▇▇ ▇▇▇▇▇▇ ▇.▇.,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇ (hereinafter referred to individually as
"Max" and collectively with Desig, Yam, Central Point, and Tri Vu as
"The Guarantors");
WHEREAS all of the above borrowers and guarantors will collectively
hereinafter be referred to as "The CCC Group"
WHEREAS certain of the Borrowers had previously arranged a revolving
credit facility from the Lender (the "Prior Facility") pursuant to a Memorandum
of Agreement dated July 31, 2000, which balance outstanding from the Prior
Facility~ upon signing of this agreement, will be carried forward into this
agreement. The balance carried forward will be the amount outstanding in
principle and interest as of the last business day prior to the signing of this
agreement.
WHEREAS The Borrowers have requested from The Lender a revolving credit
facility in the amount of Five Million United States Dollars ($5,000,000.00 USD)
inclusive of the amount carried forward under the Prior Facility, for a thirteen
(13) month term to assist with the financing of accounts receivable and purchase
order financing;
AND WHEREAS The Borrowers have agreed to, from time to time, assign and
endorse in favour of The Lender certain accepted and qualified accounts
receivable and inventory;
AND WHEREAS The Lender regards favourably the opportunity of providing the
requested revolving credit facility on a demand basis to The Borrowers for the
express purposes of financing BONA FIDE and accepted accounts receivable and
purchase order financing with BONA FIDE contracts from The Borrowers' customers;
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AND WHEREAS. The Lender has agreed, on an option basis, to convert the
indebtedness into common shares of Commercial Consolidators. Corp. (the
"Conversion Shares") by purchasing these shares at USD$1.50 per share (the
Conversion Price").
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good valuable consideration, the parties agree as follows:
1. NATURE OF TRANSACTION: The Lender shall provide to The Borrowers a revolving
accounts receivable and purchase order financing facility, with recourse
exercisable on demand. The maximum aggregate amount advanced under this facility
at any given tune shall be the lesser of the equivalent of Five Million United
States Dollars ($5,000,000.00 USD) and an amount equal to the formula as
expressed in Schedule "A" as attached, it being acknowledged that, as of the
date hereof; the amount outstanding under the Prior Facility, is deemed to have
been advanced under this facility in accordance with its terms. Short term
financing ("bulges") not to exceed fifteen days, at any one time, will also be
considered, on a case by case basis. Sub limits may be applied by The Lender as
reasonably required.
2. TERM: This facility will have a 13 month term from the above first written
date.
3. QUALIFYING CRITERIA FOR THE CUBAN ACCOUNTS RECEIVABLE AND PURCHASE ORDERS: In
order for an account receivable or purchase order to qualify for margining under
the within facility, it must meet the following criteria:
1) The customer is considered creditworthy, at the sole discretion of
the Lender;
2) The receivable/purchase order has been assigned to The Lender in
accordance with the terms of the Standard Form Assignment (copy
attached), which may be required to be executed in Spanish or English
or both, and notice of such assignment appears on each invoice.
Specifically such individual invoice notice shall state that payment
is to be made directly to the account of MFI, at the BICSA Bank, or
such other bank account as The Lender may from time to time direct;
3) The customer has been notified of the assignment of the receivable in
favour of The Lender and has acknowledged and agreed to honour a
letter of direction to remit payments directly to the account of MFI,
at the BICSA Bank, or such other bank account as The Lender may from
time to
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time direct. Copies of Letter of Direction and Acknowledgement used
generally by The Lender are attached;
4) The age and term of the subject receivable are less than 120 days
from date of invoice, unless otherwise agreed in writing. In this
regard, The Borrowers acknowledge and agree that the financing
provided hereunder must at all times be supported by security in the
form of a proper ratio (i.e., 1.25 times advanced and outstanding
amount) of good quality current under-120-day receivables, acceptable
to The Lender. Any portion of the facility not properly margined by
under-120-day accounts receivable must be repaid forthwith unless a
bulge consideration is granted by The Lender to The Borrowers or
other security received by The Lender from The CCC Group off sets the
shortfall;
5) The underlying goods and services which are the subject of the
account receivable are not under dispute, and there is not otherwise
any condition to payment or right of set-off;
6) The account receivable is not an off-set or contra account;
7) The customer has provided and endorsed to The Lender, security
satisfactory to The Lender supporting payment of the receivable to be
financed, whether by ▇▇▇▇ of Exchange. Payment Instruction or
otherwise; and;
8) In the case of FOB and/or CIF sales to clients not yet acknowledged,
The Borrowers have provided a copy of the relevant Air Waybill or
▇▇▇▇ of Lading supporting the shipment and the corresponding proforma
invoice.
9) Whenever possible, the purchase order received by The Borrower can be
financed by giving The Borrower's supplier a letter of credit for the
product purchased to fulfill the purchase order, (the facilitator
program;
Whether a receivable/purchase order meets the above criteria, shall be at
the sole discretion of The Lender applied in each individual case as may be
required from time to time. In other words, the fact that The Lender may have on
one occasion accepted a particular receivable or purchase order payable by a
particular customer, shall not obligate The Lender to accept any further
receivables or purchase orders payable by such customer, even if such
receivable(s) or purchase order(s) are in the same amount and even if they are
otherwise similar in character to the first.
QUALIFYING CRITERIA FOR DESIG RECEIVABLES: must be under 90 days from date of
invoice and outside of the coverage of the bank loan requirements. Monthly
verification of receivables required by MFI.
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QUALIFYING CRITERIA FOR YAM RECEIVABLES: must be insured by American Indemnity
with MFI as first beneficiary on policy, Monthly verification of receivables
required by MET.
QUALIFYING CRITERIA FOR MAX, TRI VU AND CENTRAL POINT RECEIVABLES: must be under
90 days from date of invoice and outside of the coverage of their bank loan
requirements. Monthly verification of receivables required by MN.
QUALIFYING CRITERIA FOR YAM INVENTORY: coverage will include new and refurbished
equipment at 35% of the value of the inventory cost up to a maximum of USD
$1,000,000. Physical inventory to be taken quarterly by MR or their
representative. Cost of such inventory taking to be borne by CCC-MFI will
attempt to provide a local firm in Miami to take physical inventory.
4. INTEREST RATE: The interest in relation to this financing facility will be
charged at the rate of Twelve Percent (12%) per annum on funds advanced and
outstanding from time to time. These charges Will be calculated daily at the
rate of 33 one-thousandths of one (1) percent (i.e., 0.033%) per day, (not to
exceed 12% per annum) commencing from the day a subject amount is advanced by
The Lender until the day of repayment credited to a MN bank account in Canada.
Interest to be paid monthly. After receipt of payments in Havana, The Lender
shall be allowed in each case a period of three (3) business days of further
charge to allow for the time required to effect transference of such payment to
Canada.
5. CONSULTING FEES: A 5% (USD$250,000) Consulting Fee will be charged by MFI to
CCC at the dine of the signing of the loan agreement. In the event that the
stock received by MFI is sold by MN or its agents on an "averaged per share
price basis" for USD$1.85, one third of the Consulting Fee will be returned to
CCC by MFI. A total of two thirds will be returned if the average price reaches
USD$1.95 and the full amount will be returned to CCC if the avenged per share
price equals or exceeds USD$2.00 per share. The stock must be sold by MFI for
the above average amounts for the return of fees to be realized by CCC.
6. ADMINISTRATION FEE: A USD$42,000 per month administration fee will be charged
to CCC by MFI for all of the administrative services provided to CCC and its
group of companies including work done in Cuba, Panama, Barbados, China and
Canada. Lit the event that the stock received by MFI is sold by MN or its agents
on an "avenged per share price basis" for USD$1.85, one third of the
Administration Fee will be returned to CCC by MFI. A total of two thirds will be
returned if the avenge price reaches USD$ 1.95 and the full amount will be
returned to CCC if the avenged per share price equals or exceeds USD$2.00 per
share. The stock must be sold by ▇▇▇ for the above average amounts for the
return of fees to be realized by CCC.
This fee does not include the services for wire transfers and foreign exchange.
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In addition to the above, The Borrowers will also be responsible for any
additional charges, such as:
1) Legal fees that may be necessary in the preparation~ execution and
registration of any additional security requirements deemed to be
necessary by The Lender, provided that such fees am quoted to and
approved by The Borrowers. The Lender undertakes to do its utmost in
keeping expenses in this regard at a reasonable level;
2) All costs, fees and expenses relating to the enforcement of the
security, should this become necessary, including legal fees
incurred as a result of delays or the default of payment; and
3) Bank charges, commissions and foreign exchange costs related to the
transferring funds.
The Lender will provide to The Borrowers, on a monthly basis, a statement
showing the calculation of the per diem fees due for the subject month. Such
fees shall be paid no later then monthly, within five (5) business days
following month end. All other fees, as applicable, shall be payable by The
Borrowers at the time they are incurred.
7. CONVERSION: The conversion from debt into equity Would take place in
USD$100,000 increments, when a bona fide buyer committed to purchase the stock
was identified and the price was acceptable to MFI or at the forced conversion
price, if requited by CCC, when the common shares trade at or above USD$2.10 for
ten (10) consecutive trading days and there is a bona fide buyer to purchase the
stock from MFI.
8. PREPAYMENT: In the event MN does not convert their debt into equity, and The
Borrowers elect to pay out the loan facility, a prepayment penalty will apply to
the administration fee based on the following formula:
within the first three (3) months - USD$200,000
from month four (4) to and including month six (6) - USD$175,000
from month seven (7) to and including month twelve(12) - USD$150,000
This penalty payment will become due at the time The Borrowers inform The
Lender of their intention to pre pay the loan, which is to be in writing
twenty-one (21) days prior to the full payment.
In the event MFI does not convert their debt into equity, and The
Borrowers elect to pay out the loan facility, a prepayment penalty will apply to
the consulting fee whereby, only a percentage of the initial fee of USD$250,000
will be returned to The Borrowers. The amount to be returned is as follows;
within the first three (3) months - USD$100,000
from month four (4) to and including month six (6) - USD$125,000
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from month seven (7) to and including month twelve (12) - USD$150,000
This penalty payment will become due at the lime The Borrowers inform. The
Lender of theft intention to pre pay the loan, which is to be in writing
twenty-one (21) days prior to the full payment.
9. Security: The Borrowers agree to provide the following security prior to any
advance hereunder and, where appropriate, on an ongoing basis prior to further
advances:
1) General Security Agreement and a moveable hypothec (universality
including inventory and receivables) forming a second charge on all
assets, assigns and property of Desig. Bank line is not to exceed
CDN$750,000;
2) General Security Agreement forming a first charge on all assets,
assigns and property of BSRUS;
3) General Security Agreement and Barbados Debenture forming a first
charge on all assets, assigns and property of Mirage;
4) General Security Agreement forming a first charge on all assets,
assigns and property of ACC;
5) UCC-1 forming a first charge on all assets, assigns and property of
YAM;
6) General Security Agreement forming a first charge on all assets,
assigns and property of Commercial Consolidators Corp.;
7) UCC-l and General Security Agreement forming a second charge on all
assets, assigns and property of Central Point;
8) General Security Agreement forming a first charge on all assets,
assigns and property of Tri Vu;
9) General Security Agreement forming a second charge on all assets,
assigns and property of Max;
10) Barbados Debenture forming a first charge on all assets, assigns and
property of Play Center,
11) Panama Debenture forming a first charge on all assets, assigns and
property of CCC Panama;
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12) A letter from The Business Development Bank of Canada for CCC
releasing their security;
13) Unlimited Cross Guarantee from all of the borrowers and guarantors
for all of the borrowers and guarantors listed at the beginning of
this agreement, subject to first position lender approval for Max
and Tri Vu.
14) Unlimited Guarantee from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ of indebtedness of
BSRUS, ACC, YAM, Mirage, CCC, Desig, Central Point, Play Center, Max
and CCC Panama
15) Unlimited Guarantee from ▇▇▇▇▇ ▇▇▇▇▇ of indebtedness of BSRUS,
Mirage, YAM, ACC and CCC, Desig, Central Point, Play Center, Max and
CCC Panama;
16) Standard Form Assignment (General) and/or Cuban Assignment Form
(Spanish version) required upon sale of the invoices accepted by The
Lender, supported by an Assignment Terms Applicable Latter (Blanket
Assignment Letter) for each of: BSRUS, ACC, Mirage, Play Center, and
CCC Panama;
17) Letters of direction to the individual customers with the
corresponding acknowledgement respecting payment;
18) Assignment of the shipping insurance policy with loss payable to The
Lender on CF or similar shipments;
19) Not less than monthly certification within ten days of the end of
each month of the collateral base accompanied by a listing of
inventory and receivables, aged and updated weekly with sales and
collections and; and same with each advance request. Certified by a
corporate officer,
20) Promissory ▇▇▇▇▇ as evidence of liabilities incurred by The
Borrowers, substantially in the Form attached hereto;
21) Subordination of all shareholder, director and officer loans.
9.01 CREDIT INSURANCE: It is the intent of The Lender to have as many of the
receivables as possible, (generated by The Borrowers) covered by insurance. It
is agreed that, once such insurance coverage is available and upon approval of
The Borrowers as to the costs thereof, the cost thereof will be borne by The
Borrowers, to be paid by monthly remittance or through adjustment of the per
diem rate set out in clause 4 above, as the parties may agree at the time.
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9.02 GENERAL INSURANCE: The Borrowers are to have in place and maintain at all
tines all risk insurance covering shipments, the said insurance to show The
Lender as first loss payee.
10. RELEASE OF SECURITY: Upon The Borrowers reducing the outstanding loan
facility down to a maximum of USD$2,500,000, The Lender agrees to assume a
second position on all security with the exemption of BSRUS, ACC, Mirage Trading
Corp., Play Center, CCC Panama and any other company that is doing business
and/or has assets (invoices, equipment, etc.) in/or with Cuba, with the
exception of Max, which, with these companies, The Lender will maintain its
first position. The security in place to maintain the loan of USD$2,500,000 must
be sufficient and satisfactory to The Lender and meet the following criteria:
80% Of under 90 day receivables (that have bills of exchange as security) from
Cimex, Cubalse, Copextel and TRD, and any other receivables from various Cuban
entities that The Lender, in its sole discretion find acceptable, before it
releases the above mentioned security.
In the event that The Borrowers reduce the loan amount down to
USD$2,500,000 either by payment reduction or conversion into shares that are
sold by The Lender, The Lender agrees to return the personal guarantees to
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇. This consideration to be granted by The
Lender to The Guarantors providing the security remaining is in compliance with
the above conditions mentioned in clause 10.
11. RECEIPTS: The Borrowers will, upon each advance, sign a receipt as evidence
of advance of funds being disbursed by The Lender and, if so requested, a
promissory note substantially in the Form attached hereto as evidence of The
Borrowers recourse liability for the subject amount in the event of
non-collection in the ordinary course.
12. RIGHT TO ENDORSE AND TRUST: In the event that payment in relation to an
invoice financed by The Lender is made by cheque payable to The Borrowers or to
The Borrowers and The Lender or one of them jointly, The Borrowers agree that
The Lender may, without further authorization, endorse The Borrowers name upon
the cheque for the purpose of negotiating such payment. The Borrowers also agree
that should the customer, through inadvertence or otherwise, direct any payment
to The Borrowers, such payment shall be received and held by The Borrowers in
trust exclusively for The Lender. In such case The Borrowers agree to notify The
Lender immediately upon receipt of the payment and co-operate in delivery of
same to The Lender.
13. Reporting: So tong as any amount remains outstanding hereunder, the
Borrowers will provide to The Lender periodically as indicated, or upon
reasonable request from time to time, the following:
1) Copy of all financed invoices issued to customers, such invoices
showing MFI as payee and/or a letter of direction to Borrower's
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customers requesting them to pay the invoice amount directly to MFI,
said letter to be signed by the customer as acceptance;
2) Monthly accounts receivable trial balance on the it day of each
following month;
3) Monthly accounts payable trial balance on the 10th day of each
following month;
4) Quarterly financial statements consisting of management prepared
balance sheet and income statement;
5) Monthly listing of priority payables indicating that The Borrowers
are in compliance with their obligations respecting payroll
remittances, P.S.T., G.S.T. and all government debts which could
potentially, if in default, interfere with The Lender ability to
collect on the accounts receivable in the normal course of business;
6) Annually, within 120 days of each fiscal year-end,
accountant-prepared financial statements; and
7) Such further or other information as The Lender may reasonably
require in the protection of their legitimate interests.
8) Provide an inventory listing on a monthly basis, no later than the
10th day of each following month.
9) The Lender or its agent will conduct field examinations on a monthly
basis or at an increased/reduced frequency that The Lender deems
necessary, which is at its sole discretion.
10) As part of The Lender's ongoing collateral monitoring process,
verification of outstanding account debtor balances will be
conducted. The Borrower shall provide The Lender with monthly
customer list updates with which to accomplish this procedure.
14. STATEMENTS TO THE BORROWERS: The Lender will, not less than monthly, but in
any event within two business days of a written request, provide to The
Borrowers a statement showing all amounts owing to The Lender as at the date
thereof together with a per diem rate thereafter. In addition, upon each
collection, The Lender will provide to The Borrowers a statement showing the
allocation of funds received.
15. FINANCIAL COVENANTS:
1) Commercial Consolidators Corp. to maintain net worth of
CDN$17,000,000 to be tested on a monthly basis;
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2) To maintain an Effective Debt to Tangible Net Worth ratio not
greater than 175:1 tested on a monthly basis; and
3) To maintain a Current Ratio of not less than 1.2:1
16. DUE DILIGENCE: Notwithstanding anything contained in this Agreement, The
Lender shall not be required to advance any amount hereunder until they have had
an opportunity to satisfy themselves, in their sole discretion, that there are
no material facts or circumstances that may interfere with their ability to
collect all amounts which may be outstanding from time to time.
17. DEFAULT: The Lender reserves the right to terminate this commitment at any
time if any of the following events or conditions occur:
1) The Borrower or Guarantor that to comply, in a timely manner, with
any of the terms or conditions specified herein, or the
nonfulfillment of any condition;
2) The Borrower or Guarantor fail to comply with any additional
requirements reasonably imposed upon the Borrower or Guarantor by
The Lender or The Lender's counsel;
3) The Borrower or Guarantor make any statement or representations to
secure this loan which are false or misleading;
4) If, in the opinion of The Lender, there is an adverse change in the
financial condition of the Borrower or Guarantor, The Lender
reserves the right to withhold the disbursement of all or part of
the proceeds of this agreement, and or terminate the commitment;
5) The failure of the Borrower or Guarantor to execute or deliver any
documentation required herein;
6) An admission in writing by the Borrower or Guarantor of its
inability to pay debts as they mature;
7) The making of an assignment for the benefit of the Borrower's or
Guarantor's creditors;
8) The institution of a proceeding by or against the Borrower or
Guarantor, under the federal bankruptcy Code or under any other
insolvency or bankruptcy law;
9) The Borrower's dissolution;
10) Lender's dissatisfaction with arty collateral in case of any
shortages on the margin formula.
NOTE: In the event The Lender terminates this agreement for any reason(s)
indicated, then The Lender will have no further obligations under any of
the documents executed by the Borrower or Guarantor in connection with
this facility, and all sums previously advanced, if any, ▇▇▇▇ become
immediately due and owing.
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18. GENERAL INDEMNITY: The Borrower and Guarantor shall indemnify and hold
harmless The Lender and its directors, officers, agents and employees from any
suits, demands, claims damages and expenses (including legal fees) on account of
any matter or thing arising out of this commitment letter or in conjunction
therewith, unless the suits, claims or damages are caused by The Lender's gross
negligence or willful conduct.
19. WAIVER OF TRIAL BY JURY: The Borrower and Guarantor hereby waive trial by
jury in any action, proceeding or counterclaim based upon, arising out of, or
connected with, this commitment letter or any other document executed in
connection with this facility. This provision is a material inducement for The
Lender entering into this commitment letter.
20. SECURITY UPON EXPIRY OF TERM: All security will remain active and in place,
even after expiry of the first or any successive renewal term of this Agreement,
until The Lender is paid all monies for fees, expenses, enforcement costs, if
any, and amounts advanced to or on behalf of The Borrowers in satisfaction in
full of all liabilities and amounts owing to The Lender. Upon such full payment,
The Lender will immediately release and re-assign to The Borrowers all security,
including all assignments, promissory notes and directions.
21. AMENDMENT: This Agreement may only be modified or amended by agreement in
writing executed by The Borrowers and The Lender.
22. CLOSING: The Lender understand that time may be of the essence to The
Borrowers. The Lender agree to use reasonable efforts to complete this financing
as soon as possible upon the completion of the due diligence (subject to
satisfactory results) and any additional legal set-up processes that may be
necessary.
23. NOTIFICATION: Any notice, request or other communication hereunder to any
party hereto in connection with this Agreement shall be in writing and be well
and sufficiently given if sent by pre-paid, registered or certified mail,
hand-delivered or sent by facsimile to such party at its address indicated on
the first page of this Agreement; provided that any communications, notices arid
requests to The Borrowers or any of them shall be sent or delivered care of
BSRUS only and any such communications, notices and requests so sent or
delivered shall be deemed delivered to each of The Borrowers.
Fax Number for MET Export Finance Inc.: (▇▇▇) ▇▇▇-▇▇▇▇ -- Canada
Fax Number for The Borrowers: (▇▇▇) ▇▇▇-▇▇▇▇ -- Canada
Any such notice shall be deemed to have been received on the date of delivery if
hand delivered, on the earlier of the date of actual delivery by the postal
authorities or five (5) business days after the date of mailing, if sent by
mail, on the date of transmission,
12
if sent by facsimile before 3:00 p.m. on a business day or on the business day
following the date of transmission if sent by facsimile after 3:00 p.m. on a
business day or on a day which is not a business day. In the event of an
interruption or abnormal delay in postal service, any notice or other
communication shall be hand delivered or sent by facsimile. Any of the parties
hereto may, by written notice to the others, given as aforesaid, designate an
alternate address for such party.
24. JURISDICTION: This Agreement shall be governed and construed in accordance
with the laws of the Province of Ontario and the Government of Canada and The
Borrowers and The Lender hereby attorn to the jurisdiction and courts thereof.
My collection action or legal enforcement relating to the collection of Cuban
accounts receivable from customers of The Borrowers located in Cuba, may at the
option of The Lender be governed and construed in accordance with the laws of
the Republic of Cuba and, for these purposes only The Borrowers hereby attorn to
the Cuban jurisdiction and the courts thereof. The Borrowers agree that a decree
or judgement of a Canadian judicial body may be enforced against The Borrowers
in Cuba as if such decree or judgement were given by a Cuban judicial body and
if deemed necessary by The Lender any judgement or order of a Canadian Judicial
Body may be enforced against The Borrowers in Cuba, by means of obtaining a
decree or judgement of The Cuban Courts on the terms of such Canadian judgement
or order.
25. EXECUTION: This Agreement may be executed in one or more counterparts (by
original or facsimile signature), with such counterparts together constituting
one original document
26. MERGER: Upon execution of this agreement dated 11th day of March 2002, this
facility will supercede and replace the Prior Facility.
27. SPECIAL CONDITION: This agreement and the rights and obligations of the
parties hereunder are conditional upon the completion of the sale and transfer
of all the shares of MN by Accord Financial Corp. and ▇▇▇▇▇▇▇▇ Financial
Services Corporation to Sterling Investors Group Limited and others (the "Share
Transaction") on or before March 14, 2002 and until the satisfaction of such
condition, the existing loan agreement between MET and The CCC Group dated July
31, 2000 (the "2000 Loan Agreement") will continue in effect. If the Share
Transaction is completed on or before March 14, 2002, then MFI will give written
notice to The CCC Group of such completion as soon as practicable thereafter and
this agreement will become effective and binding upon MFI and The CCC Group and
will supersede and replace the 2000 Loan Agreement as of the date of such
notice. If the Share Transaction is not completed on or before March 14, 2002,
then this agreement shall be null and void and of no force or effect and the
2000 Loan Agreement will continue thereafter in flail force and effect in
accordance with its terms. This agreement is subject to the approval of the
Canadian Venture Exchange (CDNX).
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IN WITNESS WHEREOF The Parties hereto have executed this contract as of
the date above written.
MFI EXPORT FINANCE INC.
Per: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ Per: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------- --------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇ - President ▇▇▇▇ ▇▇▇▇▇▇▇ - Vice President
COMMERCIAL CONSOLIDATORS CORP.
Per: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ - Chairman
BUSINESS SUPPLIES ARE US INC. PLAY CENTRE INC.
Per: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Per: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------- --------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ - Director ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
Director of Play Center Inc.
A.C.C. CORP. MIRAGE TRADING CORP.
Per: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Per: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------- --------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ - Director ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
Director of Mirage Trading Corp.
LA SOCIETE DESIG INC. YAM WIRELESS INC.
Per: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Per: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------- ---------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ - Director ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ - Director
CENTRAL POINT TRI-VU INTERACTIVE
TECHNOLOGIES INC. CORPORATION
Per: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Per: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------- -------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Director of Central Point Director of Tri-Vu
14
MAX SYSTEMS GROUP INC. CCC PANAMA
Per: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Per: /s/
-----------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Director of CCC Panama
Director
1058199 ONTARIO INC.
Per: /s/
Director of 1058199 Ontario Inc.
15
