Exhibit 10 a
THIS LOAN AGREEMENT is made as of December 21st, 2000
BETWEEN:
AXYN CANADA CORPORATION
("Axyn Canada")
- and -
SYSCAN INTERNATIONAL INC.
("Syscan").
RECITALS:
A.
WHEREAS Axyn Canada is indebted to Syscan;
B.
AND WHEREAS the parties wish to evidence that indebtedness and
provide for its repayment.
THEREFORE, the parties agree as follows:
ARTICLE 1
ACKNOWLEDGEMENT OF INDEBTEDNESS
1.1 Indebtedness
Axyn Canada acknowledges that it is indebted to Syscan in the
amount of $1,850,000 (the "Principal Amount").
1.2 Interest
The Principal Amount shall bear interest at the prime rate of the
Royal Bank of Canada from time to time in effect plus 2% per
annum from January 1st, 2001, to payment, both before and after
default.
1.3 Payment of Interest
Interest shall accrue on the Principal Amount (or any remaining
balance thereof) and shall be payable on the last day of each
month commencing June 30th, 2001. The payment of interest that
would be due on June 30th, 2001, shall be made by an equal
monthly payment on the last day of each month from June 30th,
2001 to December 31st, 2001.
1.4 Maturity of Principal Amount
The Principal Amount shall become due and payable on December
31st, 2001.
1.5 Prepayment
Axyn Canada shall be entitled to prepay the Principal Amount in
whole or in part without advance notice and without payment of
any bonus of interest.
ARTICLE 2
SHARE PROVISIONS
2.1 Pledge of Shares
Axyn Canada shall forthwith upon execution of this Agreement,
pledge to Syscan five million shares in Syscan registered in the
name of Axyn Canada (the "Pledged Shares"). That pledge shall be
carried out pursuant to a pledge agreement in the form which is
Schedule A hereto (the "Pledge Agreement").
2.2 Deposit of Shares
Axyn Canada shall deposit with Osler, Xxxxxx & Harcourt LLP,
pursuant to the terms of an escrow agreement satisfactory in form
and content to Osler, Xxxxxx & Harcourt LLP, certificates for the
Pledged Shares. The escrow agreement shall provide that the
Pledged Shares will be held by Osler, Xxxxxx & Harcourt LLP as
escrow agent until the Principal Amount and all interest thereon
has been paid or until Syscan becomes entitled to exercise its
remedies as a secured creditor under the Pledge Agreement.
2.3 Negative Pledge
Axyn Canada undertakes that it shall not, save as permitted by
this clause, sell, transfer, pledge, encumber, hypothecate or
otherwise convey any shares including the Pledged Shares owned by
Axyn Canada in Syscan until the Principal Amount and interest
thereon have been paid. This undertaking shall not apply to
those shares required to perform certain obligations alleged to
exist on the part of Axyn Canada in favour of 2977541 Canada Inc.
and Xxxxxx Xxxxxx pursuant to an agreement dated June 18th,
1999. The Principal Amount shall immediately become due and
payable if this undertaking is breached.
Axyn may sell all or part of the said shares other than the
Pledged Shares provided the net proceeds of the sale are applied
to the Principal Amount and interest thereon.
ARTICLE 3
SERVICES
3.1 Services
Axyn Canada has, to date, provided numerous administrative
services to Syscan. The parties intend that Syscan will in the
future obtain those services, to the extent practical, from other
sources. If Axyn Canada performs services for Syscan it shall do
so on the basis of fees and expenses to be agreed to in advance
in writing on a case by case basis.
ARTICLE 4
GENERAL CONDITIONS
4.1 Notice
Any demand, notice or communication to be made or given hereunder
shall be in writing, except as otherwise expressly permitted or
required under this Agreement, and may be made or given by
personal delivery, by registered mail or by transmittal by telex
or facsimile machine addressed to the respective parties as
follows:
To Axyn Canada:
0 Xxxxxxxx Xxxx
Xxxxx 000
XXXXXX XX X0X 0X0
Phone: (000) 000 0000
Fax: (000) 000 0000
To Syscan International Inc.:
000 Xxxxxxxx
XX. XXXXXXX XXX X0X 0X0
Phone: (000) 000 0000
Fax: (000) 000-0000
or to such other mailing or telex or facsimile machine address as
any party may from time to time notify the other in accordance
with this Section. Any demand, notice or communication made or
given by personal delivery shall be conclusively deemed to have
been given on the day of actual delivery thereof, or, if made or
given by registered mail, on the fifth business day following
deposit thereof in the mail or, if made or given by telex or by
facsimile transmission, on the first business day following the
transmittal thereof and receipt of the appropriate answer back.
If the party making or giving such demand, notice or
communication knows or ought reasonably to know of difficulties
with the postal system which might affect the delivery of mail,
any such demand, notice or communication shall not be mailed but
shall be made or given by personal delivery or by telex or by
facsimile transmission.
4.2 Governing Law
This Agreement shall be conclusively deemed to be a contract
made under, and shall for all purposes be governed by and
construed in accordance with, the laws of the Province of
Ontario, Canada, without prejudice to or limitation of any other
rights or remedies available under the laws of any jurisdiction
where property or assets of Axyn Canada may be found.
4.3 Successors and Assigns
This Agreement shall be binding upon and shall enure to the
benefit of Axyn Canada and Syscan, and their respective
successors and assigns, except that neither Axyn Canada nor
Syscan may assign or transfer its rights and obligations
hereunder or any interest herein without the prior written
consent of the other party.
4.4 Expenses
All costs and expenses (including, without limitation, the fees
and disbursement of legal counsel) incurred in connection with
this agreement and the transactions contemplated hereby shall be
paid by the party incurring such expenses.
4.5 Severability
Any provision of this agreement which is prohibited or
unenforceable in any jurisdiction shall not invalidate the
remaining provisions of this agreement and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provisions in any other jurisdiction.
4.6 Whole Agreement
This agreement constitutes the whole and entire agreement between
the parties relating to the subject matter of this agreement, and
cancels and supersedes any prior agreements, undertakings,
declarations, commitments and representations, written or oral,
in respect thereof.
4.7 Language
The parties expressly request and require that this agreement and
any related documents be drawn up solely in the English language.
Les parties aux presentes convient et exigent que cette entente
et tous les documents qui sy rattachent soient rediges seulement
en anglais.
4.8 Amendments and Waivers
Any provision of this agreement may be amended only if Axyn
Canada and Syscan so agree in writing and, except as otherwise
specifically provided herein, may be waived only if Syscan so
agrees in writing.
4.9 Further Assurances
Each of Axyn Canada and the Syscan shall promptly cure any
default by it in the execution and delivery of this agreement.
Axyn Canada, at its expense, shall promptly execute and deliver
to Syscan, upon request by Syscan, all such other and further
documents, agreements, opinions, certificates and other
instruments in compliance with, or accomplishment of its
covenants and agreements hereunder or to more fully state its
obligations as set out herein or to make any recording, filing or
notice or obtain any consent, all as may be reasonably necessary
or appropriate in connection therewith.
4.10 Counterparts
This agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of which
taken together shall be deemed to constitute one and the same
instrument, and it shall not be necessary in making proof of this
agreement to produce or account for more than one such
counterpart.
IN WITNESS OF WHICH the parties have duly executed this
agreement.
AXYN CANADA CORPORATION
By:
Name:
Title:
SYSCAN INTERNATIONAL INC.
By:
Name:
Title:
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