LOAN AGREEMENT
This Agreement made this 1st. day of April, 2002
BETWEEN:
DORAL EZ INVESTMENTS INC.
a corporation incorporated under
the laws of the Province of Ontario
(hereinafter called "EZ")
- and -
GRAVITY SPIN INC.
a corporation incorporated under
the laws of the Province of Ontario
(hereinafter called "GS")
WHEREAS the EZ is in the business of providing seed capital, and financing
to entrepreneurial ventures;
AND WHEREAS GS wishes to obtain a loan, and a line of credit guarantee from
EZ to finance operations;
NOW THEREFORE, in consideration of the premises and mutual Agreements and
covenants herein contained and other good and valuable consideration (the
receipt and adequacy of which is hereby mutually acknowledged), the parties
hereby covenant and agree as follows:
1.0 TERM
1.1 GS hereby engages EZ and EZ hereby agrees to render financial services
to GS for a period of five years. (the "Term"), commencing on April
01, 2002;
1.2 Both parties may terminate this agreement upon giving the other party
30 days written notice.
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2.0 EZ OBLIGATIONS
2.1 During the Term of this Agreement:
EZ shall provide to GS, a loan representing the consolidation of two
previous loans made to E Fusion ATP Inc. (now Gravity Spin Inc.) on
February 18, 2000 for $100,000.00 CDN and April 4, 2001 for
$100,000.00 CDN from Xxxxx Xxxxx personally.
EZ will secure a $100,000.00 CDN line of credit on behalf of GS, with
a financial institution to be determined by EZ.
The new loan agreement terms are as follows;
(i) the previous loans are terminated and all interest payments
are considered paid in full;
(ii) the loan amount of $200,000.00 CDN is interest free, no
principal payments are scheduled, and no interest will
accrue;
(iii) the loan will be secured with the company's assets;
(iv) EZ will discharge his services and provide all services in
the best interest of GS.
2.2 The services of EZ are non-exclusive and subject to paragraph 5.0
hereof, EZ may render services of the same or similar nature, as
herein described, to an entity whose business is in competition with
the GS, directly or indirectly;
2.3 EZ shall retain all information of any nature, type or kind regarding
the GS's business, clients and opportunities in confidence and shall
not disclose this information to any competitor.
3.0 GS OBLIGATIONS
3.1 GS shall comply with the following:
(a) GS will pay interest on the line of credit in accordance with the
terms of the bank, and will use or pay down as required;
(b) at least 25% of the profit before taxes will be used to pay down
the loan, within 60 days of the company's financial year end;
(c) the loan will be repaid before any profits or bonuses can be
distributed to any of the shareholders;
(d) GS will provide financial statements on the 10th. day following
month end;
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4.0 TRADE SECRETS
4.1 EZ will not disclose to any other person, firm or corporation, nor use
for its own benefit, during or after the term of this Agreement, any
trade secrets or other information designated as confidential by GS
which is acquired by the EZ in the course of performing services under
this Agreement.
5.0 INDEMNITY
5.1 The parties agree to indemnify and hold each other, their affiliates,
control persons, officers, employees, attorneys and agents
(collectively, the "Indemnified Persons") harmless from and against
losses, claims, damages, liabilities, costs, or expenses, joint and
several arising out of the performance of this Agreement. The parties
also agree that it shall reimburse the Indemnified Persons for any
attorney's fees and cost incurred in enforcing this Indemnification.
This Indemnity shall not apply, however, where a court of competent
jurisdiction has made a final determination that either or both
parties engaged in gross recklessness and willful misconduct in the
performance of their services hereunder which gave rise to a loss,
claim, damage, liability, cost or exposure sought to be resolved
hereunder.
5.2 The provisions of paragraph 5.1 shall survive the termination and
expiration of this Agreement.
6.0 ENTIRE AGREEMENT
6.1 This Agreement sets forth the entire understanding of the parties
hereto relating to the subject matter hereof, and supercedes and
cancels any prior communications, understandings and Agreements
between the parties. This Agreement cannot be modified or changed, nor
can any of its provisions be waived, except by written Agreement
signed by all parties.
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7.0 TIME
7.1 Time shall be of the essence in all respects of this Agreement.
8.0 NOTICE
8.1 Any notice or other communication which is required or permitted to be
given or made by one party to the other party hereunder shall be in
writing and shall be either:
(a) personally delivered to the other party;
(b) sent by facsimile transmission; or
(c) sent by regular mail, postage prepaid.
Any notice shall be sent to the intended recipient at its address as
follows:
EZ:
Xxxxx Xxxxx
Doral Group of Corporations
000 Xxxxxxxx Xxxxx Xxxx,
Xxxx 0, Xxxxxxxx,
XX, X0X 0X0
Fax: 000 000 0000
GS:
Xxxxx Xxxxxx
Gravity Spin Inc.
00 Xxxxxxxx Xxxxxx Xxxx,
Xxxxx 000, Xxx 00,
Xxxxxxxxxxx, XX
X0X 0X0
Fax: 000 000 0000
Or at such other address as any party may from time to time advise the
other by notice in writing. Any notice given by personal delivery
shall be deemed to be received on the date of such delivery. Any
notice sent by facsimile transmission shall be deemed to be received
the next business day following the date of its transmission. Any
delivery by regular mail shall be deemed to be delivered 7 business
days following the date on which it was mailed.
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9.0 DILIGENCE BY PARTIES
9.1 The parties shall, with reasonable diligence, do all things and
provide all reasonable assurances as may be required to complete the
transaction(s) and/or services contemplated in this Agreement, and
each party shall provide such further documents, information or
instruments required by the other party as may be reasonably necessary
or desirable to give effect to this Agreement and carry out its
provisions.
10.0 COUNTERSIGNING
10.1 This Agreement may be executed by the parties in one or more
counterparts, each of which when so executed and delivered shall be an
original and such counterparts shall together constitute one and the
same instrument.
11.0 SEVERENCE
11.1 Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall not invalidate the remaining provisions
hereof and any such invalid or unenforceable provision shall be deemed
to be severed. Any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
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IN WITNESS WHEREOF the parties have duly executed this Agreement as of the
date first written above.
SIGNED, SEALED AND DELIVERED
in the presence of:
DORAL EZ INVESTMENTS INC.
By: /s/ Xxxxx Xxxxx
---------------------------------- ----------------------------
Witness Xxxxx Xxxxx
Authorized Director/Officer
GRAVITY SPIN INC.
By: /s/ Xxxxx Xxxxxx
----------------------------
Xxxxx Xxxxxx
Authorized Director/Officer
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