Exhibit 10.31
March 3, 2005
mmWave Technologies Inc.
6695 Millcreek Dr. Unit 8
Mississauga Ontario
L5N 5R8
Dear Sirs:
We are
pleased to confirm that, subject to acceptance by you, The Bank
of
Nova Scotia (the "Bank") will make available to mmWave Technologies
Inc. (the
"Borrower"), credit facilities on the terms and conditions set out
in the
attached Terms and Conditions Sheet and in Schedule "A".
If the
arrangements set out in this letter, and in the attached Terms
and
Conditions Sheet and Schedule "A" (collectively the "Commitment
Letter') are
acceptable to you, please sign the enclosed copy of this letter in
the space
indicated below and return the letter to us by the close of
business on March
17, 2005 after which date this offer will lapse.
This
Commitment Letter replaces all previous commitments issued by
the
Bank to the Borrower.
Yours truly,
---------------------------
---------------------------
Bent Laursen
Zenon Iwachiw
Senior Relationship Manager
Director Commercial Banking
<PAGE>
The
arrangements set out above and in the attached Terms and
Conditions
Sheet and Schedule "A" (collectively the "Commitment Letter") are
hereby
acknowledged and accepted by:
mmWave Technologies Inc.
Name
By:
______________________________
Title:
Date:
______________________________
Guarantors:
Wireless Age Communications, Inc.
1588102 Ontario Inc.
Name
Name
By:
______________________________
By:
_______________________
Title:
Title:
Date:
______________________________
Date:
________________________
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<PAGE>
TERMS AND CONDITIONS
CREDIT NUMBER: 1
AUTHORIZED AMOUNT:
$750,000.00
--------------------------------------------------------------------------------
TYPE
Operating
PURPOSE
General
operating requirements
CURRENCY
Canadian dollars and/or U.S. Dollars equivalent thereof.
AVAILMENT
The Borrower may avail the Credit by way of direct advances
evidenced
by Agreement re Operating Credit Line.
INTEREST RATE
Cdn. Dollars): The Banks' Prime Lending Rate from time to time,
plus
1.20% per annum with interest payable monthly.
(U.S. Dollars): The Bank's U.S. Dollar Base Rate in Canada, from
time
to time, plus 1.20% per annum with interest payable monthly.
REPAYMENT
Advances are repayable on demand.
FEES
An Annual Review Fee of $1,000 is payable by the Borrower upon
acceptance of this Commitment Letter.
A Financial Statement Review Fee of $30.00 per reporting period
(quarterly) is payable by the Borrower at the end of each
reporting
period.
A Security Monitoring Fee of $30 is payable by the Borrower each
time
the Bank deems it advisable to monitor accounts receivable/loan
margins, to conduct inventory audits/checks and/or to perform
security
valuations, security verifications or other such activities
(monthly).
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<PAGE>
In addition to, and not in substitution for the obligations of
the
Borrower and the rights of the Bank upon the occurrence of an event
of
default herein, the Borrower shall pay to the Bank:
a fee of $100.00 per month (or such higher amount as may be
determined by the Bank from time to time) for each month or
part
thereof during which the Borrower is late in providing the Bank
with
financial or other information required herein;
The imposition or collection of fees does not constitute an express
or
implied waiver by the Bank of any event of default or any of the
terms
or conditions of the lending arrangements, security or rights
arising
from any default. Fees may be charged to the Borrower's deposit
account
when incurred.
SPECIFIC SECURITY
The following security, evidenced by documents in form satisfactory
to
the Bank and registered or recorded as required by the Bank, is to
be
provided prior to any advances or availment being made under
the
Credit(s):
Agreement Re Operating Credit Line. (Schedule B, for U.S.$
Advances).
CREDIT NUMBER: 2
AUTHORIZED AMOUNT:
$50,000.00
--------------------------------------------------------------------------------
TYPE
Corporate VISA - Availment, interest rate and repayment as per
Cardholder Agreement.
GENERAL SECURITY
The following security, evidenced by documents in form satisfactory
to
the Bank and registered or recorded as required by the Bank, is to
be
provided prior to any advances or availment being made under
the
Credits:
General Security Agreement over all present and future
personal property with appropriate insurance coverage, loss if
any, payable to the Bank.
Insurance over inventory with loss, if any, payable to the
Bank.
Postponement Agreement covering an amount of $700,000,
supported by respective promissory note(s).
Postponed Funds may be reduced subject to all conditions of
the Commitment Letter being met, both before and after giving
effect to such reductions.
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<PAGE>
Guarantees given by the following in the amounts shown (with
corporate seals and resolutions as applicable):
NAME
AMOUNT
----
------
Wireless Age Communications, Inc.
$750,000.
1588102 Ontario Inc.
$750,000.
GENERAL CONDITIONS
Until all debts and liabilities under the Credits have been
discharged in
full, the following
conditions will apply in respect of the Credits:
Operating loans are not to exceed at any time the lesser of the
operating limit or Borrowing Base which is defined as the
aggregate of 75% of good quality domestic (Canadian &/or US
Dollar) accounts receivable (excluding accounts over 90 days,
accounts due by employees, offsets and inter-company accounts)
less security interests or charges held by other parties and
specific payables which have or may have priority over the
Bank's
security.
The ratio of current assets to current liabilities is to be
maintained at all times at 1.2:1 or better.
The ratio of Debt (including deferred taxes) to Tangible Net
Worth
(TNW) is not to exceed 2.5:1.
TNW is defined as the sum of share capital, earned and
contributed
surplus and postponed funds less (i) amounts due from
officers/affiliates, (ii) investments in affiliates, and (iii)
intangible assets as defined by the Bank.
No dividends, withdrawals, bonuses, advances to shareholders,
management or affiliate are permitted which would place any
bank
credit conditions in default.
Without the Bank's prior written consent:
No change in ownership is permitted.
The Bank acknowledges mmWave Technologies Inc. request to the
Bank to consent to the sale of mmWave Technologies Inc. to
1588102 Ontario Inc. and provides its consent, subject to:
a) The Borrower providing the Bank with a signed copy of the
Purchase Agreement satisfactory to the Bank, immediately upon
completion of the transaction.
b) The Guarantors providing the Bank with a lawyer's affidavit
confirming the Guarantees being provided will not contravene
of current Banking Covenants.
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<PAGE>
c) Confirmation Guarantor is currently onside to all Banking
Covenants.
No mergers, acquisitions or change in the Borrower's line of
business are permitted.
The Borrower shall permit the Bank, or its agents, access, at
all
reasonable times, to all premises where the collateral covered
by
the Bank's security may be located and the Bank or its agents
may
inspect such collateral and all related documents and records.
For ongoing Credit Ris
