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A.
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Under an agreement dated as of May 25,2010 between the Lender and the Company (the "First Credit Agreement") the Lender agreed to make available to the Company a line of credit under which the Company was entitled to draw down amounts up to US$1,000,000 for its corporate purposes;
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B.
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Pursuant to the First Credit Agreement the Company has to date drawn down the sum of approximately US$700,000;
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C.
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The Company requires additional financing to complete its product development, demonstrate commercial feasibility and provide working capital for its operations; and
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D.
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The Company has requested the Lender to increase the line of credit to $2,000,000 on certain terms and conditions.
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(a)
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The Lender hereby agrees to cause a line of credit to be established in favour of the Company (the "Line of Credit") in the amount of two million (US$2,000,000) dollars of the United States of America, such amount to include the amount of the line of credit under the First Credit Agreement; and
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(b)
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The Line of Credit may be drawn down by the Company by giving three (3) days written notice to the Lender of the amount requested and the account into which the funds are to be deposited or particulars of the account payable to be paid.
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(a)
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All amounts advanced and outstanding under the Line of Credit shall bear interest at the rate of 1% per month, simple interest (i.e., not compounded) from the date of advance until paid. Amounts outstanding for less than a full month will bear interest on a pro-rated basis;
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(b)
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Prior to demand, all amounts drawn down under the Line of Credit, and all accrued but unpaid interest thereon, may be prepaid by the Company at any time without notice or penalty, but shall become due and payable within three days of receipt of a written demand by the Lender; and
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(c)
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From time to time the Lender may send to the Company a statement of all amounts owing under the Line of Credit, in respect of interest and principal, and such statement shall in the absence of any statement to the contrary by the Company within 30 days, be binding on the Company.
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(a)
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No amount shall be drawn down for any purpose other than to meet current operating expenses and the Company will, on request, provide the Lender with reasonable evidence as to the proposed use of any moneys to be advanced; and
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(b)
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The Lender may, in her sole and unfettered discretion, decline to permit any amount to be drawn down if it appears on reasonable evidence that the Company is insolvent, threatens to cease business or the Lender's security is impaired.
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CHRISTINE KAN
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CHRISTINE KAN
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ALR TECHNOLOGIES INC.
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LAWRENCE WEINSTEIN
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Per:
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Name:
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Lawrence Weinstein
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Title:
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President
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12/10/10
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