Exhibit 4.4
EXECUTION COPY
CONFIDENTIAL
RECEIVABLES PURCHASE AGREEMENT
between
mitel networks corporation
as Seller and Servicer
- and -
MITEL NETWORKS, INC.
as Seller
- and -
MITEL NETWORKS SOLUTIONS, INC.
as Seller
- and -
THE CANADA TRUST COMPANY
in its capacity as trustee
of ENDURANCE Trust
as Purchaser
- and -
EFFICIENT CAPITAL CORPORATION
as Securitization Agent
Made as of April 16, 2004
Davies ▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
CONFIDENTIAL
TABLE OF CONTENTS
ARTICLE 1
INTERPRETATION
1.1 Certain Defined Terms................................................2
1.2 Extended Meanings...................................................19
1.3 Headings, Sections, Etc.............................................19
1.4 Accounting Principles...............................................19
1.5 Currency............................................................20
1.6 Payments............................................................20
1.7 Non-Business Days...................................................20
1.8 Computation of Time Periods.........................................20
1.9 Months; Days........................................................20
1.10 Exhibits............................................................20
ARTICLE 2
PURCHASES
2.1 Purchases...........................................................21
2.2 Quebec Receivables..................................................23
2.3 List of Obligors and Credit Limits and Daily Program Operation......24
ARTICLE 3
PAYMENTS AND ACCOUNTS
3.1 Collection Account..................................................24
3.2 Reserve Accounts....................................................26
3.3 Disbursement Account................................................28
3.4 Dilutions...........................................................29
3.5 Repurchases for Breach of Representations and Warranties............29
3.6 Deemed Collections..................................................30
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND COVENANTS
4.1 Representations and Warranties of the Sellers.......................30
4.2 Representations and Warranties of the Purchaser.....................34
4.3 Affirmative Covenants of the Sellers................................36
4.4 Affirmative Covenants of the Canadian Seller........................37
4.5 Negative Covenants of the Sellers...................................38
4.6 Affirmative Covenants of the Purchaser..............................39
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
CONFIDENTIAL
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ARTICLE 5
ADMINISTRATION AND COLLECTION
5.1 Designation of the Servicer.........................................40
5.2 Standard of Care....................................................40
5.3 Authorization of Servicer...........................................41
5.4 Enforcement of Receivables..........................................41
5.5 Assignment for Purpose of Enforcement...............................41
5.6 Description of Services.............................................42
5.7 Additional Covenants of the Servicer................................44
5.8 Negative Covenants of the Servicer..................................46
5.9 Servicer Termination Events.........................................47
5.10 Notice of Servicer Termination Events...............................48
5.11 Effecting a Service Transfer........................................48
5.12 Appointment of Stand-By Servicer....................................48
5.13 Collection and Remittance of Taxes..................................48
5.14 Additional Seller Covenants Following a Service Transfer............49
5.15 Purchaser Rights Following a Service Transfer.......................50
5.16 Power of Attorney...................................................50
5.17 Execution of Additional Powers......................................51
5.18 Restrictions on Use.................................................51
ARTICLE 6
CONDITIONS PRECEDENT
6.1 Conditions Precedent to Initial Purchase............................52
6.2 Conditions Precedent to All Purchases...............................53
6.3 Undertaking of Purchaser............................................54
ARTICLE 7
Amortization EVENTS
7.1 Meaning of Amortization Event.......................................54
7.2 Action Upon an Amortization Event...................................58
7.3 Seller Designated Amortization Commencement Date....................59
7.4 Early Amortization Commencement Date Fee............................59
ARTICLE 8
MATTERS RELATING TO THE SECURITIZATION AGENT
8.1 Delegation to the Securitization Agent..............................60
8.2 Limitation of Liability of the Securitization Agent and Issuer
Trustee...........................................................60
8.3 Responsibilities of the Sellers.....................................60
8.4 Other Dealings......................................................61
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
CONFIDENTIAL
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8.5 Lockbox Fees........................................................61
ARTICLE 9
INDEMNIFICATION
9.1 Indemnities by the Sellers..........................................61
9.2 Payment of Indemnified Amounts......................................64
9.3 Litigation..........................................................65
9.4 Notification........................................................65
ARTICLE 10
MISCELLANEOUS
10.1 Costs, Expenses and Taxes...........................................65
10.2 Further Assurances..................................................67
10.3 Failure to Perform..................................................67
10.4 Entire Agreement....................................................67
10.5 Amendments, Waivers, Etc............................................67
10.6 No Waiver; Remedies.................................................68
10.7 No Set-Off..........................................................68
10.8 Non-Merger..........................................................68
10.9 Time of the Essence.................................................68
10.10 Agreement of Purchase and Sale......................................69
10.11 Notices.............................................................69
10.12 Binding Effect; Assignability, Etc..................................70
10.13 Governing Law.......................................................71
10.14 Severability........................................................71
10.15 Confidentiality.....................................................71
10.16 Financial Reporting.................................................72
10.17 Consent to Jurisdiction; Waiver of Immunities.......................72
10.18 Remedies............................................................72
10.19 Counterparts........................................................73
10.20 Business Disruption.................................................73
EXHIBITS
Exhibit A - Form of Assignment Agreement
Exhibit B - Form of Purchase Notice
Exhibit C - Form of Officer's Certificate
Exhibit D - List of Offices Where Records Are Kept
Exhibit E - Form of Periodic Report
Exhibit F - Form of Quebec Assignment
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
CONFIDENTIAL
RECEIVABLES PURCHASE AGREEMENT
THIS RECEIVABLES PURCHASE AGREEMENT made as of the 16th day of
April, 2004.
B E T W E E N:
MITEL NETWORKS CORPORATION,
a corporation existing under the
laws of Canada,
(hereinafter referred to as the
"Canadian Seller" or the
"Servicer"),
- and -
MITEL NETWORKS, INC., a
corporation existing under the
laws of Delaware,
(hereinafter referred to as
"MNI"),
- and -
MITEL NETWORKS SOLUTIONS, INC.,
a corporation existing under the
laws of Delaware
(hereinafter referred to as
"MNSI"),
- and -
THE CANADA TRUST COMPANY,
a trust company amalgamated
under the laws of Canada, in its
capacity as trustee of ENDURANCE
TRUST, a trust established under
the laws of the Province of
Ontario,
(hereinafter referred to as the
"Purchaser"),
- and -
EFFICIENT CAPITAL CORPORATION,
a corporation existing under the
laws of the Province of Ontario,
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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CONFIDENTIAL
(hereinafter referred to as the
"Securitization Agent").
WHEREAS the Sellers generate Receivables in the ongoing operation of
the Sellers' general business of providing business communications hardware and
software solutions and the Sellers are desirous of selling certain of such
Receivables that are Eligible Receivables and certain other property related
thereto to the Purchaser from time to time and the Canadian Seller is desirous
of collecting and otherwise servicing the Purchased Assets so sold by the
Sellers to the Purchaser as hereinafter set forth;
AND WHEREAS the Purchaser is willing to purchase the Purchased
Assets, including Eligible Receivables and certain other property related
thereto, from the Sellers from time to time on a fully-serviced basis on the
terms and conditions hereinafter set forth;
AND WHEREAS the Purchaser has appointed the Securitization Agent to
provide certain administrative services in respect of the on-going sales and
purchases of the Purchased Assets hereunder;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
premises and the covenants and agreements of the parties herein contained and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by each party, the parties hereby covenant and agree as
follows:
ARTICLE 1
INTERPRETATION
1.1 Certain Defined Terms
In this Agreement, including the recitals, the following terms have
the following meanings:
"Affiliate", in respect of a specified Person, means any other Person which is
either more than 20% owned by a common entity which also owns or controls the
specified Person, or where a common entity controls the day-to-day operations or
has effective management control of both the specified Person and such other
Person.
"Aggregate Discretionary Limit" means CAD18,000,000 or the equivalent in United
States Dollars, as the case may be, representing the aggregate Outstanding
Principal Balance for all Discretionary Obligors.
"Agreement" means this agreement, together with the Exhibits hereto, as the same
may be amended, modified, supplemented, revised, restated or replaced from time
to time.
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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"Amortization Commencement Date" means the earliest of:
(a) April 15, 2007, which date may be extended from time to time for
successive six month periods upon the written agreement of the
Sellers and the Purchaser;
(b) the date on which the Amortization Commencement Date is declared,
designated or deemed to have occurred pursuant to Article 7; and
(c) the date designated by the Canadian Seller or the Purchaser provided
the Canadian Seller or the Purchaser, as applicable, provides at
least 60 days prior written notice of such date to the other
parties.
"Amortization Event" has the meaning ascribed thereto in Section 7.1.
"Annual Policy Amount" means CAD3 million in respect of Purchased Receivables
denominated in Canadian Dollars and USD17 million in respect of Purchased
Receivables denominated in United States Dollars.
"Assignment" means a written assignment agreement substantially in the form of
the agreement annexed hereto as Exhibit A.
"Base Interest Rate" means the Base Interest Rate (CDN) or the Base Interest
Rate (USD), as the context requires.
"Base Interest Rate (CDN)" means, on any day, that per annum rate (based on a
year of 365 days) expressed as a percentage, equal to the average "BA 2 Month"
interest rates for Canadian dollar bankers acceptances displayed and identified
as such on the "Moneyline/Telerate Page", Screen 3197 as of 10:00 a.m., Toronto
time, on such day; if such rates do not appear thereon as contemplated, then the
"BA 2 Month Rate" shall be calculated based upon the arithmetic mean of the
applicable rates for 60-day Canadian dollar bankers acceptances quoted by four
major Canadian Schedule I chartered banks as of 10:00 a.m., Toronto time, on
such day; if less than four such quotations are available, then the "BA 2 Month
Rate" will be the arithmetic mean of such available quotations; provided,
however, that if fewer than two quotations are available, the "BA 2 Month Rate"
will be the arithmetic mean of the bid rates quoted by major banks in Toronto,
selected by the Purchaser, for Canadian dollar bankers acceptances as of 10:00
a.m., Toronto time, on such day.
"Base Interest Rate (USD)" means, on any day, that per annum rate (based on a
year of 360 days) expressed as a percentage, equal to the "USD LIBOR 2 Month"
interest rate for the USD London Interbank Offered Rate displayed and identified
as such on the "Moneyline/Telerate Page", Screen 3750 as of 11:00 a.m., London,
England time, on such day.
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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"BoC Daily Noon Rate" means, on any day, the daily noon rate published by the
Bank of Canada on its website for such day.
"Business Day" means any day, other than a Saturday, Sunday or statutory or
civic holiday, on which banks in Toronto, Ontario are open for business.
"Canadian Dollars" or "CAD" means the lawful currency of Canada.
"Canadian GAAP" means Canadian generally accepted accounting principles as
adopted by the Canadian Institute of Chartered Accountants from time to time,
consistently applied.
"Cheque Deposit Agreement" means the agreement dated April 19, 2004 between the
Canadian Seller, the Purchaser and The Toronto-Dominion Bank.
"Collections" means, without duplication, all payments made by or on behalf of
Obligors in respect of Purchased Assets, and all other cash collections and
other cash proceeds received in respect of the Purchased Assets, including cash
proceeds of any contract of insurance (including the Insurance Policy) paid in
respect of any of the Purchased Receivables, all other cash proceeds of any
Related Security related to Purchased Receivables, including cash proceeds
realized through the enforcement of a Contract related to Purchased Receivables
or other Related Security related to Purchased Receivables against an Obligor,
and any Collections deemed to have been received by the Sellers or the Servicer,
as the case may be, pursuant hereto.
"Collection Account" has the meaning ascribed thereto in Section 3.1(a).
"Consolidated Assets" means, at any date, the total assets of the Sellers and
their consolidated subsidiaries as at such date in accordance with generally
accepted accounting principles.
"Consolidated Liabilities" means, at any date, the sum of all obligations of the
Sellers and their consolidated subsidiaries as at such date in accordance with
generally accepted accounting principles.
"Consolidated Shareholders' Equity" means, on any date, the remainder of (a)
Consolidated Assets on such date, minus (b) Consolidated Liabilities on such
date.
"Contract" means any document originating and evidencing a Receivable, including
any written invoice or ▇▇▇▇, statement of account or other written account or
agreement between the relevant Seller and an Obligor pursuant to which the
Obligor is obligated to pay one or more Receivables to such Seller.
"Coupon Reserve Amount" means, on any day and in respect of Receivables
denominated in the same currency, an amount equal to the product of (a) the
Program Amount as at the open of business on such day, (b) the rate of interest,
expressed as an annualized rate, equal to the sum of
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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CONFIDENTIAL
the Base Interest Rate for such day in respect of such currency and the
Purchaser Spread, (c) DSO and (d) 2/360 in respect of Purchased Receivables that
are denominated in United States Dollars and 2/365 in respect of Purchased
Receivables that are denominated in Canadian Dollars.
"Credit and Collection Policies" means the Sellers' customary credit, collection
and administration guidelines, policies and procedures relating to the
evaluation of the creditworthiness of Obligors; Receivables; Contracts; and
Related Security owned or administered by the Sellers from time to time,
including the Purchased Receivables serviced by the Servicer on behalf of the
Purchaser hereunder, as such policies and procedures may be amended,
supplemented or replaced from time to time in accordance with Section 5.8(a).
"Credit Enhancer" means the Insurer and any Person who by any means whatsoever,
including pursuant to any letter of credit, surety bond, cash collateral
account, spread account, guaranteed rate agreement, refinancing facility, tax
protection agreement, credit default swap agreement, secondary receivables
purchase agreement, or other similar arrangement, provides credit enhancement in
respect of the Purchased Assets; provided, however, that the Insurer shall have
a long-term debt rating of at least "A" from Standard & Poor's or equivalent
unless otherwise approved by the Purchaser and the Rating Agency.
"Credit Enhancement Agreement" means any agreement, acceptable to the Canadian
Seller, acting reasonably, including the Insurance Policy, between a Credit
Enhancer and one or more of the parties to this Agreement, as such agreement may
be amended, supplemented, revised or restated from time to time.
"Credit Losses" has the meaning ascribed thereto in the Insurance Policy.
"Default Ratio" means, on any day and in respect of Purchased Receivables
denominated in the same currency, the ratio calculated by dividing (a) the
aggregate Outstanding Principal Balance of all Purchased Receivables in that
currency that became Defaulted Receivables during the preceding 90 days, by (b)
the average daily balance of all Outstanding Principal Balances of Purchased
Receivables in that currency during the preceding 90 days.
"Defaulted Receivable" means any Receivable (a) that, in whole or in part, has
remained unpaid for more than 60 days from the relevant due date, (b) that has
been, or in accordance with the Credit and Collection Policies should be,
written off as uncollectable or designated as a bad or doubtful account or (c)
in respect of which the Obligor is subject to any Insolvency Proceeding.
"Delinquent Receivable" means any Receivable, other than a Defaulted Receivable,
that in whole or in part has remained unpaid for more than 50 days from the
relevant due date or has been, or in accordance with the Credit and Collection
Policies should be, classified as delinquent.
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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"Dilution" means, with respect to any Purchased Receivable, any reduction or
adjustment in the Outstanding Principal Balance of such Purchased Receivable
granted to an Obligor by the relevant Seller on account of (a) disputes or
set-offs (whether such claims arise out of the same or a related transaction or
an unrelated transaction), (b) discounts, incorrect ▇▇▇▇▇▇▇▇, credits, volume
rebates, allowances, chargebacks, allowances or discounts for early payments,
advertising incentives or other reductions or similar adjustments granted in the
ordinary course of such Seller's business or (c) returned, repossessed or
foreclosed goods that, in each case, are unrelated to the inability of the
Obligor of such Purchased Receivable to pay such Purchased Receivable.
"Dilution Amount" means, in respect of any Dilution, the amount of such Dilution
multiplied by the sum of (a) one and (b) the product of (i) the number by which
the number of days from the date on which the relevant Receivable was originated
to the date on which such Dilution was recognized by the Securitization Agent
exceeds DSO and (ii) the Base Interest Rate relevant to the currency of the
relevant Receivable plus Purchaser Spread divided by 360 if the Receivable is
denominated in United States Dollars and 365 if the Receivable is denominated in
Canadian Dollars.
"Dilution Ratio" means, on any day and in respect of Purchased Receivables
denominated in the same currency, the ratio of (a) the aggregate Dilution
Amounts of all Dilutions in that currency occurring during the preceding 90 days
to (b) all Purchased Receivables denominated in the same currency purchased by
the Purchaser during the preceding 90 days.
"Dilution Reserve Amount" means, on any day and in respect of Purchased
Receivables denominated in the same currency, the product of (a) the aggregate
Outstanding Principal Balance of all such Purchased Receivables on such day and
(b) the greater of (i) the product of 1.5 and the highest Dilution Ratio over
the twelve-month period preceding such day and (ii) the product of 2 and the
average Dilution Ratio over the twelve-month period preceding such day.
"Disbursement Account" has the meaning ascribed thereto in Section 3.3(a).
"Discretionary Limit" means CAD100,000 in respect of Receivables denominated in
Canadian Dollars and USD100,000 in respect of Receivables denominated in United
States Dollars.
"Discretionary Obligor" means any Obligor who is not a Named Obligor.
"DSO" means, on any day and in respect of Receivables denominated in the same
currency, the aggregate Outstanding Principal Balance of all Purchased
Receivables as at the open of business on such day divided by the average daily
dollar volume of Eligible Receivables purchased by the Purchaser hereunder
during the preceding 90 days.
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OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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"Eligible Institution" means a depositary institution in Canada which at all
times has either: (i) a long-term unsecured debt rating of at least Aa3 by the
Rating Agency; or (ii) a short-term rating of at least P1 by the Rating Agency.
"Eligible Investments" means, at any particular date, book-based securities,
negotiable instruments or securities represented by instruments in bearer or
registered form which evidence any of:
(a) direct obligations of, or obligations fully guaranteed as to the
timely payment of principal and interest by, the government of
Canada or the government of the United States of America;
(b) direct obligations of, or obligations fully guaranteed as to the
timely payment of principal and interest by, the government of a
province of Canada or one of the states of the United States of
America, in each case with a short-term debt rating of not less than
R-1 (middle) by the Rating Agency;
(c) demand deposits, term deposits or certificates of deposits (having
original maturities of no more than 365 days) of banks or trust
companies chartered or licensed under the laws of Canada or any
province thereof provided that, at the time of the investment or
contractual commitment to invest therein, the short-term debt rating
of such bank or trust company shall have the highest rating from the
Rating Agency;
(d) commercial paper (having original maturities of no more than 365
days) and any other securities (having a remaining term to maturity
of no more than 365 days) having, at the time of the investment or
contractual commitment to invest therein, the highest rating from
the Rating Agency;
(e) notes issued by or bankers' acceptances (in either case having
original maturities of no more than 365 days) accepted by any bank
or trust company referred to in (c) above;
(f) any security having the highest rating from the Rating Agency or
otherwise approved in writing by the Rating Agency;
(g) term deposits with an entity, the commercial paper of which has the
highest rating from the Rating Agency; and
(h) any other class of investments approved in writing by the Rating
Agency (other than those set out in paragraphs (a) to (g) above),
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OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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and, without limiting the generality of the foregoing, if so qualified,
securities of the Issuer Trustee, the Securitization Agent and the Indenture
Trustee and any affiliate thereof may be considered Eligible Investments for the
purposes of this definition.
"Eligible Receivable" means, at any time unless otherwise specified below in
this definition, a Receivable which meets all of the following criteria as of
the Purchase Date applicable to such Receivable:
(a) the Obligor of the Receivable is a Person resident in Canada or the
United States and is not (i) an Affiliate, Parent or Subsidiary of
the Sellers or (ii) a Governmental Authority in Canada or the United
States (other than those specifically approved by the Purchaser and
the Insurer);
(b) if the Outstanding Principal Balance of the Receivable, when added
to the aggregate Outstanding Principal Balance of all Purchased
Receivables owed by the same Obligor, exceeds the Discretionary
Limit, such Obligor is on the Named Obligor List;
(c) if the Obligor of the Receivable is a Discretionary Obligor, such
Obligor is on the list of Discretionary Obligors provided to the
Purchaser pursuant to Section 2.3(a) and such Obligor meets the
requirements of a Discretionary Obligor under the Insurance Policy;
(d) unless otherwise approved by the Purchaser, the Obligor of the
Receivable is not an Obligor with respect to any Defaulted
Receivables;
(e) the Receivable is not a Delinquent Receivable;
(f) the Receivable is not a Defaulted Receivable;
(g) the Receivable is required to be paid in full in accordance with the
Credit and Collection Policies;
(h) the Receivable is payable in Canada or the United States only and is
denominated and payable either in Canadian Dollars or United States
Dollars;
(i) the Receivable was originated no more than seven days prior to the
relevant Purchase Date and the due date of the Receivable is at
least 20 days from such Purchase Date;
(j) the Receivable arises under a valid Contract issued by the relevant
Seller in the ordinary course of such Seller's business and in
accordance with all applicable policies of such Seller, including
the Credit and Collection Policies, which
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OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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Contract,together with such Receivable, has been duly authorized,
executed and delivered by the parties thereto and is in full force
and effect and constitutes the legal, valid and binding obligation
of the Obligor thereof enforceable against such Obligor in
accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, winding-up, moratorium and other similar
laws affecting the rights of creditors generally and the fact that
specific performance and injunction are equitable remedies available
only in the discretion of the court;
(k) the Receivable constitutes an "account", "claim" or "book debt"
within the meaning of the PPSA;
(l) the Receivable is not subject to any offset, counterclaim, asserted
dispute or defence whatsoever and is free and clear of any Lien;
(m) if the Contract under which such Receivable is payable is governed
by Canadian law, neither the Receivable nor such Contract nor the
Related Security is subject to any restriction on the sale or
assignment thereof hereunder and if such Contract is governed by
United States law, the Receivable is not subject to any restriction
on the sale or assignment thereof hereunder;
(n) the relevant Seller has good and marketable title to the Receivable
and the Related Security related thereto (including any proceeds
thereof) free of any Lien;
(o) the Receivable and the related Contract do not contravene any laws,
rules or regulations applicable thereto, and, to the relevant
Seller's knowledge, no party to such Contract is, with respect to
such Receivable, in violation of any such law, rule or regulation;
(p) the Receivable: (i) satisfies all applicable requirements of the
Credit and Collection Policies; and (ii) complies with all other
criteria and requirements specified by the Securitization Agent to
the Sellers;
(q) the Obligor in respect of such Receivable is not subject to any
Insolvency Proceeding and, to the best of the relevant Seller's
knowledge, there are no such proceedings pending against such
Obligor;
(r) the Outstanding Principal Balance of the Receivable, when added to
the aggregate Outstanding Principal Balance of all Purchased
Receivables denominated in the same currency owed by the same
Obligor, would not exceed the applicable credit limit for such
Obligor established pursuant to Section 2.3(a);
(s) if the Obligor of the Receivable is a Discretionary Obligor, the
Outstanding Principal Balance of the Receivable, when added to the
Outstanding Principal
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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CONFIDENTIAL
Balance of all Purchased Receivables denominated in the same
currency owed by all Discretionary Obligors, would not exceed the
Aggregate Discretionary Limit;
(t) the Outstanding Principal Balance of the Receivable, when added to
the aggregate Outstanding Principal Balance of all Purchased
Receivables owed by all Obligors denominated in the same currency as
the Receivable, would not cause the aggregate Outstanding Principal
Balance of all Purchased Receivables (including the Receivable)
denominated in the same currency as the Receivable owed by all
Obligors to exceed the Purchase Limit applicable to Purchased
Receivables denominated in the same currency as the Receivable;
(u) as to which the relevant Seller has satisfied in all material
respects all of its obligations with respect to such Receivable
required to be satisfied by such Seller thereunder;
(v) as to which the relevant Seller has not taken or failed to take any
action that would impair the rights of the Purchaser in such
Receivable;
(w) in respect of which all filings or recordings with respect to the
relevant Seller's interest in the Related Security necessary under
applicable law to preserve, perfect or protect such Seller's
interest therein have been made; and
(x) the Receivable is not payable from any jurisdiction in Canada or the
United States in which (i) all registrations and other action
required by Section 4.3(f) have not been completed or taken, and
(ii) where required by the Rating Agency, upon prior written notice
to the Canadian Seller, a local counsel opinion relating to the laws
of such jurisdiction either has been provided previously or will be
provided in connection with the related Purchase.
"Final Collection Date" means the first day following the Amortization
Commencement Date on or by which every Purchased Receivable has been collected
in full (whether through the receipt of Collections or the enforcement of the
Related Security), fully written off as uncollectable in accordance with the
Credit and Collection Policies then in effect, or assigned by the Purchaser for
value (paid in cash) to any Person, including the Credit Enhancer.
"Governmental Authority" means any government, regulatory authority,
governmental department, agency, commission, board, tribunal, bureau, crown
corporation, arbitration panel, or court or other law, rule or regulation-making
entity having jurisdiction on behalf of any nation, country, province or state
or other subdivision thereof or any municipality, district, city or other
subdivision thereof.
"Indebtedness" means (without duplication), with respect to any Person, (i) all
obligations of such Person for borrowed money and all obligations of such Person
evidenced by bonds,
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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CONFIDENTIAL
debentures, notes or other similar instruments; (ii) all obligations, contingent
or otherwise, relative to the face amount of all letters of credit, whether
drawn or undrawn, and bankers' acceptances issued for the account of such
Person; (iii) all obligations of such Person as lessee under leases which have
been or should be, in accordance with Canadian GAAP, recorded as capital leases,
including liabilities in respect of capital leases incurred by such Person in
connection with sale/leaseback transactions; (iv) net liabilities of such Person
under all hedging obligations or net liabilities of such Person under currency,
swap, forward or other foreign exchange hedging agreements; (v) whether or not
so included as liabilities in accordance with Canadian GAAP, all obligations of
such Person to pay the deferred purchase price of property or services, and
indebtedness (excluding prepaid interest thereon), secured by a lien on the
property owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited in
recourse; (vi) all agreements, undertakings or arrangements by which such Person
guarantees, endorses or otherwise becomes or is contingently liable for,
directly or indirectly, the indebtedness for borrowed monies of any other
Person; and (vii) all indebtedness of any Person that is acquired by such Person
directly or indirectly; and for all purposes hereof, the Indebtedness of a
Person shall include the Indebtedness of any partnership or joint venture in
which such Person is a general partner or a joint venturer.
"Indemnified Amounts" has the meaning ascribed thereto in Section 9.1.
"Indemnified Parties" has the meaning ascribed thereto in Section 9.1.
"Indenture Trustee" means BNY Trust Company of Canada.
"Initial Purchase" means the first Purchase made under the terms and conditions
of this Agreement pursuant to the first Purchase Notice.
"Initial Purchase Date" means the date of the Initial Purchase.
"Insolvency Proceeding" means the commencement or filing of a petition, notice
or application by or against a Person of any proceedings to adjudicate it a
bankrupt or insolvent or seeking liquidation, winding-up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law of any jurisdiction, whether in effect at the date hereof or
thereafter, relating to the dissolution, liquidation or winding-up, bankruptcy,
insolvency, reorganization of insolvent debtors, arrangement of insolvent
debtors, readjustment of debt or moratorium of debts, or to obtain an order for
relief by the appointment of a receiver, receiver manager, administrator,
inspector, liquidator or trustee or other similar official for it or for any
substantial part of its property.
"Insurance Policy", at any time, means any insurance policy or policies
maintained by the Purchaser in respect of the Purchased Receivables, as such
policy or policies may be amended
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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CONFIDENTIAL
from time to time, and any replacement insurance policy approved by the
Purchaser and the Rating Agency and shall initially mean the trade credit
insurance policy maintained by the Purchaser with Euler Hermes American Credit
Indemnity Company.
"Insurance Premium Limit" means a premium of CAD0.30 per CAD100 or USD0.30 per
USD100, as applicable.
"Insurer" means the insurer under the Insurance Policy from time to time, which
shall initially be Euler Hermes American Credit Indemnity Company.
"Issuer Trustee" means The Canada Trust Company.
"Law" means any law, code, treaty, rule or regulation or determination of an
arbitrator or Governmental Authority, whether federal, provincial, state,
territorial or local and, when used with respect to any Person, shall include
the certificate of incorporation and by-laws or other charter, constating or
governing documents of such Person.
"Lawsuit" has the meaning ascribed thereto in Section 9.1.
"Lien" means any lien, security interest, charge, encumbrance, mortgage,
hypothec, lease, title retention agreement, hypothecation, deposit arrangement,
claim, pledge, deed of trust, priority, assignment (whether or not by way of
security), ownership interest, participation interest, right of set-off or
preferential arrangement or other security agreement or other right or claim
(including statutory liens, deemed trusts or other encumbrances), including any
filing or registration made in respect thereof of any kind or nature whatsoever,
of any Person, other than Permitted Encumbrances.
"Lockbox" has the meaning ascribed thereto in Section 3.1(c).
"Loss Reserve Amount" means, on any day, the sum of:
(a) the product of two and the highest total rolling twelve-month
Non-Qualifying Losses since March 1, 2002 of all Purchased
Receivables denominated in the same currency;
(b) the amount of the Policy Deductible if the Policy Deductible is
denominated in the relevant currency; and
(c) the product of: (i) 0.10 and (ii) the lesser of (A) the aggregate
Outstanding Principal Balance of all Purchased Receivables
denominated in the same currency minus the Policy Deductible if the
Policy Deductible is denominated in the relevant currency and (B)
the Annual Policy Amount in respect of such currency
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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CONFIDENTIAL
minus such Policy Deductible if the Policy Deductible is denominated
in the relevant currency.
"Material Adverse Effect" means any effect (a) with respect to the Sellers or
the Purchaser, upon the business, property, operations or financial or other
condition of the Sellers or the Purchaser, or (b) solely with respect to the
Sellers, on the Purchased Assets, whether as a result of any act or failure to
act by any Seller or otherwise, that, in the case of either (a) or (b), could
reasonably be expected to materially and adversely affect (i) the interests of
the Purchaser in the Purchased Assets and under this Agreement, (ii) the
collectibility of the Purchased Assets, (iii) the enforceability of the
Purchased Assets, or (iv) the Sellers' or the Purchaser's ability to perform in
all material respects each of their respective obligations hereunder or under
any Related Document, as the case may be.
"Named Obligor" means any Obligor who is listed on a Named Obligor List.
"Named Obligor List" has the meaning ascribed thereto in Section 2.3(a).
"Non-Qualifying Loss" means, in respect of any Purchased Receivable, a Credit
Loss of up to CAD5,000 in respect of Purchased Receivables denominated in
Canadian Dollars and up to USD4,000 in respect of Purchased Receivables
denominated in United States Dollars.
"Non-Quebec Eligible Receivables" means Eligible Receivables other than Quebec
Eligible Receivables.
"Non-Quebec Purchased Receivables" means, at any time, any Receivable other than
Quebec Receivables owned by the Purchaser at such time which the Purchaser has
purchased from the Sellers pursuant hereto.
"Noteholders" means the holders of the Notes.
"Notes" means notes or other debt obligations of the Purchaser issued by the
Purchaser from time to time for the purposes of funding Purchases hereunder.
"Obligor" means, in respect of a Receivable, any corporation or other Person who
owes payment of, or is otherwise obligated to make payments in respect of, the
Receivable or Receivables owing from time to time under or pursuant to the
related Contract or the Related Security and includes any guarantor, surety or
similar Person with respect to such Receivable, but excludes the Insurer in its
capacity as an insurer of such Receivable or any portion thereof.
"Outstanding Principal Balance" means, at any time in respect of a Receivable or
a Purchased Receivable, the amount of the payment obligation represented thereby
that is outstanding and owing by the Obligor thereunder, including an amount
representing the amount of all Taxes payable thereunder.
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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CONFIDENTIAL
"Parent", in respect of a specified Person, means any other Person that owns at
least 50% of the voting securities of the specified Person or of which such
Person controls day to day operations of the specified Person or of which such
Person has effective management control of the specified Person.
"Payment" has the meaning given to it in Section 2.1(c).
"Payment Price" has the meaning given to it in Section 2.1(c).
"Periodic Report" means a report substantially in the form of Exhibit E, whether
in electronic format or otherwise.
"Permitted Encumbrances" means (a) statutory liens or deemed trusts securing the
payment of Taxes, assessments, governmental charges and other amounts payable
pursuant to statutes which are either (i) not delinquent, or (ii) being
contested in good faith by appropriate proceedings and for which the relevant
Seller has set aside adequate reserves in respect thereof in accordance with
Canadian GAAP or US GAAP from time to time approved by the relevant Seller; and
(b) any encumbrances created through, by, or in favour of, the Purchaser or the
Credit Enhancer.
"Person" means an individual, partnership, limited partnership, corporation,
trust, joint venture, unincorporated association, board or body established by
statute, government (or any agency or political subdivision thereof) or other
entity of similar nature.
"Policy Deductible" means the "Policy Deductible" as defined in the Insurance
Policy.
"PPSA" means the personal property security legislation, assignment of book
debts legislation, or uniform commercial code or other similar legislation in
Canada or the United States in which the filing or registration of an
assignment, financing statement or other document is required to preserve,
protect and perfect the Purchaser's right, title and interest in, to and under
any of the Purchased Assets.
"Proceeds" includes "proceeds" as defined in the Personal Property Security Act
(Ontario).
"Program Amount" means, at any time and in respect of each currency, the
aggregate of all Outstanding Principal Balances for all Purchased Receivables
denominated in such currency purchased by the Purchaser hereunder prior to such
time, less the aggregate amount of Collections theretofore paid to and received
by the Purchaser.
"Program Fee" means, on any date and in respect of each currency, an amount
equal to the quotient of (a) the product of (i) 0.80%, (ii) the aggregate
Outstanding Principal Balance of all Purchased Receivables denominated in such
currency as at the open of business on such date and (iii) the number of days
since the last date on which Program Fees were deposited to the applicable
Disbursement Account in accordance with Section 2.1(d)(iv), divided by (b) 360
in
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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CONFIDENTIAL
respect of the Purchased Receivables that are denominated in United States
Dollars and 365 in respect of the Purchased Receivables that are denominated in
Canadian Dollars.
"Program Year" means each year ending on the annual anniversary of the date
hereof.
"Purchase" means a purchase of or, with respect to Quebec Receivables Payment in
respect of, Purchased Assets made pursuant to Section 2.1.
"Purchase Amount" means, on any day and in respect of an Eligible Receivable
subject to a Purchase, the number determined in accordance with the following
formula:
FV
----------------------
(1 + r/n)d
Where:
FV = the then Outstanding Principal Balance of the
Eligible Receivable;
r = the rate of interest, expressed as an annualized
rate, equal to the sum of (a) the Base Interest
Rate in respect of the currency of the Eligible
Receivable and (b) the Purchaser Spread;
n = 360 if the Eligible Receivable is denominated in
United States Dollars or 365 if the Eligible
Receivable is denominated in Canadian Dollars; and
d = DSO,
and, when used in the context of more than one Eligible Receivable, shall mean
the aggregate Purchase Amount of such Eligible Receivables.
"Purchase Date" means the date specified in the Securitization Agent Purchase
Confirmation on which: (i) Non-Quebec Eligible Receivables are to be purchased
by the Purchaser from the Canadian Seller hereunder; or (ii) Payment is to be
made by the Purchaser in respect of certain Quebec Eligible Receivables to the
Canadian Seller hereunder.
"Purchase Limit" has the meaning ascribed thereto in Section 2.1(e).
"Purchase Notice" has the meaning ascribed thereto in Section 2.1(a).
"Purchase Price" has the meaning ascribed thereto in Section 2.1(b).
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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CONFIDENTIAL
"Purchased Assets" means, collectively, all Purchased Receivables and the
Related Security and Collections with respect thereto, and all Proceeds of, from
or with respect to any or all of the foregoing.
"Purchased Receivable" means, at any time, any Non-Quebec Purchased Receivable
owned by the Purchaser at such time which the Purchaser has purchased from the
relevant Seller pursuant hereto, or a Quebec Eligible Receivable owned by the
Purchaser at such time in respect of which the Purchaser has made a Payment to
the Canadian Seller pursuant hereto.
"Purchaser Spread" means 0.30% or such other percentage as may be agreed in
writing by the parties from time to time.
"Quebec Amortization Commencement Date" has the meaning ascribed to such term in
the Quebec Assignment.
"Quebec Eligible Receivables" means Quebec Receivables which are Eligible
Receivables.
"Quebec Purchased Receivables" means, at any time, a Quebec Eligible Receivable
with respect to which Payment has been made by the Purchaser to the Canadian
Seller in accordance with Section 2.1 and which is owned by the Purchaser at
such time.
"Quebec Receivable" means any Receivable where one of the following conditions
is satisfied:
(a) the Obligor of such Receivable is located in the Province of Quebec;
or
(b) such Receivable is payable at a location in the Province of Quebec,
provided, however, that Quebec Receivables shall not include any Receivable
owing by: (i) an Affiliate, Parent or Subsidiary of the Sellers; or (ii) a
Governmental Authority.
"Rating Agency" means ▇▇▇▇▇'▇ Investors Service, Inc. or any other nationally
recognized credit rating agency designated as the "Rating Agency" for purposes
of this Agreement by the Purchaser and the Credit Enhancer, notice of which has
been delivered to the Seller.
"Receivable" means all amounts payable by a Person to the relevant Seller in
respect of the sale of goods and services to such Person from time to time under
any document originating and evidencing the obligation to pay such amounts,
including all scheduled periodic payments, extra charges, interest and fees and
other amounts payable to the relevant Seller thereunder including all Taxes.
"Records" means all Contracts, books, records and other documents and
information (including computer and electronic records, computer programmes,
tapes, diskettes, data processing software and related property and rights and,
to the extent obtainable by way of existing software
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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CONFIDENTIAL
controlled by the Seller, hard copies of such information) maintained by or on
behalf of the Sellers evidencing or otherwise relating to any Receivables,
Related Security or any other Purchased Assets sold or intended to be sold by
the Sellers to the Purchaser, or relating to the related Obligors, and, after
the purchase of any such Receivables, Related Security or other Purchased Assets
by the Purchaser, shall include all such records, information and material
maintained or required to be maintained by the Servicer in respect thereof by
the Credit and Collection Policies or otherwise.
"Related Document" means any Periodic Report, any Purchase Notice, any Credit
Enhancement Agreement and any other written communication that has been
delivered by the Sellers to the Purchaser or the Securitization Agent in
connection herewith.
"Related Security" means, with respect to a Receivable:
(a) all of the related Seller's right, title and interest in and to the
goods or services (including returned goods, if any), the sale,
provision or distribution of which gave rise to such Receivable;
(b) all security interests, hypothecs or liens, and all property subject
thereto, from time to time securing or purporting to secure payment
of the Receivable, whether pursuant to the related Contract or
otherwise;
(c) all of the related Seller's right, title and interest in, to and
under all guarantees, indemnities, letter of credit, insurance
policies (including any insurance policy or other contract of
insurance issued by the Insurer or any other Person), all payments
and proceeds made or received under any such guarantee, indemnity,
letter of credit or insurance policy, and all other agreements or
arrangements of whatsoever character from time to time supporting or
securing payment of the Receivable, whether pursuant to the related
Contract or otherwise;
(d) all Records relating to the Receivable or to any of the foregoing;
and
(e) all proceeds of or relating to the foregoing, including to the
Receivable.
"Required Balance" means, on any day and in respect of each currency, the
greater of: (i) the sum of the Loss Reserve Amount, the Dilution Reserve Amount,
the Coupon Reserve Amount and the Servicing Fee Reserve Amount; and (ii) 40% of
the highest amount calculated in accordance with clause (i) hereof on any day in
the 12 months prior thereto.
"Reserve Account" has the meaning ascribed thereto in Section 3.2(a).
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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CONFIDENTIAL
"Securitization Agent" means Efficient Capital Corporation, in its capacity as
Securitization Agent of the Purchaser, its successors and any replacement
Securitization Agent that may be appointed by the Purchaser from time to time.
"Securitization Agent Purchase Confirmation" has the meaning ascribed thereto in
Section 2.1(a).
"Sellers" means the Canadian Seller, MNI and MNSI and "Seller" means any one of
the Sellers.
"Seller's Account" means with respect to the Canadian Seller account *Subject to
Request for Confidential Treatment; Separately Filed with the Commission*; with
respect to MNI account *Subject to Request for Confidential Treatment;
Separately Filed with the Commission*; and with respect to MNSI account *Subject
to Request for Confidential Treatment; Separately Filed with the Commission*or
such other accounts designated by notice from a Seller to the Purchaser as such
Seller's Account for the purposes hereof.
"Sellers' Amounts" has the meaning ascribed thereto in Section 3.1(e).
"Sellers' Auditors" means Deloitte & Touche LLP or such other nationally
recognized firm of chartered accountants acting as the Sellers' auditors.
"Service Transfer" has the meaning specified in Section 5.11.
"Servicer" means the Canadian Seller until a Service Transfer and, at any time
thereafter, shall mean the Stand-By Servicer.
"Servicer Termination Event" has the meaning ascribed thereto in Section 5.9.
"Servicing Fee Reserve Amount" means, on any day and in respect of each
currency, an amount equal to the product of (a) the aggregate Outstanding
Principal Balance of all Purchased Receivables denominated in such currency as
at the open of business on such day, (b) 2% and (c) the quotient of the DSO on
such day for the related currency divided by 365.
"Stand-By Servicer" means Canadian Bonded Credits Limited or such other servicer
as may be designated by the Purchaser in accordance with Section 5.12 from time
to time, and its successors and permitted assigns.
"Subsidiary", in respect of a specified Person, means any other Person that is
either more than 20% owned by the specified Person or of which the specified
Person controls day-to-day operations or of which the specified Person has
effective management control of the Person.
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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CONFIDENTIAL
"Tax" and "Taxes" means any withholding, stamp, income, business, general
corporation, large corporations, property, capital, excise, customs, goods and
services, sales, consumption, value added, harmonized or other tax, duty,
impost, fee, levy, assessment or other governmental charge, and any related
penalties or interest.
"US GAAP" means United States Generally Accepted Accounting Principles as
adopted by the Financial Accounting Standards Board from time to time,
consistently applied.
"United States" means the United States of America, any State of the United
States, the District of Columbia, Puerto Rico and the United States Virgin
Islands.
"United States Dollars" or "USD" means the lawful currency of the United States.
1.2 Extended Meanings
Words importing the singular shall include the plural and vice
versa, words importing gender shall include all genders, and words importing
natural persons shall include all Persons. Every use of the word "including"
herein shall be construed as meaning "including, without limitation".
1.3 Headings, Sections, Etc.
The division of this Agreement into Articles, Sections and Exhibits,
the insertion of headings and the provision of a table of contents are for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement. The terms "this Agreement", "hereof",
"herein", "hereunder" and similar expressions refer to this Agreement (including
the Exhibits hereto) and not to any particular Article, Section, Exhibit or
other portion of this Agreement and shall include any agreement supplemental
hereto. Unless something in the subject matter or context is inconsistent
therewith, or except where otherwise specifically provided, references herein to
Articles, Sections or Exhibits are references to the specific Articles, Sections
and Exhibits of or to this Agreement.
1.4 Accounting Principles
Where the character or amount of any asset or liability or item of
revenue or expense is required to be determined for accounting purposes, or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, such determination or calculation shall, to the
extent applicable and except as otherwise specified herein or as otherwise
agreed in writing by the parties, be made in accordance with generally accepted
accounting principles applied on a consistent basis. Wherever in this Agreement
reference is made to generally accepted accounting principles, such reference
shall be deemed to be Canadian GAAP, except that in the case of the Canadian
Seller, on a consolidated basis, such reference may be to US GAAP in the
circumstance where the Canadian Seller, on a consolidated
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basis, has elected to use US GAAP and not Canadian GAAP, applicable as at the
date on which such calculation is made or required to be made in accordance with
generally accepted accounting principles.
1.5 Currency
All amounts stated herein are in Canadian Dollars, unless otherwise
expressly stated.
1.6 Payments
Unless otherwise indicated, all amounts required hereby to be paid
to any party or deposited to any account are to be paid or deposited, as the
case may be, in immediately available funds at the place specified for such
payment or deposit.
1.7 Non-Business Days
Unless provided to the contrary herein, if any payment to be made
hereunder shall be due, any period of time would begin or end, any calculation
is to be made or any other action is to be taken on, or as of, or from a period
ending on, a day other than a Business Day, such payment shall be made, such
period of time shall begin or end, such calculation shall be made and such other
actions shall be taken, as the case may be, on or as of the next succeeding
Business Day.
1.8 Computation of Time Periods
Unless otherwise indicated, in the computation of a period of time
from a specified date to a later specified date, the word "from" means "from and
including" and each of the words "to" and "until" means "to but excluding".
1.9 Months; Days
When reference is made herein to a month or a day, unless otherwise
stated it shall be construed to mean a calendar month or a calendar day, as the
case may be.
1.10 Exhibits
The following are the Exhibits attached to this Agreement, which are
incorporated herein by reference and are deemed to be part of this Agreement:
Exhibit A - Form of Assignment Agreement
Exhibit B - Form of Purchase Notice
Exhibit C - Form of Officer's Certificate
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Exhibit D - List of Offices Where Records Are Kept
Exhibit E - Form of Periodic Report
Exhibit F - Form of Quebec Assignment
ARTICLE 2
PURCHASES
2.1 Purchases
(a) Subject to the terms and conditions hereof, from time to time prior to
the Amortization Commencement Date, the Canadian Seller may, for and on behalf
of the Sellers, by delivering a notice substantially in the form of Exhibit B
(the "Purchase Notice") to the Securitization Agent on behalf of the Purchaser
at or before 8:00 a.m. on the Business Day prior to the proposed Purchase Date
specified in such Purchase Notice, require the Purchaser to: (i) in the case of
Non-Quebec Eligible Receivables, purchase from the Sellers and/or their
respective Subsidiaries the Non-Quebec Eligible Receivables, and the Related
Security and Collections relating thereto, specified in such Purchase Notice;
and (ii) in the case of Quebec Eligible Receivables, require the Purchaser to
pay the Canadian Seller and/or its Subsidiaries an amount in respect of all
Quebec Receivables which have become Quebec Eligible Receivables since the
immediately preceding Purchase Date or, in respect of the first Purchase Notice,
shall be an amount in respect of all Quebec Receivables which are Quebec
Eligible Receivables on the Initial Purchase Date. Each Purchase Notice shall
state the amount of the Outstanding Principal Balance of each Non-Quebec
Eligible Receivable to be purchased by the Purchaser on the proposed Purchase
Date and each Quebec Eligible Receivable in respect of which payment by the
Purchaser shall be made on the proposed Purchase Date. On or prior to the first
Business Day following the date that the Securitization Agent receives a
Purchase Notice, the Securitization Agent shall, on behalf of the Purchaser,
deliver a notice (the "Securitization Agent Purchase Confirmation") to the
Canadian Seller, for and on behalf of the Sellers, confirming the purchase or
upcoming Payment, respectively, by the Purchaser and specifying that the
Purchase Date of the related Receivables, and the Related Security and
Collections relating thereto, specified in the Securitization Agent Purchase
Confirmation shall be the date of such Securitization Agent Purchase
Confirmation. Each such Securitization Agent Purchase Confirmation shall confirm
the Outstanding Principal Balance of each Receivable to be purchased by, or in
respect of which Payment is to be made by, the Purchaser on the relevant
Purchase Date, the aggregate Purchase Amount and the amounts to be deducted from
such aggregate Purchase Amount pursuant to Sections 2.1(b) and (c). It shall be
a condition precedent to any Purchase pursuant to a Purchase Notice that there
is sufficient cash on deposit in the applicable Collection Account (excluding
any Sellers' Amounts and after the payment in full of the amounts referred to in
Section 3.1(f)) which, together with other amounts available to the Purchaser,
is sufficient to pay the Purchase Price or Payment Price, as applicable, for
such Purchase.
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(b) Provided that no Purchase Limit would be exceeded and that the
conditions precedent set out in Sections 6.1 and 6.2 have been satisfied, upon
receipt by the Securitization Agent on behalf of the Purchaser of the Purchase
Notice there shall exist a binding agreement between the Purchaser and the
Sellers for the purchase and sale on a fully-serviced basis of the Non-Quebec
Eligible Receivables, and the Related Security and Collections relating thereto,
specified in such Purchase Notice, at a purchase price (the "Purchase Price")
comprised of (i) an immediate cash payment to the Canadian Seller in an amount
equal to the aggregate Purchase Amount of the Non-Quebec Eligible Receivables
specified in the Purchase Notice (to be paid in the appropriate currency or
currencies, as applicable) minus the amounts referred to in Sections 2.1(d)(i)
to (vi) plus (ii) a deferred amount to be paid to the Canadian Seller from time
to time in accordance with Sections 3.2(b) and 9.2.
(c) Provided that no Purchase Limit would be exceeded and that the
conditions precedent set out in Sections 6.1 and 6.2 have been satisfied, upon
receipt by the Securitization Agent on behalf of the Purchaser of a Purchase
Notice the Purchaser shall pay (the "Payment") a payment price (the "Payment
Price") comprised of (i) an immediate cash payment to the Sellers in an amount
equal to the aggregate Purchase Amount of the Quebec Eligible Receivables
specified in the Purchase Notice (to be paid in the appropriate currency or
currencies, as applicable) minus the amounts referred to in Sections 2.1(d)(i)
to (vi) plus (ii) a deferred amount to be paid to the Sellers from time to time
in accordance with Sections 3.2(b) and 9.2.
(d) On each Purchase Date under this Section 2.1, subject to the terms
hereof, the Purchaser shall pay to the applicable Sellers the Purchase Amount in
respect of the Purchase by depositing to the Sellers' Accounts the related
Purchase Amount, less the following amounts which the Sellers, hereby
irrevocably direct the Purchaser to deduct from the amounts to be deposited to
the Sellers' Accounts and to deposit or pay such deducted amounts in accordance
with the following, and in the following order:
(i) deposit to the applicable Disbursement Account an amount equal
to any fees or premium then due under any Credit Enhancement
Agreement due to the relevant Credit Enhancer;
(ii) deposit to the applicable Reserve Account an amount equal to
the amount necessary to maintain on deposit in such Reserve
Account the Required Balance;
(iii) deposit to the applicable Collection Account the aggregate
Dilution Amounts for all Dilutions recognized prior to such
Purchase Date in respect of which Dilution Amounts have not
yet been deposited to such Collection Account;
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(iv) deposit to the applicable Disbursement Account an amount equal
to the Program Fee in respect of such Purchase Date, together
with the Program Fees in respect of prior Purchases which have
not yet been deposited to such Disbursement Account as
required pursuant to this Section 2.1(d)(iv);
(v) pay to the Securitization Agent any of the fees referred to in
Section 8.5 which remain unpaid for a period in excess of 30
days from the due date thereof; and
(vi) deposit to the applicable Disbursement Account an amount equal
to any expenses due to third parties that are specifically
attributable to Purchases made hereunder including expenses
relating to renewals, filings and other registrations and of
the Rating Agency, provided, however, that the Canadian Seller
has, for and on behalf of the Sellers, provided its prior
written approval (which may be withheld in its discretion) of
other third party expenses where such expenses in the
aggregate exceed CAD35,000.
Upon such payments and deposits being made, all of the Sellers' right, title and
interest in, to and under the Non-Quebec Purchased Receivables listed in the
Securitization Agent Purchase Confirmation in respect of such Purchase, and all
of the Related Security and Collections with respect thereto, and all Proceeds
of, from or with respect to any or all of the foregoing, shall, without any
further action on the part of the Sellers or the Purchaser, be sold, transferred
and assigned to, and vested in, the Purchaser and the Sellers shall be deemed to
represent and warrant to the Purchaser that each of the (i) Non-Quebec Purchased
Receivables sold by the Sellers to the Purchaser pursuant to such Purchase is an
Eligible Receivable on the Purchase Date and (ii) Quebec Purchased Receivables,
in respect of which Payment has been made by the Purchaser to the Canadian
Seller, is an Eligible Receivable on the Purchase Date.
(e) No Purchase of a Receivable may be made hereunder if, after giving
effect thereto, the Program Amount in respect of all Purchased Receivables
denominated in Canadian Dollars would exceed CAD6 million or the Program Amount
in respect of Purchased Receivables denominated in United States Dollars would
exceed USD34 million, or such greater amounts as may be approved in writing from
time to time by each of the Securitization Agent, the Purchaser and the Credit
Enhancer (the "Purchase Limit").
2.2 Quebec Receivables
The Canadian Seller shall, on the date of the Initial Purchase,
execute the Quebec Assignment. Forthwith after the Quebec Amortization
Commencement Date, the Purchaser shall amend, or cause to be amended, any
registrations in respect of the Quebec Assignment so that it will no longer
apply to Quebec Receivables arising after the Quebec Amortization
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Commencement Date. For greater certainty, to the extent that there is any
inconsistency between this Agreement and the Quebec Assignment, the Quebec
Assignment shall govern.
2.3 List of Obligors and Credit Limits and Daily Program Operation
(a) On the date hereof, the Canadian Seller shall provide, and from time
to time the Canadian Seller may provide, for and on behalf of the Sellers, the
Securitization Agent with a list of Obligors in respect of which the credit
limit for each such Obligor is to exceed the Discretionary Limit setting forth
the name, address and proposed credit limit for each such Named Obligor for
approval by the Securitization Agent (any such list, as approved by the
Securitization Agent and as amended from time to time by the Securitization
Agent, shall be a "Named Obligor List" for the purposes hereof) and a list of
Discretionary Obligors setting forth the name and address of each Discretionary
Obligor. The credit limit for each Discretionary Obligor shall be the
Discretionary Limit unless the list of Discretionary Obligors specifies a lower
credit limit in respect of such Discretionary Obligor in which case such credit
limit shall apply to such Discretionary Obligor.
(b) Following the Initial Purchase Date and prior to the termination of
the Canadian Seller as Servicer hereunder, from time to time on a periodic basis
agreed to by the Canadian Seller and the Purchaser (which shall be not less than
monthly), the Canadian Seller shall provide the Securitization Agent with a
Periodic Report.
ARTICLE 3
PAYMENTS AND ACCOUNTS
3.1 Collection Account
(a) The Securitization Agent shall establish and maintain in the name of
the Purchaser, a Canadian Dollar account and a United States Dollar account at
an Eligible Institution in Toronto to be designated as the collection accounts
(each a "Collection Account") which accounts shall be separate and segregated
from the Securitization Agent's own assets. If at any time the institution at
which the Collection Accounts are maintained ceases to be an Eligible
Institution, the Securitization Agent shall, within 10 days thereafter,
establish substitute accounts at an Eligible Institution in Toronto and transfer
any funds in the Collection Accounts to such substitute accounts, and from the
date any such substitute account is established and funds are transferred, such
substitute account shall be a Collection Account hereunder.
(b) The Collection Accounts shall be administered by the Securitization
Agent pursuant to the terms hereof.
(c) On the date of the initial Purchase of Receivables owing by a
particular Obligor, and until the Final Collection Date, the Servicer shall
direct such Obligor to make payments in
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respect of all Receivables owing by such Obligor to the relevant Seller or the
Purchaser, including Purchased Receivables, by delivery of cheques directly to,
in the case of the Canadian Seller, for "Dispatch" related invoices, "Mitel
Networks Corporation, *Subject to Request for Confidential Treatment; Separately
Filed with the Commission*" and for "SAP" related invoices "Mitel Networks
Corporation, *Subject to Request for Confidential Treatment; Separately Filed
with the Commission*", in the case of MNI, "Mitel Networks, Inc. *Subject to
Request for Confidential Treatment; Separately Filed with the Commission*" and,
in the case of MNSI, "Mitel Networks Solutions, Inc. *Subject to Request for
Confidential Treatment; Separately Filed with the Commission*" (or such other
P.O. box or account addresses as may be designated in writing from time to time
by the Securitization Agent) (collectively, the "Lockbox") or by way of direct
deposit into the applicable Collection Account. The Sellers hereby covenant and
agree that, to the best of their ability, they will cause all Obligors to make
payments in respect of Receivables in accordance with the preceding sentence and
in the event that the Sellers receive any such payments, they shall forthwith
upon receipt, and in any event by no later than 4:00 p.m. (Toronto time) on the
next following Business Day after the date of receipt thereof by the relevant
Seller, deliver to the Purchaser all such payments by way of deposit to the
Lockbox. Any Collections received by the Sellers shall be held in trust for the
benefit of the Purchaser.
(d) Except as otherwise required by Law or Contract, any payment made by
an Obligor in respect of Receivables shall be applied to the Receivable to which
such payment is specifically attributable. If any such payment is not
specifically attributable to any particular Receivable:
(i) if the Canadian Seller is the Servicer hereunder, such payment
shall be applied in accordance with the Credit and Collection
Policies provided that if the Credit and Collection Policies
do not specify any such application, such payment shall be
applied to the oldest outstanding Receivable (denominated in
the same currency as such payment) owed by such Obligor until
the same has been paid in full; and
(ii) if the Canadian Seller is not the Servicer hereunder, such
payment shall be applied (a) in accordance with the Obligor's
remittance advice, (b) provided that such remittance advice is
silent or does not apply, then in accordance with an agreement
reasonably made between the relevant Seller and the Obligor
regarding payment, or (c) provided that there is no agreement
between the Seller and the Obligor regarding payment, then to
the oldest outstanding Receivable (denominated in the same
currency as such payment) owed by such Obligor until the same
has been paid in full.
(e) Promptly, following the receipt by the Securitization Agent of the
Periodic Report and the prompt verification of the accuracy thereof by the
Securitization Agent, all amounts
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applied in accordance with Section 3.1(d) to Receivables which are not Purchased
Receivables ("Sellers' Amounts") shall be transferred to the Sellers' Accounts.
(f) Amounts on deposit in the Collection Accounts (excluding any Sellers'
Amounts) that relate to Purchased Receivables shall be applied by the
Securitization Agent in the following order of priority from time to time:
(i) the amount of any interest on the Notes shall be paid to
Noteholders when due;
(ii) the amount of any fees or premium due under any Credit
Enhancement Agreement shall be transferred to the applicable
Disbursement Account when due;
(iii) the amount of any principal on the Notes shall be paid to
Noteholders when due;
(iv) the amount of any fees due to the Stand-By Servicer or any
other replacement Servicer hereunder shall be paid to the
Stand-By Servicer or such other replacement Servicer when due;
(v) prior to the Amortization Commencement Date, the amount of any
Program Fee shall be paid to the Securitization Agent when
due; and
(vi) to the extent that an amount has been transferred from a
Reserve Account to a Collection Account pursuant to Section
3.2(c)(iii) on a prior date, such amount shall be transferred
back to such Reserve Account.
3.2 Reserve Accounts
(a) The Securitization Agent shall establish and maintain in the name of
the Canadian Seller and MNI, accounts at an Eligible Institution to be
designated as the reserve accounts (each a "Reserve Account"), which accounts
shall be separate and segregated from the Securitization Agent's own assets.
Each of the Canadian Seller and MNI hereby grants to the Purchaser a security
interest in all of its right, title and interest in and to the Reserve Accounts
to secure the due and timely payment of the amounts required to be paid out of
the Reserve Accounts to the Purchaser or otherwise payable by the Sellers to the
Purchaser hereunder. If at any time the institution at which the Reserve
Accounts are maintained ceases to be an Eligible Institution, the Securitization
Agent shall, within 10 days thereafter, establish substitute accounts at an
Eligible Institution and transfer any funds in the Reserve Accounts to such
substitute accounts, and from the date any such substitute account is
established and funds are transferred, such substitute account shall be a
Reserve Account hereunder. All funds deposited in the Reserve Accounts shall be
invested by the Securitization Agent in Eligible Investments.
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(b) Until the Amortization Commencement Date, other than the occurrence of
an Amortization Commencement Date set out in Sections 7.1(i), (j) or (t) or as a
result of the Canadian Seller designating an Amortization Commencement Date
pursuant to clause (c) of the definition of "Amortization Commencement Date", on
each Purchase Date, after the completion of all Purchases on such Purchase Date,
an amount equal to the amount by which (i) the amount on deposit in a Reserve
Account on such Purchase Date after the payment and distribution of all amounts
provided for under Section 2.1 exceeds (ii) the Required Balance on such
Purchase Date, shall be paid to the Canadian Seller or MNI, as the case may be,
by transferring such amount to the applicable Sellers' Account. Upon the
occurrence of an Amortization Commencement Date that results from the occurrence
of an Amortization Event set out in Sections 7.1(i), (j) or (t) or as a result
of the Canadian Seller designating an Amortization Commencement Date pursuant to
clause (c) of the definition of "Amortization Commencement Date" and to the
Final Collection Date, amounts shall be paid to the Canadian Seller provided
that the amount remaining in each Reserve Account is equal to the lesser of (i)
the Required Balance in the same currency as the Reserve Account and (ii) 110%
of the aggregate Outstanding Principal Balance of all Purchased Receivables in
the same currency as the Reserve Account. On the Business Day immediately
following the Final Collection Date, all amounts remaining on deposit in the
Reserve Account after the payment in full of all amounts referred to in Section
3.2(c) shall be paid to the Canadian Seller or MNI, as the case may be, by
transferring such amount to the applicable Sellers' Account.
(c) Amounts on deposit in the Reserve Accounts shall be applied by the
Securitization Agent to satisfy the following:
(i) if the Servicer or the Securitization Agent determines that
there is a Credit Loss that is not a Non-Qualifying Loss, (A)
the full amount of such Credit Loss shall be transferred from
the Reserve Account to the applicable Collection Account up to
a maximum aggregate amount of CAD150,000 or the equivalent in
United States Dollars (as the case may be) in any Program Year
and (B) 10% of such Credit Loss shall be transferred from such
Reserve Account to such Collection Account to the extent of
any Credit Losses in any Program Year in excess of such
maximum aggregate amount;
(ii) payments equal to the aggregate of all then outstanding
Non-Qualifying Losses;
(iii) to the extent that the amount on deposit in the applicable
Collection Account (excluding any Sellers' Amounts) is
insufficient to pay interest (imputed or otherwise) on the
Notes when due, an amount equal to such deficiency shall be
transferred from the applicable Reserve Account to such
Collection Account;
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(iv) on or after the Amortization Commencement Date, the Dilution
Amount in respect of any Dilution shall be transferred from
the applicable Reserve Account to the applicable Collection
Account;
(v) prior to the Amortization Commencement Date and on the Final
Collection Date, to the extent that the amount on deposit in
the applicable Collection Account (excluding any Sellers'
Amounts) is insufficient to pay the Program Fee when due, an
amount equal to such deficiency shall be transferred from the
applicable Reserve Account to such Collection Account; and
(vi) to pay the fees of any replacement Servicer.
3.3 Disbursement Account
(a) The Securitization Agent shall establish and maintain in the name of
the Purchaser accounts at an Eligible Institution in Toronto to be designated as
the disbursement accounts (each a "Disbursement Account"), which accounts shall
be separate and segregated from the Securitization Agent's own assets. If at any
time the institution at which the Disbursement Accounts are maintained ceases to
be an Eligible Institution, the Securitization Agent shall, within 10 days
thereafter, establish substitute accounts at an Eligible Institution in Toronto,
Ontario and transfer any funds in the Disbursement Accounts to such substitute
accounts, and from the date any such substitute account is established and funds
are transferred, such substitute account shall be the Disbursement Account
hereunder.
(b) The Disbursement Accounts shall be administered by the Securitization
Agent pursuant to the terms hereof.
(c) Amounts shall be deposited into the Disbursement Accounts in
accordance with Sections 2.1(d)(i), (iv) and (vi).
(d) Amounts on deposit in the Disbursement Accounts shall be applied by
the Securitization Agent in the following manner from time to time:
(i) the amount of any fees or premiums due under any Credit
Enhancement Agreement shall be paid to the relevant Credit
Enhancer when due;
(ii) any expenses of the Purchaser due to third parties that are
specifically attributable to Purchases made hereunder,
including expenses relating to renewals, filings and other
registrations and of the Rating Agency, shall be paid to such
third parties when due; provided, however, that the Canadian
Seller has, for and on behalf of the Sellers, provided its
prior written
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approval (which may be withheld in its discretion) of other
third party expenses where such expenses in the aggregate
exceed CAD35,000; and
(iii) prior to the Amortization Commencement Date, the amount of any
Program Fee due to the Securitization Agent shall be paid to
the Securitization Agent when due.
3.4 Dilutions
(a) If on any day prior to the Amortization Commencement Date there is a
Dilution, the relevant Dilution Amount shall be deducted from Purchase Amounts
on subsequent Purchase Dates in accordance with Section 2.1(b) and shall be
transferred from the applicable Reserve Account to the applicable Collection
Account pursuant to Section 3.2(c)(iv). Each Seller shall treat the amount of
any such deductions as a refund of a portion of the Purchase Price or Payment
Price, as applicable, paid by the Purchaser to such Seller in respect of the
relevant Purchased Receivable to which the Dilution relates.
(b) Any Collection in respect of a Dilution for which the Dilution Amount
has been deducted from Purchase Amounts or the Dilution Amount has been
transferred from a Reserve Account to a Collection Account pursuant to Section
3.2(c)(iv) shall be deemed to be a Collection in respect of a Receivable that is
not a Purchased Receivable for the purposes of Sections 3.1(d) and (f) and the
amount of any such Collection shall be transferred from such Collection Account
to the applicable Sellers' Account.
3.5 Repurchases for Breach of Representations and Warranties
(a) If any representation or warranty in Section 4.1(k) or (l) is not
true, or is determined not to have been true as of any Purchase Date, with
respect to a Purchased Receivable, or the Contract, Related Security or
Collections related thereto, such Receivable shall cease to be a Purchased
Receivable and, together with the Related Security and Collections related
thereto, shall thereupon be sold, assigned and transferred to the applicable
Seller without recourse or warranty (expressed, implied, statutory or otherwise)
and without the need for any formal or other instrument of assignment for a
purchase price equal to the Outstanding Principal Balance of such Purchased
Receivable, which amount shall for all purposes hereof be deemed to be a
Collection of such Purchased Receivable.
(b) The parties acknowledge that, notwithstanding any other provision
hereof, the Sellers shall have no authority to reduce, amend, extend the
maturity of or otherwise modify or waive any term of any Purchased Receivable
(other than in accordance with the terms of the Contract or the Credit and
Collection Policy or in the Canadian Seller's capacity as Servicer as permitted
by this Agreement) in any manner that materially adversely affects the
collectibility of such Purchased Receivable or the Related Security or
Collections with respect thereto. Insofar as the Sellers so reduce, extend,
amend or otherwise modify a Purchased Receivable or related
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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Contract in breach of this Section 3.5(b) without the Purchaser's prior consent,
the relevant Seller will be obliged to repurchase the Purchased Receivable at a
purchase price equivalent to the Outstanding Principal Balance thereof prior to
any such reduction, extension, amendment or other modification.
3.6 Deemed Collections
The parties acknowledge that the deemed receipt of a Collection of
all or part of a Purchased Receivable pursuant to Sections 3.4 and 3.5 shall not
in any way impair or otherwise affect any contractual or other right of the
relevant Seller or the Purchaser as against the Obligor of such Purchased
Receivable or any other Person (other than the relevant Seller or the
Purchaser), and no such Obligor or other Person shall derive any benefit by
virtue of such deemed receipt.
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND COVENANTS
4.1 Representations and Warranties of the Sellers
Each Seller hereby represents and warrants to the Purchaser on a
continuous basis, and acknowledges that the Purchaser is relying on such
representations and warranties in entering into this Agreement and in making
each Purchase hereunder, notwithstanding any investigations or otherwise, that:
(a) each Seller is a corporation validly organized and existing and in
good standing under the laws of its jurisdiction of incorporation,
has full corporate power and authority to own its properties and
assets and is duly qualified to do business and is in good standing
in each jurisdiction where the failure to so qualify or maintain
such good standing, singularly or in the aggregate, could have a
Material Adverse Effect;
(b) each Seller has full corporate power and authority to execute and
deliver this Agreement and the Related Documents (to which it is a
party) and to do all acts and things required or contemplated to be
done by it hereunder or thereunder;
(c) each Seller has taken all necessary corporate action to authorize
the execution and delivery of this Agreement and the Related
Documents (to which it is a party) and the performance by it of its
obligations hereunder and thereunder and of the transactions
contemplated hereby and thereby;
(d) the execution and delivery by each Seller of this Agreement and the
Related Documents (to which it is a party) and the performance by
each Seller of its
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
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obligations hereunder and thereunder and of the transactions
contemplated hereby and thereby, do not and will not contravene,
breach, constitute a default under, violate or conflict with:
(i) each Seller's constating documents or by-laws or any
resolution passed by its board of directors or its
shareholders;
(ii) any Law applicable to the relevant Seller which could have a
Material Adverse Effect;
(iii) any material indenture, loan or credit agreement, lease,
mortgage, security agreement, bond, note, contract or other
agreement or instrument to which the relevant Seller is a
party or by which it or its property is bound; or
(iv) any order, writ, judgment, award, injunction or decree binding
on the relevant Seller or affecting its properties,
and do not and will not result in or require the creation of any
Lien upon or with respect to any of its properties;
(e) each of this Agreement and the Related Documents (to which it is a
party) has each been duly executed and delivered by each Seller;
(f) each of this Agreement and the Related Documents (to which it is a
party) is a legal, valid and binding obligation of each Seller and
is enforceable against each Seller by the other parties hereto and
thereto in accordance with its respective terms subject to
bankruptcy, insolvency, reorganization, winding-up, moratorium and
other laws generally affecting the rights of creditors and the fact
that specific performance and injunction are equitable remedies
available only in the discretion of the court;
(g) no transaction contemplated by this Agreement requires compliance
with any bulk sales act or similar Law;
(h) no authorization, approval or other action by, and no notice to or
filing with, any Governmental Authority is necessary in connection
with the execution and delivery by each Seller of this Agreement and
the Related Documents (to which it is a party), or the performance
by each Seller of its obligations hereunder or thereunder or of the
transactions contemplated hereby or thereby, or to give legal effect
to the same, except for the filing of the assignments, financing
statements and similar instruments referred to in Section 6.1(g);
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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(i) the Records are current in all material respects to their relevant
date and reflect all material transactions between each Seller and
the Obligors under the related Purchased Receivables and any other
Person in respect thereof in accordance with the Credit and
Collection Policies;
(j) other than the provision to Obligors of the Purchased Receivables or
the Obligors under the Related Security related thereto of actual
notice of the sale, transfer and assignment thereof to the
Purchaser, all filings, recordings, notifications, registrations or
other actions under all applicable Laws, including the PPSA, have
been made or taken, and all approvals obtained, in each jurisdiction
where necessary or appropriate (and where permitted by applicable
Law) to give legal effect to the transactions contemplated by this
Agreement and the Related Documents and to validate, preserve,
perfect and protect the Purchaser's ownership interest in and rights
to collect any and all of the Purchased Assets, including the right
to enforce the Related Security related thereto;
(k) upon the Purchase thereof under this Agreement, each Receivable
which is subject to such Purchase is an Eligible Receivable and each
Eligible Receivable and the related Contract and Related Security
related thereto will be owned by the Purchaser free and clear of any
Lien including any lien referred to in clause (a) of the definition
of "Permitted Encumbrances";
(l) no financing statement, registration, recording, filing or other
document similar in effect against, or naming, the relevant Seller
as debtor, seller, transferor or assignor relating to any Purchased
Receivable or any Contract or Collections relating thereto is on
file except in favour of the Purchaser;
(m) there are no actions, suits or proceedings existing or pending, or
to the knowledge of the relevant Seller, threatened, against or
affecting the relevant Seller or any of its property at law, in
equity or before any Governmental Authority or arbitration tribunal
or alternative dispute resolution mechanism that, if adversely
determined, could have a Material Adverse Effect, and each Seller is
not in default with respect to any Law or order of any Governmental
Authority, which default could have a Material Adverse Effect;
(n) no default has occurred and is outstanding under any agreement,
instrument, indenture or trust deed to which the relevant Seller is
a party, which default could have a Material Adverse Effect;
(o) the Canadian Seller's chief place of business and chief executive
office is located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇;
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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(p) there is no federal, provincial or local Law or ordinance under
which any Taxes (other than Taxes on income of the Purchaser) are
required to be paid or remitted by the Purchaser in respect of any
of the Purchased Assets, nor will the Purchaser be required to make
any deduction, withholding or remittance of Taxes with respect to
any payment or remittance to be made by or on behalf of it on its
own behalf, on behalf of the Purchaser or on behalf of any Obligor;
(q) all factual information, including all Periodic Reports, furnished
by or on behalf of the Sellers to the Purchaser, the Credit Enhancer
or the Securitization Agent for purposes of, or in connection with,
this Agreement or any transaction contemplated hereby is, when taken
as a whole, and all other factual information hereafter furnished by
or on behalf of the Sellers to the Purchaser, the Credit Enhancer or
the Securitization Agent will be, when taken as a whole, true and
accurate in all material respects on the date as of which such
information is dated or certified and (in the case of any such
information furnished prior to the date hereof) as of the date
hereof (unless such information relates to an earlier date, in which
case such information, when taken as a whole, shall be true and
accurate in all material respects as of such earlier date), and is
not, or shall not be, as the case may be, when taken as a whole,
incomplete by omitting to state any material fact necessary to make
such information not misleading;
(r) the Sellers are treating the sale, transfer and assignment of the
Purchased Assets to the Purchaser under this Agreement as a sale for
all purposes;
(s) the financial statements furnished to the Purchaser pursuant to
Section 5.6(q) have been prepared in accordance with generally
accepted accounting principles and present fairly the assets,
liabilities and financial position of the Sellers on a consolidated
basis as at the date thereof, and there has been no material adverse
change in the financial position of the Sellers on a consolidated
basis from that reflected in the most recent financial statements
provided by Sellers to the Purchaser;
(t) to the knowledge of the relevant Seller, no Amortization Event has
occurred and is continuing;
(u) the transactions contemplated by this Agreement comply in all
material respects with all laws and regulations in Canada and the
United States regarding the collection, use and disclosure of
personal information, including for greater certainty the Personal
Information Protection and Electronic Documents Act (Ontario) and
all other privacy laws and regulations of the individual Provinces
and the Federal Government of Canada and the United States;
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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(v) the Canadian Seller is duly licensed to collect provincial sales Tax
and harmonized Tax in all applicable provinces of Canada and each of
MNI and MNSI are duly licensed to collect any similar Tax in the
United States; and
(w) each Seller: (i) is acting for its own account; (ii) has made its
own independent decisions to enter into the transactions
contemplated hereby and as to whether such transactions are
appropriate or proper for it based upon its own judgement and upon
advice from such advisers as it has deemed necessary; (iii) is not
relying on any communication (written or oral) of the Securitization
Agent or the Purchaser as investment advice; and (iv) understands
that no communication (written or oral) received from the
Securitization Agent or the Purchaser will be deemed to be an
assurance or guarantee as to the expected results of such
transactions.
4.2 Representations and Warranties of the Purchaser
The Purchaser hereby represents and warrants to the Sellers on a
continuous basis, and acknowledges that the Sellers are relying on such
representations and warranties in entering into this Agreement and making any
sales hereunder, notwithstanding any investigations or otherwise, that:
(a) the Purchaser is a trust established under the laws of the Province
of Ontario;
(b) the Purchaser has full power and authority to execute and deliver
this Agreement and the Related Documents (to which it is a party)
and to do all acts and things required or contemplated to be done by
it hereunder or thereunder;
(c) the Purchaser has taken all necessary action to authorize the
execution and delivery of this Agreement and the Related Documents
(to which it is a party), and the performance by the Purchaser of
its obligations hereunder and thereunder and of the transactions
contemplated hereby and thereby;
(d) this Agreement and the Related Documents (to which it is a party)
have been duly executed and delivered by the Purchaser;
(e) each of this Agreement and the Related Documents (to which it is a
party) is the legal, valid and binding obligation of the Purchaser
and is enforceable against the Purchaser by the other parties
thereto in accordance with its terms subject to bankruptcy,
insolvency, reorganization, winding-up, moratorium and other laws
generally affecting the rights of creditors and the fact that
specific performance and injunction are equitable remedies available
only in the discretion of the court;
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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(f) the Purchaser is not, and no beneficiary of the Purchaser will be, a
non-resident of Canada within the meaning of the Income Tax Act
(Canada);
(g) the execution and delivery by the Purchaser of this Agreement and
the Related Documents (to which it is a party), and the performance
by it of its obligations hereunder and thereunder and of the
transactions contemplated hereby and thereby, do not and will not
contravene, breach, constitute a default under, violate or conflict
with:
(i) the Purchaser's declaration of trust;
(ii) any Law applicable to the Purchaser which could have a
Material Adverse Effect;
(iii) any material indenture, loan or credit agreement, lease,
mortgage, security agreement, bond, note, contract or other
material agreement or instrument to which the Purchaser is a
party or by which it or its property is bound; or
(iv) any order, writ, judgment, award, injunction or decree binding
on it or affecting the Purchaser's property;
(h) no authorization, approval or other action by, and no notice to or
filing with, any Governmental Authority is necessary in connection
with the execution and delivery by the Purchaser of this Agreement
or the Related Documents (to which it is a party), or the
performance by the Purchaser of its obligations hereunder and
thereunder or of the transactions contemplated hereby or thereby, or
to give legal effect to the same other than such as have been
obtained;
(i) there are no actions, suits or proceedings existing or pending, or
to the knowledge of the Purchaser, threatened, against or affecting
the Purchaser or any of its property at law, in equity or before any
Governmental Authority or arbitration tribunal or alternative
dispute resolution mechanism that, if adversely determined, could
have a Material Adverse Effect, and the Purchaser is not in default
with respect to any Law or order of any Governmental Authority,
which default could have a Material Adverse Effect; and
(j) no default has occurred and is outstanding under any agreement,
instrument, indenture or trust deed to which the Purchaser is a
party, which default could have a Material Adverse Effect.
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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4.3 Affirmative Covenants of the Sellers
From the date of this Agreement until the Final Collection Date,
unless each of the Purchaser and the Credit Enhancer otherwise consent in
writing, each Seller covenants to:
(a) comply with all Laws applicable to all or any of it, its business,
its properties, the Purchased Receivables and the Related Security
and Contracts related thereto, where the failure to do so could have
a Material Adverse Effect;
(b) preserve and maintain its corporate existence, rights, franchises
and privileges and qualify and remain qualified to carry on business
in each jurisdiction in which the failure to do so could have a
Material Adverse Effect;
(c) promptly notify the Purchaser of any amendment, limitation or
restriction of any licence issued to the relevant Seller by a
Governmental Authority relating to the carrying on by the relevant
Seller of its business if such amendment, limitation or restriction
could have a Material Adverse Effect;
(d) timely and fully perform and comply in all material respects with
all terms, covenants and other provisions required to be performed
and observed by it under this Agreement and the Related Documents
(to which it is a party) and under and in connection with all
Eligible Receivables and Contracts;
(e) notify the Purchaser in writing at least 30 Business Days prior to
(i) any change of address of the relevant Seller's chief place of
business and/or chief executive office or (ii) any change in its
corporate name;
(f) other than notifications to Obligors, from time to time at the
relevant Seller's expense, promptly execute and deliver all
instruments, documents and make all renewals, filings and other
registrations deemed necessary by the relevant Seller or requested
by the Purchaser, acting reasonably, to maintain, perfect, protect
or more fully evidence the Purchaser's interest in the Purchased
Assets under this Agreement as against third parties or to enable
the Purchaser to exercise or enforce any of its rights thereunder or
under this Agreement;
(g) treat the sale, transfer and assignment of the Purchased Assets to
the Purchaser under this Agreement as a sale for all purposes and
indicate in its books and records, including the Records, that the
Purchased Assets have been sold to the Purchaser pursuant to this
Agreement;
(h) take all reasonable necessary steps to (i) perfect or protect the
Purchasers' ownership of the Purchased Assets and (ii) obtain all
discharges and releases
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necessary to discharge or release any security interest or other
rights or interests of any Person in the Purchased Assets other than
those in favour of the Purchaser;
(i) promptly upon becoming aware thereof, notify the Purchaser of (i)
any Credit Losses, and (ii) litigation or other court or arbitration
proceeding brought against the relevant Seller which could have a
Material Adverse Effect; and
(j) remain responsible and liable under the Contracts related to the
Purchased Receivables and to fully perform each of its obligations
and covenants thereunder.
4.4 Affirmative Covenants of the Canadian Seller
(a) furnish to the Securitization Agent, the Purchaser (and the Credit
Enhancer with respect to (i) only):
(i) forthwith upon the occurrence of, or upon becoming aware of,
any Amortization Event or any event or the existence of any
fact which, with the giving of notice or lapse of time or
both, may constitute an Amortization Event, notice of any such
Amortization Event or any such event or fact, together with a
statement of its senior financial officer or accounting
officer, on its behalf and without personal liability, setting
forth details as to such Amortization Event or as to such fact
or event and the action which it has taken and is proposing to
take with respect thereto; and
(ii) promptly, from time to time, such other documents, records,
information or reports with respect to the Purchased Assets or
the conditions or operations, financial or otherwise, of it
(including, without limitation, reports with respect to the
remittance of Taxes) as the Purchaser or the Securitization
Agent may from time to time reasonably request;
(b) on each 15th Business Day of each month or, upon receiving notice by
the Purchaser within two days of the 15th Business Day of each
month, no later than five days after receiving such notice, deliver
to the Purchaser a certificate of the Canadian Seller in the form of
Exhibit C dated as of such date and signed on its behalf by its
Chief Financial Officer, Treasurer, Secretary, Corporate Controller
or other officer as designated by the Canadian Seller from time to
time; provided that such designee has some familiarity with the
transactions contemplated hereby; and
(c) perform all of the duties and covenants of the Servicer hereunder
for so long as it may be designated as the Servicer.
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
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4.5 Negative Covenants of the Sellers
From the date of this Agreement until the Final Collection Date,
without the Purchaser's and the Credit Enhancer's prior written consent, each
Seller covenants that it will not:
(a) take any action that may cause the validity or effectiveness of the
sales, transfers and assignments of the Purchased Assets provided
for in this Agreement to be impaired or to take any action or omit
to take any steps that may result in, or create or suffer to exist,
any Lien extending to or otherwise arising upon the Purchased Assets
or any part thereof or any interest therein or the proceeds thereof;
(b) except as otherwise provided herein, purport to sell, transfer or
assign (by operation of law or otherwise) or otherwise dispose of
any Purchased Assets or any account to which any Collections are
deposited, or assign any right to receive income in respect of any
thereof; or
(c) enter into any transaction of reorganization, consolidation,
amalgamation, merger or arrangement or sell all or substantially all
of its undertaking, property and assets (any of the foregoing events
being referred to in this Section as a "Transaction"), without
providing at least that number of days prior written notice equal to
the lesser of (i) 60 days and (ii) the then current weighted average
DSO calculated in accordance with Section 7.1(p) plus 15 days to
each of the Purchaser, the Credit Enhancer and the Securitization
Agent and, if such Transaction could have a Material Adverse Effect,
the Purchaser shall have the right upon receiving notice of such
Transaction to designate the Amortization Commencement Date to occur
effective on the date specified by the Securitization Agent by
notice in writing to the Canadian Seller; provided, however, that
the Canadian Seller shall have the right to provide written notice
to the Purchaser, the Credit Enhancer and the Securitization Agent
on or before 5:00 p.m. (Toronto time) on the second Business Day
after the receipt by the Canadian Seller of the Securitization
Agent's notice to inform the Securitization Agent that as a result
of the Securitization Agent's notice the Sellers will not proceed
with the Transaction in which event the Securitization Agent's
notice and the Seller's notice of the Transaction shall both be
deemed to be retracted, null and void. If such notice is given by
the Securitization Agent, none of the Sellers shall complete such
Transaction earlier than the date that the Transaction was specified
to occur in the notice of such Transaction sent by the relevant
Seller to the Purchaser.
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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4.6 Affirmative Covenants of the Purchaser
Each of the Purchaser and the Securitization Agent covenants that it
will, in accordance with and subject to the terms of this Agreement:
(a) duly and punctually perform each of its agreements, covenants and
obligations under this Agreement;
(b) promptly following receipt thereof, provide the Canadian Seller with
copies of any notices received from the Insurer;
(c) co-operate with the Servicer to diligently resolve any
reconciliation discrepancy arising from Section 5.7(e)(i);
(d) (i) use its reasonable commercial efforts to ensure that the
Canadian Seller receives favourable off-balance sheet treatment;
(ii) ensure that the Canadian Seller will not be in a position where
it will be required to consolidate more than its own assets under
Canadian and United States generally accepted accounting principles
as such principles exist at the date hereof; and (iii) use its best
efforts to ensure that the Canadian Seller will not be in a position
where it will be required to consolidate more than its own assets as
a result of a change in Canadian or United States generally accepted
accounting principles from those that exist on the date hereof;
(e) promptly notify the Canadian Seller in writing of:
(i) the occurrence of any event which results in the assets sold
by the Sellers to the Purchaser and forming part of the
Purchaser's Assets representing less than 50% of the
Purchaser's total assets;
(ii) from and after the occurrence of an event referred to in
Section 4.6(e)(i), the occurrence of any event which would
result in the assets sold by the Sellers to the Purchaser and
forming part of the Purchaser's Assets representing more than
50% of the Purchaser's total assets, such notice to be
provided as far as possible in advance of the occurrence of
such event; and
(iii) any change in Canadian or United States accounting rules and
regulations that would have an adverse effect on the balance
sheet treatment of the transactions contemplated hereby; and
(f) not make any amendment to the trust indenture dated April 19, 2004
between The Canada Trust Company, as trustee, and BNY Trust Company
of Canada that
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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could adversely affect the Sellers in respect of the transactions
contemplated hereby.
ARTICLE 5
ADMINISTRATION AND COLLECTION
5.1 Designation of the Servicer
By executing and delivering this Agreement, the Canadian Seller is
designated as the Servicer until the first Service Transfer, and hereby agrees
to perform the duties and obligations of the Servicer pursuant to the terms
hereof. It is understood and agreed that the Purchaser has agreed to purchase
the Purchased Receivables from the Sellers on a fully-serviced basis and that,
so long as the Canadian Seller is the Servicer, payment of the purchase prices
for the Purchased Receivables to the Sellers in the amounts, at the times and in
the manner provided for in this Agreement shall constitute the Canadian Seller's
full consideration therefor. Subject to the provisions hereof, the Servicer
shall administer, service and collect the Purchased Assets, including the
Purchased Receivables, as agent for the Purchaser until the Final Collection
Date. The Servicer may, with the prior written consent of the Purchaser, Credit
Enhancer, and the Rating Agency, as may be applicable, subcontract with any
Person for the administration and collection of the Purchased Receivables;
provided, however, that:
(a) subject to prudent business practice, if the Servicer chooses to
subcontract all or part of its servicing obligations hereunder, a
first right of refusal to be appointed as the subcontractor shall be
granted to Canadian Bonded Credits Limited of Toronto, Ontario or
another replacement servicer acceptable to the Purchaser and the
Securitization Agent, acting reasonably; and
(b) upon appointment of any Person as subcontractor, the Servicer shall
remain fully liable for the performance of the duties and
obligations so subcontracted and all other duties and obligations of
the Servicer pursuant to the terms of this Agreement.
5.2 Standard of Care
The Servicer, as agent for the Purchaser (to the extent provided
herein), shall perform its duties hereunder with reasonable care and diligence,
using that degree of skill and attention that the Servicer exercises in
managing, servicing, administering, collecting on and performing similar
functions relating to comparable receivables that it services for itself or
other Persons.
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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5.3 Authorization of Servicer
Without limiting the generality of the authority granted by the
designation of any Person as Servicer, and subject to the other provisions
hereof, the Servicer is hereby authorized and empowered by the Purchaser to take
any and all reasonable steps in its name and on its behalf necessary or
desirable and not inconsistent with the ownership of the Purchased Assets by the
Purchaser to collect all amounts due under any and all Purchased Receivables,
including to execute and deliver, on behalf of the Purchaser and any subsequent
assignees, including the Credit Enhancer, any and all instruments of
satisfaction or cancellation, or partial or full release or discharge, and all
other comparable instruments, with respect to the Purchased Receivables or the
Related Security related thereto and, after delinquency of any such Purchased
Receivables and to the extent permitted under and in compliance with applicable
law and regulations, to commence proceedings with respect to enforcing payment
of such Purchased Receivables, and the Related Security and Contracts related
thereto, and adjusting, settling or compromising the account or payment thereof,
to the same extent as each Seller could have done if it had continued to own the
Purchased Assets. The Purchaser shall furnish the Servicer with any powers of
attorney and other documents that are within the ability of the Purchaser to
furnish and which are reasonably necessary or appropriate to enable the Servicer
to carry out its servicing and administrative duties hereunder as agent of the
Purchaser.
5.4 Enforcement of Receivables
The Servicer is authorized to enforce and protect the Purchaser's
rights and interests in, to and under the Purchased Assets and the Purchaser's
right to receive payment under the Contracts related thereto, and the Servicer
may commence or defend proceedings in the name of the Purchaser (or any agent
thereof, including the Servicer) for the purpose of enforcing or protecting any
rights under any Purchased Assets or against an Obligor personally. In no event
shall the Servicer be entitled to take any action that would make the Purchaser
a party to any litigation without the Purchaser's express prior written consent
except only to the extent necessarily incidental to the enforcement by the
Servicer of any of the Purchased Assets.
5.5 Assignment for Purpose of Enforcement
If the Servicer shall commence a legal proceeding to enforce any
rights under any of the Purchased Assets or against an Obligor personally in
accordance herewith, the Purchaser shall thereupon be deemed to have
automatically assigned the applicable Purchased Receivable or Related Security
related thereto to the Servicer, solely for the purpose of and only to the
extent necessarily incidental to the enforcement by the Servicer of such rights.
The Servicer shall hold such assigned Purchased Receivable or Related Security
related thereto in trust for the Purchaser and the same shall be deemed to have
been automatically re-assigned to the Purchaser when the assignment to the
Servicer ceases to be necessary for the enforcement by the Servicer of such
rights. If in any enforcement suit or legal proceeding it shall be held that the
Servicer may not
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
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enforce a right under a Purchased Receivable on the grounds that it shall not be
a real party in interest or a holder entitled to enforce rights in respect of
the Purchased Receivable or Related Security related thereto, the Purchaser
shall, at the Servicer's expense and direction, take steps as are necessary to
enforce the Purchased Receivable.
5.6 Description of Services
Until the Final Collection Date, the Servicer shall, unless the
Purchaser and the Credit Enhancer direct otherwise, take or cause to be taken
all such reasonable actions as may be necessary or advisable from time to time
to administer and service the Purchased Assets in accordance with this Agreement
and applicable Laws, and without limiting the generality of the foregoing, and
in accordance with the Credit and Collection Policies, if applicable, the
Servicer shall:
(a) keep an account with respect to each Purchased Receivable and post
to it all payments received under or in respect of each such
Purchased Receivable;
(b) fully perform and comply with each of its covenants and agreements
under Section 3.1(c), regardless of any defence, set-off right or
counterclaim;
(c) give timely notice to the Obligor of any Purchased Receivable of any
payment default or other default thereunder, or under the related
Contract;
(d) record any Purchased Receivable as being delinquent or defaulted in
accordance with the Credit and Collection Policies;
(e) investigate all delinquencies and defaults under any Purchased
Receivable and will use its reasonable commercial efforts to pursue
payment thereof;
(f) respond to all reasonable enquiries of any Obligor of a Purchased
Receivable or under the Related Security related thereto;
(g) take all steps as are necessary to maintain the perfection and
priority, as the case may be, of all security interests, if any,
created pursuant to the Purchased Receivables and the Related
Security related thereto, and, subject to Sections 5.6(l) and (m)
below, refrain from releasing any such security interest in whole or
in part except to the extent that the Servicer would have done so in
a similar situation with respect to receivables administered by it
on its own behalf;
(h) subject to Section 5.13, make all payments to Governmental
Authorities and others where a statutory lien, prior claim or deemed
trust having priority over the Purchaser's interest in any Purchased
Assets has arisen, provided that nothing herein shall preclude the
Servicer from contesting any claim in the ordinary
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
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courseof business and in good faith, and remit all amounts of Taxes owing
in respect of any such Purchased Assets;
(i) until the time at which a Purchased Receivable is determined to be
written off as a Defaulted Receivable and assigned to the Credit
Enhancer, as determined by the Credit Enhancement Agreement,
determine, together with the Insurer or with the Insurer's approval,
as required, the advisability of taking any action and instituting
and carrying out legal proceedings with respect to any Purchased
Receivable and the Related Security pertaining thereto in case of
any default by an Obligor under any such Purchased Receivable and
take such action and institute and carry out such legal proceedings
determined by it and the Insurer, if required, to be advisable;
(j) maintain Records with respect to each Purchased Receivable and the
Related Security relating thereto and on three Business Days' prior
notice grant representatives of the Purchaser reasonable access to
examine and make copies of the Records and a reasonable opportunity
to discuss matters relating to the administration and servicing of
each Purchased Receivable and the Related Security relating thereto
with personnel of the Servicer involved in such administration and
servicing during normal business hours, including the opportunity to
see and review the Servicer's information systems and software in
operation;
(k) hold as trust property for and on behalf of the Purchaser, free of
any Lien, all Records with respect to the Purchased Receivable at
any one or more of the offices identified in Exhibit D until the
Final Collection Date;
(l) execute and deliver all such assignments, releases and discharges of
the Purchased Receivables as are required by the terms thereof and
the related Contracts upon receipt of all amounts due thereunder;
(m) settle, compromise and otherwise deal with any claims under any of
the Purchased Receivables or the Related Security related thereto as
permitted in accordance with the Credit and Collection Policies;
(n) maintain prudent administrative and operating procedures and keep
and maintain all books, records, documents and other information
reasonably necessary or advisable for the collection of the
Purchased Assets;
(o) timely and fully perform and comply with all material terms,
covenants and other provisions of the Contracts required to be
performed by and observed by the relevant Seller thereunder;
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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(p) furnish at the request of the Purchaser and the Securitization
Agent, at least 5 days prior to the date in which the Purchased
Receivable would become a Defaulted Receivable, all documentation
required under the Insurance Policy to make a claim under the
Insurance Policy in respect of such default;
(q) furnish, to the Purchaser and the Securitization Agent as soon as
practicable and, in any event, (i) within 60 days following each
fiscal quarter of the Servicer, quarterly unaudited financial
statements; and (ii) within 120 days following each fiscal year of
the Servicer, annual audited financial statements or, in each case,
such shorter time periods as may be required by applicable law;
(r) take all necessary steps to obtain all discharges and releases
necessary to discharge or release all security interests and other
rights or interests of any Person in the Purchased Assets other than
those in favour of the Purchaser; and
(s) otherwise take or cause to be taken all such actions as may be
necessary or desirable to collect each of the Purchased Receivables.
5.7 Additional Covenants of the Servicer
From the date of this Agreement until the Final Collection Date, the
Servicer covenants and agrees that it will, unless the Securitization Agent, the
Purchaser and the Credit Enhancer shall each otherwise consent in writing:
(a) comply with all Laws applicable to all or any of it, its business,
its properties, the Purchased Assets and Contracts related thereto,
where the failure to do so could have a Material Adverse Effect;
(b) fully comply with the Credit and Collection Policies in regard to
the Purchased Assets and the Related Security related thereto and in
performing its covenants hereunder;
(c) to the extent the Records related to the Purchased Receivables
consist in whole or in part of computer programs which are licensed
by the Servicer, the Servicer will, forthwith upon the occurrence of
a Servicer Termination Event, either (i) use reasonable commercial
efforts to arrange for the license or sublicense of such programs to
the Stand-By Servicer, the Securitization Agent or the Purchaser for
the limited purpose of permitting the Purchaser, the Securitization
Agent or the Stand-By Servicer to collect the Purchased Receivables
and to enforce the rights acquired by the Purchaser in respect of
the Related Security related thereto, or (ii) if acceptable to the
Purchaser and the Credit Enhancer, perform data processing services
for the Stand-By Servicer for the same purposes as set out in part
(i) for a fee equal to the market rate for such services;
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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(d) to the extent that the Records relate not only to Purchased
Receivables but also assets of the Sellers not sold to the Purchaser
hereunder, ensure that the Servicer is in a position to promptly
make duplicate copies of such Records reserved solely for the use of
the Purchaser hereunder and comprising part of the Records relating
to the Purchased Receivables and ensure that no Records that belong
to the Purchaser are permitted to be seized under any security
interest granted to any third party; provided that information in
such Records that does not pertain to the Purchased Receivables may
be redacted therefrom;
(e) on each Purchase Date:
(i) to attempt to reconcile all reports received from the
Securitization Agent with those corresponding reports of the
Sellers, and promptly notify the Securitization Agent of any
reconciliation discrepancy; and
(ii) upon the reasonable request of any of the Purchaser,
Securitization Agent or Credit Enhancer therefor, provide to
the Purchaser and/or Credit Enhancer, as the case may be, any
other information or documentation relating to any Purchased
Receivable that may be in existence in written form or, if
available in Records maintained by the Servicer, that may be
produced with the Servicer's existing software, provided that
there shall always be in written form or producible with the
Servicer's existing software from the Records information
indicating as to each Purchased Receivable the Obligor
thereunder, the amount owing thereunder and the location of
the Records relating thereto;
(f) cooperate with, and offer such assistance as may reasonably be
requested by, the chartered accountants selected by the Purchaser
and/or Credit Enhancer to furnish reports in respect of the
Purchaser and/or the Credit Enhancer, the Purchased Assets and the
servicing of the Purchased Receivables and Related Security related
thereto under this Agreement, and furnish in respect of, and within
30 days after the date of, its preceding fiscal year, addressed to
the Securitization Agent, the Purchaser, the Credit Enhancer and
such other Persons as the Purchaser and/or Credit Enhancer may
reasonably designate, a certificate of an officer of the Servicer
(on behalf of the Servicer, without personal liability) who is
familiar with this Agreement certifying that, to the knowledge of
such officer, the Servicer complied in such fiscal year with its
obligations hereunder except to the extent non-compliance therewith
did not materially adversely affect the interests of the Purchaser
and/or Credit Enhancer and except as further set forth in such
certificate;
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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(g) upon request of the Purchaser or the Credit Enhancer and with the
Servicer's consent, such consent not to be unreasonably withheld,
direct the Servicer's chartered accountants to assist the chartered
accountants of the Purchaser and/or Credit Enhancer to the extent
and in such manner as is reasonably required for the Purchaser's
chartered accountants to report on the status of Purchased
Receivables hereunder;
(h) promptly after the Servicer becomes aware thereof, but in any event
no later than two Business Days thereafter, provide each of the
Securitization Agent, the Purchaser and the Credit Enhancer with
notice of the occurrence of any Servicer Termination Event;
(i) ensure that all information related to the Purchased Assets is
maintained, accessed and transmitted in compliance in all material
respects with all laws and regulations in Canada regarding the
collection, use and disclosure of personal information, including
for greater certainty the Personal Information Protection and
Electronic Documents Act (Canada) and all other privacy laws and
regulations of the individual Provinces and the Federal Government
of Canada; and
(j) in the event of a reconciliation discrepancy arising from Section
5.7(e)(i), to co-operate with the Purchaser to diligently resolve
such issue in a timely manner.
5.8 Negative Covenants of the Servicer
From the date of this Agreement until the Final Collection Date,
unless each of the Purchaser and the Credit Enhancer shall otherwise consent in
writing, the Servicer covenants and agrees that it will not:
(a) make any material change to the Credit and Collection Policies;
(b) extend, amend or otherwise modify the terms of any Purchased
Receivable (other than adjusting, settling or compromising the
account or payment of a Purchased Receivable in the ordinary course
of business and in accordance with the Credit and Collection
Policies), or amend, modify or waive any term or condition of any
Contract related thereto except in the case of any such Contracts or
any amendments, modifications or waivers that: (i) do not affect the
payment terms of any Purchased Receivable; (ii) do not adversely
affect the quality or collectibility of any Purchased Receivable;
and (iii) are in accordance with the Credit and Collection Policies;
(c) sell, assign or otherwise encumber any of the Purchased Assets
except in accordance with the terms of this Agreement;
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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(d) release any security, guarantee or insurance securing any
Indebtedness under any of the Purchased Receivables, except to the
extent that granting such release is in accordance with this
Agreement, the Credit and Collection Policies and the Servicer's
usual practices as an obligee or such security, guarantee or
insurance is replaced in a form acceptable to the Purchaser, acting
reasonably; and
(e) take or omit to take any action if the taking or omitting to take
such action by the Servicer would constitute a breach in any
material respect by the Servicer of any representation, warranty or
covenant herein or in any other document delivered hereunder or
thereunder or contemplated hereby or thereby.
5.9 Servicer Termination Events
The occurrence or existence of one or more of the following events
or facts which is continuing shall constitute a "Servicer Termination Event"
hereunder:
(a) the Servicer fails to make any payment or deposit to be made by it
hereunder within two Business Days of being due;
(b) the Servicer fails to perform or observe any term, condition,
covenant or agreement to be performed or observed by it hereunder
(other than as specified in Section 5.9(a)) which failure could have
a Material Adverse Effect, and any such failure remains unremedied
for 30 days after notice thereof to the Servicer (and the Canadian
Seller, if the Canadian Seller is not the Servicer);
(c) any representation or warranty made by the Servicer in or pursuant
to this Agreement, or any Related Document, proves to have been
false or incorrect in any material respect when made and, if capable
of being cured, is not cured within 30 days of the Servicer becoming
aware thereof;
(d) the Servicer (if not the Canadian Seller) fails to pay any
Indebtedness when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) and such failure
continues after the applicable grace period, if any, specified in
any agreement or instrument relating to such Indebtedness; or any
other default under any agreement or instrument relating to any
Indebtedness, or any other event, shall occur if the effect of such
default or event would result in the occurrence of a Material
Adverse Effect; or
(e) the Servicer shall generally not pay its debts as they become due,
or shall admit in writing its inability to pay its debts generally,
or shall make a general assignment for the benefit of creditors; or
any proceedings shall be instituted by or against the Servicer
seeking to adjudicate it bankrupt or insolvent, or seeking
liquidation, winding-up, reorganization, arrangement, adjustment,
protection, relief or
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
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composition of it or its debts under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors, or seeking the
entry of an order for relief by the appointment of a receiver,
trustee or other similar official for it or for any substantial part
of its property and, if such proceeding has been instituted against
the Servicer, either such proceeding has not been stayed or
dismissed within 45 days or any of the actions sought in such
proceeding (including the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar
official) are granted in whole or in part, or the Servicer takes any
corporate action to authorize any of the actions described in this
Section 5.9(e).
5.10 Notice of Servicer Termination Events
The giving by the Canadian Seller of notice to the Purchaser as
required hereunder of any event, fact or circumstance that constitutes or with
the giving of notice, lapse of time or both, would constitute a Servicer
Termination Event, shall be deemed to constitute the giving of notice by the
Purchaser to the Servicer of the same on the same date as the Canadian Seller
gives such notice.
5.11 Effecting a Service Transfer
Upon the occurrence of a Servicer Termination Event, the Purchaser,
either alone or at the request of the Credit Enhancer, may effect a termination
of the Servicer's designation as Servicer hereunder (a "Service Transfer") by
giving written notice to the Servicer of its decision to terminate the
Servicer's engagement as Servicer, which termination shall take effect at the
time specified in such notice.
5.12 Appointment of Stand-By Servicer
At any time upon the occurrence of a Servicer Termination Event, the
Securitization Agent on behalf of the Purchaser may by instrument in writing
appoint the Stand-By Servicer as the Servicer hereunder.
5.13 Collection and Remittance of Taxes
(a) To the extent that any Taxes have not been financed by the Purchaser
upon the Purchase of the related Receivable, the Seller while it is
the Servicer shall be entitled to any amounts paid by Obligors in
respect of such Taxes payable in connection with Purchased
Receivables that are deposited to a Collection Account or otherwise
held by the Purchaser, and the Purchaser shall forthwith remit or
cause to be remitted all such amounts to the Servicer.
(b) The Sellers (including the Canadian Seller whether acting in its
personal capacity or as Servicer) covenant and agree to make all
payments relating to the Purchased Receivables required to be made
to Governmental Authorities and other Persons where a statutory lien
or
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
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deemed trust might arise having priority over the Purchaser's interest therein
and, where a portion of the Purchased Receivables represents an amount owing in
respect of federal or provincial Taxes, to remit the amount of Taxes owing in
respect of such Receivables.
(c) After the appointment of the first Stand-By Servicer, the Stand-By
Servicer shall, unless it is remitting such Taxes directly to the applicable
Governmental Authority, by notice to the Canadian Seller, remit to the Canadian
Seller out of Collections the amount of any Taxes owing in respect of the
Purchased Receivables, in which event the Canadian Seller shall comply with the
remittance obligations set out in Section 5.6(h) as if the same were amended so
that the word "Servicer" read "Canadian Seller".
5.14 Additional Seller Covenants Following a Service Transfer
From and after a Service Transfer until the Final Collection Date,
each Seller covenants and agrees that it shall forthwith, in addition to any
other obligations, upon the request of the Purchaser and at the Sellers'
expense:
(a) instruct the Obligor of each Purchased Receivable (and any other
Persons, if applicable, in the case of the Related Security related
thereto) to remit all payments due under the Purchased Assets to the
Stand-By Servicer;
(b) remit to the Stand-By Servicer all payments received by each Seller
from Obligors of Purchased Receivables and from other Persons, if
applicable, under the Related Security related thereto;
(c) segregate all cash, cheques and other instruments constituting
Collections received by the relevant Seller in a manner acceptable
to the Purchaser and the Credit Enhancer and, immediately upon
receipt, deliver all such cash, cheques and instruments, duly
endorsed or with duly executed instruments of transfer, in
accordance with Section 3.1(c);
(d) co-operate fully with the Stand-By Servicer in the prompt
preparation and delivery to the Purchaser and the Credit Enhancer of
the report and notices to be delivered by the Servicer under Section
5.6 and provide the Purchaser with such other reports, information,
documents and records as the Purchaser may reasonably request
promptly following each such request;
(e) deliver up copies or originals of all Records relating to the
Purchased Receivables (including computer diskettes or tapes
containing all information necessary or reasonably desirable to
enable the Purchaser or its agent to collect the amounts owing under
the Purchased Receivables, together with a printed copy or
microfiche of all such information) to the Purchaser or as it may
direct in writing (or retain the same in segregated storage if so
directed), and provide the Purchaser
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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or its agent with all reasonable assistance necessary to decipher
the information contained on the computer diskettes or tapes; and
(f) perform any and all acts and execute and deliver any and all
documents as may reasonably be requested by the Purchaser in order
to effect the purposes of this Agreement or to enable the Stand-By
Servicer to collect and enforce the Purchased Receivables and any
Related Security or Contract related thereto.
5.15 Purchaser Rights Following a Service Transfer
Upon a Service Transfer, the Purchaser may, but is not required to,
at any time, directly or through the Securitization Agent or the Stand-By
Servicer, without limitation:
(a) perform the services, duties and functions specified in Sections
5.6, 5.7, 5.13 and 5.14 with respect to the Purchased Assets in any
manner the Purchaser reasonably deems fit;
(b) notify any Obligor of the purchase by the Purchaser and the sale,
transfer and assignment by the Sellers of any Purchased Receivable
under this Agreement;
(c) contact any Obligor of Purchased Receivables for any reasonable
purpose, including for the performance of audits and verification
analyses, and the determination of account balances and other data
maintained by the Canadian Seller in its capacity as Servicer;
(d) direct any Obligor to make all payments on account of any Purchased
Receivables directly to the Purchaser at an address designated by
the Purchaser or to such third party (including the Securitization
Agent or the Stand-By Servicer) or bank or depositary as may be
designated by the Purchaser; and
(e) proceed directly against any Obligor and take any and all other
actions, in the relevant Seller's name or otherwise, necessary or
reasonably desirable to collect any of the Purchased Assets or
effect any related result.
5.16 Power of Attorney
Each Seller, subject to Section 5.18, hereby grants to the Purchaser
an irrevocable power of attorney and hereby irrevocably appoints the Purchaser
as each Seller's attorney-in-fact, with full power of substitution and expressly
coupled with an interest in favour of the Purchaser, to take in the place and
stead of and in the name of each Seller or in the Purchaser's own name from time
to time at the Purchaser's discretion, acting reasonably, such actions as the
Sellers may be obligated to take hereunder or as the Purchaser may deem
necessary or advisable to collect, endorse, negotiate or otherwise realize on
any Purchased Receivable, the Related Security related
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thereto or any part thereof, any negotiable instrument, or other right of any
kind, held or owned by the Sellers and sold, transferred, assigned or delivered
to or received by the Purchaser as payment on account or otherwise in respect of
any of the Purchased Assets, including:
(a) to evidence or protect the Purchaser's ownership interest in the
Purchased Assets and to execute and file, in each Seller's name and
on each Seller's behalf, such recording, registration, financing or
similar statements (including any amendments, renewals and
continuation statements) under applicable Laws, including, in any
personal property registry office, in such jurisdictions where it
may be necessary to validate, perfect or protect the Purchaser's
position as owner of the Purchased Assets;
(b) to ask, demand, collect, ▇▇▇ for, recover, compound, receive and
give acquittance and receipts for monies due and to become due in
connection with the Purchased Receivables or otherwise owed to the
Purchaser;
(c) to receive, endorse and collect any cheques, drafts or other
instruments, documents and chattel paper in connection with monies
due and to become due in connection with the Purchased Receivables
or otherwise owed to the Purchaser;
(d) to file any claims or take any action or institute any proceedings
that the Purchaser may deem to be necessary or desirable for the
collection of any Purchased Receivable; and
(e) to execute and deliver, in the relevant Seller's name and on the
relevant Seller's behalf, such instruments and documents (including
assignments) necessary or desirable in furtherance of the foregoing.
5.17 Execution of Additional Powers
Subject to Section 5.18, the Sellers, following a request by the
Purchaser to do so, shall promptly execute and deliver to the Purchaser such
other powers of attorney in such form and having such content as may be
necessary or reasonably appropriate to enable the Purchaser to exercise the
powers described in Section 5.16.
5.18 Restrictions on Use
The Purchaser covenants and agrees with the Sellers not to use the
powers granted by Section 5.16 or pursuant to Section 5.17 unless the first
Service Transfer shall have occurred.
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ARTICLE 6
CONDITIONS PRECEDENT
6.1 Conditions Precedent to Initial Purchase
On or prior to the Initial Purchase Date, the following shall have
occurred, or each Seller shall have delivered or caused to be delivered to the
Purchaser, the Securitization Agent and/or the Credit Enhancer, as may apply,
the following documents, in each case, in form and substance satisfactory to the
Purchaser, the Securitization Agent and/or the Credit Enhancer:
(a) executed copies of this Agreement, the Assignment and the Related
Documents required to be delivered in connection with the Initial
Purchase, including a certified copy of the Credit and Collection
Policies;
(b) a certificate of an officer of each Seller providing for and
certifying the resolutions of the board of directors or shareholders
of such Seller approving and authorizing the execution, delivery and
performance of this Agreement and the other documents to be
delivered by the relevant Seller hereunder and the assignment of the
Receivables, and the Related Security and Collections related
thereto, hereunder;
(c) an incumbency certificate of the officers of each Seller executing
this Agreement and the other documents to be delivered by each
Seller hereunder showing their names, offices and specimen
signatures on which certificate the Purchaser and the Credit
Enhancer shall be entitled to conclusively rely until such time as
each Seller delivers a replacement certificate meeting the
requirements of this Section 6.1(c);
(d) certified copies of the constating documents and by-laws of each
Seller;
(e) for each Seller, certificates of status, of good standing or of
compliance, as appropriate, issued by its jurisdiction of
incorporation and by each jurisdiction where registrations have
been, or are to be, effected in respect of the Purchaser's ownership
interest in the Purchased Assets evidencing each Seller's
registration and good standing as a registered corporation therein;
(f) reports showing the results of the searches conducted in each of the
Provinces and Territories in Canada and the States of Virginia and
Delaware in the United States against the relevant Seller and each
predecessor of such Seller on the Business Day immediately preceding
the Initial Purchase Date (or as near as practicable thereto) to
determine the existence of any Liens in the assets of the relevant
Seller or in the Receivables, the Related Security or Collections
related thereto, together with a certificate of an officer of the
relevant Seller certifying that the
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aforementioned searches disclosed no Liens registered or recorded
against the relevant Seller or its predecessors with respect to, and
then applicable to, the Receivables, the Related Security or
Collections related thereto, prior to the date shown as the "file
currency date" (or similar designation) on the search reports, other
than those for which discharges or releases have been provided in
accordance with Section 6.1(h), and, if required by the Rating
Agency, an opinion of counsel in each of the Provinces and
Territories in Canada and the States of Virginia and Delaware in the
United States on the due registration within such jurisdiction of
the Purchaser's purchase of, and its interest in, the Purchased
Assets;
(g) copies of properly completed and duly registered assignments and/or
financing statements or verification statements for each of the
Provinces and Territories in Canada and the States of Virginia and
Delaware in the United States, with the registration particulars
stamped thereon, dated prior to (where permitted by applicable Law)
the Initial Purchase Date naming the relevant Seller as seller,
assignor or debtor and the Purchaser as purchaser, assignee or
secured party, and/or such other similar instruments or documents as
may be necessary and/or, in the Purchaser's reasonable opinion,
advisable under any applicable PPSA to perfect, record or protect
the Purchaser's ownership interest in the Purchased Assets;
(h) executed copies of all discharges and releases, if any, reasonably
required by the Purchaser or necessary to discharge or release all
Liens or interests of any Person in the Purchased Receivables, the
Contracts, the Related Security and the Collections related thereto
previously granted by the relevant Seller;
(i) an opinion of counsel to each Seller dated as of the date of this
Agreement; and
(j) such other documentation as may be required by (i) the Purchaser or
its counsel, (ii) the relevant Seller or its counsel or (iii) the
Credit Enhancer or its counsel, in each case, acting reasonably.
6.2 Conditions Precedent to All Purchases
Prior to each Purchase hereunder (including the Initial Purchase),
the following conditions precedent shall have been satisfied by each Seller, as
the case may be, in each case, in form and substance satisfactory to the
Purchaser and the Credit Enhancer:
(a) the Securitization Agent shall have received the Purchase Notice
and, for any Purchase other than the Initial Purchase, the most
recent Periodic Report;
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(b) the representations and warranties of the Sellers contained in
Section 4.1 shall be true and correct on and as of the Purchase Date
as though made on and as of such date;
(c) no event shall have occurred and be continuing, or would result from
the Purchase, which would constitute an Amortization Event or would
constitute an Amortization Event but for the requirement that notice
be given or lapse of time or both;
(d) all documents, instruments and agreements required by the terms
hereof to be delivered to the Purchaser, the Securitization Agent
and the Credit Enhancer on the date of the Purchase shall be so
delivered and shall be satisfactory in form and substance to the
Purchaser and the Credit Enhancer, acting reasonably; and
(e) the Insurance Policy shall be in full force and effect.
6.3 Undertaking of Purchaser
If requested by the Canadian Seller, for and on behalf of the
Sellers, the Purchaser shall, prior to each Purchase (including the Initial
Purchase), execute and deliver any agreement which in the opinion of the Sellers
and the Purchaser is reasonably required to evidence the respective interests of
the Purchaser and any creditor of or purchaser from the Sellers in and to any
Receivables, provided such agreement shall be in form satisfactory to the
Purchaser and the Sellers, each acting reasonably.
ARTICLE 7
AMORTIZATION EVENTS
7.1 Meaning of Amortization Event
The term "Amortization Event" means any one of the following events
or circumstances:
(a) the Sellers or the Servicer (if the Canadian Seller) fail to make
any payment or deposit to be made by it hereunder within two
Business Days of being due;
(b) the Sellers or the Servicer (if the Canadian Seller) fails to
perform or observe any term, condition, covenant or agreement to be
performed or observed by it hereunder or under the Cheque Deposit
Agreement or any other agreement relating hereto (other than that
specified in Section 7.1(a)), which failure, in the opinion of the
Securitization Agent, acting reasonably, could have a Material
Adverse Effect, and any such failure remains unremedied for 30 days
after notice thereof to the Seller and the Servicer;
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(c) the occurrence of any Servicer Termination Event;
(d) any representation or warranty made by the relevant Seller (or any
of its officers) in or pursuant to this Agreement, any Periodic
Report or any other Related Document proves to have been false or
incorrect in any material respect when made and, if capable of being
cured, is not cured within 30 days of such Seller becoming aware
thereof;
(e) the Sellers shall fail to pay any amount in respect of Indebtedness
in excess of CAD3.5 million (or the equivalent in any other
currency) in the aggregate, or any interest or premium thereon, in
any such case, when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) and such failure
shall continue after the applicable grace period, if any, specified
in any agreement or instrument relating to such Indebtedness or any
other default under any agreement or instrument relating to any
Indebtedness in excess of CAD5 million (or the equivalent in any
other currency) in the aggregate, or any other event, shall occur if
the effect of such default or event is to accelerate the maturity of
any Indebtedness; or any Indebtedness in excess of CAD5 million (or
the equivalent in any other currency) shall be declared to be due
and payable, or required to be prepaid (other than by a regularly
scheduled required prepayment), redeemed, purchased or defeased, or
an offer to prepay, redeem, purchase or defease any such
Indebtedness shall be required to be made, in any such case, prior
to the stated maturity thereof;
(f) except as permitted hereby, any Purchase ceases to create or result
in legal and equitable title to and ownership of all right, title
and interest in, to and under the related Purchased Assets in favour
of the Purchaser free and clear of any Lien, and any such failure
remains unremedied for 10 days after notice thereof to the Canadian
Seller;
(g) the relevant Seller shall generally not pay its debts as they become
due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of
creditors; or any proceedings shall be instituted by or against such
Seller seeking to adjudicate it bankrupt or insolvent, or seeking
liquidation, winding-up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency, reorganization or relief of
debtors, or seeking the entry of an order for relief by the
appointment of a receiver, trustee or other similar official for it
or for any substantial part of its property and, if such proceeding
has been instituted against such Seller, either such proceeding has
not been stayed or dismissed within 45 days or any of the actions
sought in such proceeding (including the entry of an order for
relief or the appointment of a receiver, trustee, custodian or
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OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
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ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
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other similar official) is granted in whole or in part, or such
Seller takes any corporate action to authorize any of the actions
described in this Section 7.1(g);
(h) in the reasonable opinion of the Securitization Agent, after
consultation with the Purchaser and the Credit Enhancer, (i) there
shall be evidence of fraud on the part of the relevant Seller or
(ii) there shall have occurred a material adverse change, other than
as a result of an event already listed in this Section 7.1, in the
financial condition or operations of the relevant Seller which could
have a Material Adverse Effect;
(i) the Insurance Policy is not renewed or is otherwise cancelled or
terminated and no replacement Credit Enhancer provides credit
enhancement acceptable to the Purchaser and the Securitization
Agent;
(j) there shall come into existence any prohibition at law against the
Seller selling, or the Purchaser purchasing, the Receivables, or the
Related Security and Collections relating thereto, pursuant to this
Agreement;
(k) denial of any claim under the terms of the Insurance Policy due to
negligence with respect to failing to comply with the Credit and
Collection Policies or fraud on the part of the Servicer or any
improper record keeping or servicing practices of the Servicer;
(l) the aggregate Credit Losses since the commencement of the then
current program year exceeds CAD5,000,000 converted, if required, at
the BoC Daily Noon Rate in effect at the time of the Credit Loss
original invoice date;
(m) the aggregate Credit Losses with respect to Discretionary Obligors
since the commencement of the then current program year exceeds
CAD2,500,000 converted, if required, at the BoC Daily Noon Rate in
effect at the time of the Credit Loss original invoice date;
(n) the weighted average Dilution Ratio exceeds 19.8% for a period of 7
consecutive days, calculated as the quotient of:
(i) the sum of:
(A) Dilution Ratio for Purchased Receivables denominated in
United States Dollars on that day, multiplied by the
Outstanding Principal Balance of Purchased Receivables
denominated in United States Dollars on that day,
converted to Canadian Dollars at the BoC Daily Noon Rate
on that day; and
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(B) Dilution Ratio for Purchased Receivables denominated in
Canadian Dollars on that day, multiplied by the
Outstanding Principal Balance of Purchased Receivables
denominated in Canadian Dollars on that day; over
(ii) the Outstanding Principal Balance of all Purchased Receivables
on that day, with Purchased Receivables denominated in United
States Dollars converted to Canadian Dollars at the BoC Daily
Noon Rate on that day;
(o) the weighted average Default Ratio exceeds 15.0% for a period of 7
consecutive days, which on any day is equal to the quotient of:
(i) the sum of:
(A) Default Ratio for Purchased Receivables denominated in
United States Dollars on that day, multiplied by the
Outstanding Principal Balance of Purchased Receivables
denominated in United States Dollars on that day,
converted to Canadian Dollars at the BoC Daily Noon Rate
on that day; and
(B) Default Ratio for Purchased Receivables denominated in
Canadian Dollars on that day, multiplied by the
Outstanding Principal Balance of Purchased Receivables
denominated in Canadian Dollars on that day; over
(ii) the Outstanding Principal Balance of all Purchased Receivables
on that day, with Purchased Receivables denominated in United
States Dollars converted to Canadian Dollars at the BoC Daily
Noon Rate on that day;
(p) the weighted average DSO exceeds 85 days for a period of 7
consecutive days, which on any day is equal to the quotient of:
(i) the sum of:
(A) DSO for Purchased Receivables denominated in United
States Dollars on that day, multiplied by the
Outstanding Principal Balance of Purchased Receivables
denominated in United States Dollars on that day,
converted to Canadian Dollars at the BoC Daily Noon Rate
on that day; and
(B) DSO for Purchased Receivables denominated in Canadian
Dollars on that day, multiplied by the Outstanding
Principal Balance of
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Purchased Receivables denominated in Canadian Dollars on
that day; over
(ii) the Outstanding Principal Balance of all Purchased Receivables
on that day, with Purchased Receivables denominated in United
States Dollars converted to Canadian Dollars at the BoC Daily
Noon Rate on that day;
(q) if greater than 10% of the Outstanding Principal Balance of
Purchased Receivables owing by the Obligors thereunder during a
calendar month are not deposited into the Collection Account as
required by Section 3.1(c);
(r) the balance of the applicable Reserve Account is less than the
Required Balance in the same currency as the Reserve Account for a
period of 7 consecutive days;
(s) if the Sellers' Consolidated Shareholders' Equity, plus the value,
at the time of issuance, of any preference shares (including any
series thereof) issued to the shareholders of the Canadian Seller
and not included in the Consolidated Shareholders' Equity falls
below CAD40 million; and
(t) any of (i) the long-term debt rating of the Insurer falls below A-
by Standard & Poors Corporation, and the Insurance Policy is not
replaced with another Insurer within 30 Business Days.
7.2 Action Upon an Amortization Event
Upon the occurrence of any Amortization Event described in Sections
7.1(b), (c), (d), (h), (i), (j) or (k), the Purchaser or its authorized agent
may, by notice to the Canadian Seller, declare the Amortization Commencement
Date to have occurred on the date specified in such notice, which date shall be
not less than two Business Days subsequent to the date such notice is given to
the Canadian Seller. If the Canadian Seller gives notice to the Purchaser that
any Amortization Event described in Sections 7.1(l) through (o), inclusive, has
occurred, or if the Purchaser gives notice to the Canadian Seller that the
Purchaser has determined that any such Amortization Event has occurred, the
Amortization Commencement Date shall occur automatically upon the giving of such
notice by the Canadian Seller to the Purchaser or by the Purchaser to the
Canadian Seller, as the case may be, without the necessity of any further
notice. Upon the occurrence of any other Amortization Event described in Section
7.1, the Amortization Commencement Date will occur automatically, without the
necessity of any notice; provided, however, that the Purchaser will provide
notice of such occurrence promptly upon having actual knowledge of the
occurrence of such event and provided that the Purchaser's failure to provide
any such notice shall not derogate from its rights and remedies hereunder. Upon
any such declaration or automatic occurrence, the Purchaser shall have, in
addition to its rights and remedies hereunder and under the Related Documents,
all other rights and remedies under applicable laws and otherwise, which rights
and remedies will be cumulative. Notwithstanding
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the above, the Purchaser, with the consent of the Credit Enhancer, may waive any
Amortization Event in its sole discretion.
7.3 Seller Designated Amortization Commencement Date
The Canadian Seller may designate any Business Day as the
Amortization Commencement Date if the Sellers' Auditors, acting reasonably,
determine that any purchase proposed to be made pursuant to Section 2.1 will not
result in the relevant Purchased Assets being removed from the Sellers' balance
sheet under Canadian GAAP or US GAAP, and the Canadian Seller has provided a
letter from the Sellers' Auditors addressed to each of the Purchaser, the Credit
Enhancer and the Securitization Agent setting out the rationale therefor.
7.4 Early Amortization Commencement Date Fee
If an Amortization Commencement Date results from the designation by
the Canadian Seller thereof pursuant to clause (c) of the definition of
Amortization Commencement Date and such Amortization Commencement Date falls
within three years of the date hereof, the Canadian Seller shall pay a fee to
the Securitization Agent on behalf of the Purchaser equal to the product of (a)
0.80%, (b) the Purchase Limit, (c) 0.50 if the declaration occurs less than two
years after the date hereof or 0.25 if the declaration occurs on or after two
years from the date hereof and (d) the number of days between the original
Amortization Commencement Date and the designated Amortization Commencement
Date, divided by 365; provided, however, that no such fee shall be payable in
circumstances where the Canadian Seller's designation is a direct result of (i)
repeated aberrations in the Purchaser's ability to raise the funds required to
effect Purchases, (ii) the premiums due under the Insurance Policy exceeding the
Insurance Premium Limit, (iii) the Insurance Policy being materially amended or
terminated, (iv) the Canadian Seller being unable to achieve off balance sheet
treatment according to Canadian GAAP or US GAAP by December 31, 2004, (v) a
business disruption to the Sellers as provided for in Section 10.20, (vi) the
payment of a third party expense that exceeds CAD35,000 as provided for in
Section 2.1(d)(vi) or 3.3(d)(ii), (vii) an assignment of this Agreement by the
Purchaser where the assignment is reasonably likely to result in a materially
higher cost to the Sellers; or (viii) the Securitization Agent or the Purchaser
failing to perform or observe any term, condition, covenant or agreement to be
performed or observed by it hereunder or any other agreement relating hereto and
any such failure remains unremedied for 30 days after notice thereof by the
Canadian Seller to the Purchaser and Securitization Agent.
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OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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ARTICLE 8
MATTERS RELATING TO THE SECURITIZATION AGENT
8.1 Delegation to the Securitization Agent
The Purchaser may delegate to the Securitization Agent all or any of
its powers, rights and discretion hereunder, and the Securitization Agent may
from time to time take such actions and exercise such powers for and on behalf
of the Purchaser as are delegated to it or contemplated hereby and all such
actions and powers as are reasonably incidental thereto. The Sellers shall be
entitled to and be fully protected in relying on any instruction made or given
by the Securitization Agent in accordance with this Section 8.1, and shall have
no liability to the Purchaser in respect of such reliance.
8.2 Limitation of Liability of the Securitization Agent and Issuer Trustee
This Agreement shall be deemed and construed for all purposes as
being made by the Securitization Agent in, and only in, its capacity as agent of
the Purchaser. This Agreement shall be deemed and construed for all purposes as
made by the Issuer Trustee, in, and only in, its capacity as trustee of the
Purchaser through its agent, the Securitization Agent. Except for the gross
negligence or wilful misconduct on the part of the Securitization Agent, the
Securitization Agent and its directors, officers, agents, employees, consultants
and shareholders shall have no liability under this Agreement and any liability
of the Issuer Trustee under this Agreement is non-recourse to the Issuer Trustee
in its personal capacity and limited solely to the property of the Purchaser. No
property of the Securitization Agent and no other property or assets of the
Issuer Trustee, whether owned by it in its personal capacity or otherwise, will
be subject to levy, execution or other enforcement procedure with regard to any
obligation under this Agreement. Without limiting the generality of the
foregoing, and notwithstanding any term or provision hereof to the contrary, the
Sellers hereby acknowledge and agree that the Securitization Agent acts as agent
for the Purchaser and has no duties or obligations to, will incur no liability
to, and does not act as an agent in any capacity for, the Sellers.
8.3 Responsibilities of the Sellers
The parties acknowledge that the Sellers are not selling,
transferring or assigning to the Purchaser their rights or obligations under any
Contract except to the extent necessary for the collection and enforcement of
the Purchased Receivables arising out of the Contract. In this regard, and
notwithstanding anything contained herein to the contrary:
(a) each Seller shall remain responsible and liable under the Purchased
Receivables, the Related Security and any Contract for the
performance of all such Seller's duties and obligations thereunder
notwithstanding the sale to the Purchaser of the Receivables payable
thereunder;
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
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ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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(b) the exercise by the Purchaser (directly or through the
Securitization Agent) of any of its rights hereunder shall not
release the Sellers from any of their duties or obligations with
respect to, or under, the Purchased Receivables, the Related
Security or any Contract; and
(c) neither the Purchaser nor the Securitization Agent will have any
duty or obligation with respect to any Receivables or Contracts, nor
will the Purchaser or the Securitization Agent be obligated to
perform any of the duties or obligations of the Sellers thereunder.
8.4 Other Dealings
The Purchaser and its agents, including the Securitization Agent,
the Stand-By Servicer and each of their respective Affiliates, if any, may
generally engage in any kind of business with the Sellers, the Purchaser, any
Obligor, any of their respective Affiliates and any Person who may do business
with or own securities of any thereof, all as if they did not have rights or
obligations hereunder or under any related deed or agreement, and without any
duty to account therefor hereunder to the Sellers, the Purchaser or any other
Person.
8.5 Lockbox Fees
The Sellers agree to pay the fees relating to the Lockbox (and the
services of Symcor Inc. and ▇▇▇▇▇▇ Trust and Savings Bank in connection
therewith) to the Securitization Agent forthwith upon receipt by the Sellers of
an invoice from the Securitization Agent for such fees. If such fees are, in the
opinion of the Sellers, acting reasonably, not competitive with other lockbox
service providers, the parties agree to take all reasonably necessary steps to
put in place alternative lockbox arrangements.
ARTICLE 9
INDEMNIFICATION
9.1 Indemnities by the Sellers
Without prejudice to any other rights of the Purchaser hereunder or
under any applicable Law, the Sellers (which, in this Article 9 shall include
the Canadian Seller in its capacity as Servicer), jointly and severally, hereby
agree to indemnify each of the Securitization Agent (in its own capacity and in
trust for each of its shareholders, officers, employees, agents and permitted
assigns) and the Purchaser (in its own capacity and in trust for each of its
beneficiaries, the Issuer Trustee and permitted assigns) (collectively, the
"Indemnified Parties") and to save them harmless from and against any and all
damages, losses, claims, liabilities, costs and expenses (including reasonable
legal fees and disbursements on a solicitor and client basis, but excluding
consequential, indirect, punitive or exemplary damages and any loss of future
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
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profit or fees) (all of the foregoing being collectively referred to as
"Indemnified Amounts") awarded against or incurred by any of them arising out of
or as a result of:
(a) the sale, transfer and assignment by the Sellers to the Purchaser of
a Receivable, other than a Quebec Receivable, which at the time of
such transfer was not an Eligible Receivable;
(b) the Payment by the Purchaser to the Sellers, in respect of a Quebec
Receivable, which at the time of such Payment, was not an Eligible
Receivable;
(c) reliance on any representation or warranty made or deemed to be made
by the Sellers (or any of their directors and officers) in or in
connection with this Agreement, any Periodic Report or any Related
Document which was incorrect in any material respect when made or
deemed made or delivered;
(d) the failure by the Sellers to comply with any applicable Law with
respect to any Receivable that would constitute an Eligible
Receivable hereunder and any Contract or Related Security in respect
thereof, or to perform its material obligations under any such
Contract, or the non-conformity of any such Receivable, Contract or
Related Security with any applicable Law;
(e) the failure to sell, assign, transfer and convey absolutely to the
Purchaser either legal or equitable ownership in, and to vest in and
maintain vested in the Purchaser such Receivables as are, or are
intended to be, Purchased Receivables and all Collections and
Related Security related thereto, and/or the failure to transfer
such Collections received by the Sellers to the Securitization Agent
for the benefit of the Purchaser, all free and clear of any Lien
(whether existing at the time of the purchase under this Agreement
or intended purchase thereof or arising at any time thereafter);
(f) the failure to file in a timely fashion financing statements or
other similar instruments or documents, or instruments of
assignment, under any applicable Law with respect to this Agreement
or any Purchase under this Agreement, whether at the time of any
Purchase or at any time thereafter;
(g) the payment by the Purchaser of any amount of Collections to the
Sellers which, for any reason whatsoever, should not have been paid
to the Sellers;
(h) any dispute, claim, set-off or defence of an Obligor (other than as
a result of the Obligor's discharge in bankruptcy or a statutory
limitation on the rights of secured parties to exercise their
remedies) to the payment of any Purchased Receivable, including a
defence based on the Purchased Receivables not being a legal, valid
and binding obligation of the Obligor, enforceable against the
Obligor in
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CAPITAL CORPORATION.
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accordance with its terms, or any other claim resulting from the
sale of any goods or services relating to such Purchased Receivable
or the furnishing or failure to furnish any such goods or services;
(i) any products liability claim, suit or other similar or related claim
or action of whatsoever sort arising out of or in connection with
any goods or services that are the subject of any Purchased
Receivable or Contract related thereto;
(j) any failure of the Sellers to perform or observe any of their
duties, covenants or obligations under this Agreement, the Cheque
Deposit Agreement or any other agreement relating hereto or
contemplated hereby;
(k) any Canadian, foreign, federal, provincial, state, municipal, local
or other Tax of any kind or nature whatsoever that may be imposed on
the Securitization Agent or the Purchaser on account of any payment
made under this Article 9; provided that, in respect of any such
Taxes for which the Purchaser may be liable, the Sellers shall
indemnify and hold harmless the Purchaser only in respect of any
such Taxes imposed after the date of this Agreement;
(l) any Canadian, foreign, federal, provincial, state, municipal, local
or other Tax of any kind or nature whatsoever that may be imposed on
the Purchaser or the Purchased Assets (except for Taxes on the net
income, profits or capital of the Purchaser and any additional Taxes
that result solely by virtue of an assignment by the Purchaser to or
the exercise of any rights under this Agreement by a non-resident of
Canada) with respect to, or resulting from any delay in paying or
any omission to pay, any Taxes required to be paid, deducted or
withheld and remitted, in connection with the execution, delivery,
filing, recording and enforcement hereof and of the Related
Documents or in connection with the consummation of the transactions
(including any Purchase by the Purchaser of Purchased Receivables
and Related Security related thereto) or performance of the
obligations contemplated hereby and thereby; provided that the
Purchaser shall first provide the Sellers with reasonable
documentary evidence that such Taxes or payments are due and owing
by the Purchaser and further provided that no such gross-up shall be
required, or, as the case may be, any such payment otherwise
required shall be reduced, in either case, to the extent of,
determined in the sole discretion of the Purchaser, any benefit,
deduction, credit or other reduction in Taxes received by or
otherwise allowed to the Purchaser in respect of any such payment;
or
(m) any remittance from Collections which may be required by the
Minister of National Revenue pursuant to the Excise Tax Act
(Canada), provided that any payment required under this Section
9.1(m) shall be reduced to the extent of,
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OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
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ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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determined in the sole discretion of the Purchaser, any benefit,
deduction, credit or other reduction in Taxes received by or
otherwise allowed to the Purchaser in respect of any such payment,
excluding, however, in each case, Indemnified Amounts to the extent resulting
from: (i) the failure of any Obligor to pay an amount owing under a Purchased
Receivable or any Related Security; (ii) the gross negligence, wilful misconduct
or breach of contract on the part of any Indemnified Party; (iii) recourse
(except as otherwise specifically provided in this Agreement) for uncollectable
Receivables; (iv) any overall net income taxes or franchise taxes imposed on
such Indemnified Party by the jurisdiction under the laws of which such
Indemnified Party is organized or any political subdivision thereof; or (v) any
consequential, punitive or exemplary damages. If indemnification is to be sought
hereunder, then the Indemnified Party shall promptly notify the Sellers of the
commencement of any lawsuit, investigation, claim or dispute to be made by the
Indemnified Party or by any other Person (collectively, a "Lawsuit"); provided,
however, that the failure to notify the Sellers shall not relieve the Sellers
from any liability or obligation that it may have hereunder, except to the
extent the Sellers are actually prejudiced thereby. Following such notification,
the Sellers may elect in writing to assume the defence of any Lawsuit (and the
costs related thereto) commenced by a third party and the Indemnified Party and
the Sellers shall reasonably co-operate in connection therewith and, upon such
election, the Sellers shall not be liable for any legal costs subsequently
incurred by such Indemnified Party (other than costs of investigation or the
production of documents or witnesses) unless (i) the Sellers have failed to
provide legal counsel reasonably satisfactory to such Indemnified Party in a
timely manner or (ii) such Indemnified Party shall have been advised by legal
counsel that (A) the representation of such Indemnified Party by legal counsel
selected by the Sellers would be inappropriate due to actual or potential
conflicts of interest or (B) there may be significant legal defences available
to such Indemnified Party that are different from or additional to those
available to the Sellers or any other Indemnified Party represented by such
legal counsel. In no event, however, shall the Sellers, in connection with any
one action or proceeding or separate but substantially similar or related
actions or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one law firm (together with any appropriate local counsel) at any time acting
for all Indemnified Parties hereunder. Notwithstanding anything to the contrary
contained herein, the Sellers shall not have any obligation to hold harmless or
indemnify any Indemnified Party hereunder or pay any legal costs for any
Indemnified Party if such Indemnified Party enters into any settlement of a
Lawsuit without the prior consent of the Sellers, which consent shall not be
unreasonably withheld.
9.2 Payment of Indemnified Amounts
At the Purchaser's option, any payment required to be made pursuant
to Section 9.1 on account of an Indemnified Amount by the Sellers to the
Purchaser shall be made either by the Purchaser deducting the Indemnified Amount
from amounts owing by the Purchaser to the
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OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
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ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
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Sellers hereunder or by way of deposit by the Sellers to the Purchaser's Account
forthwith following a claim therefor by or on behalf of the Purchaser on its own
behalf and in trust for the other Indemnified Parties.
9.3 Litigation
At the request of the Purchaser or the Securitization Agent, the
Sellers shall, at their expense, assist and co-operate with the Purchaser in any
action, suit or proceeding brought by or against, or any investigation
involving, the Indemnified Parties relating to any of the transactions
contemplated by this Agreement or to any of the Purchased Assets or Contracts
(other than an action, suit or proceeding by the Sellers against the Purchaser
or the Securitization Agent). In addition, the Sellers agree to notify the
Securitization Agent and the Purchaser, at the Sellers' expense, promptly upon
learning of any pending or threatened action, suit, proceeding or investigation
if any damages, losses, claims, liabilities, costs or expenses in connection
with any such action, suit, proceeding or investigation or the defence thereof
could be Indemnified Amounts and (except for an action, suit, proceeding or
investigation by the Sellers against the Purchaser or the Securitization Agent)
to consult with the Purchaser concerning the defence thereof and prior to any
settlement thereof; provided, however, that if (i) the Sellers shall have
acknowledged in writing that any such damages, losses, claims, liabilities,
costs or expenses would be Indemnified Amounts, and (ii) in the Securitization
Agent's and the Purchaser's joint determination, the Sellers have the financial
ability to satisfy such damages, losses, claims, liabilities, costs or expenses,
then the Sellers shall have the right, on the Indemnified Parties' behalf but at
the Sellers' expense, to defend such action, suit, proceeding or investigation
with counsel selected by the Sellers and shall have sole discretion as to
whether to litigate, appeal or enter into an exclusively monetary settlement.
9.4 Notification
The Sellers shall promptly notify the Purchaser of any claim or
threatened claim which may, in the Sellers' reasonable opinion, give rise to
indemnification pursuant to this Article 9.
ARTICLE 10
MISCELLANEOUS
10.1 Costs, Expenses and Taxes
(a) In addition to the rights of indemnification provided for in Article 9
and the fees payable by the Sellers hereunder, the Sellers, jointly and
severally, hereby agree to pay on demand all reasonable costs and expenses of
the Purchaser and the Securitization Agent, including the legal fees and other
reasonable expenses of counsel to the Purchaser and the Securitization Agent
(including goods and services taxes and disbursements), in connection with:
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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(i) any amendment to this Agreement or any waiver of any provision of this
Agreement requested by the Sellers or required or initiated by any action or
failure to act by the Sellers (including any amendment or waiver that, in the
opinion of the Securitization Agent, requires the Securitization Agent to
perform a credit review of the transaction or event associated with or giving
rise to such amendment or waiver but excluding any amendment(s) relating solely
to the structure of the Trust and unrelated to the Sellers); and (ii) the
enforcement of this Agreement or any Related Document. For greater certainty,
all costs and expenses of the Purchaser and the Securitization Agent incurred
after the occurrence of an Amortization Event in connection with administering
and collecting the Purchased Receivables shall be deemed to be costs and
expenses incurred in connection with the enforcement of this Agreement and the
Related Documents.
(b) The Sellers shall:
(i) jointly and severally, pay on demand any and all stamp,
filing, recording and other Taxes and fees payable or
determined to be payable in connection with the execution,
delivery, filing, recording or enforcement of this Agreement
or any Related Document, provided that no payment shall be
required to be made by the Sellers under this Section
10.1(b)(i) in respect of Taxes on the net income, profits or
capital of the Purchaser or any additional Taxes that result
solely by virtue of an assignment by the Purchaser to, or the
exercise of any rights hereunder by, a non-resident of Canada;
and
(ii) reimburse on demand the Purchaser for any overpayment made to
the Sellers or any loss in respect of any Purchase Amount
resulting from a miscalculation by the Purchaser or the
Securitization Agent in determining the Purchase Price
(including any Purchase Amount) or Payment Price, as
applicable, in respect of a Purchased Receivable or any
component thereof or any other amount; provided, however, that
the Purchaser will request such reimbursement in writing and
will explain, in reasonable detail, such miscalculation, and
further provided that the amount of such reimbursement shall
not exceed the amount which should initially have been paid to
the Purchaser but for such miscalculation, plus interest at
the applicable Base Interest Rate plus 0.30%.
(c) The Purchaser shall reimburse on demand the Sellers for any
overpayment made to the Purchaser or for the failure by the Purchaser to
transfer funds to the Sellers pursuant to Section 3.1(e) or on the Final
Collection Date; provided, however, that the Canadian Seller, for and on behalf
of the Sellers, will request such reimbursement in writing and will explain, in
reasonable detail, such overpayment, and further provided that the amount of
such
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
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reimbursement shall not exceed the amount which should initially have been paid
to the Sellers, plus interest at the applicable Base Interest Rate plus 0.30%.
10.2 Further Assurances
Each of the parties hereto upon the request of another party,
whether before or after the closing of any transaction contemplated hereby,
shall do, execute, acknowledge and deliver or cause to be done, executed,
acknowledged or delivered all such further acts, deeds, documents, assignments,
transfers, conveyances and assurances as may be reasonably necessary or
desirable to effect complete consummation of the objects of and the transactions
contemplated by this Agreement. Without limiting the generality of the
foregoing, upon an Amortization Commencement Date, the Purchaser shall, at the
expense and request of the Canadian Seller, for and on behalf of the Sellers,
without any representations, warranties or recourse of any kind whatsoever,
enter into such agreements, acknowledgements, releases and other instruments
that in the Canadian Seller's sole discretion, acting reasonably, are necessary
to release any Receivables (which, for greater certainty, shall under no
circumstances include any Purchased Receivables) that are generated after the
Amortization Commencement Date from any liens in favour of the Purchaser.
10.3 Failure to Perform
If the Servicer fails to perform any of its agreements or
obligations hereunder, the Securitization Agent and/or the Purchaser may (but
will not be required to) perform, or cause to be performed, such agreement or
obligation, and the reasonable expenses of the Securitization Agent and/or the
Purchaser, as the case may be, incurred in connection therewith will be payable
by the Sellers as provided in Section 10.1.
10.4 Entire Agreement
This Agreement, together with all Related Documents, contains the
entire agreement by the parties hereto with respect to the subject matter hereof
and shall constitute the entire and only agreement between the parties with
respect to the subject matter hereof, superseding any and all prior
negotiations, understandings and agreements, written or oral. There are no
representations, warranties, terms, conditions, undertakings or collateral
agreements, express, implied or statutory, between the parties, except as
expressly set forth herein.
10.5 Amendments, Waivers, Etc.
No amendment or waiver of any provision of this Agreement nor
consent to any departure by the Sellers, the Servicer, the Purchaser or the
Securitization Agent therefrom shall be effective in whole or in part unless the
amendment, waiver or consent is in writing and signed by (a) the Sellers and the
Purchaser (with respect to an amendment), (b) the Purchaser or any
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
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agent on its behalf (with respect to a waiver or consent by it), (c) the
relevant Seller (with respect to a waiver or consent by the relevant Seller),
(d) the Securitization Agent (with respect to a waiver or consent by it), or to
the extent it affects the rights, duties or obligations of the Securitization
Agent, and then, in any such case, such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given. In each case, the Credit Enhancer shall have consented to any such
amendments, waivers or consents. For greater certainty, the provisions of
Article 9 may be amended without the consent of those Indemnified Parties whose
interest therein is held in trust by the Securitization Agent or the Purchaser,
as the case may be.
10.6 No Waiver; Remedies
No failure on the part of the Purchaser to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by Law.
Without limiting the generality of the foregoing, the Purchaser is hereby
authorized by the Sellers at any time and from time to time, to the fullest
extent permitted by Law, to set off and apply any and all amounts at any time
held and other indebtedness at any time owing by the Purchaser to or for the
credit or the account of the Sellers in respect of the transactions contemplated
by this Agreement against any and all of the obligations of the Sellers, now or
hereafter existing under this Agreement and the Related Documents.
10.7 No Set-Off
The Sellers (including the Canadian Seller whether acting in its
personal capacity or as Servicer) shall make all payments required to be made by
it hereunder without deduction or set-off, regardless of any defence or
counterclaim (whether based on any Law or policy now or hereafter issued or
enacted by any Governmental Authority).
10.8 Non-Merger
Each party hereby agrees that all provisions of this Agreement are
material and shall survive the execution, delivery and performance of this
Agreement, the closing of any transactions contemplated hereby and the
execution, delivery and performance of any and all documents delivered in
connection herewith.
10.9 Time of the Essence
Time shall be of the essence of this Agreement and of every
provision hereof.
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
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10.10 Agreement of Purchase and Sale
Each of the Sellers and the Purchaser hereby expressly acknowledges
that this Agreement, except as is specifically provided with respect to the
duties and obligations of the Servicer, is intended to create a relationship of
purchaser and vendor. Each of the Sellers and the Purchaser hereby expressly
disclaims any intention to establish a trust relationship or, except as is
specifically provided with respect to the duties and obligations of the
Servicer, or by Section 5.16 or 5.17, to constitute either the Sellers or the
Purchaser as the agent of the other. Each of the Sellers and the Purchaser
covenants with each other that it will not, at any time, allege or claim that a
relationship of trust or agency is created hereby, except as otherwise expressly
provided for herein.
10.11 Notices
All notices, consents or other communications authorized or required
to be given pursuant to this Agreement, or pursuant to which any rights or
obligations may arise hereunder, shall be in writing (including facsimile
communication and such other method of recorded communications as to which the
parties may hereafter agree to in writing) and shall be either personally
delivered or sent by facsimile as follows:
(a) in the case of communication to the Sellers:
Mitel Networks Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
Attention: Treasurer
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No: 613-592-2122 ext. 4431
with a copy, for any default-related communication, to:
Attention: Legal Department
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Osler, ▇▇▇▇▇▇ & Harcourt LLP
1 First Canadian Place
PO Box 50, Stn. 1st Can. Pl.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
(b) in the case of communication to the Securitization Agent or the
Purchaser:
Efficient Capital Corporation
▇▇▇▇ - ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: Chief Operating Officer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Any notice or other communication given by personal delivery will be
conclusively deemed to have been given and received on the day of actual
delivery thereof and, if given by facsimile, on the day of transmittal thereof
if given during the normal business hours of the recipient and on the next
Business Day if not given during such business hours on any day. A party may
change its address for receipt of notices or other communications hereunder by
giving notice thereof to the other party in the manner aforesaid.
10.12 Binding Effect; Assignability, Etc.
(a) This Agreement shall be binding upon and inure to the benefit of the
Sellers, the Purchaser and their respective successors and assigns. Except as
otherwise permitted hereby, no party may assign its rights hereunder or any
interest herein without the prior consent of the other parties, such consent not
to be unreasonably withheld, and provided that any assignee hereunder agrees to
be bound by Section 10.15 to the same extent as the assigning party.
Notwithstanding any other provision of this Agreement, upon the occurrence of an
Amortization Event, the Purchaser may, subject to the provisions of Section
10.15, sell, assign and transfer any Purchased Assets (in whole or in part) to,
or encumber or grant any security interest in or over any Purchased Assets (in
whole or in part) in favour of, any Person, without consent of or notice to the
Sellers and the Purchaser may also sell, assign, or transfer to any such Person
any of its rights hereunder or interest herein on the same basis for the purpose
of giving effect to any such sale, assignment or transfer of Purchased Assets or
encumbrance or grant of a security interest. Upon any sale, assignment or
transfer referred to in the preceding sentence, such Person shall be fully
subrogated to all rights, benefits and privileges of the Purchaser hereunder and
shall be bound by all terms and provisions of this Agreement with respect to
such Purchased Assets. If this Agreement and the Related Documents and
agreements are assigned by the Purchaser, the assignee shall be responsible for
any additional costs and expenses arising as a direct result of such assignee.
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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(b) Notwithstanding Section 10.12(a), the Purchaser may, subject to the
provisions of Section 10.15, (i) assign by way of security and/or subrogation
its rights hereunder to the Indenture Trustee and/or the Insurer and (ii) assign
to the Insurer the benefit of the representations and warranties provided by the
Sellers hereunder and the benefit of Article 9 with respect thereto, in each
case without the prior written consent of the Sellers.
10.13 Governing Law
This Agreement shall be governed by, and construed in accordance
with, the laws of the Province of Ontario and the federal laws of Canada
applicable therein.
10.14 Severability
Any provision hereof that is prohibited or unenforceable in whole or
in part in any jurisdiction shall, as to such provision and such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
10.15 Confidentiality
The Purchaser, the Sellers and the Securitization Agent each
acknowledge that this Agreement, agreements and documents related hereto and all
data and information delivered hereunder by one party to another, shall be
considered as non-public information of the party making delivery, and each
party shall make all reasonable efforts to hold all such non-public information
in the strictest confidence in accordance with best prudent practice for
handling confidential information of such nature and shall only use such
information in connection with the transactions contemplated hereunder; provided
that, notwithstanding the foregoing, the Purchaser, the Sellers and the
Securitization Agent each may make disclosure of such non-public information (i)
to its accountants, lawyers, bankers and other advisors on a need-to-know basis,
(ii) as requested or required by any Governmental Authority, securities
regulatory authority or representative thereof or pursuant to legal process or
when required under applicable Law, (iii) to the Credit Enhancer, (iv) to the
institutional shareholder of the Securitization Agent, (v) to implement the
terms of this Agreement or to enforce any rights which it may have to collect
any Purchased Receivable or to enforce its respective rights with respect to any
Related Security, (vi) to the Stand-By Servicer (provided, however, that the
Purchaser shall require the Stand-By Servicer to agree to be bound by the
provisions of this Section 10.15 to the same extent as the Purchaser) or (vii)
with the consent of the other parties hereto. Unless specifically prohibited by
applicable Law, each party hereto shall notify the other parties hereto of any
request by any Governmental Authority, securities regulatory authority or
representative thereof or other Person for disclosure of any such non-public
information prior to disclosure of such information to permit the party affected
to contest such disclosure, if possible. In no event shall the Purchaser or the
Securitization Agent be obligated or required to return any materials furnished
by the
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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Sellers. Nothing in this Agreement shall obligate the Sellers or the Servicer to
disclose (whether in any Related Document or otherwise) all or any part of any
Records if such disclosure or the manner or form thereof could, in the
reasonable opinion of the Sellers or the Servicer, constitute a breach of any
Law or any duty of secrecy or confidentiality applicable to it.
10.16 Financial Reporting
The Sellers and the Purchaser hereby covenant and agree that they
will not at any time prepare any financial statements (other than those prepared
for internal reporting purposes) that account for the transactions contemplated
hereby in a manner that is inconsistent with the sale to the Purchaser of the
Purchased Assets except to the extent required by Canadian GAAP or US GAAP.
10.17 Consent to Jurisdiction; Waiver of Immunities
(a) The parties hereby irrevocably submit to the jurisdiction of any court
sitting in Toronto, Ontario in any action or proceeding arising out of or
relating to this Agreement, and the parties hereby irrevocably agree that all
claims in respect of such action or proceeding may be heard and determined in
such court. The parties hereby irrevocably waive, to the extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding. The parties hereby agree that a final judgment in any action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
(b) Nothing in this Section 10.17 shall affect the right of any party to
serve legal process in any other manner permitted by law, or affect its right to
enforce any action, proceeding or judgment against the other parties or their
property in the courts of other jurisdictions.
(c) To the extent that the Sellers have or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, the
Sellers hereby irrevocably waive, to the extent permitted by law, such immunity
in respect of its obligations hereunder.
10.18 Remedies
The remedies provided for herein are cumulative and not exclusive of
any remedies provided by law.
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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10.19 Counterparts
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same instrument. For all purposes of this Agreement and
all other documents and agreements contemplated hereby, the signature of any
party hereto or thereto, evidenced by a telecopy showing such signature or other
electronically transmitted version of such signature, shall constitute
conclusive proof for all purposes of the signature of such person to such
documents and agreements, to the same extent in all respects as a copy of such
documents and agreements showing the original signature of such party.
10.20 Business Disruption
The Canadian Seller, for and on behalf of the Sellers, may, upon
providing 60 days notice to the Purchaser, designate an Amortization
Commencement Date, where, in the reasonable opinion of the Canadian Seller, the
requests made by the Purchaser and directed to the Sellers with respect to the
production of any information or documentation related to the Seller hereunder,
become materially disruptive to the Sellers' business.
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first written above.
MITEL NETWORKS CORPORATION
by _______________________________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Treasurer
MITEL NETWORKS, INC.
by _______________________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
MITEL NETWORKS SOLUTIONS, INC.
by _______________________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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THE CANADA TRUST COMPANY, in its
capacity as trustee of ENDURANCE
TRUST, by Efficient Capital
Corporation, in its capacity as
Securitization Agent
by ________________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
EFFICIENT CAPITAL CORPORATION, in its
capacity as Securitization Agent
by __________________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
CONFIDENTIAL
EXHIBIT A
FORM OF ASSIGNMENT AGREEMENT
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
CONFIDENTIAL
EXHIBIT B
FORM OF PURCHASE NOTICE
TO: ENDURANCE TRUST c/o Efficient Capital Corporation
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
This Purchase Notice is delivered to you pursuant to the receivables
purchase agreement made as of April 16, 2004 (the "Receivables Purchase
Agreement") between Mitel Networks Corporation, as Canadian Seller, Mitel
Networks, Inc., as Seller, and Mitel Networks Solutions, Inc., as Seller, and
collectively, the Sellers, Endurance Trust, as Purchaser, and Efficient Capital
Corporation, as Securitization Agent.
The Canadian Seller, for and on behalf of the Sellers, hereby gives
notice to the Purchaser that: (i) in respect of the Non-Quebec Eligible
Receivables set out in the attached Schedule it offers for sale on the date
below such Eligible Receivables; and (ii) in respect of the Quebec Eligible
Receivables set out in the attached Schedule, it requires payment for such
Eligible Receivables, all in accordance with the terms of the Receivables
Purchase Agreement.
Purchase Date:
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
CONFIDENTIAL
SCHEDULE A TO PURCHASE NOTICE
LIST OF RECEIVABLES
-------------------------------------------------------------------------------
Invoice Number Date of Issue Due Date Obligor Outstanding Amount
-------------------------------------------------------------------------------
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DATED the ______________ day of _____________________, ______________.
MITEL NETWORKS CORPORATION
By________________________________________
(Authorized Officer)
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
CONFIDENTIAL
EXHIBIT c
FORM OF OFFICERS' CERTIFICATE
The undersigned Canadian Seller hereby certifies for itself
and on behalf of the Sellers to Endurance Trust that no event has occurred and
is continuing which constitutes, or but for the requirement that notice be given
or lapse of time or both would constitute, an Amortization Event (as defined in
the Receivables Purchase Agreement between the Sellers, the Purchaser and the
Securitization Agent made as of April 16, 2004).
DATED the ______________ day of _____________________, ______________.
MITEL NETWORKS CORPORATION
By________________________________________
(Authorized Officer)
Title_____________________________________
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
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EXHIBIT D
LIST OF OFFICES WHERE RECORDS ARE KEPT
The undersigned Canadian Seller hereby certifies for itself and on
behalf of the Sellers, to Endurance Trust that the following list includes all
locations where all records required under the terms and conditions of the
Receivables Purchase Agreement between Mitel Networks Corporation, Mitel
Networks, Inc., Mitel Networks Solutions, Inc. and Endurance Trust, made as of
April 16, 2004 are kept.
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OFFICE ADDRESS
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Seller:
By:
Title:
DATE:
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
CONFIDENTIAL
EXHIBIT E
FORM OF PERIODIC REPORT
TO: ENDURANCE TRUST c/o Efficient Capital Corporation
This Periodic Report is delivered to you pursuant to the receivables
purchase agreement made as of April 16, 2004 (the "Receivables Purchase
Agreement") between Mitel Networks Corporation, as Canadian Seller, Mitel
Networks, Inc., as Seller, and Mitel Networks Solutions, Inc., as Seller, and
collectively, the Sellers, Endurance Trust, as Purchaser, and Efficient Capital
Corporation, as Securitization Agent.
The Canadian Seller, for and on behalf of the Sellers, hereby
gives notice to the Purchaser that on the date hereof the Servicer has applied
the following payments, dilutions and defaults:
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Obligor ID Invoice Number Payment Date Payment Amount Transaction Type
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THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.
CONFIDENTIAL
EXHIBIT F
FORM OF QUEBEC ASSIGNMENT
THIS DOCUMENT AND ANY COPIES THEREOF, ELECTRONIC OR OTHERWISE, ARE THE PROPERTY
OF EFFICIENT CAPITAL CORPORATION. UNAUTHORIZED DISTRIBUTION OF THIS DOCUMENT,
ELECTRONIC OR OTHERWISE, IS PROHIBITED WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF EFFICIENT CAPITAL CORPORATION. THIS DOCUMENT AND ANY COPIES THEREOF,
ELECTRONIC OR OTHERWISE, ARE TO BE RETURNED UPON THE REQUEST OF EFFICIENT
CAPITAL CORPORATION.