EXHIBIT 10.8
RECEIVABLES SALE AGREEMENT (the "Agreement"), dated as of February 8, 2002, by
and between YAK COMMUNICATIONS (CANADA) INC. ("YakCan"), an Ontario corporation,
as a Seller and Subservicer, YAK COMMUNICATIONS (AMERICA), INC. ("YakAmerica"),
a Florida corporation, as a Seller (collectively with YakCan, the "Seller"), YAK
COMMUNICATIONS (USA), INC. ("YakUSA"), a Florida corporation, as a Guarantor,
YakCan, as a Guarantor, YakAmerica, as a Guarantor (collectively with YakCan and
YakUSA, the "Guarantor") and TEXTRON FINANCIAL CANADA LIMITED, an Ontario
corporation, as Purchaser and Master Servicer.
W I T N E S S E T H:
WHEREAS, the Seller desires to sell its receivables and the Purchaser
is a corporation formed for the purpose of purchasing certain receivables,
including from time to time;
WHEREAS, the Purchaser shall, acting in its capacity as the Master
Servicer, retain the complete right and ultimate authority to perform certain
servicing, administrative and collection functions in respect of the receivables
purchased by the Purchaser under this Agreement;
WHEREAS, the Purchaser and the Master Servicer desire that the
Subservicer be appointed to perform certain servicing, administrative and
collection functions in respect of the Purchased Receivables; and
WHEREAS, the Seller has been requested and is willing to act as the
Subservicer.
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms.
The capitalized terms used in this Agreement shall have the respective meanings
set forth on Exhibit A to this Agreement.
1.2 Other Terms.
All accounting terms not specifically defined in this Agreement shall be
construed in accordance with generally accepted accounting principles. All terms
defined in the PPSA, and not specifically defined in this Agreement, are used in
this Agreement as defined in the PPSA.
ARTICLE II
PURCHASE AND SALE; ESTABLISHMENT OF ACCOUNTS
2.1 Assignment of Universality of Claims.
In consideration for the payments to be received by it in accordance with this
Agreement, and for other good and valuable considerations, each of YakCan and
YakAmerica hereby sells, transfers, assigns and sets over to the Purchaser the
universality (as such term is used in the Civil Code of Quebec) of all of its
present and future accounts receivable (including all of its present and future
customer accounts as such term is used in Article 2684 of the Civil Code of
Quebec), including, for greater certainty, all of its present and future
Receivables. Seller shall provide the Purchaser with a list of Eligible
Receivables (the "List") which List shall be delivered by the Seller to the
Purchaser no later than two (2) Business Days prior to each Purchase Date.
2.2 Purchase of Receivables.
Until the occurrence of a Termination Date, upon receipt of the List, the Master
Servicer, in its sole discretion, will confirm which of the Eligible Receivables
listed in the List that the Purchaser will retain as Purchased Receivables.
The retention of such Eligible Receivables as Purchased Receivables shall occur
upon payment of the applicable Purchase Price, as provided at Section 2.3 of
this Agreement. All present and future accounts receivable (including all of its
present and future customer accounts as such term is used in Article 2684 of the
Civil Code of Quebec) of the Seller and other Receivables of the Seller existing
on a Purchase Date which the Purchaser shall not retain as Purchased Receivables
on such Purchase Date shall be deemed to be automatically re-assigned to the
Seller by the Purchaser, without any representation or warranty of any kind
whatsoever by the Purchaser. Upon retention of the Eligible Receivables as
Purchased Receivables, Seller will be deemed, for greater certainty and without
prejudice to Section 2.1 above, to have confirmed that it has sold, transferred,
assigned, set over and conveyed to Purchaser, without recourse except as
expressly provided herein, all of Seller's right, title and interest in and to
the Purchased Receivables, and that title to such Purchased Receivables has
passed to Purchaser. The Seller shall not take any action inconsistent with such
ownership and, from and after the date hereof, shall not claim any ownership in
any Purchased Receivable. Documents relating to the Purchased Receivables shall
be held in trust by the Seller and the Subservicer, for the benefit of the
Purchaser as the owner of the Purchased Receivables, and possession of any
Required Information relating to the Purchased Receivables so retained is for
the sole purpose of facilitating the servicing of the Purchased Receivables and
carrying out the terms of this Agreement. Such retention and possession is at
the will of the Purchaser and in a custodial capacity for the benefit of the
Purchaser only.
2.3 Purchase Price and Payment.
The Purchase Price for Receivables retained by Purchaser as Purchased
Receivables on any Purchase Date and paid by the Purchaser to the Seller shall
be an amount equal to the aggregate Net Value of such Purchased Receivables and
shall be paid by the Purchaser to the Seller by wire transfer on such respective
Purchase Date. The Purchase Price to be paid on such Purchase Date shall be
reduced by (a) the Program Fees as of such Purchase Date, (b) the amount, if
any, by which the Seller Credit Reserve Account (net of withdrawals required
hereunder) is less than the Specified Credit Reserve Balance as of such Purchase
Date, (c) any Rejected Receivable Amount, and (d) other amounts due the
Purchaser in accordance with this Agreement. At no time shall the aggregate Net
Value of all Purchased Receivables exceed the Purchase Commitment.
2.4 Establishment of Accounts; Conveyance of Interests Therein;
Investments.
(a) A Blocked Account, pursuant to Blocked Account Agreement,
acceptable to the Purchaser, with providers, acceptable to the
Purchaser, will be established or assigned, as the case may be,
for the benefit of the Purchaser into which all Collections from
Payors with respect to Receivables shall be deposited. The
Blocked Account will be maintained at the expense of the Seller.
The Seller agrees to deposit all Collections it receives with
respect to Receivables in the Blocked Account and will instruct
all Payors to make all payments on Receivables to the Blocked
Account. All funds in the Blocked Account will be remitted to the
Collection Account as instructed by the Master Servicer.
(b) The Purchaser has established and shall maintain the "Collection
Account" (the "Collection Account"), the "Purchase Account" (the
"Purchase Account") and the "Seller Credit Reserve Account" (the
"Seller Credit Reserve Account").
(c) The Seller does hereby sell, transfer, assign, set over and
convey to the Purchaser all right, title and interest of the
Seller in and to all amounts deposited, from time to time, in the
Blocked Account, the Collection Account and the Seller Credit
Reserve Account. Any Collections relating to Receivables held by
the Seller or the Subservicer pending deposit to the Blocked
Account as provided in this Agreement, shall be held in trust for
the benefit of the Purchaser until such amounts are deposited
into the Blocked Account. All Collections in respect of Purchased
Receivables received by the Seller and not deposited directly by
the Payor in the Blocked Account shall be remitted to the Blocked
Account on the day of receipt or the following Business Day if
the day of receipt is not a Business Day, and if such Collections
are not remitted by Seller on a timely basis within two (2) days
of receipt, in addition to its other remedies hereunder, the
Purchaser shall be entitled to receive a late charge (which shall
be in addition to the Program Fee) equal to 25% per annum of such
Collections or the maximum rate legally permitted if less than
such rate, calculated as of the first Business Day of such
delinquency.
(d) Notwithstanding anything to the contrary herein, in the event
that the Net Value of outstanding Purchased Receivables exceeds
the Purchase Commitment (using the Equivalent Amount of Canadian
Dollars in the case of the Purchase Commitment being denominated
in U.S. Dollars), such excess shall become immediately payable to
the Purchaser. Except as expressly provided otherwise in this
agreement, the foregoing shall not be construed to permit the
existence of any excess, which shall be in the discretion of the
Purchaser.
2.5 Grant of Security Interest.
It is the intention of the parties to this Agreement that each payment of the
Purchase Price by the Purchaser to the Seller for Purchased Receivables to be
made under this Agreement shall constitute payment of consideration for a
purchase of such Purchased Receivables and not a loan. In the event, however,
that a court of competent jurisdiction were to hold that the transaction
evidenced by this Agreement constitutes a loan and not a purchase and sale, it
is the intention of the parties that this Agreement shall constitute a security
agreement under the PPSA, the UCC and any other applicable law, and that the
Seller shall be deemed to have granted to the Purchaser, without limitation to
any other provisions hereof, as security for all its obligations hereunder, a
continuing first priority perfected security
interest in, lien on, hypothecation of and assignment of all of the Seller's
right, title and interest in, to and under the Purchased Receivables; all
payments of principal of or interest on such Purchased Receivables; all amounts
on deposit from time to time in the Blocked Account, the Collection Account and
the Seller Credit Reserve Account; all other rights relating to and payments
made under this Agreement, and all proceeds of any of the foregoing. The Seller
shall xxxx its books and records as may be necessary or appropriate to evidence,
protect and perfect the Purchaser's security interest, lien, charge,
hypothecation and assignment and shall cause its financial statements to reflect
such security interest.
2.6 Further Action Evidencing Purchases.
The Seller agrees that, from time to time, at its expense, it will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or appropriate, or that the Purchaser may
reasonably request, in order to perfect, protect or more fully evidence the
transfer of ownership of the Purchased Receivables or to enable the Purchaser to
exercise or enforce any of its rights hereunder. The Seller further agrees that
the Purchaser may file applications for registration under the Civil Code of
Quebec in order to perfect, protect or more fully evidence the transfer of
ownership of the Receivables.
ARTICLE III
CONDITIONS OF PURCHASES
3.1 Conditions Precedent to All Purchases.
Each Purchase shall be subject to the conditions precedent that as of each
Purchase Date:
(a) No Event of Seller Default has occurred and the Seller is in
compliance with each of its covenants and representations set
forth in Sections 4.1 and 4.2 of this Agreement;
(b) The Seller shall have delivered to the Purchaser a complete copy
of each of the then current Carrier Agreements, Clearinghouse
Agreements, Billing and Collection Agreements and Blocked Account
Agreements and any amendment or modification of such agreements;
(c) (i) a determination, in the Purchaser's sole discretion, that the
Seller is in compliance with any and all regulatory and
administrative requirements which will include, but not be
limited to, compliance with any and all tax obligations, and (ii)
Purchaser's receipt of personal background checks on certain of
the Seller's shareholders, directors or managers, the results of
which are acceptable to Purchaser, in its sole determination;
(d) All necessary legislative, regulatory, governmental and other
third party approvals, notices, consents, licences and permits
including those necessary to perform this agreement and the
Related Documents and to carry on the Seller's business shall
have been given and obtained and all such approvals, notices,
consents, licences and permits shall not contain any terms or
conditions which the Purchaser reasonably considers to be
materially adverse to the Seller or the Purchaser and their
position and evidence thereof shall have been furnished to the
Purchaser;
(e) The Purchaser shall be satisfied with the results of all personal
property and other searches and enquiries conducted in respect of
the Seller's and its property and assets as the Purchaser's
counsel may reasonably require and such discharges to terminate
liens and/or estoppel letters (to confirm the amounts secured by
any existing encumbrances and the collateral covered thereby)
shall be received by the Purchaser as may be required by the
Purchaser in its discretion;
(f) The Seller shall have paid all reasonable fees and expenses of
the Purchaser's counsel, Xxxxxx Xxxxxxx, and all special local
counsel retained, and all other reasonable fees and expenses of
the Purchaser incurred in connection with any of this agreement
and the Related Documents and the transactions contemplated
thereby, including without limitation, all audit and appraisal
fees;
(g) The Seller shall be obligated to pay to the Purchaser a
commitment fee in an amount equal to the sum of four percent
(4.00%) of the Purchase Commitment (or the Equivalent Amount
thereof).
Such commitment fee is fully earned and non-refundable and shall
be payable in two equal instalments of two percent (2.00%) of the
Purchase Commitment (or the Equivalent Amount thereof), with the
first instalment due on the Closing Date and the second
instalment due on the first anniversary of the Closing Date,
provided, however, the entire unpaid portion of such fee shall be
immediately payable upon the occurrence of an Event of Seller
Default. Any increases in the commitment amount agreed to by
Seller and Purchaser will bear an additional commitment fee of
two percent (2.00%) per annum under the payment terms noted
herein;
(h) YakUSA shall have delivered to Purchaser on the Closing Date and
the last day of each calendar month (a) an Officer's Certificate
evidencing sufficient cash and committed financing to fund the
consolidated business plan of YakCan and (b) an Officer's
Certificate calculating Free Cash Flow of YakUSA, and in the
event that Free Cash Flow for any month is less than zero, Seller
shall at all times maintain unrestricted cash or cash equivalents
(including, without limitation, marketable securities or the cash
equivalent of any available but unused Purchase Commitment
existing on the date of determination) of not less than five (5)
times the absolute value of Free Cash Flow as of the date of Free
Cash Flow determination;
(i) The Seller shall have delivered to the Purchaser a copy of each
written notice delivered by or received by either the Carrier,
Billing and Collection Agent, Clearinghouse Agent or the Seller
with respect to any Carrier Agreements, Clearinghouse Agreements
and/or the Billing and Collection Agreements;
(j) The Termination Date shall not have occurred;
(k) The Purchaser shall have received, on or before the initial
Purchase Date, a Payout Letter, in form and substance
satisfactory to the Purchaser and its counsel, from SLF Sales
Linked Finance Ltd.; and
(l) The Seller shall have taken such other action, including but not
limited to, prior to the initial Purchase Date, the delivery of
(a) an opinion of counsel in form and substance satisfactory to
Purchaser and its counsel, (b) a chart of the corporate structure
of the Seller and the Guarantor set out in Schedule 6 hereto, (c)
interim financial statements of the Seller for the fiscal year to
date period ending December 31, 2001, (d) release documentation
evidencing the full and final release from all existing lenders
who have an interest or lien in the accounts receivable and
Customer Base of the Seller, (e) any and all subordination
agreements required by the Purchaser, including without
limitation, a subordination agreement from YakUSA, (f) evidence
of the conversion of a $466,000 promissory note payable to
Xxxxxxx Xxxxxx to equity of YakCan, (g) an Assignment of Life
Insurance Agreement in favour of the Purchaser, as assignee, in
respect of a $1,000,000 policy on the life of Xxxxxxx Xxxxxxx,
and (h) such other approvals, opinions or documents, including
without limitation the Blocked Account Agreement, to the
Purchaser, as the Purchaser may request, in form and substance
satisfactory to Purchaser.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER
4.1 Representations, Warranties and Covenants as to the Seller.
The Seller represents and warrants to the Purchaser and Master Servicer , as of
the date of this Agreement and as of each subsequent Purchase Date, as follows:
(a) YakCan and YakAmerica are corporations duly organized, validly
existing and in good standing under the laws of the Province of
Ontario and under the laws of the State of Florida, respectively
and are duly qualified to do business and are in good standing in
each jurisdiction in which they are doing business and have the
power and authority to own and convey all of their respective
properties and assets and to execute and deliver this Agreement
and the Related Documents and to perform the transactions
contemplated thereby; and each is the legal, valid and binding
obligation
of the Seller enforceable against the Seller in accordance with
its terms subject to bankruptcy, insolvency, reorganization and
other laws affecting the rights of creditors and the fact that
specific performance and injunction are equitable remedies
available only in the discretion of the court;
(b) The execution, delivery and performance by the Seller of this
Agreement and the Related Documents and the transactions
contemplated thereby (i) have been duly authorized by all
necessary corporate or other action on the part of the Seller,
(ii) do not contravene or cause the Seller to be in default under
(A) any contractual restriction contained in any loan or other
agreement or instrument binding on or affecting the Seller or its
property; or (B) any law, rule, regulation, order, writ,
judgment, award, injunction, or decree applicable to, binding on
or affecting the Seller or its property and (iii) does not result
in or require the creation of any Adverse Claim upon or with
respect to any of the property of the Seller (other than in
favour of the Purchaser as contemplated hereunder);
(c) There is no court order, judgment, writ, pending or, to the
knowledge of the Seller, threatened action, suit or proceeding,
of a material nature against or affecting the Seller, its
officers or directors, or the property of the Seller, in any
court or tribunal, or before any arbitrator of any kind or before
or by any Governmental Authority (i) asserting the invalidity of
this Agreement or any of the Related Documents, (ii) seeking to
prevent the sale and assignment of any Receivable or the
consummation of any of the transactions contemplated thereby,
(iii) seeking any determination or ruling that might materially
and adversely affect the Seller, this Agreement, the Related
Documents, the Receivables, the Contracts or any LOA, or (iv)
asserting a claim for payment of money in excess of Cdn.$50,000
(or the Equivalent Amount thereof);
(d) The primary business of the Seller is the provision of
telecommunication services and/or equipment. All license numbers
issued to the Seller by any Governmental Authority are set forth
on Schedule 3 and the Seller has complied in all material
respects with all applicable laws, rules, regulations, orders and
related Contracts and all restrictions contained in any agreement
or instrument binding on or affecting the Seller, and has and
maintains all permits, licenses, certifications, authorizations,
registrations, approvals and consents of Governmental Authorities
or any other party necessary for the business of the Seller and
each of its subsidiaries;
(e) (i) The Seller has filed on a timely basis all tax returns
(federal, provincial, and local) required to be filed and has
paid or made adequate provisions for the payment of all taxes,
assessments, and other governmental charges due from the Seller;
(ii) the financial statements of the Seller, copies of which have
been furnished to the Purchaser, fairly present the financial
condition of the Seller, all in accordance with generally
accepted accounting principles consistently applied; (iii) since
June 30, 2001, there has been no material adverse change in any
such condition, business or operations of the Seller; and (iv)
YakCan has delivered to the Purchaser (a) within 30 days after
the end of each month, internally prepared monthly financial
statements, including balance sheet and income statement prepared
in accordance with generally accepted accounting principles, of
YakCan and YakAmerica as of the end of such month certified by an
officer of YakCan, accompanied by a management narrative
summarizing circumstances and issues underlying such financial
statements and facing YakCan and YakAmerica going forward, (b)
within 90 days after the end of the fiscal year of YakUSA
beginning with the year ending June 30, 2001, YakUSA's
consolidated year end financial statements and consolidated
audited financial statements, including balance sheet and income
statement (including consolidating schedules for the Seller)
prepared in accordance with U.S. generally accepted accounting
principles and prepared by an accounting firm acceptable to
Purchaser and (c) the Seller has provided to the Purchaser any
and all other information which Purchaser may reasonably request,
and the Seller shall provide the Purchaser access to its
facilities to review the foregoing and all other books and
records of the Seller.
(f) All information furnished by or on behalf of the Seller to the
Master Servicer or the Purchaser in connection with this
Agreement is true and complete in all material respects and does
not omit to state a material fact and the sales of Purchased
Receivables under this Agreement are made by the
Seller in good faith and without intent to hinder, delay or
defraud present or future creditors of the Seller;
(g) The Blocked Account is the only Account to which Payors and
future Payors have been or will be instructed to direct
Receivable proceeds and each Payor of an Eligible Receivable has
been directed upon its receipt of the notice, a form of which has
been provided by Purchaser to Seller, which such notice was
mailed or provided to such Payors prior to the initial Purchase
Date, to remit all payments with respect to such Receivable for
deposit in the Blocked Account;
(h) The principal place of business and chief executive office of
each Seller is located at the address of such Seller set forth
under its signature below and there are not now, and during the
past four months there have not been, any other locations where
the Seller is located or keeps Records except as set forth in the
designated space beneath its signature line in this Agreement;
(i) The legal name of the Seller is as set forth at the beginning of
this Agreement and YakCan has not changed its legal name since
October 15, 1998 and Yak America has not changed its legal name
since March 8, 2001 , and during such period, the Seller did not
use, nor does the Seller now use any tradenames, fictitious
names, assumed names or "doing business as" names other than
those appearing on Schedule 4 hereof;
(j) The Seller has not done anything to impede or interfere with the
collection by the Purchaser of the Purchased Receivables and has
not amended, waived or otherwise permitted or agreed to any
deviation from the terms or conditions of any Purchased
Receivable or any related Carrier Agreement, Clearinghouse
Agreement, Billing and Collection Agreement, Contract or LOA so
as to (i) create an Adverse Claim with respect to any Receivable
or (ii) materially affect the ability of Subservicer or the
Master Servicer to act in its capacity as such; and has not
allowed any invoice due and owing by the Seller relating to any
Carrier Agreement, Clearinghouse Agreement or Billing and
Collection Agreement to become any more than thirty days past
due; and
(k) For income tax reporting and accounting purposes, the Seller will
treat the sale of each Purchased Receivable pursuant to this
Agreement as a sale of, or absolute assignment of its full right,
title and ownership interest in such Purchased Receivable to the
Purchaser, which treatment shall be reflected as a note to its
financial statements.
4.1A Affirmative Covenants of the Seller.
The Seller further covenants and agrees that it shall, until the termination of
this agreement:
(a) Except as otherwise provided by this agreement, pay to the
Purchaser on demand, or by any other method of payment provided
for herein, all fees and expenses provided for in this agreement
or in the Related Documents, including without limitation, in
connection with the establishment and maintenance of any accounts
including Blocked Accounts. The Purchaser may, without making
demand, charge the accounts of the Seller outlined herein for all
such fees and expenses.
(b) Conduct continuously and operate actively its business according
to good business practices and maintain all of its properties
necessary in its business;
(c) Keep in full force and effect its existence and comply in all
material respects with the laws and regulations governing the
conduct of its business;
(d) Make all such reports and pay all such franchise and other taxes
and license fees and do all such other acts and things as may be
lawfully required to maintain its rights, licenses, leases,
powers and franchises under all applicable laws, its property,
operations, business, prospect or condition (financial or
otherwise);
(e) Operate its business in compliance in all material respects with
all applicable laws and promptly notify the Purchaser in writing
of any violation or alleged violation of which it becomes aware
of any law, statute, regulation or ordinance of any governmental
entity, or of any agency thereof, applicable to Seller which may
materially adversely affect the Seller's business, property,
assets, operations or condition or prospects (financial or
otherwise);
(f) The Seller has provided to the Purchaser any and all other
information which Purchaser may reasonably request, and the
Seller shall provide the Purchaser reasonable access to its
facilities during regular business hours to review the foregoing
and all other books and records of the Seller;
(g) Provide the Purchaser with a notice on or before the ninetieth
(90th) day before the End Date or Voluntary Termination Date.
Such notice shall outline either (a) that the Seller will satisfy
and pay all the outstanding obligations and indebtedness owed to
the Purchaser under and pursuant to this agreement on or before
the Termination Date, (b) that the Seller wishes to renew this
agreement and will enter into good faith negotiations to do so
with the Purchaser, or (c) that the Seller requests that all
Purchases cease on the Termination Date. Should the Seller pursue
option (c), the Purchaser, in its sole discretion, may continue
to make Purchases up to and including the Termination Date. If
the Purchaser continues to make such Purchases, this Agreement,
in its entirety, will be in full force and effect until the close
of Business on the ninetieth (90th) day after the Termination
Date. During such period, a commitment fee, mutually agreeable to
the Seller and Purchaser, shall be paid by the Seller immediately
after the Termination Date which shall be fully earned and
non-refundable on such date; and
(h) Provide the Purchaser with reasonable access to the Seller's
facilities to allow the Purchaser to conduct four annual post
closing field audits (all Purchaser's costs and expenses of such
audits shall be paid by the Sellers).
4.2 Representations and Warranties of the Seller as to Purchased
Receivables.
With respect to each Purchased Receivable retained pursuant to this Agreement
the Seller represents and warrants, as of the date hereof and as of each
subsequent Purchase Date, as follows:
(a) Such Purchased Receivable (i) includes all the Required
Information; (ii) is, or will be upon billing, the liability of
an Eligible Payor and (iii) was created by the provision or sale
of telecommunication services or equipment by the Seller in the
ordinary course of its business; (iv) has a Purchase Date no
later than 90 days from its Billing Date; (v) is not a Purchased
Receivable with respect to which, as of any Determination Date,
payment by the Payor of such Receivable has been received in full
and is not duplicative of any other Receivable; and (vi) is owned
by the Seller free and clear of any Adverse Claim, and the Seller
has the right to sell, assign and transfer the same and interests
therein as contemplated under this Agreement and no consent other
than those secured and delivered to the Purchaser on or prior to
the Closing Date from any Governmental Authority, the Payor, a
Carrier, the Billing and Collection Agent, the Clearinghouse
Agent or any other Person shall be required to effect the sale of
any such Purchased Receivable;
(b) The Billed Amount of such Purchased Receivable is payable in
Canadian Dollars and the Eligible Receivable Amount with respect
thereto, unless the Purchaser and Seller agree otherwise in
writing, is not in excess of U.S.$22,500 (or the Equivalent
Amount) or five percent (5%) of the aggregate Net Value with
respect to any one individual Payor of any Payor Class other than
an Eligible Receivable payable by Xxxx Canada (Quebec), Xxxx
Canada (Ontario) and Telus Corporation, and is net of any
adjustments or other modifications contemplated by any Carrier
Agreement, Clearinghouse Agreement, Billing and Collection
Agreement or otherwise and, neither the Receivable nor the
related Carrier Agreement, Clearinghouse Agreement, Billing and
Collection Agreement or Contract has been compromised, adjusted,
extended, satisfied, subordinated, rescinded, set-off or modified
by the Seller, the Payor, the Carrier, the Clearinghouse Agent or
the Billing and Collection Agent, and is not subject to
compromise,
adjustment, termination or modification, whether arising out of
transactions concerning the Contract, any Carrier Agreement,
Clearinghouse Agreement, Billing and Collection Agreement or
otherwise; and
(c) To the Seller's knowledge there are no procedures or
investigations pending or threatened before any Governmental
Authority (i) asserting the invalidity of such Receivable,
Carrier Agreement, Clearinghouse Agreement, Billing and
Collection Agreement, LOA or such Contract, (ii) asserting the
bankruptcy or insolvency of the related Payor, (iii) seeking the
payment of such Receivable or payment and performance of the
related Carrier Agreement, Clearinghouse Agreement, Billing and
Collection Agreement, or such other Contract or LOA, or (iv)
seeking any determination or ruling that might materially and
adversely affect the validity or enforceability of such
Receivable or the related Carrier Agreement, Clearinghouse
Agreement, Billing and Collection Agreement, or such other
Contract or LOA.
4.3 Negative Covenants of the Seller.
The Seller shall not, without the written consent of the Purchaser,:
(a) Sell, assign or otherwise dispose of, or create or suffer to
exist any Adverse Claim or lien upon any Receivable and related
Contracts, its Customer Base, the Blocked Account, the Collection
Account, or any other account in which any Collections of any
Receivable are deposited, or assign any right to receive income
in respect of any Receivable;
(b) Submit or permit to be submitted to Payors any invoice for
telecommunication or internet services or equipment rendered by
or on behalf of Seller which contains a "pay to" address other
than the Blocked Account;
(c) Without the written notice of the Purchaser and the Master
Servicer, which consent will not be unreasonably withheld, make
any change to (i) the location of its chief executive office or
the location of the office where Records are kept or (ii) its
corporate name or use any tradenames, fictitious names, assumed
names or "doing business as" names other than those listed on
Schedule 4 hereof;
(d) Enter into or execute any Clearinghouse Agreement or Billing and
Collection Agreement (other than those listed on Schedule 5
hereof) or any amendment or modification thereof;
(e) Make any payments or distributions, whether in respect of debt
obligations, management fees, or otherwise, to Guarantor or any
affiliate thereof; or
(f) Assume by any means whatsoever, whether arising at law or
otherwise, any liability, expense or other obligations of
Guarantor or any affiliate thereof.
4.4 Repurchase Obligations.
Upon discovery by any party to this Agreement of a breach of any representation
or warranty in Sections 4.1 or 4.2 of this Article IV which materially and
adversely affects the value of a Purchased Receivable or the interests of the
Purchaser therein (herein a "Rejected Receivable"), the party discovering such
breach shall give prompt written notice to the other parties to this Agreement.
Thereafter, on the next Purchase Date, the Net Value of the Rejected Receivables
shall be deducted (as provided for in Section 2.3) from the amount otherwise
payable to the Seller pursuant to Section 2.3 and in satisfaction of the
Rejected Receivable Amount and, provided the full Net Value of such Rejected
Receivables is deposited in the Collection Account, such Rejected Receivables
shall then be considered to have been repurchased by the Seller. In the event
that the full Net Value of such Rejected Receivables is not deposited in the
Collection Account pursuant to the foregoing sentence, the Purchaser shall
deduct any such deficiency from the Excess Collection Amount or make demand upon
the Seller to pay, and the Seller shall immediately wire, any such deficiency to
the Purchaser for deposit to the Collection Account. Upon full payment of
the amounts set forth above to the Collection Account, the Seller will be deemed
to have repurchased such Rejected Receivable.
ARTICLE V
ACCOUNTS ADMINISTRATION
5.1 Collection Account.
The Purchaser and the Master Servicer acknowledge that certain amounts deposited
in the Collection Account may relate to Receivables other than Purchased
Receivables and that such amounts continue to be owned by the Seller. All such
amounts shall be administered in accordance with Section 5.3.
5.2 Determinations of the Master Servicer.
On each Determination Date, the Master Servicer will determine, in good faith,
the following:
(a) the Net Value of all Purchased Receivables which have become
Rejected Receivables since the prior Purchase Date and the extent
to which they have not been repurchased or offset in the manner
set forth in Section 4.4 (the "Rejected Receivable Amount");
(b) the amount of Collections up to the Purchase Price of all
Purchased Receivables received since the prior Determination Date
(the "Paid Receivables Amount");
(c) the Net Value of all Purchased Receivables to the extent they
have become Defaulted Receivables since the prior Purchase Date
(the "Defaulted Receivable Amount" or "Credit Deficiency");
(d) the aggregate amount deposited in the Collection Account in
excess of the Purchase Price of each Purchased Receivable,
including Collections pertaining to Receivables not purchased
under this Agreement, since the prior Determination Date (the
"Excess Collection Amount");
(e) the Net Value of all Purchased Receivables less the Rejected
Receivable Amount and the Defaulted Receivable Amount as of the
current Determination Date; and
(f) the amount of any accrued and unpaid Program Fee.
The Master Servicer's determinations of the foregoing amounts shall be
conclusive in the absence of manifest error. The Master Servicer shall notify
the Seller of such determinations.
5.3 Distributions from Accounts.
(a) On each Determination Date, following the determinations set
forth in Section 5.2, the Master Servicer will make the following
withdrawals and deposits:
(i) withdraw the Paid Receivables Amount and the Rejected
Receivable Amount plus any outstanding Rejected Receivable
Amount applicable to any prior period, to the extent such
Rejected Receivable Amount is not paid to the Purchaser as a
reduction in Purchase Price to be paid to the Seller, from
the Collection Account and deposit such amount in the
Purchase Account;
(ii) withdraw the Defaulted Receivable Amount from the Seller
Credit Reserve Account and deposit such amount in the
Purchase Account;
(iii) withdraw the Excess Collection Amount from the Collection
Account and deposit such amount in the Seller Credit Reserve
Account to the extent that the Seller Credit Reserve Account
is less than the Specified Credit Reserve Balance; and
(iv) withdraw the balance of the Excess Collection Amount from
the Collection Account and, subject to any offset required
under Section 5.3(b) of this Agreement, remit such amount
by wire transfer to an account designated by the Seller;
provided, however, with respect to Receivables processed or
cleared pursuant to any Carrier Agreement, Clearinghouse
Agreement or Billing and Collection Agreement, if
applicable, the Excess Collection Amount shall be retained
by the Purchaser in the Collection Account until such time
that the Seller's billing cycle (or batch) to which such
Excess Collection Amount applies is deemed closed by the
Purchaser which, absent the occurrence of an Event of Seller
Default and provided that the Purchaser has received
information in sufficient form and format to allow the
Purchaser to properly apply and/or post Collections against
Purchased Receivables, will occur no later than the next
immediate Purchase Date following such determination.
(b) The full amount of the Purchase Price before any offsets shall be
withdrawn from the Purchase Account and paid and administered as
follows: (i) the Program Fee due and owing as of each respective
Purchase Date shall be paid to the Purchaser, (ii) the amount, if
any, by which the Seller Credit Reserve Account is less than the
Specified Credit Reserve Balance as of such respective Purchase
Date shall be deposited in the Seller Credit Reserve Account,
(iii) the amount, if any, due and owing the Purchaser pursuant to
Section 9.4 of this Agreement shall be paid to the Purchaser, and
(iv) any remaining amount shall be paid to the Seller in
accordance with Section 2.3 of this Agreement.
(c) Until the Termination Date, with commercially reasonable best
efforts on each Purchase Date or in any event within two Business
Days of each Purchase Date, the Master Servicer shall withdraw
all amounts deposited hereunder (net of withdrawals required
hereunder) from the Seller Credit Reserve Account which are in
excess of the Specified Credit Reserve Balance and shall pay to
the Purchaser all amounts due and owing the Purchaser in
accordance with Sections 2.3, 4.4, 5.3, 8.1, 9.4 and any
applicable Termination Fee, and pay the balance, if any, by wire
transfer to an account designated by the Seller.
5.4 Allocation of Moneys following Termination Date.
(a) Upon the occurrence of a Termination Date hereunder, the Master
Servicer shall administer and monitor the Blocked Account and any
and all Collections and apply the amount of such Collections to
the outstanding Net Value of Purchased Receivables. Following the
Termination Date and the Purchaser's receipt of the Termination
Fee, if applicable, from the Seller, the Master Servicer shall,
to the extent funds deposited hereunder (net of withdrawals
required hereunder) are sufficient, withdraw an amount equal to
the Program Fee from the Seller Credit Reserve Account on each
Purchase Date and deposit it in the Purchase Account. To the
extent that such funds do not equal the Program Fee, the Seller
shall deposit in the Purchase Account the balance of the Program
Fee within five Business Days following demand therefor. To the
extent any Purchased Receivable becomes a Defaulted Receivable,
the Purchaser may withdraw an amount equal to such Defaulted
Receivable Amount from the Seller Credit Reserve Account and
deposit such amount in the Purchase Account, provided, however,
that such recourse is expressly limited to the monies which
comprise the Seller Credit Reserve Account at the time of the
Termination Date which shall not at any time exceed the Specified
Credit Reserve Balance. Thereafter, any Excess Collection Amount
may not be used for deposit to the Seller Credit Reserve Account
and shall be otherwise administered in accordance with this
Agreement.
(b) In any event, following the Termination Date and the Purchaser's
receipt of the Termination Fee, if any, the Seller may, at its
option, repurchase all previously Purchased Receivables which
have not been fully paid by the respective Payors thereof by
depositing with the Purchaser the then aggregate Net Value of
such Purchased Receivables. Following such payment and any other
amount due and owing the Purchaser under this Agreement, this
Agreement shall be deemed terminated.
(c) On the first Determination Date on which the aggregate Net Value
of all Purchased Receivables (other than Defaulted Receivables)
(i) is less than 10% of the aggregate Net Value of Purchased
Receivables (other than Defaulted Receivables) on the Termination
Date and (ii) is less than the aggregate amount remaining in the
Seller Credit Reserve Account, the Master Servicer shall withdraw
an amount equal to such aggregate Net Value from such accounts
and deposit it in the Purchase Account. Thereupon the Master
Servicer shall disburse all remaining amounts held in the Seller
Credit Reserve Account to the Seller and all interests of the
Purchaser in all Purchased Receivables owned by the Purchaser
shall be reconveyed by the Purchaser to the Seller. Following
such disbursement and reconveyance, this Agreement shall be
deemed terminated.
ARTICLE VI
APPOINTMENT OF THE SUBSERVICER
6.1 Appointment of the Subservicer.
Subject to Section 6.5, as consideration for the Seller's receipt of that
portion of the Excess Collection Amount relating to Purchased Receivables, the
Master Servicer and the Purchaser hereby appoints YakCan and YakCan hereby
accepts such appointment to act as Subservicer under this Agreement. The
Subservicer may, with the prior consent of the Purchaser, which consent shall
not be unreasonably withheld, subcontract with a subservicer for billing,
collection, servicing or administration of the Receivables. Any termination or
resignation of the Subservicer under this Agreement shall not affect any claims
that the Purchaser may have against the Subservicer for events or actions taken
or not taken by the Subservicer arising prior to any such termination or
resignation.
6.2 Duties and Obligations of the Subservicer.
(a) The Subservicer shall service the Purchased Receivables and
enforce the Purchaser's respective rights and interests in and
under each Purchased Receivable and each related Contract or LOA;
and shall take, or cause to be taken, all such actions as may be
necessary or advisable to service, administer and collect each
Purchased Receivable all in accordance with (i) customary and
prudent servicing procedures for telecommunication receivables of
a similar type, and (ii) all applicable laws, rules and
regulations; and shall serve in such capacity until the
termination of its responsibilities pursuant to Section 6.4 or
7.1. The Subservicer shall at any time permit the Purchaser or
any of its representatives to visit the offices of the
Subservicer during regular business hours and examine and make
copies of all Servicing Records;
(b) The Subservicer shall notify the Purchaser of any action, suit,
proceeding, dispute, offset, deduction, defense or counterclaim
that is or, to the Subservicer's knowledge, may be asserted by
any Person with respect to any Purchased Receivable.
(c) The Purchaser shall not have any obligation or liability with
respect to any Purchased Receivables which may arise out of a
related Contract, nor shall it be obligated to perform any of the
obligations of the Subservicer hereunder.
6.3 Subservicing Expenses.
The Subservicer shall be required to pay for all expenses incurred by the
Subservicer in connection with its activities hereunder (including any payments
to accountants, counsel or any other Person) and shall not be entitled to any
payment or reimbursement therefor.
6.4 Subservicer Not to Resign.
The Subservicer shall not resign from the duties and responsibilities hereunder
except upon determination that (a) the performance of its duties hereunder has
become impermissible under applicable law and (b) there is no reasonable action
which the Subservicer could take to make the performance of its duties hereunder
permissible under applicable law evidenced as to clause (a) above by an opinion
of counsel to such effect delivered to the Purchaser.
6.5 Authorization of the Master Servicer.
The Seller hereby acknowledges that the Master Servicer (including any of its
successors or assigns), in its capacity as such, shall retain the authority to
take any and all reasonable steps in its name and on its behalf necessary or
desirable in the determination of the Master Servicer to collect all amounts due
under any and all Purchased Receivables, process all Collections, commence
proceedings with respect to enforcing payment of such Purchased Receivables and
the related Contracts, and adjusting, settling or compromising the account or
payment thereof. The Seller shall furnish the Master Servicer (and any
successors thereto) with any powers of attorney and other documents necessary or
appropriate to enable the Master Servicer to carry out its servicing and
administrative duties under this Agreement, and shall cooperate with the Master
Servicer to the fullest extent in order to facilitate the collectibility of the
Purchased Receivables.
ARTICLE VII
EVENTS OF SELLER DEFAULT
7.1 Events of Seller Default.
If any of the following events (each, an "Event of Seller Default") shall occur
and be continuing:
(a) The Seller (either as Seller or Subservicer) shall materially
fail to perform or observe (a) any monetary term, covenant or
agreement contained in this Agreement and such failure shall
continue for two (2) days (not including Saturday or Sunday)
after notice thereof has been given by Purchaser to Seller, or
(b) any other term, covenant or agreement contained in this
Agreement and such failure shall continue for ten (10) days after
notice thereof has been given by Purchaser to Seller unless such
other term covenant or agreement provides for a different period
of time;
(b) An Insolvency Event shall have occurred and where such Insolvency
Event consists of an involuntary proceeding against Seller, and
the involuntary proceedings are not dismissed within thirty (30)
days from the date they were initiated;
(c) There is a material breach of any of the representations and
warranties of the Seller as stated in Sections 4.1 or 4.2 that
has remained uncured for a period of 30 days, or, as such breach
may pertain to a Purchased Receivable, has not been cured
pursuant to Section 4.4;
(d) Any Governmental Authority shall file notice of a lien with
regard to any of the assets of the Seller or with regard to the
Seller which remains undischarged for a period of 30 days;
(e) This Agreement shall for any reason cease to evidence the
transfer to the Purchaser (or its assignees or transferees) of
the legal and equitable title to, and ownership of, the Purchased
Receivables;
(f) The termination of any Clearinghouse Agreement, if applicable,
and/or any Carrier Agreement or Billing and Collection Agreement
for any reason whatsoever absent the consummation of a substitute
Clearinghouse Agreement, Carrier Agreement and/or Billing and
Collections Agreement, as the case may be, within ten (10)
Business Days of the termination thereof where, in the
Purchaser's reasonable business judgment, such termination
materially and adversely affects the business of Seller, and/or,
any invoice due and owing by the Seller relating to any Carrier
Agreement, Clearinghouse Agreement or Billing and Collection
Agreement has become more than thirty days past due;
(g) The amount deposited hereunder (net of withdrawals required
hereunder) in the Seller Credit Reserve Account has remained at
less than the Specified Credit Reserve Balance for fourteen
consecutive days; or
(h) YakCan and the Seller, in the reasonable discretion of Purchaser,
do not have sufficient cash on hand, or committed financing, to
reasonably perform their business plan.
then and in any such event, the Master Servicer may, by notice to the Seller and
the Purchaser declare that an Event of Seller Default shall have occurred and,
the Termination Date shall forthwith occur, without demand, protest or further
notice of any kind, and the Purchaser shall make no further Purchases from the
Seller. The Purchaser and Master Servicer shall have, in addition to all other
rights and remedies under this Agreement, all other rights and remedies provided
under the PPSA and other applicable law, which rights shall be cumulative.
ARTICLE VIII
INDEMNIFICATION AND SECURITY INTEREST
8.1 Indemnities by the Seller.
(a) Without limiting any other rights that the Purchaser, the Master
Servicer, or any director, officer, employee or agent of either
such party (each an "Indemnified Party") may have under this
Agreement or under applicable law, the Seller hereby agrees to
indemnify each Indemnified Party from and against any and all
claims, losses, liabilities, obligations, damages, penalties,
actions, judgments, suits, and related costs and expenses of any
nature whatsoever, including reasonable attorneys' fees and
disbursements (all of the foregoing being collectively referred
to as "Indemnified Amounts") which may be imposed on, incurred by
or asserted against an Indemnified Party in any way arising out
of or relating to this Agreement or the ownership of the
Purchased Receivables or in respect of any Receivable or any
Contract, excluding, however, Indemnified Amounts to the extent
resulting from gross negligence or wilful misconduct on the part
of any Indemnified Party.
(b) Any Indemnified Amounts subject to the indemnification provisions
of this Section shall be paid to the Indemnified Party within
five Business Days following demand therefor, together with
interest at the lesser of 12% per annum or the highest rate
permitted by law from the date of such demand for the Indemnified
Amount.
8.2 Security Interest.
Without limitation to any other provisions hereof, (a) the Seller hereby grants
to the Purchaser a continuing first priority perfected security interest, lien
on, hypothecation of and assignment of and in the Seller's Customer Base,
including but not limited to, all past, present and future customer contracts,
lists, agreements, LOA's or arrangements relating thereto; all of the Seller's
right, title and interest in, to and under all of the Seller's Receivables not
retained by the Purchaser hereunder, including all rights to payments under any
related Contracts, contract rights, instruments, documents, chattel paper,
general intangibles, LOA's or other agreements with all Payors and all the
Collections, Records and proceeds thereof; any other obligations or rights of
Seller to receive any payments in money or kind; all cash or non-cash proceeds
of the foregoing; all of the right, title and interest of the Seller in and with
respect to the goods, services or other property which gave rise to or which
secure any of the foregoing, as security for the timely payment and performance
of any and all obligations the Seller or the Subservicer may owe the Purchaser
under Sections 2.3, 4.4, 5.3, 8.1, 9.4 and any applicable Termination Fee, but
excluding recourse for unpaid Purchased Receivables, and (b) as security for all
its Guaranteed Obligations, YakUSA grants to the Purchaser, a continuing
first-ranking perfected and duly registered security interest in, lien on,
hypothecation of and assignment of all the personal property of YakUSA, now
owned or hereafter acquired, tangible or intangible. This Section 8.2 shall
constitute a security agreement under the PPSA and the UCC and any other
applicable law and the Purchaser shall have the rights and remedies of a secured
party thereunder. Such security interest shall be further evidenced by Seller's
and YakUSA's execution of appropriate PPSA and UCC-1 financing statements
prepared by and acceptable to the Purchaser, and such other further assurances
that may be reasonably requested by the Purchaser from time to time.
ARTICLE IX
MISCELLANEOUS
9.1 Notices, Etc.
All notices, shall be in writing and mailed or telecommunicated, or delivered as
to each party hereto, at its address set forth under its name on the signature
pages hereof or at such other address as shall be designated by such party in
a written notice to the other parties hereto. All such notices and
communications shall not be effective until received by the party to whom such
notice or communication is addressed.
9.2 Remedies.
No failure or delay on the part of the Purchaser or the Master Servicer to
exercise any right hereunder shall operate as a waiver or partial waiver
thereof. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
9.3 Binding Effect; Assignability.
This Agreement shall be binding upon and inure to the benefit of the Seller, the
Subservicer, the Purchaser, the Master Servicer and their respective successors
and permitted assigns. Subject to the provisions of Section 6.1, neither the
Seller nor the Subservicer may assign any of their rights and obligations
hereunder or any interest herein without the prior written consent of the
Purchaser and the Master Servicer. The Purchaser may, at any time, without the
consent of the Seller or the Subservicer, assign any of its rights and
obligations hereunder or any interest herein to any Person. Without limiting the
generality of the foregoing, the Seller acknowledges that the Purchaser has
assigned its rights hereunder for the benefit of third parties. The Seller does
hereby further agree to execute and deliver to the Purchaser all documents and
amendments presented to the Seller by the Purchaser in order to effectuate the
assignment by the Purchaser in furtherance of this Section 9.3 consistent with
the terms and provisions of this Agreement. This Agreement shall create and
constitute the continuing obligations of the parties hereto in accordance with
its terms, and shall remain in full force and effect until its termination;
provided, that the rights and remedies with respect to any breach of any
representation and warranty made by the Seller or the Master Servicer pursuant
to Article IV and the indemnification and payment provisions of Article VIII
shall be continuing and shall survive any termination of this Agreement.
9.4 Costs, Expenses and Taxes.
(a) In addition to the rights of indemnification under Article VIII,
the Seller agrees to pay upon demand, all reasonable costs and
expenses in connection with this Agreement and the other
documents to be delivered hereunder before and after the Closing
Date, including, without limitation: (i) any periodic auditing of
the Seller and the modification or amendment of this Agreement;
(ii) the reasonable fees and out-of-pocket expenses of counsel
for the Purchaser or the Master Servicer with respect to (A)
advising the Purchaser as to its rights and remedies under this
Agreement or (B) the enforcement (whether through negotiations,
legal proceedings or otherwise) of this Agreement or the other
documents to be delivered hereunder; (iii) any and all accrued
Program Fee and amounts related thereto not yet paid to the
Purchaser; (iv) any and all credit fees, banking fees and
personal property registry search and filing fees; and (v) any
and all stamp, sales, excise and other taxes and fees payable or
determined to be payable in connection with the execution,
delivery, filing or recording of this Agreement or the other
agreements and documents to be delivered hereunder, and agrees to
indemnify and save each Indemnified Party from and against any
and all liabilities with respect to or resulting from any delay
in paying or omission to pay such taxes and fees.
(b) If the Seller or the Subservicer fails to pay any Blocked Account
fees or other charges or debits related to such accounts, or to
pay or perform any agreement or obligation contained under this
Agreement, the Purchaser may or may direct the Master Servicer to
pay or perform, or cause payment or performance of, such
agreement or obligation, and the expenses of the Purchaser or the
Master Servicer incurred in connection therewith shall be payable
by the party which has failed to so perform.
9.5 Amendments; Waivers; Consents.
No modification, amendment or waiver of, or with respect to, any provision of
this Agreement or the Related Documents, shall be effective unless it shall be
in writing and signed by each of the parties hereto. This Agreement, the Related
Documents and the documents referred to therein embody the entire agreement
among the Seller, the
Subservicer, the Purchaser and the Master Servicer, and supersede all prior
agreements and understandings relating to the subject hereof, whether written or
oral.
9.6 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS
PROVISIONS) OF THE PROVINCE OF ONTARIO, EXCEPT TO THE EXTENT THAT
THE VALIDITY OR PERFECTION OF THE INTERESTS OF THE PURCHASER IN
THE PURCHASED RECEIVABLES OR REMEDIES HEREUNDER OR THEREUNDER, IN
RESPECT THEREOF, ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE PROVINCE OF ONTARIO.
(b) THE SELLER AND THE SUBSERVICER HEREBY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF THE COURTS OF THE PROVINCE XX XXXXXXX XXX XXX
XXXXXXX XXXXXX XX XXXXXX LOCATED IN ONTARIO, AND EACH WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT
ALL SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED
TO THE ADDRESS SET FORTH ON THE SIGNATURE PAGE HEREOF AND SERVICE
SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE DAYS AFTER THE SAME
SHALL HAVE BEEN DEPOSITED IN CANADA POST, POSTAGE PREPAID. THE
SELLER AND THE SUBSERVICER EACH HEREBY WAIVES ANY OBJECTION BASED
ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION
INSTITUTED HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL
OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT.
NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF THE PURCHASER
TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
AFFECT THE RIGHT OF THE PURCHASER TO BRING ANY ACTION OR
PROCEEDING AGAINST THE SELLER OR ITS PROPERTY, OR THE SUBSERVICER
OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION. THE
SELLER AND THE SUBSERVICER EACH HEREBY AGREE THAT THE EXCLUSIVE
AND APPROPRIATE FORUMS FOR ANY DISPUTE HEREUNDER ARE THE COURTS
OF THE PROVINCE OF ONTARIO AND THE FEDERAL COURTS OF CANADA
DISTRICT COURT LOCATED IN ONTARIO AND AGREE NOT TO INSTITUTE ANY
ACTION IN ANY OTHER FORUM.
(c) THE SELLER, AND THE SUBSERVICER EACH HEREBY WAIVES ANY RIGHT TO
HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR IN CONNECTION WITH THIS AGREEMENT.
INSTEAD, ANY DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A
TRIAL WITHOUT A JURY.
9.7 Execution in Counterparts; Severability.
This Agreement may be executed in any number of counterparts, each of which when
so executed shall be deemed to be an original and all of which when taken
together shall constitute one and the same agreement. In case any provision in
or obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
9.8 Confidentiality.
Each of Seller and Purchaser understands and agrees to keep confidential, and
shall cause its respective directors, officers, shareholders, employees, agents,
and attorneys to keep confidential the terms and conditions of this Agreement,
all documents referenced herein and the respective terms thereof, and any
communication between the parties regarding this Agreement or the services to be
provided hereunder hereby, except to the extent that (a) any party makes any
disclosure to his or its auditors, attorneys or other professional advisors, (b)
any disclosure is otherwise required by law or pursuant to any rule or
regulation of any federal, state or other governmental authority
or regulatory agency, provided that Seller provides prior written notice thereof
or (c) the Seller is in receipt of the prior written consent of Purchaser with
respect to any compromise by Seller of the confidentiality contemplated
hereunder. Seller further understands and agrees that the violation by the
Seller or its agents of the foregoing shall entitle the Purchaser, at its
option, to obtain injunctive relief without a showing of irreparable harm or
injury and without bond.
9.9A. The Guarantee.
YakUSA, as primary obligor and not as a surety merely, hereby unconditionally
and irrevocably, guarantees to the Purchaser the punctual payment when due in
accordance with the terms hereof of all obligations, of whatever kind and
description, of the Seller to the Purchaser now or hereafter existing, whether
direct or indirect, absolute or contingent, matured or unmatured, secured or
unsecured pursuant to or arising out of or under this agreement. YakAmerica, as
primary obligor and not as a surety merely, hereby unconditionally and
irrevocably, guarantees to the Purchaser the punctual payment when due in
accordance with the terms hereof of all obligations, of whatever kind and
description, of YakCan to the Purchaser now or hereafter existing, whether
direct or indirect, absolute or contingent, matured or unmatured, secured or
unsecured pursuant to or arising out of or under this agreement. YakCan, as
primary obligor and not as a surety merely, hereby unconditionally and
irrevocably, guarantees to the Purchaser the punctual payment when due in
accordance with the terms hereof of all obligations, of whatever kind and
description, of YakAmerica to the Purchaser now or hereafter existing, whether
direct or indirect, absolute or contingent, matured or unmatured, secured or
unsecured pursuant to or arising out of or under this agreement. (all of the
obligations described in the paragraphs above are referred to herein
collectively as the "Guaranteed Obligations")
9.9B. Guarantee Absolute.
The Guarantor (as defined in the first recital of this agreement) guarantees
that its Guaranteed Obligations will be paid strictly in accordance with their
terms regardless of any law, regulation or order now or hereafter in effect in
any jurisdiction affecting any of such terms or the rights of the Purchaser with
respect thereto. The liability of the Purchaser hereunder shall be absolute and
unconditional irrespective of:
(a) Any lack of validity or enforceability of the obligations of the
Seller or the Guaranteed Obligations or any agreement or
instrument relating thereto;
(b) Any change in the time, manner or place of the payment of, or in
any other term of, all or any of the obligations of the Seller or
the Guaranteed Obligations, or any amendment or modification of
or any consent to departure from this agreement or any Related
Documents;
(c) Any exchange, release or nonperfection of any collateral or any
release or amendment to, waiver of, or consent to departure from,
or any guarantee for, all or any part of the obligations of the
Seller or the Guaranteed Obligations;
(d) Any whole or partial termination of this Guarantee as to any
other Guarantor; or
(e) Any other circumstance which might otherwise constitute a defence
available to, or a discharge of, a Guarantor in respect of the
obligations of the Seller or the Guaranteed Obligations or a
Guarantor in respect of this Guarantee or the Guaranteed
Obligations.
The above Guarantee shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of any of the obligations of the Seller or
the Guaranteed Obligations are rescinded or must otherwise be returned by the
Purchaser under applicable law, all as though such payment had not been made.
9.9C Consents, Waivers and Renewals.
The Guarantor hereby waives promptness, diligence, notice of the acceptance
hereof, and any other notice with respect to any of the obligations of the
Seller (and where the Guarantor is a Seller, the other Seller) or the Guaranteed
Obligations and this agreement and any requirement that the Purchaser protect,
secure, perfect or insure any security interest or lien or any property subject
thereto or exhaust any right or take any action against the Guarantor or any
other person or entity or any collateral before proceeding hereunder. The
Guarantor agrees that the Purchaser may at any time and from time to time,
either before or after the maturity thereof, without notice to or further
consent of the Guarantor extend the time of payment of, exchange or surrender
any Collateral for, or renew any of the obligations of the Seller or the
Guaranteed Obligations, and may also make any agreements with the Seller, the
Guarantor or with any other party to or person liable on any of the obligations
of the Seller, or interested therein, for the extension, renewal, payment,
compromise, discharge, or release thereof, in whole or in part, or for
any modification of the terms thereof or of any agreement between the Purchaser
and the Guarantor or any such other party or person, without in any way
impairing or affecting this Guarantee. The Guarantor agrees to make payment to
the Purchaser of any of the obligations of the Seller (and where the Guarantor
is a Seller, the other Seller) and the Guaranteed Obligations whether or not the
Purchaser shall have resorted to any collateral security, or shall have
proceeded against any other obligor principally or secondarily obligated with
respect to any of the obligations of the Seller or the Guaranteed Obligations.
The Purchaser shall be free to deal with the Seller and the Guarantor as it sees
fit.
9.9D. Subrogation.
The Guarantor shall not exercise any rights which it may acquire by way of
subrogation under this agreement, by any payment made hereunder or otherwise,
until all the obligations of the Seller and the Guaranteed Obligations shall
have been paid in full. If any amount shall be paid to the Guarantor on account
of such subrogation rights in violation of the foregoing restriction, such
amount shall be held in trust for the benefit of the Purchaser and shall
forthwith be paid to the Purchaser to be credited and applied to the obligations
of the Seller (and where the Guarantor is a Seller, the other Seller), whether
matured or unmatured, in accordance with the terms of this agreement.
9.10 Interest Act (Canada).
For the purposes of this Agreement, whenever interest to be paid hereunder is to
be calculated on the basis of a year of three hundred and sixty (360) days or
any other period of time that is less than a calendar year, the yearly rate of
interest to which the rate determined pursuant to such calculation is equivalent
to the rate so determined multiplied by the actual number of days in the
calendar year in which the same is to be ascertained and divided by three
hundred and sixty (360).
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective officers thereunto duly authorized, as of the date first above
written.
Seller
YAK COMMUNICATIONS (CANADA) INC.
Per: /s/ Xxxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: President
Address at which the chief executive office is located
Address:
00 Xxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxx, XX X0X 0X0
Attention: Xxxxxxx Xxxxxxx
President
Phone number: 000.000.0000
Telecopier number: 416.279.1371
SELLER
YAK COMMUNICATIONS (AMERICA), INC.
Per: /s/ Xxxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: President
Address:
00 Xxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxx, XX X0X 0X0
Attention: Xxxxxxx Xxxxxxx
President
Phone number: 000.000.0000
Telecopier number: 416.279.1371
PURCHASER
TEXTRON FINANCIAL CANADA LIMITED
Per:
------------------------------------
Name:
Title:
Address:
000 Xxxxxxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention:
Phone number:
Telecopier number:
GUARANTOR
YAK COMMUNICATIONS (USA), INC.
Per: /s/ Xxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: President
Address:
00 Xxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxx, XX X0X 0X0
Attention: Xxxxxxx Xxxxxxx
President
Phone number: 000.000.0000
Telecopier number: 416.279.1371
GUARANTOR
YAK COMMUNICATIONS (CANADA) INC.
Per: /s/ Xxxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: President
Address at which the chief executive office is located
Address:
00 Xxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxx, XX X0X 0X0
Attention: Xxxxxxx Xxxxxxx
President
Phone number: 000.000.0000
Telecopier number: 416.279.1371
GUARANTOR
YAK COMMUNICATIONS (AMERICA), INC.
Per: /s/ Xxxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: President
Address:
00 Xxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxx, XX X0X 0X0
Attention: Xxxxxxx Xxxxxxx
President
Phone number: 000.000.0000
Telecopier number: 416.279.1371
