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EXHIBIT 10.38

OFFER

FOR PURCHASE OF RECEIVABLES

This offer for the purchase of receivables (the "Offer") is made the      day of
February, 2005

jointly by:

1.MEC Holdings (Canada) Inc., a stock corporation organised and existing under
the laws of Ontario, with its registered head office at 337 Magna Drive, Aurora,
Ontario, Canada, (the "Seller")

and

2.MAGNA INTERNATIONAL Inc., a stock corporation organised and existing under the
laws of Ontario, with its registered head office at 337 Magna Drive, Aurora,
Ontario, Canada, (the "Obligor")

to

BANK AUSTRIA CREDITANSTALT AG, a bank organised and existing under the laws of
Austria, with its registered seat in Austria, 1030 Vienna, Vordere,
Zollamtsstraße 13, registered at the register of entrepreneurs maintained by
Firmenbuchgericht Wien at the Handelsgericht Wien under number FN 150714p,
(the "Bank").

Whereas

A.The Seller and the Obligor have entered into the Preferred Access Agreement
dated 1st November 2004 (the "Contract"), by which the Obligor shall pay to the
Seller, for the right of access to use the Facilities owned by the Seller, an
annual amount of CDN 5,000,000.

B.The Seller intends to sell to the Bank certain of its receivables under the
Contract subject to the terms and conditions of this Offer.

Now, the Seller and the Obligor hereby declare as follows:

1.The Seller offers herewith to the Bank to purchase from the Seller the
Receivables together with all ancillary rights and securities, if any, in
accordance with the terms and conditions as set out in Annex 1 to this Offer
(the "Terms and Conditions"); provided, however, that no term or condition of
this Offer (including the Terms and Conditions) shall be deemed to amend,
supplement, modify or otherwise affect the rights of first refusal of Obligor
contained in article 8 of the Contract.

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2.The Terms and Conditions shall be deemed to be incorporated into this Offer
and form a part thereof. Capitalized terms defined in the Terms and Conditions
shall, subject to any contrary indication, have the same meanings herein.

3.This Offer is irrevocable and valid until February     , 2005.

4.Acceptance of this Offer may be made by the Bank in its sole discretion only
by crediting the account of the Seller at The Bank of Nova Scotia, Account no
77842-00857-15 (bankcode 77842) with the Purchase Price minus the management fee
set out in Clause 9 of the Terms and Conditions provided that all conditions
precedent in Clause 5 of the Terms and Conditions have been satisfied or waived.

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MEC Holdings (Canada) Inc.    

 
 

 
 

 
 

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MAGNA INTERNATIONAL Inc.    

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ANNEX 1

TERMS AND CONDITIONS

1.     SCOPE OF THE TERMS AND CONDITIONS

These terms and conditions (the "Terms and Conditions") shall apply to the Offer
for Purchase of the Receivables (the "Offer") made the      day of February,
2005 by the Seller and the Obligor to the Bank for the purchase of the
Receivables.

2.     DEFINITIONS AND INTERPRETATIONS

2.1   Definitions

Capitalized terms defined in the Offer shall, subject to any contrary
indication, have the same meanings herein. In addition, in these Terms and
Conditions and in the Offer, unless the context otherwise requires, the
following expressions shall have the meanings given to them in this Clause 2:

"Business Day"   means a day on which banks are open for business in Vienna and
Toronto;
"CDN"
 
means the lawful currency of Canada;
"Clause"
 
means a clause under these Terms and Conditions;
"Contract"
 
means the Preferred Access Agreement between Obligor and Seller dated 1st
November 2004, as may be amended from time to time;
"Effective Date"
 
Means February     , 2005 (but not later than February     , 2005), provided
that on such date:
 
 
(a)
 
the Bank has received each of the documents listed in Clause 5.1 of these Terms
and Conditions (Documentary Conditions Precedent) in a form and substance
satisfactory to it, and
 
 
(b)
 
all further conditions precedent listed in Clause 5.2 of these Terms and
Conditions (Further Conditions Precedent) have been fulfilled in a manner
satisfactory to the Bank
 
 
provided that it is at the sole discretion of the Bank (who shall not be obliged
to do so) to waive any such conditions;
"Earlier Expiry of the Contract"
 
has the meaning given to it in Clause 8.1 (Earlier Expiry of the Contract);
 
 
 
 
 

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"Facilities"
 
means the sport facilities owned by the Seller as defined and described in
Article 1 (a) of the Contract;
"Payment Account"
 
Bank Austria Creditanstalt AG, Vienna
SWIFT BKAUATWW
Correspondent Bank: Royal Bank of Canada, Toronto
SWIFT ROYCCAT2
Account 095912091510
Ref. 8109/MEC/2006-2009

or any other account as the Bank may designate from time to time;
"Purchase Documents"
 
means the Offer (including the Terms and Conditions), and any other document
which is necessary for the completion of the purchase of the Receivables;
"Purchase Price"
 
has the meaning given to it in Clause 6.1 (Purchase Price);
"Receivables"
 
has the meaning given to it in Clause 3 (Object of The Purchase);
"Reduction of Annual Fee"
 
has the meaning given to it in Clause 8.2 (Reduction of Annual Fee);
"Right of Access"
 
means the rights of access to use the Facilities in the way described in the
Contract;

2.2   Interpretations

In these Terms and Conditions, unless the context otherwise requires:

(a)words importing the singular shall be construed so as to include the plural
and vice versa;

(b)a reference to a specified Clause shall be construed as a reference to that
specified Clause of these Terms and Conditions;

(c)the clause headings are for ease of reference only and shall not affect the
interpretation of these Terms and Conditions;

(d)a term used in any other document or in any notice given under or in
connection with these Terms and Conditions has the same meaning in that document
or notice as in these Terms and Conditions; and

(e)words denoting persons include corporations, partnerships and other legal
persons and references to a person includes its successors and permitted
assigns.

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3.     OBJECT OF THE PURCHASE

3.1   Receivables

The object of the purchase shall be the following Seller's receivables under the
Contract (hereinafter "Receivables"):

Payment claims of the Seller against the Obligor for the 2006, 2007 and 2008
calendar years (the "Relevant Years") arising under the Contract as compensation
for the Rights of Access as specified in article 4 (a) of the Contract. The
Receivables consists of three equal payments of CDN 5,000,000 (each an "Annual
Fee") and each Annual Fee is payable in advance on or before the third Business
day in each of the Relevant Years and in accordance with Clause 7 herein. The
aggregate nominal amount of the purchased Receivables is CDN 15,000,000.

3.2   Exclusion

For the avoidance of doubt, the following payment obligations of the Obligor
shall not form part of the Receivables and therefore such payment obligations do
not constitute the object of the purchase under the Offer and these Terms and
Conditions:

(a)any applicable taxes on the Annual Fees, as provided in article 4 (a) of the
Contract;

(b)any expenses as provided in article 4 (b) of the Contract;

(c)any taxes, licence, fees, rates, duties, assessments and other fees as
provided in article 4 (c) of the Contract;

and nothing in these Terms and Conditions is intended to limit the Obligor's
obligations to pay such taxes on the Annual Fees, expenses, other taxes,
licence, fees, rates, duties, assessments and other fees to the Seller and/or to
the respective tax authorities, as applicable.

4.     PURCHASE PROCEDURE

4.1   Legal Form of the Purchase

The purchase of the Receivables shall be:

(a)effected on the Effective Date;

(b)notwithstanding any other provision contained herein or in the Offer, made
without any right of recourse against the Seller in case of the insolvency of
the Obligor or non-payment of the obligations of the Obligor pursuant to the
Contract (subject to any amendment made thereof which is done in accordance with
these Terms and Conditions), this Offer or the Terms and Conditions;

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(c)made together with the assignment of all securities and ancillary rights
(if any), which shall be automatically transferred to Bank; and

(d)made in the legal form of an assignment in accordance with Austrian law.

4.2   Acknowledgement of the Obligor

(a)The Obligor confirms that:

(i)it knows and accepts the purchase of the Receivables under the Offer; and

(ii)it has not been notified of any other assignment of the Contract or sale of
the Receivables with respect to the Receivables.

(b)The Obligor undertakes that commencing on the Effective Date and until the
Annual Fee for 2008 has been paid, the Obligor will pay each Annual Fee to the
Payment Account in accordance with Clause 7.1 (Payments by the Obligor) of the
Terms and Conditions of this Offer and the Seller hereby irrevocably directs
Obligor to make such payments in accordance therewith.

4.3   Recording of Assignment

On and after the Effective Date the Seller shall ensure that its financial
statements and shall procure that its parent company's financial statements
indicate that the Seller has transferred the Receivables to the Bank. The Seller
shall register its financing statement in the Personal Property Security
Registration System of the Province of Ontario for a period of 12 years and
provide the Bank with copy of the verification statement evidencing such
registration.

5.     CONDITIONS PRECEDENT

5.1   Documentary Conditions Precedent

In order for the Offer to be accepted, the following conditions precedent must
be either satisfied in a manner satisfactory to the Bank or waived by the Bank:

(a)delivery by the Seller to the Bank of a copy of the Contract and the security
documents (if any); and

(b)delivery by the Seller to the Bank of a copy, certified as a true copy by or
on behalf of the Seller, of each such law, decree, consent, license, approval,
registration, permission or other necessary document, as is in the reasonable
opinion of the Bank necessary to render the Contract legally valid, binding and
enforceable and to enable the Seller to perform its respective obligations
thereunder;

(c)delivery by the Seller to the Bank of any other documents which in the
reasonable opinion of the Bank are necessary for the completion of the purchase
of the Receivables;

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(d)the Bank has received a legal opinion from the Seller's Canadian counsel,
satisfactory to the Bank in form and substance, issued by Seller's Canadian
counsel confirming, inter alia, that:

(i)the Contract creates legally valid claims of the Seller against the Obligor
in the principal amount of CDN 15,000,000 and that such claims exist, are valid,
binding, enforceable and payable under Ontario law; and

(ii)under Ontario law the sale of the Receivables and any securities and
ancillary rights, if any, in favour of the Bank is effective; and

(iii)specifying the reasons under Ontario law under which the Obligor may be
entitled to stop or reduce payment of the Receivables or to suspend or terminate
the Contract; and

(iv)the financing statement of the Seller has been registered on behalf of Bank
in the Personal Property Security Registration System of the Province of Ontario
for a period of 12 years (a copy of the verification statement evidencing such
registration shall be attached).

5.2   Further Conditions Precedent

All representations and warranties set out in Clause 11 (Representations and
Warranties) are true and correct in all material respects.

6.     PURCHASE PRICE AND ITS PAYMENT

6.1   Purchase Price

The purchase price for the Receivables is CDN 13,679,275.00 (the "Purchase
Price").

6.2   Set-off by Bank

The Bank may, after providing written notice to the Seller, (but shall not be
obliged to) set-off its obligation to pay the Purchase Price against any
obligation of the Seller due and payable at any office of the Bank anywhere and
in any currency. The Bank may effect such currency exchanges as are appropriate
to implement such set-off.

7.     PAYMENTS AND ACCOUNTS

7.1   Payments by the Obligor

Commencing on the Effective Date and until the Annual Fee for 2008 has been
paid, Annual Fees shall be paid in CDN, in full, without any set-off or
counterclaim whatsoever and free and clear of any deductions or withholdings by
not later than 11 a.m. (local time in the place of payment) on the Third
Business Day of the calendar year to the Payment Account or such account as the
Bank may have notified to the Obligor in writing; provided however, that Obligor
shall be entitled to set-off, counterclaim for, retain, restrict, reserve,
withhold and/or deduct any amounts attributable to the non-performance, improper
performance or default by Seller under the terms of the Contract.

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7.2   Transfer to the Payment Account

If the Obligor makes any payments with respect to the Receivables under the
Contract/this Agreement not to the Payment Account but to any account of the
Seller then:

(a)the Seller hereby irrevocably and unconditionally guarantees to the Bank to
transfer promptly (on the first written demand of the Bank) without any
compensation and retention to the Payment Account any payments with respect to
the Receivables (including without limitation the payments in form of bills of
exchange, cheques, rights and claims having the character of payment and claims
against banks resulting from crediting any account).

(b)until a transfer as provided in a) above is effective, the Seller shall hold
the purchased Receivables together with all securities and ancillary rights
(if any) and any payments in respect to the Receivables as a trustee of the
Bank, so that the Bank is the only beneficial owner and person entitled under
such Receivables, securities and ancillary rights and payments. The Seller shall
administer and collect such assets for the Bank in accordance with Bank's
instructions. The Seller shall act as a trustee without any costs for the Bank.

7.3   Funds and Place

Notwithstanding Clause 7.1 (Payments by the Obligor) above, amounts payable by
the Obligor to the Bank in respect of costs, expenses and taxes shall be made in
the currency in which they are incurred.

7.4   No Set-off, Counterclaim or Retention

Subject to Clause 7.1 (Payments by the Obligor), payments to the Bank under the
Purchase Documents shall be made in full without any set-off, counterclaim,
retention, restriction, reservation, withholdings, deductions or other
condition.

7.5   Taxes

If at any time any applicable law, regulation or regulatory requirement or any
governmental authority, monetary agency or central bank requires the Seller or
the Obligor (as the case may be) to make any deduction or withholding in respect
of taxes from any payment due hereunder, the Bank shall notify the Seller in
writing of the shortfall in the payment made to it and it shall be the Seller's
obligation to make an additional payment to the Bank to ensure that the Bank
receives a net sum equal to the sum which it would have received had no such
deduction or withholding been required to be made and the Seller shall indemnify
the Bank against any losses or costs incurred by it by reason of any failure to
make any such deduction or withholding. The Seller or the Obligor (as the case
may be) shall promptly deliver to the Bank any receipts, certificates or other
proof evidencing the amounts (if any) paid or payable in respect of any
deduction or withholding as aforesaid.

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7.6   Currency Indemnity

If any amount payable by the Seller or the Obligor (as the case may be) under
the Purchased Documents has been received by the Bank in other currency than CDN
and the amount produced by converting such currency into CDN is less than the
relevant CDN amount, then respectively the Seller or the Obligor (as the case
may be) shall as an independent obligation indemnify the Bank for any deficiency
and loss sustained as a result of such conversion. Any conversion shall be made
at such prevailing rate of exchange, on such date and in such market as is
determined by the Bank.

7.7   Partial Payment

In the case of a partial payment, the Bank may appropriate such payment towards
such obligation of the Seller or the Obligor (as the case may be) under this
transaction as the Bank may decide. Any such appropriation shall override any
appropriation made by the Seller or Obligor (as the case may be).

8.     EARLY EXPIRY OF CONTRACT AND REDUCTION OF ANNUAL FEE

8.1   Earlier Expiry of the Contract

In the event of an Earlier Expiry of the Contract, the Bank shall provide the
Seller with information on the amount of payments received from the Obligor
before the date of the Earlier Expiry of the Contract (the "Payments Received").
Within 14 days from the receipt of such information, but not later than on the
date of Earlier Expiry of the Contract, the Seller shall reimburse the Bank
with:

(a)any difference between the Purchase Price and the Payments Received
(the "Difference"); and

(b)any interest which accrues on the Difference calculated at the interest rate
which the Bank could earn by placing the Difference (separately for each Annual
Fee originally payable under the Contract) on deposit with a leading bank in the
relevant Interbank Market for the period starting on the date of the actual
payment of such Difference up to the date on which the respective Annual Fee
would have been payable had the Earlier Expiry of the Contract not occurred.

For the purpose of these Terms and Conditions the "Earlier Expiry of the
Contract" means any expiry of the Contract before the Annual Fee for 2008 has
been paid, including without limitation an expiry of the Contract as a result
of:

(i)the withdrawal from the Contract of any of its parties; or

(ii)any termination of the Contract (other than termination caused by insolvency
of the Obligor) but including without limitation termination caused by the
damage of the Facilities, the sale of the Facilities by the Seller to the
Obligor (in which case the Seller shall be required to make the appropriate
payment to Bank prior to the completion of such transaction) or any other party
or by non-performance or improper performance of the Contract by the Seller.

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8.2   Reduction of Annual Fee

In the event of the Reduction of Annual Fee, the Obligor shall pay to the Bank
the resulting reduced Annual Fee, as defined and provided in the article 4(a) of
the Contract and the Bank shall provide the Seller with information on the
amount of payments received from the Obligor before the date of the Reduction of
the Annual Fee (the "Pre-Reduced Payments Received"). Within 14 days from the
receipt of such information, but not later than on the first date of the
implementation of the Reduction of Annual Fee, the Seller shall reimburse the
Bank with:

(a)the difference between the Purchase Price, less the Pre-Reduced Payments
Received and less the amounts of the resulting reduced Annual Fee to be paid
(and, for the avoidance of doubt, being unpaid so far) by the Obligor
(the "Reduced Difference"); and

(b)the interest which accrues on the Reduced Difference calculated at the
interest rate which the Bank could earn by placing the Reduced Difference
(separately for each Annual Fee originally payable under the Contract) on
deposit with a leading bank in the relevant Interbank Market for the period
starting on the date of the actual payment of such Reduced Difference up to the
date on which the respective Annual Fee would have been payable had the
Reduction of Annual Fee not occurred.

For the purpose of these Terms and Conditions the "Reduction of Annual Fee"
means any reduction of the Annual Fee (as defined in article 4 (a) of the
Contract) to be paid by the Obligor under the Contract including without
limitation:

(i)the reduction made by the Obligor as a result of non-performance or improper
performance of the Contract by the Seller,

(ii)the reduction as a result of any set-off the Obligor's receivable towards to
the Seller against the Receivables made by any reason by the Obligor.

9.     MANAGEMENT FEE

The Seller shall pay to the Bank a management fee of 0.15% of the aggregate
nominal amount of the purchased Receivables.

10.   COSTS AND EXPENSES

The Seller shall:

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(a)indemnify the Bank for all costs, charges and expenses (including the costs
of the Bank's Canadian lawyer) incurred by the Bank in or in connection with the
negotiation, preparation and execution of this transaction (including value
added taxes thereon); and

(b)reimburse the Bank on demand for such legal costs or expenses (including
value added tax thereon) reasonably incurred by the Bank in the enforcement of,
or preservation of any rights under, this transaction; and

(c)pay any and all taxes, stamp and other duties to which the transactions
hereunder may be subject or give rise and indemnify the Bank against any and all
liabilities with respect to or resulting from any delay or omission on the part
of the Seller to pay any such taxes or duties.

The Seller undertakes to reimburse the Bank upon first request with all costs
and fees which have to be borne by the Seller as set forth in this Clause 10
(Costs and Expenses).

11.   REPRESENTATIONS AND WARRANTIES

11.1 Representations and Warranties of the Seller

        The Seller represents and warrants to the Bank that:

General

(a)the Seller has the power to execute, deliver and perform its obligations
under the Purchase Documents and under any other documents connected with the
performance of the Purchase Documents; all necessary action has been taken by
Seller to authorise the execution, delivery and performance of the Purchase
Documents and any other documents connected with the performance of the Purchase
Documents; no limitation on the Seller's powers will be exceeded as a result of
transactions under the Purchase Documents or any other documents connected with
the performance of the Purchase Documents;

(b)upon acceptance of the Offer by the Bank, the Purchase Documents constitute
Seller's valid and legally binding obligations of the Seller, enforceable in
accordance with their terms, subject to applicable bankruptcy, insolvency,
reorganisation, moratorium, and similar laws affecting legal entities' rights
generally, and to general equitable principles;

(c)the execution, delivery and performance of the Purchase Documents and any
other documents connected with the performance of the Purchase Documents by each
of Seller will not (i) contravene any existing law, regulation or authorisation
to which it is subject, (ii) result in any material breach of, or default under,
any agreement or other instrument to which it is a party or is subject, or
(iii) contravene any provision of Seller's Articles of Incorporation, By-laws or
other constituent documents;

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(d)every material consent for, authorisation of or registration with
governmental or public bodies or courts required by Seller in connection with
the execution, delivery performance, validity, enforceability or admissibility
in evidence of the Purchase Documents and any other documents connected with the
performance of the Purchase Documents has been obtained or made and is in full
force and effect and there has been no default by Seller in the observance of
any conditions imposed in connection therewith; and

(e)there are no actions, proceedings or claims pending or to the best of
Seller's knowledge threatened, the adverse determination of which might have a
materially adverse effect on Seller's ability to perform their obligations
under, or affect the validity or enforceability of the Purchase Documents;

(f)any of the documents given to Bank in accordance with Clause 5.1 (Documentary
Conditions Precedent) of these Terms and Conditions is correct and a true copy
of the original;

Contract and Receivables

(g)the Contract and all related documents thereto are in full force and effect
and constitute legally binding, valid and enforceable obligations of the Seller
and the Obligor;

(h)the execution, delivery and performance of the Contract and any other
documents connected with the performance of the Contract by Seller will not
(i) contravene any existing law, regulation or authorisation to which it is
subject, (ii) result in any breach of, or default under, any agreement or other
instrument to which it is a party or is subject, or (iii) contravene any
provision of its Articles of Incorporation, By-laws or other constituent
documents;

(i)all consents, licenses, permissions and registrations, if any, which are
necessary for and/or in connection with the execution, delivery, performance,
validity and enforceability of the Contract by Seller have been obtained and are
in full force and effect;

(j)the Seller has properly made the Facilities accessible to the Obligor in the
way which allows the Obligor to exercise the Right of Access in accordance with
the Contract;

(k)the Seller has legal title to the Facilities and, other than the Contract
which the Obligor may record on the title of the Facilities, there is no
security interest, mortgage, pledge, nor any other agreement or arrangement
having the effect of conferring security, over or in respect of the whole or any
part of the Facilities;

(l)the purchase and sale of the Receivables is not prohibited or restricted
under the Contract;

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(m)the Receivables (together with the ancillary rights and the security, if any)
purchased by the Bank is a legally valid, binding and enforceable claim against
the Obligor and has been validly transferred to the Bank;

(n)Seller has no actual knowledge of any circumstances which make the ability of
the Obligor to pay questionable or which impair the enforceability of the
Receivables;

(o)the Receivables (together with the ancillary rights and the security, if any)
purchased by the Bank is, subject to Clause 7.1 (Payments by Obligor) free of
all objections, set-off, counterclaims and deductions whatsoever; and

(p)the aggregate face amount of the Receivables is not less than CDN 15,000,000

11.2 Representations and Warranties of the Obligor

        The Obligor represents and warrants to the Bank that:

(a)Obligor has the power to execute, deliver and perform its obligations under
the Purchase Documents and under any other documents connected with the
performance of the Purchase Documents; all necessary action has been taken by
Obligor to authorise the execution, delivery and performance of the Purchase
Documents and any other documents connected with the performance of the Purchase
Documents; no limitation on Obligor's powers will be exceeded as a result of
transactions under the Purchase Documents or any other documents connected with
the performance of the Purchase Documents;

(b)if the Offer has been accepted by the Bank, the Purchase Documents constitute
Obligor's valid and legally binding obligations, enforceable in accordance with
their terms, subject to applicable bankruptcy, insolvency, reorganisation,
moratorium, and similar laws affecting legal entities' rights generally, and to
general equitable principles;

(c)the execution, delivery and performance of the Purchase Documents and any
other documents connected with the performance of the Purchase Documents by
Obligor will not (i) contravene any existing law, regulation or authorisation to
which it is subject, (ii) result in any breach of, or default under, any
agreement or other instrument to which it is a party or is subject, or
(iii) contravene any provision of Obligor's Articles of Incorporation, By-laws
or other constituent documents;

(d)every consent for, authorisation of or registration with governmental or
public bodies or courts required by Obligor in connection with the execution,
delivery performance, validity, enforceability or admissibility in evidence of
the Purchase Documents and any other documents connected with the performance of
the Purchase Documents has been obtained or made and is in full force and effect
and there has been no default by Obligor in the observance of any conditions
imposed in connection therewith; and

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(e)there are no actions, proceedings or claims pending or to the best of
Obligor's knowledge threatened, the adverse determination of which might have a
materially adverse effect on Obligor's ability to perform its obligations under,
or affect the validity or enforceability of the Purchase Documents.

The warranties and representations of this Clause 11 (Representations and
Warranties) are made on the date of the Offer and shall remain true in all
material respects until the Bank has received full payment of the Receivables by
reference to the facts and circumstances existing on the respective date they
are made.

11.3 Liability of Seller under the Purchase Documents

        If:

(i)any representation, warranty or statement made or deemed to be made by the
Seller in the Purchase Documents is or proves to have been incorrect or
misleading in any material respect when made or deemed to be made; and

(ii)the Seller does not comply with any provision of the Purchase Documents and
that non-compliance is not remedied promptly after the Bank has given notice of
the non-compliance to the Seller

than the Seller shall be liable to the Bank. The Seller irrevocably and
unconditionally agrees to fully indemnify the Bank from time to time on Bank's
first written demand from and against any expense, loss, damage or liability
(as to which amount the certificate of the Bank shall in the absence of manifest
error be conclusive) which the Bank may incur as a result of such
misrepresentation and/or non — compliance, provided that such liability shall be
limited to an amount equal to the face amount of the Receivables purchased by
the Bank plus all accrued fees, costs and expenses (if any).

12.   UNDERTAKINGS

Each of the Seller and the Obligor irrevocably agree and undertake, on their own
behalf and not on behalf of one another, to the Bank as follows:

(a)(Seller only) not to assign the Contract or sell the Receivables to any
person other than the Bank, not to encumber the Contract or the Receivables with
any security interest, and not to transfer them or burden them in any other
manner;

(b)to execute, sign and deliver all documents for the fulfilment of the terms
and conditions of the Purchase Documents and take each and every action
reasonably needed for the Bank to obtain the exclusive rights on the Receivables
and to hand over to the Bank without any delay all necessary documents and to
give all necessary information concerning the Receivables requested by the Bank;

(c)not to breach any provision of the Contract materially affecting the rights
of the Bank to collect the Receivables;

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(d)(Seller only) unless the Seller has paid to the Bank the full amount
stipulated in Clause 8.2 (Reduction of Annual Fee), Seller shall not agree on a
Reduction of the Annual Fee without the explicit prior written consent of the
Bank;

(e)(Seller only) unless Seller has paid to the Bank the full amount stipulated
in Clause 8.1 (Earlier Expiry of the Contract), Seller shall not sell, transfer
or otherwise dispose of the Facilities without the explicit prior written
consent of the Bank;

(f)(Seller only) without the explicit prior written consent of the Bank, other
than the Contract which the Obligor may record on the title of the Facilities,
not to create, extend or permit to arise or subsist any security interest,
mortgage, pledge, or any other agreement or arrangement having the effect of
conferring security over or in respect of the whole or any part of the
Facilities;

(g)(Seller only) without the explicit prior written consent of the Bank not to
agree to any changes of the Contract materially affecting the right of the Bank
to collect the Receivables in particular not to agree to any amendment of the
Contract concerning the payment of the Annual Fee as defined and provided in
article 4 (a) of the Contract.;

(h)to assist the Bank (without receiving any fees or cost reimbursement
therefore) at Bank's request in any judicial or other action for the enforcement
of, or the preservation of any rights in respect of, the Receivables and the
security and ancillary rights thereto, if any;

(i)(Seller only) to ensure that each of the representations and warranties given
by the Seller in Clause 11 (Representations and Warranties) of these Terms and
Conditions will continue to be true and accurate in all material respects until
the Bank has received full payment of the Receivables; and

(j)(Seller only) to deliver to the Bank as soon as the same become available,
but in any event within 120 days after the end of each of its financial years
its unaudited financial statements for such financial year and such other
financial information which the Bank reasonably requests from time to time.

13.   ASSIGNMENT

13.1 Successors

The Offer (including the Terms and Conditions) shall be binding upon and inure
to the benefit of the Seller, Obligor and the Bank and their respective
successors and assignees, if any.

13.2 No Assignment by Seller or Obligor

Neither the Seller nor the Obligor shall assign its rights or transfer its
obligations under the Purchase Documents (or the transaction being the object of
the Purchase Documents) without the prior written consent of the Bank.
Notwithstanding the foregoing, either the Seller or the Obligor may assign its
rights under the Purchase Documents (or the transaction being the object of the
Purchase Documents) to on affiliate.

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13.3 Assignment by Bank

The Bank shall be entitled, at its own expense, to assign its rights or
obligations under the Purchase Documents (or the transaction being the object of
the Purchase Documents) to another bank or financial institution. Such an
assignment may be made without the prior written consent of the Seller and
Obligor, however the Bank shall provide notice of any such assignment to both
the Seller and the Obligor.

14.   PARTIAL INVALIDITY

If at any time any provision of any Purchase Document is or becomes illegal,
invalid or unenforceable in any respect under the law of any jurisdiction,
neither the legality, validity or enforceability of the remaining provisions
hereof nor the legality, validity or enforceability of such provision under the
law of any other jurisdiction shall in any way be affected or impaired thereby
and the parties shall replace such illegal, invalid or unenforceable provision
with a legal, valid and enforceable one which reflects the intended commercial
effect of the illegal, invalid or unenforceable as close as possible.

15.   DISCLOSURE

After providing notice to the Seller and the Obligor, the Bank may disclose to a
prospective assignee, transferee in accordance with Clause 13.3 (Assignment by
Bank) who may propose entering into contractual relations with the Bank in
relation to this transaction such information about the Seller, the Obligor, the
Purchase Documents and the transaction being the object of the Purchase
Documents as the Bank shall consider appropriate.

16.   LAW AND JURISDICTION

16.1 Applicable Law

The Offer and its Terms and Conditions and all legal relations based thereon are
subject to Austrian Law. The Contract and the legal relations based thereon are,
and shall continue to be, governed by the laws of the Province of Ontario,
Canada.

16.2 General Business Conditions

Unless otherwise agreed herein, the General Terms and Conditions of Bank Austria
Creditanstalt AG May 2003 version, ("GTC BACA") and set forth in Annex 2 to the
Offer, are an integral part of these Terms and Conditions.

16.3 Jurisdiction

The competent courts for the first district of Vienna (especially the
"Handelsgericht Wien" and any court which may replace such court by law) shall
have the non-exclusive jurisdiction for any disputes arising in connection with
the Purchase Documents and the purchases of Receivables based thereon.

        THE SELLER, THE OBLIGOR AND THE BANK HEREBY IRREVOCABLY WAIVE, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS OFFER OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

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OFFER FOR PURCHASE OF RECEIVABLES
ANNEX 1 TERMS AND CONDITIONS