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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. 







 
	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. 






	
	 	 
	
	
 	

 
	
	
 	

 
	
	
 	

 
	
MEC Holdings (Canada) Inc.	 	 
	

	
 	

 
	
	
 	

 
	

	
 	

 
	
	 	 
	
	
 	

 
	

	
 	

 
	

	
 	

 
	
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