Print this pageTERMS & CONDITIONS
Canada – R01182024
The following are the Factoring Agreement Terms and Conditions (Terms and Conditions) that are incorporated by reference in the Factoring Master Agreement between Seller and, as applicable and as according to the Factoring Master Agreement itself, either eCapital Groups [(ECAPITAL FREIGHT FACTORING, INC.; ECAPITAL FREIGHT FACTORING ITC INC.; ECAPITAL FREIGHT FACTORING, LTD.), (collectively referred to as “eCapital Group,” from time to time) and (“Purchaser,” as applicable)] and Seller. Each of the aforementioned companies are separate and distinct entities, although through servicing agreements, common ownership or otherwise, utilize these Terms and Conditions interchangeably. They are referred to herein collectively for convenient reference only. Nothing contained herein shall alter the Factoring Master Agreement with respect to which specific Purchaser is a party thereto, and nothing contained herein shall create liability among the remaining entities for the debts and obligations of the particular entity that is the exact Purchaser under the applicable Factoring Master Agreement. Capitalized terms not herein defined shall have the meaning set forth in the Factoring Master Agreement and vice versa. All other capitalized terms not otherwise defined shall have the meaning set forth in the PPSA.
1. Definitions. The following terms used herein and in the Factoring Master Agreement shall have the following meaning:
“Account Limit” – The amount specified in the Factoring Master Agreement.
“Account/s”– Means all currently existing and hereafter arising accounts, contract rights, and all other forms of obligations owing to Seller arising out of the sale or lease of goods or the rendition of services by Seller irrespective of whether earned by performance, and any and all credit insurance, guarantees, or security therefor.
“Account Debtor” – The obligor on an Account.
“Accounts Transmittal Form” – A form that may be supplied by Purchaser from time to time wherein Seller lists such of its Accounts as it requests that Purchaser purchase under the terms of this Agreement.
“Accounts Transmittal Upload” – A transmission initiated by Seller of images or digital information in a form required by Purchaser, listing such of its Accounts as it requests that Purchaser purchase under the terms of this Agreement.
“Accounts Transmittal” – An Accounts Transmittal Form or an Accounts Transmittal Upload, as applicable.
“Additional Fee” – The Additional Fee Percent or Additional Fee % specified in the Factoring Master Agreement, multiplied by the stated Face Amount of a Purchased Account at the time of purchase by Purchaser, for each Additional Fee Period specified in the Factoring Master Agreement, or portion thereof that all or any portion thereof remains unpaid, computed from the end of the Initial Fee Period.
“Advance Fee” – The fee specified in the Factoring Master Agreement as the percentage in addition to the Prime Rate as specified in the Factoring Master Agreement, charged on the average daily net Funds Advanced outstanding hereunder, calculated monthly and payable on the last day of each calendar month (at a rate computed on the basis of the actual number of days elapsed over a year of 360 days).
Advance Percentage” or “Advance %” – The percentage specified in the Factoring Master Agreement multiplied by the Face Amount of each Purchased Account. The percentage may vary on Accounts owed by different Account Debtors. Upon any Event of Default, Purchaser may change the Advance Percentage as it deems necessary, in its sole discretion.
“Affiliate of Seller” – Any Person (other than Purchaser): (i) directly or indirectly controlling, controlled by, or under common control with, Seller; (ii) directly or indirectly owning or holding five percent (5%) or more of any equity interest in Seller; or (iii) five percent (5%) or more of whose voting stock or other equity interest is directly or indirectly owned or held by Seller. For purposes of this definition, “control” (including the correlative meanings, the terms “controlling,” “controlled by” and “under common control with”) means the power, directly or indirectly, to determine management and policies of a Person, whether through the ownership of voting securities or by contract or otherwise.
“Agreement” – The Factoring Master Agreement, incorporating these Terms and Conditions, and any extensions, riders, supplements, amendments, or modifications thereto or in connection therewith.
“Avoidance Claim” – Any claim that any payment received by Purchaser from or for the account of an Account Debtor is avoidable under the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada) or any other debtor relief statute, other than claims which relate solely to Non-Recourse Accounts, if any.
“Buyout Fee” – See Section 3.9.
“Chattel Paper” – Means all present and future agreements made between Seller as secured party and others which evidence both a monetary obligation and a security interest in or a lease of specific goods.
“Clearance Days” – Up to three (3) business days.
“Clearance Day Payments” – Payments received by Purchaser in whatever form and from whatever source, in reduction of the Obligations.
“Client Profile” – Any application submitted by Seller setting forth details regarding Seller’s business.
“Closed” – A Purchased Account is closed upon the first to occur of (i) receipt by Purchaser of full payment; (ii) the unpaid Face Amount has been charged to the Reserve Account by Purchaser pursuant to the terms hereof. The closure of any Purchased Account by Purchaser shall not be construed so as to relieve Seller of any of its Obligations provided herein. Seller shall not be deemed to have satisfied its repurchase obligation if a Reserve Shortfall exists.
“Closing Date” – The date on which Seller executes this Agreement. Purchaser’s payment of the Purchase Price on any Account shall be deemed Purchaser’s acceptance and performance of the Factoring Master Agreement, notwithstanding Purchaser not executing the Factoring Master Agreement.
“Collateral” – All Seller’s now owned and hereafter acquired real and personal property and assets wherever located, including, without limitation, Accounts, Debts, Chattel Paper, Inventory, Equipment, Instruments, Investment Property, Documents, Documents of Title, Money, Leases, and Intangibles, and all proceeds of the foregoing (including proceeds of proceeds); provided always that the term “Collateral” when used herein shall not include any consumer goods of the Seller. Any reference to “Collateral” herein shall be deemed to be a reference to the Collateral or any part thereof.
“Contract Term” – Means either the Initial Term or any Subsequent Term of this Agreement.
“Cover Amount” – See Section 2.1.1.
“Date of Acceptance” or “DOA” – means the date upon which any Addendum stating revised terms to the Agreement is signed by the Parties, and if unsigned by Purchaser, the date upon which Purchaser updates its systems to give effect to such revised terms, which shall apply to all subsequently purchased invoices.
“Debts” – means all debts, accounts, amounts, claims, choses in action and moneys which now are, or which may at any time hereafter become, due or owing to or owned by Seller, whether or not earned by performance, including without limitation any and all accounts receivable arising or resulting from the sale, lease, use, assignment or other disposition of any Collateral; all securities, mortgages, bills, notes and other documents now held or owned, or which may be hereafter taken, held or owned, by or on behalf of Seller, in respect of such accounts, debts, amounts, claims, choses in action and moneys or any part thereof; and all books, documents and papers recording, evidencing or relating to such accounts, debts, amounts, claims, choses in action and moneys or any part thereof.
“Depository” – As specified by Seller on the Funding Transfer Instructions form provided by Purchaser, or any demand deposit account maintained by Seller or any Guarantor or represented by an employee of Seller to be maintained by Seller, or any other account of Seller, including fuel card accounts, into which Seller directs Purchaser to make advances or payments of any obligations owed to Seller by Purchaser pursuant to the terms hereof.
“Default Rate” – One and one-half percent (1.5%) for each thirty (30) days, commencing on the date any Event of Default first occurs.
“Documentation Fee” – See Section 3.1.
“Documents” – Means all books of account and other books, invoices, writings, letters, papers and other documents whether in written, magnetic, electronic or other form, relating to or being records of the Collateral or by which any of the Collateral is secured, evidenced, acknowledged or made payable.
“Documents of Title” – Means all writings now or hereafter owned by Seller, each of which writing purports to be issued by or addressed to a bailee and purports to cover such goods and chattels in the bailee’s possession as are identified or fungible portions of an identified mass, whether such goods and chattels are inventory or equipment, and which writing is treated in the ordinary course of business as establishing that the person in possession of such writing is entitled to receive, hold and dispose of such writing and the goods and chattels it covers, and further, whether such writing is negotiable in form or otherwise, including bills of lading and warehouse receipts.
“Early Termination Fee” The Early Termination Fee Percent or Early Termination Fee % specified in the Factoring Master Agreement multiplied by the stated Account Limit at the time of termination not to exceed 10%
“Eligible Account” – An Account that is acceptable for purchase as determined by Purchaser in the exercise of its sole credit or business judgment.
“Email/Fax Submission” – An Invoice and/or associated documents provided by Seller to Purchaser pursuant to the Email/Fax Submission Program via an electronically transmitted image in advance of the provision of an original Invoice representing a corresponding Account.
“Email/Fax Submission Program” – Purchaser may accept images of Invoices and associated paperwork/backup documents submitted by Seller via email and/or fax as evidence of an Eligible Account at Purchaser’s sole discretion subject to the following requirements and limitations: (i) only Invoices for completed services and/or delivered services are eligible for submission; (ii) Invoice and associated paperwork/backup documents must be received by Purchaser based on its cut-off time as set from time to time to be eligible for same day funding; (iii) images may include the following and be in order as follows: Accounts Transmittal, Invoice, rate confirmation, signed bill of lading or other proof of delivery, any other applicable documents such as lumper receipts or scale tickets; (iv) a late fee of two hundred dollars ($200) shall be due from Seller to Purchaser for each Purchased Account submitted via email or fax for which Purchaser has requested and not received original documents within ten (10) days of purchase of said Purchased Account(s); (v) Seller’s eligibility to submit Accounts for purchase by Purchaser via email and/or fax is at the sole discretion of Purchaser and may be revoked by Purchaser at any time.
“Encumbrance” – Means any encumbrance of any kind whatsoever, choate or inchoate, whether arising by contract, statute or otherwise, including without limitation a security interest, mortgage, assignment, lien, hypothec, pledge, hypothecation, charge, trust or deemed trust, conditional sale agreement, lease or other title-retention agreement.
“Equipment” – all equipment now owned or hereafter acquired by Seller, including, without limitation, all machinery, fixtures, plant, tools, furniture, chattels, vehicles of any kind or description including, without limitation, motor vehicles, parts, accessories installed in or affixed or attached to any of the foregoing, all purchase warranties and claims, drawings, specifications, plans and manuals relating thereto, any equipment specified as equipment of Seller and described in any schedule, exhibit or appendix hereto and any other tangible personal property which is not inventory.
“Event of Default” – See Section 12.1.
“Exposed Payments” – Payments received by Purchaser from or for the account of a Payor that has become subject to a bankruptcy, insolvency or similar proceeding and for which the trustee, monitor or similar officer makes a claim that such funds or payments constitutes a preference, reviewable transaction or otherwise, thereby permitting or requiring the payment(s) to be paid to the Trustee or as a court of competent jurisdiction otherwise orders.
“Face Amount” – The face amount due on an Account.
“Factoring Master Agreement” – The Factoring Master Agreement by and between the Parties.
“Finance Application” – Any application (including, but not limited to the Client Profile) submitted by Seller to Purchaser for the purpose of procuring financing from Purchaser, together with any supporting information provided by Seller to Purchaser in connection therewith.
“Fuel Advance” – Funds advanced to Seller by Purchaser pursuant to the Fuel Advance Program against future Accounts that have yet to be assigned an Invoice and are not yet Eligible Accounts.
“Fuel Advance Fee” – $25 per Fuel Advance paid by the Purchaser to the Seller under the Fuel Advance Program.
“Fuel Advance Program” – Fuel Advances may be made to Seller at Purchaser’s sole discretion subject to the following requirements and limitations: (i) maximum Fuel Advance amount of the lesser of fifty percent (50%) of the Face Value of the future Account and three thousand dollars ($3,000); (ii) goods to be delivered associated with the future Account must be loaded on to the Seller’s truck but not yet delivered; (iii) the Account Debtor on the future Account has been credit approved by Purchaser; (iv) a late fee of one tenth of a percent (.1%) per diem shall accrue on the Face Value of the entire future Account for which a proof of delivery sufficient to evidence an Eligible Account has not been provided by Seller to Purchaser within ten (10) days of the provision of the Fuel Advance by Purchaser to Seller; (v) no other advance may be taken by Seller from any other party on a future Account for which Purchaser has made or will make a Fuel Advance; (vi) any cheques or payments of any kind received by Seller on a future Account for which Purchaser has made a Fuel Advance must be forwarded to Purchaser without first being deposited, cashed or otherwise endorsed or negotiated; (vii) Seller’s eligibility to receive Fuel Advances may be revoked at the sole discretion of Purchaser at any time; (viii) the maximum number of Fuel Advances the Seller may receive in any given time period under the Fuel Advance Program is determined at the sole discretion of Purchaser and may be changed by Purchaser at any time; (ix) Seller shall pay an Fuel Advance Fee to Purchaser on each future Account for which Purchaser makes a Fuel Advance in addition to, at the discretion of Purchaser, expenses (both out-of-pocket expenses and allocated internal costs) incurred by Purchaser in connection with the transfer of the Fuel Advance to Seller.
“Funds Advanced” – The daily net balance (after the setting off of any and all fees or other amounts or Obligations owing by Seller to Purchaser as provided in this Agreement) of any monies remitted, paid or otherwise transferred to Seller by Purchaser.
“Funding Transfer Instructions” – A form provided by Purchaser and submitted by Seller indicating Seller’s chosen method of transfer of funds owed to Seller by Purchaser pursuant to the terms hereof.
“Ineligible Date” – The date which is the last day of the Ineligible Date period specified in the Factoring Master Agreement, computed from the Invoice Date.
“Initial Fee” – The Initial Fee Percent or Initial Fee % specified in the Factoring Master Agreement multiplied by the stated Face Amount of a Purchased Account at the time of purchase by Purchaser.
“Initial Fee Period’’ – The number of days specified in the Factoring Master Agreement, computed from the Purchase Date.
“Initial Term” – See Section 13.2
“Insolvent” – An Account Debtor has become Insolvent if it is the subject of (i) an application by the Seller or any other person seeking a declaration that the Seller is insolvent or that the Seller should be adjudged to be bankrupt; (ii) the filing of any proposal or Notice of Intention to File a Proposal under the Bankruptcy and Insolvency Act (Canada); (iii) any proceeding under the Companies’ Creditors Arrangement Act (Canada); or (iv) a cessation of operations due to financial hardship within the Insolvency Period.
“Insolvency Period” – The earlier of (i) the Ineligible Date or (ii) the date on which the Seller could be required to repurchase an account under the section hereof entitled “Repurchase of Accounts”.
“Instruments” – all present and future bills, notes and cheques [as such terms are defined pursuant to the Bills of Exchange Act (Canada)] of Seller, and all other writings that evidence a right to the payment of money and are of a type that in the ordinary course of business are transferred by delivery and all letters of credit and advices of credit provided that such letters of credit and advices of credit state that they must be surrendered upon claiming payment thereunder.
“Intangibles” – all intangible property now owned or hereafter acquired by Seller and which is not Debts or Accounts including, without limitation, all contractual rights, insurance claims, goodwill, licences, inventions, franchises, designer rights, know-how processes and formulae, patents, patent applications, trade marks, trade names, copyrights and other intellectual or industrial property of Seller, whether registered or not and whether under licence or otherwise, and all other choses in action of Seller of every kind, whether due or owing at the present time or hereafter to become due or owing.
“Investment Property” – all present and future investment property held by Seller including securities, shares, options, rights, warrants, joint venture interests, interests in limited partnerships, trust units, bonds, debentures and all other documents which constitute evidence of a share, participation or other interest of Seller in property or in an enterprise or which constitute evidence of an obligation of the issuer, together with all accretions thereto, all substitutions therefor, all dividends and income derived therefrom and all rights and claims in respect thereof.
“Inventory” – all goods and chattels now or hereafter forming the inventory of Seller including, without limitation, all goods, merchandise, raw materials, work in process, finished goods, goods held for sale, resale or lease or that have been leased or that are to be, or have been, furnished under a contract of service, and goods used in or procured for packing or packaging, timber to be cut, minerals and hydrocarbons to be extracted, all livestock and their unborn young and all growing crops.
“Invoice” – The document that evidences or is intended to evidence an Account. Where the context so requires, references to an Invoice shall be deemed to refer to the Account to which it relates.
“Invoice Date” – The date of creation of an Invoice, which shall be no earlier than the date of Account completion, recorded thereupon.
“Late Charge” – One and one-half percent (1.5%) for each ten days (10) computed from the late payment date; provided, however, that any late charge with respect to any reserve shortfall shall be computed from the date such reserve shortfall occurred.
“Late Invoice Date” – The date which is the last day of the Ineligible Date period specified in the Factoring Master Agreement, computed from the Invoice Date.
“Leases” – all leases now owned or hereafter acquired by Seller as tenant (whether oral or written) or any agreement therefor, together with all of Seller’s erections, improvements and fixtures situate thereupon.
“Minimum Invoice Fee” – Shall mean the greater of Initial Fee + Additional Fee or the Minimum Invoice Fee as per your Factoring Master Agreement, and at no time will be less than $35.00 per Invoice purchased by Purchaser. Purchaser reserves the right to increase the Minimum Invoice Fee at any time and for any reason, including so as to recoup Purchaser’s increased costs of borrowing and operational costs with respect to subsequently Purchased Accounts. Notice of each increase shall be provided to Seller and shall take effect immediately upon delivery of the same.
“Misdirected Payment Fee” – Fifteen percent (15%) for the first event, (increasing by 10% for each subsequent event) of the amount of any payment on account of a Purchased Account (a) which has been received by Seller or a third party and not delivered in kind to Purchaser on the next banking day following the date of receipt by Seller or the date of Seller’s knowledge of receipt by such third party, or (b) which Seller has attempted directly or indirectly to divert from direct payment to Purchaser’s address.
“Missing Notation Fee” – Fifteen percent (15%) of the Face Amount of any Purchased Account.
“Money” – all money now or hereafter owned by Seller, whether or not such money is authorized or adopted by the Parliament of Canada as part of its currency or by any foreign government as part of its currency.
“Non-Recourse Account” – A Purchased Account other than a Recourse Account.
“Non-Recourse Credit Guarantee” – Means the assumption by Purchaser of the risk of non-payment on certain Purchased Accounts identified by Purchaser, provided the cause of non-payment is solely due to an Account Debtor becoming Insolvent subject further to the provisions of Section 2.
“Non-Recourse Credit Guarantee Fee”– A fee due to Purchaser for the provision of the Non-Recourse Credit Guarantee where applicable and as specified in the Factoring Master Agreement.
“Obligations” – Means the aggregate of all present and future indebtedness, obligations and liabilities of Seller to Purchaser and/or Purchaser’s Affiliates whether direct or indirect, absolute or contingent, due or to become due, joint or several, primary or secondary, liquidated or unliquidated, secured or unsecured, wheresoever and howsoever incurred and whether arising before, during or after the execution hereof or the commencement of any bankruptcy, insolvency or other proceeding that could give rise to an Avoidance Claim in which Seller is a Debtor, including but not limited to any obligations arising pursuant to letters of credit or acceptance transactions or any other financial accommodations; and all principal, interest, fees, charges, expenses, attorneys’ fees chargeable to Seller or incurred by Purchaser in connection with this Agreement.
“Parties” – Seller and Purchaser specified in the Factoring Master Agreement.
“Payments” – Payments received by Purchaser, in whatever form and from whatever source, in reduction of the Obligations.
“Person” – Means and includes natural persons, corporations, limited partnerships, general partnerships, limited liability companies, joint stock companies, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and governments and agencies and political subdivisions thereof.
“PPSA” shall be the Personal Property Security Act (Ontario) or such other personal property security legislation then in force and governing the Collateral (wherever situated) or the Security Interest granted pursuant to Section 6 herein.
“Preference Reserve” – see Section 2.3.5.1.
“Prime Rate” the rate of interest announced by the Bank of Nova Scotia from time to time as its prime rate but not less than 2.45%.
“Purchase Date” – The date upon which an account has been deemed to have been purchased as set forth in Section 2.1.7 herein.
“Purchase Price” – The Face Amount, less (a) duplication, discounts, returns, credits or allowances of any nature at any time issued, owing, granted or outstanding, (b) the Initial Fee and (c) the amount equal to the Reserve Percentage.
“Purchase Summary Report” – Means a report prepared by Purchaser, which may occur upon receipt of an Accounts Transmittal, indicating those accounts of Seller that Purchaser intends to purchase.
“Purchased Accounts” – Accounts purchased hereunder which have not been Repurchased.
“Purchaser’s Affiliates” – With respect to Purchaser, any affiliated or subsidiary companies, entities, members, owners, joint ventures, and Purchaser’s managers, directors, officers, employees or agent and representatives.
“Rebate” – As described in Section 3.3.6
“Receiver” – See Section 12.3.2
“Recourse Accounts” – See Section 2.1.2
“Repurchased” – An Account has been repurchased when Seller has paid to Purchaser the then unpaid Face Amount, together with any unpaid fees relating to the Purchased Account, upon demand by Purchaser under the terms hereof.
“Required Reserve Amount” – The Reserve Percentage multiplied by the balance of Purchased Accounts.
“Reserve Account” – A bookkeeping account on the books of the Purchaser representing an unpaid portion of the Purchase Price, maintained by Purchaser to ensure Seller’s performance with the provisions hereof.
“Reserve Percentage ” or “Reserve %” – The percentage specified in the Factoring Master Agreement, provided, that Purchaser may, in its sole discretion, from time to time increase the Reserve Percentage to the extent that Purchaser determines that: (a) the dilution with respect to the Accounts for any period has increased in any material respect or may be reasonably anticipated to increase in any material respect above historical levels, (b) the general creditworthiness of Account Debtors has declined, or (c) Seller has failed to comply with the Terms and Conditions. At Purchaser’s sole discretion, the Reserve Percentage may vary on Accounts owed by different Account Debtors.
“Reserve Shortfall” – The amount by which the Reserve Account is less than the Required Reserve Amount.
“Security Interest” – See Section 6.
“Subsequent Term” – See Section 13.
“Termination Amount” – See Section 13.8.
“Trustee” – See Section 2.3.5.2.
“Volume Shortfall” – See Section 3.2.3.
2. Sale; Purchase Price; Billing; Reserve
2.1. Assignment and Sale.
IF THE NON-RECOURSE CREDIT GUARANTEE OPTION IS “ACCEPTED” OR “INCLUDED” ON THE FACTORING MASTER AGREEMENT, THEN WITH RESPECT TO THE REST OF THIS SECTION 2, THE FOLLOWING PARAGRAPHS 2.1.1, 2.1.2, AND 2.1.4 – 2.1.8 SHALL APPLY:
2.1.1. From time to time, Seller may transmit to Purchaser a list of Seller’s Accounts by Accounts Transmittal. Purchaser may thereafter provide to Seller a Purchase Summary Report based on such Accounts Transmittal, and Seller shall sell to Purchaser, as absolute owner, such of Seller’s Accounts as are listed on such Purchase Summary Report. Upon purchase, and subject to any obligation by Seller to repurchase such Account as provided in Section 4, Purchaser will assume the risk of non-payment on such Purchased Accounts not to exceed the Covered Amount, provided: (i) the cause of non-payment is solely due to an Account Debtor becoming Insolvent prior to the Ineligible Date and, (ii) the Account Debtor is not an Affiliate of Seller, and (iii) Seller has obtained a credit approval for the Account Debtor in the eCapital credit database prior to the load being hauled that is within the approved credit limit, and (iv) Seller has provided all original backup documentation relating to the unpaid Purchased Account (to include but not limited to rate sheets, delivery notices and properly signed bills of lading) within 7 days of such a request being made by Purchaser to Seller. “Covered Amount” means as to any single Account Debtor, any amount not to exceed $5,000 per Invoice, and not to exceed in total $50,000 for all sums due to Purchaser by such Account Debtor, or as may otherwise be specified in the Factoring Master Agreement.
2.1.2. Notwithstanding the foregoing, Purchaser may also from time to time purchase Accounts from Seller with full recourse to Seller (“Recourse Accounts”). Such Accounts shall be listed on a Purchase Summary Report indicating those Accounts that are being purchased as Recourse Accounts.
IF THE NON-RECOURSE CREDIT GUARANTEE OPTION IS NOT OFFERED, OR IS DECLINED OR N/A ON THE FACTORING MASTER AGREEMENT, THEN WITH RESPECT TO THE REST OF THIS SECTION 2, THE FOLLOWING PARAGRAPHS 2.1.3 – 2.1.8 SHALL APPLY:
2.1.3. From time to time, Seller may transmit to Purchaser a list of Seller’s Accounts by Accounts Transmittal. Purchaser may send to Seller a Purchase Summary Report based on such Accounts Transmittal, and Seller shall sell to Purchaser, as absolute owner, with full recourse, such of Seller’s Accounts as are listed on such Purchase Summary Report.
2.1.4. Each Accounts Transmittal shall be accompanied by such documentation supporting and evidencing the Account, as Purchaser shall from time to time request.
2.1.5. Purchaser may in the exercise of its sole discretion purchase from Seller such Accounts as Purchaser determines to be an Eligible Account, so long as the total outstanding Face Amount of Purchased Accounts does not exceed, before and after such purchase, the Account Limit. Purchaser may, in Purchaser’s sole credit judgment exercised in good faith, either increase or decrease the Account Limit. To the extent Purchaser’s purchase of any Purchased Account shall cause the total outstanding Face Amount of Purchased Accounts to exceed the Account Limit, the then existing Account Limit shall, as of the date of such purchase, be automatically increased by an amount equal to the amount by which the total outstanding Face Amount of Purchased Accounts exceeds the Account Limit as a result of such purchase.
2.1.6. All parties hereto agree than an Account with Invoice Date thirty (30) or more days prior to the then current date shall not be considered an Eligible Account. Notwithstanding the foregoing, Purchaser may in the exercise of its sole discretion determine that an Account with Invoice Date thirty (30) or more days prior to the then current date shall be an Eligible Account.
2.1.7. Purchaser shall pay the Purchase Price, less any amounts due to Purchaser from Seller, including, without limitation, any amounts due under Section 2.3.2 hereof, of any Purchased Account to Seller’s Depository within three business days of Purchaser’s decision to purchase the Accounts, whereupon the Accounts shall be deemed purchased hereunder.
2.1.8. Purchaser may instruct each Account Debtor to remit all payments due under the related Account to Purchaser provided, that any Account Debtor may be permitted to pay all payments by the automatic debit of its account for payment to an account of Purchaser.
2.2. Notification and Billing. Purchaser may send a statement to any or all Account Debtors itemizing their account activity. All Account Debtors will be instructed to make payments to Purchaser.
2.3. Reserve Account.
2.3.1. Purchaser may pay to Seller any amount by which collected funds in the Reserve Account are greater than the Required Reserve Amount; provided, that no Event of Default exists hereunder, and provided further Purchaser, in its sole discretion and acting in good faith, has no concerns about Seller’s ability to continue to perform its obligations hereunder. Payment by Purchaser of said funds to Seller shall be made in accordance with any written instructions of Seller which are agreed to by Purchaser. Subject to Section 2.3.5, Purchaser may retain the Reserve Account until 120 days after the termination of this Agreement in accordance with the terms hereof, at which time the Purchaser shall pay any balance remaining in the Reserve Account.
2.3.2. Purchaser may apply a portion of any Purchase Price to the Reserve Account in the amount of the Reserve Shortfall.
2.3.3. Seller shall pay to Purchaser, on demand, the amount of any Reserve Shortfall.
2.3.4. Purchaser may (i) charge the Reserve Account with any Obligation, including any amounts due from Seller to Purchaser hereunder; and (ii) pay any amounts due Seller hereunder by a credit to the Reserve Account. Purchaser has the express right of set off and recoupment as against the Reserve Account.
2.3.5. Exposed Payments
2.3.5.1. Upon termination of this Agreement , Seller shall pay to Purchaser (or Purchaser may retain), to hold in a non-segregated non-interest bearing account the amount of all Exposed Payments (the “Preference Reserve”).
2.3.5.2. Purchaser may charge the Preference Reserve with the amount of any Exposed Payments that Purchaser pays to any bankruptcy trustee, monitor, receiver or similar official (hereafter, collectively, a “Trustee”) of the Account Debtor that made the Exposed Payment, on account of a claim asserted under any bankruptcy, insolvency or similar law. Purchaser has the express right of set off and recoupment as against the Preference Reserve.
2.3.5.3. In the event that a claim is made by a Trustee with respect to an Exposed Payment, Purchaser shall provide notice to Seller and to the Account Debtor that made the Exposed Payment of such claim by the Trustee. In the event that neither Seller nor the Account Debtor that made the Exposed Payment has obtained either agreement of the Trustee to hold its claim in abeyance or an Order of a court of competent jurisdiction enjoining Purchaser from making a payment to the Trustee (such Order being obtained on notice to Purchaser and for which Purchaser agrees to take no position on the motion or application and for which Seller and the Account Debtor that made the Exposed Payment would not seek costs as against Purchaser), Purchaser shall pay the amount to the Trustee of the claim – whether from the Preference Reserve or, if insufficient funds are available in the Preference Reserve, from such other sources of funding as may be available to Purchaser and the Seller shall be thereby prevented from asserting any claim or defence as against the Purchaser that the Purchaser should not have made payment to the Trustee.
2.3.5.4. Purchaser shall refund to Seller from time to time that balance of the Preference Reserve for which a claim under any bankruptcy, insolvency or any similar law can no longer be asserted due to the passage of any statute of limitations, settlement with the Trustee of the Account Debtor that made the Exposed Payment or otherwise as Purchaser may determine in its sole and unfettered discretion.
2.3.5.5. In the event that no claims are made by any Trustee in respect of any Exposed Payment(s) prior to termination of this Agreement but that such a claim is made following the termination of this Agreement, Purchaser shall give notice of such claim(s) to Seller and to the Account Debtor(s) that made the Exposed Payment(s) and shall make the payment(s) to the Trustee(s) in accordance with clause 2.3.5.3 and Seller agrees to indemnify and hold harmless Purchaser for any and all amounts that Purchaser may pay, or may be required to pay to the Trustee within ten (10) days of the Purchaser making any such payment. This Section shall survive the termination of this Agreement.
2.4. Payments and Collections. Purchaser shall, for the purpose of the computation of fees due hereunder, add the Clearance Days to any Clearance Day Payments which is acknowledged by the parties to constitute an integral aspect of the pricing of Seller’s facility to Purchaser, and shall apply irrespective of the characterization of whether receipts are owned by Purchaser or Seller. Should any cheque or item of payment not be honored when presented for payment, then payment shall be deemed not to have been made, and the fees shall be recalculated accordingly.
3. Fees.
Seller shall pay to Purchaser, on demand, all fees and other amounts due hereunder, including but not limited to:
3.1. Documentation Fee. The Documentation Fee specified in the Factoring Master Agreement upon Purchaser’s first purchase of Accounts.
3.2. Initial Fee. The Initial Fee immediately upon its accrual, calculated using the applicable Initial Fee Percent specified in the Factoring Master Agreement as follows:
IF THE FACTORING MASTER AGREEMENT DOES NOT CONTAIN A GROWTH ADVANTAGE TABLE, THE FOLLOWING PARAGRAPH 3.2.1 SHALL APPLY:
3.2.1. The Initial Fee Percent specified in the Factoring Master Agreement.
IF THE FACTORING MASTER AGREEMENT CONTAINS A GROWTH ADVANTAGE TABLE , THEN WITH RESPECT TO THE REST OF THIS SECTION 3.2, THE FOLLOWING PARAGRAPHS 3.2.2 – 3.2.4 SHALL APPLY:
3.2.2. The Initial Fee Percent shall be the percentage designated as the Starting Tier in the Factoring Master Agreement or otherwise incorporated into the Factoring Master Agreement.
3.2.3. If the Initial Fee Percent herein are based on a tiered pricing model and are therefore determined by the volume of the Face Amount of Invoices sold hereunder, then it is understood by the Parties that the Starting Tier shall be based upon the estimated volume of the Face Amount of Invoices to be sold on a monthly basis by Seller to Purchaser hereunder. In the event that the Seller sells to Purchaser in any calendar month an aggregate Face Amount of Invoices that exceeds the tier specified in the Factoring Master Agreement as the Starting Tier, then the lowered tiered pricing for the Initial Fee Percent as indicated in the Growth Advantage Table of the Factoring Master Agreement for the tier in which the aggregate Face Amounts of Invoices sold in that month falls shall be applied retroactively to the prior month’s Purchased Accounts on Purchase Accounts exceeding the Starting Tier, if applicable. In other words, if Seller achieves more favourable pricing in a particular month due to a higher volume of Purchased Accounts, then that same pricing formula shall be applied retroactively to the Purchased Accounts from the prior month on Purchase Accounts exceeding the Starting Tier, and any surplus generated thereby from the amounts paid for the Initial Fee Percent shall be released to Seller as a Rebate (but subject to Purchaser’s express rights of setoff and recoupment, which are reserved hereby) in the same manner as the Reserve Account. In the event, that the Seller sells to Purchaser in any calendar month an aggregate Face Amount of Invoices that is less than the lower amount specified for the Starting Tier in the Factoring Master Agreement, then Seller shall pay to Purchaser the difference between the Initial Fee Percent paid by Seller during the applicable calendar month and the Initial Fee Percent that Seller would have paid to Purchaser for the volume of the Face Amount of Invoices actually sold in the applicable calendar month (the “Volume Shortfall”). Purchaser shall have the ability to deduct the Volume Shortfall as applied to the Initial Fee Percent from either of (i) the Purchase Price of any Purchased Accounts purchased in subsequent calendar months or (ii) a reduction of the Reserve Account.
3.2.4. Regardless of the prior calendar month’s dollar volume of monthly Accounts purchased, if an Event of Default under the Agreement has occurred and is continuing without cure the Initial Fee Percent may without notice be increased to the highest Initial Fee Percent set forth in the Growth Advantage Table.
3.3. Additional Fee. In connection with each Purchased Account, the Additional Fee at the time each such Purchased Account is Closed, calculated using the Additional Fee Percent specified in the Factoring Master Agreement as follows:
IF THE FACTORING MASTER AGREEMENT DOES NOT CONTAIN A GROWTH ADVANTAGE TABLE OR ADVANCE FEE, THE FOLLOWING PARAGRAPH 3.3.1 SHALL APPLY:
3.3.1. The Additional Fee Percent specified in the Factoring Master Agreement.
IF THE FACTORING MASTER AGREEMENT CONTAINS A GROWTH ADVANTAGE TABLE, THEN WITH RESPECT TO THE REST OF THIS SECTION 3.3, THE FOLLOWING PARAGRAPHS 3.3.2 – 3.3.4 SHALL APPLY:
3.3.2. The Additional Fee Percent in the row designated as the Starting Tier in the Growth Advantage Table of the Factoring Master Agreement or otherwise incorporated into the Factoring Master Agreement.
3.3.3. If the Additional Fee Percent herein are based on a tiered pricing model and are therefore determined by the volume of the Face Amount of Invoices sold hereunder, then it is understood by the Parties that the Starting Tier shall be based upon the estimated volume of the Face Amount of Invoices to be sold on a monthly basis by Seller to Purchaser hereunder. In the event that the Seller sells to Purchaser in any calendar month an aggregate Face Amount of Invoices that exceeds the tier specified in the Factoring Master Agreement as the Starting Tier, then the lowered tiered pricing for the Additional Fee Percent as indicated in the Growth Advantage Table of the Factoring Master Agreement for the tier in which the aggregate Face Amounts of Invoices sold in that month falls shall be applied retroactively to the prior month’s Purchased Accounts on Purchase Accounts exceeding the Starting Tier, if applicable. In other words, if Seller achieves more favourable pricing in a particular month due to a higher volume of Purchased Accounts, then that same pricing formula shall be applied retroactively to the Purchased Accounts from the prior month on Purchase Accounts exceeding the Starting Tier, and any surplus generated thereby from the amounts paid for the Additional Fee Percent shall be released to Seller as a Rebate (but subject to Purchaser’s express rights of setoff and recoupment, which are reserved hereby) in the same manner as the Reserve Account. In the event, that the Seller sells to Purchaser in any calendar month an aggregate Face Amount of Invoices that is less than the lower amount specified for the Starting Tier in the Factoring Master Agreement, then Seller shall pay to Purchaser the Volume Shortfall for the Additional Fee Percent. Purchaser shall have the ability to deduct the Volume Shortfall as applied to the Additional Fee Percent from either of (i) the Purchase Price of any Purchased Accounts purchased in subsequent calendar months or (ii) a reduction of the Reserve Account.
3.3.4. Regardless of the prior calendar month’s dollar volume of monthly Accounts purchased, if an Event of Default under the Agreement has occurred and is continuing without cure the Additional Fee Percent may be increased to the highest Additional Fee Percent set forth in the Growth Advantage Table.
IF THE FACTORING MASTER AGREEMENT CONTAINS AN ADVANCE FEE, THEN WITH RESPECT TO THE REST OF THIS SECTION 3.3, THE FOLLOWING PARAGRAPHS 3.3.5 – 3.3.6 SHALL APPLY:
3.3.5. The Advance Fee Specified in the Factoring Master Agreement.
The Parties hereby expressly agree and acknowledge that in the event that the Factoring Master Agreement contains an Advance Fee that this (i) has been requested by the Seller; (ii) has resulted in the Initial Fee being a percentage rate lower than would otherwise be the case if the Seller has not requested the Advance Fee; and (iii) the Seller has requested the Advance Fee on the belief or basis that the Account Debtors will pay the Invoices on a timely manner such that the combination of the Advance Fee and the Initial Fee will be less than the amount that the Seller would pay for the Initial Fee if the Purchaser charged only the Initial Fee without any reduction to its percentage rate on account of the Advance Fee.
3.3.6. The Additional Fee Percent specified in the Factoring Master Agreement.
3.4. Non-Recourse Credit Guarantee Fee. The Non-Recourse Credit Guarantee Fee specified in the Factoring Master Agreement, if applicable. The parties acknowledge that it is an integral part of the pricing that such Non- Recourse Credit Guarantee Fee shall apply to all Accounts purchased notwithstanding the fact that not all Accounts are purchased with a Non-Recourse Credit Guarantee.
3.5. Misdirected Payment Fee. Any Misdirected Payment Fee immediately upon its accrual.
3.6. Missing Notation Fee. Any Missing Notation Fee on any Invoice that is sent by Seller to an Account Debtor that does not contain the notice as required by Section 8.3 hereof. It is recognized that the costs imposed upon Purchaser by the Seller’s action or inaction resulting in the imposition of this penalty are difficult to ascertain, and this fee represents the good faith effort to compensate Purchaser without imposing upon the parties the expensive burden of litigating that cost, and is the agreed liquidated damages with result therefrom.
3.7. Payment by Credit Card. In the event an Account Debtor makes a payment to Purchaser using a credit card, Purchaser shall credit to the obligation of the Account Debtor the amount credited to Purchaser by Purchaser’s credit card processor, net of any processing fees.
3.8. Late Charge. The Late Charge on:
3.8.1. All past due amounts due from Seller to Purchaser hereunder; and
3.8.2. The amount of any Reserve Shortfall.
3.9. Out-Of-Pocket Expenses. The out-of-pocket expenses and allocated internal costs incurred by Purchaser in the administration of this Agreement and billed to Seller at Purchaser’s normal and customary rates (including but not limited to such fees as may be stated in a listing or Schedule of “As Utilized Fees” issued by Purchaser from time to time), which includes re-documentation fees (minimum fee of $150 shall apply), wire transfer fees, invoice handling/postage fees, fees for handling of payments received by Purchaser on account of Seller that are not Purchased Accounts, and audit fees. At Purchaser’s discretion, Seller shall pay for the cost of any filing (including PPSA filings), or searching, or obtaining any public or other record. In the event that Seller requires or requests that Purchaser enter into negotiations with a secured party of Seller in connection with the termination of this Agreement, or review or sign any agreement with or for the benefit of such secured party, Seller shall pay Purchaser out-of-pocket costs of its counsel and other advisors, as well as an hourly rate of $250.00 for the reasonable time of Purchaser’s personnel spend in connection therewith (collectively the “Buyout Fee”), with such Buyout Fee not being less than $750.00 payable by Seller to Purchaser. The Buyout Fee shall be in addition to the Termination Amount that may be due under section 13.2 hereof.
3.10. Non-Factored Account Processing Fee. At discretion of Purchaser and without notice to Seller, a processing fee of 0.5% of the invoice amount for any non-factored invoice that is paid to Purchaser for account of Seller.
3.11 Minimum Invoice Fee: Purchaser shall pay the current Minimum Invoice Fee.
4. Repurchase of Accounts.
4.1. Purchaser may require that Seller repurchase, by payment of the unpaid Face Amount thereof, together with any unpaid fees relating to the Purchased Account, on demand, or at the Purchaser’s option, by Purchaser’s charge to the Reserve Account:
4.1.1. Any Purchased Account, including a Non-Recourse Account, the payment of which has been disputed by the Account Debtor obligated thereon, Purchaser being under no obligation to determine the bona fides of such dispute. Any Account not paid by the Late Invoice Date shall be deemed to be disputed by the applicable Account Debtor.
4.1.2. Any Purchased Account including a Non-Recourse Account, regarding which Seller has breached any representation or warranty under this Agreement, or upon the occurrence of an Event of Default, or upon the termination date of this Agreement.
4.1.3. Any Purchased Account including a Non-Recourse Account, for which Seller fails to provide all original backup documentation (to include but not limited to invoices, delivery notices and properly signed bills of lading) relating to the unpaid Purchased Account, within 7 days of Purchaser’s request.
4.1.4. Any Purchased Account (other than an Account Debtor becoming Insolvent within the Insolvency Period with respect to a Non-Recourse Account) where in Purchaser’s reasonable judgment Account Debtor has indicated or demonstrated an unwillingness to pay the Purchased Account when due, or any portion of any Purchased Account which remains unpaid beyond either the Ineligible Date or the Late Invoice Date, as determined in the sole discretion of Purchaser.
4.1.5. All of the Purchased Accounts including Non-Recourse Accounts of any Account Debtor obligated thereon, in the event that greater than ten percent (10%) of Purchased Accounts due from that Account Debtor remain unpaid beyond either the Ineligible Date or the Late Invoice Date, as determined in the sole discretion of Purchaser.
4.2. The repurchase of a Purchased Account shall not constitute a reassignment of such Account, and a security interest therein shall remain in the Purchaser.
5. Repayment of Fuel Advance. Purchaser may require Seller to repay any Fuel Advance, including any fees owed to Purchaser thereon, on demand, or at Purchaser’s option, by charge to the Reserve Account, any Fuel Advance:
5.1. Made 5 days or greater from the date of said request for repayment, for which an original Invoice sufficient to evidence an Eligible Account has not been provided by Seller to Purchaser; or
5.2. That in the sole judgment of Purchaser does not represent an Account that will become an Eligible Account.
6. Security Interest.
6.1. As continuing collateral security for the due and timely payment and performance by the Seller of the Obligations, Seller hereby mortgages, charges, pledges, assigns, transfers, sets over to the Purchaser, and grants to Purchaser a general and continuing first priority security interest in the Collateral (the “Security Interest”).
6.2. Notwithstanding the creation of the Security Interest, the relationship of the parties shall be that of Purchaser and Seller of accounts, and not that of lender and borrower.
6.3. The Security Interest shall extend to all proceeds (other than consumer goods) of the Collateral.
6.4. The Seller hereby acknowledges that value has been given by the Purchaser for the granting of the Security Interest, that the Seller has rights in the Collateral (other than future and hereafter acquired Collateral), and that the parties have agreed not to postpone the time for attachment of the Security Interest.
6.5. The last day of the term of any Lease, sublease or agreement therefor, oral or written, now held or hereafter acquired by the Seller is specifically excepted from the Security Interest and shall not form part of the Collateral, but the Seller agrees to stand possessed of such last day in trust for such person as the Purchaser may direct and the Seller shall assign and dispose thereof in accordance with such direction.
6.6. To the extent that the Security Interest would constitute a breach or cause the acceleration of any agreement, lease, contractual right, licence, approval, privilege, franchise or permit to which the Seller is a party, the Security Interest shall not attach thereto but the Seller shall hold its interest therein in trust for the Purchaser, and shall grant a security interest in such agreement, contractual right, licence or permit to the Purchaser forthwith upon obtaining the appropriate consents to the creation of such security interest.
6.7. In the event that Seller amalgamates with any other corporation or corporations:
(a) the term “Seller” wherever used herein shall extend to and include each of the amalgamating corporations and the amalgamated corporation, and the indebtedness, obligations and liabilities of each of them shall be included in the Obligations; and
(b) the Security Interest shall extend to and the Collateral shall include all the property and assets of each of the amalgamating corporations and the amalgamated corporation and to any property or assets of the amalgamated corporation thereafter owned or acquired.
7. Authorization to Purchaser.
7.1. Seller irrevocably authorizes Purchaser to exercise at any time, any of the following powers, at Seller’s sole expense, until all of the Obligations have been paid in full: (a) receive, take, endorse, assign, deliver, accept and deposit, in the name of Purchaser or Seller, any and all proceeds of any Collateral securing the Obligations or the proceeds thereof; (b) take or bring, in the name of Purchaser or Seller, all steps, actions, suits or proceedings deemed by Purchaser necessary or desirable to effect collection of or other realization upon the Collateral and otherwise collect or realize upon such Collateral in whatever reasonable and lawful manner Purchaser sees fit, including the right to make compromises and settlements with any Account Debtor and generally to perform any acts necessary or expedient for the purpose of collecting the Collateral; (c) pay any sums necessary to discharge any lien or Encumbrance which is, or may become, senior to Purchaser’s security interest in any assets of Seller, which sums shall be included as Obligations and debited to the Reserve Account; (d) initiate electronic debit or credit entries through any electronic clearinghouse or other system for presentment including but not limited to Electronic Cheque Presentment, and ACH systems to or from the Depository, or any deposit (or other) account maintained by Seller wherever located; (e) file in the name of the Seller or Purchaser or both: Mechanic’s Lien or related notices, and/or claims under any bond, in connection with goods or services sold or provided by Seller; (f) notify any Account Debtor obligated with respect to any Account, that the underlying Account has been assigned to Purchaser by Seller and that payment thereof is to be made to the order of and directly and solely to Purchaser; (g) communicate directly with Seller’s Account Debtors to verify the amount and validity of any Account created by Seller; (h) after an Event of Default, change the address for delivery of mail (inclusive of FedEx, UPS or similar service) to Seller and to receive and open mail addressed to Seller; (i) after an Event of Default, extend the time of payment of, compromise or settle for cash, credit, return of merchandise, and upon any terms or conditions, any and all Accounts and discharge or release any Account Debtor or other obligor (including filing of any public record releasing any lien granted to Seller by any such Account Debtor), without affecting any of the Obligations; (j) disclose such information to third parties making credit inquiries about Seller as Purchaser deems necessary, including but not limited to any such inquiries made by credit reporting agencies; and (k) attend and vote in Seller’s name or Purchaser’s name at all meetings of creditors, to file proofs of claim and generally to perform any acts necessary or expedient for the purpose of collecting the Collateral.
7.2. Seller irrevocably authorizes Purchaser at any time and from time to time to file any initial financing statements and amendments thereto that: (a) indicate the Collateral as all assets of the Seller or words of similar effect, regardless of whether any particular asset comprised in the Collateral falls within the scope of the PPSA, (b) contain any other information required by the PPSA.
7.3. Purchaser shall not have any duties or obligations (implied or otherwise) except those expressly set forth in this Agreement. None of Purchaser, its officers, employees, agents or designees shall have, and Seller hereby releases and exculpates all of such persons and entities, from any liability arising from any acts under this Agreement or in furtherance thereof whether of omission or commission, and whether based upon any error of judgment or mistake of law or fact, except for willful misconduct. In no event will Purchaser have any liability to Seller for lost profits or other special or consequential damages. Without limiting the generality of the foregoing, Seller releases Purchaser from any claims which Seller may now or hereafter have arising out of Purchaser’s endorsement and deposit of cheques issued by Seller’s customers stating that they were in full payment of an account, but issued for less than the full amount which may have been owed on the account.
7.4. Seller hereby gives its consent to Purchaser, without compensation or any other limitation, to publish or display testimonials or other statements from Seller and by any means in any media for Purchaser’s advertising or promotional purposes.
7.5. Seller hereby gives its consent to Purchaser, without compensation or any other limitation, to share information about Seller including transactional data and information with non affiliated third parties for any purpose including marketing to Seller of special offers and trade discounts.
7.6. Seller hereby ratifies its authorization to Purchaser to file, prior to the date hereof, any initial financing statements or amendments which indicates the Collateral as all assets of the Seller or words of similar effect.
7.7. Seller hereby grants Purchaser the limited power of attorney to (a) correct and/or execute or initial all typographical or clerical errors discovered in any of the documents executed by Seller in connection herewith, (b) make, amend or correct any filing required by any provincial or territorial ministry of transportation or any other governmental ministry or agency having jurisdiction over Seller, including but not limited to the correction of inconsistent names under which Seller is listed, (c) file or submit any forms or documents as may be required to update or correct any corporate registrations for Seller or to reinstate the corporate status of Seller in the name of and at the cost of Seller, including doing so through the use of a third-party vendor such as www.mycorporation.com, and (d) prepare and sign, on behalf of Seller, notice of assignment of all of Seller’s Accounts to Purchaser, said notice to be provided to any Account Debtor of Seller at Purchaser’s sole discretion. In the event that Purchaser corrects and/or executes or initials any errors in accordance with this Section 7.7, Purchaser will send Seller a copy of the document so executed or initialed on Seller’s behalf; provided, that failure to do so shall not invalidate the correction.
7.8. Seller hereby acknowledges and agrees that Purchaser shall have no obligation to rescind any notice(s) of assignment provided to any Account Debtor of Seller while any Obligations, including any loan or working capital advance, remain unpaid.
8. Covenants by Seller.
8.1. After written notice by Purchaser to Seller, and automatically, without notice, after an Event of Default, Seller shall not (a) grant any extension of time for payment of any of its Accounts, (b) compromise or settle its Accounts for less than the full amount thereof, (c) release in whole or in part any Account Debtor, or (d) grant any credits, discounts, allowances, deductions, return authorizations or the like with respect to any of the Accounts.
8.2. Seller shall: (a) keep proper books of account and records covering all its business and affairs on a current basis as well as accurate and complete records concerning the Collateral; (b) notify Purchaser promptly of any loss or damage to or any seizure of any significant portion of the Collateral; and (c) furnish Purchaser with such information regarding the Collateral and its value and location as Purchaser may from time to time reasonably request. From time to time as requested by Purchaser, at the sole expense of Seller, Purchaser or its designee shall have access, during reasonable business hours if prior to an Event of Default and at any time if on or after an Event of Default, to all premises where Collateral is located for the purposes of inspecting (and removing, if after the occurrence of an Event of Default) any of the Collateral, including Seller’s books and records, and Seller shall permit Purchaser or its designee to make copies of such books and records or extracts therefrom as Purchaser may request. Without expense to Purchaser, Purchaser may use any of Seller’s personnel, equipment, including computer equipment, programs, printed output and computer readable media, supplies and premises for the collection of accounts and realization on other Collateral as Purchaser, in its sole discretion, deems appropriate. Seller hereby irrevocably authorizes all accountants and third parties to disclose and deliver to Purchaser at Seller’s expense all financial information, books and records, work papers, management reports and other information in their possession relating to Seller.
8.3. Before sending any Invoice to an Account Debtor, Seller shall mark same with a notice of assignment as may be required by Purchaser.
8.4. Seller shall pay when due all rents, rates, levies, assessments, payroll, taxes and other charges lawfully levied, imposed upon or assessed against or in respect of the Collateral, or the income and profits of Seller, when the same become payable, and shall provide proof thereof to Purchaser in such form as Purchaser shall reasonably require.
8.5. Seller shall not create, incur, assume or permit to exist any lien upon or with respect to any assets in which Purchaser now or hereafter holds a Security Interest. Further, Seller shall keep the Collateral in good condition and repair, normal wear and tear excepted.
8.6. Seller shall maintain surety bonds and all insurances required by law to operate its business, as well as insurances on the Collateral and all insurable property owned or leased by Seller in the manner, to the extent and against at least such risks (in any event but not limited to fire, theft and business interruption insurance) as usually maintained by owners of similar businesses and properties in similar geographic areas. All such insurance shall be in the amounts and form and with insurance companies acceptable to Purchaser in its sole discretion. Seller shall furnish to Purchaser: (a) upon written request, any and all information concerning such insurance carried; (b) upon written request, lender loss payable endorsements naming Purchaser as loss payee, in form and substance satisfactory to Purchaser; and (c) at least annually and at such other times as reasonably requested by Purchaser, certificates of insurance from Insurance companies showing Purchaser as loss payee, mortgagee or additional insured, and shall have attached a mortgage clause in the form approved by the Insurance Bureau of Canada or otherwise acceptable to Purchaser. All policies of insurance shall provide for not less than thirty (30) days prior written cancellation notice to Purchaser. Purchaser may apply any proceeds of such insurance which it is entitled to receive toward payment of the Obligations, whether or not due, in such order of application as Purchaser may determine.
8.7. Notwithstanding Seller’s obligation to pay the Misdirected Payment Fee or the Missing Notation Fee pursuant to Sections 3.5 or 3.6 hereof, Seller shall pay the amount of any payment on account of a Purchased Account, or after the occurrence of an Event of Default any payment of any Account, received by Seller to Purchaser on the next banking day following the date of receipt thereof by Seller. Any such payment received by Seller shall be held by Seller in trust for Purchaser and shall not be commingled with any funds of Seller.
8.8. Seller shall not, without the prior written consent of Purchaser, amalgamate with any other corporation or corporations or enter into any arrangement or agreement, which, either separately or in combination with any other transactions, arrangements or agreements, would have the effect of Seller merging, amalgamating or entering into any joint venture or co-tenancy arrangement with any other person.
8.9. Seller will keep its chief executive office and its records concerning its accounts receivable and other accounts located at the address set out in Section 24 as the initial address for notice to the Seller and provide Purchaser with at least 30 days prior written notice of its intention to move its business or the Collateral from the address set out in Section 24.
8.10. Seller shall not, without Purchaser’s prior written consent, have any existing, or make any new, investments in any individual or entity, or make any capital contributions or other transfers of assets to any individual or entity.
8.11. For the duration of this Agreement, Seller shall furnish to Purchaser, upon written request, within three business days of such request, with (i) Seller’s current customer list, including customer name, email address, mailing address, phone number and contact person, and (ii) Seller’s updated accounts receivable aging.
8.12. For the duration of this Agreement, Seller agrees that it shall not undertake any other financing or sell its future receivables to any entity other than Purchaser or Purchaser’s Affiliates without the express written consent of Purchaser and hereby acknowledges that such action may constitute a material dilution of Purchaser’s interest in the Collateral. In the event that Seller breaches this covenant, Seller shall pay to Purchaser the sum of ten percent (10%) of the financing received without Purchaser’s consent, in addition to any other remedies available to Purchaser under this Agreement.
8.13. The Collateral is now and will be located at or in transit to or from (a) the location of Seller provided as the initial address for notice to Seller in Section 24, or (b) any additional address or location specified as a location of Seller or any of the Collateral as provided in writing by Seller to Purchaser at the time of execution of the Factoring Master Agreement; or upon at least 30 days prior written notice to Purchaser, such other location.
8.14. Seller shall observe and perform all its obligations under all material leases, licences, undertakings and agreements to which it is a party, obtain and preserve its rights, powers, licences, privileges, franchises and goodwill thereunder, and comply with all applicable laws, by laws, rules, regulations and ordinances in a proper and efficient manner so as to preserve and protect the Collateral and the business and undertaking of Seller in all material respects. Furthermore, Seller shall perform all obligations incidental to any trust imposed upon it by statute and shall ensure that any breaches of such obligations and the consequences of any such breach shall be promptly remedied.
8.15. Seller agrees, upon the request of Purchaser, to obtain a written agreement from each landlord of Seller in favour of Purchaser and in form and substance satisfactory to Purchaser, whereby such landlord: (a) agrees to give notice to Purchaser of any default by Seller under the lease and a reasonable opportunity to cure such default prior to the exercise of any remedies by the landlord; and (b) acknowledges the Security Interest created by this Agreement and the right of Purchaser to enforce the Security Interest created by this Agreement in priority to any claim of such landlord.
8.16. Seller shall promptly notify Purchaser in writing the detail of: (a) any amendment to its articles, including, without limitation, by virtue of the filing of articles of amalgamation, effecting a change in Seller’s name or authorizing it to use a French version of its name; (b) any claim, litigation or proceedings before any court, administrative board or other tribunal which either does or could have a material adverse effect on the Collateral or Seller; (c) any claim, lien, attachment, execution or other process or encumbrance made or asserted against or with respect to the Collateral which either does or could have a material adverse effect on the Security Interest; (d) any transfer of Seller’s interest in the Collateral, whether or not permitted hereunder; or (e) any material loss of or damage to the Collateral, whether or not such loss or damage is covered by insurance.
8.17. Seller shall not, without the prior written consent of Purchaser: (a) create, allow to be created, assume or suffer to exist any Encumbrance upon the Collateral; (b) sell, lease, assign or otherwise dispose of or deal with the Collateral; or (c) release, surrender or abandon possession of the Collateral. Notwithstanding the preceding, this Agreement and the Security Interest shall in no way hinder or prevent Seller, without the prior written consent of Purchaser, at any time and from time to time until an Event of Default shall have occurred and the Security Interest shall have become enforceable: (a) from collecting and, where necessary, enforcing the collection of all amounts due or to become due to the Debtor under any Debt other than a Purchased Account; and (b) from selling, leasing, licensing, consigning or otherwise disposing of inventory or of any obsolete, worn out, damaged or otherwise unsuitable equipment forming part of the Collateral, in the ordinary course of the Debtor’s business and for the purpose of carrying on the same; provided, however, that with respect to Investment Property: (a) until the occurrence of an Event of Default, Seller reserves the right to receive all income from or interest on the Collateral consisting of Investment Property, and if Purchaser receives any such income or interest prior to such an Event of Default, Purchaser shall pay such income or interest promptly to Seller; and (b) upon the occurrence of an Event of Default, Seller will not demand or receive any income from or interest on such Collateral, and if Seller receives any such income or interest without any demand by it, such income or interest shall be held by Seller in trust for Purchaser in the same medium in which received, shall not be commingled with any assets of Seller and shall be delivered to Purchaser in the form received, properly endorsed to permit collection, not later than the next business day following the day of its receipt. Purchaser may apply the net cash receipts from such income or interest to payment of any of the Obligations, provided that Purchaser shall account for and pay over to Seller any such income or interest remaining after payment in full of the Obligations.
8.18. If any of the Collateral consists of Investment Property, (i) Seller authorizes Purchaser to transfer such Collateral or any part thereof into its own name or that of its nominee so that Purchaser or its nominee may appear of record as the sole owner thereof; provided, that so long as no Event of Default has occurred, Purchaser shall deliver promptly to Seller all notices, statements or other communications received by it or its nominee as such registered owner, and upon demand and receipt of payment of necessary expenses thereof, shall give to Seller or its designee a proxy or proxies to vote and take all action with respect to such property; provided further that after the occurrence of an Event of Default, Seller waives all rights to be advised of or to receive any notices, statements or communications received by Purchaser or its nominee as such record owner, and agrees that no proxy or proxies given by Purchaser to Seller or its designee as aforesaid shall thereafter be effective; and (ii) Seller further agrees to execute such other documents and to perform such other acts, and to cause any issuer or securities intermediary to execute such other documents and to perform such other acts as may be necessary or appropriate in order to give Purchaser “control” of such Investment Property, as defined in the Securities Transfer Act, 2006 (Ontario), which “control” shall be in such manner as Purchaser shall designate in its sole judgment and discretion, including, without limitation, an agreement by any issuer or securities intermediary that it will comply with instructions in the case of an issuer or entitlement orders in the case of a securities intermediary, originated by Purchaser, whether before or after the occurrence of an Event of Default, without further consent by Seller.
8.19. Seller shall pay or reimburse Purchaser for all costs and expenses of Purchaser, its agents, officers and employees (including, without limitation, legal fees and disbursements on a substantial indemnity basis) incurred with respect to: (a) the preparation, perfection, execution and filing of this agreement and the filing of financing statement(s) and financing change statement(s) with respect to this Agreement; (b) any person engaged by Purchaser to conduct any inspections permitted under this Agreement; and (c) dealing with other creditors of Seller in connection with the establishment, confirmation, amendment or preservation of the priority of the Security Interest; such costs and expenses to be payable by Seller to Purchaser on demand, to bear interest at the highest rate per annum borne by any of the Obligations, calculated and compounded monthly, and (with all such interest) to be added to and form part of the Obligations.
8.20. Purchaser may, in its sole discretion and upon notice to Seller, perform any covenant of Seller under this Agreement that Seller fails to perform and that Purchaser is capable of performing, including any covenant the performance of which requires the payment of money, provided that Purchaser will not be obligated to perform any such covenant on behalf of Seller. No such performance by Purchaser will require Purchaser further to perform Seller’s covenants nor relieve Seller from any default or operate as a derogation of the rights and remedies of Purchaser under this Agreement. Seller agrees to indemnify and to reimburse Purchaser for all costs and expenses incurred by Purchaser in connection with the performance by it of any such covenant, and all such costs and expenses shall be payable by Seller to Purchaser on demand, shall bear interest at the highest rate per annum borne by any of the Obligations, calculated and compounded monthly, and shall (with all such interest) be added to and form part of the Obligations.
9. Account Disputes. Seller shall notify Purchaser promptly of and, if requested by Purchaser, will settle all disputes concerning any Purchased Account, at Seller’s sole cost and expense. However, Seller shall not, without Purchaser’s prior written consent, compromise or adjust any Purchased Account or grant any additional discounts, allowances or credits thereon. Purchaser may, but is not required to, attempt to settle, compromise, or litigate (collectively, “Resolve”) the dispute upon such terms, as Purchaser in its sole discretion deems advisable, for Seller’s account and risk and at Seller’s sole expense. Upon the occurrence of an Event of Default Purchaser may Resolve such issues with respect to any Account of Seller, at Seller’s cost.
10. Avoidance Claims.
IF THE NON-RECOURSE CREDIT GUARANTEE FEE IS “ACCEPTED” OR “INCLUDED” ON THE FACTORING MASTER AGREEMENT, THEN WITH RESPECT TO THE REST OF THIS SECTION 10, THE PARAGRAPHS 10.1, 10.3 AND 10.4 SHALL APPLY:
10.1. Seller shall indemnify Purchaser from any loss arising out of the assertion of any Avoidance Claim other than such claims that relate to Purchased Accounts that are owed by an Account Debtor which was Insolvent and shall pay to Purchaser on demand the amount thereof.
IF NON-RECOURSE CREDIT GUARANTEE FEE IS “DECLINED” ON THE FACTORING MASTER AGREEMENT, THEN WITH RESPECT TO THE REST OF THIS SECTION 10, THE FOLLOWING PARAGRAPHS 10.2 – 10.4 SHALL APPLY:
10.2. Seller shall indemnify Purchaser from any loss arising out of the assertion of any Avoidance Claim and shall pay to Purchaser on demand the amount thereof.
10.3. Seller shall notify Purchaser within two (2) business days of it becoming aware of the assertion of an Avoidance Claim.
10.4. This provision shall survive termination of this Agreement.
11. Representation and Warranty. Seller represents and warrants that:
11.1. If Seller is a corporation, it is a corporation incorporated and organized and validly existing under the laws of its jurisdiction of incorporation, and has full corporate power, authority and capacity to own its property, to carry on the business carried on by it, and to enter into and perform this Agreement;
11.2. Seller has full legal right to own its property and to carry on the business carried on by Seller, and is in compliance in all material respects with all laws governing Seller and Seller’s business;
11.3. Seller is fully authorized to enter into this Agreement. If Seller is a corporation, it has taken all corporate action necessary to be taken by it to authorize the execution, delivery and performance of this Agreement and the related documents. Except as has been obtained and is in full force and effect, no consent, waiver or authorization of, or filing with or notice to, any person (including any creditors or shareholders of Seller) is required to be obtained in connection with the execution, delivery or performance by Seller of this Agreement and the related documents. This Agreement has been executed and delivered by Seller and will, when executed and delivered by all counterparties to such agreements other than the Seller, constitute, a legal, valid and binding agreement of Seller enforceable against Seller in accordance with its terms subject to the qualification that enforceability may be limited by bankruptcy and laws affecting the enforcement of creditors’ rights generally and that equitable remedies may be limited by the courts;
11.4. The execution, delivery and performance by Seller of this Agreement and the related documents will not conflict with or result in a breach of any law governing Seller or Seller’s business, and will not conflict with, or result in a breach of, or constitute a default under, any of the provisions of (i) if Seller is a corporation, the articles of incorporation, other constating documents or by-laws of Seller, or (ii) any agreement, permit or other contractual obligation to which Seller is a party or by which it is bound, in any material respect;
11.5. There is no action, suit or proceeding (whether or not purportedly on behalf of Seller) pending or, to the knowledge of Seller, threatened, against or affecting Seller before any court or before or by any governmental department, commission or agency, in Canada or elsewhere, or before any arbitrator or board and Seller is not in default with respect to any order or award of any arbitrator or government department, commission or agency or otherwise seeking damages or payment of monies which exceed the sum of $5,000.00 and which has not been disclosed in writing to Purchaser;
11.6. Seller is the legal and beneficial owner of all Accounts offered for sale by it to Purchaser hereunder, in each case free of all liens;
11.7. Seller is solvent and, if applicable, in good standing in the jurisdiction of its organization and all jurisdictions where it carries on business;
11.8. Seller has not received notice or otherwise learned of actual or imminent bankruptcy, insolvency, or material impairment of the financial condition of any applicable Account Debtor regarding Purchased Accounts;
11.9. Seller’s financial statements, if provided to Purchaser, and any financial statements furnished to Purchaser hereafter, fairly represent the financial condition of Seller and each Guarantor at such dates, and since those dates there has been no material adverse change, financial or otherwise, in such condition or in the operation or ownership of Seller. Regardless of whether financial statements were provided to Purchaser, Seller has a continuing, affirmative obligation to advise Purchaser of any material adverse change in its financial condition, operation or ownership. Purchaser shall require bank login access, or bank statements if online access is unavailable, to any bank account maintained by Seller or Affiliate of Seller at any time during the performance of this Agreement and the Seller shall provide them to Purchaser within three (3) business days of Purchaser’s request. Seller’s failure to do so will constitute a material breach of this Agreement;
11.10. With respect to the Purchased Accounts:
11.10.1. They are and will remain bona fide existing obligations created by the sale and delivery of goods or the rendition of services in the ordinary course of Seller’s business;
11.10.2. To the best of Seller’s knowledge, unconditionally owed and will be paid to Purchaser without defenses, disputes, offsets, counterclaims, or rights of return or cancellation other than, with respect to a Non-Recourse Account, Accounts owed by an Account Debtor which was insolvent;
11.10.3. Seller has not given any consents, approvals or waivers, or agreed to any amendments, or made any representations, warranties or commitments to the Account Debtor thereunder, which would in any way impair the rights of Seller (or of Purchaser) to receive all amounts expressed to be payable thereunder when due;
11.10.4. the Account Debtor thereunder has no valid basis for contestation of the right of Seller (or of Purchaser) to receive all amounts expressed to be payable thereunder when due (in each case without setoff or abatement whatsoever);
11.10.5. no person other than Seller has any right, title or interest in or to such Accounts; and
11.10.6. such Purchased Accounts are not sales to any entity that is affiliated with Seller or in any way not an “arms length” transaction;
11.11. Where no French form of Seller’s corporate name is set out in the Factoring Master Agreement, this provision shall be deemed to be a representation by Seller that there is no French form of its corporate name as of the date hereof. Unless otherwise stated in the Factoring Master Agreement, Seller does not carry on any business under any business name, business style or trade name.
12. Default.
12.1. Events of Default. The following events will constitute an Event of Default hereunder:
(a) Seller defaults in the payment of any Obligations when due or in the observance performance of, or compliance with, any provision hereof or of any other agreement now or hereafter entered into with Purchaser, including with Purchaser’s Affiliates and any third party servicers, or any warranty or representation made at any time by Seller to Purchaser, including to Purchaser’s Affiliates and any third party servicers, proves to be false in any way, however minor;
(b) Seller or any guarantor shall generally not pay its debts as they become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors;
(c) Seller ceases or threatens to cease to carry on its business or any proceedings shall be instituted by or against the Seller or any guarantor seeking to adjudicate it as bankrupt or insolvent or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of insolvent debtors, or seeking the entry of an order for relief by the appointment of a receiver, receiver-manager, trustee, custodian or similar official for it or any substantial part of its property;
(d) any guarantor fails to perform or observe any of such guarantor’s obligations to Purchaser or shall notify Purchaser of its intention to rescind, modify, terminate or revoke any guarantee of the Obligations, or any such guarantee shall cease to be in full force and effect for any reason whatever;
(e) Purchaser for any reason, in good faith, deems itself insecure with respect to the prospect of repayment or performance of the Obligations;
(f) failure of Seller or any guarantor to notify Purchaser in writing at least thirty (30) days prior to changing its name, jurisdiction of organization, organizational structure, or incorporating or otherwise initiating a new business substantially similar in ownership or operation (including a transportation brokerage) to that of Seller;
(g) a change of twenty (20%) or more in the direct or indirect capital ownership of the Seller;
(h) Seller suspends or discontinues its business as conducted on the date hereof for any reason, or at any time Seller has not submitted Accounts to Purchaser for purchase for a period of ninety (90) days;
(i) Seller enables or permits any third party to directly or indirectly access any information contained in those areas of Purchaser’s website or account portal which are accessible with the use of a password provided to Seller by Purchaser, including but not limited to any access to printouts, or paper or electronic copies of such information from Purchaser’s website;
(j) an encumbrancer, whether permitted or otherwise, takes possession of any significant portion of the Collateral;
(k) an order is made or legislation enacted for the expropriation, confiscation, forfeiture, escheating or other taking or compulsory divestiture, whether or not with compensation, of all or a significant portion of the Collateral unless the same is being actively and diligently contested by Seller in good faith and Seller shall have provided to Purchaser such security therefor as it may reasonably require and such order or legislation shall have been vacated, lifted, discharged, stayed or repealed within thirty days from the date of being entered, pronounced or enacted, as the case may be;
(l) any process of a court, execution, attachment, garnishment, distress or analogous process is issued or levied or becomes enforceable or is enforced against any significant portion of the Collateral unless the same is being actively and diligently contested by Seller in good faith and Seller shall have provided to Purchaser such security therefor as it may reasonably require and such court process, execution, attachment, garnishment, distress or analogous process shall have been vacated, lifted, discharged or stayed within thirty days after being entered, commenced or levied as the case may be; or
(m) Seller is dissolved or its corporate charter expires or is revoked
12.2. Effect of Default. Upon the occurrence of any Event of Default, (a) the Default Rate shall accrue and is payable on all Obligations, and in addition to any rights Purchaser has under this Agreement or applicable law, Purchaser may immediately terminate this Agreement, at which time all Obligations shall immediately become due and payable without notice, and (b) any fees due hereunder and previously waived by Purchaser shall be automatically reinstated, all such fees having been waived on the condition that no Event of Default was existing or shall thereafter occur. Further, upon the occurrence of any Event of Default or after the giving of any notice of termination pursuant to Section 13 hereof, Purchaser may in its sole discretion, deny Seller access to any remotely accessed reporting or credit system (including any online or telephone systems or account portal) that may be maintained by Purchaser. Upon the waiver by Purchaser of any Event of Default hereunder, Seller shall pay Purchaser a default waiver fee equal to ten percent (10%) of the then existing Account Limit. Any failure by Purchaser to assess such default waiver fee immediately upon the occurrence of an Event of Default shall not be deemed a waiver by Purchaser to charge such fee.
12.3. Remedies. Upon the occurrence of any Event of Default, the Security Interest shall immediately become enforceable and Purchase may, forthwith or at any time thereafter and without notice to Seller, in addition to any rights and remedies Purchaser has under this Agreement or as a secured party under the PPSA or any other legislation governing the Collateral, wherever it may be located:
12.3.1. Purchaser may appoint or reappoint by instrument in writing any person to be an agent or any person to be a receiver, manager or receiver and manager (herein called a “Receiver”) of the Collateral and to remove any Receiver so appointed and to appoint another if the Purchaser so desires;
12.3.2. Purchaser may make payments to discharge any claim, lien, mortgage, security interest, charge or other Encumbrance on properties on which either the Seller or the Purchaser may hold charges or encumbrances (whether or not ranking in priority to the Security Interest);
12.3.3. Purchaser may enter upon, use and occupy any and all premises owned, leased or occupied by the Seller where the Collateral may be located;
12.3.4. Purchaser may take immediate possession of all or any part of the Collateral and require the Seller to assemble and deliver possession of the Collateral at a location or locations specified by the Purchaser, with power to exclude the Seller, its officers, directors, employees and agents therefrom;
12.3.5. Purchaser may notify the Account Debtor(s) under any Accounts of the assignment of such accounts to the Purchaser and direct such Account Debtor(s) to make payment of all amounts due or to become due to the Seller thereunder directly to the Purchaser and give valid and binding receipts and discharges therefor and in respect thereof and, upon such notification and at the expense of the Seller, enforce collection of any Accounts, and adjust, settle or compromise the amount or payment thereof, in the same manner and to the same extent as the Seller might have done;
12.3.6. Purchaser may file such proofs of claim or other documents as may be necessary or desirable to have its claim lodged in any bankruptcy, winding up, liquidation, dissolution or other proceedings (voluntary or involuntary) relating to the Seller;
12.3.7. Purchaser may preserve, protect and maintain the Collateral and make such replacements thereof and additions thereto as the Purchaser shall deem advisable;
12.3.8. Purchaser may sell, consign, lease or otherwise dispose of all or any part of the Collateral whether by public or private sale, consignment or lease or otherwise and on any terms so long as every aspect of the disposition is commercially reasonable, including, without limitation, terms that provide time for payment on credit, provided that:
12.3.8.1. neither Purchaser nor any Receiver will be required to sell, consign, lease or dispose of the Collateral, but may peaceably and quietly take, hold, use, occupy, possess and enjoy the Collateral without molestation, eviction, hindrance or interruption by Seller or any other person or persons whomsoever for such period of time as is commercially reasonable;
12.3.8.2. Purchaser or any Receiver may dispose of all or any part of the Collateral in the condition in which it was on the date possession of it was taken, or after any commercially reasonable repair, processing or preparation for disposition;
12.3.8.3. Purchaser or any Receiver may convey, transfer and assign to a purchaser or purchasers the title to any of the Collateral so sold;
12.3.8.4. Subject to the requirements of the PPSA, all money or other proceeds of realization collected or received by Purchaser or any Receiver upon the realization of the Security Interest or on exercise of any other rights or remedies herein contained with respect to the Collateral shall be applied on account of the Obligations in such manner as Purchaser deems best or, at the option of Purchaser, may be held unapportioned in a collateral account or released to Seller, all without prejudice to the liability of Seller or the rights of Purchaser hereunder. The balance of such proceeds, if any, shall be paid in accordance with the PPSA and any other applicable law governing the Collateral and the Security Interest. Seller will be entitled to be credited with the actual proceeds of any such sale, consignment, lease or other disposition, realization or collection only when such proceeds are received by Purchaser or any Receiver in cash; and
12.3.8.5. If the proceeds of realization received by or on behalf of Purchaser from the disposition of the Collateral are not sufficient to satisfy the Obligations in full, Seller shall be liable to pay such deficiency to the Purchaser forthwith on demand.
12.3.9. Purchaser may comment legal action to enforce payment or performance of any or all of the Obligations.
12.3.10. Purchaser may enjoy and exercise all of the rights and remedies of a secured party under the PPSA.
12.3.11. Any Receiver appointed hereunder shall, subject to the provisions of the instrument appointing it, have all of the powers of the Purchaser hereunder together with (a) the power to carry on the business of Seller or any part thereof; (b) the power to borrow money in Seller’s name or in the Receiver’s name; and (c) the power to grant security interests in the Collateral in priority to the Security Interest as security for the money so borrowed. The Receiver shall be deemed to be the agent of Seller for the purpose of establishing liability for the acts or omissions of the Receiver and Purchaser shall not be liable for such acts or omissions. Seller hereby irrevocably authorizes Purchaser from time to time after appointment of any Receiver to give instructions to the Receiver relating to the performance of the Receiver’s duties and to fix the remuneration of the Receiver in connection therewith.
12.4. Set-Off. Without in any way limiting any other rights or remedies available to Purchaser, Purchaser shall have the right (but shall not be obligated), at any time and from time to time after the occurrence of an Event of Default and without notice to Seller (such notice being expressly waived by Seller), to set off against the Obligations or any of them deposits (general or special) or moneys then held by Purchaser or any other indebtedness owing by Purchaser to, or held by Purchaser for the credit of, Seller, regardless of the currency in which such indebtedness is denominated and notwithstanding that such indebtedness is not then due.
12.5. Waiver of Notice. PURCHASER’S FAILURE TO CHARGE OR ACCRUE INTEREST OR ANY FEES DUE HEREUNDER SHALL NOT BE DEEMED A WAIVER BY PURCHASER OF ITS CLAIM THERETO.
12.6. Remedies Cumulative. The remedies provided in section 12.3 are cumulative and in addition to (and not in substitution for, exclusive of nor dependent on) any other remedies contained herein or in any existing or future security document granted by Seller to Purchaser and to all other remedies existing at law or in equity or by statute.
12.7. Restriction on Seller. Upon the Purchaser taking possession of the Collateral or the appointment of a Receiver, all the powers, functions, rights and privileges of Seller or any officer, director, employee or agent of Seller with respect to the Collateral shall, to the extent permitted by law, be suspended unless specifically continued by the written consent of Purchaser; however, all other powers, functions, rights and privileges of Seller or any officer, director, employee or agent of the Debtor shall be unaffected by such events.
12.8. Indulgences and Releases. Either the Purchaser or any Receiver may grant extensions of time and other indulgences, take and give up or abstain from perfecting or taking advantage of securities, accept compositions, compound, compromise, settle, grant releases and discharges, release any part of the Collateral to third parties and otherwise deal with Seller, debtors of Seller, sureties and others and with the Collateral and other security as Purchaser or such Receiver may see fit without prejudice to the liability of Seller under the Obligations or the right of Purchaser and such Receiver to hold the Collateral and realize upon the Security Interest.
12.9. Expenses of Enforcement. Seller agrees to indemnify and reimburse Purchaser for all costs and expenses of Purchaser, its agents, advisors and consultants (including without limitation legal fees and disbursements on a substantial indemnity basis) incurred with respect to the exercise by Purchaser of any of its rights, remedies and powers under this Agreement (including without limitation costs and expenses related to the custody, preservation and realization of the Collateral, any amounts paid under Section 12.3.2, the remuneration of the Receiver and all costs and expenses incurred by the Receiver in performing its functions under its appointment), and such costs and expenses shall be added to and shall form part of the Obligations.
13. Termination.
13.1. This Agreement will be effective on the Closing Date and will continue in full force and effect until Purchaser has released its lien in accordance with paragraph 16 hereof.
13.2. Unless otherwise provided in the Factoring Master Agreement, an initial Term equal to 12 months from the Closing Date (“Initial Term”) shall apply.
13.3. At the end of the then-current term, being either an Initial Term or any Subsequent Term, unless (a) notice to terminate is given 60 days prior to the end of the then-current term and (b) full payment of all outstanding Obligations has been made by Seller to Purchaser prior to the end of the then-current term, this Agreement shall be extended automatically for “Subsequent Term/s” which shall each comprise a 12-month period (unless otherwise agreed in writing).
13.4. Seller may give notice to terminate this agreement without incurring an Early Termination Fee provided such notice is given 60 days prior to the end of the then-current term. If no such notice is given, this Agreement shall be automatically extended for a Subsequent Term or further Subsequent Term. It is agreed that during and after any notice this Agreement shall continue to be in full force and effect until Purchaser releases its lien in accordance with paragraph 16 hereof.
13.5. It is agreed that during and after any notice of termination this Agreement shall continue to be in full force and effect until Purchaser releases its lien in accordance with paragraph 16 hereof.
13.6. Any notice to terminate this Agreement by Seller must be given either by a) email to Purchaser sent to: [email protected] or b) by mail addressed to: eCapital, Att: Contracts Department, at 174 West Street S., Orillia, Ontario, L3V 6L4. Termination notices sent by any other method or to any other email address will be deemed invalid.
13.7. Early Termination. Seller shall also have the option at any time upon 30 days prior written notice to Purchaser, to terminate this Agreement by paying to Purchaser in cash the amount of the outstanding Obligations. In such case, at the time of said early termination, Seller shall also pay to Purchaser an Early Termination Fee. (collectively the “Termination Amount”).
Notwithstanding any other provision of this Agreement, Seller shall pay to Purchaser any Buyout Fees as may be due under section 3.8.1 hereof.
13.8. Purchaser may terminate this Agreement without notice following the occurrence of an Event of Default, after which event Seller shall pay to Purchaser the Termination Amount.
13.9. Any payments received by Purchaser from any Account Debtor following the termination of this Agreement may be, at Purchaser’s option, (a) applied to repay any outstanding Obligations hereunder, (b) forwarded to Seller, or (c) returned to such Account Debtor. Notwithstanding the foregoing, Purchaser (i) shall not bear any responsibility or liability with respect to any such payments, and (ii) may retain 2.5% of the amount of any such payments received to cover Purchaser’s costs of handling such payments.
14. Account Stated. Purchaser shall render to Seller, from time to time, a statement by email or online setting forth the transactions arising hereunder. Each statement shall be considered correct and binding upon Seller as an account stated, except to the extent that Purchaser receives, within 30 days after providing such statement, written notice from Seller of any specific exceptions by Seller to that statement, where after it shall be binding against Seller as to any items to which it has not objected.
15. Amendment. PURCHASER RESERVES THE RIGHT TO AMEND THESE TERMS AND CONDITIONS at any time, and from time to time, by publishing a revised version of the Terms and Conditions at the following site, www.terms.eCapital.com. Seller’s submission of Accounts to Purchaser for purchase following the posting of any such amendments to the Terms and Conditions constitutes Seller’s acceptance of those revisions, and Purchaser has no obligation to inform Seller of such changes in any other manner.
16. No Lien Termination without Release. In recognition of the Purchaser’s right to have its legal fees and other expenses incurred in connection with this Agreement secured by the Collateral, notwithstanding payment in full of all Obligations by Seller, Purchaser shall not be required to record any terminations, discharges or satisfactions of any of Purchaser’s liens on the Collateral unless and until Seller has executed and delivered to Purchaser a general release (which shall be notarized if required by Purchaser) in the form contained on the final page of the Terms and Conditions. Seller understands that this provision constitutes a waiver of its rights under the PPSA. Seller shall pay to Purchaser any fees that may be due under section 3.9.1 of this Agreement.
17. Legal Fees. Seller agrees to reimburse Purchaser on demand for:
17.1. The actual amount of all costs and expenses, including legal fees, which Purchaser has incurred or may incur in negotiating, preparing, or administering this Agreement and any documents prepared in connection herewith;
17.2. The actual amount of all costs and expenses, including legal fees, arising out of or in connection with this Agreement, and whether or not arising out of a dispute which does not involve Purchaser;
17.3. The actual costs, including photocopying, travel, and legal fees and expenses incurred in complying with any subpoena or other legal process attendant to any litigation in which Seller is a party;
17.4. The actual amount of all costs and expenses, including legal fees, which Purchaser may incur in enforcing this Agreement and any documents prepared in connection herewith, or in connection with any bankruptcy or insolvency proceeding commenced by or against Seller, including those (a) arising out of any automatic stay, (b) seeking dismissal or conversion of the bankruptcy proceeding, (c) opposing confirmation of Seller’s plan thereunder, or (d) protecting, preserving or enforcing any lien, security interest or other right granted by Seller to Purchaser or arising under applicable law, whether or not suit is brought, including but not limited to the defense of any Avoidance Claims.
18. Reaffirmation of Finance Application. To induce Purchaser to enter into this Agreement, Seller hereby restates and affirms all representations and warranties it made in any Finance Application.
19. Entire Agreement. This Agreement supersedes all prior agreements and understandings between said parties, verbal or written, express or implied, relating to the subject matter hereof. No course of dealing, course of performance or trade usage, and no parole evidence of any nature, shall be used to supplement or modify any terms of this Agreement. There are no representations, agreements, warranties, conditions, covenants or terms, express or implied, collateral or otherwise, affecting this Agreement or the Security Interest or Seller’s obligations and liabilities hereunder other than as expressed herein.
Jury Trial Waiver. IN RECOGNITION OF THE HIGHER COSTS AND DELAYS WHICH MAY RESULT FROM A JURY TRIAL, THE PARTIES HERETO WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (I) ARISING HEREUNDER, OR (II) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY FURTHER WAIVES ANY RIGHT TO CONSOLIDATE ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY; AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHTS TO TRIAL BY JURY. THE PARTIES HERETO ACKNOWLEDGE THAT EACH MAKES THIS WAIVER KNOWINGLY, WILLINGLY, VOLUNTARILY AND WITHOUT DURESS, AND ONLY AFTER EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEYS.
20. Mechanic’s Lien. Where applicable, Seller hereby agrees at Purchaser’s request to file a notice, claim or other registration of mechanic’s, repairer’s or storer’s lien, or lien of any similar nature available in the applicable jurisdiction, on any real property improvement upon which it has performed labour or furnished materials, the Account for which labour and/or materials it has assigned to Purchaser. In the event Seller fails to promptly comply with such request, Seller does hereby constitute and appoint Purchaser as its agent to execute and file in the name of Seller such notice, claim or registration for such a lien to the extent of the debt due from the Account Debtor for and on account of such labour and material. In connection with the filing of such notice, claim or registration for such a lien, Seller agrees to periodically advise Purchaser of the amount or amounts owed by the Account Debtor in connection with each real improvement so that the said notice, claim or registration will be accurate in all respects. Seller further agrees not to provide the Account Debtor with any waiver, release or discharge of any lien rights of Seller without the prior written consent of Purchaser.
21. Covenant Not to Sue.
21.1. Seller and Guarantor(s) agree that they will never institute, prosecute or in any way aid in the institution or prosecution of any claim, demand, action or cause of action at law or in equity against the Purchaser, Purchaser’s Affiliates or any third party servicer for a claim of usury, a claim that that the Purchaser is required to have any lending license, or any other claim contending that the Purchase Price paid by the Purchaser in exchange for the Purchased Accounts is, or should be construed as, a loan from the Purchaser to the Seller. Nothing in this Section 21 is intended to prevent Seller or Guarantor from complying with any lawfully issued subpoena or court ordered discovery.
21.2. This Section 21 is a covenant not to sue, and not a release. In the event that the Seller or any Guarantor breaches or in any way violates the terms of this Section 20 the Sellers and Guarantors jointly and severally agree to indemnify the Purchaser for all damages arising from that breach, including without limitation the payment of all costs and expenses of every kind for the enforcement of Purchaser’s rights and remedies under this section, including any and all attorneys’ fees and costs in any trial court or appellate court proceeding, any administrative proceeding, any arbitration or mediation, or any negotiations or consultations in connection with breach of this Section 21.
21.3. This covenant shall inure to the benefit of Purchaser, Purchaser’s Affiliates and any third party servicers, and shall bind Seller, Guarantor(s) and their respective successors and/or assigns, any of their respective affiliated or subsidiary companies, partners, owners, joint ventures, and/or any of Seller’s managers, directors, officers, employers or agents.
22. No Liability for Special Damages.
22.1. Purchaser may from time to time promote or provide to Seller the products or services of third parties, such as (but not limited to) fuel cards, fuel discounts, insurance, and roadside services, (“the Services”). The Seller acknowledges and agrees that the Purchaser is acting as a facilitator in the provision of the Services and does not provide any guaranty or warranty of performance by itself or by such third party. Seller hereby indemnifies Purchaser against any claim it may have arising out of the provision of the Services.
22.2. In no event (including but not limited to any claim under Section 22.1) will Purchaser be liable to Seller under any legal theory or doctrine for any lost profits, lost revenues, lost business opportunities, lost savings, exemplary, aggravated, punitive, special, indirect, consequential, incidental or special damages resulting from or arising out of or in connection with this Agreement, the transactions or relationships contemplated hereby or Purchaser’s performance or failure to perform hereunder, even if Purchaser has been advised of the possibility of such damages, all of such claims or damages are hereby waived by Seller and each Guarantor.
23. Indemnified Amounts. Seller agrees to indemnify and save harmless Purchaser, Purchaser’s Affiliates and any third party service providers from any and all manner of suits, claims, liabilities, demands and expenses (including reasonable legal fees and collection costs) resulting from or arising out of this Agreement, whether directly or indirectly, including the transactions or relationships, contemplated hereby (including the enforcement of this Agreement) except which results from gross negligent or willful misconduct of the Purchaser, and any failure by Seller to perform or observe its obligations under this Agreement.
24. Notice. All notices required to be given to Purchaser, except as specified in paragraph 13.1 (notice of termination), shall be sent to: 174 West Street S., Orillia, Ontario, L3V 6L4; Attn: The General Manager; and if to Seller, at the address, fax number or email address furnished on the Finance Application or Factoring Master Agreement, or to such other addresses as each such party may in writing hereafter indicate.
25. Conflict. Unless otherwise expressly stated in any other agreement between Purchaser and Seller, if a conflict exists between the provisions of this Agreement and the provisions of such other agreement, the provisions of this Agreement shall control.
26. Severability. In the event any one or more of the provisions contained in this Agreement is held to be invalid, illegal or unenforceable in any respect, then such provisions shall be ineffective only to the extent of such prohibition or invalidity, and the validity, legality, and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.
27. Relationship of Parties. The relationship of the parties hereto shall be that of Seller and Purchaser of Accounts, and Purchaser shall not be a fiduciary of the Seller, although Seller may be a fiduciary of the Purchaser. Purchaser may, at Purchaser’s option, contract with one or more third parties chosen by Purchaser, including but not limited to Capital Partners Services, to perform all or part of Purchaser’s duties hereunder.
28. Service of Process. Seller agrees that Purchaser may effect service of process upon Seller by regular mail at the address for notices set forth in section 24 of this Agreement.
29. Successors and Assigns.
29.1. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
29.2. Purchaser may assign its rights and delegate its duties hereunder. Upon such assignment, Seller shall be deemed to have attorned to such assignee and shall owe the same obligations to such assignee and shall accept performance hereunder by such assignee as if such assignee were Purchaser. Such assignment shall constitute a novation whereby Seller shall agree that the assignee assumes Purchaser’s obligations under this Agreement and Purchaser is released from further liability under this Agreement. Seller may not assign its rights or delegate its duties hereunder, without Purchaser’s prior written consent.
30. Choice of Law. This Agreement and all transactions contemplated hereunder and/or evidenced hereby shall be governed by, construed under, and enforced in accordance with the laws of the Province of Ontario.
31. Waiver. No delay or omission to exercise any right or remedy accruing to Purchaser upon any breach or default by Seller hereunder shall impair any such right or remedy by Purchaser nor be construed as a waiver of any such breach or default or of any similar breach or default thereafter occurring, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right or remedy. No waiver of a single breach or default shall operate or be construed as a waiver of any subsequent breach or default. All waivers hereunder must be in writing and signed by the waiving party.
32. Further Assurances. Seller shall do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered, such further acts, deeds, mortgages, transfers, assurances or other documents as Purchaser shall reasonably require to give effect to or to preserve and perfect the Security Interest in the Collateral intended to be granted to Purchaser hereunder, or any security interest Seller may hereafter grant or become bound to grant to Purchaser, for the purpose of accomplishing and effecting the intention of this Agreement. Seller hereby irrevocably appoints Purchaser to be the attorney of Seller, coupled with an interest, with full power of substitution, for and in the name of Seller to execute and to do any deeds, documents, transfers, demands, assignments, assurances, consents and things which Seller is obliged to sign, execute or do hereunder.
33. Term. This Agreement shall become effective according to its terms immediately upon the execution hereof by Seller and shall continue as security for the Obligations until all of the Obligations are paid and performed in full and this agreement is terminated.
34. Non-Substitution. This Agreement and the Security Interest are in addition to and not in substitution for any other agreement made between Seller and Purchaser or any other security granted by Seller to Purchaser whether before or after the execution of this Agreement.
35. No Merger. Neither the taking of any action, suit or proceedings, judicial or extra-judicial, nor the exercise of any power of seizure or disposition shall extinguish the liability of Seller to pay and perform the Obligations nor shall the acceptance of any payment or alternate security constitute or create any novation. No covenant, representation or warranty of Seller herein shall merge in any judgment.
36. Time of Essence. Time shall in all respects be of the essence hereof.
37. Disclosure of Information re Seller. Seller agrees that Purchaser may provide from time to time such information concerning this Agreement, the Collateral and the Obligations to such persons as Purchaser in good faith believes are entitled to the same under the PPSA.
38. Headings and Titles of Clauses. The headings and the titles of clauses in this Agreement are for descriptive purposes only and do not control or alter the meaning of this Agreement as set forth in the text thereof and are not to be taken into account in the construction or interpretation of any provisions to which they refer.
FORM OF GENERAL RELEASE
For good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the undersigned and each of them (collectively “Releasor”) hereby forever releases, discharges and acquits eCapital Freight Factoring, Inc. (“Releasee”), its parent, affiliates, subsidiaries, directors, shareholders, agents, contractors and employees, of and from any and all claims, demands, obligations, liabilities, indebtedness, breaches of contract, breaches of duty of any relationship, acts, omissions, misfeasance, malfeasance, cause or causes of action, debts, sums of money, accounts, compensations, contracts, controversies, promises, damages, costs, losses and expenses (collectively “Claims”), of every type, kind, nature, description or character, and irrespective of how, why, or by reason of what facts, whether heretofore existing, now existing or hereafter arising, or which could, might, or may be claimed to exist, of whatever kind or name, whether known or unknown, suspected or unsuspected, liquidated or unliquidated, each as though fully set forth herein at length, to the extent that they arise out of or are in way connected to or are related to Releasor’s factoring relationship with Releasee.
Releasor agrees that the matters released herein are not limited to matters which are known or disclosed, and the Releasor waives any and all rights and benefits which it now has, or in the future may have, conferred upon it by virtue of the provisions of the laws of any state that may impose a limit or limits on the extent to which a general release may exclude matters which are not known by or disclosed to Releasor.
Releasor acknowledges that factual matters now unknown to it may have given or may hereafter give rise to Claims which are presently unknown, unanticipated and unsuspected, and it acknowledges that this Release has been negotiated and agreed upon in light of that realization and that it nevertheless hereby intends to release, discharge and acquit the Releasee from any such unknown Claims.
Acceptance of this Release shall not be deemed or construed as an admission of liability by any party released.
In the event of any litigation arising out of or related to this Release, the prevailing party shall recover its reasonable legal fees and expenses from the unsuccessful party. It shall be presumed (subject to rebuttal only by the introduction of competent evidence to the contrary) that the amount recoverable is the amount billed to the prevailing party by its counsel and that such amount will be reasonable if based on the billing rates charged to the prevailing party by its counsel in similar matters.
Releasor acknowledges that either (a) it has had advice of counsel of its own choosing in negotiations for and the preparation of this release, or (b) it has knowingly determined that such advice is not needed.