ANNUAL REAL GDP GROWTH RATES

INTRODUCTION Mark Perna, Director Accord Financial Ltd. In 2012, the Canadian factoring industry recorded a significant 15 percent increase in volume compared with 2011, following a substantial 44% increase the previous year. Non- factoring volumes were up a healthy 22% to CA$5.50 billion from CA$4.49 billion, while recourse factoring volumes were up just 3.4% to CA$2.73 billion. Total volume for all factors in 2012 was CA$8.23 billion, compared with CA$7.13 billion in 2011. There were 58 factoring companies in 2012, down from 60 in 2011. INDUSTRY ENVIRONMENT The Canadian economy continued its modest recovery, posting a 1.8 percent increase in GDP for 2012 on top of an increase of 2.5 percent and 3.1 percent in 2011 and 2010 respectively. During 2009 the economy was in recession with GDP having contracted 2.5%. ANNUAL REAL GDP GROWTH RATES 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% -2.0% -2.5% -3.0% 3.1% 2.5% 1.8% 0.5% -2.5% 2008 2009 2010 2011 2012 1

The Bank of Canada, the country s central bank, kept the prime rate steady throughout the year at 3.0%. The prime rate has remained unchanged at 3.0% since 2010. Commodity and energy prices posted a modest decline in 2012, continuing the same trend set in 2011. The exception was natural gas which was up over 12 percent, a rebound from the previous year s 23 per cent decrease. As Canada has an abundance of oil, gas, forests and other natural resources, this contributed to the decline in GDP growth in 2012. Another area of Canada s economy that has contributed to slow GDP growth is the merchandise trade balance of payments. Over the past decade, Canada s trade surplus peaked at CA$65.8 billion in 2004. After a gradual decline to CA$43.7 billion in 2008, the trade balance swung sharply to a deficit in 2009 coinciding with the economy in recession. After rebounding to a tiny surplus in 2011, it fell back to a deficit of CA$12.1 billion in 2012, its worst level over the past 10 years. This decline was no doubt fuelled by the strength of the Canadian dollar over the last decade. At the beginning of 2003, the exchange rate was 1.58 Canadian dollars to one U.S. dollar, while in 2012 the average exchange rate saw the Canadian dollar trade virtually at par with the U.S. dollar. The Canadian dollar has also strengthened considerably against the Euro in the last three years, as the average exchange rate fell dramatically from 1.59 in 2009 to 1.37 in 2010, and declined again from 1.38 in 2011 to 1.28 in 2012. Yearly Average Exchange Rates for Euro & USD Vs CAD 1.7 1.6 1.5 1.4 1.3 1.2 1.1 1 0.9 1.586 1.560 1.469 1.377 1.424 1.366 1.285 1.134 1.142 1.066 0.989 1.075 1.030 0.999 2006 2007 2008 2009 2010 2011 2012 Euro USD 2

It is important to note that the U.S.A. is by far Canada s largest trading partner. Autos, auto parts and energy are key sectors. About 73 percent of Canadian exports are to the U.S., while 62% of imports are from the U.S. At the end of 2012, inflation was kept in check with a relatively modest increase of 1.5% in the Consumer Price Index. The previous year had shown an increase of 2.9%. The unemployment rate in 2012 improved marginally to 7.2 percent compared to 7.4 percent in the previous year. Unemployment had peaked at 8.3 percent during the recession in 2009. Most financial institutions did well in 2012. The banks as a group reported substantial improved earnings over the previous year, with earnings of the five largest banks posting a 20% increase over 2011. Canadian banks have a tradition of conservative lending practices and strong capitalization. This is reflected by the fact that the World Economic Forum has ranked Canada s banks as the soundest in the world for five years in a row. There was no necessity for government bank bailouts in Canada during the financial crisis of 2008 2009 and the recovery thereafter. The mainstay of the banks business continued to be investment banking and consumer lending. The small and medium sized business sector continues to be underserved and the finance companies and recourse factors concentrate in this area. The larger loans, those from CA$10 million to CA$1.0 billion are handled by the large asset based lenders such as Bank of Montreal, Canadian Imperial Bank of Commerce, GE Capital, PNC Financial, Royal Bank of Canada, Roynat Asset Finance, TD Bank and Wells Fargo. The market below CA$10 million is generally served by the small finance companies and the recourse factors, although in the CA$5 million to CA$10 million bracket there is some cross over with a few of the more aggressive asset based lenders. MARKET PERFORMANCE AND SUPPLY There were only two participants in non-recourse factoring in 2012, the same as last year. At the start of 2011, it was announced that Coface Credit Management s fledgling factoring operation, founded in 2007, was no longer taking on new clients. During 2011 they terminated all factoring operations. However, this did not have any effect on Coface s active credit insurance business in Canada. Total non-recourse volume was up substantially to CA$5.50 billion, an increase of 22 percent from last year s CA$4.49 billion. National Bank of Canada 3

Millions CAD CANADA 2012 accounted for all of the increase, adding to their market share, while Accord Financial Limited held the balance. National Bank of Canada expanded their business significantly in 2012 by continuing to exploit new markets such as natural resources, hospital supply chain services and non-notification factoring. 2012 Factoring Volume: Domestic vs International (CA$m) 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 - Domestic International The competitive situation between National Bank of Canada and Accord Financial Limited is quite diverse. National Bank, being the sixth largest bank in Canada, tends to offer its services to its own clientele with a lending component. Accord Financial Ltd. is primarily engaged in service factoring without lending and therefore deals with clients that are funded by a variety of Canadian banks. Accord s clients that require non-bank funding are steered towards their sister company, Accord Financial Inc. on the recourse side. Both National Bank of Canada and Accord Financial are listed on the Toronto Stock Exchange and both are members of Factors Chain International as well. factoring volumes recorded a modest 3.4 percent increase in 2012, which was an improvement over the 2011 increase of 2.1 percent. It was the third year in a row that the economy posted positive GDP growth and this contributed to the increase. The number of recourse participants declined from 58 in 2011 to 56 in 2012. Accord Financial Inc. was the recourse volume leader with $818 million followed by TCE Capital, J.D. Factors and Bibby Financial Services. Over the last seven years, total factoring volume, non-recourse and recourse has posted overall growth to CA$8.23 billion in 2012, an all time record. During the 4

Millions CAD CANADA 2012 period from 2005 to 2007, factoring volume actually declined from CA$5.07 billion to CA$4.23 billion. The main reason for this decline was the closure in early 2007 of the Canadian offices of GMAC Commercial Credit Corp., as GMAC s volume was about CA$1.0 billion. Since 2007, total factoring volume has shown steady growth, nearly doubling over the five-year period. The bulk of the increase was due to a surge in non-recourse volume throughout the latest five-year period. ANNUAL FACTORING VOLUME: & Nonrecourse (CA$m) 9,000 8,500 8,000 7,500 7,000 6,500 6,000 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 7,134 8,234 5,054 5,355 5,129 5,074 4,630 4,754 4,952 4,228 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 NON-RECOURSE RECOURSE Since 2006 non-recourse volume has grown 109% while recourse volume increased by 12%. National Bank of Canada is the market leader with a 61% market share. As Accord Financial Ltd and Accord Financial Inc are both owned by the same parent company, their combined volume of CA$1.32 billion placed them in second spot with a 16% market share, and TCE Capital was third at 5%. 5

MARKET SHARE BY SERVICE PROVIDER 2012 Others (53 companies) 15% J.D. Factors 3% TCE Capital 5% Accord Financial 16% National Bank 61% The non-recourse factors generally serve clients whose annual volume may range from CA$1 million to CA$75 million. The average client is somewhere around CA$5 million. Non-recourse has traditionally appealed to companies selling into the retail trade, as the factors have an in-depth knowledge of this area. However, the dominant non-recourse player has been successful in opening up large markets outside of retail. Factoring commission rates vary from 0.50% for large volume clients to 2.00% for small clients. Interest rates range from bank prime plus 1% to prime plus 3%. The recourse factors service clients with roughly the same volume range as the non-recourse factors. Their clients may be manufacturers or importers, with sales to industrial, commercial, governmental or retail customers. Occasionally, a large recourse factor will even finance a smaller recourse factor. While commission and interest rates vary widely, most loans in the mainstream will have an effective yield of between 15 to 20% when you lump the commission and interest together. Smaller clients, those requiring low to mid-6 figure loans, will pay more. There is presently no industry trade association in Canada. However, the U.S. based International Factoring Association established a Canadian chapter in 2009. Most of the larger recourse factors are members of this group and their meetings are held monthly in Toronto. The Commercial Finance Association in the United States did establish a Canadian chapter about ten years ago, based in Toronto. The Canada chapter, as it was known was active for many years but more recently exists in name only. 6

FUTURE TRENDS The Toronto-Dominion Bank economists project that GDP growth will be a modest 1.6% in 2013, accelerating to 2.6% in 2014 based on stronger growth projected for the U.S. This compares with actual GDP growth in 2012 of 1.8%. If the 2013 GDP projection holds true at 1.6%, it will mark the third year in a row of shrinking GDP growth after the post recession rebound in 2010. Canada has not been immune to the slowdown in global growth in 2012, and thus the Canadian economy is expected to continue its sub-par growth in 2013. Despite the fact that Canada s housing sector is slowing, the rate of growth is expected to accelerate throughout the year and into 2014 as well, due mainly to anticipated improvements to the U.S. economy and the positive effects that will have on Canada s exports to the U.S. As well, the unemployment rate should continue its gradual improvement, inflation is a non-issue and interest rates are projected to remain low with the prime rate steady at 3% for the remainder of the year. factors racked up another year of slow but steady volume growth in 2012 with a 3.4% increase from the previous year. Given the modest projected GDP growth in 2013, recourse volume should at least increase incrementally in the near future. At present, growth prospects for the larger recourse factors would seem to be in the asset based lending sector of the business. While it is a fact that the banks have maintained more vigorous lending standards for small and medium-sized businesses that they implemented during the recession, their strategy of dealing with weaker clients has changed over the last couple of years. While they may not give the clients what they want or need, they seem more reluctant to terminate their loan facilities than previously. This has negatively impacted the deal flow to recourse factors and this trend will in all likelihood continue. The non-recourse service factoring business, without lending, faces stiff competition from credit insurers. Ever since the end of the recession a few years ago, the credit insurers have engaged in much more liberal credit granting and lower premiums. As the economy continues to improve, albeit slowly, this situation should remain constant. Regarding non-recourse business with lending, the market leader, National Bank of Canada, had another significant increase in volume in 2012 and this led to a meaningful increase in turnover for the non-recourse sector overall. Industry sources predict that non-recourse growth will be about 10 percent in 2013. Evidence suggests that new markets will continue to be developed and innovative financial products will come on stream in due course. 7

As Canada has 58 factoring service providers, there are many different types of financing available. These include: Accounts receivable, either on a notification or non-notification basis with or without recourse. Inventory Equipment Purchase Order Financing Spot factoring for specific buyers Some factors will take residential or commercial real estate as side collateral to enhance margining on other assets. Factoring services are used by many different types of manufacturers, importers, distributors, and sometimes even by retailers. Service industries have a presence as well. Some typical industry segments would be: Apparel Automotive components Electronics Food and beverage suppliers Footwear Home Furnishings Human resource staffing Hospital Supply Services Metal and steel manufacturing Natural resources Oil field services Sporting goods Technology Toys and games Transportation (trucking) The two largest factoring service providers, namely National Bank of Canada and Accord Financial, are members of Factors Chain International. Both are active in providing import and export services to their clients. 8

DIRECTORY OF LARGER CANADIAN FACTORS CANADA 2012 Company Name Contact Person Mailing Address Telephone Facsimile Website Email Services Provided Parent Company Accord Financial Inc. (formerly Montcap Financial Corporation) Mr. Fred A. Moss Suite 1510 3500 de Maisonneuve W. Montreal, QC H3Z 3C1 (514) 932-8223 (514) 932-0076 www.accordfinancial.com sales@accordfinancial.com International Accord Financial Corp. Accord Financial Ltd. Mr. Simon Hitzig Suite 1803 77 Bloor St. W. Toronto, ON M5S 1M2 (416) 961-0007 (416) 961-9443 www.accordfinancial.com hitzig@accordfinancial.com Non-recourse Domestic International Accord Financial Corp. Bibby Financial Services (Canada) Inc. Vice Mr. Hardy Kang 310 4 Robert Speck Pky Mississauga, ON L4Z 1S1 (905) 949-8300 (866) 666-0241 www.bibbycanada.ca hkang@bibbycanada.ca Bibby Line Group Brome Capital Mr. Michel Gendron Suite 700 550 Sherbrooke St. W. Montreal, QC H3A 1B9 (514) 842-2975 (877) 644-9828 www.bromecapital.com info@bromecapital.com Domestic International Private Investors Express Commercial Services Inc. Chief Financial Officer: Mr. Fred Paatz 2477 Glenwood School Dr. Burlington, ON L7R 3R9 (888) 496-1468 (905) 639-1625 www.ebf.ca fred@ebf.ca The EBF Group Ltd. First Vancouver Finance Senior VP Sales Manager: Mr. Tom Klausen 225-10711 Cambie Rd Richmond, British Columbia V6X 3G5 (604) 988-1490 (604) 273-9208 www.fvf.ca tklausen@fvf.ca Private Investors Grand Financial Management Inc, Chief Financial Officer: Mr. Michael Rakhmayev 43 100 Bass Pro Mills Dr. Vaughan, ON L4K 5X1 (877) 738-6661 (905) 738-6631 www.grandfin.com michaelr@grandfin.com Grand Financial Management Inc. J D Factors Corporation Vice Ms. Tina Capobianco 315 Matheson Blvd E Mississauga, ON L4Z 1X8 (800) 263-0664 (905) 501-0395 www.jdfactors.com J D Factors LLC Liquid Capital Corp. Vice President and Chief Operating Officer: Mr. Brian Birnbaum Suite 400 5734 Yonge Street Toronto, ON M2M 4E7 (877) 228-0800 (416) 222-0166 www.liquidcapitalcorp.com birnbaum@liquidcapitalcorp.com Private Investors Maple Trade Finance Ms. Carole-Ann Miller Suite 701 5475 Spring Garden Rd., Halifax, NS B3J 3T2 (866) 444-6555 (902) 444-5567 www.mapletradefinance.ca info@mapletradefinance.ca Maple Financial Group 9

Company Name Contact Person Mailing Address Telephone Facsimile Website Email Services Provided Parent Company Morrison Financial Services Ltd. Mr. David Morrison Suite 15 156 Duncan Mill Rd. Toronto, ON M3B 3N2 (416) 391-3535 (416) 391-4843 www.morrisonfinancial.com davidm@mfgroup.ca David Morrison Nat l Bank of Canada Factoring Group Senior Manager: Mr. Michel Leblanc 7 th Floor 1010 La Gauchetiere W. Montreal, QC H3B 5K7 (514) 394-8899 (514) 394-4086 www.nbc.ca Non-recourse Domestic International National Bank of Canada Receivables Purchase Group Inc. President & Board Member: Mr. Richard Sabourin Suite 300 221 Lakeshore Road East, Oakville, ON L6J 1H7 (800) 837-0265 (905) 842-0242 www.rpgreceivables.com rick@rpgreceivables.com Receivables Purchase Group Inc. TCE Capital Corp. Mr. Gus Baril Suite 707 505 Consumers Rd. Toronto, ON M2J 4V8 (416) 497-7400 (416) 497-3139 www.tcecapital.com Private Investors 10