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HomeMy WebLinkAboutBy-law No. 2009-103 -71-4' CORPORATION OF THE MUNICIPALITY OF BAYHAM BY-LAW NO. 2009-103 A BY-LAW TO AUTHORIZE THE EXECUTION OF AN AGREEMENT BETWEEN THE MUNICIPALITY OF BAYHAM AND CANADIAN IMPERIAL BANK OF COMMERCE WHEREAS the Municipality of Bayham has an existing loan with the Canadian Imperial Bank of Commerce authorized under by-law 99-93; AND WHEREAS the Council of the Corporation of the Municipality of Bayham now deems it necessary and expedient to renew the credit agreement with Canadian Imperial Bank of Commerce; NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE MUNICIPALITY OF BAYHAM ENACTS AS FOLLOWS: "frs e+r- 1. THAT the Mayor and Clerk be and are hereby authorized to execute the Agreement, attached hereto as Schedule"A"and forming part of this by-law,between Canadian Imperial Bank of Commerce and the Municipality of Bayham; 2. THAT this by-law shall come into full force and effect upon final passing. READ A FIRST, SECOND AND THIRD TIME AND FINALLY PASSED THIS 3rd DAY OF SEPTEMBER 2009. A 417-1.4- 216e2-4 7' OR CLERK 4 CA Version 2008110 CIBC Page 1 of 4 GIBC Retail Markets Credit Agreement STRAFFORDVILLE 200 Broadway Street Tillsonburg, Ontario N4G 5A7 Jul 28, 2009 THE CORPORATION OF THE MUNICIPALITYOF BAYHAM PO BOX 160 STRAFFORDVILLE, Ontario N 0J 1 Y0 Canada Attention: Suzanne Mantel-Treasurer Dear Ms. Mantel: We are pleased to establish the following credit facilities. Each credit offered is referred to as a "Facility. Overall Credit Limit Overall Credit Limit: The total approved amount of all Facilities: Term Facility is not at any time to exceed CDN$593,276.00. Facility A: Term Facility Loan Amount: $593,276.00 Purpose: This Facility is to be used for: Capital infrastructure projects. Description: A non-revolving Demand Instalment Loan. Principal that is repaid is not available to be re-borrowed. Rate: Interest will be calculated at a fixed rate of 6.250% per year for a 27 month term amortized over 27 months. Last Regular Scheduled Apr 11,2012 Payment Date: Repayment: On demand. Until demand, this Facility is repayable as follows: 6 regular semi-annual payments of$109,971.35 (principal and interest blended).Any outstanding principal and interest and any other amount due but unpaid with respect to this Facility is due on the Last Regular Scheduled Payment Date. The first/next regular instalment payment is due on Oct 11,2009 and the last regular instalment payment plus any outstanding principal and interest and any other amount due but unpaid with respect to this Facility is due on the Last Regular Scheduled Payment Date. You may only prepay this Facility in accordance with Schedule A. Fees: The fees payable in respect of this Facility are as listed under "GENERAL FEES"at the end of this Letter. Conditions: See also"CONDITIONS APPLICABLE TO FACILITIES", "All Facilities"at the end of this Letter. CA Version 2008110 Page 2 of 4 CIBC Retail Markets Credit Agreement CONDITIONS APPLICABLE TO FACILITIES CONDITIONS APPLICABLE TO FACILITIES All Facilities: The following conditions are applicable to all Facilities: Registrations: CIBC may, if it deems necessary in its sole discretion, register a Financing Statement/Financing Change Statement under the Personal Property Security Act(or the equivalent)in the applicable jurisdiction, or file a registration under any relevant legislation and in any government office in relation to any security granted in connection with the Facilities, recording CIBC's security interest, including,without limitation, recording CIBC's security interest in any motor vehicle by registering the Vehicle Identification Number. Saskatchewan If this Letter is governed by the laws of Saskatchewan and you are a Waiver: corporation, you agree that The Limitation of Civil Rights Act and The Land Contracts(Actions)Act does not apply insofar as it relates to actions as defined in that Act, or insofar as it relates to or affects this Letter, the rights of CIBC under this Letter or any instrument, charge, security agreement or other document of any nature that renews, extends or is collateral to this Letter. Conditions All security required under the Facilities generally or under a specific Applicable to all Facility must be in form and substance satisfactory to CIBC and unless Security: otherwise agreed in writing, must be delivered prior to any advance under all Facilities generally or under the relevant Facility if the security is only required for that specific Facility, as applicable. SECURITY The following security is required in addition to any other security requirements outlined elsewhere in this letter(without duplication): Other Security: Capital Capital Expenditure Borrowing By-Law Dated December 2, 1999.. Exependiture Borrowing By-Law REPORTING REQUIREMENT You will provide to us: (a) Audited annual financial statements within 150 days after the end of each fiscal year, on a consolidated basis. (b) A annual budget for your next fiscal year, including annual projected income statement within 150 days after the end of each fiscal year end, on an unconsolidated basis. Conditions: Any financial statements required above shall only be accepted by us if they have been signed by officers or persons duly authorized to sign the financial statements, or the financial statements must be accompanied by a certificate (as required by us)from an authorized signatory of the business certifying that the financial statements present a true and fair view of the business. CA Version 2008110 Page 3 of 4 CIBC Retail Markets Credit Agreement GENERAL FEES GENERAL FEES Other than as indicated in this Letter,the following fees are payable in respect of the Facilities, in addition to any other fees outlined elsewhere in this Letter. Amendment Fee: If you require an amendment to this Letter,there will be a fee of $150.00 payable on the date you sign such amendment to this Letter. OTHER PROVISIONS Next Scheduled Review The next scheduled review is Jun 30, 2010.The terms of this Agreement Date: will continue until amended or superseded by another agreement in writing. Schedule A: The attached Schedule A,which contains certain additional provisions applicable to the Facilities, and certain definitions,forms part of this Letter. Repayment: All amounts under any Facility are repayable immediately on demand by us unless otherwise indicated.We may terminate any Facility in whole or in part at any time. Interest Payment Except with respect to interest on amounts in default,which is payable Dates: on demand, interest is payable as specified herein and subject to the terms and conditions in Schedule A. Overdrafts: Money advanced under any Facility in excess of the Credit Limit or Loan Amount applicable to that particular Facility is repayable on demand and will bear interest at our Excess Interest Rate to the extent permitted by applicable laws and regulations. Authorized Debits: Unless you have made other arrangements with us,you authorize us to debit your Operating Account for any required payments (including, without limitation, any scheduled payments), interest,fees or other amounts that are payable by you to us with respect to any Facility, as and when such amounts are payable. Governing Law: The laws of the Province of Ontario and the federal laws of Canada applicable therein shall apply to this letter including Schedule A and any amendments,additions or replacements. The parties hereto submit to the exclusive jurisdiction of the courts in that Province. French Language: The parties confirm their express wish that this Letter and all documents related thereto be drawn up in English. Les parties confirment leur volonte expresse de voir le present contrat et tous les documents s'y rattachant etre rediges en anglais. Replacements: This Letter supersedes and replaces all prior discussions, letters and agreements(if any)describing the terms and conditions of Facilities contained in this Letter. This Letter does not however serve to operate as a novation.To the extent necessary, CIBC reserves all of its rights in respect of any Security that has been granted to secure your obligations with respect to the Facilities. Please indicate that you have read and accept the foregoing terms and conditions(including the terms and conditions in any Schedule attached to this letter)by signing the enclosed duplicate copy of this Letter (including obtaining written acknowledgements from any Guarantors as required by us)and returning it to the undersigned prior to Sep 30,2009. If(a)we have not received a duly executed copy of this Letter(including any acknowledgements from any Guarantors as required by us)by the date indicated above, and (b)you have not fulfilled all the conditions required for us to advance funds under the Facilities indicated in this Letter by Sep 30, 2009 (or any extension of this date that we may agree to),we may in our sole discretion and without notice to you,cancel all of the Facilities listed in this Letter and we will be under no further obligation to advance any funds to you under this Letter. I CA Version 2008/10 Page 4 of 4 CIBC Retail Markets Credit Agreement OTHER PROVISIONS We would like to take this opportunity to thank you for choosing CIBC.We look forward to assisting you and your business with any future financial needs you may have. Yours truly, CANADIA, ' RI BANK OF COMMERCE Signature Name: Larry Calendino Title: Senior Business Advisor Address: Simcoe, Ontario Phone No.: Fax No.: Accepted this3 d day OfacTT,a2.s„9 THE CORPORATION OF THE MUNICIP) ITYOF BAYH M ALF Signature Name: Lynn Acre Title: Mayor L--� Signature Name: Suzann4Mantel Title: 1 reasurer Attachment(s): (1)Schedule A Standard Credit Terms V 6326 iCap-2006/05 CIBC Page 1 of 26 CIBC Retail Markets Credit Agreement Schedule A-Standard Credit Terms 1 INTEREST 1.1 Interest rates: In this Agreement a)"CIBC Base Rate"means the current posted interest rate per year which varies by term as declared by CIBC for CIBC brand closed fixed rate fixed term loans in Canada. b)"CIBC Residential Mortgage Rate"means the current posted interest rate per year which varies by term as declared by CIBC Mortgages Inc.for CIBC brand closed fixed rate residential Canadian dollar mortgage loans in Canada. c)"Prime Rate"means a fluctuating annual interest rate equal at all times to the reference rate of interest (however designated)by CIBC for determining interest chargeable by us on loans in Canadian dollars made in Canada. d)"US Base Rate"means a fluctuating annual interest rate equal at all times to the reference rate of interest (however designated)by CIBC for determining interest chargeable by CIBC on loans in US dollars made in Canada. You can find out what the CIBC Rates are at any time by calling 1 800 465-CIBC(1 800 465-2422). 1.2 Calculation of interest: Unless otherwise specified in this Agreement: a)Each variable interest rate provided for in this Agreement will change automatically,without notice,whenever the Prime Rate or the US Base Rate,as the case may be,changes.Prime Rate and US Base Rate shall be determined by us and such determination shall be conclusive. b)Unless otherwise stated,any interest rate stated as an annual rate of interest is an interest rate for 365 days,and for the purpose of the Interest Act(Canada),shall be the stated interest rate multiplied by the actual number of days in the calendar year in which such rate is to be applied and divided by 365.For the purpose of the Interest Act(Canada)and all other purposes,the principle of deemed re-investment of interest is not applicable and the rates of interest specified in this Agreement are nominal rates and not effective rates or yields. c) In calculating interest for any period,the first day of such period shall be included and the last day of such period shall be excluded,and interest shall be calculated on the applicable balance at the end of each day. d)Unless you have made other arrangements with us,we will automatically debit your Operating Account for interest amounts owing. If your Operating Account is in overdraft and you do not deposit to the account an amount equal to the monthly interest payment,the effect is that we will be charging interest on overdue interest(which is known as compounding). If any interest payment is due on a day other than a Business Day, then the interest payment is due on the next Business Day. e)Interest is payable in arrears at the frequency specified in the Letter(and if not specified is payable once a month)prior to the end of the specified payment period and on the day required by us. Interest on interest, and interest on overdue amounts is also payable on demand. f) Interest that is charged to you and is unpaid compounds at the frequency in which interest is payable and continues to compound whether or not CIBC demands payment from you or starts a legal action,or gets judgment against you. g)Interest at the Excess Interest Rate will be charged on the amount that exceeds the Credit Limit of any particular Facility. This will happen even if the Overall Credit Limit has not been exceeded. h)(i) Interest charged on a Canadian dollar Facility that is:(x)based on the Prime Rate;or(y)a Fixed Rate Loan,is calculated based on a fraction whereby the numerator is equal to the principal balance multiplied by number of days in the year in which interest is calculated multiplied by the applicable interest rate,and the denominator is equal to 365(or 366 in a leap year for a Fixed Rate Loan or Variable Rate Loan). (ii)Interest charged on a US dollar Facility that is: (x)based on the US Base Rate per year;or(y)a Fixed 6326iCap-2006105 Page 2 of 26 CIBC Retail Markets Credit Agreement Schedule A-Standard Credit Terms Rate Loan is calculated based on a fraction whereby the numerator is equal to the principal balance multiplied by number of days in the payment period multiplied by the applicable interest rate, and the denominator is equal to 365(or 366 in a leap year for a Fixed Rate Loan or Variable Rate Loan). 2 PAYMENTS 2.1 Payments: If a payment is due on a day other than a Business Day, it may be paid on the next Business Day. 2.2 Applying money received: All payments and money we receive from you or from any Security may be applied on such parts of your liabilities to us as we may determine. This means that we may choose which Facility to apply the money against,or what mix of principal,interest,fees and overdue amounts within any Facility will be paid. 2.3 Right of off-set: We may at any time off-set and apply any deposits held by us and any other amounts owed by us to or for your credit against any and all of your obligations with respect to the Facilities,even though we have not made any demand and even though any such obligations may not yet be due and payable. 2.4 Our records: Our loan accounting records will provide conclusive evidence of all terms and conditions of the Facilities such as principal loan balances, interest calculations,and payment dates. 2.5 Foreign currencies: We may convert any amount stated in a foreign currency to an amount in Canadian dollars according to our usual practice. 3 REPRESENTATIONS AND WARRANTIES 3.1 Representations and warranties: To induce us to establish and maintain the Facilities,you represent and warrant to us as follows: a)You have all necessary capacity, power and authority to own your property,to carry on the business carried on by you,and to enter into and perform your obligations under this Agreement and the Security. b)This Agreement and the Security have been duly authorized,executed and delivered,and constitute legal,valid and binding obligations and are enforceable in accordance with their terms. c)The execution and delivery by you of this Agreement and the Security and the performance by you of your obligations thereunder,and the obtaining by you of amounts under the Facilities,will not conflict with or result in a breach of any applicable law,and will not conflict with or result in a breach of or constitute a default under any of the provisions of your constating documents or by laws or any agreement or restriction to which you are a party or by which you are bound. d)All financial statements for you that you deliver to us will present fairly your financial position in accordance with Generally Accepted Accounting Principles,as of the dates thereof and for the fiscal periods then ended. e)Since the date of the most recent financial statements of you delivered to us,there has occurred no event which, individually or with any other events,has had,or which may reasonably be expected to have,a Material Adverse Effect. f) You have not failed to observe or perform, beyond any period of grace permitted by us,any of your obligations in this Agreement. g)Except as disclosed in writing by you to us prior to the date of this Agreement with specific reference to this Agreement,to the best of your knowledge(i)the business carried on and the property owned or used at any time by you and your predecessors has at all times been carried on,owned or used in compliance with all environmental laws;(ii)there are no circumstances that could reasonably be expected to give rise to any civil or criminal proceedings or liability regarding the release from or presence of any hazardous substance on any lands used in or related to your business or property; (iii)there are no proceedings and there are no circumstances or material facts which could give rise to any proceeding in which it is or could be alleged that you are responsible for any domestic or foreign clean up or remediation of lands contaminated by hazardous substances or for any other remedial or corrective action under any environmental laws;and(iv)you have maintained all environmental and operating documents and records relating to your business and property 6326 iCap-2006105 Page 3 of 26 CIBC Retail Markets Credit Agreement Schedule A-Standard Credit Terms in the manner and for the time periods required by any environmental laws. Except as disclosed to us in writing with reference to this Agreement,you have never conducted an environmental audit of your business or property. h)No representation or warranty made by you herein or in any other document furnished to us from time to time contains or will contain any untrue statement of a material fact or omits or will omit to state any material fact necessary to make such statements not misleading.All projections and pro forma information delivered to us from time to time by you are and will be prepared in good faith based on assumptions believed by you to be reasonable at the time of delivery. 3.2 Survival: All representations and warranties contained in this Agreement shall survive the execution and delivery of this Agreement and the obtaining of amounts under the Facilities,and the obtaining of any amount under any Facility shall constitute a reaffirmation on and as of such delivery date and such borrowing date,of all representations and warranties contained in this Agreement, in each case with reference to the then-existing facts and circumstances. 4 ADDITIONAL OBLIGATIONS 4.1 Failure to perform: You will notify us promptly if you fail to perform or observe any of your obligations in this Agreement. 4.2 Expenses: You will reimburse us for all reasonable fees(including legal fees)and out of pocket expenses incurred in (i)performing any searches(whether the Facility is secured or unsecured)or preparing or filing any registrations in relation to the approval,maintenance,review,renewal or amendment of your Facilities;(ii) preparing,registering,maintaining, renewing,reviewing or amending any Security; (iii)responding to requests from you for waivers,amendments,renewals and other matters, (iv)enforcing our rights under this Agreement or any Security and(v)discharging or replacing any Security. Unless you have made other arrangements with us,we will automatically debit your Operating Account for any of these amounts owing to us on the date when they are payable as advised by us. 4.3 Further information: You will provide such further information about you and/or your business and your Subsidiaries as is reasonably requested by us from time to time,and such information shall be in a form acceptable to us. 4.4 Further assurances: You will from time to time promptly upon request by us do and execute all such acts and documents as may be reasonably required by us to give effect to the Facilities and the Security. 4.5 Insurance: You will keep all your assets and property insured(to the full insurable value)against loss or damage by fire and all other risks usual for similar property and for any other risks we may reasonably require. If we request,these policies will include a loss payable clause(and with respect to mortgage security,a mortgagee clause)in favour of us.As further security,you assign all required insurance proceeds to us.You will provide to us either the policies themselves or adequate evidence of their existence. If any insurance coverage for any reason stops,we may(but shall have no obligation to)insure the property. Finally,you will notify us immediately of any loss or damage to any of your property. 4.6 Dispositions of property: You will not sell, assign,transfer,create or cause or permit anyone else to create,a Lien,or otherwise dispose of,all or any material part of your property,except for sales in the normal course of your business for fair market value or as otherwise consented by CIBC in writing. 4.7 Additional Financing: You will not obtain any additional financing or enter into any long-term leases without our prior consent (which consent will not be unreasonably withheld). 4.8 Investments: You will not make any Investment except as expressly permitted by us. 4.9 Transactions with Affiliates: Except as specifically permitted by us,you will not enter into any transaction,including the purchase,sale or exchange of any property or the rendering of any services,with any of your shareholders or Affiliates,or with any of your or their directors or officers,or enter into, assume or permit to exist any employment, 6326 iCap-2006/05 Page 4 of 26 CIBC Retail Markets Credit Agreement Schedule A-Standard Credit Terms consulting or similar agreement or arrangement with any such shareholder or Affiliate or with any of your or their directors or officers,except a transaction or agreement or arrangement which is in the ordinary course of your business and which is upon fair and reasonable terms not less favourable to you than it would obtain in a comparable arms-length transaction.You will ensure that your Subsidiaries(if any)comply with this section. 4.10 Amalgamations or Corporate Restructuring: You will not enter into any amalgamation,corporate restructuring or similar transaction without providing us at least 30 days'prior notice or as otherwise required by applicable law. 4.11 Application to Subsidiaries: • If requested by us,you will ensure that each of your Subsidiaries complies with this Agreement as if the references to you therein were references to each such Subsidiary. 4.12 Mortgage Security: If the Facilities or a Facility is secured by a mortgage(in Quebec,an immovable hypothec): a)You agree to pay all expenses for registering the mortgage/immovable hypothec and for reviewing,renewing, amending, maintaining and updating our registration to ensure such mortgage security and our position as a secured creditor is protected. You also agree to reimburse us for expenses incurred for discharging or replacing any such mortgage security. b)We may confirm the value of the property secured and the amount of any existing Liens against it by having the property appraised and doing any necessary searches.You agree to reimburse us for any costs of doing this. c)We may have the property appraised periodically to determine its value, but not more often than once a year. You agree to reimburse us for the appraisal costs incurred by us. d)If the property is sold,or if another charge is registered against it,we may require you to repay the full amount secured by the mortgage/immovable hypothec. If the owner of the property secured is a natural person and such person dies,you(or your executors or administrators,as applicable)agree to notify us immediately and agree to provide us with equivalent security satisfactory to CIBC forthwith. 5 INDEMNITIES 5.1 Legal and regulatory change: You agree to pay us the amount necessary to compensate us if,after the date of this Agreement,our cost of offering or providing the Facilities to you is increased,or the amount that we receive under the Facilities is reduced because of a change in the law,or the introduction of a new law,or our compliance with any request or directive by any central bank,superintendent of financial institutions or other comparable authority which(I)subjects us to any tax with respect to the Facilities, (ii)changes the basis of taxation of payments to us under the Facilities(except for changes in the rate of tax on our overall net income), (iii)imposes any capital maintenance or capital adequacy requirement,reserve requirement or similar requirement with respect to the Facilities,or(iv)imposes any other condition or restriction on us.We will notify you promptly of any such event.Our certificate containing reasonable details of our calculations shall be conclusive evidence of the amount you must pay us. 5.2 Tax withholding: You will,whenever legally permitted,pay all amounts due to us under this Agreement without any reduction or withholding on account of Taxes,other than Excluded Taxes. If you are required by law to make any such reduction or withholding,then the amount payable by you shall be increased so as to yield to us on a net basis,after payment of all Taxes and after payment of all Excluded Taxes on any additional amounts payable under this section,the rates of interest and the amounts specified in this Agreement. "Taxes"means all income,stamp or other taxes,levies, imposts,duties,charges,fees,deductions or withholdings now or hereafter imposed, levied,collected,withheld or assessed and includes sales taxes,value added taxes and goods and services taxes. "Excluded Taxes"means Taxes imposed on our overall net income or franchise taxes,taxes on doing business or taxes measured by our capital or net worth. 5.3 Payment of sales tax,etc.: You shall be liable for and shall pay to us promptly on demand,all sales taxes,and goods and services taxes, and similar taxes that are payable with respect to any goods or services we make available to you under this Agreement,or if any such tax is payable directly by you,then you shall send us,upon our request,a 6326 ICap-2006/05 Page 5 of 26 CIBC Retail Markets Credit Agreement Schedule A-Standard Credit Terms certified copy of an official receipt showing you have paid such tax.You shall indemnify and save us harmless from any additional taxes,interest, penalties or other liabilities that may become payable by us or to which we may be subjected as a result of any breach by you of this section.Our certificate containing reasonable details of our calculations and the amount of such taxes,interest or penalties shall be prima fade evidence of the amount you must pay us. 5.4 Cost of default: You shall indemnify and save us harmless from all losses and expenses which we suffer because(1)you fail to make any payment you are required to make,or to fulfil any other obligation promptly under this Agreement, (ii)you give us notice that you wish to obtain funds under a Facility and then fail to accept such funds, (iii)you give us notice that you wish to make an optional payment and then fail to make such payment,or(iv) you repay any amount on which interest is fixed until a certain date,other than on that date,or repay any other amount other than on its maturity date.Our certificate containing reasonable details of our calculations and the amount of such losses and expenses shall be prima facie evidence of the amount you must pay us. 5.5 Environmental matters: You shall indemnify and save harmless us,our directors,officers, employees and agents,from all claims, demands, liabilities,damages,losses,costs,charges and expenses(including without limitation,the cost of any environmental assessment or other reports,or of defending any lawsuits,or of any fines,or for any preventative, remedial,or clean-up activity,or to compensate for any loss or damage to any property or person)arising from any failure by you to carry on your business,and maintain your assets and property in accordance with all applicable environmental laws and regulations,or arising from any release,deposit, discharge or disposal of pollutants of any sort in connection with either your business or property. If we ask,you will defend any lawsuits,investigations or prosecutions brought against us or any of our directors, officers,employees and agents in connection with any failure by you to carry on your business,and maintain your assets and property in accordance with all applicable environmental laws and regulations,or arising from any release,deposit,discharge or disposal of pollutants of any sort in connection with either your business or property.Your obligation under this section continues even after the Facilities have been repaid or cancelled or this Agreement has terminated. 5.6 Indemnity: You hereby-indemnify and agree to hold CIBC harmless from all losses,damages,costs,demands,claims, expenses(including out-of-pocket expenses)and other consequences which CIBC may incur,sustain or suffer, other than pursuant to its own negligence or wilful misconduct, in relation to any of your Facilities or any Security,or enforcing or protecting the provisions thereof,including without limitation, legal and other professional expenses reasonably incurred by CIBC and whether incurred in defending any action brought against C1BC,or in any proceedings brought by CIBC against you,any guarantor of your liabilities to CIBC hereunder or with respect to your or any guarantor's property charged or pledged to CIBC for the purpose of protecting, taking possession thereof, holding or realizing thereon,or otherwise in connection herewith. 6 GENERAL 6.1 Calculations relating to financial covenants: All calculations relating to financial covenants may be done,at our option on a consolidated basis,as indicated in the Letter,and each amount derived from your profit and loss statement shall be calculated as the total of such amount during your four most recently-completed fiscal quarters(or, if agreed upon by us in our sole discretion,during your most recently completed fiscal year),as shown in your most recent financial statements delivered to us. 6.2 Reporting requirements: We may,at our option and as indicated in the Letter, require certain reports to be delivered on a consolidated or unconsolidated basis. 6.3 Our pricing policy: The fees, interest rates and other charges for your banking arrangements with us are dependent upon each other.Accordingly, if you cancel or do not follow through with,in the manner originally contemplated,any of these arrangements,we reserve the right to require payment by you of increased or added fees, interest rates and charges as a condition of the continuation of your banking arrangements. 6.4 Our rights re: demand Facilities: It is important to us that you succeed.We may,however,at our discretion,demand immediate repayment of any outstanding amount under any demand Facility.We may also,at any time,and for any reason,cancel the unused portion of any demand Facility. 6326iCap-2006105 Page 6 of 26 CIBC Retell Markets Credit Agreement Schedule A-Standard Credit Terms 6.5 Payments: Unless you have made other arrangements with us,we will automatically debit your Operating Account for any payments owing(including scheduled payments). If your Operating Account is in overdraft and you do not deposit to the account an amount equal to the payment being debited,the effect is that we will be charging interest on the overdue amount at the Excess Interest Rate. if any payment is due on a day other than a Business Day,then the payment is due on the next Business Day. 6.6 Pre-conditions: You may use the Facilities granted to you in the Letter only if: a)We have received properly signed copies of all documentation that we may require in connection with the Facilities,the operation of your accounts and your ability to borrow and give us the Security we require; b)All the required Security has been received and, if we require it,registered to our satisfaction; c)Any special provisions or conditions set forth in the Letter have been complied with;and d)If applicable,you have given us the required number of days notice for drawing under a Facility. 6.7 Standard Arm's Length Waiver: In the event that any funds borrowed under a Facility will be used for the purpose of purchasing stocks, bonds, mutual fund units or shares or other securities(the"Securities")from a CIBC subsidiary(the "Company")which may be held in a hypothecated account,or to open an investment account with a Company for purposes of purchasing Securities(an"Account"),you acknowledge that: a)You have discussed the purchase of such Securities or the opening of the Account with a representative of the Company. b)The Letter(including any Facility used for the purposes outlined in this section)is an entirely separate transaction from the purchase of such Securities or the opening of an Account with the Company,and the obligations to CIBC with respect to the Facility will not in any way be affected by any advice that may have been given or representations that may have been made by the Company representative with respect to the Securities or the advisability of purchasing them or opening an Account or by any dispute that may arise in relation to the Securities or the Account,or with the Company or any investment manager of the Company,or obligation in relation to the Securities or the Account or any obligation of the Company or the investment manager of the Company. c)Even though the Company may be a subsidiary of CIBC,there is no obligation to obtain credit under a Facility from CIBC in connection with the purchase of Securities or opening an Account with the Company.CIBC's decision to provide credit under a Facility will be based solely on CIBC's lending and security requirements. 6.8 Notice of Default: You will promptly notify us of the occurrence of any event that is an Event of Default(or any that would be an Event of Default if the only thing required is either notice being given or time elapsing,or both). 6.9 Miscellaneous: You allow us to provide particulars of any of the Facilities where we determine it is necessary for purposes of approving,setting up,maintaining, renewing,amending,restating, replacing or discharging any Facility or any Security,and you allow us to give a copy of this Agreement and any Security granted by you or any other person to CIBC,to each existing guarantor(as well as to any future guarantors)and any signing officer of the business that we have on file as an authorized signing officer, each as we may determine necessary, together with copies of all renewals, replacements, restatements,supplements or amendments to this Agreement or any Security. 6.10 Confidentiality: The terms of this Agreement are confidential between you and us,and accordingly you will not disclose the contents of this Agreement to anyone except your professional advisors. 6.11 Consent to release information:You acknowledge and consent that CIBC may from time to time give any credit or other Information about you to, or request or receive such Information from,any credit bureaux, government registries, reporting agencies or other person, including without limitation,any financial institutions, CIBC subsidiaries or CIBC business units. 6326 iCap-2006/05 Page 7 or 26 CIBC Retail Markets Credit Agreement Schedule A-Standard Credit Terms The word"Information"means financial and financially-related information including,without limitation (i) information to identify or locate you(or any collateral that has been charged or pledged), (ii)information to qualify you for products and services, (iii)any motor vehicle information,where applicable,or(iv)such other information that CIBC requires or must report for regulatory purposes or otherwise:This is explained in the CIBC privacy brochure,Your Privacy Is Protected,available at any branch or www.cibc.com,which describes how the CIBC group collects, uses,discloses,and retains information about you and the products and services you use. Specific Consents: a)Direct Marketing:CIBC may tell you about products and services through direct mail,telephone,and other direct means. b)Disclosure within the CIBC group:CIBC may share Information within the CIBC group so that the CIBC group may tell you about products and services. If you do not wish to consent to(a)or(b),an authorized signing officer of the business(which must be in accordance with CIBC's records)can contact CIBC at 1 800 465 CIBC(2422)at any time. You understand that you will not be refused credit or other services just because you withdraw your consent to(a)or(b).The CIBC group includes CIBC and its subsidiaries that currently offer deposits, loans,mutual funds,securities trading, mortgages,trust and insurance services. You acknowledge that we may offer you Facilities,and that we may assign such Facilities,or your liabilities thereunder,to another entity,CIBC subsidiary or CIBC business unit(the"beneficial owner"),whether or not such beneficial owner is named in this Agreement or any other document referencing such Facilities. You agree that we may disclose any information relating to such Facilities(including any personal guarantee)to such beneficial owner(including,without limitation,any personal information),or its agents,any assignee of such beneficial owner,and any service provider(as defined below). Personal information includes all information provided by a principal of the business or a guarantor of your debt or other information obtained by us in connection with your credit application and/or the credit agreement,and any ongoing information and documentation about you,any guarantor of your debt,or your Facilities,to the extent required by the beneficial owner,its agent or assignee,or any service provider,to enable such person to administer the Facilities and exercise its rights thereunder. "Service Provider"means a person or entity that has been engaged in connection with the servicing,maintenance,collection or operation of your Facilities or the provision of services or benefits to you and/or any guarantor of your debt(including loyalty programs). 6.12 Waiver: No delay on our part in exercising any right or privilege will operate as a waiver thereof,and no waiver of any failure or default will operate as a waiver thereof unless made in writing and signed by an authorized officer of us,or will be applicable to any other failure or default. 6.13 Counterparts: This Agreement may be executed in one or more counterparts,which together shall constitute one agreement. 6.14 Notice: Any communication or notice to be given with respect to the Facilities may be effectively given by delivering the same at the addresses set out herein(or as set out in any Guarantee or other documentation provided to CIBC in relation to the Facilities),or by sending the same by facsimile or prepaid registered mail to the parties at such addresses. Any notice so mailed will be deemed to have been received on the fifth(5th)day next following the mailing thereof, provided that postal service is in normal operation during such time. Any facsimile notice will be deemed to have been received on transmission if sent on a Business Day and, if not, on the next Business Day following transmission. Either party may from time to time notify the other party, in accordance with this section,of any change of its address which thereafter will be the address of such party for all purposes of the Facilities. It is your responsibility to notify CIBC of any change to your address and the address of any Guarantor. If CIBC is not advised of such change of address,the last known address we have will be deemed to be the current address for purposes of notice and service hereunder. 6.15 Limitation Period: To the extent permitted by law,a party to this Agreement(the"Claiming Party")may bring an action in respect of any loss or damage that occurs as a result of an act or omission on the part of another party(the "Defaulting Party")within six(6)years from the date(i)the Claiming Party first knew the loss or damage occurred and was contributed to by an act or omission of the Defaulting Party,or(ii)on which a reasonable person with the abilities and circumstances of the Claiming Party ought to have known of the matters referred to in(i)above.This provision does not apply to Agreements that are governed by the laws of the Province of 6326 iCap-2006/05 Page 8 of 26 CIBC Retail Markets Credit Agreement Schedule A-Standard Credit Terms Quebec. 7 REVOLVING FACILITIES A revolving Facility(including a Revolving Term Facility unless otherwise indicated)may also be referred to in this Agreement as a revolving Line of Credit or as an Operating Line of Credit. Unless otherwise stated in the Letter,the following terms apply to each Facility that is described in the Letter as a revolving Facility (including a Revolving Term Facility unless otherwise indicated). 7 1 The Facility offered,the Credit Limit,the interest rate, interest rate spread, minimum payments required and other terms of the Facility and the Agreement may be changed at our sole discretion and without prior notice (unless otherwise required). Such changes will take effect immediately or,in the event that we are required to provide you with prior notice under an applicable statute, regulation or otherwise,will take effect on the date indicated in such notice. These changes may apply to all amounts owing on or arising after the date that you receive notice of the change. If agreement to such change is required by applicable law,regulation or otherwise, if you continue to use the Facility after the date on which such changes will take effect(as may be indicated in any notice we send to you),you will be deemed to have agreed to any such change. 7.2 We may,without notice to you,return any debit from your Operating Account to which your Line of Credit is attached that,if paid,would result in the Credit Limit for that particular Facility being exceeded,unless you have made prior arrangements acceptable to CIBC. If we pay any of these debits,you must repay us immediately the amount by which the Credit Limit for that particular Facility is exceeded. 7.3 We set a Credit Limit for each revolving Facility.You need to ensure that you don't exceed your Credit Limit for each Facility. If you do exceed your Credit Limit on any Facility,we may not advance money,even if we have done so in the past. In cases where we do advance money when you have exceeded your Credit Limit on any Facility,you agree to repay the excess amount immediately. 7.4 You agree not to use each revolving Facility to move debt from one Facility to another. If nevertheless you use a revolving Facility to make a payment on another Facility,then you must deposit,to the Operating Account to which the revolving Facility is attached,from other sources,in addition to any other amount you are required to deposit,the amount of such payment. 7.5 You agree to make sufficient deposits to bring each Operating Account to which a Small Business Overdraft is attached into a positive balance at least for one full Business Day each calendar month or a minimum of$250 in deposits to each account each calendar month,whichever is less. 7.6 Other than a Revolving Term Facility,which you will only use for the purpose(s)specified in the Letter,you will use your revolving Facility(ies)only for your business operating cash needs or for the purposes specified in the Letter under each such Facility. You are responsible for all debits from the Operating Account that you have either initiated(such as cheques, loan payments,pre-authorized debits,etc.)or authorized us to make. 7.7 If any of your revolving Facilities are margined,the available Credit Limit of that Facility is the lesser of the Credit Limit stated in the Letter for that particular Facility and the amount calculated using the Monthly Statement of Available Credit Limit(or any other report which CIBC requires for this purpose),as(a)the Market Value of such assets against which the Credit Limit is margined,or(b)otherwise required under "Reporting Requirements"in the Letter,each as applicable for that particular margined Facility. 8 NON-REVOLVING FACILITIES A non-revolving Facility may also be referred to as a Term Facility. Unless otherwise stated in this Agreement,the following terms apply to each Facility that is described in this Agreement as a non-revolving Facility. The terms of this section 8 shall also apply to all Revolving Term Facilities unless otherwise indicated. 8.1 Changes: CIBC may at any time change the interest rate,interest rate spread,term,other terms of a Loan,and the type of repayment we require, including,without limitation,changing a blended payment Loan to payments of principal plus interest,or to any other type of Loan. We may also change the amortization period on a Loan, the amount of the regular instalment payments to be made and/or the frequency of the instalment payments,each without advanced notice(unless required by an applicable law,regulation or otherwise)and such changes will become effective immediately(unless we are required to give prior notice by applicable law,regulation or otherwise,in which case the change will take effect on the date indicated in the notice). If we make any such changes,we will notify you. 6326iCap-2006!05 Page 9 of 26 CIBC Retail Markets Credit Agreement Schedule A-Standard Credit Terms 8.2 Payments: Any payment we receive that is applied to a non-revolving Facility is applied first to overdue interest,then to current interest owing,then to overdue principal,then to any fees and charges owing,and finally to current principal. 8.3 Variable Rate Loans: The principal payment amount of your Loan is due on each payment date specified in this Agreement. 8.4 Fixed Rate Loans: The interest rate specified in this Agreement for each Fixed Rate Loan that you have not yet drawn will be fixed on the date of advance of the Loan.We will notify you of the actual interest rate on the date of advance.The interest rate quoted in this Agreement is used for reference purposes only,being the rate that would have been applicable if the Loan had been advanced on the date of this Agreement. 8.5 Prepayment:' a)If you are repaying a Variable Rate Loan in instalments of principal plus interest,and you are not in default,you may prepay all or part of the Term Facility at any time without notice or penalty. b)Subject to paragraph(c)below,you may prepay all or part of a Fixed Rate Loan on the following condition. You must pay us,on the prepayment date,a prepayment fee equal to the greater of(i)three months'interest on the Loan calculated at your existing annual interest rate on the date of prepayment(plus any discount you received on your existing annual interest rate),on the amount prepaid,and(ii)the Interest Rate Differential for the remainder of the term of the Loan, determined in accordance with the standard formula used by CIBC(determined in our sole discretion)in these situations. For examples of prepayment fee calculations,see the definition of"Interest Rate Differential for the remainder of the term"at the end of this Schedule. c) If(a)you are a corporation, (b)the Fixed Rate Loan being prepaid is secured by a mortgage or hypothec on immovables,and(c)the initial term or any renewal term of the Fixed Rate Loan is more than five years,you may prepay all or part of the Fixed Rate Loan at any time after the date that is five years from the date the Fixed Rate Loan was advanced to you or the most recent date as of which the Fixed Rate Loan has been renewed for a new term,as the case may be, in addition to principal and interest to the date of such prepayment and instead of notice,three months'further interest calculated at your existing annual interest rate on the date of prepayment(plus any discount you received on your existing annual interest rate)on the principal amount prepaid. d)We will apply the prepayment against instalments in reverse order of due date. e)The prepayment fee required by paragraph(b)above is not applicable to any Fixed Rate Loans in an original principal amount of less than$100,000 granted to a sole proprietor or individual unless it is secured by a collateral mortgage or hypothec on immovables. 8.6 Repayment of Committed Instalment Loans: Each non-revolving Facility that is a Committed Instalment Loan is payable in regular instalments as indicated in the Letter, but is repayable in full upon the occurrence of an Event of Default. 8.7 Repayment of Demand Instalment Loans: Each non-revolving Facility that is a Demand Instalment Loan is repayable in full upon demand by CIBC notwithstanding that certain Facilities in the Letter indicate that regular instalments(or interest only)are payable and refers to a Last Regular Scheduled Payment Date. 8.8 Collateral Mortgage and Prepayment: If the Fixed Rate Loan is secured by a mortgage,the mortgage is amended by deletion of all terms(if any) that relate to prepayment of the Fixed Rate Loan. The only prepayment terms that apply to the Fixed Rate Loan are the ones set forth in this Agreement. 8.9 Definitions: "Fixed Rate Loan"means a non-revolving Facility on which interest is calculated at a fixed rate of interest. "Variable Rate Loan"means a non-revolving Facility on which interest is calculated at a fluctuating rate of interest. i Does not apply to a Farm Mortgage Loan or a Revolving Term Facility. 6326iCap-2006!05 Page 10 of 26 CIBC Retail Markets Credit Agreement Schedule A-Standard Credit Terms 9 FEES The following terms apply to the General Fees section of the Letter and to any other fee indicated in the Letter. 9.1 Fees: For any fee that is stated as a percentage,the amount charged will be based on the total authorized amount of all Facilities to which that fee applies,minus the amount of any authorized Canada Small Business Financing Act(or Small Business Loans Act)Business Improvement Loan, Farm Improvement and Marketing Cooperatives Loan, Provincial Loan Program and Provincial Guaranteed Farm Loan. 9.2 You will pay CIBC the fees for each Facility and for the overall Facilities as outlined in the Letter or as otherwise notified by CIBC. Unless you have made other arrangements with us,we will automatically debit your Operating Account for fee amounts owing on the date when they are payable as advised by us. 9.3 Definitions: "Amendment Fee"means the fee charged for each amendment request by you.The amendment fee compensates us for the due diligence,analysis and administration necessary to amend your Facility(ies). "Annual Review Fee"means the fee charged when you are renewing an existing Facility(ies).The annual review fee compensates us for the due diligence and financial statement analysis necessary to renew your Facility(ies). "Loan Administration Fee"means the monthly fee charged for administering any Facility that is a revolving Facility(other than a Revolving Term Facility). "Other Fees"or"Fees"means any other fees charged for your Facility(ies)as indicated in the Letter or as advised by us.These fees could relate to the type of instrument used in connection with a Facility,the discharge of Security,site inspection fees,environmental reports prepared by us or completed by an environmental engineering company,fees required to be paid for government sponsored programs,etc.The specific reason and amount of the fee is detailed in the Letter or as advised by us. "Standby Fee"means the fee that applies to the unused portion of any Facility that is a revolving Facility(other than a Revolving Term Facility). For example,if the total approved amount of a revolving Facility is$100,000 and the unused portion over the month is$60,000,then$60,000 is multiplied by the Standby Fee percentage(%)to determine the Standby Fee payable per month. "Structuring Fee"means the fee charged when you are requesting a new Facility.The structuring fee provides compensation for the time spent by CIBC to process your Facility application. 10 CANADA SMALL BUSINESS FINANCING ACT(OR SMALL BUSINESS LOANS ACT) BUSINESS IMPROVEMENT LOANS The following terms apply to each Canada Small Business Financing Act(or Small Business Loans Act)Business Improvement Loan(each,a"BIL"). 10.1 How we make BILs available to you: We may from time to time in our discretion make available to you any of the BILs indicated in the Letter. 10.2 Interest rate: The interest rate for a Variable Rate Loan(as defined in section 8.9(Definitions))BIL changes automatically,without notice,with the Prime Rate.The interest rate for a Fixed Rate Loan(as defined in section 8.9.(Definitions))BIL is fixed for the term of the BIL and is based on a spread over the CIBC Residential Mortgage Rate for the same term.We will calculate interest payable on the money you owe us at the agreed upon interest rate(s). Interest is calculated on the daily balance of each BIL at the end of each day and charged monthly on the last Business Day of each month. Interest that is charged to you and is unpaid compounds monthly and continues to compound whether or not CIBC demands payment from you or starts a legal action, or gets judgment against you. 10.3 Non-revolving: Any BIL is non-revolving.This means that any principal payment made permanently reduces the available BIL amount and may not be reborrowed. 8326 rap-2006105 Page 11 of 26 CIBC Retell Markets Credit Agreement Schedule A•Standard Credit Terms 10.4 Making BIL payments: You agree to make BIL payments as outlined in the Letter. 10.5 Purpose of the BIL: You confirm to CIBC that: a)the purpose of the BIL is as specified in the BIL Application,and has not changed,and b)the BIL Application and all information and supporting documents presented to CIBC in connection with the BIL are,to the best of your knowledge,after due enquiry,accurate and complete. 10.6 Approval of your BIL Application: CIBC may verify the information disclosed in your BIL Application, business plan,declarations,and statement of assets and may verify your credit references. CIBC may also request information including credit information from individuals that will be participating in your business pursuant to your business plan.CIBC may also require an independent appraisal be provided if we deem it necessary. If CIBC determines information is inconsistent or unacceptable to C!BC for any reason, CIBC may in its sole discretion, refuse to make a BIL available to you or advance funds under any BIL. 10.7 Conversion: CIBC and you may both agree to convert a Fixed Rate Loan BIL and a Variable Rate Loan BIL subject to the following conditions: a)a Fixed Rate Loan BIL may be converted to a Variable Rate Loan BIL subject to a conversion charge; b)a Fixed Rate Loan BIL may be converted to another Fixed Rate Loan BIL subject to a conversion charge; c)a Variable Rate Loan BIL may be converted to a Fixed Rate Loan BIL and will not be subject to a conversion charge. The conversion charge is equal to the greater of: A) three months'interest on the outstanding principal balance of the loan,and B) the amount by which(I)the net present value of the outstanding principal balance of the BIL for the remainder of the BIL term, calculated at the date of the conversion and discounted at the Bank of Canada Bank Rate as of the date of the calculation,exceeds(ii)the net present value of a new BIL in an amount equal to the outstanding principal balance of the BIL as if it were made on the date of conversion for the remainder of the BIL term at CiBC's current annual interest rate for the closest annual term for that period,and discounted at the Bank of Canada Bank Rate as of the date of the calculation of the net present value. For an example calculation of the conversion charge that may be payable on conversion of a BIL,see the sample calculation of the prepayment fee payable in Section 10.8 below. For purposes of the sample calculation of the conversion charge,consider the Fixed Rate Loan BIL being converted as having a principal amount of $73,666.84. All other sample rates,dates and calculations of net present values are,for the purposes of the example,the same as indicated in the sample calculation in Section 10.8. 10.8 Prepayment of a fixed rate BIL: You may prepay up to 10%of the original loan amount under a fixed rate BIL on the anniversary date of the first advance without notice,fee or penalty.This privilege is not cumulative. You may prepay any other amount,either on the same day or on any other day,so long as you pay CIBC a prepayment fee equal to the greater of: a)three months'interest on the amount in excess of the 10%referred to above or the amount prepaid at the applicable interest rate,and b)the amount by which(i)the net present value of the interest and principal payments comprising an amount equal to the excess referred to above or the prepaid amount for the remainder of the BIL term,calculated at the date of prepayment,exceeds(i!)the net present value of a new BIL in an amount equal to the excess referred to above or the prepaid amount as if it were made by CIBC on the prepayment date for the remainder of the BIL term at CIBC's current annual interest rate for the closest annual term for that period, in both cases calculated at the Bank of Canada Bank Rate. For purposes of calculating this amount,"net present value"is based on a formula(determined by CIBC in its sole discretion)that takes into account(i)the interest rate 6326 ICap-2006/05 Page 12 of 26 CIBC Retail Markets Credit Agreement Schedule A-Standard Credit Terms of your existing BIL,(ii)the number of interest periods(i.e.weekly,monthly,quarterly, etc.)remaining in the term of your existing BIL(calculated from the beginning of the last interest period that falls on or before the date of prepayment),(iii)the amount of principal and interest that would have been payable for each regularly scheduled payment period(i.e.weekly, monthly,quarterly etc.)and/or interest period,as the case may be, had your existing BIL not been prepaid, (iv)the remaining amortization period of your existing BIL,and(v)the interest rate that would be applicable on the date of prepayment if CIBC were to provide a new BIL for an annual term closest to the remaining period of the BIL for which CIBC has posted interest rates. For example, if the original amount of the BIL advanced on June 30,2004 was$100,000 and the interest rate was fixed at 9.70%per year for a 5-year term amortized over 5 years,and if,on June 30,2005 you decided to prepay the entire amount of the BIL; A) 10%of the original balance(or$10,000)may be prepaid without notice,fee or penalty on the anniversary date (i.e.June 30,2005). If the balance outstanding on June 30,2005 was,for example$83,666.84,a prepayment fee would be payable on the remaining balance in excess of the 10%payable without notice,fee or penalty (i.e.,$73,666.84). B) Assume for this example that the interest rate that would be approved for a BIL for a 4-year term on June 30, 2005 is 8.7%per year. C) The net present value of the blended principal and interest payments payable on the BIL for the remainder of the term of the BIL based on the original rate of 9.70%per year and discounted at the Bank of Canada Bank Rate at the date of prepayment would be$75,083.79. D) The net present value of blended principal and interest payments payable on a new BIL reinvested for an annual term closest to the remaining term of the existing BIL for which CIBC has posted interest rates(i.e.a 4 year term),based on the new interest rate of 8.70%per year,and discounted at the Bank of Canada Bank Rate at the date of prepayment,would be$73,666.84. E) The amount by which(C)exceeds(D)is$1,416.95. F) Three months'of interest(based on blended principal and interest payments)on$73,666.84 is$1,755.73. G) The prepayment fee payable would be$1,755.73, being the greater of(E)and(F)above. c)The prepayment fee required above is not applicable to any BIL in an original principal amount of less than $100,000 granted to a sole proprietor or individual unless it is secured by a collateral mortgage. This is a sample calculation only. To find out the amount of the prepayment fee on your BIL, please contact CIBC. 10.9 Event of Default or Demand: It is a term of your BIL that you are required to keep all other Facilities in good standing. Upon the occurrence of an Event of Default in respect of a Committed Instalment Loan or a demand made by CIBC in respect of a Demand Instalment Loan,CIBC shall so notify you,and give you at least 10 days to remedy it, except for a failure to pay any amount when due,in which case you will have three days to remedy the Event of Default or the situation which caused CIBC to make demand on such Demand Instalment Loan,as the case may be. If the Event of Default in respect of the Committed Instalment Loan or the situation which caused CIBC to make demand in respect of a Demand Instalment Loan,as the case may be, is not fully remedied at the end of such notice period,the outstanding amount of the BIL will become due and payable without further notice. 10.10 Renewing or renegotiating a BIL: To the extent your BIL Application is to renew or renegotiate a loan made under the Act,the terms of the Act apply,and,notwithstanding any other term of this Agreement,your BIL will become due and payable immediately and without notice if any payment of principal or interest is not paid in full when due. 10.11 Changes of name or legal status: You must notify CIBC immediately of any change in your name or legal status and provide CIBC with satisfactory evidence of such changes.You must notify CIBC immediately of any change in the ownership of or title of any Security or if any Security is substituted. 10.12 Transfer or assignment: You may not transfer or assign any BIL without CIBC's express written consent. 6326 ICap-2006105 Page 13 of 26 CIBC Retail Markets Credit Agreement Schedule A-Standard Credit Terms 10.13 Restriction on BIL Guarantee: The total liability of the guarantor(s)of any BIL as guarantors(whether under this Agreement,or under any other agreement), is with respect to that BIL,notwithstanding any other agreement,limited to 25%of the amount of the BIL disbursed,but this shall not reduce the liability in any other capacity of a member or former member of a partnership or of a sole proprietor. 10.14 Negative Pledge: You confirm that there is no Lien on any of your present or future assets and agree that you will not assign any right to any income without CIBC's consent. 10.15 Other terms and conditions: With respect to any BIL, in the event of any conflict between this section 10 and any term contained in this Agreement,this section 10 shall prevail. 10.16 Definitions: In this section 10, unless otherwise indicated: "Act"means the Canada Small Business Financing Act, (or if applicable, its predecessor,the Small Business Loans Act)as amended, restated,supplemented or replaced from time to time. "Bank of Canada Bank Rate"means the rate published by the Bank of Canada as the Bank Rate or Overnight Rate from time to time. "BIL Application"means the application that you sign under the Act in connection with a BIL. 11 BANKERS'ACCEPTANCES(B/As) The following terms apply to each B/A under this Agreement 11.1 Definitions: In this Agreement,the following terms have the following meanings: "Bankers'Acceptance"or"B/A"means a Canadian dollar Draft that we have accepted under this Agreement. "Commerce Acceptance Rate"means the variable reference rate that we declare from time to time as our stamping or acceptance fee for Drafts accepted by us. "Draft"means,at any time,a blank bill of exchange within the meaning of the Bills of Exchange Act drawn by you on CIBC(in satisfactory form to CIBC),but before we have accepted it. 11.2 Availability: B/As are available only with terms to maturity of between 30 and 180 days. If CIBC determines in good faith, which determination will be conclusive and binding on you,and so notifies you,that there does not exist at the applicable time a normal market in Canada for the purchase and sale of bankers'acceptances,then notwithstanding any other provision hereof any obligation of CIBC to purchase Bankers'Acceptances will be suspended until CIBC determines that such market does exist and gives notice thereof to you. 11.3 Minimum Issue amount: You will present Drafts for acceptance in a minimum amount of$1 million or such other amount as we may agree in our sole discretion.We can change this minimum amount at any time by 30 days'prior written notice. 11.4 Required Notice: You may either obtain a new advance by issuing a B/A stamped by CIBC(including a rollover of an existing B/A) or you may convert an amount outstanding under another Facility to issuance of a B/A on the following terms. You must give us notice(in the form we require,including,when applicable,the date of acceptance,the amount and the maturity date).Notice must be given by 10:00 a.m. (local time where the CIBC Branch/Centre that you present a B/A or Draft to is located)on the Business Day prior to the requested date of issuance. You must also give us any other notice required by the Letter. 11.5 Special Conditions: a)Draft Conditions. You will deliver to us the Drafts that you want us to issue. Each Draft must: 6326 iCap-2006105 Page 14 of 26 CIBC Retail Markets Credit Agreement Schedule A-Standard Credit Terms i) be in a whole multiple of C$100,000; ii) be dated the date of delivery(which will be the same date as the requested date you notified us); iii)mature on a Business Day;and iv)be presented to the CIBC Branch/Centre for acceptance by 12:00 noon(local time where that CIBC Branch/Centre is located)on the date of delivery(unless you have made prior arrangements in writing with us). b)Maturity Limitation. The maturity date of a Draft submitted to us for acceptance may not: i) be after a scheduled or mandatory final maturity or termination date for that Facility;or ii)conflict, in our opinion,with any scheduled or mandatory repayment for that Facility. c)Conversion-To-Loan Limitation. You may only convert a B/A into a Loan otherwise allowed under this Agreement if the total of"A"plus"B"is less than the Prime Rate existing on that maturity date,where: "A"is the annual discount rate quoted at 9:30 a.m.(Toronto time)by the Toronto office of CIBC Wood Gundy as the discount rate at which it would purchase a bankers'acceptance issued by CIBC having a term to maturity of 30 days,and "B"is the annual stamping or acceptance rate applicable to a Draft accepted by us under this Agreement, as determined on the maturity date of that B/A. In making these calculations,each of"A"and"B"is expressed as a percentage. 11.6 Stamping Fee: When we accept a Draft under this Agreement,you will pay us a stamping fee,on the date of acceptance,in the amount as set out in the Letter.The stamping fee will be calculated on the face amount of that Draft for the number of days to maturity based on a 365 day year(unless the stamping fee is calculated in a leap year,in which case it will be calculated based on a 366 day year). Unless you have made other arrangements with us, we will automatically debit your Operating Account in the amount of the stamping fee. 11.7 Reimbursement: B/As are negotiable instruments that are purchased in financial markets at a discount.Market forces determine what the discount amount for B/As is at any particular time.At maturity,the holder of a B/A redeems it from CIBC.We then pay the holder the face amount.You will,therefore, reimburse us at the maturity date for the face amount of all B/As that we have accepted for you, unless you convert those amounts to another Facility (assuming all proper notice has been given). If you do not reimburse us or convert those amounts to another Facility,we may convert them to any type of Loan(if available)under any Facility. 11.8 Signatures and Safekeeping: All Drafts must either be signed by a properly authorized signing officer or bear a mechanically reproduced facsimile signature of that officer(subject to any prior written arrangements with us).Each Draft and B/A bearing a facsimile signature of that officer will be as binding on you as if it had been manually signed by that officer.This applies even for individuals who may no longer be authorized or otherwise be an officer at any time.You will compensate us for any loss or expense relating to any Draft or B/A that we deal with under this Agreement.We need only exercise the same degree of care in safekeeping executed Drafts delivered to us for future acceptance as if they were CIBC's property and we were keeping them at the place at which they are to be held. 11.9 Facility Cancellation: If your B/A Facility is terminated for any reason,we may require you to pay us immediately on demand the appropriate reimbursement amount for each B/A then outstanding.We will calculate the reimbursement amount in accordance with standard practice in the banking industry in Canada.After making this payment, a)you will have no further liability for that B/A;and b)we will: 6326 iCap-2006/05 Page 15 of 26 CIBC Retail Markets Credit Agreement Schedule A-Standard Credit Terms I) become the sole party liable under the B/A;and ii) compensate you if you have to pay anyone else under that B/A. 11.10 Waiver: You will not claim any days of grace for the payment of a B/A.You waive any defence to payment which might otherwise exist if for any reason a B/A is held by us in our own right at its maturity. 11.11 Obligations Absolute: Your obligations for Drafts and 3/As are unconditional and irrevocable.You will perform your obligations strictly in accordance with the provisions of this Agreement including,among other things: a)any lack of validity or enforceability of a Draft accepted by us as a B/A; and b)the existence of a claim,set off,compensation,defence or other right which you may have against the holder of a B/A,CIBC or another person. 12 LIBOR RATE PROVISIONS The following terms apply to each LIBOR Loan under your LIBOR Facility(ies): 12.1 Definitions: In this Agreement,the following terms have the following meanings: "LIBOR Rate"for any LIBOR Period means a rate of interest per year equal to the rate at which we are prepared to offer,as at 11:00 a.m.(London, England time)on the second LIBOR Business Day before the start of that LIBOR Period,deposits to leading banks in London, England interbank eurocurrency market in an amount of U.S. dollars similar to the amount of the applicable LIBOR Loan and for a deposit period comparable to that LIBOR Period;except that, if we do not receive proper or timely notice as required below but we permit your request,then the LIBOR Rate for such LIBOR Period means the rate of interest per year as determined by us(in our absolute discretion)and offered to you and immediately accepted by you. "LIBOR Business Day"means a Business Day on which U.S.dollar transactions can be carried out between leading banks in the interbank eurocurrency market in London, England and between CIBC and other leading banks in New York City. "LIBOR Loan"means a Fixed Rate Loan in U.S.dollars under your LIBOR Facility in whole multiples of US$1,000,000(or such other amount as we may agree in our sole discretion)on which interest is calculated by reference to a LIBOR Rate. "LIBOR Period"means the period selected by you in accordance with this Agreement for computing interest from time to time on a LIBOR Loan. 12.2 Availability: LIBOR Loans are available only in whole multiples of US$1,000,000(or such other amount as we may agree in our sole discretion)each,for terms of one to six months. 12.3 Required Notice: a)You may draw down or roll over a LIBOR Loan,or convert another type of Facility under this Agreement to a LIBOR Loan,or repay a LIBOR Loan, but only as provided in this Article.Any such action must be done on a LIBOR Business Day.Also,you must give notice(in the form we require)to the CIBC Branch/Centre before 10:00 a.m.(local time where the CIBC Branch/Centre is located).The notice must be given on the third LIBOR Business Day before the requested date of drawdown, rollover,conversion or repayment.You may roll over or convert an existing LIBOR Loan only on the expiry of its LIBOR Period. b)If we do not receive proper or timely notice as required by the preceding paragraph,we may(but we are not obliged to)decide what you are permitted to do for that LIBOR Loan.We may,on the other hand,simply roll over an existing LIBOR Loan at the end of its LIBOR Period for a new LIBOR Loan with a new LIBOR Period determined by us. 12.4 Maturity Limitation: The expiry date of a LIBOR Period for any LIBOR Loan may not(a)be after a scheduled or required maturity or 6326 iCap-2006105 Page 16 of 26 CIBC Retail Markets Credit Agreement Schedule A-Standard Credit Terms termination date for that Credit or(b)conflict, in our opinion,with any scheduled or mandatory repayment for that Facility. 12.5 Repayments: You may only repay all(but not part)of a LIBOR Loan,and only on the last day of the LIBOR Period for that LIBOR Loan. 12.6 Interest Calculation and Payment: Interest at a LIBOR Rate will be calculated on the daily balance of each LIBOR Loan for the actual number of days elapsed,on the basis of a 360 day year.You will pay interest on each LIBOR Loan in arrears at the end of each LIBOR Period. If a LIBOR Period is greater than three months,you will pay interest at the end of each three month period during that LIBOR Period, except that overdue interest will be payable immediately on demand.Overdue amounts in respect of a LIBOR Loan(including any overdue interest)may at our option be either converted to another type of Loan(if available)under any Facility or considered to be a LIBOR Loan for one or more LIBOR Periods as we may determine. Unless you have made other arrangements with us,we will automatically debit your Operating Account for an amount equivalent to the interest payable in each LIBOR Loan on the last day of the LIBOR Period,unless such day is not a Business Day,in which case,we will debit your Operating Account on the next Business Day. 12.7 Interest Act: Each nominal rate of interest referenced to a LIBOR Rate,expressed as an annual rate for purposes of the Interest Act(Canada),is that rate multiplied by the actual number of days in the calendar year in which the rate is to be ascertained,and divided by 360. 12.8 Lack of LIBOR Rate: At any time before the start of any LIBOR Period,we might determine that(a)by reason of circumstances affecting the London,England interbank eurocurrency market generally,adequate and fair means do not exist for determining the LIBOR Rate applicable for that LIBOR Period,or(b)deposits in U.S.dollars are not in the ordinary course of business available to CIBC in that market for deposit periods comparable to that LIBOR Period in a total amount similar to that LIBOR Loan bearing interest at a rate no greater than the LIBOR Rate applicable to that LIBOR Loan. If we do,then from and after that date,you may not roll over any existing LIBOR Loan at the end of its LIBOR Period,or obtain any new LIBOR Loan.Our determination of any events under this paragraph will be conclusive. 12.9 Illegality: If at any time we determine in good faith that any legal requirement or any official directive or request (whether or not having the force of law)by a central bank or other governmental authority will make it unlawful or impossible for us to make, maintain or fund any LIBOR Loan,we will notify you accordingly. Upon receiving such a notice,you will either: a)on the last day of the LIBOR Period of any LIBOR Loan, if we can continue to maintain that Loan;or b)immediately, if we cannot legally maintain that Loan: i) pay us in full the then outstanding principal amount of each such LIBOR Loan,together with all accrued interest;or ii)convert that Loan into another type of Loan allowed under this Agreement. For clarification, upon a payment or conversion of a LIBOR Loan made under this section in the middle of its LIBOR Period,you will immediately on demand compensate us as provided elsewhere in this Agreement.Our determination of any matters under this paragraph will be conclusive. 13 FARM IMPROVEMENT AND MARKETING COOPERATIVES LOANS ACT The following terms apply to each Loan made under the Farm Improvement and Marketing Cooperatives Loans Act ("FIMCLA"): 13.1 Purpose of the FIMCLA: You represent and warrant to us that the purpose of the FIMCLA is as specified in the FIMCLA Application and the Letter and that this has not changed,and that the FIMCLA Application and all information and supporting documents presented to CIBC in connection with the FIMCLA are to the best of your knowledge,after due enquiry,accurate and complete. 13.2 Approval of Your FIMCLA Application: 6326 iCap-2006/05 Page 17of26 CIBC Retail Markets Credit Agreement Schedule A-Standard Credit Terms CIBC may verify the information disclosed in your FIMCLA Application and may verify your credit references. CIBC may also request information including credit information from any individuals that will be participating in your farming or cooperatives business. CIBC may also require an independent appraisal to be provided if we deem it necessary. if CIBC determines information is inconsistent or unacceptable to CIBC for any reason, CIBC may in its sole discretion, refuse to make a FIMCLA available to you or advance funds under any FIMCLA. 13.3 Prepayment: You may prepay all or part of a FIMCLA at any time prior to the stated maturity date provided that you pay us, on the prepayment date,a compensation fee equal to the loss of interest(if any)for such prepayment. The compensation fee for your FIMCLA will be calculated according to the conditions for prepaying a Fixed Rate Loan in section 8(Non-Revolving Facilities)of this Agreement. 13.4 Collateral Mortgage and Prepayment: If the FIMCLA is secured by a mortgage or hypothec on immovables,the applicable document is amended by deletion of all terms(if any)that relate to prepayment of the loan.The only prepayment terms that apply to the loan are the ones set forth in this Agreement. 13.5 Definitions: In this section 13, unless otherwise indicated: "Act"means the Farm Improvement and Marketing Cooperatives Loans Act,as amended,restated,supplemented or replaced from time to time. "FIMCLA Application"means the application that you sign under the Act or with CIBC in connection with a FIMCLA. 14 FARM MORTGAGE LOAN The following terms apply to each Farm Mortgage Loan. 14.1 Prepayment: a)Variable Rate Farm Mortgage Loans: If you are repaying a Variable Rate Farm Mortgage Loan in instalments of principal plus interest,and you are not in default,you may prepay all or part of the Farm Mortgage Loan at any time without notice or penalty.We will apply the prepayment against instalments in reverse order of due date. b)Fixed Rate Farm Mortgage Loans: If you make Fixed Rate Farm Mortgage Loan payments in either blended payments or payments of fixed instalments of principal plus interest,and you are not in default,you will have the following prepayment privileges: i) On each anniversary date of the Date of Advance during the initial term,you may prepay,without notice,bonus or penalty,up to 10%of the original Fixed Rate Farm Mortgage Loan.On each anniversary date of the Renewal Date during any renewal term,you may prepay,without notice,bonus or penalty,up to 10%of the principal of the renewed amount of the Fixed Rate Farm Mortgage Loan.This privilege is not cumulative. ii) If(i)the initial or any renewal term of the Fixed Rate Farm Mortgage Loan is less than or equal to five years,or(ii)the initial or renewal term of the Fixed Rate Farm Mortgage Loan is greater than five years but the date of the proposed prepayment is less than five years after the Date of Advance or the Renewal Date,you may prepay,on any regular instalment date, all or part of the principal sum without notice,provided that you pay us the Interest Rate Differential for the remainder of the term of the Fixed Rate Farm Mortgage Loan determined in accordance with the standard formula used by CIBC(determined in our sole discretion)in these situations. For examples of prepayment fee calculations,see the definition of"Interest Rate Differential for the remainder of the term"at the end of this Schedule. iii)If the initial or renewal term of the Farm Mortgage Loan is more than five years,you may prepay on any regular instalment date,all or part of the principal sum at any time after the date that is five years from the Date of Advance or the Renewal Date,as the case may be, provided that you pay us,in addition to principal and interest to the date of such prepayment and instead of notice,three months'further interest calculated at your existing annual interest rate on the date of prepayment(plus any discount you received on your existing annual interest rate)on the principal amount prepaid. iv)We will apply the prepayment against instalments in reverse order of due date. 6326 Cap-2006/05 Page 16 of 26 CIBC Retail Markets Credit Agreement Schedule A-Standard Credit Terms 14.2 Interest calculations on a Fixed Rate Farm Mortgage Loan: Interest on blended payments is calculated semi-annually,not in advance. 14.3 Collateral Mortgage and Prepayment: The Mortgage is amended by deletion of all terms(if any)that relate to prepayment of the loan. The only prepayment terms that apply to a Farm Mortgage Loan are the ones set forth in this Agreement. 14.4 Definitions: "Date of Advance"means the date that the Farm Mortgage Loan was advanced to you. "Farm Mortgage Loan"means either a Fixed Rate Farm Mortgage Loan or a Variable Rate Farm Mortgage Loan. "Fixed Rate Farm Mortgage Loan"means a non-revolving Facility that is a Farm Mortgage Loan on which interest is calculated at a fixed rate of interest. "Interest Rate"means the variable reference rate of interest used by CIBC to establish fixed rates for farmers under the CIBC Farm Mortgage Loan program,as such rates are changed by CIBC from time to time without prior notice. "Maturity Date"means the date that all principal and interest on a Farm Mortgage Loan becomes due and payable,as specified in the Agreement. "Mortgage"means a collateral mortgage, hypothec on immovables or charge made by you in our favour that secures either the Farm Mortgage Loan by specific reference to the Farm Mortgage Loan,or all of your indebtedness and liability to us, as the case may be. "Renewal Date"means the most recent date as of which a Farm Mortgage Loan has been renewed for a new term. "Variable Rate Farm Mortgage Loan"means a non-revolving Facility that is a Farm Mortgage Loan on which interest is calculated at a fluctuating rate of interest. 15 LETTERS OF CREDIT (L/Cs) Unless otherwise agreed,the following terms apply to each Letter of Credit issued by CIBC pursuant to this Agreement. 15.1 Reimbursement, Payment or Prepayment: You agree,forthwith upon demand,to provide CIBC with cash in the proper currency to meet each drawing that CIBC is required to pay under an UC or to reimburse CIBC for each drawing that CIBC has paid under an LJC or UC Acceptance. If we demand payment of any Letter of Credit Facility,or if you elect to permanently repay or terminate any Letter of Credit Facility,and we have any obligation to a beneficiary or holder of any L/C, UC Acceptance or other similar instrument which remains outstanding under that Letter of Credit Facility,you must provide CIBC with cash,in the same currency as the UC or UC Acceptance,or marketable securities satisfactory to us(collectively the"Cash Collateral")in an amount equal to CIBC's maximum potential liability under the UC or UC Acceptance,or otherwise under any Credit.We shall release any Cash Collateral that is no longer required for such purposes. 15.2 CIBC Not Liable: Neither CIBC nor any of its correspondents will be liable for the use which may be made with respect to any UC or L/C Acceptance;any acts or omissions of the beneficiary of any UC or UC Acceptance, including the application of any payment made to such beneficiary;the form,validity,sufficiency,correctness,genuineness or legal effect of any document relating to any UC or LJC Acceptance,even if such document should prove to be in any respect invalid,insufficient, inaccurate,fraudulent or forged;any failure of the beneficiary of any UC or UC Acceptance to meet the obligations of such beneficiary to you or to any other person;or any failure by CIBC to make payment under any UC or LJC Acceptance as a result of any law,control or restriction rightfully or wrongfully exercised or imposed by any domestic or foreign court or government or governmental authority or as a result of any other cause beyond the control of CIBC. The obligations of you under this Section 15.2 are absolute and unconditional under all circumstances including without limitation any matter referred to above. 15.3 Indemnity: You hereby indemnify and agree to hold CIBC harmless from all losses,damages,costs,demands,claims, 6328 iCap-2006/05 Page 19 of 26 MSC Retail Markets Credit Agreement Schedule A-Standard Credit Terms expenses(including out-of-pocket expenses)and other consequences which CIBC may incur,sustain or suffer, other than as a result of its own negligence or wilful misconduct,as a result of issuing or amending an UC or UC Acceptance, including without limitation, legal and other expenses incurred by CIBC in any action to compel payment by CIBC under an UC or L/C Acceptance or to restrain CIBC frcm making payment under any UC or UC Acceptance. 15.4 L/C Fees: Unless you have made other arrangements with us,we will automatically debit your Operating Account for all fees payable with respect to UCs or UC Acceptances. If your Operating Account is in overdraft(for greater certainty,if you have exceeded any Credit Limit attached to your Operating Account)and you do not deposit to the account the amount of such fees,your Operating Account will bear interest at the Excess Interest Rate. 15.5 Standard Agreements: The terms and conditions of our standard Application for Irrevocable Documentary Credit or Application for Standby Letter of Credit,as applicable,and any of our other standard documentation relating to UC's or UC Acceptances, in effect from time to time will be applicable to each L/C or UC Acceptance,as applicable, whether or not any such Application or other documentation has been executed by you or on your behalf. A copy of any such Application or other documentation is available from CIBC. 15.6 Rules: Unless otherwise specified in the applicable Application or other documentation referred to above,and subject to any provision herein to the contrary,each UC shall be subject to the Uniform Customs and Practice for Documentary Credits or the International Standby Practices,as applicable,of the International Chamber of Commerce current at the time of issuance of such UC. '16 DEFINITIONS 16.1 In this Agreement"you"and"your"refer to the customer in whose favour,subject to the terms of this Agreement,the Facilities are established(and for greater certainty, if the customer is a business,such terms refer to the business and not a key principal, principal,guarantor or signing officer of the business), and"CIBC","we","us"and"our"refer to Canadian Imperial Bank of Commerce. 16.2 Unless otherwise stated in this Agreement "Affiliate"means any other person or entity that directly or indirectly controls,is controlled by,or is under direct or indirect common control with you and includes any person or entity in like relation to an Affiliate.One person or entity shall be deemed to control another person or entity if the first person or entity possesses,directly or indirectly,the power to direct or cause the direction of the management and policies of the other person or entity,whether through the ownership of voting securities, by contract or otherwise. "Agreement"means the Letter, including this Schedule and any other Schedules to the Letter,as amended, renewed,replaced or supplemented from time to time. "Business Day"means any day excluding Saturday,Sunday and excluding any day which is a legal holiday in the province or territory where you have your Operating Account. "Capital Expenditures"means the outlay of money to acquire or improve capital assets such as buildings, machinery,vehicles,etc. "Cash Flow"means the cash arising from collection of revenue,financing activities and other miscellaneous items less cash used for payments of expenses, purchase of fixed assets, investing activities and other miscellaneous items. "Committed Instalment Loan"means a loan that is payable in regular instalments and is repayable in full upon the occurrence of an Event of Default. Such Committed Instalment Loan may be either a Fixed Rate Loan or a Variable Rate Loan(each as defined in section 8.9(Definitions)). "cost of funds to CIBC"or"CIBC's cost of funds"for purposes of calculating the Interest Rate Differential for the remainder of the term is the"Transfer Price Rate"as determined by CIBC's Treasury Balance Sheet and Risk Management area based on Canadian cash and swap markets for the date on which cost of funds is being determined. "Credit Limit"means, in respect of any Facility,the credit limit indicated in the Letter. 6326 Cap-2006105 Page 20 of 26 CIBC Retail Markets Credit Agreement Schedule A-Standard Credit Terms "Creditor Insurance"means the type of insurance whereby the insurer agrees to pay off the insured outstanding Facility balances or debts of individuals in the event of death. "Current Assets"means cash,accounts receivable, inventory and other assets that are likely to be converted into cash,sold,exchanged or expended in the normal course of business within one year or less, excluding amounts due from related parties. "Current Liabilities"means debts that are or will become payable within one year or one operating cycle, whichever is longer,and which will require Current Assets to pay.They usually include accounts payable, accrued expenses,deferred revenue,operating loans and the current portion of long-term debt. "Current Ratio"means the result of Current Assets divided by Current Liabilities. "Debt"includes(i)an obligation for borrowed money, (ii)an obligation evidenced by a note,bond,debenture or other similar instrument,(iii)an obligation for the deferred purchase price of property or services, (iv) a capitalized lease obligation, (v)a guarantee, indemnity or financial support obligation,determined in accordance with GAAP, (vi)an obligation(of you or any other person or entity)secured by a Lien on any of your property,even though you have not otherwise assumed or become liable for the payment of such obligation, (vii)an obligation arising in connection with an acceptance facility or letter of credit issued for your account,and (viii)a capital share that is redeemable by you either at a fixed time or on demand by the holder of such share,valued at the maximum purchase price at which you may be required to redeem, repurchase or otherwise acquire such share. "Debit Service"means EBITDA minus the current portion of long-term debt and interest expense. "Debt Service Ratio"means the ratio of X to Y,where X is EBITDA, and Y is the current portion of long term debt, plus interest expense. "Debt Service Ratio"means the ratio of X to Y,where X is EBITDA,less partners'draws,and Y is the current portion of long term debt, plus interest expense. "Debt Service Ratio"means the ratio of X to Y,where X is EBITDA,less proprietor's draws,and Y is the current portion of long term debt, plus interest expense. "Debt to Effective Equity Ratio"means the ratio of X to Y,where X is Debt, less all Postponed Debt,and Y is the total of Shareholders'Equity, plus all Postponed Debt,less: (i)amounts due from/investments in related parties and (ii)Intangibles. "Demand Instalment Loan"means a loan that is repayable in regular instalments(or interest only)as indicated in the Letter and is repayable in full upon demand.Such Demand Instalment Loan may be either a Fixed Rate Loan or a Variable Rate Loan(each as defined in section 8.9(Definitions). "Dividends"means payments to shareholders reflected as a charge against retained earnings.Dividends may be paid on both preferred and common shares.Dividends must be approved by the company's board of directors,and may only be declared if the company meets specified financial tests. "EBIT'means earnings before interest and income taxes. "EBITDA"means earnings before income taxes, plus interest and depreciation/amortization. "EDC Receivable Value"means at any time,the value of your EDC Receivables.For purposes of this valuation we exclude any receivable(i)that is not subject to the Security,(ii)that is subject to any Lien not specifically permitted by us, (iii)that does not satisfy EDC's eligibility criteria for accounts receivable insurance, (iv)that is subject to any offset or counterclaim by the applicable account debtor, (v)that is payable in a currency that is not acceptable to us, (vi)that is owed by an Affiliate or any employee,agent or representative of you or an Affiliate,or(vii)that is otherwise excluded by us in our reasonable discretion. "EDC Receivables"means your receivables that are insured by accounts receivable insurance of Export Development Canada in good standing which has been assigned to CIBC in form acceptable to us. "Effective Equity"means Shareholders' Equity,plus all Postponed Debt less(i)amounts due from/investments in related parties and(ii)Intangibles. 6326 iCap-2006105 Page 21 of 26 CIBC Retail Markets Credit Agreement Schedule A-Standard Credit Terms "Event of Default"means,in connection with any Committed Instalment Loan(even if that Committed Instalment Loan has not yet been drawn),the occurrence of any of the following events(or the occurrence of any other event of default described in this Agreement,in any of the Security or in any other agreement or document you have signed with us): a)You do not pay,when due,any amount that you are required to pay us under this Agreement or otherwise,or you do not perform any of your other obligations to us under this Agreement or otherwise. b)Any part of the Security terminates or is no longer in effect,without our prior written consent. c)You cease to carry on your business in the normal course,or it reasonably appears to us that that may happen. d)A representation that you have made(or deemed to have made)in this Agreement or in any Security is incorrect or misleading in any material respect. e)If you are a corporation,there is, in our reasonable opinion,a change in effective control of the corporation,or if you are a partnership,there is a change in the partnership membership. f) We believe, in good faith and upon commercially reasonable grounds,that all or part of the property subject to any of the Security is or is about to be placed in jeopardy or that an event has occurred that has a Material Adverse Effect. g)The holder of a Lien takes possession of all or part of your property;or a distress,execution or other similar process is levied against any such property. h)You: I) become insolvent; ii)are unable generally to pay your debts as they become due; iii)make a proposal in bankruptcy,or file a notice of intention to make such a proposal; iv)make an assignment in bankruptcy; v)bring a court action to have yourself declared insolvent or bankrupt;or someone else brings an action for such a declaration;or vi)you default in payment or breach any other obligation to any of your other creditors. i) If you are a corporation: i) you are dissolved; ii)your shareholders or members pass a resolution for your winding-up or liquidation; iii)someone goes to court seeking your winding-up or liquidation,or the appointment of an administrator, conservator, receiver,trustee,custodian or other similar official for you or for all or substantially all your assets;or iv)you seek protection under any statute offering relief against the company's creditors. If there is more than one borrower and forfeiture of the term is incurred by any one borrower,then it also means there is forfeiture of the term for all other borrowers. "Excess Interest Rate", means the variable reference interest rate per year declared by CIBC from time to time to be its interest rate on accounts that exceed their authorized Credit Limit,which is currently an annual rate of 21%. "Funded Debt"means the aggregate of all obligations or borrowings bearing interest. This may include all obligations for the deferred payment of the purchase of property,all capital lease obligations,all indebtedness secured by purchase money security interests and the amount of any contingent liabilities such as guarantees or other financial assistance provided in respect of the liabilities of a third party. This 6326 iCap-2006105 Page 22 of 26 CIBC Retail Markets Credit Agreement Schedule A-Standard Credit Terms usually excludes Postponed Debt if it is from a primary shareholder. "Funded Debt to EBITDA Ratio"means the ratio of X to Y,where X is the total Funded Debt and Y is EBITDA. "Funded Debt to Total Capital Ratio"means the ratio of X to Y,where X is the total of Funded Debt,and Y is the Total Capital. "GAAP"or"Generally Accepted Accounting Principles"means those accounting principles which are recognized as being generally accepted in Canada and which are in effect from time to time as set out in the handbook published by the Canadian Institute of Chartered Accountants. If you have,or the party to which the references to GAAP are intended to apply has,adopted International Financial Reporting Standards("IFRS"), then the applicable references in this Agreement to GAAP will be interpreted to mean IFRS. "Hypothecated Account"includes a mutual fund account,a CIBC Private Investment Counsel Inc.(formerly TAL Private Management)PFA(Pooled Fund)account,a CIBC Trust account,a CIBC Private Investment Counsel Inc. (formerly TAL Management)Custodial account or a Personal Portfolio Services account held at CIBC Trust inc., or any other account in which Liquid Securities are maintained. "Interest Coverage Ratio"means the ratio of X to Y,where Xis EMT and Y is interest expense. "Interest Rate Differential for the remainder of the term"means: a)in the case of a Farm Mortgage Loan,the difference between the cost of funds to CIBC for the relevant term on the date the Farm Mortgage Loan was advanced and the cost of funds to CIBC to reinvest in a Farm Mortgage Loan for a term equal to the closest lower annual term of the remaining period of the Farm Mortgage Loan on the date the prepayment is calculated (as indicated in the Fixed Rate Farm Mortgage Loan Reinvestment Table below) multiplied by the amount of the Loan being prepaid,(assuming that interest was payable monthly on the Farm Mortgage Loan)multiplied by the remaining period of the Farm Mortgage Loan in months,divided by 12;and b)in the case of a Fixed Rate Fixed Term Loan,the difference between the net present value of the Fixed Rate Fixed Term Loan and the amount being prepaid. For purposes of calculating the Interest Rate Differential for the remainder of the term for Fixed Rate Fixed Term Loans,the calculation of"net present value of the Fixed Rate Fixed Term Loan"is based on a formula(determined by CIBC in accordance with its usual banking practice) that takes into account(i)CIBC's cost of funds for the Fixed Rate Fixed Term Loan at the time the Loan was made,(ii)the number of interest periods(i.e.weekly, monthly,quarterly,etc.)remaining in the term of the Fixed Rate Fixed Term Loan(calculated from the beginning of the last interest period that falls on or before the date of prepayment), (iii)the amount of principal and interest that would have been payable for each regularly scheduled payment period(i.e.weekly,monthly,quarterly etc.)and/or interest period,as the case may be, had the Fixed Rate Fixed Term Loan not been prepaid, (iv)the remaining amortization period of the Fixed Rate Fixed Term Loan, and(v)CIBC's cost of funds to provide a new Fixed Rate Fixed Term Loan on the date of prepayment for a term closest to the remaining period of the Fixed Rate Fixed Term Loan for which CIBC has posted interest rates(as indicated in the Fixed Rate Fixed Term Loan Reinvestment Table below). The following table indicates the term that CIBC will use to calculate the Interest Rate Differential for the remainder of the term by setting out the period that CIBC will use as the remaining term to reinvest in a Fixed Rate Farm Mortgage Loan or Fixed Rate Loan for a fixed term,as the case may be. Column A lists the remaining period in the term of the Fixed Rate Farm Mortgage Loan or Fixed Rate Fixed Term Loan,and Column B lists the term used to determine the cost of funds to CIBC to reinvest in the same type of Loan on the prepayment date: Fixed Rate Farm Mortgage Loan Fixed Rate Fixed Term Loan Reinvestment Table Reinvestment Table Column A Column B Column A Column B Less than or equal to 3 Monthly basis Less than or equal to 3 Monthly basis months months Greater than 3 months and 1 year Greater than 3 months and 1 year less than or equal to 23 less than or equal to 17 months months Greater than 23 months 2 years Greater than 17 months 2 years and less than or equal to and less than or equal to 35 months 29 months 6326 Cap-2006105 Page 23 of 26 CIBC Retail Markets Credit Agreement Schedule A-Standard Credit Terms Greater than 35 months 3 years Greater than 29 months 3 years and less than or equal to and less than or equal to 47 months 41 months Greater than 47 months 4 years Greater than 41 months 4 years and less than or equal to and less than or equal to 59 months 53 months Greater than 59 months 5 years Greater than 53 months 5 years and less than or equal to and less than or equal to 83 months 77 months Greater than 83 months 7 years Greater than 77 months 7 years and less than or equal to and less than or equal to 119 months 101 months 120 months or greater 10 years Sample Prepayment Fee Calculation For a Fixed Rate Farm Morteacie Loan For example,the Interest Rate Differential for the remainder of the term of a Fixed Rate Loan that is a Farm Mortgage Loan is as follows: a)If the original Farm Mortgage Loan advanced on February 1,2002 was for$100,000 at 6.5%for a 5-year term, and you elected to prepay$75,000 on August 1,2005: i) CIBC's cost of funds on February 1,2002 for a 5-year term based on CIBC's calculations for similar Loans,was 4.82%; ii)CIBC's cost of funds on August 1,2005 for a 1 year term(which is the reinvestment term applicable based on the Reinvestment Table above for the remaining 18 months of the term of the Farm Mortgage Loan being prepaid) is 3.22%; iii)the Interest Rate Differential for the remainder of the term is 1.60%for this Farm Mortgage Loan((I)minus (ii)). b)The prepayment fee payable on this Fixed Rate Farm Mortgage Loan would be 1.60%x$75,000 x 18/12 months (being the remaining term of the Farm Mortgage Loan being prepaid),for a total of$1,800. This is a sample calculation only. To find out the amount of the Interest Rate Differential for the remainder of the term on your Farm Mortgage Loan,please contact CIBC. Sample Prepayment Fee Calculation For a Fixed Rate Fixed Term Loan For example,the Interest Rate Differential for the remainder of the term of a Fixed Rate Loan that has a fixed term is as follows: a)If the original Fixed Rate Fixed Term Loan advanced on February 1,2002 was for$100,000 at 6.5%per year for a 5-year term,and you elected to prepay$75,000 on October 27,2003: i) The net present value of$75,000 calculated for the remaining 39 months is$77,222.75; ii)The Interest Rate Differential for the remainder of the term is the difference between the net present value and the total prepayment amount,or in this case$2,222.75. ($77,222.75-$75,000); iii)3 months'interest on$75,000(based on separate principal and interest payments)calculated at 6.5%per year is$1,218.75. b)The prepayment fee payable on this Fixed Rate Fixed Term Loan would be$2,222.75, being the greater of(ii) and(iii)above. 6326 cap-2006105 Page 24 of 26 CIBC Retail Markets Credit Agreement Schedule A-Standard Credit Terms This is a sample calculation only. To find out the amount of the Interest Rate Differential for the remainder of the term on your Fixed Term Fixed Rate Loan, please contact CIBC. "Intangibles"means assets of the business that have no value in themselves but represent value in the context of the business operation,including,without limitation,such personal property as goodwill;copyrights, patents and trademarks;franchises; licences;leases;research and development costs;capitalized advertising costs;organization costs;exploration permits;and deferred development costs. "Inventory Value"means,at any time,the value of your inventory,determined at the lower of cost and market on a first-in,first-out basis.For purposes of this valuation we exclude any inventory(i)that is work-in-progress, (ii)that is not located in Canada,(iii)that is not subject to the applicable duly perfected Liens created by the Security,(iv)that is subject to any Lien not specifically permitted by its, (v)that may be seized by your landlord,(vi)that is obsolete or not readily saleable in the ordinary course of business,(vii)that has not been paid for in full and is subject to a right of repossession;or(viii) that is otherwise excluded by us in our reasonable discretion. For any margined agricultural Facilities,see also the definition of"Inventory Value"applicable to such Facilities in section 16.3(Agricultural Facilities). "Investment"means any direct or indirect investment in or purchase or other acquisition of the securities of or any equity interest in any person or entity,any loan or advance to,or arrangement for the purpose of providing funds or credit to(excluding extensions of trade credit in the ordinary course of business in accordance with customary commercial terms),or capital contribution to,any person or entity,or any purchase or other acquisition of all or substantially all of the property of any person or entity. "LIC Acceptance"means a draft(as defined under the Bills of Exchange Act(Canada))payable to the beneficiary of a documentary LIC which the UC applicant or beneficiary,as the case may be,has presented to us for acceptance under the terms of the LIC. "Letter"means the letter agreement between you and CIBC to which this Schedule and any other Schedules are attached,as the same may be amended, restated,supplemented, renewed or replaced from time to time. "Letter of Credit"or"LIC"means a documentary or stand-by letter of credit,a letter of guarantee,or a similar instrument in form and substance satisfactory to us. "Letter of Credit Facility"means any Facility in the Letter made available by way of documentary import UCs and L/C Acceptances or standby L/Cs, including,without limitation,a Documentary Import Letters of Credit Facility,a US Dollar Documentary Import Letters of Credit Facility,a Standby Letters of Credit/Letters of Guarantee Facility,and a US Dollar Standby Letters of Credit/Letters of Guarantee Facility. "Lien"includes without limitation a mortgage,charge,lien,hypothec,prior claim,security interest or encumbrance of any sort on any property or asset,and includes conditional sales contracts,title retention agreements,capital trusts and capital leases. "Liquid Security"is as defined in the Letter. "Loan"means a term loan under a Facility. "Market Value"means with respect to any Liquid Security,the value at which such security may be sold in the market by CIBC or its nominee or agent on the date upon which such sale or potential sale is to be made,as determined by CIBC. "Material Adverse Effect"means a material adverse effect on your business, property,condition(financial or otherwise)or prospects considered as a whole,or a material adverse effect on your ability to perform your obligations under any of this Agreement and the Security. "Minimum Effective Equity"means the dollar amount below which Effective Equity is not to reduce. "Normal Course Lien"means a Lien that(a)arises by operation of law or in the ordinary course of business as a result of owning any such asset(but does not include a Lien given to another creditor to secure debts owed to that creditor)and(b),taken together with all other Normal Course Liens,does not materially affect the value of the asset or its use in the business. "Operating Account"means your Canadian dollar or US dollar business operating account(s)with us selected by 6326 ICap-2006105 Page 25 of 26 CIBC Retell Markets Credit Agreement Schedule A-Standard Credit Terms us from time to time. "Postponed Debt"means Debt(i)where priority of both repayment and security is formally postponed by the holder of such Debt in our favour by a written postponement satisfactory to us, (ii)incurred without breaching any obligation to us and at a time when you are not in default of any obligation to us,(iii)no principal of which is repayable so long as any amount is owed by you to us(or until such earlier date as we may agree in writing), (iv)which is not secured by any covenant that is more onerous than or in excess of the covenants in our favour in this Agreement. "Prior Ranking Claims"means,at any time, any of your liabilities that ranks,in right of payment in any circumstances,equal to or in priority to any of your liabilities to us. Examples are unpaid wages,salaries and commissions,unremitted source deductions for vacation pay,arrears of rent,unpaid taxes,amounts owed in respect of worker's compensation,amounts owed to unpaid vendors who have a right of repossession,and amounts owing to creditors which may claim priority by statute or under a Purchase Money Lien. "Purchase Money Lien"means any Lien which secures a Purchase Money Obligation permitted by this Agreement, provided that such Lien is created not later than 30 days after such Purchase Money Obligation is incurred and does not affect any asset other than the asset financed by such Purchase Money Obligation. "Purchase Money Obligation"means any Debt(including without limitation a capitalized lease obligation) incurred or assumed to finance all or any part of the acquisition price(and not exceeding the fair market value)of any asset acquired by you. "Receivable Value"means,at any time,the value of your receivables.For purposes of this valuation we exclude any receivable(i)that is not subject to the Security, (ii)that is subject to any Lien not specifically permitted by us, (iii)that has been outstanding for a period greater than that indicated in the Letter in the margin section of the applicable Facility,(iv)that is subject to any offset or counterclaim, (v)that is owed by any person or entity whose principal place of business is located outside Canada or the United States of America,(vi)that is payable in a currency that is not acceptable to us, (vii)that is owed by an Affiliate or any employee,agent or representative of you or an Affiliate,(viii)with respect to which a cheque, note,draft or other payment instrument has not been honoured in accordance with its terms,(ix) that is owed by any person or entity that is insolvent or is otherwise doubtful of collection in our reasonable opinion,or(x)that is otherwise excluded by us in our reasonable discretion. "Revolving Term Facility"means a Revolving Term Facility indicated in the Letter,and includes a Revolving Farm Term Facility. "Security"means any security(including,without limitation,any guarantee)held by us for your indebtedness, obligations and liabilities to us,whether granted in respect of a particular Facility or all Facilities. "Shareholders'Equity"means the total shareholders'equity(or,as the case may be,partners'capital or proprietor's capital)that would be shown on your balance sheet prepared in accordance with GAAP but excluding (i)any accounts owed to you by an Affiliate or any shareholder,director,officer,employee,agent or representative of you or an Affiliate,and(ii)any intangibles such as,without limitation,goodwill, copyrights, patents,trademarks,franchises, licences,leases,research and development costs,and deferred development costs. "Subsidiary"means any person or entity of which you,directly or indirectly,beneficially own or control, shares or other equity units having ordinary voting power to elect a majority of the board of directors or other individuals performing comparable functions,or which are entitled to or represent more than 50%of the owners'equity or capital or entitlement to profits,and shall include any other person or entity in like relationship to a Subsidiary of you. "Total Capital"means Shareholders'Equity. "Withdrawals"means money paid to the owners of the Company beyond normal salaries or transfers to related parties. "Working Capital"means the dollar amount that Current Assets less Current Liabilities is not to reduce below. 16.3 Agricultural Facilities: The following definitions apply to any Farm Operating Line of Credit, Farm Term Facility, Revolving Farm Term Facility, Farm Improvement and Marketing Cooperatives Loans Act Facility, Farm Mortgage Loan, Farm Provincial Loan Program or Provincial Guaranteed Farm Loan: 6326iCep-2006105 Page 26 of 26 CIBC Retail Markets Credit Agreement Schedule A-Standard Credit Terms "Crops held for sale"means crop production harvested and stored and available for sale. "Inventory Value"includes the total market value of your inventories listed in the Letter with respect to the applicable Facility,other than a)inventories supplied by trade creditors who at that time have not been fully paid and would have a right to repossess all or part of such inventories,and b)Any part of the Security terminates or is no longer in effect,without our prior written consent. "Market Livestock"means cattle, hogs or other livestock purchased raised or with intention to feed and sell at market weights.