MCAP Service Corporation



ADDITIONAL PROVISIONS FOR

MCAP Fusion Mortgage (Home Account Line of Credit and Variable Rate Mortgage)

1. EFFECT ON STANDARD TERMS:

These Additional Provisions form part of the Registered Mortgage. In the event of any inconsistency or conflict between these Additional Provisions, the Loan Agreement, the Registered Mortgage and the Standard Charge/ Mortgage Terms, the provisions of these documents shall apply in the following order of precedence to resolve the inconsistency or conflict: (i) the Loan Agreement; (ii) the Additional Provisions; (iii) the Registered Mortgage; and (iv) the Standard Charge/Mortgage Terms.

For purposes of your Mortgage, the following terms under the Standard Charge/ Mortgage Terms shall have the meanings set out below and these definitions shall apply and replace those set out in the Standard Charge/ Mortgage Terms:

a) “Balance Due Date” shall refer to and apply to the Line of Credit and is the date you must repay in full the

outstanding balance of your Loan under the Line of Credit;

b) “Compound Interest” shall refer to and apply to amounts owing under both the Line of Credit and the Variable

Rate Mortgage;

c) “Interest Rate” shall refer to the rates of interest calculated and charged under both the Line of Credit (the “Line

of Credit Interest Rate”) and the Variable Rate Mortgage (the “Variable Rate Mortgage Interest Rate”) and the

applicable interest rates may differ;

d) “Interest Adjustment Date” shall refer to and apply to the Line of Credit (the “Line of Credit Interest Adjustment

Date”) and the Variable Rate Mortgage (the “Variable Rate Mortgage Interest Adjustment Date”) and the

applicable dates may differ;

e) “Line of Credit Balance” shall refer to the Line of Credit and the amount outstanding under the Line of Credit

(which may fluctuate from time to time);

f) “Loan” shall refer to both the Line of Credit and the Variable Rate Mortgage and the amounts outstanding under

each of the Line of Credit and the Variable Rate Mortgage from time to time (and "Loan Amount" shall be

construed accordingly);

g) “Maturity Date” shall refer to and apply to the Variable Rate Mortgage and is the date on which you must repay

in full the outstanding balance of your Variable Rate Mortgage (unless you are offered a Renewal Agreement)

and is the last day of your Variable Rate Mortgage Term. The Maturity Date shall occur prior to the Balance Due

Date for your Line of Credit;

h) “Maximum Loan Limit” shall refer to the maximum amount of money you can borrow at any point in time under

your Line of Credit and the Variable Rate Mortgage as set out in the Loan Agreement. This amount may change

from time to time;

i) “Mortgage” includes:

i. The Registered Mortgage with any Additional Provisions;

ii. The Standard Charge/ Mortgage Terms;

iii. The Commitment Letter or Loan Agreement;

iv. Any amendments to the Registered Mortgage or the Commitment Letter or Loan Agreement; and

v. Any agreement by which a Guarantor, Covenantor or other person is bound by all or any part of the

Registered Mortgage, Commitment Letter or Loan Agreement;

j) “Outstanding Loan Amount” will vary from time to time and consists of all amounts you owe us from time to

time under your Line of Credit (including present and future advances under your Line of Credit) and your

Variable Rate Mortgage, including: (i) the Line of Credit Balance and Principal Amount for the Variable Rate

Mortgage; (ii) unpaid principal or interest under both the Line of Credit and Variable Rate Mortgage; (iii)

Compound Interest under the Line of Credit and Variable Rate Mortgage; (iv) Costs and interests on those Costs;

and (v) all other amounts payable under the Loan. In addition to the above, the Outstanding Loan Amount also

consists of amounts owing under any other product offered by us in a written amendment to the Loan

Agreement;

k) “Principal or Principal Amount” shall refer to the Principal Amount owing under the Variable Rate Mortgage;

l) “Registered Mortgage” means the form of charge or Mortgage which you sign and is the part of the Mortgage

that is or will be registered against the title to the Property or, where the Property is under the electronic

registration system, will be signed and registered electronically against title to the Property;

m) “Regularly Scheduled Payment” shall refer to and apply to the amount of each payment that will be paid on a

consistent frequency (i.e. monthly) under the Line of Credit (the “Line of Credit Regularly Scheduled Payment”)

and (i.e. weekly, bi-weekly, semi-monthly or monthly) under the Variable Rate Mortgage (the “Variable Rate

Mortgage Regularly Scheduled Payment”). For greater certainty, the consistent frequency may differ as

between the Line of Credit and Variable Rate Mortgage;

n) “Standard Charge/ Mortgage Terms” means the set of Standard Charge Terms, Standard Mortgage Terms or

Additional Covenants that are incorporated into the Mortgage by reference to their filing number or by

attachment to the Registered Mortgage; and

o) “Term” shall refer to and apply to the Line of Credit and the Variable Rate Mortgage as applicable.

2. CAPITALIZED TERMS:

All capitalized terms used but not otherwise defined in these Additional Provisions have the respective meanings ascribed to such terms in the Standard Charge/ Mortgage Terms.

3. OUTSTANDING LOAN AMOUNT:

The Outstanding Loan Amount of your Loan will vary from time to time and consists of all amounts you owe us from time to time under your Line of Credit (including present and future advances under your Line of Credit) and your Variable Rate Mortgage. The amount of the Registered Mortgage will be calculated as the total of 100% of the appraised value of the Property, as such amount is determined by us.

4. INTEREST RATE:

Interest for the Loan will be chargeable under the Line of Credit and the Variable Rate Mortgage. We will charge you interest at the Line of Credit Interest Rate (based on the Line of Credit Balance) from the Advance Date to the Line of Credit Interest Adjustment Date. We will also charge interest at the Variable Rate Mortgage Interest Rate (based on the Principal Amount) from the Advance Date to the Variable Rate Mortgage Interest Adjustment Date.

From the applicable Interest Adjustment Date forward, the Line of Credit Interest Rate and Variable Rate Mortgage Interest Rate shall be calculated as follows:

Line of Credit Interest Rate: Starting on the Line of Credit Interest Adjustment Date, interest at the Line of Credit Interest Rate is calculated daily and is compounded monthly, not in advance. For this purpose, we calculate interest for each payment period using a factor that is based on the Line of Credit Interest Rate, compounded monthly. Interest is payable monthly on the unpaid balance of the Line of Credit. The unpaid balance is calculated daily by adding new advances and subtracting payments from the unpaid balance of the previous month. For each day during a monthly period for which the unpaid balance remains unchanged, interest is then calculated by multiplying the unpaid balance by the Line of Credit Interest Rate compounded monthly, dividing by 365, and multiplying by the number of days in the applicable period. The amounts from this calculation are then added together to create a total that is the interest payable for the monthly period. You promise to pay interest at the Line of Credit Interest Rate in effect at the time and as calculated above, on the Line of Credit Balance until paid in full.

For your Line of Credit Interest Rate, you will be charged MCAP Prime Rate and any applicable premium (or discount) to the MCAP Prime Rate as set out in the Loan Agreement. Thereafter, the Line of Credit Interest Rate will change each time the MCAP Prime Rate changes, with no prior notice to you. Your Line of Credit Regularly Scheduled Payment will also change accordingly.

Variable Rate Mortgage Interest Rate: Starting on the Variable Rate Mortgage Interest Adjustment Date, interest at the Variable Rate Mortgage Interest Rate is compounded semi-annually, not in advance. For this purpose, we calculate interest for each payment period using a factor that is based on the Variable Rate Mortgage Interest Rate, compounded semi-annually. Interest is payable on the payment frequency selected by you (for example monthly). You promise to pay interest at the Variable Rate Mortgage Interest Rate in effect at the time and as calculated above, on the outstanding balance of your Variable Rate Mortgage until paid in full.

Your Variable Rate Mortgage Interest Rate is based on the MCAP Prime Rate and any applicable premium (or discount) to the Prime Rate as set out in the Loan Agreement. Based on this, your Variable Rate Mortgage Interest Rate will change each time the MCAP Prime Rate changes, with no prior notice to you. Your Variable Rate Mortgage Regularly Scheduled Payment will also change accordingly.

Compound Interest - If you do not pay interest under the Line of Credit or Variable Rate Mortgage when it is due, we will add the overdue interest to the outstanding balance of the Line of Credit or Variable Rate Mortgage as applicable, and charge you interest on the combined amount until it is paid. This is called Compound Interest. We calculate Compound Interest at the current, applicable Interest Rate in effect at the time. You promise to pay Compound Interest at the same frequency as the applicable Regularly Scheduled Payments until the outstanding balance of the Loan, and any unpaid interest, is paid in full.

Interest at the Interest Rate applicable to your Line of Credit and Variable Rate Mortgage will accrue and will be compounded in the same manner and is payable whether before or after default as well as prior to and after the Balance Due Date or Maturity Date on any Outstanding Loan Amounts from time to time. Interest whether before or after default as well as prior to and after the Balance Due Date or Maturity Date will accrue at the same rate as during the applicable Terms for your Line of Credit and Variable

Rate Mortgage.

5. REGULARLY SCHEDULED PAYMENTS:

There are regularly scheduled payments under your Line of Credit and your Variable Rate Mortgage and they are calculated as follows:

Line of Credit Regularly Scheduled Payment: Your minimum Line of Credit Regularly Scheduled Payment amount is equal to the accrued interest on your Line of Credit Balance. It is calculated on the daily closing balance of your Line of Credit and is payable monthly.

Variable Rate Mortgage Regularly Scheduled Payment: Your Variable Rate Mortgage Regularly Scheduled Payment amount will change following a change in the Prime Rate. We recalculate your Variable Rate Mortgage Regularly Scheduled Payment amount to an amount sufficient to pay the interest that will accrue to each Variable Rate Mortgage Regularly Scheduled Payment date plus the amount of Principal that has to be paid to maintain the Amortization Period of the Variable Rate Mortgage. This amount will be your new Variable Rate Mortgage Regularly Scheduled Payment amount until it is again changed following an increase or decrease in the MCAP Prime Rate.

Any prepayments made by you will not affect your Variable Rate Mortgage Regularly Scheduled Payments but will shorten your Amortization Period for your Variable Rate Mortgage and will change the composition of interest and Principal in your Variable Rate Mortgage Regularly Scheduled Payments.

If the amount of any Variable Rate Mortgage Regularly Scheduled Payment is less than the accrued interest due over that payment period (i.e. if the MCAP Prime Rate has increased over the payment period, but your rate adjustment has not yet been applied to your Variable Rate Mortgage), accrued interest will be owing by you and will be paid as per the payment provisions below.

Provided you are not in default under your Mortgage, amounts received by us from you for your Line of Credit Regularly Scheduled Payment and your Variable Rate Mortgage Regularly Scheduled Payment will be applied as follows:

From the Line of Credit Regularly Scheduled Payment:

1) If applicable, mortgage life and/or critical illness insurance premiums and associated taxes and premiums or

payments for any other optional products or services you have chosen;

2) Property Taxes (if we pay them on your behalf);

3) Accrued interest on your Line of Credit; and

4) Any other Costs outstanding.

From the Variable Rate Mortgage Regularly Scheduled Payment:

1) If applicable, mortgage life and/or critical illness insurance premiums and associated taxes and premiums or

payments for any other optional products or services you have chosen to the extent not paid or payable under

the Line of Credit Regularly Scheduled Payment;

2) Property Taxes (if we pay them on your behalf and to the extent not paid or payable under the Line of Credit

Regularly Scheduled Payment);

3) Interest that is due and payable including accrued interest that results from an increase in the Variable Rate

Mortgage Interest Rate prior to the applicable adjustment to your Variable Rate Mortgage Regularly Scheduled

Payment;

4) Reduction of the outstanding Principal owing in accordance with your amortization schedule;

5) Any other Costs outstanding not paid under the Line of Credit Regularly Scheduled Payment.

6. PREPAYMENT PROVISIONS:

Different prepayment provisions are applicable to the Line of Credit and Variable Rate Mortgage components of your Loan and are as follows:

Line of Credit: You may prepay any portion of the outstanding balance of the Line of Credit Balance at any time, with no penalty.

Variable Rate Mortgage: The following Prepayment Provisions are available to you each year of the Term of the Variable Rate Mortgage (i.e., during the 12 month period starting from the Variable Rate Mortgage Interest Adjustment Date, and starting from each anniversary of the Variable Rate Mortgage Interest Adjustment Date thereafter), provided you are not in default:

a) Increased Payment: Once per year, you may increase the amount of the Variable Rate Mortgage Regularly

Scheduled Payment up to a maximum of 20%. The maximum for each payment increase is calculated using the

amount of the current Variable Rate Mortgage Regularly Scheduled Payment in effect at the time.

b) Lump Sum Payment: You may make lump sum prepayments on your Variable Rate Mortgage of $100 or more

on any Variable Rate Mortgage Regularly Scheduled Payment date, provided the total of these prepayments

made throughout the year does not exceed 20% of the original Principal Amount of the Variable Rate Mortgage.

If all or any portion of these privileges are not used in a particular year, they cannot be carried forward and used in a future year.

7. EARLY PAYOUT PROVISIONS:

Different payout provisions are applicable to the Line of Credit and Variable Rate Mortgage and are as follows:

Line of Credit: You may payout the entire outstanding Line of Credit Balance at any time. There is no Early Payout Penalty or Reinvestment Fee charged for using this privilege.

Variable Rate Mortgage (the remainder of this Section 7 applies only to your Variable Rate Mortgage):

During the first 3 years of the Term:

- You may payout the entire outstanding balance of your Variable Rate Mortgage prior to the Maturity Date.

- If you exercise this option, a Reinvestment Fee and an Early Payout Penalty will apply.

If applicable, in subsequent years of the Term (i.e., on or after the 3rd anniversary of the Variable Rate Mortgage Interest Adjustment Date):

- You may payout the entire outstanding balance of the Variable Rate Mortgage, at any time.

- If you exercise this option, a Reinvestment Fee does not apply but an Early Payout Penalty will apply.

Reinvestment Fee:

The Reinvestment Fee is $500 in the first year of the Term, $400 in the second year, and $300 in the third year. There is no Reinvestment Fee in subsequent years of the Term. Early Payout Penalty:

The Early Payout Penalty is equal to 3 months simple interest, calculated on the Principal Amount of the Variable Rate Mortgage.

This is calculated by multiplying your current Variable Rate Mortgage Interest Rate in effect at the time of prepayment OR the current MCAP Prime Rate in effect at the time of prepayment (whichever is greater), by the outstanding Principal balance of your Variable Rate Mortgage, for a 3 month period.

If you request an Early Payout, you cannot exercise the lump sum and/ or increased payment privileges for your Variable Rate Mortgage (outlined in section 6a and 6b of this document), until the Payout Statement expires. The calculation of the Early Payout Penalty will be based on the outstanding Principal balance of your Variable Rate Mortgage.

8. CONVERTIBILITY:

You may, at any time without penalty, convert this Variable Rate Mortgage to a 5 Year Fixed Rate Mortgage offered by MCAP at the time subject to the following sentence. If the remaining Term of the Line of Credit is less than 5 years, conversion can only be into a fixed product term that does not exceed the remaining Term of the Line of Credit. You will receive the Interest Rate we quote at the time, for the applicable Term. You will sign a Renewal Agreement which will contain all of the amended terms and conditions of the new Fixed Rate Mortgage. All the features and benefits of the existing Variable Rate Mortgage are amended upon conversion, and you will adopt the features and benefits of the new Fixed Rate Mortgage. You cannot convert if you are in default. Any conversion will not affect, discharge or limit your obligations under the Line of Credit and the terms and conditions of the Line

of Credit will continue to apply unamended on and after conversion.

9. RENEWAL:

Different provisions are applicable to the Line of Credit and Variable Rate Mortgage and are as follows:

Line of Credit: The Line of Credit is not renewable.

Variable Rate Mortgage (the remainder of this Section applies only to the Variable Rate Mortgage):

The outstanding balance of the Variable Rate Mortgage is due and payable on the Maturity Date; however, we may offer to renew it prior to the Maturity Date.

If we have sent you a Renewal Agreement (in advance of the Maturity Date), and:

i. If you accept the Renewal Agreement:

All the features and benefits of the existing Variable Rate Mortgage are amended upon renewal, and you will

adopt the features and benefits of the new mortgage.

ii. If you fail to either accept or decline the Renewal Agreement, and do not pay out the Variable Rate Mortgage on

the Maturity Date:

a. The Variable Rate Mortgage will automatically renew into a closed term 6 Month Convertible Fixed Rate

Mortgage on the Maturity Date.

b. The renewed closed term 6 Month Convertible Fixed Rate Mortgage will provide you with the option to

subsequently convert it to a longer closed term, fixed rate mortgage without penalty, at any time during the

renewal term.

c. If you choose to pay out the outstanding balance of your closed term 6 Month Convertible Fixed Rate

Mortgage during the renewal term, you will be subject to the Early Payout Penalty (which is the greater of the

Interest Rate Differential Amount or Three Months Interest Cost), plus a Reinvestment Fee.

You may not renew your Variable Rate Mortgage prior to the end of your Variable Rate Mortgage Term. However, if you wish to switch to a new Term prior to the Maturity Date, you can do so upon payment of any penalties or fees associated with Early Payouts.

Any renewal, amendments or change of or to the Variable Rate Mortgage Term or to your Variable Rate Mortgage will not affect your obligations under the Line of Credit and all amounts owing thereunder and otherwise owing pursuant to the Line of Credit under the Mortgage and the terms and conditions of the Line of Credit will continue to apply unamended on and after any such renewal, amendment or change.

10. ASSUMABILITY:

This Loan is not assumable, unless otherwise required by applicable law in which case the assumption will be subject to satisfying any conditions that we may require.

11. PORTABILITY:

Subject to our consent and any conditions we may require, this Loan is portable.

12. LINES OF CREDIT:

Unless otherwise specified, the provisions in this Section only applies to your Line of Credit.

a) Your Line of Credit Limit:

We may from time to time, without prior notice to you, decrease your Line of Credit Limit (which is shown on your monthly statement), by sending you a notice indicating your new limit.

We may from time to time, without your consent and provided you are not in default under the Mortgage, increase your Line of Credit Limit (which is shown on your monthly statement), in certain circumstances, including as the Principal Amount of your Variable Rate Mortgage is reduced by sending you a notice indicating your new limit.

Subject to federal regulations, the Line of Credit Limit can never exceed 65% of the Property value.

b) Accessing Your Loan:

We will give you ways to access your Line of Credit via a separate agreement, which will set out the terms and conditions relating to the particular method to access your Line of Credit.

c) Redraws/Advances:

You may request a redraw/ advance on your Line of Credit at any time, for any purpose other than default management, up to the Line of Credit Limit.

If there is more than one Borrower under this Loan Agreement, requests for redraws/advances on your Line of Credit may be made by any one of the Borrowers, provided the Borrower making the request adequately identifies themself to us.

d) Suspension of Redraws/ Advances:

We may, at our option and sole discretion, cancel or suspend your right to subsequent redraws/ advances at any time. We may similarly cancel, suspend or alter the ways you access your Line of Credit.

e) Revolving Credit Arrangement:

The balance on your Line of Credit can fluctuate. Even if you pay down the outstanding balance to zero, your Registered Mortgage will not be discharged, because your Variable Rate Mortgage may not be fully repaid, you may have other products outstanding with us and/or if you wish, you may redraw/ advance funds under your Line of Credit at a later date. In other words, the Registered Mortgage constitutes our continuing security for your revolving credit arrangement under the Line of Credit and Variable Rate Mortgage and all other amounts owing to us under the Mortgage.

f) Monthly Statement:

For each monthly statement period, we will send you a statement notifying you of:

- Each amount paid to, or withdrawn from your Line of Credit over the period (including interest, service fees,

Property Taxes, principal payments, etc.), and the dates when those amounts were posted to your Line of Credit.

- The total payments and withdrawals over the period, including interest and non-interest charges.

- The Line of Credit Interest Rate that applied on each day for your Line of Credit, and the total interest charged

during that period.

- The Line of Credit Limit, and the amount available to borrow under the Line of Credit, at the end of that period.

- The minimum payment under your Line of Credit and its due date (being the date on which we deducted the

payment from your bank account).

We may choose to discontinue sending monthly statements for any period during which there were no withdrawals nor payments on your Line of Credit, and:

- There is no outstanding balance at the end of the statement period, or

- Demand for repayment of the outstanding balance has been made by us, that your Loan has been suspended or

cancelled due to default. However, the failure by us to do so will not reduce or affect your obligation to make

your payments that are due, in accordance with the terms of the Loan Agreement.

When you receive your statement, you must examine all entries and balances on it. If you believe there are errors, omissions or irregularities, you must notify us in writing within 30 days after the date the statement was sent to you. If you fail to do so, you will be deemed to have agreed to the statement in its entirety.

You will be bound by this section, even if your statement is delayed or lost in the mail.

You must notify us immediately if there are circumstances from which one might reasonably infer that a fraud may occur in connection with your Line of Credit. Subject to any other agreement you may have with us, we will not be liable for any improper redraws/ advances on your Line of Credit if you have not given us immediate notice as required by this section, or if your estate has not given us immediate notice of your death.

For payment instruments such as an EFT (Electronic Funds Transfer), we will only be liable for losses due to forged, unauthorized or altered signatures, provided you do both of the following:

- You notify us of the alleged forgery or alteration, in writing and within the time period required, and

- You prove to us that you took all reasonable steps to prevent the forged, unauthorized or altered signature (and

the resulting loss), and despite these measures, the loss was unavoidable.

You authorize us to charge our standard account service fees to the Line of Credit. You also authorize us to charge any other debts you may owe us, to the Line of Credit. You may retrieve up to date information about the nature and amounts of these fees at or by calling our Customer Service Centre.

g) Due on Demand:

We may, at our option, demand at any time the amount outstanding, under the Line of Credit.

13. OCCUPATION BY BORROWER(S) AND GUARANTOR(S) :

All Borrower(s) and Guarantor(s) (subject to any alternative agreement in writing) must occupy the Property until the Balance Due Date. We may declare this Loan in default and exercise all remedies available to us in the case of default, if at any time, the Property:

- is not occupied by all Borrower(s) and Guarantor(s), OR

- is not owned by the Borrower(s).

14. MORTGAGE STATEMENTS:

We may provide you with a Monthly Statement for your Line of Credit, as detailed in Section 12(f) above. In relation to your Variable Rate Mortgage, we will provide you an annual statement.

15. ASSIGNMENT BY MCAP:

Without the consent of, and without notice to, the Borrowers and Guarantors, and without affecting the Obligations of the Borrowers and Guarantors under this Loan, MCAP may assign, transfer, sell, pledge or convey this Loan Agreement (prior to and after any Advances), this Loan, or any portion of this Loan (including, but not limited to, the Line of Credit and/or the Variable Rate Mortgage and all amounts payable thereunder as specified in such applicable documentation) to any third party (“Third Party”) in relation to a sale, securitization, financing, pledging or security arrangement. The Borrowers and Guarantors agree, and for this purpose grant MCAP an irrevocable power of attorney coupled with an interest, to execute and register in any applicable land titles or registry office any and all documentation, notices and agreements required to evidence or perfect any assignment, transfer,

sale, pledge, conveyance or security arrangement pursuant to this Section. On any notice of an assignment, transfer, sale, pledge, conveyance or security arrangement pursuant to this Section from MCAP or from a Third Party (as consented to by MCAP), the Borrowers and Guarantors shall make all payments due under this Loan to such Third Party as mortgagee hereunder.

16. DEFAULT:

Your Obligations under this Loan include all the provisions applicable to the Variable Rate Mortgage and the Line of Credit. A default under any of the provisions of the Variable Rate Mortgage or the Line of Credit will be a default under the Mortgage and, on a default, the Outstanding Loan Amount will at our option be immediately due and payable.

On default, and unless we decide otherwise, amounts received or collected by us will be applied in the following priority:

1) Costs in relation to the Loan;

2) Property Taxes, including any arrears, penalties and interest thereon;

3) Compound Interest under the Variable Rate Mortgage;

4) Interest and interest arrears under the Variable Rate Mortgage;

5) Principal under the Variable Rate Mortgage (until the Principal is reduced to zero);

6) Compound Interest under the Line of Credit;

7) Interest and interest arrears under the Line of Credit;

8) The Line of Credit Balance (until reduced to zero); and

9) All other required amounts until the Outstanding Loan Amount is reduced to zero.

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