7514 - Commitment Letter - Credit Agreement



Phone:

_________________, 20___

Borrower Name

Address

Town/city, Postal Code

Attn: _______________

Dear Sirs:

Alberta Treasury Branches has approved and offers financial assistance on the terms and conditions in the attached Commitment Letter. [Include the following if this is a renewal – This agreement amends and restates in its entirety our previous letter(s). Any borrowings outstanding under previous letter agreement(s) are deemed to be Borrowings hereunder under the related facility referenced herein.]

You may accept our offer by returning the enclosed duplicate of this letter, signed as indicated below, by 4:00 p.m. mountain standard time (“MST”) on or before ______________________, 20____ [within 30 days from the date on this letterhead] or our offer will automatically expire. We reserve the right to cancel our offer at any time prior to acceptance.

Thank you for your [continued] business.

Yours truly,

ALBERTA TREASURY BRANCHES

|Per: | |

| |insert name of ATB signing officer |

| |insert title of ATB signing officer |

Encl.

Accepted this       day of      , 20  

BORROWER

| |

|insert name of individual Borrower |

| |

|INSERT NAME OF CORPORATE BORROWER |

|Per: | |

| |insert name of corporate Borrower's signing officer |

| |insert title of corporate Borrower's signing officer |

| |

|And per: | |

| |insert name of corporate Borrower's signing officer |

| |insert title of corporate Borrower's signing officer |

GUARANTOR

| |

|insert name of individual Guarantor |

| |

|INSERT NAME OF CORPORATE GUARANTOR |

| |

| | |

| | |

| | |

| |

| | |

| | |

| | |

LENDER: ALBERTA TREASURY BRANCHES

BORROWER:

GUARANTOR (if applicable):

1. DETAILS OF CREDIT FACILITIES (EACH REFERRED TO AS A "CREDIT FACILITY"):

[Insert appropriate description as per AFC – examples follow]

Credit Facility #1 - Operating Credit Facility (Revolving) – $___________

- is available by way of Prime-based loans.

- Interest will be calculated from the date or dates funds are advanced on the daily outstanding principal at Prime plus ___% per annum and will be payable on the last day of each month.

- is available by way of letters of guarantee (to an aggregate maximum of $______).

- is to be used for the general operating purposes of Borrower [revise if necessary as per terms of AFC]. [If this Credit Facility is to pay out another lender, replace with: This Credit Facility is to be used to pay out in full all indebtedness and liability owing by Borrower to _________________, and thereafter, for the general operating purposes of Borrower.]

- [Include if Credit Facility is margined] advances will be limited to the amount (the "Margin Limit") equal to the lesser of:

- the maximum principal amount of this Credit Facility; and

- the aggregate of (a) [75%] of Good Accounts Receivable of Borrower plus (b) [50%] (to a maximum of $________) of Inventory of Borrower [Insert if applicable where RMBL and operating both exist and if contained in margining formula for operating facility] plus (c) ___ % of the purchase price of the unencumbered, residential, single family lots that are registered in the name of the Borrower and have not been in the Borrower’s Inventory for greater than ____ months.

- may be prepaid in whole or in part at any time without penalty.

- Borrower may borrow, repay and reborrow up to this Credit Facility amount above [but not exceeding the Margin Limit]. Principal advances and repayments to be in the minimum sum of $_______ or multiples of it.

- is payable in full on demand by Lender.

Credit Facility #2 – Non-Revolving, Reducing Credit Facility (“Term Loan”) $___________

- is available by way of [Modify as necessary]

- Prime-based loans

- Interest will be calculated from the date or dates funds are advanced on the daily outstanding principal at Prime plus ___% per annum.

- may be prepaid in whole or in part at any time without penalty.

- Fixed-rate loans

- Interest is payable at ___% per annum for the period from advance or conversion to this Credit Facility's Maturity Date.

- may be amortized over a maximum of ____ months.

- [Use this clause for all Term Loans designated as “business”] Borrower may, when not in default hereunder, prepay the whole or any part of the outstanding principal amount upon payment of an amount (which Lender and Borrower agree is a genuine pre-estimate of damages and not a penalty) equal to [3 or 6] months’ interest on the amount prepaid or the Interest Rate Differential, whichever is greater.

- [Use this clause for all Term Loans designated as “agricultural” and secured by real estate or made to a corporation] For Term Loans involving terms of 5 years or less, Borrower may, when not in default hereunder, in each calendar year: (a) prepay without notice or penalty, a portion of the outstanding principal not exceeding 20% of the principal amount outstanding as of the end of last calendar year (this privilege when not exercised in any such calendar year is not cumulative). In addition, Borrower may, when not in default hereunder, at any time prepay on any payment date the whole or any part of the outstanding principal amount upon payment of an amount (which Lender and Borrower agree is a genuine pre-estimate of damages and not a penalty) equal to 3 months' interest on the amount prepaid or the Interest Rate Differential.

For Term Loans involving terms greater than 5 years, unless demanded by the Lender, the Borrower may not prepay the whole or any part of the principal, including an increase in regular payments, without the Lender’s written approval and the Borrower will be subject to a prepayment charge (a) in the first 5 years, 3 months’ interest or the Interest Rate Differential, whichever is greater; (b) after 5 years, 3 months’ interest.

- [Use this clause for all Term Loans designated as “agricultural” not secured by real estate (non-corporate Borrower)] may be prepaid in whole or in part at any time without penalty.

- is available by way of one-draw/two draws/multiple draws [choose appropriate number of draws] on or before _____, 20__. Unless approved by Lender in writing, any amount not drawn on or before that date will be cancelled and no longer available to the Borrower.

- is to be used for [specify use as per terms of AFC, e.g. the acquisition by Borrower of capital assets].

- is non-revolving. Amounts repaid may not be reborrowed.

- is payable in full on demand by Lender but in any event no later than __________, 20___ [or the date falling ____ years after the date of the initial advance] ("this Credit Facility's Maturity Date").

- [For Professional Practice Financing (Accountants): include if interest –only followed by blended monthly payments] Over the first ___ months following the date of the initial advance (the “Interest-Only Period”), the Borrower shall, on the last day of each month, make interest payments equal to the total interest accrued within that month. Upon expiration of the Interest-Only Period and to and including this Credit Facility’s Maturity Date (the “Blended Interest Period”), the Borrower shall, on the last day of each month, make blended payments in an amount to be determined by the Lender based on the Credit Facility’s outstanding balance and prevailing interest rate over the Blended Interest Period, while maintaining an amortization period of ___ months. The balance of all amounts owing under this Credit Facility are due and payable in full on demand by the Lender but, in any event, no later than this Credit Facility’s Maturity Date. Payments will be applied, at the Lender’s option, firstly to accrued interest and secondly to principal.

- [Include if blended weekly/bi-weekly/monthly payments] Borrower shall (continue to) make blended payments of $______ per [week/bi-weekly period/month] on the

_______ [last day for monthly unless otherwise specified/Friday for weekly/second Friday for bi-weekly, unless day of week is specified] of each [week/bi-weekly period/month]

[for new loans]

commencing

[___________________, 20___]

or

[no more than ____ [enter 45 days (for monthly payments)/15 days (for weekly payments)/30 days (for bi-weekly payments)] after the date of the initial advance],

- to be applied at Lender’s option firstly to accrued interest and secondly to principal, with the balance of all amounts owing under this Credit Facility being due and payable in full on demand by Lender but in any event no later than this Credit Facility’s Maturity Date. Payment amounts are subject to adjustment on notice to Borrower to ensure amortization period of ____ months is maintained [delete last sentence if fixed rate pricing].

[Include if blended quarterly, semi annual or annual payments] Borrower shall (continue to) make blended payments of $_______ per [quarter/half-yearly/year] on

[specify all payment dates coming due in the next year] and continuing each [quarter/half-year/year]

[for new loans]

commencing [___________, 20___],

- to be applied at Lender’s option firstly to accrued interest and secondly to principal, with the balance of all amounts owing under this Credit Facility being due and payable in full on demand by Lender but in any event no later than this Credit Facility’s Maturity Date. Payment amounts are subject to adjustment on notice to Borrower to ensure amortization period of ___ months is maintained [delete last sentence if fixed rate pricing].

- [Include if payments are principal only] Borrower shall make principal payments of $_________ per [week/month/quarter] on the last day of each [week/month/quarter] commencing [_____________, 20___ or no more than 45 days after the date of the initial advance], with the balance of all amounts owing under this Credit Facility being due and payable in full on demand by the Lender but in any event no later than this Credit Facility's Maturity Date. Interest is calculated on the daily outstanding principal balance and is payable on the last day of each month.

- For Term Loans and for each advance drawn under an Evergreen Line of Credit Facility, the Borrower may apply, in writing, at any time to the Lender to change the applicable interest rate from a fixed rate Credit Facility to a variable rate Credit Facility. If approval is granted, the Borrower shall pay: (a) all out-of-pocket expenses incurred by the Lender; (b) a fee of 3 months' interest on the principal balance outstanding as at the date of conversion or the Interest Rate Differential, whichever is greater; and (c) all accrued interest up to the conversion date.

- Borrower may apply at any time to Lender to change the applicable interest rate from a variable rate to a fixed rate. If approval is granted, the Borrower will pay:

a) An administration fee of:

i) $500 for a Term Loan with an outstanding balance of $100,000 or less;

ii) $750 for a Term Loan with an outstanding balance greater than $100,000 up to and including $500,000;

iii) $1,000 for a Term Loan with an outstanding balance greater than $500,000;

b) All out of pocket expenses incurred by Lender; and

c) All accrued interest to the conversion date.

Credit Facility #3 – Evergreen Line of Credit Facility – $___________

- each loan under this Credit Facility is to be used to finance [specify purpose e.g. the purchase of a new vehicle or vehicles for leasing purposes, expand as required for other assets.]

- the interest rate on each loan made available under this Credit Facility will be determined when drawn.

- is available by way of a series of reducing loans. Payment schedule for each loan will be determined when drawn, amortized over maximum [____] years for [capital purchase]. The last day of the term of each loan under this Credit Facility is referred to as this Credit Facility's Maturity Date for such loan.

- advances under this Credit Facility will be determined by the Lender. Lender will finance up to ___% of _____________ [capital purchase] excluding GST. Purchase to be evidenced by ______________ [a paid invoice including serial number of capital asset]. Each advance will be evidenced by a confirmation confirming the details of such loan. Prior to each advance, Lender must be satisfied it has a registered first charge on the _______ (e.g. – capital asset) being purchased.

- Borrower may borrow, repay and reborrow under this Credit Facility provided the total of all outstanding advances do not exceed the maximum principal amount of this Credit Facility.

- for each advance drawn under this Credit Facility, the Borrower may apply, in writing, at any time to the Lender to change the applicable interest rate from a fixed rate Credit Facility to a variable rate Credit Facility. If approval is granted, the Borrower shall pay: (a) all out-of-pocket expenses incurred by the Lender; (b) a fee of 3 months' interest on the principal balance outstanding as at the date of conversion or the Interest Rate Differential, whichever is greater; and (c) all accrued interest up to the conversion date.

- for each advance drawn under this Credit Facility, Borrower may apply at any time to Lender to change the applicable interest rate from a variable rate to a fixed rate. If approval is granted, the Borrower will pay:

a) An administration fee of:

i) $500 for an advance with an outstanding balance of $100,000 or less;

ii) $750 for an advance with an outstanding balance greater than $100,000 up to and including $500,000;

iii) $1,000 for an advance with an outstanding balance greater than $500,000;

d) All out of pocket expenses incurred by Lender; and

e) All accrued interest to the conversion date.

- For each fixed rate advance drawn under an Evergreen Line of Credit Facility designated as “Business”, unless demanded by the Lender, the Borrower may not prepay the whole or any part of the principal sum advanced under such Credit Facility without the Lender’s written approval, which may be conditional on paying a prepayment privilege equal to 3 months’ interest on the amount prepaid or the Interest Rate Differential, whichever is greater.

For each fixed rate advance drawn under an Evergreen Line of Credit Facility designated as “Agriculture”:

a) If:

i) secured by real estate; or

ii) made to a corporation,

and involving a term equal to or less than 5 years, then the Borrower may, each calendar year, by way of lump sum amount(s), prepay the whole or any part of the principal sum, up to 20% of the amount outstanding as of the end of the last calendar year, without a prepayment charge. This privilege is non-cumulative. Unless demanded by the Lender, any prepayment above 20%, without the Lender’s written approval, will be subject to a prepayment charge, representing a pre-estimate of damages, equal to 3 months’ interest or the Interest Rate Differential, whichever is greater.

b) If:

i) secured by real estate; or

ii) made to a corporation,

and involving a term greater than 5 years, then, unless demanded by the Lender, the Borrower may not prepay the whole or any part of the principal, including an increase in regular payments, without the Lender’s written approval, and the Borrower will be subject to a prepayment charge: (A) in the first 5 years, equal to 3 months’ interest or the Interest Rate Differential, whichever is greater, and (B) after 5 years, equal to 3 months’ interest.

c) If not secured by real estate, then, at any time, the Borrower may prepay, without penalty, the whole or any portion of the principal, interest and/or other amounts payable under such Credit Facility.

For each variable rate advance drawn under an Evergreen Line of Credit Facility designated as “Agriculture” or “Business”, the Borrower may prepay, without penalty, the whole or any portion of the principal, interest and/or other amounts payable under such Credit Facility.

- Each loan under this Credit Facility is payable in full on demand by Lender but in any event no later than this Credit Facility's Maturity Date for such loan.

Credit Facility #4 – Residential Mortgage Builders Line of Credit - $__________

- each loan under this Credit Facility is to be used to provide individual residential mortgage builders loans (each an “RMBL”) for the construction of [Show Homes, Spec Homes and Pre-Sold Homes] in [insert names of communities].

- Borrower may borrow, repay and reborrow under this Credit Facility provided that, in the aggregate, the authorized amount of all outstanding RMBLs does not exceed the maximum principal amount of this Credit Facility. An RMBL, once assumed by an approved purchaser, will no longer be included as an outstanding RMBL under this Credit Facility.

- Borrower must indicate at the time of each request for an RMBL whether it relates to the construction of a Show Home, Spec Home or Pre-Sold Home.

- the authorized amount available to be drawn under each RMBL will be determined in the sole discretion of the Lender on the basis of [the lesser of]:

- For Pre-Sold Homes

- ___% of an accredited appraiser’s (acceptable to Lender) determination of the market valuation of the property to be financed under such RMBL; [or]

- [Insert if in AFC] ___% of the contract price of the home to be financed under such RMBL, net of GST.

- For Show Home and Spec Homes

- ___% of an accredited appraiser’s (acceptable to Lender) determination of the market valuation of the property to be financed under such RMBL; [or]

- [Insert if in AFC] ___% of the list price of the home to be financed under such RMBL, net of GST

- $___________

- the aggregate authorized amount of RMBLs for Spec Homes and Show Homes available under this Credit Facility is not to exceed $_____________.

- for each RMBL requested, Borrower may select from Lender’s then available fixed or variable interest rates and terms provided that for RMBLs for Show Homes the maximum term is two (2) years and for all other RMBLs the maximum term is one (1) year. The Borrower’s selection will be separately documented for each RMBL.

- Prepayment penalties may apply as applicable in each of the options schedules for the individual RMBLs provided that the Lender agrees to waive the prepayment penalty amount if such RMBL is assumed by a purchaser approved by the Lender. Progress draws may be available under each individual RMBL based upon the normal policies and procedures of the Lender including, without restriction, completion of a satisfactory inspection. If an RMBL is to be advanced in draws, the interest accruing between draws is to be deducted from the next advance and otherwise paid by the interest adjustment date (as defined in the loan documentation of each RMBL). The interest adjustment date can be no longer than 12 months after the initial application date.

- the payment schedule for each RMBL will be determined when approved and based upon an amortization of a maximum of 25 years. Regardless of the payment schedule selected, each RMBL is payable on demand by Lender and, in any event, must be paid in full within 12 months of the interest adjustment date (other than for a Show Home, which must be paid in full within 24 months after the date of first advance).

- Borrower must provide to Lender in respect of each Pre-Sold Home a copy of the accepted offer to purchase and such information regarding the purchaser as Lender requires. If an RMBL is being assumed, the purchaser must be approved by Lender.

Credit Facility #5 – Letter of Guarantee by Lender in the amount of $________ in favour of _____________

- Borrower will pay a fee of ___% per annum calculated on the face amount of the Letter of Guarantee, payable upon issuance based on the number of days in the term of such Letter of Guarantee.

- Borrower will reimburse Lender for any money actually paid by the Lender on the Letter of Guarantee plus interest calculated at Prime plus _____% per annum from date of payment by Lender until paid by Borrower.

- Letter of Guarantee will expire on ____________ [Irrevocable letter of guarantee] OR will expire ______ days from the date notice of termination is given by Lender and is subject to review on ________________, 20___. [Revocable letter of guarantee].

- the face amount of any outstanding Letter of Guarantee is payable in full on demand by Lender to be held as cash collateral to satisfy the contingent liability thereunder.

Credit Facility #6 – Alberta BusinessCard MasterCard/Alberta Agri-Industry BusinessCard MasterCard – $___________ (called the Business Credit Limit in the Agreement) [delete MasterCard product that does not apply]

- interest will be calculated on the total interest bearing balance at Prime plus ____% per annum [or at a fixed rate of ____% per annum].

- minimum monthly payment of ____% [enter 3% for Alberta BusinessCard or 1% for Alberta Agri-Industry BusinessCard] of the new balance at payment due date is required.

- other terms and conditions are outlined in the ATB Financial MasterCard cardholder agreement in effect from time to time.

Credit Facility #7 – Agricultural Conditional Sales Contract

- Terms and conditions are outlined in the Agricultural Conditional Sales Contract Agreement.

Credit Facility #8 – Foreign Exchange, Interest Rate and Commodity Derivatives [Delete if not applicable]

- At Borrower’s request, Lender may enter into foreign exchange forward contracts and/or interest rate and commodity derivatives with Borrower from time to time.

- Lender makes no commitment to enter into any such contract or derivative and may, at any time, in its sole discretion, decline to enter into any such contract or derivative.

- Any Security Documents will also secure Borrower’s liability and obligations pursuant to any such contracts or derivatives.

2. NEXT REVIEW DATE:

All Credit Facilities are demand facilities and are subject to review by Lender at any time in its sole discretion and at least annually. The next annual review date has been set for _________________________ [insert review date of Credit] but may be set at an earlier or later date at the sole discretion of Lender.

3. FEES:

- Non-refundable application fee of $____ is payable on acceptance of this offer [, of which $_______ has already been paid].

- A [monthly] fee of $________ is payable for margining [include if applicable].

- Renewal fee is payable annually in an amount determined by Lender [or in the amount of $_________ or such other amount as may be specified by Lender].

- A fee of $________ is payable for loan administration, payable [monthly or on each drawdown or repayment of Borrowings hereunder].

- A fee of $________ is payable on each drawdown under Credit Facility #___ [include if applicable].

- Any amount in excess of established Credit Facilities may be subject to a fee where Lender in its sole discretion permits excess Borrowings, if any.

- Non-refundable fee of $_____ for each letter of guarantee, payable upon application and annually.

- [for RMBLs] An administration fee of $_________ is payable for each RMBL mortgage that is not assumed by a qualified purchaser and retained with Lender at the time of sale.

- For reports or statements not received within the stipulated periods (and without limiting Lender’s rights by virtue of such default), Borrower will be subject to a fee of [$50 per month (per monthly or quarterly report or statement)] and [$250 per month (per annual report or statement)] for each late reporting occurrence.

- [other applicable fees as required.]

Lender is hereby authorized to debit Borrower’s account for any unpaid fees.

4. SECURITY DOCUMENTS:

All security documents (whether held or later delivered) (collectively referred to as the "Security Documents") shall secure all Credit Facilities and all other obligations of Borrower to Lender (whether present or future, direct or indirect, contingent or matured). [The parties acknowledge that the following security documents are currently held]:

a) [insert as applicable – see below for examples]

The [additional] security documents required at this time are as follows [delete or modify as necessary]:

a) General Security Agreement from Borrower providing a security interest over all present and after acquired personal property [and a floating charge on all lands – delete if not applicable] [, and specifically registered against the following serial-numbered motor vehicles, boats or aircraft: ______________________________]

b) Land Mortgage in the principal sum of $________ from Borrower constituting a first fixed charge on the lands located at ___________________________

c) General Assignment of Leases and Rents in respect of the lands described above, to be registered by way of Caveat at Land Titles Office.

d) Continuing Guarantee from _____________ - [unlimited/limited to $____], supported by the following:

- [insert as applicable, e.g. a general security agreement etc];

e) Postponement and Assignment of Claims from _____________________

f) Assignment of Monies on Deposit in the principal sum of $_____________

The Security Documents are to be registered in the following jurisdictions: Alberta, _____.

5. REPRESENTATIONS AND WARRANTIES:

Borrower represents and warrants to Lender that:

g) each Loan Party (other than any that are individuals) is duly incorporated or duly created, validly existing and duly registered or qualified to carry on business in the Province of Alberta and in each other jurisdiction where it carries on any material business;

h) the execution, delivery and performance by Borrower and each Guarantor (if any) of this agreement and each Security Document to which it is a party have been duly authorized by all necessary actions and do not violate its governing documents or any applicable laws or agreements to which it is subject or by which it is bound;

i) the most recent financial statements of Borrower and, if applicable, any Guarantor, provided to Lender fairly present its financial position as of the date thereof and its results of operations and cash flows for the fiscal period covered thereby and, since the date of such financial statements, there has occurred no material adverse change in its business or financial condition;

j) each Loan Party has good and marketable title to all of its properties and assets, free and clear of any encumbrances other than Permitted Encumbrances;

k) [Borrower has no Subsidiaries] or [Borrower has no Subsidiaries other than ______________________________________]. [select applicable clause]

All representations and warranties are deemed to be repeated by Borrower on each request for an advance hereunder.

6. REPORTING COVENANTS:

Borrower covenants with Lender that it will provide the following to Lender: (delete as applicable)

l) Within [90] days after the end of each of its fiscal years [consolidated/ unconsolidated/ combined] financial statements of Borrower on an [audited /review engagement /notice to reader] basis and prepared by a firm of qualified accountants. If audited financial statements are not currently required, Lender reserves the right to require audited financial statements [note – add any financial statements or personal statement of affairs required from Guarantor]

m) [delete if not required] within [60] days following the end of each of its first 3 fiscal quarters, internally produced financial statements of Borrower

n) [delete if not required] within [20] days following the end of each calendar month, internally produced financial statements of Borrower

o) [delete if not required] within [20] days following the end of each calendar month, accounts payable and accounts receivables listings and statements of inventory value as at the end of such month and giving separate listings and statements for each business location of Borrower certified by a senior officer of Borrower

p) [delete if not required] within 90 days after the end of each of its fiscal years, annual capital and revenue budgets from Borrower for the next following fiscal year

q) [For RMBLs delete if not required] within [30] days after the receipt from Alberta New Home Warranty, a copy of the Alberta New Home Warranty Program’s annual builder assessment (if applicable)

r) on request, any further information regarding the assets, operations and financial condition of Borrower and any Guarantor that Lender may from time to time reasonably require

s) [add any additional reporting requirements as per AFC].

7. POSITIVE COVENANTS:

Borrower covenants with Lender that:

t) it will pay to Lender when due all amounts (whether principal, interest or other sums) owing by it to Lender from time to time;

u) it will pay to Lender on demand, all legal (on a solicitor and his own client, full indemnity basis) and other costs incurred by Lender in respect of all Credit Facilities including the preparation, registration and any realization on the Security Documents and other related matters;

v) it will deliver to Lender the Security Documents, in all cases in form and substance acceptable to Lender and Lender’s solicitor;

w) it will ensure that each Loan Party maintains appropriate types and amounts of insurance with Lender shown as first loss payee on any property insurance covering any assets on which Lender has security, with such other terms as Lender may require;

x) it will promptly advise Lender, in writing, of any significant loss or damage to the property of any Loan Party;

y) it will ensure that each Loan Party maintains its corporate or partnership status (if applicable) in good standing and maintains, repairs and keeps in good working order and condition all of its property and assets;

z) it will permit Lender at any reasonable time or times and on reasonable prior notice to enter the premises of each Loan Party and to inspect its property and operation and to examine and copy all of its relevant books of accounts and records;

aa) it will ensure that each Loan Party remits when due all sums owing to tax and other governmental authorities including, without limitation, any sums in respect of employees and GST, and provides proof to Lender upon request;

ab) it will ensure that each Loan Party complies with all applicable laws, permits and regulations including, without limitation, those relating to the environment, and obtains and maintains all necessary licenses, permits, authorizations and approvals which are required to be obtained and maintained by it in the operation of its business;

ac) [for agricultural borrowers with irrigation rights] it acknowledges and agrees that Lender shall be entitled to give notice to any irrigation district in which Borrower has Irrigation Acres in a parcel of land on which Lender has security of the covenants of Borrower with respect to irrigation. "Irrigation Acres" means irrigation acres as defined in the Irrigation Districts Act (Alberta) or in any legislation in replacement thereof;

ad) [for loans made to finance livestock and secured by such livestock] it will comply with all of its obligations under Alberta’s Livestock Identification and Commerce Act or any legislation in replacement thereof (“LICA”), including, without restriction: (i) fully and punctually completing all documentation mandated by LICA and otherwise adhering to all other statutory requirements under LICA, (ii) disclosing the livestock security interest (as that term is defined in LICA) held by the Lender in the livestock (inclusive of its dam and offspring), (iii) causing any purchaser of such livestock to pay for the livestock in accordance with LICA, with those sale proceeds made jointly payable to the Borrower and Lender and (iv) depositing such sale proceeds to the Borrower’s account(s) with the Lender (except, however, if the cheque in payment of those proceeds is issued jointly to the Borrower, Lender and third party, then, prior to depositing the cheque to the Borrower’s account(s) with the Lender, the Borrower will obtain all necessary endorsements from the third party with respect to that cheque).

ae) [for RMBL loans only and when ANHWP insured] it will be and will remain a participant in good standing with one of Lender’s approved New Home Warranty Programs;

af) [Add others as per terms of AFC]

8. NEGATIVE COVENANTS:

Borrower covenants with Lender that, except with the prior written consent of Lender, Borrower will not and will not permit any Loan Party to:

ag) create or permit to exist any mortgage, charge, lien, encumbrance or other security interest on any of its present or future assets, other than Permitted Encumbrances;

ah) sell, lease or otherwise dispose of any assets except (i) inventory sold, leased or disposed of in the ordinary course of business, (ii) obsolete equipment which is being replaced with equipment of equivalent value, and (iii) assets sold, leased or disposed of during a fiscal year having an aggregate fair market value not exceeding [Cdn. ................
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