Ontario Feeder Cattle Loan Guarantee Program guidelines

The Feeder Cattle Loan Guarantee Program (FCLGP) supports beef cattle farmers by facilitating access to competitive, short-term, low-interest borrowing through Feeder Cattle Co-operatives.

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Effective: July 29, 2024

These Program Guidelines are subject to change from time to time. Consult the program's website for the most up-to-date information.

These Program Guidelines are established pursuant to section 15(6) of Order-in-Council 702/2016.

Definitions

For the purposes of these Program Guidelines, the terms below have the following meanings:

"Allocation" means the amount each Co-operative is allocated from the Total Guaranteed Amount;

"Applicant" means a Person who:

Is a Member of a Co-operative,
Is in the business of Producing Cattle, and
Has applied to a Co-operative to be issued a Purchase Order;

"Assurance Account" means a trust account established by a Co-operative in which the Producer Deposit is deposited and includes any other funds the Co-operative may be holding for the Producer;

"Auditor General" means the Auditor General of Ontario;

"Business Day" means any working day, Monday to Friday inclusive, but excluding statutory and other holidays on which the Government of Ontario has elected to be closed for business;

"Cattle" means steers or heifers to be finished for slaughter, but excludes Cattle to be sold for breeding purposes;

"Co-operative" means a feeder Cattle finance Co-operative established under the Co-operatives Corporations Act and, for greater certainty, shall also be defined as a class of farmers to whom a loan can be made for the purposes of section 8(1)(b) of the Ministry of Agriculture, Food and Rural Affairs Act, provided the Co-operative meets the terms and conditions of the Program;

"Inter Co-op Member Custom Feeder" means a Custom Feeder that is a Member of a different Co-operative than the Producer;

"Crown" means His Majesty the King in Right of Ontario and includes any successor, whether it is "His Majesty the King" or "Her Majesty the Queen";

"Custom Feeder" means the Person who is Producing Cattle on behalf of a Producer;

"Custom Feeding" means an arrangement between a Producer and a Custom Feeder whereby the Custom Feeder agrees to Produce Cattle on the Producer's behalf;

"Custom Feeding Agreement" means an agreement setting out the terms and conditions under which Custom Feeding will be undertaken;

"Defaulting Member" means a Member who has failed to repay a shortfall related to funds spent under one or more Purchase Orders after 20 Business Days have passed since the Member has been given notice that the shortfall exists;

"Emergency Declaration" means a declaration issued by the Minister that a situation has arisen beyond the Producer's control that significantly prevents a Producer's ability to sell marketable cattle.

"Feeding Agreement" means an agreement entered into between a Co-operative and a Producer where the Producer agrees to Produce Cattle;

"Guarantee" means the payment that the Crown will provide to a Lender in the event a Co-operative defaults on repaying any amount of principal or Interest owing under its Loan;

"Guarantee Agreement" means the agreement set out in a form substantially similar to the agreement attached as Schedule "A" to the OIC;

"Guaranteed Amount" means the amount of money secured by a Guarantee being provided under the Program;

"Interest" means the interest payable in respect of a Loan or a Purchase Order, as set out in a Loan Agreement or Purchase Order, as the case may be, but does not include any fees, fines, commissions or other similar charges or expenses or any cost of collection or enforcement of a security interest, any repayment of credit advance or any insurance charge, official fee or any amount required to be paid on account of applicable taxes;

"Lender" means an entity providing a Loan under the Program and includes:

Farm Credit Canada, or successor entity,
Any bank to which the Bank Act (Canada) applies,
A caisse populaire, credit union or trust company licensed to carry on business as such in Ontario and has been approved by the Minister to provide loans to Co-operatives under the Program, and
Any other entity approved by the Minister to provide Loans under the Program;

"Loan" means a loan, via the provision of a revolving credit facility or similar financial transaction, by a Lender to a Co-operative;

"Loan Agreement" means an agreement that sets out the terms and conditions upon which a Loan is provided;

"Material Adverse Change" means a change in the financial or other conditions of the Co-operative or Producer, as the case may be, or in the state of circumstances of any property subject to a security interest in relation to a Loan or Purchase Order, as the case may be, that in the opinion of a reasonable and prudent lender would be considered likely to cause a significant diminution in the earnings power or value of the Co-operative or a Producer's business, as the case may be, or in the ability of the Co-operative or a Producer, as the case may be, to perform any obligations with respect to the Loan or Purchase Order, as the case may be;

"Member" means a Person which has paid the Co-operative's membership fee for the current Program Year;

"Member Custom Feeder" means a Custom Feeder that is a Member of the same Co-operative as the Producer;

"Member's Debt" means the financial obligations for the member related to funds spent under one or more Purchase Orders issued by the Co-operative for that Member and any other outstanding fees owed to the Co-operative.

"Minister" means the Minister of Agriculture, Food and Rural Affairs or such other Minister who may be designated from time to time as the responsible Minister in relation to the Ministry of Agriculture, Food and Rural Affairs Act or the Program, as the case may be, in accordance with the Executive Council Act or any other Act of the Legislature that allows another Minister to be designated as the responsible Minister, unless the context indicates otherwise;

Note: The Minister has delegated a number of the powers granted to the Minister under the OIC to staff within the Ministry.

"Minister's Direction" means a direction issued pursuant to sections 15(9), 15(10) or 15(11) of the OIC;

"Ministry" means the ministry of the Minister.

"Non-Member Custom Feeder" means a Custom Feeder that is not a member of any Co-operative;

"Ontario" means the Province of Ontario, unless the context indicates otherwise;

"Person" means a legally-recognized entity, and includes individuals or corporations;

"Proceeds" means any money, domestic or foreign, money's worth or any other proceeds derived by a Producer, directly or indirectly, from Producing Cattle;

"Produce Cattle or Producing Cattle" means the further feeding and raising of Cattle or the finishing of Cattle for slaughter;

"Producer" means an entity that has been issued a Purchase Order;

"Producer Deposit" means five percent (5%) of the total value of a Purchase Order;

"Program" means the Ontario Feeder Cattle Loan Guarantee Program;

"Program Guidelines" means this document and includes any other documents setting out the criteria governing the operation of the Program that is posted on the Ministry's website;

"Program Year" means January 1 of one year to December 31 of the same year;

"Purchase Order" means an order issued by a Co-operative to a Producer to purchase Cattle;

"Purchase Order Credit Review" means a review of the Applicant's creditworthiness and includes the following in relation to the Applicant:

A check of the Co-operative's own records,
Searches under the Personal Property Security Act and the Bank Act (Canada),
A check with one or more reputable credit rating agencies,
A check with at least one credit reference provided by Farm Credit Canada, or successor entity, or the Applicant's bank, credit union caisse populaire, trust company licensed to carry on business in Ontario or another Province of Canada as a lender of money or a supplier of Agricultural inputs,
Any information provided by the Ministry regarding any money owing to the Crown, and
Any other requirements set out under the Program Guidelines;

"Related Person" has the same meanings as set out under the Income Tax Act (Canada);

"Requirements Of Law" includes all applicable requirements of law, as may be set out in statutes, regulations, by-laws, codes, rules, ordinances, official plans, approvals, permits, licenses, authorizations, decrees, injunctions, orders and declarations or any other similar requirement of law that could be imposed on a Person from authorities having jurisdiction over that Person;

"Residual Cattle" means any remaining unsold Cattle purchased under a Purchase Order after the Producer has fully repaid the Co-operative from the Proceeds generated by the sale of some of the Cattle purchased under the Purchase Order; and

"Total Guaranteed Amount" means five hundred million dollars ($500,000,000.00).

Acronyms

For the purposes of this Program Guidelines, the acronyms below will have the following meanings:

"GSA" means a general security agreement;

"LGIC" means the Lieutenant Governor in Council;

"OIC" means Order-in-Council 702/2016, as amended; and

"PMSI" means a purchase-money security interest issued under the Personal Property Security Act.

Part I: Purpose of the Program

Purpose of Program

The purpose of this Program is to facilitate access for Co-operatives to low-interest Loans so that a Co-operative can assist its Members in Producing Cattle by providing competitive financing and terms.

Part II: Program Overview

Commencement

This Program began in 1990 and has continued through successive Orders-in-Council. The current Program OIC came into effect May 4, 2016, and was amended by Order-in-Council 124/2019 (effective January 31, 2019), Order-in-Council 1368/2021 (effective October 7, 2021), Order-in-Council 347/2022 (effective February 17, 2022), Order-in-Council 170/2023 (effective February 9, 2023) and Order-in-Council 160/2024 (effective September 1, 2023).

All previous Loans, Purchase Orders, and Feeding Agreements remain in effect and subject to the Order-in-Council under which they were issued.

Termination of Program

The Minister may — without liability, cost or penalty to the Crown — terminate this Program at any time.

If the Program is terminated, termination will be done according to sections 9 to 10 of the OIC, including:

Posting a notice on the Ministry's website indicating the Program has been terminated; and
Any payments owing under the Program will be paid.

Termination of the Program does not remove any financial obligations outstanding by any party.

Review of the Program

The Minister will review the Program at least once every five (5) years from the date the Order-in-Council comes into effect to confirm the Program is continuing to meet its objectives and is performing on a cost-benefit basis. The Minister may review the Program at an earlier time to confirm that the Program is continuing to meet its objectives and is performing on a cost-benefit basis.

Part III: Program Administration

Administration of the Program

The Minister is responsible for all aspects of the administration and delivery of the Program and is authorized on behalf of the Crown to enter a Guarantee Agreement if the Minister deems it appropriate to do so.

The Minister has all authority to issue directions to Lenders and Co-operatives (and Program Administrator if one has been designated) necessary to oversee and operate the Program.

Program Guidelines

Any Program Guidelines for the Program will be posted on the Ministry's website. When Program Guidelines are amended, the amendments will not have any retroactive effect.

Should there be a conflict between the Program Guidelines, OIC or any statute, the conflict will be resolved in the following way:

The requirements under any statute shall prevail over the OIC, Minister's direction and these Program Guidelines;
The requirements under the OIC shall prevail over the Minister's Direction and these Program Guidelines; and,
The Minister's directions shall prevail over these Program Guidelines.

Part IV: Participant Requirements

Lenders

The Minister must approve in writing an entity before any Loans that entity issues will be eligible to be covered by the Guarantee.

To be eligible to participate in the Program as a Lender, an entity must:

Be a Person;
Be lawfully allowed to provide loans in Ontario;
Be in compliance with all Requirements Of Law in relation to its loan operations; and
Agree to be bound by and comply with the terms and conditions of the OIC, these Program Guidelines; its Guarantee Agreement; Minister's Directions and its Loan Agreement.

A Lender will not allow the amount a Co-operative owes under a Loan to exceed that Co-operative's Allocation.

A Lender will not provide a Loan to a Co-operative where the rate of Interest on that Loan exceeds the Prime Business Rate, as quoted by the Bank of Canada on the Bank of Canada's website, minus twenty-five (25) basis points unless the Lender has obtained the prior written consent of the Chief Executive Officer of the Ontario Financing Authority.

Co-operatives

For a Co-operative to be approved to participate in the Program, the Co-operative will meet the requirements set out in the OIC and these Program Guidelines and continue to meet these requirements while participating in the Program. These requirements include:

Be incorporated pursuant to the Co-operative Corporations Act for the sole purpose of financing the production of Cattle;
Be in compliance with all Requirements of Law;
Agree to be bound and comply with the terms and conditions of the OIC, the Guarantee Agreement, these Program Guidelines, its Loan Agreement, its Purchase Orders, its Feeding Agreements and any Custom Feeding Agreements;
Not be indebted to the Crown;
Have a minimum of three (3) directors on its board of directors;
Require its board of directors to be responsible for the following:
1. Approving new Members of the Co-operative,
2. Retaining the services of any officers or employees that are necessary to perform the requirements of the Program,
3. Arranging Loans, including entering into a Loan Agreement with the Lender on behalf of the Co-operative,
4. Setting any applicable fees on behalf of the Co-operative,
5. Approving any Custom Feeding Agreements a Member may want to enter into for the purpose of Custom Feeding Cattle, and
6. Issuing Purchase Orders and entering Feeding Agreements and Custom Feeding Agreements (if applicable) with the Co-operative's Members.
  1. When issuing Purchase Orders, a Co-operative will ensure that Members who are requesting a Purchase Order or combination of Purchase Orders with a total value of five hundred thousand dollars ($500,000) or less are given priority over Members who are requesting a Purchase Order or combination of Purchase Orders with a total value over five hundred thousand dollars ($500,000).
Appoint a supervisor for the Co-operative responsible for:
1. Inspecting the Cattle forthwith upon delivery to the Member,
2. Ensuring the Cattle are identified as the Co-operative and the Lender previously agreed upon,
3. Monitoring the gain, death loss, relocation and sale of the Cattle, and
4. Determining whether the Member is Producing Cattle in accordance with the terms and conditions of the Feeding Agreement;
Have an annual membership fee of at least twenty-five dollars ($25.00);
Only allow Members that meet the eligibility requirements set out in of the OIC and these Program Guidelines as Members of the Co-operative;
Have at least twenty (20) Members as part of the Co-operative of which at least three (3) of those Members must have active Purchase Orders outstanding at any one time;
Have an Assurance Account;
Have the appropriate insurance, which includes commercial general liability insurance on an occurrence basis for third party bodily injury, personal injury and property damage at an amount in keeping with normal business practices;
Have a collections policy in place in order to collect any debt arising out of a Purchase Order;
Only enter or issue Loan Agreements, Purchase Orders, Feeding Agreements and Custom Feeding Agreements that are in compliance with the terms and conditions of the OIC and these Program Guidelines;
Conduct a Purchase Order Credit Review at a minimum of every five (5) years for each Member, and
1. Upon receiving an application from a potential new member:
  1. Ask the applicant to disclose:
    1. Whether they are a party to any existing litigation where they are being sued for damages, and,
    2. Whether they have filed for bankruptcy in the last seven (7) years.
2. Whenever there is a request for a significant increase in the amount of money the Member is requesting being provided to it under one or more Purchase Orders (e.g., doubling the amount within an 18-month period), and
3. At any other time the Co-operative deems appropriate;
Administer all Purchase Orders, Feeding Agreements and Custom Feeding Agreements in a business-like manner;
Enforce any security interests it may have in relation to a Purchase Order when a Member fails to repay to the Co-operative any amount owing under a Purchase Order;
Collect any money owing to the Co-operative under a Purchase Order where a Member owes money under a Purchase Order;
In partnership with their Lender, determine the appropriate maximum number of Purchase Orders, Feeding Agreements and Custom Feeding Agreements that a Member may have at any one time with a Co-operative; and
Set additional residency requirements for membership with a Co-operative (if required/deemed necessary by Co-operatives).

For the purposes of collecting annual membership fees, Co-operatives may choose to collect it annually or on a multi-year basis. However, membership fees collected in advance of the year intended are to be held and not used for any purposes other than the intended year's membership fee. Co-operatives should establish a refund policy for unused membership fees.

Co-operative Dissolution and Transfer of Members

Where a Co-operative intends to dissolve and/or transfer one or more Members, the Co-operative must seek prior written approval from the Minister. The Co-operative must provide the Minister with a written notice outlining its intention to dissolve and/or transfer one or more Members, reasons for the dissolution and/or transfer of one or more Members as well as a date at which the Co-operative intends the dissolution and/or transfer of one or more of its Members to be completed. The Minister must also receive, in writing, acknowledgement of the Co-operative's dissolution and/or transfer of one or more of its Members from affected Lenders. To transfer one or more of its Members, the Co-op must:

Coordinate activities related to the transfer of the Members between affected Co-operatives, lenders and Members;
Maintain clear security transfer over the related Cattle; and
Confirm there is sufficient allocation cap space for the Co-operative(s) to which the Member are transferring.

For a Co-operative dissolution, the Co-operative must wind-down operations as required under the Co-operative Corporations Act, including a majority supported resolution to dissolve. If approved, the Co-operative must provide written notification to the Minister of completion of the dissolution and/or transfer of one or more of its Members.

Producer/Member

For an individual to be eligible to participate in the Program, that individual will meet the following requirements and continue to meet these requirements while participating in the Program:

Agree to be bound and comply with the terms and conditions of the Program, as set out in the OIC and these Program Guidelines;
Agree when Producing Cattle on behalf of the Co-operative the Co-operative has all legal, equitable and beneficial ownership over those Cattle;
Not represent or imply to any Person the Producer has any type of legal, equitable or beneficial ownership in the Cattle owned by the Co-operative;
Not be indebted to the Crown and attest to this on the Purchase Order;
Other than producing other Cattle financed by the Co-operative, not be indebted to any Co-operative under the Program and attest to this on the Purchase Order;
Only be a Member of one Co-operative at a time, own or rent farmland in Ontario or have a Custom Feeding Agreement whereby the person producing Cattle owns or rents farmland in Ontario;
Not be a related person to a corporation that is participating under the Program in paragraph (f) above;
Provide the Co-operative with a Premises Identification Number;
Provide the Co-operative with the information required to allow the Co-operative to conduct a Purchase Order Credit Review;
Assign any payments the Member is eligible to receive under any program set out in these Program Guidelines to the Co-operative as security for any payments the Producer will be required to make to the Co-operative under a Purchase Order;
Deposit the Producer Deposit into the Co-operative's Assurance Account for each Purchase Order the Co-operative has issued to the Producer and attest on the Purchase Order the Producer Deposit is not from any loan or other form of indebtedness;
Only accept Purchase Orders and enter Feeding Agreements or Custom Feeding Agreements that are in compliance with the terms and conditions of the OIC and these Program Guidelines;
Only use the funds from a Purchase Order to purchase Cattle in the name of the Co-operative, which includes all related ancillary fees at the time the Cattle are purchased;
- Note: Ancillary fees such as trucking, commission, processing and related product costs, and any interest charged applied by the agent;
Enter a Feeding Agreement or a Custom Feeding Agreement with the Co-operative prior to Producing Cattle; and
Produce the Cattle:
1. On farmland that the Member owns or rents in Ontario, or
2. In a Custom Feeding facility located in Ontario.

Corporation/Member

The Co-operative may, in its sole and absolute discretion, allow Members to participate as a corporate entity. Where a corporate entity obtains Purchase Orders, the Co-operative will not issue Purchase Orders to other Members who control the corporate entity. Participation under a corporation is not meant to be a means in which a Person can obtain Purchase Orders in an amount greater than the limits set out in this Guidelines.

A corporation must provide:

A copy of incorporation;
A list of shareholders;
A resolution from the corporation board to participate in the Program;
The legal name of corporation; and
The Business Identification Number.

In addition to the meeting the Producer/Member requirements above, the corporation will meet and maintain the following requirements:

Be lawfully incorporated in Ontario;
Be privately-owned;
Comply with all Requirements Of Law;
Other than producing other Cattle financed by the Co-operative, not be indebted to any Co-operative under the Program and attest to this on the Purchase Order;
Not be indebted to the Crown and have a duly authorized signing officer attest to this on the Purchase Order; and
Deposit the Producer Deposit into the Co-operative's Assurance Account for each Purchase Order the member has with the Co-operative and have a duly authorized signing officer attest on the Purchase Order that the Producer Deposit required is not from any loan or other form of indebtedness.

Additional Terms and Requirements for Lenders, Co-operatives and Members

No Lender or Co-operative will enter a Loan Agreement that would result in the Co-operative exceeding its
No Co-operative will allow the aggregate amount of all outstanding Purchase Orders it issues to exceed its Allocation.
No Co-operative will use any funds it receives from a Loan for any other purpose other than to issue Purchase Orders.
Co-operatives agree that any failure by the Minister to notify the Co-operative of a contravention identified in an inspection shall not constitute a waiver by the Minister of that contravention.
No Lender will provide a Loan and no Co-operative will accept a Loan under the Program exceeding the Prime Business Rate quoted by the Bank of Canada on its website for that period of time, less twenty-five (25) basis points, without the prior written consent of the Chief Executive Officer of the Ontario Financing Authority.
If the Minister issues a Minister's Direction to a Lender, Co-operative or Member, the direction will be followed forthwith.

Custom Feeders

A Person is eligible to be a Custom Feeder provided they meet the eligibility criteria set out below and continues to meet those eligibility requirements while Custom Feeding under the Program.

To be eligible to participate as a Custom Feeder, that Person will:

Agree to be bound by and comply with the terms and conditions of the OIC, the Program Guidelines and the Custom Feeding Agreement;
Only enter a Custom Feeding Agreement that is substantially similar to that set out under Appendix "C" or Appendix "D", as the case may be, of these Program Guidelines;
Not enter a Custom Feeding Agreement where the Person is going to be a Custom Feeder if the Producer's Co-operative is not going to sign the Custom Feeding Agreement;
Only Produce Cattle in accordance with the terms and conditions of the Custom Feeding Agreement when acting as a Custom Feeder;
Agree that any debt arising under a Custom Feeding Agreement is owned by the Producer and not the Co-Operative;
Not assign the Custom Feeding of any Cattle to another Custom Feeder without the prior written consent of the Producer and Co-Operative that owns the Cattle, and;
Agree to any other requirements the Minister sets out in the Program Guidelines.

A Member shall not Produce Cattle via a Custom Feeding Agreement where the Co-operative is not party to that Custom Feeding Agreement. For greater certainty, when a Member enters a Custom Feeding Agreement with an Inter Co-op Member Custom Feeder, both the Member's Co-operative and the Inter Co-op Member Custom Feeder's Co-operative must sign the Custom Feeding Agreement.

Part V: Assurance Account

Assurance Account

Each Co-operative will establish an Assurance Account with a Lender with which all funds received or otherwise attributed with a Member will be deposited and form a part of that Assurance Account.

Use of Assurance Account

Each Co-operative will deposit the Producer Deposit for each Purchase Order it issues into its Assurance Account and will use its Assurance Account as a common credit insurance pool. No Co-operative will use any money from its Assurance Account to fund its general operations.

If a Member defaults on repaying an amount owing under a Purchase Order, the Co-operative will access the money from that Member's Producer Deposit in the Assurance Account in accordance with the requirements of the OIC and these Program Guidelines.

If a Co-operative has used money from the Assurance Account and:

The use of that money has resulted in one or more Producers having less than the original Producer Deposit for one or more Purchase Orders in the Assurance Account, and
The Co-operative is not in default on the Loan, and
The Co-operative plans on continuing operations

the Co-operative will notify those Producers of the amount used from their respective Producer Deposits and will require those Producers to top-up the Producer Deposit for their respective outstanding Purchase Orders to the normal Producer Deposit amount prior to issuing any new Purchase Orders to those Producers.

A Co-operative will not return any portion of money in its Assurance Account to any Member:

If that Member has outstanding debt related to that Producer Deposit;
The Co-operative is in default of its Loan; or
If a member has been given twenty (20) days' notice of a shortfall.

A Co-operative may, upon receiving a request from the Member and provided ninety (90) calendar days have passed from the day in which the Member has repaid its financial obligations of the related Purchase Order, return to the Member the Producer Deposit for the cleared Purchase Order(s).

Part VI: Financial Terms and Conditions

Purchase Orders

A Co-operative may impose additional fee(s), provided the fees are reasonable and related to covering costs incurred by the Co-operative for Program participation. Additional fees may be for issuing Purchase Orders, credit checks, tagging/inspecting Cattle, insurance on Cattle, or other administration costs.

Discretion of Co-operative

A Co-operative has the discretion to refuse to issue a Purchase Order to a Member if a payment from the Co-operative's Assurance Account was made in relation to a previous Purchase Order the Co-operative issued to that Member.

Total Amount of Outstanding Purchase Orders

The total aggregate of all outstanding Purchase Orders issued to an Applicant shall not at any time exceed:

Two million dollars ($2,000,000.00) where the Applicant is an individual and has fed at least one hundred (100) head of Cattle in the previous twelve (12) months or participated in the Program in the previous Program Year and complied with the terms and conditions of the OIC, these Program Guidelines, the Purchase Orders issued to the Applicant and previous Feeding Agreements;
Three million dollars ($3,000,000.00) where the Applicant is a corporation and has fed at least one hundred (100) head of Cattle in the previous twelve (12) months or participated in the Program in the previous Program Year and complied with the terms and conditions of the OIC, these Program Guidelines, the Purchase Orders issued to the Applicant and previous Feeding Agreements; and
Two hundred thousand dollars ($200,000) in the case of any Applicant that does not meet the requirements set out above.

Purchase Order Terms and Requirements

A Co-operative will not issue a Purchase Order to a Member unless the following conditions have been met:

The Member is familiar with the General Terms and Conditions for the:
1. Purchase Order/Feeding Agreement as set out in Appendix "A" of these Program Guidelines, or
2. Purchase Order as set out under Appendix "B" of these Guidelines as well as the applicable Custom Feeding Agreement as set out in Appendix "C" or Appendix "D" of these Program Guidelines;
The Member meets the requirements under Part IV of these Program Guideline;
The Co-operative is issuing the Purchase Order for the sole purpose of the Member purchasing Cattle in the name of the Co-operative, which includes all related ancillary fees at the time the Cattle are purchased;
The Member and Co-operative has fulfilled any outstanding requirements of the Purchase Order Credit Review and the Member's credit review remains acceptable;
The Purchase Order the Co-operative issues is substantially similar to the Purchase Order/Feeding Agreement set out in Appendix "A" of these Program Guidelines;
The Purchase Order prohibits the assignment of the funds to any other Person;
The Purchase Order requires the payment to the Co-operative of any outstanding balance owing in relation to the Purchase Order within twenty (20) Business Days of notification by the Co-operative that the Proceeds from the sale of the Cattle were insufficient to pay the principal and Interest owing on the Loan related to that Purchase Order;
The Purchase Order requires the Co-operative to make payment to the Member any excess Proceeds from the sale of Cattle after related amounts owed by the Member have been deducted where the loan is not in default; and,
The Purchase Order provides notice that if the Co-operative is in default with its Lender, the Lender or Trustee will be able to secure interest in all the Co-operative's

Co-operatives, with the agreement of their Lender, will determine the appropriate maximum number of Purchase Orders that a Member may have at any one time with a Co-Operative. Once established, or subsequently changed, the Co-operative is to report the number to the Minister within ten (10) business days of any change.

A Co-operative will not assign a Purchase Order without the prior written consent of the Minister and the Lender.

Purchasing Cattle

A Producer will not purchase any Cattle on behalf of a Co-operative unless the Co-operative has issued a Purchase Order to that Producer before the Cattle is purchased.

A Co-operative may authorize a Member to purchase Co-operative-owned Cattle, provided those Cattle are purchased at the fair market value.

A Co-operative may authorize a Member to purchase Member-owned Cattle at 75% of fair market value with estimated weights or up to 100% of fair market value if they were weighed. The fair market value may be reasonably discounted to reflect reduced costs if that Member is already in possession of those Cattle.

A Producer will not encumber or otherwise create, or allow to be created, any security interest in the Cattle purchased pursuant to a Purchase Order.

Feeding Agreements and Producing Cattle

A Co-operative will enter a Feeding Agreement with each Member it has issued a Purchase Order setting out how the Member is to Produce Cattle. Appendix "A" of these Program Guidelines set out the "Purchase Order/Feeding Agreement" while Appendix "E" of these Program Guidelines set out the "Feeding Agreement".

The Feeding Agreement will set out the terms and conditions in which the Member is to Produce the Cattle, including:

The location in which the Member will Produce Cattle;
All legal, beneficial and equitable ownership of the Cattle remains with the Co-operative;
Rights of inspection the Co-operative will have regarding the Cattle;
The Member is to Produce Cattle so the Cattle remain healthy;
The Member is to indemnify the Co-operative;
The grounds in which the Co-operative may re-possess the Cattle;
The Co-operative consents to any enrollment of the Cattle in any type of business risk management program by the Member; and
Any other terms and conditions set out elsewhere in the Program Guidelines.

A Member will not Produce Cattle unless they have a Feeding Agreement in place with a Co-operative. The Feeding Agreement the Co-operative issues must be substantially similar to the Purchase Order/Feeding Agreement set out in Appendix "A" or the Feeding Agreement set out in Appendix "E" of these Guidelines.

Co-operatives, with the agreement of their Lender, will determine the appropriate maximum number of Feeding Agreements that a Member may have at any one time with a Co-Operative. Once established, or subsequently amended, the Co-operative is to report the maximum number of Purchase Orders to the Minister within ten business days (10) of any change.

Custom Feeding Agreements

A Co-operative may, in its sole and absolute discretion, offer Custom Feeding arrangements to its Members. Where a Co-operative enters a Custom Feeding Agreement with its Member – whether the Custom Feeding Agreement involves a Member Custom Feeder, an Inter Co-op Member Custom Feeder or a Non-Member Custom Feeder, that Custom Feeding Agreement will be substantially similar to the Custom Feeding Agreement set out in Appendix "C" and Appendix "D" of these Program Guidelines. For greater certainty, where a Co-operative enters a Custom Feeding Agreement with a Member and a Custom Feeder, the Co-operative and Member do not also have to enter a Feeding Agreement. A Co-operative should only have a Feeding Agreement or a Custom Feeding Agreement with its Member (and Custom Feeder, if applicable).

The Custom Feeding Agreement will set out the terms and conditions in which the Member and Custom Feeder will Produce Cattle, including:

The location in which the Custom Feeder will Produce Cattle in Ontario;
The duration of the Custom Feeding;
The weight, if any, that the Cattle are to reach;
Where the Member and Custom Feeder will Produce Cattle through Member Custom Feeding and, the way the Member's Cattle will be differentiated from other Cattle being produced by the Custom Feeder;
An acknowledgement and agreement by the Member and the Custom Feeder that any debt arising from the Custom Feeding is owed by the Member to the Custom Feeder and not the Co-operative;
An acknowledgement and agreement by the Member and Custom Feeder that all legal, beneficial and equitable ownership of the Cattle is to remain with the Co-operative;
What, if any, inspection rights the Co-operative will have regarding the Cattle;
The Custom Feeder is to Produce the Cattle so the Cattle remain healthy;
The Custom Feeder is to have insurance covering its operations;
The Member and Custom Feeder are to indemnify the Co-operative;
A requirement that the Custom Feeder is to notify the Co-operative within the timelines set out in the Program Guidelines if the Member does not pay the Custom Feeder for their services when payment is due;
The grounds in which the Co-operative may repossess the Cattle;
The Co-operative consents to any enrollment of the Cattle in any type of business risk management program by the Member; and

The requirement that a Producer must have a Custom Feeding Agreement does not prevent a Co-operative's ability to give a Member written consent to place Cattle:

In a community pasture owned by the Association of Community Pastures; or
In a custom feeding facility in the event of an emergency at the Producer's

Repossession of Cattle Conditions

A Co-operative may re-possess its Cattle from its Member or Custom Feeder if:

The Member or Custom Feeder breaches a term or condition of the Purchase Order, Feeding Agreement or the Custom Feeding Agreement;
The Member or Custom Feeder breaches a covenant contained in the Purchase Order, Feeding Agreement or Custom Feeding Agreement and fails to remedy that breach for a period of ten (10) Business Days after the Co-operative has provided notice of the breach;
The Member appears to have, abandoned the Cattle;
The Member or Custom Feeder is not raising the Cattle in accordance with good agricultural practices, as determined by the Co-operative's supervisor;
The Member or Custom Feeder abandons or discontinues all or any part of their business in relation to the Purchase Order, Feeding Agreement or Custom Feeding Agreement;
The Member uses any funds under a Purchase Order for any other purpose other than to producing Cattle;
The Member Fails to pay or meet any obligations or liabilities owed to the Co-operative under any Purchase Order or Feeding Agreement;
The Member fails to pay or meet obligations or liabilities owed to the Custom Feeder under the Custom Feeding Agreement;
The Member or Custom Feeder breaches a covenant contained in the Custom Feeding Agreement and fails to remedy that breach for a period of ten (10) Business Days after the Custom Feeder has provided notice of the breach;
The Member or Custom Feeder makes representation in connection with the Purchase Order, Feeding Agreement or Custom Feeding Agreement that is, or was at the time of its making, false or misleading;
The Member becomes insolvent or there is an appointment of a receiver, manager, trustee or liquidator in respect of the Member's property;
The Member or Custom Feeder makes an assignment for the benefit of the Member's creditors;
The Member asks, in writing, that the Co-operative take the Cattle;
The Member or Custom Feeder fails to provide required information under the OIC, Program Guidelines, Purchase Order, Feeing Agreement or Custom Feeding Agreement for a period of ten (10) Business Days after receiving a written demand for the information;
The Member or Custom Feeder prevents or fails to co-operate with any audit or other inspection provided for under the OIC, Purchase Order, Feeding Agreement or Custom Feeding Agreement for a period of ten (10) Business Days after receiving a demand for such co-operation;
An execution or other legal process of any court becomes executable against the Member or Custom Feeder.

A Material Adverse Change occurs if a Co-operative repossesses any Cattle from a Member due to one of the above clauses. When this occurs, the Co-operative will follow the same rules for selling those repossessed Cattle as if those Cattle had not been re-possessed.

Selling Cattle

All Cattle purchased pursuant to a Purchase Order will be sold in the name of the Co-operative and all Proceeds from the sale of the Cattle will be paid directly to the Co-operative.

All Cattle purchased pursuant to a Purchase Order will be sold in accordance with the requirements under the Livestock and Livestock Products Act and the Farm Products Payments Act. Farmer to farmer sales are permitted under these Acts; however, it is important to note that the Co-operative will not be covered under the Ontario Beef Cattle Financial Protection Program should there be a failure to pay in a farmer to farmer transaction.

A Co-operative will only make payments to the Member after the related Cattle have been sold and the Member's obligations under that Purchase Order have been paid. A Co-operative will not make any interim payments to a Producer.

A Custom Feeder shall not encumber or sell any Cattle subject to a Custom Feeding Agreement.

Payment for Cattle

A Co-operative shall not make any interim payments to a Member in respect of any Cattle while the Member is still Producing the Cattle. For greater certainty, a Co-operative will only make payments to the Member after the cattle have been sold. Upon receiving the payment from the sale of its Cattle, the Co-operative will apply the Proceeds of that sale towards the Member's debt.

A Co-operative shall not make any payments to a Custom Feeder in respect of any Cattle on behalf of a Member while the Custom Feeder or the Member are still Producing Cattle.

When Proceeds is Greater Than Amount Owing

If the Proceeds from the sale of Cattle received by the Co-operative is greater than the Member's debt, the following will occur:

If the Co-operative is not in default of its Loan, the Co-operative will pay to the Member the difference within a reasonable time; or
If the Co-operative is in default of its Loan, the Trustee will record on the Member's behalf the related proceeds used to clear that Member's debt and any potential profits are set aside for that Member while the Co-operative's debt is being settled.

Residual Cattle

Should the Member be in possession of Residual Cattle and:

The Co-op is satisfied that any other Cattle purchased under any other active Purchase Order with that Member are accounted for;
The Member is in good standing with the Co-operative; and
If any other Member has been given Notice of a shortfall greater than the amount of the Co-operative's Assurance Account, the Co-operative shall consult with the Provincial Program Supervisor prior to initiating the transfer.

the Co-operative may transfer ownership of the Residual Cattle to that Member using a Transfer of Ownership of Cattle form similar to that in Appendix "F".

Member and Co-operative Loan Default Process — Accessible description.

When Proceeds is Less than Amount Owing

If the Proceeds from the sale of Cattle received by the Co-operative is less than the Member's debt, the following will occur:

The Co-operative will immediately provide notice to the Member the Proceeds from the sale of Cattle was insufficient to clear the Member's debt and the amount of the outstanding difference. The Member will pay the Co-operative the outstanding amount within twenty (20) Business Days of receiving the notice.
If the outstanding amount is paid, the Co-operative will clear the Member's debt in relation to that Purchase Order and the Member may remain in good standing with the Co-operative.
If the Member does not pay the remaining amount owing under the Member's debt, the Co-operative will use the related funds from that Member's Producer Deposit in the Assurance Account.
1. If the Member's debt is repaid, the Member is entitled to any remaining assurance funds and the Member may remain in good standing with the Co-operative.
2. If there is still an amount owing under the Member's debt, the Member will:
  1. Be in default on that Purchase Order (i.e. the Member is a Defaulting Member), and
  2. Be deemed to be in default on all other Purchase Orders the Member has with the Co-operative and the related Member's Producer Deposit(s) are forfeited.

Where a Member is a Defaulting Member the

Co-operative will immediately notify the Lender, Provincial Program Supervisor and the Minister's designated representative (as noted on the Guarantee Agreement);
Co-operative may re-possess all Cattle the Member purchased under any other Purchase Order the Co-operative has with the Member; and,
Member forfeits any funds from that Member's Producer Deposits in the Assurance Account to the Co-operative.

A Co-operative will only use any forfeited funds in the Assurance Account as follows:

To pay any outstanding balances owing;
If there are any funds remaining after;
1. to pay any additional expenses incurred, including as a result of the Co-operative repossessing the Cattle; and
2. If there are any funds remaining after paragraph (a) to build-up the balance in the Assurance Account for use if any other Member does not have sufficient funds in that Member's portion of the Assurance Account to cover any outstanding debt that Member owes to the Co-operative.
If there is still an outstanding debt after steps set out in paragraphs (a) and (b), the Co-operative will access the following funds in this order to clear the outstanding shortfall:
1. Any other funds or investments the Co-operative holds
2. Funds from other non-defaulting Member's Producer Deposits in the Assurance Account on a pro-rata basis.

If the Co-operative is still unable to clear the remaining debt, the Co-operative has twenty (20) Business Days from the depletion of the Assurance Account (unless an alternative arrangement has been agreed upon with their Lender) to work out any alternative payment arrangements with their Lender.

When Co-operative Does Not Pay Amount Owing

If the Co-operative does not pay the outstanding amount owing on the Loan and is unable to negotiate alternative repayment terms with their Lender, the Co-operative will be in default of the Loan and the Co-operative and the Lender will immediately notify the Provincial Program Supervisor and the Minister's designated representative (as noted on the Guarantee Agreement).

Sale of Repossessed Cattle

When Cattle are repossessed, the Co-operative will keep records of:

The Proceeds from the sale of all of the Cattle that were repossessed;
The principal and interest owing related to the Purchase Order(s) in which the Cattle were repossessed;
The costs related to repossessing the Cattle; and
The amount remaining in the Assurance Account for each Member who is not a Defaulting Member.

If Proceeds are Greater than Amounts Owing

If, the Proceeds from the sale of the repossessed Cattle are greater than the Member's debt, the Co-operative will:

Repay the principal and interest owing related to the Purchase Order(s) in which the Cattle were repossessed;
Pay costs related to repossessing the Cattle, including any reasonable costs associated with continuing to raise the Cattle, including reasonable profits pro-rata;
Replenish the assurance accounts of Members who are not Defaulting Members; and,
Pay to the Member any remaining amount.

Part VII: Defaults and Claims

Process Where Co-operative is in Default

Where a Co-operative is in default, the Co-operative will be immediately ineligible to participate in the Program and the Lender will stop providing any further funds to the Co-operative.

Minister's Actions

Upon a Co-operative defaulting, the Minister will, subject to the provisions of the Trustee Act and the Financial Administration Act, or any successor legislation, become the trustee of the Co-operative's Assurance Account and will maintain the records of individual Member assurance deposits and deposit any of those funds into the Consolidated Revenue Fund unless the law allows otherwise.

The Lender and the Minister will agree as to the time and manner of the liquidation of any Cattle and shall take into consideration maximizing the value of the Cattle. The Lender and the Minister do not have to agree as to the time and manner of liquidation of any other security the Lender holds in relation to the outstanding funds.

Maximum Amount of Guarantee Calculation

The Guaranteed Amount is twenty-five percent (25%) of the outstanding principal and interest owing on the Co-operative's debt after all Member Producer Deposits and Co-operative assets have been depleted, but before the liquidation of Co-operative Cattle held by Members who are not Defaulting Members takes place.

Liquidation of Cattle

The Proceeds from liquidation will be divided into two parts:

The amount required to fully discharge each Member's debt; and
The surplus amount owing to each Member who is not a Defaulting Member will be recorded and held separately.

Repayment of Amounts Owing

Any outstanding principal and Interest that the Co-operative owes to its Lender will be repaid in the following order:

All assets of the Co-operative
All proceeds referred to in paragraph (1) above
The Guarantee payment, and if a debt to the Lender remains,
All proceeds referred to in paragraph (2) above pro-rata.
If any funds remain after the step set out in paragraph (d) has been undertaken, those funds will be disbursed pro-rata to Members who are not a Defaulting Member.

When the Lender Makes a Claim on the Guarantee

If the Lender makes a claim on the Guarantee and:

The amount owing under the Guarantee is sufficient to fully repay the principal and Interest owing under the Loan, then any funds deposited into the Co-operative's Assurance Account as per paragraph (2) above shall, subject to any other claim having priority on those funds, be paid to the Members that generated those funds on a pro-rata basis.
The amount owing under the Guarantee is not sufficient to fully repay the principal and Interest owing under the Loan, the Lender shall be paid from any funds deposited into the Co-operative's Assurance Account under paragraph (2) above on a pro-rata basis until the outstanding amount of principal and Interest are repaid or the funds in the Co-operative's Assurance Account has been fully depleted, whichever is first.

Default Arising Other than a Co-operative's Default on a Loan

A Co-operative will be in default of its Loan if it breaches its requirements under the Program and fails to remedy the situation as required. The Lender or the Minister, as the case may be, will immediately notify the other of any default to which they become aware. The Co-operative will be immediately ineligible to participate in the Program and the Lender is prohibited from providing any further funds to the Co-operative.

The Lender will demand the Co-operative to pay all amounts owing within thirty (30) Business Days or any other such longer time as the Lender and the Co-operative agree, provided the Lender does not charge interest for that additional time.

If the Co-operative is unable to pay the amount of principal and/or interest owing under the Loan the Co-operative default process shall be initiated.

Part VIII: Emergency Declaration

The Minister may issue an Emergency Declaration setting out that an emergency situation has arisen within all or any part of Ontario. An Emergency Declaration may apply to one or more Lenders, Co-operatives, Producers (i.e. Members of the Co-operative) or Custom Feeders, as the case may be.

The Minister may issue an Emergency Declaration for any of the following situations that significantly prevents Producer's ability to sell marketable Cattle:

Natural disaster,
Disease,
Human or animal health risk,
Accidents,
Decrease in processing capacity, or
Closure of interprovincial or international markets for Cattle leaving Ontario.

The Minister will only issue an Emergency Declaration where: (1) an emergency arises as a result of any of the situations outlined in the OIC and Program Guidelines; and (2) that the Minister is of the opinion that issuing an Emergency Declaration is reasonably necessary to address an emergency situation.

Where the Minister has issued an Emergency Declaration:

The Lender and the Co-Operative may agree in writing to an extension to the term of the Loan set out in the Loan Agreement by a period that shall not exceed three (3) months beyond any extension the Lender and the Co-Operative may have already agreed to.
The Co-Operative shall extend the term of any Purchase Order the Co-operative has with its Producers in which the Emergency Declaration relates to the day before the Co-operative's Loan with the Lender is due.
The Co-operative shall inform the Minister within ten business days (10) of any extension to the term of the Loan the Co-operative has arranged with its Lender including the length of the extension to the term of the Loan.

The Minister may renew an Emergency Declaration any number of times, provided the grounds for the original declaration remain in effect. Lenders and Co-operatives will be required to re-negotiate loan extensions each time the Emergency Declaration is renewed.

Co-operatives are responsible for identifying all Producer Purchase Orders that will be subject to the extension under the Emergency Declaration and reporting the number of loan extensions to the Ministry.

The existing twelve (12) month loan period and additional three (3) month loan extension period must first be used before loan extensions be offered in an emergency situation. Loans extensions issued under the Emergency Declaration are not repayable until after any agreed upon extension has lapsed.

If a Lender and a Co-operative are unable to agree to an extension of the term of a Loan, whether it is the original Emergency Declaration or a renewal of an Emergency Declaration, then both the Producer's debt with the Co-operative and the Co-operative's Loan with the Lender will become due and payable the day before the Co-operative's loan comes due with their lender.

Part IX: Financial Guarantee

Form of Guarantee

Every Guarantee issued in respect of a Loan under the Program will be in substantially the same form as the Guarantee Agreement set out under Schedule "A" of the OIC.

Maximum Amount of Guarantee

The Guaranteed Amount is twenty-five percent (25%) of the outstanding principal and interest owing on the Loan after all Member Producer Deposits and Co-operative assets have been depleted, but before the liquidation of Co-operative Cattle held by non-defaulting members takes place.

Maximum Guarantee Payment

The maximum guarantee payment shall be the lesser of:

The remaining Co-operative debt after the liquidation of Co-operative Cattle held by Members who are not a Defaulting Member and their related Member debt is cleared; or
The maximum amount of Guarantee.

Eligibility of Loans Delivered by Guarantee

A Loan will not be eligible to be covered by a Guarantee where the Lender issued the Loan in contravention of the terms and conditions of the OIC, these Program Guidelines, the Guarantee Agreement or any Minister's Directions or a Co-operative failed to abide to a Minister's direction to stop issuing Purchase Orders.

Notice to Lender Regarding Payment of Guarantee

The Minister will send a notice to the Lender within sixty (60) days of receiving a claim request if the Minister is to make a payment on a Guarantee or the reasons for denying a claim.

Crown's Right on Payment of Guarantee

If the Minister makes a payment on a Guarantee and the Lender recovers any money in respect of the Loan, the Minister is entitled to a recovery payment.

Lenders/Co-operatives/Members Retaining Records

Program related records and agreements are to be retained by their respective party for a period of at least seven (7) years from the date in which the Loan was issued.

Reporting

Beginning 2018 and annually thereafter, each Lender participating in the Program shall report to the Minister by January 20, the interest rate(s) charged to a Co-operative during the previous calendar year.

Each Co-operative participating in the Program shall provide the Minister with the following reports:

An annual report by February 15^th that sets out:
1. Total membership of the Co-operative,
2. Number of Members of the Co-operative that are under forty (40) years of age,
3. Number of active Members as of December 31^st,
4. Number of Cattle purchased and sold in the Calendar Year,
5. Number of Cattle remaining as of December 31^st,
6. The outstanding Member debt remaining as of December 31^st. The total of all Member borrowing during the Calendar Year; and
Any other reports that the Minister may request from time to time in accordance with any requirements set out in the request.

Lender/Co-operative/Member Audits

All Lenders, Co-operatives, Members and Custom Feeders will permit any inspection that may be requested by the Minister and will provide reasonable assistance. Any requested information will be provided within ten (10) Business Days of the request being made, unless more time has been provided in the request.

Members and Custom Feeders will permit the Minister, Auditor General or the Administrator, if the Minister has appointed an Administrator for the Program, as well as their respective delegates or representative, carrying out, from time to time, audits to confirm the Producer or Custom Feeder's compliance with the terms and conditions of the OIC, Program Guidelines, Purchase Orders issued to a Member, Feeding Agreements entered with the Member or Custom Feeding Agreements entered with the Custom Feeder.

General

Any payments owing to the Crown as a result of the Minister making a payment on the Guarantee will be considered a debt that is owed to the Crown and may be set-off against any other payment the Crown or His Majesty the King in Right of Canada may owe to the person indebted to the Crown in accordance with section 43 of the Financial Administration Act and/or section 155 of the Financial Administration Act (Canada).

The Minister may charge interest on any debt that is owed under this Program at the applicable interest rate that is being charged by the Crown for debts owing to the Crown.

Any Co-operative or Member that willfully provides or has provided false or misleading information under the Program shall have his/her/its/their participation in the Program terminated and shall be prohibited from participating in the Program for a minimum of five (5) years from the date in which the false or misleading information is discovered.

The Minister, Lender, Co-operative – as well as any of their respective employees or agents – may collect, use and/or disclose an individual's Social Insurance Number where that individual operates a business as a sole proprietor or operates within a partnership as an unincorporated entity for tax, auditing and debt collection purposes.

Part X: Loan Requirements

Eligible Loans to the Co-operative

A Loan is eligible under the Program if it meets the requirements set out in the OIC and these Program Guidelines.

Co-operative Loan Requirements

The Loan with a Co-operative will meet the following requirements:

The Loan is for the purposes of providing a Co-operative with funds to allow the Co-operative to issue Purchase Orders so that Members can Produce Cattle;
The Loan prohibits the Co-operative from using any funds provided under the Loan for any other purposes than to allow the Co-operative to issue Purchase Orders;
The Loan is entered into with a Co-operative in good standing;
The Co-operative passes a credit review conducted by the Lender;
The quantum of the Loan shall not be larger than the Co-operative's Allocation;
The Loan is secured by,
1. A registered or otherwise perfected GSA whereby the Lender has a first charge security interest in the Co-operative's Cattle;
2. A priority agreement, where any existing charge or lien with another creditor sets out that the Lender's GSA ranks in priority to the security held by any other creditor; or
3. A PMSI that is registered or otherwise perfected in accordance with the Personal Property Security Act against the Co-operative's Cattle such that the Lender has a first charge security interest in the Co-operative's Cattle;
The debt from the Purchase Order issued to a Member shall be repaid on the earlier of:
1. The Lender's demand, or
2. The expiration of a term of up to twelve (12) months with a provision for an extension of up to three (3) additional months upon the agreement of the Lender and the Co-operative;
The Loan shall be repayable at any time without notice, penalty or bonus;
The Loan complies with the terms and conditions of the OIC, these Program Guidelines and the Guarantee Agreement;
The Loan Agreement prohibits the Co-operative from assigning the Loan;
The Loan Agreement provides that the Loan shall be in default upon the occurrence of any one or more of the following:
1. Any representation made or information the Co-operative provides to the Lender is, or was at the time of its making, false or misleading,
2. The Co-operative uses the funds from the Loan for any other purpose other than to issue Purchase Orders to its Members for the purposes of Producing Cattle,
3. The failure of the Co-operative to pay or otherwise perform as and when due, whether by maturity or by acceleration of, any obligations, liabilities or indebtedness owed to the Lender in relation to the Loan,
4. The Co-operative breaches a covenant in the Loan Agreement and fails to remedy that breach for a period of at least ten (10) Business Days after the Lender has provided notice of the breach,
5. The insolvency of the Co-operative or the appointment of a receiver, manager, trustee or liquidator in respect of any of the Co-operative's property,
6. The Co-operative makes an assignment for the benefit of the Co-operative's creditors,
7. The institution of a proceeding in bankruptcy against the Co-operative, whether voluntary or involuntary, or the institution of proceedings by the Co-operative to obtain relief against the Lender or any other creditors of the Co-operative,
8. Any execution or other legal process of any court becomes enforceable against the Co-operative,
9. The Co-operative discontinues or abandons all or any part of its business operation in relation to the Loan,
10. A material adverse change occurs,
11. The Co-operative prevents or fails to co-operate with any audit or other inspection,
12. The Co-operative fails to provide any information required to be provided under the OIC, the Program Guidelines, the Guarantee Agreement or the Loan Agreement; and

The Lender will not assign all or a part of any Loan to which the Guarantee applies to any other Person without the Minister's prior written consent.

Appendix "A" Purchase Order/Feeding Agreement

Part "A" — General Terms And Conditions

Article A1 — Interpretation

A1.01 Definitions. For the purposes of this Agreement, the terms below will have the following meanings:

"Agreement" means this Purchase Order/Feeding Agreement, as set out in:

This Part "A"; and
Part "B",

as they may be amended.

"Assurance Account" means a trust account established by the Co-Op in which the Producer Deposit is deposited and includes any other funds the Co-Op may be holding for a Producer.

"Business Day" means any working day, Monday to Friday, inclusive, but excludes statutory and other holidays on which the Government of Ontario has elected to be closed for business.

"Cattle" means steers and heifers to be finished for slaughter but excludes cattle to be sold for breeding purposes.

"Co-Op" means a feeder Cattle finance Co-operative established under the Co-operatives Corporations Act.

"Crown" means:

His Majesty the King in Right of Ontario; or
Her Majesty the Queen in Right of Ontario,

depending on who is the Head Of State for Canada.

"Custom Feeder" means the Person that is going to Produce Cattle for the Producer.

"Custom Feeding" means an arrangement between a Producer and a Custom Feeder whereby the Custom Feeder agrees to Produce Cattle on behalf of the Producer.

"Custom Feeding Agreement" means an agreement between the Co-Op, the Producer and a Custom Feeder setting out the terms and conditions under which Custom Feeding will be undertaken.

"Draw" means the amount of money the Co-Op will make available to the Producer to purchase Cattle, as set out in section B1.01 of Part "B".

"Emergency Declaration" means a declaration issued pursuant to section 15.1(1) of the OIC.

"Guidelines" means the document entitled Ontario Feeder Cattle Loan Guarantee Guidelines.

"Interest" means the amount of interest being charged on the Spend, as set out under section B1.02 of Part "B".

"Lender" means the person who lent money to the Co-Op.

"Material Adverse Change" means a change in the financial or other condition of the Producer, or in the state or circumstances of any property subject to a security interest in relation to this Agreement that would, in the opinion of a reasonable and prudent lender, be considered likely to cause a significant diminution in the earning power or the value of the business of or in the ability of the Producer to perform any of the Producer's obligations with respect to this Agreement.

"Ministry" means the ministry of the Minister.

"OIC" means Order-in-Council 702/2016.

"Part "A"" means this Purchase Order/Feeding Agreement – Part "A" – General Terms And Conditions, as set out in Appendix "A" of the Guidelines.

"Part "B"" means the Purchase Order/Feeding Agreement – Part "B" – Operational Requirements, as set out in Appendix "A" of the Guidelines.

"Parties" means the Co-Op and the Producer collectively.

"Party" means either the Co-Op or the Producer, depending on the context.

"Person" means a legal entity.

"Proceeding" means any causes of action, actions, claims, demands, applications, lawsuits or other judicial or quasi-judicial-based proceeding.

"Produce Cattle" and "Producing Cattle" means the further feeding of Cattle or the finishing of Cattle for slaughter.

"Producer" means a Person that is Producing Cattle.

"Producer Deposit" means five percent (5%) of the total amount provided under this Agreement that the Producer provides to the Co-op.

"Program" means the Ontario Feeder Cattle Loan Guarantee Program.

"Requirements Of Law" means all applicable statutes, codes, acts, ordinances, orders, approvals, decrees, by-laws, rules, regulations, official plans, permits, licenses, authorizations, directions, injunctions and agreements with all authorities that now or at any time hereafter may be applicable to Cattle.

"Residual Cattle" means any remaining unsold Cattle purchased under this Agreement after the Producer has fully repaid the Co-op from the proceeds generated by the sale of some of the Cattle.

"Spend" means what the Producer spent out of the money the Co-Op made available to the Producer under section B1.01 of Part "B", as set out under section B1.01 of Part "B". The Spend represents the money the Producer is to repay to the Co-Op.

"Supervisor" means the individual occupying that position in the Co-Op.

A1.02 Interpretation. For the purposes of interpreting this Agreement:

Words in the singular include the plural and vice versa;
The headings do not form a part of this Agreement – they are for reference purposes only and will not affect the interpretation of this Agreement;
Any reference to dollars or currency in this Agreement will be to Canadian dollars and currency;
Any reference to a statute means a statute of the Province of Ontario, unless otherwise indicated;
Any reference to a statute is to that statute and to the regulations made pursuant to that statute as they may be amended from time to time and to any statute or regulations that may be passed that have the effect of supplanting or superseding that statute or regulation unless a provision in this Agreement provides otherwise
Any reference to the OIC is to the OIC as it may be amended from time to time and to any Order-in-Council that may be passed that has the effect of supplanting or superseding the OIC unless a provision in this Agreement provides otherwise; and
The words "include", "includes", and "including" denote that the subsequent list is not exhaustive.

Article A2 — Term Of Purchase Order/Feeding Agreement

A2.01 Effective Date. This Agreement comes into effect on the date the Co-Op signs Part "B".

A2.02 Expiry Date. This Agreement expires three hundred sixty-five (365) days after the Effective Date, unless:

This Agreement is extended upon agreement by the Parties for a period not to exceed the time the Lender and the Co-Op agreed to extend the Loan, in which case, this Agreement will remain in in effect for a period of ninety (90) days after the day this Agreement was extended by the Parties; or
This Agreement is extended beyond the time period set out under section A2.02(a) of this Part "A" because of an Emergency Declaration, in which case, this Agreement will remain in effect for a period of ninety (90) days after the day this Agreement was extended by the Parties.

In the event this Agreement is extended by one or more subsequent Emergency Declarations, this Agreement will remain in effect for a period of ninety (90) days after the day this Agreement was extended by the last Emergency Declaration.

Article A3 — Ownership Of Cattle

A3.01 Co-Op Retains Ownership Of Cattle. Despite anything else contained in this Agreement, at law or in equity, the Producer agrees that the legal, beneficial and equitable ownership of Cattle purchased under this Agreement remains with the Co-Op at all times.

A3.02 Producer To Inform Any Creditors Or Would-Be Creditors Co-Op Owns The Cattle. Without limiting any other obligations the Producer may have under this Agreement, the Producer will inform its existing creditors as well as any would-be future creditors the Co-Op has all legal, beneficial and equitable ownership in the Cattle purchased under this Agreement and those Cattle will in no way be considered security for any Producer indebtedness or form part of the Producer's estate for the purposes of any insolvency proceedings.

A3.03 Co-Op To Pay Producer Net Balance From Sale Of Cattle. Despite the ownership of the Cattle set out under section A3.01 of Part "A", the Co-Op will pay to the Producer the net balance between the total sale price of the Cattle purchased under this Agreement and the amount owing under this Agreement, including any interest earned thereon, in accordance with section A7.07 of Part "A".

Article A4 — Producer's Representations, Warranties And Covenants

A4.01 Producer's Knowledge. The Producer represents and warrants it has read and understands:

The OIC;
The Guidelines; and
This Agreement.

A4.02 Producer Is Bound. The Producer covenants to be bound by:

The OIC;
The Guidelines; and
This Agreement.

A4.03 Producer's Authority To Execute Agreement. The Producer represents and warrants it has:

The full power and authority to enter this Agreement; and
Taken all necessary actions to authorize the execution of this Agreement.

A4.04 Producer Not Indebted To The Crown. The Producer represents and warrants it is not indebted to the Crown.

A4.05 Producer Not Indebted To Other Co-operatives. The Producer represents and warrants it is not indebted to other Co-operatives under the Program.

A4.06 Producer Deposit Is Not From Loan Or Other Indebtedness. The Producer represents and warrants the Producer Deposit being provided in relation to this Agreement is not from a loan or other form of indebtedness.

A4.07 Producer Has Financial Resources To Repay Co-Op. The Producer represents and warrants it has the financial resources necessary to repay the Co-Op on any Spend the Producer is going to make under this Agreement.

A4.08 Producer Has Financial Resources And Expertise To Produce Cattle. The Producer represents and warrants it has the financial resources and expertise necessary to Produce Cattle under this Agreement and will continue to have the financial resources and expertise necessary to Produce Cattle during the term of this Agreement.

A4.09 No Agreements Restricts Co-Op's Ability To Exercise Rights Under This Agreement. The Producer represents and warrants it is not a party to any agreement restricting the Co-Op's ability to exercise any rights the Co-Op may have under this Agreement.

A4.10 No Proceedings Against Producer That Could Cause Material Adverse Change. The Producer represents and warrants there are no outstanding Proceedings or other expenses or losses owing by it that would cause or is likely to cause a Material Adverse Change during the term of this Agreement.

A4.11 Information Producer Provided To Co-Op Is Correct. The Producer represents and warrants any information it provided to the Co-Op in relation to this Agreement is true and accurate in all material respects as of the date the Co-Op signed Part "B".

A4.12 Producer To Provide Supporting Documentation. The Producer covenants to provide to the Co-Op with, upon request, and within the time-period set out in the Notice, documents proving the matters referred to in this Article A4 of Part "A".

A4.13 Producer To Make Sure Representations, Warranties And Covenants Remain True. The Producer covenants to take, or not take, as the case may be, any actions required to ensure the representations, warranties and covenants set out in this Article A4 of Part "A" continue to be true throughout the term of this Agreement.

A4.14 Producer To Notify Co-Op Of Any Changes To Representations, Warranties And Covenants. The Producer covenants to advise the Co-Op within five (5) Business Days of:

Any changes affecting its representations, warranties and covenants set out in this Article A4 of Part "4"; and
Any Proceedings commenced against it which could or would reasonably adversely affect in a material manner its ability to comply with the terms and conditions of this Agreement.

A4.15 Producer's Representations, Warranties And Covenants For Benefit Of The Co-Op. The Producer acknowledges and agrees the representations, warranties and covenants set out in this Article A4 of Part "A" are for the sole benefit of the Co-Op.

A4.16 Co-Op's Reliance On Producer's Representations, Warranties And Covenants. The Producer acknowledges and agrees the Co-Op is relying on all representations, warranties and covenants set out in this Article A4 of Part "A".

Article A5 — Co-Op's Representations, Warranties and Covenants

A5.01 Co-operative's Knowledge. The Co-Op represents and warrants it has read and understands:

The OIC;
The Guidelines; and
This Agreement.

A5.02 Co-Op Is Bound. The Co-Op covenants to be bound by:

The OIC;
The Guidelines; and
This Agreement.

A5.03 Co-Op's Authority To Execute Agreement. The Co-Op represents and warrants it has:

The full power and authority to enter this Agreement; and
Taken all necessary actions to authorize the execution of this Agreement.

A5.04 Co-Op's Representations, Warranties And Covenants For Benefit Of The Producer. The Co-Op acknowledges and agrees the representations, warranties and covenants set out in this Article A5 of Part "A" are for the sole benefit of the Producer.

A5.05 Producer Reliance On Co-Op's Representations, Warranties And Covenants. The Co-Op acknowledges and agrees the Producer is relying on all representations, warranties and covenants set out in this Article A5 of Part "A".

Article A6 — Producer's Obligations Under The Purchase Order/Feeding Agreement

A6.01 Producer To Use Draw To Purchase Cattle. The Producer will only use the money provided by the Draw to purchase Cattle. For greater clarity, this includes paying for any related ancillary costs or expenses to the purchase of the Cattle at the time the Cattle are purchased.

A6.02 Cattle Purchased In Name Of Co-Op. The Producer will only purchase Cattle with money provided by the Draw in the name of the Co-Op.

A6.03 Produced Cattle To Be Raised In Name Of Co-Op. The Producer will only Produce Cattle in the name of the Co-Op.

A6.04 Payment Of Insurance On Cattle. The Producer will pay the Co-Op for the insurance in accordance with section B3.01 of Part "B".

A6.05 Business Insurance. The Producer will have, and maintain while this Agreement is in effect, at its own cost and expense, with insurers having a secure A.M. Best rating of B+ or greater, or the equivalent, all necessary and appropriate insurance that a prudent person Producing Cattle would have, including commercial general liability insurance on an occurrence basis for third party bodily injury, personal injury and property damage. The insurance policy will include the following:

A cross-liability clause;
Contractual liability charge; and
A thirty (30) day written notice of cancellation or termination provision.

The policy will also include the Co-Op as additional insureds from the date the Producer signs Part "B" and will maintain said insurance while this Agreement remains in effect with respect to the Producer's obligations under, or otherwise in connection with, this Agreement.

A6.06 Proof Of Insurance. The Producer will provide the Co-Op with proof that confirms the insurance coverage required under section A6.06 of this Part "A" is in place in the manner and within the time limit set out in the Notice.

A6.07 Copy Of Insurance Policy. The Producer will provide the Co-Op, upon its request, a copy of any insurance policy the Producer is required to have under section A6.06 this this Part "A" within the time limit set out in the Notice.

A6.08 Identification Of Cattle. The Producer will mark the Cattle as set out under section B1.01 of Part "B".

A6.09 Location Of Cattle. The Producer will only Produce Cattle at the place set out in section B1.02 of Part "B", unless the Producer has received the prior written consent of the Co-op to place the Cattle in a community pasture owned by the Association of Community Pastures, in which case the Cattle will be raised at the community pasture in which the Co-Op consented. In the event an emergency arises that requires the Cattle to be moved from the location set out in section B1.02 of Part "B", the Producer may move the Cattle to a location of their chOICe, provided the Producer provides the Co-Op with notice of the movement as soon as practicable thereafter and the Co-Op consents to where the Cattle were moved. If the Co-Op does not consent to that location, the Producer will follow any directions issued by the Co-Op regarding their location.

A6.10 Producing Cattle. The Producer will:

Keep the Cattle under the Producer's charge, management or control throughout the term of this Agreement;
Produce Cattle in accordance with all Requirements Of Law;
Maintain the health of the Cattle and provide proper veterinary services to the Cattle;
Forthwith notify the Supervisor of any morbidity or mortality of the Cattle;
Feed the Cattle and make them ready for market in accordance with good agricultural practices, as determined by the Co-op and under the Supervisor's overall supervision; and
Deliver the Cattle for sale at such time as may be requested by the Supervisor.

A6.11 Producer Responsible For All Costs Of Producing Cattle. The Producer acknowledges and agrees the Producer is responsible for all costs related to Producing Cattle under this Agreement. The Producer further acknowledges and agrees that the Co-Op has no legal or other obligation to pay for any costs related to Producing Cattle the Producer incurs under this Agreement.

A6.12 Indemnification Of Co-Op. The Producer will indemnify and hold harmless the Co-Op, its directors, officers, employees and servants, from and against all suits, judgments, claims, demands, expenses, actions, causes of action and losses (including, without limitation, reasonable legal expenses), relating to Producing Cattle or the sale of the Cattle.

A6.13 Access To Facilities Where Cattle Are Being Raised. The Producer will allow employees of the Co-Op to have reasonable access, upon being given a minimum of twenty-four (24) hours' Notice, to the facilities where the Cattle are being raised for the purposes of inspecting the facilities and the Cattle. Without limiting the generality of the foregoing, access includes access to any records under the Producer's charge, management or control related to the Produced Cattle.

A6.14 Proceeds From Sale Of Cattle. The Producer will do or cause to be done anything necessary to ensure the proceeds from the sale of the Cattle are paid to the Co-Op.

A6.15 Payment Of The Spend. The Producer will pay the Co-Op the Spend, plus Interest.

A6.16 Payment Of Outstanding Amount Owing Under The Spend. In the event the proceeds from the sale of the Cattle are insufficient to cover the Spend, the Producer will pay to the Co-Op the difference, including any Interest owing thereon, within twenty (20) Business Days of receiving Notice from the Co-Op about the outstanding amount owing from the Spend.

Article A7 — Co-Op's Obligations Under The Purchase Order/Feeding Agreement

A7.01 Make Draw Available To Producer. The Co-Op will make up to the amount set out in section B1.01 of Part "B" available to the Producer.

A7.02 Deposit Producer Deposit Into Co-operative's Assurance Account. The Co-Op will deposit the Producer Deposit into the Co-Op's Assurance Account

A7.03 Pay Seller Of Cattle In Reasonable Time. The Co-Op will pay the seller of Cattle in a reasonable time.

A7.04 Allow Producer To Enroll Cattle In Risk Management Programs. The Co-Op will allow the Producer to enroll the Cattle in any risk management programs in the Producer's own name and receive any benefits from those risk management programs directly.

A7.05 Exception. Despite section A7.05 of this Part "A", the Producer will assign any benefits the Producer may be eligible to receive for the Cattle under a risk management program the Producer has enrolled to the Co-Op as security if required to do so under any terms or conditions set out under the Program.

A7.06 Insurance. The Co-Op will have and maintain until the Cattle are sold insurance on the Cattle that covers the fair market value of the Cattle throughout the Term of the Agreement.

A7.07 Co-Op To Pay Producer Net Balance From Sale Price Of Cattle. The Co-Op will pay to the Producer the net balance between the total sale price of the Cattle purchased pursuant to this Agreement and the amount of the Spend, provided:

The Producer is not indebted to the Co-Op; or
In the event the Producer is indebted to the Co-Op, the Co-Op may use the net balance between the total sale price of the Cattle purchased pursuant to the Draw and the amount owing under the Draw to set-off against any debt that the Producer Is to the Co-Op; and
The Co-op is not in default of its Loan with the Lender.

A7.08 Return Of Producer Deposit. The Co-Op will return the Producer Deposit in accordance with Program requirements and Co-Op bylaws, provided:

The Producer is not indebted to the Co-Op; or
No other producer within the Co-Op has been given Notice of a shortfall or is in default of making a payment owing under an agreement that producer entered with the Co-Op to Produce Cattle under the Program.

In the event the Producer is indebted to the Co-Op, the Co-Op may use the Producer Deposit provided under this Agreement to set-off against any debt that the Producer owes to the Co-Op.

A7.09 Transfer Of Ownership In Residual Cattle. The Co-Op may transfer ownership of any Residual Cattle within a reasonable time to the Producer, provided:

The Producer is in good standing with the Co-Op; and
The Co-Op is not in default or aware it could be in default of making a payment owing to a Lender.

The Parties agree the Co-Op retains all legal, beneficial and equitable ownership in the Cattle until the Co-Op executes a transfer or ownership, which upon execution, transfers all legal, beneficial and equitable ownership in the Residual Cattle from the Co-Op to the Producer.

Article A8 — Notice To Producers

A8.01 Notice To Producers. The Producer may not receive part or all the net proceeds from the sale of Cattle or have their Producer Deposit returned as per sections A7.07 and A7.08 of this Part "A" if the Co-Op is in default of its Loan with the Lender.

Article A9 — Co-Op's Right To Remove Cattle

A9.01 The Co-Op's Right To Remove Cattle. The Producer acknowledges and agrees the Co-Op may remove some or all the Cattle purchased under this Agreement and sell those Cattle if one or more of the following circumstances occurs:

The Producer breaches a term or condition of this Agreement;
The Producer breaches a covenant in this Agreement and fails to remedy that breach for a period of ten (10) Business Days after the Co-Op has provided Notice of the breach;
A representation the Producer made in connection with this Agreement is, or was at the time of making, false or misleading;
The Producer appears to have abandoned the Cattle;
The Producer is not Producing Cattle in accordance with good agricultural practices, as determined by the Co-Op;
The Producer fails to pay or otherwise perform as and when due any obligations or liabilities owed to the Co-Op under this Agreement or any other agreement the Producer has entered with the Co-Op under the Program;
The Producer is insolvent or there is an appointment of a receiver, manager, trustee or liquidator in respect of the Producer's property;
The Producer makes an assignment for the benefit of its creditors;
A proceeding in bankruptcy, whether voluntary or involuntary, is initiated against the Producer or the Producer seeks to obtain relief against the Co-Op or another creditor of the Producer via another Proceeding;
The Producer abandons of discontinues all or any part of its business in relation to this Agreement;
An execution or other legal process of any court becomes executable against the Producer;
A Material Adverse Change occurs;
The Producer prevents or fails to co-operate with any audit or other inspection provided for under the OIC, the Guidelines or this Agreement for a period of ten (10) Business Days after receiving demand for such co-operation;
The Producer fails to provide any information required to be provided under the OIC, the Guidelines or this Agreement for a period of ten (10) Business Days after receiving Notice of the request;
The Producer asks the Co-Op, in writing, to take the Cattle; or
The Producer uses any part of the funds provided under this Agreement for any other purposes than Producing Cattle.

Where the Co-Op removes any Cattle pursuant to this section A9.01 of Part "A", section A7.08 of Part "A" has no application to those possessed Cattle.

A9.02 Debt Owing To Co-Op For Removal Of Cattle. The Producer acknowledges and agrees the Producer is indebted to the Co-Op for all reasonable costs the Co-Op incurs to remove the Cattle pursuant to section A9.01 of this Part "A" as well as any subsequent management of the Cattle, including the sale of the Cattle, and that this debt is in addition to what the Producer may owe the Co-Op in relation to the Draw provided under this Agreement. The Producer further acknowledges and agrees that the Producer will repay any debt owing to the Co-op for any reasonable costs the Co-Op incurs from taking any action pursuant to section A9.01 of this Part "A" as well as any subsequent management of the Cattle, including the sale of the Cattle.

A9.03 Payment To Producer. Where Cattle are sold pursuant to section A9.01 of this Part "A", the Producer acknowledges and agrees the Producer will only be paid any remaining amount of money after:

The Producer's debt owing under this Agreement has been fully repaid, including any Interest thereon; and
The Co-Op's reasonable costs associated with removing the Cattle pursuant to section A9.01 of this Part "A" as well as managing the Cattle, including any sale of the Cattle.

Article A10 — General Terms And Conditions For Purchase Order/Feeding Agreement

A10.01 Representatives May Bind Parties. The Parties represent and warrant their respective representatives have the authority to legally bind them to the extent permissible by law.

A10.02 Terms Binding. The Parties will take all reasonable measures to ensure their officers, directors, employees, agents and third-party contractors are bound to observe all terms and conditions of this Agreement.

A10.03 Agreement Binding. This Agreement will enure to the benefit of and be binding upon the Parties, their successors, executors, administrators and their permitted assigns.

A10.04 Waivers In Writing. If a Party fails to comply with any term of this Agreement, that Party may only rely on a waiver of the other Party if the other Party has provided a written waiver in accordance with the Notice provisions set out under section A10.12 of Part "A". Any waiver must refer to a specific failure to comply and will not have the effect of waiving any subsequent failures to comply.

A10.05 Tolerance Or Indulgence Of A Breach Not A Waiver. Any failure by one Party to insist on one or more instances of strict compliance by another Party of any of the terms and conditions in this Agreement will not be construed as a waiver by the Party that is tolerating the breach and the obligations of the other Party with respect to such compliance will continue in full force and effect.

A10.06 Time Is Of The Essence. Time is of the essence in the performance and observation of the terms and conditions of this Agreement. No extension or variation of time will operate as a waiver of this provision.

A10.07 No Assignment. The:

Co-Op will not assign this Agreement to any other person without the prior written consent of the Minister and the Lender; and
Producer will not assign this Agreement to any other person without the prior written consent of the Co-Op.

A10.08 No Amendment. Neither Party will amend this Part "A":

Without obtaining the prior written consent of the Minister and the Lender; and
An amending agreement in writing, that is dated and signed by both Parties is made.

A10.09 Severability Of Provisions. The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of any other provision of this Agreement. Any invalid or unenforceable provision will be deemed to be severed from this Agreement.

A10.10 Governing Law. This Agreement and the rights, obligations and relations of the Parties will be governed by and construed in accordance with the laws of the Province of Ontario and the applicable federal laws of Canada. Any actions or proceedings in relation to this Agreement will be conducted in Ontario.

A10.11 Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter contained herein and supersedes all prior oral or written representations or agreements.

A10.12 Notice. Notices will be in writing and will be delivered by postage-prepaid mail, personal delivery or Email and will be addressed to the Co-Op and the Producer respectively, as set out in section B2.03 of Part "B".

Notices will be deemed to have been received:

In the case of postage-prepaid mail, five (5) Business Days after such Notice is mailed; or
In the case of personal delivery, facsimile or Email, one (1) Business Day after such Notice is received by the other Party.

In the event of a postal disruption, Notices will be given by personal delivery or by facsimile or Email. Unless the Parties expressly agree in writing to additional methods of Notices, Notices may only be provided by the methods set out in this section A10.12 of Part "A".

The Parties agree for the purposes of this section A10.12 of Part "A", the names of the individuals may be changed without amending this Agreement through the Party making the change providing written notice to the other Party of said change.

A10.13 Counterparts. Part "B" may be signed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

A10.14 Survival. The rights and obligations set out under Articles A1 and A3 as well as sections A6.08. A6.09, A7.07, A7.08, A9.02, A9.03, A10.06, A10.08, A10.09, A10.10, A10.11, A10.12 and A10.14 of this Part "A" and all applicable definitions, cross-referenced provisions will continue in full force and effect for a period of seven (7) years from the expiry or termination of this Agreement.

Purchase Order/Feeding Agreement

Part "B" — Operational Requirements

Purchase Order Number:

Between:

(the "Producer")

and

(the "Co-Op")

In consideration of the covenants and agreements contained in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which is expressly acknowledged, the Parties agree as follows:

Part B1 — The Draw

B1.01 The Draw. The Co-Op will provide up to the following Draw $____ to the Producer to purchase Cattle in the name of the Co-Op.

B1.02 Interest. The Producer will pay simple Interest on the Spend at a floating rate of ____% after the Cattle are sold.

Part B2 — Identification + Location Of Cattle

B2.01 Identification Of Cattle. The Cattle will be identified by:

B2.02 Location Of Cattle. The Cattle will be located at:

Part B3 — General Terms And Conditions

B3.01 Cattle Insurance. The Producer will pay insurance at $____ per head of Cattle per day or a fee of $____ per head of Cattle.

B3.02 Business Insurance. The Producer will have at least $____ in insurance.

B3.03 Notices. All Notices under this Agreement will be provided to:

To The Producer
Attention: ____________________
Address: ____________________
Email: ____________________

To The Co-Op
Attention: ____________________
Address: ____________________
Email: ____________________

B3.04 Agreement. The Agreement consists of Part "A" and this Part "B" (both of which are set out as Appendix "A" of the Guidelines).

B3.05 Terms. Capitalized terms not defined herein have the same meaning as set out in Part "A".

In Witness whereof, the Parties have executed this Part "B" on the dates indicated below:

____________________ (print Producer's legal name)

____________________ (print Producer representative's name)

____________________ (signature of Producer's representative)

I have the authority to bind the Producer.

____________________ Date

____________________ (print Co-Op's legal name)

____________________ (print Co-Op representative's name)

____________________ (signature of Co-Op's representative)

I have the authority to bind the Co-op.

____________________ Date

Part B4 — The Spend

B4.01 The Spend. The Spend under this Purchase Order is as follows:

Expense: Cattle
Amount: $____

Expense: Co-op Charges
Amount: $____

Expense: Ancillary Charges
Amount: $____

Expense: Insurance
Amount: $____

Expense: Other Charges
Amount: $____

Expense: Taxes
Amount: $____

Expense: Total Spend
Amount: $____

B4.02 Total Number Of Cattle Purchased. The Producer purchased ____ head of Cattle under the Spend.

I certify the Total Spend set out in section B4.01 of this Part "B" is correct.

____________________ (print Producer's legal name)

____________________ (print Producer representative's name)

____________________ (signature of Producer's representative)

____________________ Date

I have the authority to bind the Producer.

Appendix "B" Purchase Order

Purchase Order — Part "A" — General Terms And Conditions

Article A1 — Interpretation

A1.01 Definitions. For the purposes of this Purchase Order, the terms below will have the following meanings:

"Agreement" means this Purchase Order, as set out in:

This Part "A"; and
Part "B",

as they may be amended.

"Assurance Account" means a trust account established by the Co-Op in which the Producer Deposit is deposited and includes any other funds the Co-Op may be holding for a Producer.

"Business Day" means any working day, Monday to Friday, inclusive, but excludes statutory and other holidays on which the Government of Ontario has elected to be closed for business.

"Cattle" means steers and heifers to be finished for slaughter but excludes cattle to be sold for breeding purposes.

"Co-Op" means a feeder Cattle finance Co-operative established under the Co-operatives Corporations Act.

"Crown" means:

His Majesty the King in Right of Ontario; or
Her Majesty the Queen in Right of Ontario,

depending on who is the Head Of State for Canada.

"Custom Feeder" means the Person that is going to Produce Cattle for the Producer.

"Custom Feeding" means an arrangement between a Producer and a Custom Feeder whereby the Custom Feeder agrees to Produce Cattle on behalf of the Producer.

"Custom Feeding Agreement" means an agreement between the Co-Op, the Producer and a Custom Feeder setting out the terms and conditions under which Custom Feeding will be undertaken.

"Draw" means the amount of money the Co-Op will make available to the Producer to purchase Cattle, as set out in section B1.01 of Part "B".

"Emergency Declaration" means a declaration issued pursuant to section 15.1(1) of the OIC.

"Guidelines" means the document entitled Ontario Feeder Cattle Loan Guarantee Guidelines.

"Interest" means the amount of interest being charged on the Spend, as set out under section B1.02 of Part "B".

"Lender" means the person who lent money to the Co-Op.

"Material Adverse Change" means a change in the financial or other condition of the Producer, or in the state or circumstances of any property subject to a security interest in relation to this Purchase Order that would, in the opinion of a reasonable and prudent lender, be considered likely to cause a significant diminution in the earning power or the value of the business of or in the ability of the Producer to perform any of the Producer's obligations with respect to this Purchase Order.

"Ministry" means the ministry of the Minister.

"OIC" means Order-in-Council 702/2016.

"Part "A" means the Purchase Order – Part "A" – General Terms And Conditions, as set out in Appendix "B" of the Guidelines.

"Part "B" means the Purchase Order – Part "B" – Operational Requirements, as set out in Appendix "B" of the Guidelines.

"Parties" means the Co-Op and the Producer collectively.

"Party" means either the Co-Op or the Producer, depending on the context.

"Person" means a legal entity.

"Proceeding" means any causes of action, actions, claims, demands, applications, lawsuits or other judicial or quasi-judicial-based proceeding.

"Produce Cattle" and "Producing Cattle" means the further feeding of Cattle or the finishing of Cattle for slaughter.

"Producer" means a Person that is Producing Cattle.

"Producer Deposit" means five percent (5%) of the total amount provided under this Purchase Order that the Producer provides to the Co-op.

"Program" means the Ontario Feeder Cattle Loan Guarantee Program.

"Residual Cattle" means any remaining unsold Cattle purchased under this Purchase Order after the Producer has fully repaid the Co-op from the proceeds generated by the sale of some of the Cattle.

"Spend" means what the Producer spent the money the Co-Op made available to the Producer under section B1.01 of Part "B", as set out under section B3.01 of Part "B". The Spend represents the money the Producer is to repay to the Co-Op.

"Supervisor" means the individual occupying that position in the Co-Op.

A1.02 Interpretation. For the purposes of interpreting this Purchase Order:

Words in the singular include the plural and vice versa;
The headings do not form a part of this Purchase Order – they are for reference purposes only and will not affect the interpretation of this Purchase Order;
Any reference to dollars or currency in this Purchase Order will be to Canadian dollars and currency;
Any reference to a statute means a statute of the Province of Ontario, unless otherwise indicated;
Any reference to a statute is to that statute and to the regulations made pursuant to that statute as they may be amended from time to time and to any statute or regulations that may be passed that have the effect of supplanting or superseding that statute or regulation unless a provision in this Purchase Order provides otherwise
Any reference to the OIC is to the OIC as it may be amended from time to time and to any Order-in-Council that may be passed that has the effect of supplanting or superseding the OIC unless a provision in this Purchase Order provides otherwise; and
The words "include", "includes", and "including" denote that the subsequent list is not exhaustive.

Article A2 — Term Of Purchase Order

A2.01 Effective Date. The Purchase Order comes into effect on the date the Co-Op signs Part "B".

A2.02 Expiry Date. This Purchase Order expires three hundred sixty-five (365) days after the Effective Date, unless:

This Purchase Order is extended upon agreement by the Parties for a period not to exceed the time the Lender and the Co-Op agreed to extend the Loan, in which case, this Purchase Order will remain in in effect for a period of ninety (90) days after the day this Purchase Order was extended by the Parties; or
This Purchase Order is extended beyond the time period set out under section A2.02(a) of this Part "A" because of an Emergency Declaration, in which case, this Purchase Order will remain in effect for a period of ninety (90) days after the day this Purchase Order was extended by the Parties.

In the event this Purchase Order is extended by one or more subsequent Emergency Declarations, this Purchase Order will remain in effect for a period of ninety (90) days after the day this Purchase Order was extended by the last Emergency Declaration.

Article A3 — Ownership Of Cattle

A3.01 Co-Op Retains Ownership Of Cattle. Despite anything else contained in this Purchase Order, at law or in equity, the Producer agrees that the legal, beneficial and equitable ownership of Cattle purchased under this Purchase Order remains with the Co-Op at all times.

A3.02 Producer To Inform Any Creditors Or Would-Be Creditors Co-Op Owns The Cattle. Without limiting any other obligations the Producer may have under this Purchase Order, the Producer will inform its existing creditors as well as any would-be future creditors the Co-Op has all legal, beneficial and equitable ownership in the Cattle purchased under this Purchase Order and those Cattle will in no way be considered security for any Producer indebtedness or form part of the Producer's estate for the purposes of any insolvency proceedings.

A3.03 Co-Op To Pay Producer Net Balance From Sale Of Cattle. Despite the ownership of the Cattle set out under section A3.01 of this Part "A", the Co-Op will pay to the Producer the net balance between the total sale price of the Cattle purchased under this Purchase Order and the amount owing under this Purchase Order, including any interest earned thereon, in accordance with section A6.06 of this Part "A".

Article A4 — Producer's Representations, Warranties And Covenants

A4.01 Producer's Knowledge. The Producer represents and warrants it has read and understands:

The OIC;
The Guidelines; and
This Purchase Order.

A4.02 Producer Is Bound. The Producer covenants to be bound by:

The OIC;
The Guidelines; and
This Purchase Order.

A4.03 Producer's Authority To Execute Purchase Order. The Producer represents and warrants it has:

The full power and authority to enter this Purchase Order; and
Taken all necessary actions to authorize the execution of this Purchase Order.

A4.04 Producer Not Indebted To The Crown. The Producer represents and warrants it is not indebted to the Crown.

A4.05 Producer Not Indebted To Other Co-operatives. The Producer represents and warrants it is not indebted to other Co-operatives under the Program.

A4.06 Producer Deposit Is Not From Loan Or Other Indebtedness. The Producer represents and warrants the Producer Deposit being provided in relation to this Purchase Order is not from a loan or other form of indebtedness.

A4.08 Producer Has Financial Resources And Expertise To Produce Cattle. The Producer represents and warrants it has the financial resources and expertise necessary to pay and monitor a Custom Feeder to Produce Cattle on the Producer's behalf and will continue to have the financial resources and expertise necessary to pay and monitor a Custom Feeder to Produce Cattle on the Producer's behalf during the term of this Agreement.

A4.09 No Agreements Restricts Co-Op's Ability To Exercise Rights Under The Purchase Order. The Producer represents and warrants it is not a party to any agreement restricting the Co-Op's ability to exercise any rights the Co-Op may have under this Purchase Order.

A4.11 Information Producer Provided To Co-Op Is Correct. The Producer represents and warrants any information it provided to the Co-Op in relation to this Purchase Order is true and accurate in all material respects as of the date it signed Part "B".

A4.13 Producer To Make Sure Representations, Warranties And Covenants Remain True. The Producer covenants to take, or not take, as the case may be, any actions required to ensure the representations, warranties and covenants set out in this Article A4 of this Part "A" continue to be true throughout the term of this Purchase Order.

A4.14 Producer To Notify Co-Op Of Any Changes To Representations, Warranties And Covenants. The Producer covenants to advise the Co-Op within five (5) Business Days of:

Any changes affecting its representations, warranties and covenants set out in this Article A4 of this Part "4"; and
Any Proceedings commenced against it which could or would reasonably adversely affect in a material manner its ability to comply with the terms and conditions of this Purchase Order.

Article A5 — Co-Op's Representations, Warranties and Covenants

A5.01 Co-operative's Knowledge. The Co-Op represents and warrants it has read and understands:

The OIC;
The Guidelines; and
This Purchase Order.

A5.02 Co-Op Is Bound. The Co-Op covenants to be bound by:

The OIC;
The Guidelines; and
This Purchase Order.

A5.03 Co-Op's Authority To Execute Purchase Order. The Co-Op represents and warrants it has:

The full power and authority to enter this Purchase Order; and
Taken all necessary actions to authorize the execution of this Purchase Order.

Article A6 — Producer's Obligations Under The Purchase Order

A6.02 No Purchase Of Cattle Until Section A9.01 Of This Part "A" Is Complied With. The Producer will not purchase any Cattle under this Purchase Order until section A9.01 of this Part "A" is complied with.

A6.03 Cattle Purchased In Name Of Co-Op. The Producer will only purchase Cattle with money provided by the Draw in the name of the Co-Op.

A6.04 Proceeds From Sale Of Cattle. The Producer will do or cause to be done anything necessary to ensure the proceeds from the sale of the Cattle are paid to the Co-Op.

A6.05 Payment Of The Spend. The Producer will pay the Co-Op the Spend, plus Interest.

A6.06 Payment Of Outstanding Amount Owing Under The Spend. In the event the proceeds from the sale of the Cattle are insufficient to cover the Spend, the Producer will pay to the Co-Op the difference, including any Interest owing thereon, within twenty (20) Business Days of receiving Notice from the Co-Op about the outstanding amount owing from the Spend.

Article A7 — Co-Op's Obligations Under The Purchase Order

A7.01 Make Draw Available To Producer. The Co-Op will make up to the amount set out in section B1.01 of Part "B" available to the Producer.

A7.02 No Draw Until Section A9.01 Of Part "A" Complied With. Despite section A7.01 of this Part "A", the Co-Op is not required to make the Draw available to the Producer until section A9.01 of this Part "A" is complied with.

A7.03 Deposit Producer Deposit Into Co-operative's Assurance Account. The Co-Op will deposit the Producer Deposit into the Co-Op's Assurance Account

A7.04 Pay Seller Of Cattle In Reasonable Time. The Co-Op will pay the seller of Cattle in a reasonable time.

A7.05 Allow Producer To Enroll Cattle In Risk Management Programs. The Co-Op will allow the Producer to enroll the Cattle in any risk management programs in the Producer's own name and receive any benefits from those risk management programs directly.

A7.06 Exception. Despite section A7.05 of this Part "A", the Producer will assign any benefits the Producer may be eligible to receive for the Cattle under a risk management program the Producer has enrolled to the Co-Op as security if required to do so under any terms or conditions set out under the Program.

The Producer is not indebted to the Co-Op; or
In the event the Producer is indebted to the Co-Op, the Co-Op may use the net balance between the total sale price of the Cattle purchased pursuant to the Draw and the amount owing under the Draw to set-off against any debt that the Producer owes to the Co-Op; and
The Co-op is not in default of its Loan with the Lender.

A7.08 Return Of Producer Deposit. The Co-Op will return the Producer Deposit in accordance with Program requirements and Co-Op bylaws, provided:

The Producer is not indebted to the Co-Op; or
No other producer within the Co-Op has been given Notice of a shortfall or is in default of making a payment owing under an agreement that producer entered with the Co-Op to Produce Cattle under the Program.

In the event the Producer is indebted to the Co-Op, the Co-Op may use the Producer Deposit provided under this Purchase Order to set-off against any debt that the Producer owes to the Co-Op.

A7.09 Transfer Of Ownership In Residual Cattle. The Co-Op may transfer ownership of any Residual Cattle within a reasonable time to the Producer, provided:

The Producer is in good standing with the Co-Op; and
The Co-Op is not in default or aware it could be in default of making a payment owing to a Lender.

Article A8 — Notice To Producers

A8.01 Notice To Producers. The Producer may not receive part or all the net proceeds from the sale of Cattle or have their Producer Deposit returned as per sections A7.05 and A7.06 of this Part "A" if the Co-Op is in default of its Loan with the Lender.

Article A9 — Custom Feeding Agreement

A9.01 Custom Feeding Agreement. The Producer will enter a Custom Feeding Agreement.

Article A10 — General

A10.01 Representatives May Bind Parties. The Parties represent and warrant their respective representatives have the authority to legally bind them to the extent permissible by law.

A10.03 Agreement Binding. This Purchase Order will enure to the benefit of and be binding upon the Parties, their successors, executors, administrators and their permitted assigns.

A10.04 Waivers In Writing. If a Party fails to comply with any term of this Purchase Order, that Party may only rely on a waiver of the other Party if the other Party has provided a written waiver in accordance with the Notice provisions set out under section A10.12 of this Part "A". Any waiver must refer to a specific failure to comply and will not have the effect of waiving any subsequent failures to comply.

A10.05 Tolerance Or Indulgence Of A Breach Not A Waiver. Any failure by one Party to insist on one or more instances of strict compliance by another Party of any of the terms and conditions in this Purchase Order will not be construed as a waiver by the Party that is tolerating the breach and the obligations of the other Party with respect to such compliance will continue in full force and effect.

A10.06 Time Is Of The Essence. Time is of the essence in the performance and observation of the terms and conditions of this Purchase Order. No extension or variation of time will operate as a waiver of this provision.

A10.07 No Assignment. The:

Producer will not assign this Agreement without the prior written consent of the Co-Op; and
Co-Op will not assign this Agreement without the prior written consent of the Lender and the Minister.

A10.08 No Amendment. Neither Party will amend this Part "A":

Without obtaining the prior written consent of the Minister and the Lender; and
An amending agreement in writing, that is dated and signed by both Parties is made.

A10.09 Severability Of Provisions. The invalidity or unenforceability of any provision of this Purchase Order will not affect the validity or enforceability of any other provision of this Purchase Order. Any invalid or unenforceable provision will be deemed to be severed from this Purchase Order.

A10.10 Governing Law. This Purchase Order and the rights, obligations and relations of the Parties will be governed by and construed in accordance with the laws of the Province of Ontario and the applicable federal laws of Canada. Any actions or proceedings in relation to this Purchase Order will be conducted in Ontario.

A10.11 Entire Agreement. This Purchase Order constitutes the entire agreement between the Parties with respect to the subject matter contained herein and supersedes all prior oral or written representations or agreements.

Notices will be deemed to have been received:

In the case of postage-prepaid mail, five (5) Business Days after such Notice is mailed; or
In the case of personal delivery, facsimile or Email, one (1) Business Day after such Notice is received by the other Party.

The Parties agree for the purposes of this section A10.12 of this Part "A", the names of the individuals may be changed without amending this Purchase Order through the Party making the change providing written notice to the other Party of said change.

A10.13 Counterparts. Part "B" may be signed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

A10.14 Survival. The rights and obligations set out under Articles A1, A3 and A9 as well as sections A7.07, A7.08, A10.06, A10.08, A10.09, A10.10, A10.11, A10.12 and A10.14 of this Part "A" and all applicable definitions, cross-referenced provisions will continue in full force and effect for a period of seven (7) years from the expiry or termination of this Purchase Order.

Purchase Order

Part "B" — Operational Requirements

Purchase Order Number^{footnote 1[1]}: ____

Between:

(the "Producer")

and

(the "Co-Op")

Part B1 — The Draw

B1.01 The Draw. The Co-Op will provide up to the following Draw $ ____________________ to the Producer to purchase Cattle in the name of the Co-Op.

B1.02 Interest. The Producer will pay simple Interest on the Spend at a floating rate of __________% after the Cattle are sold.

Part B2 — General Terms And Conditions

B2.01 Notices. All Notices under this Agreement will be provided to:

To The Producer
Attention: ____________________
Address: ____________________
Email: ____________________

To The Co-Op
Attention: ____________________
Address: ____________________
Email: ____________________

B2.02 Agreement. The Agreement consists of Part "A" and this Part "B" (both of which are set out in Appendix "B" of the Guidelines).

B2.03 Terms. Capitalized terms not defined herein have the same meaning as set out in Part "A".

In Witness whereof, the Parties have executed this Part "B" on the dates indicated below:

____________________ (print Producer's legal name)

____________________ (print Producer representative's name)

____________________ (signature of Producer's representative)

____________________ Date

I have the authority to bind the Producer.

____________________ (print Co-Op's legal name)

____________________ (print Co-Op representative's name)

____________________ (signature of Co-Op's representative)

____________________ Date

I have the authority to bind the Co-op.

Part B3 — The Spend

B3.01 The Spend. The Spend under this Purchase Order is as follows:

Expense: Cattle
Amount: $____

Expense: Co-op Charges
Amount: $____

Expense: Ancillary Charges
Amount: $____

Expense: Insurance
Amount: $____

Expense: Other Charges
Amount: $____

Expense: Taxes
Amount: $____

Expense: Total Spend
Amount: $____

B3.02 Total Number Of Cattle Purchased. The Producer purchased ____ head of Cattle under the Spend.

I certify the Total Spend set out in section B3.01 of this Part "B" is correct.

____________________ (print Producer's legal name)

____________________ (print Producer representative's name)

____________________ (signature of Producer's representative)

____________________ Date

I have the authority to bind the Producer.

Appendix "C" Member/Non-Member Custom Feeding Agreement

Member/Non-Member Custom Feeding Agreement – Part "A" — General Terms And Conditions

Article A1 — Interpretation

A1.01 Definitions. For the purposes of this Agreement, the terms below will have the following meanings:

"Agreement" means this Member/Non-Member Custom Feeding Agreement, as set out in:

Part "A"; and
Part "B",

as they may be amended.

"Business Day" means any working day, Monday to Friday, inclusive, but excludes statutory and other holidays on which the Government of Ontario has elected to be closed for business.

"Cattle" means steers and heifers to be finished for slaughter but excludes cattle to be sold for breeding purposes.

"Co-Op" means a feeder Cattle finance Co-operative established under the Co-operatives Corporations Act.

"Custom Feeder" means the Person that is going to Produce Cattle for the Producer.

"Custom Feeding" means an arrangement between a Producer and a Custom Feeder whereby the Custom Feeder agrees to Produce Cattle on behalf of the Producer.

"Emergency Declaration" means a declaration issued pursuant to section 15.1(1) of the OIC.

"Guidelines" means the document entitled Ontario Feeder Cattle Loan Guarantee Guidelines.

"Lender" means the person who lent money to the Co-Op.

"Material Adverse Change" means a change in the financial or other condition of the Producer, or in the state or circumstances of any property subject to a security interest in relation to the Agreement that would, in the opinion of a reasonable and prudent lender, be considered likely to cause a significant diminution in the earning power or the value of the business of or in the ability of the Producer to perform any of the Producer's obligations with respect to the Agreement.

"Ministry" means the ministry of the Minister.

"OIC" means Order-in-Council 702/2016.

"Part "A" means Member/Non-Member Custom Feeding Agreement – Part "A" – General Terms And Conditions, as set out in Appendix "C" of the Guidelines.

"Part "B" means Member/Non-Member Custom Feeding Agreement – Part "B" – Operational Requirements, as set out in Appendix "C" of the Guidelines.

"Parties" means the Co-Op, the Producer and the Custom Feeder collectively.

"Party" means the Co-Op, the Producer or the Custom Feeder, depending on the context.

"Person" means a legal entity.

"Proceeding" means any causes of action, actions, claims, demands, applications, lawsuits or other judicial or quasi-judicial-based proceeding.

"Produce Cattle", "Produced Cattle" and "Producing Cattle" means the further feeding of Cattle or the finishing of Cattle for slaughter.

"Producer" means a Person that is Producing Cattle.

"Program" means the Ontario Feeder Cattle Loan Guarantee Program.

"Supervisor" means the individual occupying that position in the Co-Op.

A1.02 Interpretation. For the purposes of interpreting this Agreement:

Words in the singular include the plural and vice versa;
The headings do not form a part of this Agreement – they are for reference purposes only and will not affect the interpretation of this Agreement;
Any reference to dollars or currency in this Agreement will be to Canadian dollars and currency;
Any reference to a statute means a statute of the Province of Ontario, unless otherwise indicated;
Any reference to a statute is to that statute and to the regulations made pursuant to that statute as they may be amended from time to time and to any statute or regulations that may be passed that have the effect of supplanting or superseding that statute or regulation unless a provision in the Agreement provides otherwise
Any reference to the OIC is to the OIC as it may be amended from time to time and to any Order-in-Council that may be passed that has the effect of supplanting or superseding the OIC unless a provision in the Agreement provides otherwise; and
The words "include", "includes", and "including" denote that the subsequent list is not exhaustive.

Article A2 — Term Of Custom Feeding Agreement

A2.01 Effective Date. This Agreement comes into effect on the date the Co-Op signs Part "B".

A2.02 Expiry Date. This Agreement expires three hundred sixty-five (365) days after the Effective Date, unless:

This Agreement is extended upon agreement by the Parties for a period not to exceed the time the Lender and the Co-Op agreed to extend the Loan, in which case, this Agreement will remain in in effect for a period of ninety (90) days after the day this Agreement was extended by the Parties; or
This Agreement is extended beyond the time period set out under section A2.02(a) of this Part "A" because of an Emergency Declaration, in which case, this Agreement will remain in effect for a period of ninety (90) days after the day this Agreement was extended by the Parties.

Article A3 — Ownership Of Cattle

A3.01 Co-Op Retains Ownership Of Cattle. Despite anything else contained in this Agreement, at law or in equity, the legal, beneficial and equitable ownership of the Produced Cattle under this Agreement remains with the Co-Op at all times.

A3.02 Producer And Custom Feeder To Inform Any Creditors Or Would-Be Creditors Co-Op Owns The Cattle. Without limiting any other obligations the Producer or Custom Feeder may have under this Agreement, the Producer and Custom Feeder will inform its existing creditors as well as any would-be future creditors the Co-Op has all legal, beneficial and equitable ownership in the Cattle under this Agreement and those Cattle will in no way be considered security for any Producer or Custom Feeder indebtedness or form part of the Producer or Custom Feeder's estate for the purposes of any insolvency proceedings.

Article A4 — Producer's Representations, Warranties And Covenants

A4.01 Producer's Knowledge. The Producer represents and warrants it has read and understands:

The OIC;
The Guidelines; and
This Agreement.

A4.02 Producer Is Bound. The Producer covenants to be bound by:

The OIC;
The Guidelines; and
This Agreement.

A4.03 Producer's Authority To Execute Agreement. The Producer represents and warrants it has:

The full power and authority to enter this Agreement; and
Taken all necessary actions to authorize the execution of this Agreement.

A4.04 Producer Has Financial Resources And Expertise To Produce Cattle. The Producer represents and warrants it has the financial resources and expertise necessary to pay and monitor a Custom Feeder to Produce Cattle on the Producer's behalf and will continue to have the financial resources and expertise necessary to pay and monitor a Custom Feeder to Produce Cattle on the Producer's behalf during the term of this Agreement.

A4.05 No Agreements Restricts Co-Op Or Custom Feeder's Ability To Exercise Rights Under The Agreement. The Producer represents and warrants it is not a party to any agreement restricting the Co-op or the Custom Feeder's ability to exercise any rights the Co-Op or Custom Feeder may have under this Agreement.

A4.06 No Proceedings Against Producer That Could Cause Material Adverse Change. The Producer represents and warrants there are no outstanding Proceedings or other expenses or losses owing by it that would cause or is likely to cause a Material Adverse Change during the term of this Agreement.

A4.07 Information Producer Provided To Co-Op And Custom Feeder Is Correct. The Producer represents and warrants any information it provided to the Co-Op or the Custom Feeder in relation to this Agreement is true and accurate in all material respects as of the date it signed Part "B".

A4.08 Producer To Provide Supporting Documentation. The Producer covenants to provide to the Co-Op or the Custom Feeder, as the case may be, with, upon request, and within the time-period set out in the Notice, documents proving the matters referred to in this Article A4 of this Part "A".

A4.09 Producer To Make Sure Representations, Warranties And Covenants Remain True. The Producer covenants to take, or not take, as the case may be, any actions required to ensure the representations, warranties and covenants set out in this Article A4 of this Part "A" continue to be true throughout the term of this Agreement.

A4.10 Producer To Notify Co-Op And Custom Feeder Of Any Changes To Representations, Warranties And Covenants. The Producer covenants to advise the Co-Op and the Custom Feeder within five (5) Business Days of:

Any changes affecting its representations, warranties and covenants set out in this Article A4 of this Part "A"; and
Any Proceedings commenced against it which could or would reasonably adversely affect in a material manner its ability to comply with the terms and conditions of this Agreement.

A4.11 Producer's Representations, Warranties And Covenants For Benefit Of The Co-Op And Custom Feeder. The Producer acknowledges and agrees the representations, warranties and covenants set out in this Article A4 of this Part "A" are for the benefit of the Co-Op and Custom Feeder.

A4.12 Co-Op And Custom Feeder's Reliance On Producer's Representations, Warranties And Covenants. The Producer acknowledges and agrees the Co-Op and the Custom Feeder are relying on all representations, warranties and covenants set out in this Article A4 of this Part "A".

Article A5 — Custom Feeder's Representations, Warranties And Covenants

A5.01 Custom Feeder's Knowledge. The Custom Feeder represents and warrants it has read and understands:

The OIC;
The Guidelines; and
This Agreement.

A5.02 Custom Feeder Is Bound. The Custom Feeder covenants to be bound by:

The OIC;
The Guidelines; and
This Agreement.

A5.03 Custom Feeder's Authority To Execute Agreement. The Custom Feeder represents and warrants it has:

The full power and authority to enter this Agreement; and
Taken all necessary actions to authorize the execution of this Agreement.

A5.04 Expertise To Produce Cattle. The Custom Feeder represents and warrants it has the expertise necessary to Produce Cattle under this Agreement and will continue to have the expertise necessary to Produce Cattle during the term of this Agreement.

A5.05 No Agreements Restricts Co-Op Or Producer's Ability To Exercise Rights Under The Agreement. The Custom Feeder represents and warrants it is not a party to any agreement restricting the Co-Op or the Producer's ability to exercise any rights the Co-Op or Producer may have under this Agreement.

A5.06 No Proceedings Against Custom Feeder That Could Cause Material Adverse Change. The Custom Feeder represents and warrants there are no outstanding Proceedings or other expenses or losses owing by it that would cause or is likely to cause a Material Adverse Change during the term of the Agreement.

A5.07 Information Custom Feeder Provided To Co-Op And Producer Is Correct. The Custom Feeder represents and warrants any information it provided to the Co-Op or the Producer in relation to this Agreement is true and accurate in all material respects as of the date the Custom Feeder signed Part "B".

A5.08 Custom Feeder To Provide Supporting Documentation. The Custom Feeder covenants to provide to the Co-Op and the Producer with, upon request, and within the time-period set out in the Notice, documents proving the matters referred to in this Article A5 of this Part "A".

A5.09 Custom Feeder To Make Sure Representations, Warranties And Covenants Remain True. The Custom Feeder covenants to take, or not take, as the case may be, any actions required to ensure the representations, warranties and covenants set out in this Article A5 of this Part "A" continue to be true throughout the term of this Agreement.

A5.10 Custom Feeder To Notify Co-Op And Producer Of Any Changes To Representations, Warranties And Covenants. The Custom Feeder covenants to advise the Co-Op and the Producer within five (5) Business Days of:

Any changes affecting its representations, warranties and covenants set out in this Article A5 of this Part "A"; and
Any Proceedings commenced against it which could or would reasonably adversely affect in a material manner its ability to comply with the terms and conditions of this Agreement.

A5.11 Custom Feeder's Representations, Warranties And Covenants For Benefit Of The Co-Op And Producer. The Custom Feeder acknowledges and agrees the representations, warranties and covenants set out in this Article A5 of this Part "A" are for the benefit of the Co-Op and the Producer.

A5.12 Co-Op And Producer's Reliance On Custom Feeder's Representations, Warranties And Covenants. The Custom Feeder acknowledges and agrees the Co-Op and the Producer are relying on all representations, warranties and covenants set out in this Article A5 of this Part "A".

Article A6 — Co-Op's Representations, Warranties And Covenants

A6.01 Co-Op's Knowledge. The Co-Op represents and warrants it has read and understands:

The OIC;
The Guidelines; and
This Agreement.

A6.02 Co-Op Is Bound. The Co-Op covenants to be bound by:

The OIC;
The Guidelines; and
This Agreement.

A6.03 Co-Op's Authority To Execute Agreement. The Co-Op represents and warrants it has:

The full power and authority to enter this Agreement; and
Taken all necessary actions to authorize the execution of this Agreement.

A6.04 Co-Op's Representations, Warranties And Covenants For Benefit Of The Producer And Custom Feeder. The Co-Op acknowledges and agrees the representations, warranties and covenants set out in this Article A6 of this Part "A" are for the benefit of the Producer and Custom Feeder.

A6.05 Producer And Custom Feeder's Reliance On Co-Op's Representations, Warranties And Covenants. The Co-Op acknowledges and agrees the Producer and Custom Feeder are relying on all representations, warranties and covenants set out in this Article A6 of this Part "A".

Article A7 — Producer's Obligations Under The Agreement

A7.01 Produced Cattle To Be Raised In Name Of Co-Op. The Producer will only Produce Cattle in the name of the Co-Op.

A7.02 Payment Of Insurance On Cattle. The Producer will pay the Co-Op for the insurance that the Co-Op has purchased for the Cattle in accordance with section B1.01 of Part "B".

A7.03 Business Insurance. The Producer will have, and maintain while this Agreement is in effect, at its own cost and expense, with insurers having a secure A.M. Best rating of B+ or greater, or the equivalent, all necessary and appropriate insurance that a prudent person Producing Cattle would have, including commercial general liability insurance on an occurrence basis for third party bodily injury, personal injury and property damage. The insurance policy will include the following:

A cross-liability clause;
Contractual liability coverage; and
A thirty (30) day written notice of cancellation or termination provision.

The policy will also include the Co-Op as additional insured from the date the Producer signs Part "B" and will maintain said insurance while this Agreement remains in effect with respect to the Producer's obligations under, or otherwise in connection with, this Agreement.

A7.04 Proof Of Insurance. The Producer will provide the Co-Op with proof that confirms the insurance coverage required under section A7.03 of this Part "A" is in place in the manner and within the time limit set out in the Notice; and

A7.05 Copy Of Insurance Policy. The Producer will provide the Co-Op, upon its request, a copy of the insurance policy the Producer is required to have under section A7.03 of this Part "A" within the time limit set out in the Notice; and

A7.06 Identification Of Cattle. The Producer will mark the Cattle as set out under section B1.02 of Part "B".

A7.07 Where Produced Cattle To Be Located. The Producer will only allow Produced Cattle to be raised at the place set out in section B1.03 of Part "B". In the event an emergency arises that requires the Cattle to be moved from the location set out in section B1.03 of Part "B", the Producer may move the Cattle or cause the Cattle to be moved to a location of their chOICe, provided the Producer provides the Co-Op with notice of the movement as soon as practicable thereafter and the Co-Op consents to where the Cattle were moved. If the Co-Op does not consent to the location, the Producer will follow any directions issued by the Co-Op regarding their location.

A7.08 Producing Cattle. The Producer will:

Keep the Cattle under the Producer's charge, management or control throughout the term of this Agreement;
Monitor the Custom Feeder while the Custom Feeder is Producing Cattle;
Ensure the Custom Feeder is Producing Cattle in accordance with all Requirements Of Law;
Ensure the Custom Feeder is maintaining the health of the Cattle and is providing proper veterinary services to the Cattle;
Ensure the Custom Feeder is feeding the Cattle and making them ready for market in accordance with good agricultural practices, as determined by the Co-Op and under the Supervisor's overall supervision;
Forthwith notify the Supervisor of any morbidity or mortality of the Cattle; and
Deliver the Cattle or cause the Custom Feeder to deliver the Cattle for sale at such time as may be requested by the Supervisor.

A7.09 Producer Responsible For All Costs Of Producing Cattle. The Producer acknowledges and agrees it is solely responsible for all costs related to Producing Cattle, including the fees the Custom Feeder is charging the Producer to Produce Cattle, as set out under section B1.01 of Part "B". The Producer further acknowledges and agrees the Co-Op has no legal, equitable or other obligation to pay for any costs related to Producing Cattle the Producer incurs, including the fees the Custom Feeder is charging the Producer to Produce Cattle, as set out under section B1.01 of Part "B".

A7.10 Indemnification Of Co-Op. The Producer will indemnify and hold harmless the Co-Op, its directors, officers, employees and servants, from and against all suits, judgments, claims, demands, expenses, actions, causes of action and losses (including, without limitation, reasonable legal expenses), related to Producing Cattle.

A7.11 Access To Facilities Where Cattle Are Being Raised. The Producer will allow or cause to be allowed employees of the Co-Op to have reasonable access, upon being given a minimum of twenty-four (24) hours' Notice, to the facilities where the Cattle are being raised for the purposes of inspecting the facilities and the Cattle. Without limiting the generality of the foregoing, access includes access to any records under the Producer's charge, management or control related to the Produced Cattle.

Article A8 — Custom Feeder's Obligations Under The Agreement

A8.01 Produced Cattle To Be Raised In Name Of Co-Op. The Custom Feeder will Produce Cattle in the name of the Co-Op that owns the Cattle.

A8.02 Business Insurance. The Custom Feeder will have, and maintain while this Agreement is in effect, at its own cost and expense, with insurers having a secure A.M. Best rating of B+ or greater, or the equivalent, all necessary and appropriate insurance that a prudent person Producing Cattle as a Custom Feeder would have, including commercial general liability insurance on an occurrence basis for third party bodily injury, personal injury and property damage. The insurance policy will include the following:

A cross-liability clause;
Contractual liability coverage; and
A thirty (30) day written notice of cancellation or termination provision.

The policy will also include the Co-Op and the Producer as additional insureds from the date the Producer places the Cattle with the Custom Feeder and will maintain said insurance while the Cattle are with the Custom Feeder.

A8.03 Proof Of Insurance. The Custom Feeder will provide the Co-Op and the Producer, as the case may be, with proof that confirms the insurance coverage required under section A8.02 of this Part "A" is in place in the manner and within the time limit set out in the Notice.

A8.04 Copy Of Insurance Policy. The Custom Feeder will provide the Co-Op and the Producer, as the case may be, upon their request, a copy of the insurance policy the Custom Feeder is required to have under section A8.02 of this Part "A" within the time limit set out in the Notice.

A8.05 Where Produced Cattle To Be Located. The Custom Feeder will only Produce Cattle at the place set out in section B1.03 of Part "B". In the event of an emergency situation arises that requires the Cattle to be moved from the location set out in section B1.03 of Part "B", the Custom Feeder may move the Cattle to a location of their chOICe, provided the Custom Feeder provides the Co-Op and Producer with notice of the movement as soon as practicable thereafter and the Co-Op consents to where the Cattle were moved. If the Co-Op does not consent to the location, the Producer will follow any directions issued by the Co-Op regarding their location.

A8.06 Producing Cattle. The Custom Feeder will:

Produce Cattle in accordance with all Requirements Of Law;
Maintain the health of the Cattle and provide proper veterinary services to the Cattle;
Feed the Cattle and make them ready for market in accordance with good agricultural practices, as determined by the Supervisor and under the Supervisor's overall supervision;
Forthwith notify the Producer of any morbidity or mortality of the Cattle; and
Have the Cattle ready to be delivered or deliver the Cattle for sale at such time as may be requested by the Supervisor.

A8.07 Producer Responsible For All Costs Of Producing Cattle. The Custom Feeder acknowledges and agrees the Producer is solely responsible for all fees the Custom Feeder charges the Producer to Produce Cattle, as set out under section B1.01 of Part "B". The Custom Feeder further acknowledges and agrees that the Co-Op has no legal, equitable or other obligation to pay for any fees the Custom Feeder is charging the Producer to Produce Cattle, as set out under section B1.01 of Part "B".

A8.08 Notice To Co-Op Of Payment Owing By Producer To Custom Feeder. The Custom Feeder will provide Notice to the Co-Op of any payment the Producer owes to the Co-op that has not been paid within fourteen (14) Business Days of when that payment became due.

A8.09 Indemnification Of Co-Op And Producer. The Custom Feeder will indemnify and hold harmless the Co-Op and the Producer, their directors, officers, employees and servants, from and against all suits, judgments, claims, demands, expenses, actions, causes of action and losses (including, without limitation, reasonable legal expenses), related to Producing Cattle.

A8.10 Access To Facilities Where Cattle Are Being Raised. The Custom Feeder will allow or cause to be allowed employees of the Co-Op or the Producer to have reasonable access, upon being given a minimum of twenty-four (24) hours' Notice, to the facilities where the Cattle are being raised for the purposes of inspecting the facilities and the Cattle. Without limiting the generality of the foregoing, access includes access to any records under the Custom Feeder's charge, management or control related to the Produced Cattle under this Agreement.

Article A9 — Co-Op's Obligations Under The Agreement

A9.01 Allow Producer To Enroll Cattle In Risk Management Programs. The Co-Op will allow the Producer to enroll the Cattle in any risk management programs in the Producer's own name and receive any benefits from those risk management programs directly.

A9.02 Exception. Despite section A9.01 of this Part "A", the Producer will assign any benefits the Producer may be eligible to receive for the Cattle under a risk management program the Producer has enrolled to the Co-Op as security if required to do so under any terms or conditions set out under the Program.

A9.03 Insurance. The Co-Op will have and maintain until the Cattle are sold insurance on the Cattle that covers the fair market value of the Cattle throughout the Term of this Agreement.

Article A10 — Co-Op's Right To Remove Cattle

A10.01 Co-Op's Right To Take Cattle. The Producer and the Custom Feeder acknowledge and agree the Co-Op may take some or all the Cattle covered by this Agreement and sell those Cattle if one or more of the following circumstances occurs:

The
1. Producer breaches a term or condition of this Agreement, or
2. The Custom Feeder breaches a term or condition of this Agreement;
The
1. Producer breaches a covenant contained in this Agreement and fails to remedy that breach for a period of ten (10) Business Days after the Co-Op or the Custom Feeder has, as the case may be, provided Notice of the breach, or
2. Custom Feeder breaches a covenant contained in this Agreement and fails to remedy that breach for a period of ten (10) Business Days after the Co-Op or the Producer has, as the case may be, provided Notice of the breach;
Where a representation made by the:
1. Producer in connection with this Agreement is, or was at the time of its making, false or misleading, or
2. Custom Feeder in connection with this Agreement is, or was at the time of its making, false or misleading;
The Producer or the Custom Feeder appears, as the case may be, to have abandoned the Cattle;
The Producer or the Custom Feeder is not, as the case may be, Producing Cattle in accordance with good agricultural practices, as determined by the Co-Op;
The failure of the Producer to pay or otherwise perform as and when due any obligations or liabilities owed to the Co-Op or Custom Feeder under this Agreement;
The Producer or the Custom Feeders, as the case may be, insolvency or the appointment of a receiver, manager, trustee or liquidator in respect of the Producer or Custom Feeder's property, as the case may be;
The Producer or the Custom Feeder makes, as a case may be, an assignment for the benefit of their creditors;
The institution of a proceeding in bankruptcy against the Producer or the Custom Feeder, as the case may be, whether voluntary or involuntary, or the institution of any proceeding by the Producer or the Custom Feeder, as the case may be, to obtain relief against any of the Producer or Custom Feeder's creditors, as the case may be;
The:
1. Producer abandons or discontinues all or any part of its business in relation to this Agreement, or
2. Custom Feeder abandons or discontinues all or any part of its business in relation to this Agreement;
An execution or other legal process of any court becomes executable against the Producer or the Custom Feeder, as the case may be;
A Material Adverse Change occurs in relation to the Producer or the Custom Feeder;
The:
1. Producer prevents or fails to co-operate with any audit or other inspection provided for under the OIC, a Purchase Order related to the Cattle covered under this Agreement or this Agreement for a period of ten (10) Business Days after receiving a demand for such co-operation, or
2. The Custom Feeder prevents or fails to co-operate with any audit or other inspection provided for under the OIC or this Agreement for a period of ten (10) Business Days after receiving a demand for such co-operation;
The
1. Producer fails to provide any information required to be provided under the OIC, the Guidelines, a Purchase Order related to the Cattle covered under this Agreement or this Agreement for a period of ten (10) Business Days after receiving a written demand for the information, or
2. Custom Feeder fails to provide any information required to be provided under the OIC, the Guidelines or this Agreement for a period of ten (10) Business Days after receiving a written demand for the information;
The Producer or the Custom Feeder asks, as the case may be, in writing that the Co-Op take the Cattle; or
The Producer uses any part of the funds under a Purchase Order the Producer has with the Co-Op for any other purposes other than Producing Cattle.

A10.02 Co-Op's Right To Remove Cattle From Custom Feeder Supersedes Producer's Right To Remove Of Cattle From Custom Feeder. If the Co-Op and the Producer both decide to remove Cattle from the Custom Feeder, the Co-Op's right to remove the Cattle pursuant to section A10.01 of this Part "A" supersedes the Producer's right to remove Cattle pursuant to section A11.01 of this Part "A" and the Producer will yield to the Co-Op's right to remove Cattle pursuant to section A10.01 of this Part "A".

A10.03 Producer Debt Owing To Co-Op For Reasonable Costs To Remove Cattle. The Producer acknowledges and agrees the Producer is indebted to the Co-Op for all reasonable costs the Co-Op incurs to remove the Cattle pursuant to section A10.01 of this Part "A" as well as any subsequent management of the Cattle, including the sale of the Cattle, and that this debt is in addition to what the Producer may owe the Co-Op in relation to any other agreements the Producer may have with the Co-Op. The Producer further acknowledges and agrees that the Producer will repay any debt owing to the Co-Op for any reasonable costs the Co-Op incurs from taking any action pursuant to section A10.01 of this Part "A" as well as any subsequent management of the Cattle, including the sale of the Cattle.

A10.04 Co-Op Does Not Owe Debt To Custom Feeder. The Custom Feeder acknowledges and agrees that the Co-Op does not owe the Custom Feeder a debt at law, in equity or otherwise, for any unpaid costs the Custom Feeder incurred to Produce Cattle for the Producer in the event the Co-Op removes the Cattle pursuant to section A10.01 of this Part "A" and that any unpaid costs the Custom Feeder incurred to Produce Cattle for the Producer represents a debt as between the Custom Feeder and the Producer.

Article A11 — Producer's Right To Remove Cattle

A11.01 Producer's Right To Remove Cattle. The Custom Feeder acknowledges and agrees the Producer may remove some or all the Cattle covered by this Agreement if one or more of the following circumstances occurs:

The Custom Feeder breaches a term or condition of this Agreement;
The Custom Feeder breaches a covenant contained in this Agreement and fails to remedy that breach for a period of ten (10) Business Days after the Co-Op or the Producer has, as the case may be, provided Notice of the breach;
The Custom Feeder made a false or misleading representation in connection with this Agreement;
The Custom Feeder appears to have abandoned the Cattle;
The Custom Feeder is not Producing Cattle in accordance with good agricultural practices;
The Custom Feeder's insolvency or there is an appointment of a receiver, manager, trustee or liquidator in respect of the Custom Feeder's property;
The Custom Feeder make an assignment for the benefit of the Custom Feeder's creditors;
The institution of a proceeding in bankruptcy against the Custom Feeder, whether voluntary or involuntary, or the institution of any proceeding by the Custom Feeder to obtain relief against any of the Custom Feeder's creditors;
The Custom Feeder abandons or discontinues all or any part of its business in relation to this Agreement;
An execution or other legal process of any court becomes executable against the Custom Feeder;
A Material Adverse Change occurs in relation to the Custom Feeder;
The Custom Feeder prevents or fails to co-operate with any audit or other inspection provided for under the OIC or this Agreement for a period of ten (10) Business Days after receiving a written demand for such co-operation;
The Custom Feeder fails to provide any information required to be provided under the OIC, the Guidelines or this Agreement for a period of ten (10) Business Days after receiving a written demand for the information;
The Custom Feeder asks the Producer in writing to take the Cattle; and
The Producer provides the Custom Feeder with fifteen (15) Business Days' Notice the Producer is terminating this Agreement.

Article A12 — General

A12.01 Representatives May Bind Parties. The Parties represent and warrant their respective representatives have the authority to legally bind them to the extent permissible by law.

A12.02 Terms Binding. The Parties will take all reasonable measures to ensure their officers, directors, employees, agents and third-party contractors are bound to observe all terms and conditions of the Agreement.

A12.03 Agreement Binding. This Agreement will enure to the benefit of and be binding upon the Parties, their successors, executors, administrators and their permitted assigns.

A12.04 Waivers In Writing. If a Party fails to comply with any term of the Agreement, that Party may only rely on a waiver of the other Party if the other Party has provided a written waiver in accordance with the Notice provisions set out under section A12.12 of this Part "A". Any waiver must refer to a specific failure to comply and will not have the effect of waiving any subsequent failures to comply.

A12.05 Tolerance Or Indulgence Of A Breach Not A Waiver. Any failure by one Party to insist on one or more instances of strict compliance by another Party of any of the terms and conditions in the Agreement will not be construed as a waiver by the Party that is tolerating the breach and the obligations of the other Party with respect to such compliance will continue in full force and effect.

A12.06 Time Is Of The Essence. Time is of the essence in the performance and observation of the terms and conditions of this Agreement. No extension or variation of time will operate as a waiver of this provision.

A12.07 No Assignment. The:

Custom Feeder will not assign this Agreement without the prior written consent of the Producer and the Co-Op;
Producer will not assign this Agreement without the prior written consent of the Co-Op; and
Co-Op will not assign this Agreement without the prior written consent of the Lender and the Minister.

A12.08 No Amendment. The Parties will not amend this Part "A" without:

Obtaining the prior written consent of the Minister and the Lender; and
An amending agreement in writing, dated and signed by the Parties.

A12.09 Severability Of Provisions. The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of any other provision of this Agreement. Any invalid or unenforceable provision will be deemed to be severed from this Agreement.

A12.10 Governing Law. This Agreement and the rights, obligations and relations of the Parties will be governed by and construed in accordance with the laws of the Province of Ontario and the applicable federal laws of Canada. Any actions or proceedings in relation to this Agreement will be conducted in Ontario.

A12.11 Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter contained herein and supersedes all prior oral or written representations or agreements.

A12.12 Notice. Notices will be in writing and will be delivered by postage-prepaid mail, personal delivery or Email and will be addressed to the Co-Op, the Producer and the Custom Feeder respectively, as set out in section B1.04 of Part "B".

Notices will be deemed to have been received:

In the case of postage-prepaid mail, five (5) Business Days after such Notice is mailed; or
In the case of personal delivery, facsimile or Email, one (1) Business Day after such Notice is received by the other Party.

The Parties agree for the purposes of this section A12.12 of this Part "A", the names of the individuals may be changed without amending this Agreement through the Party making the change providing written notice to the other Party of said change.

A12.13 Counterparts. Part "B" may be signed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

A12.14 Survival. The rights and obligations set out under Articles A1, A7 and A8 as well as sections A12.06, A12.07, A12.06, A12.08, A12.09, A12.10, A12.11, A12.12 and A12.14 of this Part "A" and all applicable definitions, cross-referenced provisions will continue in full force and effect for a period of seven (7) years from the expiry or termination of this Agreement.

Member/Non-Member Custom Feeding Agreement – Part "B" — Operational Requirements

Member/Non-Member Custom Feeding Agreement Number^{footnote 2[2]}

Between:

(the "Producer")

and

(the "Co-Op")

and

(the "Custom Feeder")

Part B1 — Operational Terms and conditions

B1.01 Cattle Insurance. The Producer will pay insurance at $____ per head of Cattle per day or a fee of $____ per head of Cattle.

B1.02 Producer's Business Insurance. The Producer will have at least $____.

B1.03 Payment To Custom Feeder. The Producer will pay the Custom Feeder $____ based on ____________________ to Produce Cattle under the Agreement.

B1.04 Identification Of Cattle. The Cattle will be identified by: ____________________.

B1.05 Location Of Cattle. The Cattle will be located at: ____________________.

B1.06 Duration Of Custom Feeding. The Custom Feeder will Produce Cattle from ____________________ to ____________________.

B1.07 Custom Feeder's Business Insurance. The Custom Feeder will have at least $____ in insurance.

B1.08 Notices. All Notices under this Agreement will be provided to:

To The Producer
Attention: ____________________
Address: ____________________
Email: ____________________

To The Co-Op
Attention: ____________________
Address: ____________________
Email: ____________________

To The Custom Feeder
Attention: ____________________
Address: ____________________
Email: ____________________

Part B2 — General Terms And Conditions

B2.01 Agreement. This Agreement consists of Part "A" and this Part "B" (both of which are set out in Appendix "C" of the Guidelines).

B2.02 Terms. Capitalized terms not defined herein have the same meaning as set out in Part "A".

In Witness whereof, the Parties have executed this Part "B" on the dates indicated below:

____________________ (print Producer's legal name)

____________________ (print Producer representative's name)

____________________ (signature of Producer's representative)

____________________ Date

I have the authority to bind the Producer.

____________________ (print Co-Op's legal name)

____________________ (print Co-Op representative's name)

____________________ (signature of Co-Op's representative)

____________________ Date

I have the authority to bind the Co-Op.

____________________ (print Custom Feeder's legal name)

____________________ (print Custom Feeder's representative's name)

____________________ (signature of Custom Feeder's representative)

____________________ Date

I have the authority to bind the Custom Feeder.

Appendix "D" Inter Co-op Custom Feeding Agreement

Inter Co-op Custom Feeding Agreement — Part "A" — General Terms And Conditions

Article A1 — Interpretation

A1.01 Definitions. For the purposes of this Agreement, the terms below will have the following meanings:

"Agreement" means this Inter Co-op Custom Feeding Agreement, as set out in:

Part "A"; and
Part "B",

as they may be amended.

"Business Day" means any working day, Monday to Friday, inclusive, but excludes statutory and other holidays on which the Government of Ontario has elected to be closed for business.

"Cattle" means steers and heifers to be finished for slaughter but excludes cattle to be sold for breeding purposes.

"CF-Co-Op" means the Custom Feeder's Co-Op.

"Co-Op" means a feeder Cattle finance Co-operative established under the Co-operatives Corporations Act.

"Custom Feeder" means the Person that is going to Produce Cattle for the Producer.

"Custom Feeding" means an arrangement between a Producer and a Custom Feeder whereby the Custom Feeder agrees to Produce Cattle on behalf of the Producer.

"Emergency Declaration" means a declaration issued pursuant to section 15.1(1) of the OIC.

"Guidelines" means the document entitled Ontario Feeder Cattle Loan Guarantee Guidelines.

"Lender" means the person who lent money to the P-Co-Op.

"Material Adverse Change" means a change in the financial or other condition of the Producer, or in the state or circumstances of any property subject to a security interest in relation to the Agreement that would, in the opinion of a reasonable and prudent lender, be considered likely to cause a significant diminution in the earning power or the value of the business of or in the ability of the Producer to perform any of the Producer's obligations with respect to the Agreement.

"Ministry" means the ministry of the Minister.

"OIC" means Order-in-Council 702/2016.

"P-Co-Op" means the Producer's Co-Op.

"Part "A" means Inter Co-Op Custom Feeding Agreement – Part "A" – General Terms And Conditions, as set out in Appendix "D" of the Guidelines.

"Part "B" means Inter Co-Op Custom Feeding Agreement – Part "B" – Operational Requirements, as set out in Appendix "D" of the Guidelines.

"Parties" means the P-Co-Op, the Producer, the CF-Co-Op and the Custom Feeder collectively.

"Party" means the P-Co-Op, the Producer, CF-Co-Op or the Custom Feeder, depending on the context.

"Person" means a legal entity.

"Proceeding" means any causes of action, actions, claims, demands, applications, lawsuits or other judicial or quasi-judicial-based proceeding.

"Produce Cattle", "Produced Cattle" and "Producing Cattle" means the further feeding of Cattle or the finishing of Cattle for slaughter.

"Producer" means a Person that is Producing Cattle.

"Program" means the Ontario Feeder Cattle Loan Guarantee Program.

"Supervisor" means the individual occupying that position in the P-Co-Op.

A1.02 Interpretation. For the purposes of interpreting this Agreement:

Words in the singular include the plural and vice versa;
The headings do not form a part of this Agreement – they are for reference purposes only and will not affect the interpretation of this Agreement;
Any reference to dollars or currency in this Agreement will be to Canadian dollars and currency;
Any reference to a statute means a statute of the Province of Ontario, unless otherwise indicated;
Any reference to a statute is to that statute and to the regulations made pursuant to that statute as they may be amended from time to time and to any statute or regulations that may be passed that have the effect of supplanting or superseding that statute or regulation unless a provision in the Agreement provides otherwise
Any reference to the OIC is to the OIC as it may be amended from time to time and to any Order-in-Council that may be passed that has the effect of supplanting or superseding the OIC unless a provision in the Agreement provides otherwise; and
The words "include", "includes", and "including" denote that the subsequent list is not exhaustive.

Article A2: Term Of Custom Feeding Agreement

A2.01 Effective Date. This Agreement comes into effect on the latter date on which the P-Co-Op or the CF-Co-Op signs Part "B".

A2.02 Expiry Date. This Agreement expires three hundred sixty-five (365) days after the Effective Date, unless:

This Agreement is extended upon agreement by the Parties for a period not to exceed the time the Lender and the P-Co-Op agreed to extend the Loan, in which case, this Agreement will remain in in effect for a period of ninety (90) days after the day this Agreement was extended by the Parties; or
This Agreement is extended beyond the time period set out under section A2.02(a) of this Part "A" because of an Emergency Declaration, in which case, this Agreement will remain in effect for a period of ninety (90) days after the day this Agreement was extended by the Parties.

Article A3: Ownership Of Cattle

A3.01 P-Co-Op Retains Ownership Of Cattle. Despite anything else contained in this Agreement, at law or in equity, the legal, beneficial and equitable ownership of the Produced Cattle under this Agreement remains with the P-Co-Op at all times.

A3.02 Producer And Custom Feeder To Inform Any Creditors Or Would-Be Creditors P-Co-Op Owns The Cattle. Without limiting any other obligations the Producer or Custom Feeder may have under this Agreement, the Producer and Custom Feeder will inform its existing creditors as well as any would-be future creditors the P-Co-Op has all legal, beneficial and equitable ownership in the Cattle under this Agreement and those Cattle will in no way be considered security for any Producer or Custom Feeder indebtedness or form part of the Producer or Custom Feeder's estate for the purposes of any insolvency proceedings.

Article A4: Producer's Representations, Warranties And Covenants

A4.01 Producer's Knowledge. The Producer represents and warrants it has read and understands:

The OIC;
The Guidelines; and
This Agreement.

A4.02 Producer Is Bound. The Producer covenants to be bound by:

The OIC;
The Guidelines; and
This Agreement.

A4.03 Producer's Authority To Execute Agreement. The Producer represents and warrants it has:

The full power and authority to enter this Agreement; and
Taken all necessary actions to authorize the execution of this Agreement.

A4.05 No Agreements Restricts P-Co-Op, CF-Co-Op Or Custom Feeder's Ability To Exercise Rights Under The Agreement. The Producer represents and warrants it is not a party to any agreement restricting the P-Co-Op, the CF-Co-Op or the Custom Feeder's ability to exercise any rights the P-Co-Op, the CF-Co-Op or the Custom Feeder may have under this Agreement.

A4.07 Information Producer Provided To P-Co-Op, CF-Co-Op And Custom Feeder Is Correct. The Producer represents and warrants any information the Producer provided to the P-Co-Op, the CF-Co-Op or the Custom Feeder in relation to this Agreement is true and accurate in all material respects as of the date it signed Part "B".

A4.08 Producer To Provide Supporting Documentation. The Producer covenants to provide to the P-Co-Op, the CF-Co-Op or the Custom Feeder, as the case may be, with, upon request, and within the time-period set out in the Notice, documents proving the matters referred to in this Article A4 of this Part "A".

A4.09 Producer Covenants Not To Bring Proceedings Against CF-Op-Op Liable For Damages Or Losses Solely Caused By Custom Feeder. The Producer covenants not to bring any Proceedings against the CF-Co-Op for any damages or losses the Producer incurs where those damages or losses are solely caused by the Custom Feeder. For greater certainty, this provision does not apply to any situation where the CF-Co-Op breaches one of its obligations under this Agreement and that breach results in the Producer incurring damages or losses as a result of that breach.

A4.10 Producer To Make Sure Representations, Warranties And Covenants Remain True. The Producer covenants to take, or not take, as the case may be, any actions required to ensure the representations, warranties and covenants set out in this Article A4 of this Part "A" continue to be true throughout the term of this Agreement.

A4.11 Producer To Notify P-Co-Op, CF-Co-Op And Custom Feeder Of Any Changes To Representations, Warranties And Covenants. The Producer covenants to advise the C-Co-Op, the CF-Co-Op and the Custom Feeder within five (5) Business Days of:

Any changes affecting its representations, warranties and covenants set out in this Article A4 of this Part "A"; and
Any Proceedings commenced against it which could or would reasonably adversely affect in a material manner its ability to comply with the terms and conditions of this Agreement.

A4.12 Producer's Representations, Warranties And Covenants For Benefit Of The P-Co-Op, CF-Co-Op And Custom Feeder. The Producer acknowledges and agrees the representations, warranties and covenants set out in this Article A4 of this Part "A" are for the benefit of the P-Co-Op, the CF-Co-Op and the Custom Feeder.

A4.13 P-Co-Op, CF-Co-Op And Custom Feeder's Reliance On Producer's Representations, Warranties And Covenants. The Producer acknowledges and agrees the P-Co-Op, the CF-Co-Op and the Custom Feeder are relying on all representations, warranties and covenants set out in this Article A4 of this Part "A".

Article A5 — Custom Feeder's Representations, Warranties And Covenants

A5.01 Custom Feeder's Knowledge. The Custom Feeder represents and warrants it has read and understands:

The OIC;
The Guidelines; and
This Agreement.

A5.02 Custom Feeder Is Bound. The Custom Feeder covenants to be bound by:

The OIC;
The Guidelines; and
This Agreement.

A5.03 Custom Feeder's Authority To Execute Agreement. The Custom Feeder represents and warrants it has:

The full power and authority to enter this Agreement; and
Taken all necessary actions to authorize the execution of this Agreement.

A5.05 No Agreements Restricts P-Co-Op, CF-Co-Op Or Producer's Ability To Exercise Rights Under The Agreement. The Custom Feeder represents and warrants it is not a party to any agreement restricting the Co-op or the Producer's ability to exercise any rights the P-Co-Op, the CF-Co-Op or the Producer may have under this Agreement.

A5.07 Information Custom Feeder Provided To P-Co-Op, CF-Co-Op And Producer Is Correct. The Custom Feeder represents and warrants any information the Custom Feeder provided to the P-Co-Op, the CF-Co-Op or the Producer in relation to this Agreement is true and accurate in all material respects as of the date the Custom Feeder signed Part "B".

A5.08 Custom Feeder To Provide Supporting Documentation. The Custom Feeder covenants to provide to the P-Co-Op, the CF-Co-Op and the Producer with, upon request, and within the time-period set out in the Notice, documents proving the matters referred to in this Article A5 of this Part "A".

A5.10 Custom Feeder To Notify P-Co-Op, CF-Co-Op And Producer Of Any Changes To Representations, Warranties And Covenants. The Custom Feeder covenants to advise the P-Co-Op, the CF-Co-Op and the Producer within five (5) Business Days of:

Any changes affecting its representations, warranties and covenants set out in this Article A5 of this Part "A"; and
Any Proceedings commenced against it which could or would reasonably adversely affect in a material manner its ability to comply with the terms and conditions of this Agreement.

A5.11 Custom Feeder's Representations, Warranties And Covenants For Benefit Of The P-Co-Op, CF-Co-Op And Producer. The Custom Feeder acknowledges and agrees the representations, warranties and covenants set out in this Article A5 of this Part "A" are for the benefit of the P-Co-Op, the CF-Co-Op and the Producer.

A5.12 P-Co-Op, CF-Co-Op And Producer's Reliance On Custom Feeder's Representations, Warranties And Covenants. The Custom Feeder acknowledges and agrees the P-Co-Op, the CF-Co-Op and the Producer are relying on all representations, warranties and covenants set out in this Article A5 of this Part "A".

Article A6 — P-Co-Op's Representations, Warranties And Covenants

A6.01 P-Co-Op's Knowledge. The P-Co-Op represents and warrants it has read and understands:

The OIC;
The Guidelines; and
This Agreement.

A6.02 P-Co-Op Is Bound. The P-Co-Op covenants to be bound by:

The OIC;
The Guidelines; and
This Agreement.

A6.03 P-Co-Op's Authority To Execute Agreement. The P-Co-Op represents and warrants it has:

The full power and authority to enter this Agreement; and
Taken all necessary actions to authorize the execution of this Agreement.

A6.04 P-Co-Op's Representations, Warranties And Covenants For Benefit Of The Producer, CF-Co-Op And Custom Feeder. The P-Co-Op acknowledges and agrees the representations, warranties and covenants set out in this Article A6 of this Part "A" are for the benefit of the Producer, the CF-Co-Op and the Custom Feeder.

A6.05 Producer, CF-Co-Op And Custom Feeder's Reliance On P-Co-Op's Representations, Warranties And Covenants. The P-Co-Op acknowledges and agrees the Producer, the CF-Co-Op and the Custom Feeder are relying on all representations, warranties and covenants set out in this Article A6 of this Part "A".

Article A7 — CF-Co-Op's Representations, Warranties And Covenants

A7.01 CF-Co-Op's Knowledge. The CF-Co-Op represents and warrants it has read and understands:

The OIC;
The Guidelines; and
This Agreement.

A7.02 CF-Co-Op Is Bound. The CF-Co-Op covenants to be bound by:

The OIC;
The Guidelines; and
This Agreement.

A7.03 CF-Co-Op's Authority To Execute Agreement. The CF-Co-Op represents and warrants it has:

The full power and authority to enter this Agreement; and
Taken all necessary actions to authorize the execution of this Agreement.

A7.04 CF-Co-Op's Representations, Warranties And Covenants For Benefit Of The P-Co-Op, Producer And Custom Feeder. The CF-Co-Op acknowledges and agrees the representations, warranties and covenants set out in this Article A7 of this Part "A" are for the benefit of the P-Co-Op, the Producer and the Custom Feeder.

A7.05 P-Co-Op, Producer And Custom Feeder's Reliance On CF-Co-Op's Representations, Warranties And Covenants. The CF-Co-Op acknowledges and agrees the P-Co-Op, the Producer and the Custom Feeder are relying on all representations, warranties and covenants set out in this Article A7 of this Part "A".

Article A8 — Producer's Obligations Under The Agreement

A8.01 Produced Cattle To Be Raised In Name Of P-Co-Op. The Producer will only Produce Cattle in the name of the P-Co-Op.

A8.02 Payment Of Insurance On Cattle. The Producer will pay the P-Co-Op for the insurance that the P-Co-Op has purchased for the Cattle in accordance with section B1.01 of Part "B".

A8.03 Business Insurance. The Producer will have, and maintain while this Agreement is in effect, at its own cost and expense, with insurers having a secure A.M. Best rating of B+ or greater, or the equivalent, all necessary and appropriate insurance that a prudent person Producing Cattle would have, including commercial general liability insurance on an occurrence basis for third party bodily injury, personal injury and property damage. The insurance policy will include the following:

A cross-liability clause;
Contractual liability coverage; and
A thirty (30) day written notice of cancellation or termination provision.

The policy will also include the P-Co-Op as additional insured from the date the Producer signs Part "B" and will maintain said insurance while this Agreement remains in effect with respect to the Producer's obligations under, or otherwise in connection with, this Agreement.

A8.04 Proof Of Insurance. The Producer will provide the P-Co-Op with proof that confirms the insurance coverage required under section A8.03 of this Part "A" is in place in the manner and within the time limit set out in the Notice.

A8.05 Copy Of Insurance Policy. The Producer will provide the P-Co-Op, upon its request, a copy of the insurance policies the Producer is required to have under section A8.03 of this Part "A" within the time limit set out in the Notice.

A8.06 Identification Of Cattle. The Producer will mark the Cattle as set out under section B1.02 of Part "B".

A8.07 Where Produced Cattle To Be Located. The Producer will only allow Produced Cattle to be raised at the place set out in section B1.03 of Part "B". In the event an emergency arises that requires the Cattle to be moved from the location set out in section B1.03 of Part "B", the Producer may move the Cattle or cause the Cattle to be moved to a location of their choice, provided the Producer provides the Co-Op with notice of the movement as soon as practicable thereafter and the Co-Op consents to where the Cattle were moved. If the Co-Op does not consent to the location, the Producer will follow any directions issued by the Co-Op regarding their location.

A8.08 Producing Cattle. The Producer will:

Keep the Cattle under the Producer's charge, management or control throughout the term of this Agreement;
Monitor the Custom Feeder while the Custom Feeder is Producing Cattle;
Ensure the Custom Feeder is Producing Cattle in accordance with all Requirements Of Law;
Ensure the Custom Feeder is maintaining the health of the Cattle and is providing proper veterinary services to the Cattle;
Ensure the Custom Feeder is feeding the Cattle and making them ready for market in accordance with good agricultural practices, as determined by the P-Co-Op and under the Supervisor's overall supervision;
Forthwith notify the Supervisor of any morbidity or mortality of the Cattle; and
Deliver the Cattle or cause the Custom Feeder to deliver the Cattle for sale at such time as may be requested by the Supervisor.

A8.09 Producer Responsible For All Costs Of Producing Cattle. The Producer acknowledges and agrees it is solely responsible for all costs related to Producing Cattle, including the fees the Custom Feeder is charging the Producer to Produce Cattle, as set out under section B1.01 of Part "B". The Producer further acknowledges and agrees the P-Co-Op has no legal, equitable or other obligation to pay for any costs related to Producing Cattle the Producer incurs, including the fees the Custom Feeder is charging the Producer to Produce Cattle, as set out under section B1.01 of Part "B".

A8.10 Indemnification Of P-Co-Op. The Producer will indemnify and hold harmless the P-Co-Op, its directors, officers, employees and servants, from and against all suits, judgments, claims, demands, expenses, actions, causes of action and losses (including, without limitation, reasonable legal expenses), related to Producing Cattle.

A8.11 Access To Facilities Where Cattle Are Being Raised. The Producer will allow or cause to be allowed employees of the P-Co-Op to have reasonable access, upon being given a minimum of twenty-four (24) hours' Notice, to the facilities where the Cattle are being raised for the purposes of inspecting the facilities and the Cattle. Without limiting the generality of the foregoing, access includes access to any records under the Producer's charge, management or control related to the Produced Cattle.

Article A9 — Custom Feeder's Obligations Under The Agreement

A9.01 Produced Cattle To Be Raised In Name Of P-Co-Op. The Custom Feeder will Produce Cattle in the name of the P-Co-Op.

A9.02 Duration Of Custom Feeding. Without limiting any rights of the P-Co-Op under Article A12 or the Producer under Article A13, the Custom Feeder will Produce Cattle for the period set out under section B1.04 of Part "B".

A9.03 Business Insurance. The Custom Feeder will have, and maintain while this Agreement is in effect, at its own cost and expense, with insurers having a secure A.M. Best rating of B+ or greater, or the equivalent, all necessary and appropriate insurance that a prudent person Producing Cattle as a Custom Feeder would have, including commercial general liability insurance on an occurrence basis for third party bodily injury, personal injury and property damage. The insurance policy will include the following:

A cross-liability clause;
Contractual liability coverage; and
A thirty (30) day written notice of cancellation or termination provision.

The policy will also include the P-Co-Op and the Producer as additional insureds from the date the Producer places the Cattle with the Custom Feeder and will maintain said insurance while the Cattle are with the Custom Feeder.

A9.04 Proof Of Insurance. The Custom will provide the P-Co-Op and the Producer, as the case may be with proof that confirms the insurance coverage required under section A9.03 of this Part "A" is in place in the manner and within the time limit set out in the Notice.

A9.05 Copy Of Insurance Policy. The Custom Feeder will provide the P-Co-Op and the Producer, as the case may be, upon their request, a copy of the insurance policy the Custom Feeder is required to have under section A9.03 of this Part "A" within the time limit set out in the Notice.

A9.06 Where Produced Cattle To Be Located. The Custom Feeder will only Produce Cattle at the place set out in section B1.03 of Part "B". In the event an emergency arises that requires the Cattle to be moved from the location set out in section B1.03 of Part "B", the Custom Feeder may move the Cattle to a location of their choice, provided the Custom Feeder provides the Co-Op and the Producer with notice of the movement as soon as practicable thereafter and the Co-Op consents to where the Cattle were moved. If the Co-Op does not consent to the location, the Producer will follow any directions issued by the Co-Op regarding their location.

A9.07 Producing Cattle. The Custom Feeder will:

Produce Cattle in accordance with all Requirements Of Law;
Maintain the health of the Cattle and provide proper veterinary services to the Cattle;
Feed the Cattle and make them ready for market in accordance with good agricultural practices, as determined by the Supervisor and under the Supervisor's overall supervision;
Forthwith notify the Producer of any morbidity or mortality of the Cattle; and
Have the Cattle ready to be delivered or deliver the Cattle for sale at such time as may be requested by the Supervisor.

A9.08 Producer Responsible For All Costs Of Producing Cattle. The Custom Feeder acknowledges and agrees the Producer is solely responsible for all fees the Custom Feeder charges the Producer to Produce Cattle, as set out under section B1.01 of Part "B". The Custom Feeder further acknowledges and agrees that the P-Co-Op and the CF-Co-Op has no legal, equitable or other obligation to pay for any fees the Custom Feeder is charging the Producer to Produce Cattle, as set out under section B1.01 of Part "B".

A9.09 Notice To P-Co-Op And CF-Co-Op Of Payment Owing By Producer To Custom Feeder. The Custom Feeder will provide Notice to the P-Co-Op and the CF-Co-Op of any payment the Producer owes to the Custom Feeder that has not been paid within fourteen (14) Business Days of when that payment became due.

A9.10 Indemnification Of P-Co-Op, CF-Co-Op And Producer. The Custom Feeder will indemnify and hold harmless the P-Co-Op, the CF-Co-Op and the Producer, their directors, officers, employees and servants, from and against all suits, judgments, claims, demands, expenses, actions, causes of action and losses (including, without limitation, reasonable legal expenses), related to Producing Cattle.

A9.11 Access To Facilities Where Cattle Are Being Raised. The Custom Feeder will allow or cause to be allowed employees of the P-Co-Op and the Producer to have reasonable access, upon being given a minimum of twenty-four (24) hours' Notice, to the facilities where the Cattle are being raised for the purposes of inspecting the facilities and the Cattle. Without limiting the generality of the foregoing, access includes access to any records under the Custom Feeder's charge, management or control related to the Produced Cattle under this Agreement.

Article A10 — P-Co-Op's Obligations Under The Agreement

A10.01 Allow Producer To Enroll Cattle In Risk Management Programs. The P-Co-Op will allow the Producer to enroll the Cattle in any risk management programs in the Producer's own name and receive any benefits from those risk management programs directly.

A10.02 Exception. Despite section A10.01 of this Part "A", the Producer will assign any benefits the Producer may be eligible to receive under a risk management program the Producer has enrolled the Cattle to the P-Co-Op as security if required to do so under any terms or conditions set out under the Program.

A10.03 Insurance. The P-Co-Op will have and maintain until the Cattle are sold insurance on the Cattle that covers the fair market value of the Cattle throughout the Term of the Agreement.

Article A11 — CF-Co-Op's Obligations Under The Agreement

A11.01 CF-Co-Op To Inform P-Co-Op And Producer If Custom Feeder Defaults On Purchase Order Or Membership Status Changes. The CF-Co-Op will inform the P-Co-Op and the Producer as soon as practicable if the Custom Feeder defaults on a Purchase Order the Custom Feeder has with the CF-Co-Op or the Custom Feeder's membership status with the CF-Co-Op changes.

A11.02 CF-Co-Op Will Not Stop, Obstruct, Hinder Or Otherwise Interfere With P-Co-Op Removing Cattle From Custom Feeder. The CF-Co-Op agrees that the CF-Co-Op will not stop, obstruct, hinder or otherwise interfere with the P-Co-Op removing the Cattle from the Custom Feeder pursuant to section A12.01 of this Part "A".

A11.03 CF-Co-Op Will Not Stop, Obstruct, Hinder Or Otherwise Interfere With Producer Removing Cattle From Custom Feeder. The CF-Co-Op agrees that the CF-Co-Op will not stop, obstruct, hinder or otherwise interfere with the Producer removing the Cattle from the Custom Feeder pursuant to section A13.01 of this Part "A".

Article A12 — P-Co-Op's Right To Remove Cattle

A12.01 P-Co-Op's Right To Remove Cattle. The Producer and the Custom Feeder acknowledge and agree the P-Co-Op may remove some or all the Cattle covered by this Agreement and sell those Cattle if one or more of the following circumstances occurs:

The:
1. Producer breaches a term or condition of this Agreement, or
2. The Custom Feeder breaches a term or condition of this Agreement;
The:
1. Producer breaches a covenant contained in this Agreement and fails to remedy that breach for a period of ten (10) Business Days after the P-Co-Op, CF-Co-Op or the Custom Feeder has, as the case may be, provided Notice of the breach, or
2. Custom Feeder breaches a covenant contained in this Agreement and fails to remedy that breach for a period of ten (10) Business Days after the P-Co-Op, the CF-Co-Op or the Producer has, as the case may be, provided Notice of the breach;
Where a representation made by the:
1. Producer in connection with this Agreement is, or was at the time of its making, false or misleading, or
2. Custom Feeder in connection with this Agreement is, or was at the time of its making, false or misleading;
The Producer or the Custom Feeder appears, as the case may be, to have abandoned the Cattle;
The Producer or the Custom Feeder is not, as the case may be, Producing Cattle in accordance with good agricultural practices, as determined by the P-Co-Op;
The failure of the Producer to pay or otherwise perform as and when due any obligations or liabilities owed to the P-Co-Op or Custom Feeder under this Agreement;
The Producer or the Custom Feeder's, as the case may be, insolvency or there is an appointment of a receiver, manager, trustee or liquidator in respect of the Producer or Custom Feeder's property, as the case may be;
The Producer or the Custom Feeder makes, as a case may be, an assignment for the benefit of their creditors;
The institution of a proceeding in bankruptcy against the Producer or the Custom Feeder, as the case may be, whether voluntary or involuntary, or the institution of any proceeding by the Producer or the Custom Feeder, as the case may be, to obtain relief against any of the Producer or Custom Feeder's creditors, as the case may be;
The:
1. Producer abandons or discontinues all or any part of its business in relation to this Agreement, or
2. Custom Feeder abandons or discontinues all or any part of its business in relation to this Agreement;
An execution or other legal process of any court becomes executable against the Producer or the Custom Feeder, as the case may be;
A Material Adverse Change occurs in relation to the Producer or the Custom Feeder;
The:
1. Producer prevents or fails to co-operate with any audit or other inspection provided for under the OIC, a Purchase Order related to the Cattle covered under this Agreement or this Agreement for a period of ten (10) Business Days after receiving a demand for such co-operation, or
2. The Custom Feeder prevents or fails to co-operate with any audit or other inspection provided for under the OIC or this Agreement for a period of ten (10) Business Days after receiving a demand for such co-operation;
The:
1. Producer fails to provide any information required to be provided under the OIC, the Guidelines, a Purchase Order related to the Cattle covered under this Agreement or this Agreement for a period of ten (10) Business Days after receiving a written demand for the information, or
2. Custom Feeder fails to provide any information required to be provided under the OIC, the Guidelines or this Agreement for a period of ten (10) Business Days after receiving a written demand for the information;
The Producer or the Custom Feeder asks, as the case may be, in writing that the P-Co-Op take the Cattle; or
The Producer uses any part of the funds under a Purchase Order the Producer has with the P-Co-Op for any other purposes other than Producing Cattle.

A12.02 P-Co-Op's Right To Remove Cattle From Custom Feeder Supersedes Producer's Right To Remove Of Cattle From Custom Feeder. If the P-Co-Op and the Producer both decide to remove Cattle from the Custom Feeder, the P-Co-Op's right to remove the Cattle pursuant to section A12.01 of this Part "A" supersedes the Producer's right to remove Cattle pursuant to section A13.01 of this Part "A" and the Producer will yield to the P-Co-Op's right to remove Cattle pursuant to section A12.01 of this Part "A".

A12.03 Producer Debt Owing To P-Co-Op For Reasonable Costs To Remove Cattle. The Producer acknowledges and agrees the Producer is indebted to the P-Co-Op for all reasonable costs the P-Co-Op incurs to remove the Cattle pursuant to section A12.01 of this Part "A" as well as any subsequent management of the Cattle, including the sale of the Cattle, and that this debt is in addition to what the Producer may owe the P-Co-Op in relation to any other agreements the Producer may have with the P-Co-Op. The Producer further acknowledges and agrees that the Producer will repay any debt owing to the P-Co-Op for any reasonable costs the P-Co-Op incurs from taking any action pursuant to section A12.01 of this Part "A" as well as any subsequent management of the Cattle, including the sale of the Cattle.

A12.04 P-Co-Op Does Not Owe Debt To Custom Feeder. The Custom Feeder acknowledges and agrees that the P-Co-Op does not owe the Custom Feeder a debt at law, in equity or otherwise, for any unpaid costs the Custom Feeder incurred to Produce Cattle for the Producer in the event the P-Co-Op removes the Cattle pursuant to section A12.01 of this Part "A" and that any unpaid costs the Custom Feeder incurred to Produce Cattle for the Producer represents a debt as between the Custom Feeder and the Producer.

Article A13 — Producer's Right To Remove Cattle

A13.01 Producer's Right To Remove Cattle. The Custom Feeder acknowledges and agrees the Producer may remove some or all the Cattle covered by this Agreement if one or more of the following circumstances occurs:

The Custom Feeder breaches a term or condition of this Agreement;
The Custom Feeder breaches a covenant contained in this Agreement and fails to remedy that breach for a period of ten (10) Business Days after the P-Co-Op, the CF-Co-Op or the Producer has, as the case may be, provided Notice of the breach;
The Custom Feeder made a false or misleading representation in connection with this Agreement;
The Custom Feeder appears to have abandoned the Cattle;
The Custom Feeder is not Producing Cattle in accordance with good agricultural practices;
The Custom Feeder's insolvency or there is an appointment of a receiver, manager, trustee or liquidator in respect of the Custom Feeder's property;
The Custom Feeder make an assignment for the benefit of the Custom Feeder's creditors;
The institution of a proceeding in bankruptcy against the Custom Feeder, whether voluntary or involuntary, or the institution of any proceeding by the Custom Feeder to obtain relief against any of the Custom Feeder's creditors;
The Custom Feeder abandons or discontinues all or any part of its business in relation to this Agreement;
An execution or other legal process of any court becomes executable against the Custom Feeder;
A Material Adverse Change occurs in relation to the Custom Feeder;
The Custom Feeder prevents or fails to co-operate with any audit or other inspection provided for under the OIC or this Agreement for a period of ten (10) Business Days after receiving a written demand for such co-operation;
The Custom Feeder fails to provide any information required to be provided under the OIC, the Guidelines or this Agreement for a period of ten (10) Business Days after receiving a written demand for the information;
The Custom Feeder asks the Producer in writing to take the Cattle; and
The Producer provides the Custom Feeder with fifteen (15) Business Days' Notice the Producer is terminating this Agreement.

Article A14 — General

A14.01 Representatives May Bind Parties. The Parties represent and warrant their respective representatives have the authority to legally bind them to the extent permissible by law.

A14.02 Terms Binding. The Parties will take all reasonable measures to ensure their officers, directors, employees, agents and third-party contractors are bound to observe all terms and conditions of the Agreement.

A14.03 Agreement Binding. This Agreement will enure to the benefit of and be binding upon the Parties, their successors, executors, administrators and their permitted assigns.

A14.04 Waivers In Writing. If a Party fails to comply with any term of the Agreement, that Party may only rely on a waiver of the other Party if the other Party has provided a written waiver in accordance with the Notice provisions set out under section A14.12 of Part "A". Any waiver must refer to a specific failure to comply and will not have the effect of waiving any subsequent failures to comply.

A14.05 Tolerance Or Indulgence Of A Breach Not A Waiver. Any failure by one Party to insist on one or more instances of strict compliance by another Party of any of the terms and conditions in the Agreement will not be construed as a waiver by the Party that is tolerating the breach and the obligations of the other Party with respect to such compliance will continue in full force and effect.

A14.06 Time Is Of The Essence. Time is of the essence in the performance and observation of the terms and conditions of this Agreement. No extension or variation of time will operate as a waiver of this provision.

A14.07 No Assignment. The:

Custom Feeder will not assign this Agreement without the prior written consent of the Producer, the P-Co-Op and the CF-Co-Op;
Producer will not assign this Agreement without the prior written consent of the P-Co-Op; and
The P-Co-Op will not assign this Agreement without the prior written consent of the Lender and the Minister.

A14.08 No Amendment. The Parties will amend this Part "A" without:

Obtaining the prior written consent of the Minister and the Lender; and
An amending agreement in writing, dated and signed by the Parties.

A14.09 Severability Of Provisions. The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of any other provision of this Agreement. Any invalid or unenforceable provision will be deemed to be severed from this Agreement.

A14.10 Governing Law. This Agreement and the rights, obligations and relations of the Parties will be governed by and construed in accordance with the laws of the Province of Ontario and the applicable federal laws of Canada. Any actions or proceedings in relation to this Agreement will be conducted in Ontario.

A14.11 Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter contained herein and supersedes all prior oral or written representations or agreements.

A14.12 Notice. Notices will be in writing and will be delivered by postage-prepaid mail, personal delivery or Email and will be addressed to the P-Co-Op, the Producer, the CF-Co-Op and the Custom Feeder respectively, as set out in section B1.05 of Part "B".

Notices will be deemed to have been received:

In the case of postage-prepaid mail, five (5) Business Days after such Notice is mailed; or
In the case of personal delivery, facsimile or Email, one (1) Business Day after such Notice is received by the other Party.

The Parties agree for the purposes of this section A14.12 of this Part "A", the names of the individuals may be changed without amending this Agreement through the Party making the change providing written notice to the other Party of said change.

A14.13 Counterparts. Part "B" may be signed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

A14.14 Survival. The rights and obligations set out under Articles A1, A8 and A9 as well as sections A14.06, A14.08, A14.09, A14.10, A14.11, A14.12 and A14.15 of this Part "A" and all applicable definitions, cross-referenced provisions will continue in full force and effect for a period of seven (7) years from the expiry or termination of this Agreement.

Inter Co-op Custom Feeding Agreement — Part "B" — Payment And Feeding Requirements

Inter Co-op Custom Feeding Agreement Number^{footnote 2[2]}:

Between:

(the "Producer")

and

(the "P-Co-Op")

and

(the "Custom Feeder")

and

(the "CF-Co-Op")