Document:

Exhibit 10.1

 

EXECUTION COPY

 

 

REVOLVING
CREDIT AGREEMENT

 

between

 

BRASCAN (US)
CORPORATION 

as Lender

 

and

 

CRYSTAL RIVER CAPITAL, INC.,

as Borrower

 

dated as of August 9, 2007

 

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  I.

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
   

  	
  1.1

  	
  Accounting Terms

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.2

  	
  General Terms

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.3

  	
  Certain Matters of Construction

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
  ADVANCES, PAYMENTS

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  Amount of Advances

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.2

  	
  Procedure for Advances Borrowing

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.3

  	
  Disbursement of Advance Proceeds

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.4

  	
  Maximum Advances

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.5

  	
  Manner of Borrowing and Repayment of Advances

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.6

  	
  Repayment of Excess Advances

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.7

  	
  Statement of Account

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.8

  	
  Additional Payments

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.9

  	
  Use of Proceeds

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
  INTEREST AND FEES

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
  Interest

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.2

  	
  Computation of Interest

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.3

  	
  Maximum Charges

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.4

  	
  Increased Costs

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.5

  	
  Basis For Determining Interest Rate Inadequate or
  Unfair

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
  REPRESENTATIONS AND WARRANTIES

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Authority

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.2

  	
  Formation and Qualification

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.3

  	
  Survival of Representations and Warranties

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.4

  	
  Tax Returns

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.5

  	
  Financial Statements

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.6

  	
  Entity Name

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.7

  	
  O.S.H.A. and Environmental Compliance

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.8

  	
  Solvency; No Litigation, Violation, Indebtedness or
  Default

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.9

  	
  Licenses and Permits

  	
  16

  

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
   

  	
  4.10

  	
  Default of Indebtedness

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.11

  	
  No Default

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.12

  	
  No Burdensome Restrictions

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.13

  	
  Margin Regulations

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.14

  	
  Investment Company Act

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.15

  	
  Disclosure

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.16

  	
  Conflicting Agreements

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.17

  	
  Application of Certain Laws and Regulations

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.18

  	
  Business and Property of Borrower

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.19

  	
  Anti-Terrorism Laws

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.20

  	
  Trading with the Enemy

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
  AFFIRMATIVE COVENANTS

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Reserved

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.2

  	
  Conduct of Business and Maintenance of Existence and
  Assets

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.3

  	
  Violations

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.4

  	
  Financial Covenants

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.5

  	
  Execution of Supplemental Instruments

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.6

  	
  Payment of Indebtedness

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.7

  	
  Standards of Financial Statements

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  VI.

  	
  NEGATIVE COVENANTS

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  Prohibition on Fundamental Changes

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.2

  	
  Guarantees

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.3

  	
  Dividends

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.4

  	
  Indebtedness

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.5

  	
  Nature of Business

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.6

  	
  Transactions with Affiliates

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.7

  	
  Fiscal Year and Accounting Changes

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.8

  	
  Amendment of Articles of Incorporation, By-Laws

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.9

  	
  Compliance with ERISA

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.10

  	
  Anti-Terrorism Laws

  	
  22

  

 

ii

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
   

  	
  6.11

  	
  Trading with the Enemy Act

  	
  22

  
	
   

  	
   

  	
   

  
	
  VII.

  	
  CONDITIONS PRECEDENT

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  Conditions to Initial Advances

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.2

  	
  Conditions to Each Advance

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  VIII.

  	
  INFORMATION AS TO BORROWER

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  Environmental Reports

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.2

  	
  Litigation

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.3

  	
  Material Occurrences

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.4

  	
  Annual Financial Statements

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.5

  	
  Quarterly Financial Statements

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.6

  	
  Other Reports

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.7

  	
  Additional Information

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.8

  	
  Notice of Suits, Adverse Events

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.9

  	
  ERISA Notices and Requests

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.10

  	
  Pay Down Amounts

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.11

  	
  Additional Documents

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  IX.

  	
  EVENTS OF DEFAULT

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.1

  	
  Nonpayment

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.2

  	
  Breach of Representation

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.3

  	
  Financial Information

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.4

  	
  Judicial Actions

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.5

  	
  Noncompliance

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.6

  	
  Judgments

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.7

  	
  Bankruptcy of Borrower

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.8

  	
  Inability to Pay

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.9

  	
  Material Adverse Effect

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.10

  	
  Cross Default

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.11

  	
  Change of Control

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.12

  	
  Invalidity

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.13

  	
  Licenses

  	
  28

  
					

 

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  Page

  
	
   

  	
   

  	
   

  
	
   

  	
  9.14

  	
  Pension Plans

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.15

  	
  Borrowing and Pay Down Amounts

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  X.

  	
  BRASCAN’S RIGHTS AND REMEDIES AFTER DEFAULT

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.1

  	
  Rights and Remedies

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.2

  	
  Brascan’s Discretion

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.3

  	
  Rights and Remedies not Exclusive

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.4

  	
  Allocation of Payments After Event of Default

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  XI.

  	
  WAIVERS AND JUDICIAL PROCEEDINGS

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.1

  	
  Waiver of Notice

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.2

  	
  Delay

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.3

  	
  Jury Waiver

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
  XII.

  	
  EFFECTIVE DATE AND TERMINATION

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.1

  	
  Term

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.2

  	
  Termination

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  XIII.

  	
  MISCELLANEOUS

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.1

  	
  Governing Law

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.2

  	
  Entire Understanding

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.3

  	
  Successors and Assigns; Participations

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.4

  	
  Application of Payments

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.5

  	
  Indemnity

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.6

  	
  Notice

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.7

  	
  Survival

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.8

  	
  Severability

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.9

  	
  Expenses

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.10

  	
  Injunctive Relief

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.11

  	
  Damages

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.12

  	
  Captions

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.13

  	
  Counterparts; Facsimile Brascans

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.14

  	
  Construction

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.15

  	
  Sharing Information

  	
  35

  

 

iv

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
   

  	
  13.16

  	
  Publicity

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.17

  	
  Certifications From Banks and Participants; US
  PATRIOT Act

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  List of
  Exhibits and Schedules

  	
   

  

 

	
  Exhibits

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit 2.1

  	
  Revolving Credit Note

  	
   

  
	
  Exhibit 14.3

  	
  Commitment Transfer Supplement

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedules

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1.2

  	
  Permitted Encumbrances

  	
   

  
	
  Schedule 4.1

  	
  Consents

  	
   

  
	
  Schedule 4.2(a)

  	
  States of Qualification and Good Standing

  	
   

  
	
  Schedule 4.2(b)

  	
  Subsidiaries

  	
   

  
	
  Schedule 4.4

  	
  Federal Tax Identification Number

  	
   

  
	
  Schedule 4.8(b)

  	
  Litigation

  	
   

  
	
  Schedule 4.8(d)

  	
  Plans

  	
   

  
	
  Schedule 4.9

  	
  Licenses and Permits

  	
   

  
	
  Schedule 6.3

  	
  Guarantees

  	
   

  
	
  Schedule 6.6

  	
  Indebtedness

  	
   

  

 

v

 

REVOLVING CREDIT AGREEMENT

 

Revolving Credit Agreement dated as of August
9th, 2007, by and among CRYSTAL RIVER CAPITAL, INC., a corporation organized
under the laws of the State of Maryland (“Borrower”) and BRASCAN (US)
CORPORATION (“Brascan”), as Lender.

 

IN CONSIDERATION of the mutual covenants and
undertakings herein contained, Borrower and Brascan hereby agree as follows:

 

I.              DEFINITIONS.

 

1.1           Accounting
Terms. Where explicitly indicated, as used in this Agreement,
the Other Documents or any certificate, report or other document made or
delivered pursuant to this Agreement, accounting terms not defined in Section 1.2
or elsewhere in this Agreement and accounting terms partly defined in Section 1.2
to the extent not defined, shall have the respective meanings given to them
under GAAP; provided, however, whenever such accounting terms are used for the
purposes of determining compliance with financial covenants in this Agreement,
such accounting terms shall be defined in accordance with GAAP as applied in
preparation of the audited financial statements of Borrower for the fiscal year
ended December 31, 2006.

 

1.2           General
Terms. For purposes of this Agreement the following terms shall have the
following meanings:

 

“Adjusted Net Portfolio Value” shall
mean, at any time of determination, the fair value, as set forth in Borrower’s
balance sheet most recently delivered pursuant to Section 8.4 or 8.5 hereof, of
Borrower’s portfolio of mortgage-backed securities, adjusted for a hypothetical
2.0% per annum increase in interest rates.

 

“Advances” shall mean the advances
made pursuant to Section 2.1 hereof.

 

“Affiliate” of any Person shall mean
(a) any Person which, directly or indirectly, is in control of, is controlled
by, or is under common control with such Person, or (b) any Person who is a
director, managing member, general partner or officer (i) of such Person, (ii)
of any Subsidiary of such Person or (iii) of any Person described in clause (a)
above. For purposes of this definition, control of a Person shall mean the
power, direct or indirect, (x) to vote more than 25% of the Equity Interests
having ordinary voting power for the election of directors of such Person or
other Persons performing similar functions for any such Person, or (y) to
direct or cause the direction of the management and policies of such Person
whether by ownership of

 

“Agreement” shall mean this Revolving
Credit Agreement, as the same may be amended, restated, supplemented or
otherwise modified from time to time.

 

“Anti-Terrorism Laws” shall mean any
Applicable Laws relating to terrorism or money laundering, including Executive
Order No. 13224, the USA PATRIOT Act, the Applicable Laws comprising or
implementing the Bank Secrecy Act, and the Applicable Laws administered by the
United States Treasury Department’s Office of Foreign Asset Control (as any of
the foregoing Applicable Laws may from time to time be amended, renewed, extended,
or replaced).

 

 

“Applicable Law” shall mean all laws,
rules and regulations applicable to the Person, conduct, transaction, covenant,
Other Document or contract in question, including all applicable common law and
equitable principles; all provisions of all applicable state, Federal and
foreign constitutions, statutes, rules, regulations and orders of any
Governmental Body, and all orders, judgments and decrees of all courts and
arbitrators.

 

“Blocked Person”  shall have the meaning set forth in Section 4.19(b)
hereof.

 

“Borrower” shall have the meaning set
forth in the preamble to this Agreement and shall extend to all permitted
successors and assigns of such Person.

 

“Borrower’s Account” shall have the
meaning set forth in Section 2.7 hereof.

 

“Borrowing Date” shall have the
meaning set forth in Section 2.2(a) hereof.

 

“Brascan” shall have the meaning
ascribed to such term in the preamble to this Agreement and shall include each
Person which becomes a transferee, successor or assign of Brascan.

 

“Business Day” shall mean any day
other than Saturday or Sunday or a legal holiday on which commercial banks are
authorized or required by law to be closed for business in New York, New York
and, if the applicable Business Day relates to any Eurodollar Rate Loans, such
day must also be a day on which dealings are carried on in the London interbank
market.

 

“CERCLA” shall mean the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. §§9601 et seq.

 

“Change of Control” shall mean the
occurrence of any event which results in Hyperion Crystal River Capital
Advisors, LLC, a wholly-owned subsidiary of Hyperion Brookfield Asset
Management, Inc., or another wholly-owned subsidiary of Hyperion Brookfield
Asset Management, Inc. not acting as manager and advisor of Borrower.

 

“Closing Date” shall mean August 9,
2007.

 

“Code” shall mean the Internal Revenue
Code of 1986, as the same may be amended or supplemented from time to time, and
any successor statute of similar import, and the rules and regulations
thereunder, as from time to time in effect.

 

“Compliance Certificate” shall mean a
compliance certificate to be signed by the Chief Executive Officer, Chief Financial
Officer, Chief Operating Officer, Controller or Treasurer of Borrower, which
shall state that, based on an examination sufficient to permit such officer to
make an informed statement, no Default or Event of Default exists, or if such
is not the case, specifying such Default or Event of Default, its nature, when
it occurred, whether it is continuing and the steps being taken by Borrower
with respect to such default and, such certificate shall have appended thereto
calculations which set forth Borrower’s compliance with the requirements or
restrictions imposed by Sections 5.4, 6.5, 6.6 and 6.9.

 

2

 

“Consents” shall mean all filings and
all licenses, permits, consents, approvals, authorizations, qualifications and
orders of Governmental Bodies and other third parties, domestic or foreign,
necessary to carry on Borrower’s business or necessary (including to avoid a
conflict or breach under any agreement, instrument, other document, license,
permit or other authorization) for the execution, delivery or performance of
this Agreement, the Other Documents, including any Consents required under all
applicable Federal, state or other Applicable Law.

 

“Controlled Group” shall mean, at any
time, Borrower and all members of a controlled group of corporations and all
trades or businesses (whether or not incorporated) under common control and all
other entities which, together with Borrower, are treated as a single employer
under Section 414 of the Code.

 

“Default” shall mean an event,
circumstance or condition which, with the giving of notice or passage of time
or both, would constitute an Event of Default.

 

“Default
Rate” shall have the meaning set forth in Section 3.1 hereof.

 

“Dollar” and the sign “$” shall
mean lawful money of the United States of America.

 

“Equity Interests” of any Person shall
mean any and all shares, rights to purchase, options, warrants, general,
limited or limited liability partnership interests, member interests,
participation or other equivalents of or interest in (regardless of how
designated) equity of such Person, whether voting or nonvoting, including
common stock, preferred stock, convertible securities or any other “equity
security” (as such term is defined in Rule 3a11-1 of the General Rules and
Regulations promulgated by the SEC under the Exchange Act).

 

“ERISA” shall mean the Employee
Retirement Income Security Act of 1974, as amended from time to time and the
rules and regulations promulgated thereunder.

 

“Eurodollar
Rate” shall mean, for any Eurodollar
Rate Loan for the then current Interest Period relating thereto, the interest
rate per annum determined by Brascan by dividing (the resulting quotient
rounded upwards, if necessary, to the nearest 1/100th of 1% per annum) (i) the
rate of interest equal to the average of the London interbank offered rates for
U.S. Dollars quoted by the British Bankers’ Association as set forth on
Moneyline Telerate (or appropriate successor or, if British Banker’s
Association or its successor ceases to provide such quotes, a comparable
replacement determined by Brascan) display page 3750 as of 11:00 a.m. (London
Time) (or such other display page on the Moneyline Telerate system as may
replace display page 3750) two (2) Business Days prior to the first day of such
Interest Period for an amount comparable to such Eurodollar Rate Loan and
having a borrowing date and a maturity comparable to such Interest Period divided
by (ii) a number equal to 1.00 minus the Reserve Percentage. The Eurodollar Rate shall be adjusted with
respect to any Eurodollar Rate
Loan that is outstanding on the effective date of any change in the Reserve
Percentage as of such effective date. Brascan shall give prompt notice to
Borrower of the Eurodollar Rate
as determined or adjusted in accordance herewith, which determination shall be
conclusive absent manifest error.

 

3

 

“Eurodollar Rate Loan” shall mean an
Advance at any time that bears interest based on the Eurodollar Rate.

 

“Event of Default” shall have the
meaning set forth in Article IX  hereof.

 

“Exchange Act” shall have the mean the
Securities Exchange Act of 1934, as amended.

 

“Executive Order No. 13224” shall mean
the Executive Order No. 13224 on Terrorist Financing, effective September 24,
2001, as the same has been, or shall hereafter be, renewed, extended, amended
or replaced.

 

“Existing Credit Agreement” means the
credit agreement dated March 1, 2006 amongst the Borrower, Bank Hapoalim B.M.
and Signature Bank, as amended from time to time.

 

“GAAP” shall mean generally accepted
accounting principles in the United States of America in effect from time to
time.

 

“Governmental Body” shall mean any
nation or government, any state or other political subdivision thereof or any
entity, authority, agency, division or department exercising the legislative,
judicial, regulatory or administrative functions of or pertaining to a
government.

 

“Hazardous
Substance” shall mean, without limitation, any flammable explosives,
radon, radioactive materials, asbestos, urea formaldehyde foam insulation,
polychlorinated biphenyls, petroleum and petroleum products, methane, hazardous
materials, Hazardous Wastes, hazardous or Toxic Substances or related materials
as defined in CERCLA, the Hazardous Materials Transportation Act, as amended
(49 U.S.C. Sections 1801, et seq.), RCRA, Articles 15 and 27 of the New York
State Environmental Conservation Law or any other applicable environmental law
and in the regulations adopted pursuant thereto.

 

“Hazardous
Wastes” shall mean all waste materials subject to regulation under
CERCLA, RCRA or applicable state law, and any other applicable Federal and
state laws now in force or hereafter enacted relating to hazardous waste
disposal.

 

“Indebtedness” of a Person at a
particular date shall mean all obligations of such Person which in accordance
with GAAP would be classified upon a balance sheet as liabilities (except
capital stock and surplus earned or otherwise) and in any event, without
limitation by reason of enumeration, shall include all indebtedness, debt and
other similar monetary obligations of such Person whether direct or guaranteed,
and all premiums, if any, due at the required prepayment dates of such
indebtedness, and all indebtedness secured by a Lien on assets owned by such
Person, whether or not such indebtedness actually shall have been created,
assumed or incurred by such Person. Any indebtedness of such Person resulting
from the acquisition by such Person of any assets subject to any Lien shall be
deemed, for the purposes hereof, to be the equivalent of the creation,
assumption and incurring of the indebtedness secured thereby, whether or not
actually so created, assumed or incurred.

 

4

 

“Interest
Period” shall mean, with respect to a Eurodollar Rate Loan, the
period commencing on the Borrowing Date of such Eurodollar Rate Loan and ending
on the Repayment Date for such Eurodollar Rate Loan.

 

“Lien” shall mean any mortgage, deed
of trust, pledge, hypothecation, assignment, security interest, lien (whether
statutory or otherwise), charge, claim or encumbrance, or preference, priority
or other security agreement or preferential arrangement held or asserted in
respect of any asset of any kind or nature whatsoever including any conditional
sale or other title retention agreement, any lease having substantially the
same economic effect as any of the foregoing, and the filing of, or agreement
to give, any financing statement under the Uniform Commercial Code or
comparable law of any jurisdiction.

 

“Material Adverse Effect” shall mean a
material adverse effect on (a) the condition (financial or otherwise), results
of operations, assets, business, properties or prospects of Borrower, (b)
Borrower’s ability to duly and punctually pay or perform the Obligations in
accordance with the terms thereof, or (c) the practical realization of the
benefits of Brascan’s and Brascan’s rights and remedies under this Agreement
and the Other Documents.

 

“Maximum Advance Amount” shall mean $100,000,000.

 

“Multiemployer Plan” shall mean a “multiemployer
plan” as defined in Sections 3(37) and 4001(a)(3) of ERISA.

 

“Multiple Employer Plan” shall mean a
Plan which has two or more contributing sponsors (including Borrower or any
member of the Controlled Group) at least two of whom are not under common
control, as such a plan is described in Section 4064 of ERISA.

 

“Net Income” shall mean fiscal
year-to-date after-tax  net income from continuing operations,  including
extraordinary losses and extraordinary gains, all as determined in
accordance with GAAP, provided, however, that there shall be
specifically excluded therefrom (i) unrealized gains (or losses) on
derivatives; and (ii) realized and unrealized gains (or losses, including
non-cash impairment losses) on securities available for sale.

 

“Net Worth” at a particular date,
shall mean (a) the aggregate amount of all assets of Borrower as may properly
be classified as such in accordance with GAAP consistently applied and such
other assets as are properly classified as “intangible assets”, less (b) the
aggregate amount of all Indebtedness of Borrower.

 

“Notice of Borrowing” shall have the
meaning set forth in Section 2.2(a) hereof.

 

“Obligations” shall mean and include
any and all loans, advances, debts, liabilities, obligations, covenants and
duties owing by Borrower to Brascan of any kind or nature, present or future
(including any interest accruing thereon after maturity, or after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding relating to Borrower, whether or not a claim
for post-filing or post-petition interest is allowed in such proceeding),
whether or not evidenced by any note, guaranty or other 

 

5

 

instrument,
arising under this Agreement and the Other Documents, including but not limited
to reasonable attorneys’ fees and expenses and all obligations of Borrower to Brascan
to perform acts or refrain from taking any action.

 

“Ordinary Course of Business” shall
mean, generally, the ordinary course of Borrower’s business as conducted on the
Closing Date.

 

“Other Documents” shall mean the
Revolving Credit Note and any and all other agreements, instruments and
documents, now or hereafter executed by Borrower and/or delivered to Brascan in
respect of the transactions contemplated by this Agreement.

 

“Parent” of any Person shall mean a
corporation or other entity owning, directly or indirectly at least 50% of the
shares of stock or other ownership interests having ordinary voting power to
elect a majority of the directors of the Person, or other Persons performing
similar functions for any such Person.

 

“Payment Office” shall mean initially Brascan’s
office at                                 ;
thereafter, such other office of Brascan, if any, which it may designate by
notice to Borrower and to Brascan to be the Payment Office.

 

“PBGC” shall mean the Pension Benefit
Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA or
any successor.

 

“Pension Benefit Plan” shall mean at
any time any employee pension benefit plan (including a Multiple Employer Plan,
but not a Multiemployer Plan) which is covered by Title IV of ERISA or is
subject to the minimum funding standards under Section 412 of the Code and
either (i) is maintained by any member of the Controlled Group for employees of
any member of the Controlled Group; or (ii) has at any time within the
preceding five years been maintained by any entity which was at such time a
member of the Controlled Group for employees of any entity which was at such
time a member of the Controlled Group.

 

“Permitted Encumbrances” shall mean
(a) Liens for taxes, assessments or other governmental charges not delinquent
or being Properly Contested; (b) Liens disclosed in the financial statements
referred to in Section 4.5, the existence of which Brascan is deemed to have consented
to in writing; (c) deposits or pledges to secure obligations under worker’s
compensation, social security or similar laws, or under unemployment insurance;
(d) deposits or pledges to secure bids, tenders, contracts (other than
contracts for the payment of money), leases, statutory obligations, surety and
appeal bonds and other obligations of like nature arising in the Ordinary
Course of Business; (e) Liens arising by virtue of the rendition, entry or
issuance against Borrower or any Subsidiary, or any property of Borrower or any
Subsidiary, of any judgment, writ, order, or decree which has either been
stayed or bonded, or which does not constitute or result in an Event of Default
under Section 9.6; (f) common carriers’, mechanics’, workers’, materialmen’s or
other like Liens arising in the Ordinary Course of Business with respect to
obligations which are not due or which are being contested in good faith by
Borrower; (g) Liens placed upon fixed assets hereafter acquired to secure a
portion of the purchase price thereof, provided that any such lien shall not
encumber any other property of Borrower; (h) Liens 

 

6

 

disclosed on
Schedule 1.2; and (j) Liens in favor of counterparties to repurchase agreements
entered into in the Ordinary Course of Business.

 

“Person” shall mean any individual,
sole proprietorship, partnership, corporation, business trust, joint stock
company, trust, unincorporated organization, association, limited liability
company, limited liability partnership, institution, public benefit
corporation, joint venture, entity or Governmental Body (whether Federal,
state, county, city, municipal or otherwise, including any instrumentality, division,
agency, body or department thereof).

 

“Plan” shall mean any employee benefit
plan within the meaning of Section 3(3) of ERISA (including a Pension Benefit
Plan), maintained for employees of Borrower or any member of the Controlled
Group or any such Plan to which Borrower or any member of the Controlled Group
is required to contribute on behalf of any of its employees.

 

“Properly Contested” shall mean, in
the case of any Indebtedness of any Person (including any taxes) that is not
paid as and when due or payable by reason of such Person’s bona fide dispute
concerning its liability to pay same or concerning the amount thereof, (i) such
Indebtedness is being properly contested in good faith by appropriate
proceedings promptly instituted and diligently conducted; (ii) such Person has
established appropriate reserves as shall be required in conformity with GAAP;
(iii) the non-payment of such Indebtedness shall not have a Material Adverse
Effect and shall not result in the forfeiture of any assets of such Person;
(iv) no Lien is imposed upon any of such Person’s assets with respect to such
Indebtedness (except only with respect to property taxes that have priority as
a matter of applicable state law) and enforcement of such Lien is stayed during
the period prior to the final resolution or disposition of such dispute; (v) if
such Indebtedness results from, or is determined by the entry, rendition or
issuance against a Person or any of its assets of a judgment, writ, order or
decree, enforcement of such judgment, writ, order or decree is stayed pending a
timely appeal or other judicial review; and (vi) if such contest is abandoned,
settled or determined adversely (in whole or in part) to such Person, such
Person forthwith pays such Indebtedness and all penalties, interest and other
amounts due in connection therewith.

 

“RCRA” shall mean the Resource
Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq., as same may be
amended from time to time.

 

“Regulations” shall have the meaning
set forth in Section 3.11 hereof.

 

“Repayment Date” shall have the
meaning set forth in Section 2.2(a) hereof.

 

“Reportable Event” shall mean a
reportable event described in Section 4043(c) of ERISA or the regulations
promulgated thereunder.

 

“Reserve Percentage” shall mean as of
any day the maximum percentage in effect on such day as prescribed by the Board
of Governors of the Federal Reserve System (or any successor) for determining
the reserve requirements (including supplemental, marginal and emergency
reserve requirements) with respect to eurocurrency funding (currently referred
to as “Eurocurrency Liabilities”).

 

7

 

“Revolving Credit Note” shall mean the
promissory notes referred to in Section 2.1 hereof.

 

“Revolving Interest Rate” shall mean
an interest rate per annum equal to the sum of the Eurodollar Rate plus 4.00%
per annum with respect to Eurodollar Rate Loans.

 

“SEC” shall mean the Securities and
Exchange Commission or any successor thereto.

 

“Subsidiary” of any Person shall mean
a corporation or other entity of whose Equity Interests having ordinary voting
power (other than Equity Interests having such power only by reason of the
happening of a contingency) to elect a majority of the directors of such
corporation, or other Persons performing similar functions for such entity, are
owned, directly or indirectly, by such Person.

 

“Term” shall have the meaning set
forth in Section 12.1 hereof.

 

“Termination Event” shall mean (i) a
Reportable Event with respect to any Plan or Multiemployer Plan; (ii) the
withdrawal of Borrower or any member of the Controlled Group from a Plan or
Multiemployer Plan during a plan year in which such entity was a “substantial
employer” as defined in Section 4001(a)(2) of ERISA; (iii) the providing of
notice of intent to terminate a Plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to
terminate a Plan or Multiemployer Plan; (v) any event or condition (a) which
might constitute grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Plan or Multiemployer Plan, or
(b) that may result in termination of a Multiemployer Plan pursuant to Section
4041A of ERISA; or (vi) the partial or complete withdrawal within the meaning
of Sections 4203 and 4205 of ERISA, of Borrower or any member of the Controlled
Group from a Multiemployer Plan.

 

“Toxic Substance” shall mean and
include any material present on the real property or the leasehold interests which
has been shown to have significant adverse effect on human health or which is
subject to regulation under the Toxic Substances Control Act (TSCA), 15 U.S.C.
§§ 2601 et seq., applicable state law, or any other applicable Federal or state
laws now in force or hereafter enacted relating to toxic substances. “Toxic
Substance” includes but is not limited to asbestos, polychlorinated biphenyls
(PCBs) and lead-based paints.

 

“Trading with the Enemy Act” shall
mean the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) and any enabling
legislation or executive order relating thereto.

 

“Transactions” shall mean the
consummation of the transactions contemplated under this Agreement and the
Other Documents.

 

“USA Patriot Act” shall mean the
Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, as the same
has been, or shall hereafter be, renewed, extended, amended or replaced.

 

8

 

1.3           Certain
Matters of Construction. The terms “herein”, “hereof” and “hereunder”
and other words of similar import refer to this Agreement as a whole and not to
any particular section, paragraph or subdivision. All references herein to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement. Any
pronoun used shall be deemed to cover all genders. Wherever appropriate in the
context, terms used herein in the singular also include the plural and vice
versa. All references to statutes and related regulations shall include any
amendments of same and any successor statutes and regulations. Unless otherwise
provided, all references to any instruments or agreements to which Brascan is a
party, including references to any of the Other Documents, shall include any
and all modifications or amendments thereto and any and all extensions or
renewals thereof to the extent such modifications, amendments, extensions or
renewals are permitted by the terms hereof. All references herein to the time
of day shall mean the time in New York, New York. Whenever the words “including”
or “include” shall be used, such words shall be understood to mean “including,
without limitation” or “include, without limitation”. A Default or Event of
Default shall be deemed to exist at all times during the period commencing on
the date that such Default or Event of Default occurs to the date on which such
Default or Event of Default is waived in writing pursuant to this Agreement or,
is cured within any period of cure expressly provided for in this Agreement;
and an Event of Default shall “continue” or be “continuing” until such Event of
Default has been waived in writing by Brascan. Any agreement entered into by Brascan
pursuant to this Agreement or any of the Other Documents, any payment made by
or to or funds received by Brascan pursuant to or as contemplated by this
Agreement or any of the Other Documents, or any act taken or omitted to be
taken by Brascan, shall, unless otherwise expressly provided, be entered into,
made or received, or taken or omitted, for the benefit or account of Brascan. All
covenants hereunder shall be given independent effect so that if a particular
action or condition is not permitted by any of such covenants, the fact that it
would be permitted by an exception to, or otherwise within the limitations of,
another covenant shall not avoid the occurrence of a default if such action is
taken or condition exists. In addition, all representations and warranties
hereunder shall be given independent effect so that if a particular
representation or warranty proves to be incorrect or is breached, the fact that
another representation or warranty concerning the same or similar subject
matter is correct or is not breached shall not affect the incorrectness of a
breach of a representation or warranty hereunder.

 

II.            ADVANCES, PAYMENTS.

 

2.1           Amount
of Advances. Subject to the terms and conditions set forth in this
Agreement, Brascan shall make Advances of Eurodollar Rate Loans to Borrower, upon
the request of Borrower in accordance with the provisions of Section 2.2
hereof, in aggregate amounts outstanding at any time up to the Maximum Advance
Amount. The Advances shall be evidenced by one or more secured promissory notes
(collectively, the “Revolving Credit Note”) substantially in the form
attached hereto as Exhibit 2.1.

 

2.2           Procedure
for Advances Borrowing.

 

(a)           Borrower shall provide to Brascan a
written request to incur an Advance hereunder (each, a “Notice of Borrowing”)
no later than 12:00 p.m., on any Business Day, which Notice of Borrowing shall
specify: (i) the date of the proposed borrowing (the “Borrowing Date”),
which shall be at least one (1) Business Day after Brascan’s receipt of such
Notice of 

 

9

 

Borrowing; 
(ii) the amount of such Advance to be made in Eurodollar Rate Loans and (iii)
the date such Advance shall be repaid (the “Repayment Date”).

 

(b)           Eurodollar Rate Loans shall not be
made available to Borrower during the continuance of a Default or an Event of
Default.

 

(c)           Borrower shall indemnify Brascan and
hold Brascan harmless from and against any and all losses or expenses that Brascan
may sustain or incur as a consequence of any default by Borrower in the payment
of the principal of or interest on any Eurodollar Rate Loan or failure by
Borrower to complete a borrowing of a Eurodollar Rate Loan after notice thereof
has been given.

 

(d)           Notwithstanding any other provision
hereof, if any Applicable Law, treaty, regulation or directive, or any change
therein or in the interpretation or application thereof, shall make it unlawful
for Brascan (for purposes of this subsection (d), the term “Lender”
shall include Brascan and the office or branch where Brascan or any corporation
or bank controlling such Lender makes or maintains any Eurodollar Rate Loans)
to make or maintain its Eurodollar Rate Loans, the obligation of Lender to make
Eurodollar Rate Loans hereunder shall forthwith be cancelled and Borrower
shall, if any Eurodollar Rate Loans are then outstanding, promptly upon request
from Lender,  either pay all such
Eurodollar Rate Loans or convert such Eurodollar Rate Loans into loans priced
according to Brascan’s cost of funds for making such loans plus 4.00%. If any
such payment or conversion of any Eurodollar Rate Loan is made on a day that is
not the last day of the Interest Period applicable to such Eurodollar Rate
Loan, Borrower shall pay Brascan, upon Brascan’s request, such amount or
amounts as may be necessary to compensate Brascan for any loss or expense
sustained or incurred by Brascan in respect of such Eurodollar Rate Loan as a
result of such payment or conversion, including (but not limited to) any
interest or other amounts payable by Brascan to Brascan of funds obtained by Brascan
in order to make or maintain such Eurodollar Rate Loan. A certificate as to any
additional amounts payable pursuant to the foregoing sentence submitted by Brascan
to Borrower shall be conclusive absent manifest error.

 

2.3           Disbursement
of Advance Proceeds. All Advances shall be disbursed from
whichever office or other place Brascan may designate from time to time and,
together with any and all other Obligations of Borrower to Brascan, shall be
charged to Borrower’s Account on Brascan’s books. During the Term, Borrower may
use the Advances by borrowing and reborrowing, all in accordance with the terms
and conditions hereof. The proceeds of each Advance requested by Borrower under
Section 2.2(a) hereof shall, with respect to requested Advances to the extent Brascan
make such Advances, be made available to Borrower on the applicable Borrowing
Date by way of credit to Borrower’s operating account at Brascan, or such other
bank as Borrower may designate following notification to Brascan, in
immediately available Federal funds or other immediately available funds or be
disbursed to Brascan to be applied to the outstanding Obligations giving rise
to such deemed request.

 

2.4           Maximum
Advances.

 

The aggregate balance of Advances outstanding
at any time shall not exceed the Maximum Advance Amount.

 

10

 

2.5           Manner
of Borrowing and Repayment of Advances.

 

(a)           Except as expressly provided herein, each
payment by Borrower on account of principal and interest on an Advance, and any
other amounts payable hereunder, or under any of the Other Documents, shall be
made without any deduction whatsoever, including, but not limited to, any
deduction for any setoff or counterclaim, and shall be made to Brascan at the
Payment Office, not later than 1:00 p.m., on the Repayment Date with respect to
such Advance, in Dollars and in immediately available funds.

 

(b)           Subject to the terms hereof, the
Borrower shall repay all Obligations including the outstanding principal amount
of all Advances hereunder together with all accrued interest, fees and other
amounts then unpaid by it with respect to such Advances in full on the first anniversary
date of the Closing Date and the commitments of Brascan hereon shall be
automatically terminated on such date.

 

2.6           Repayment
of Excess Advances. The aggregate balance of Advances
outstanding at any time in excess of the maximum amount of Advances permitted
hereunder shall be immediately due and payable without the necessity of any
demand, at the Payment Office, whether or not a Default or Event of Default has
occurred.

 

2.7           Statement
of Account. Brascan shall maintain, in accordance with its
customary procedures, a loan account (“Borrower’s Account”) in the name
of Borrower in which shall be recorded the date and amount of each Advance made
by Brascan and the date and amount of each payment in respect thereof;
provided, however, the failure by Brascan to record the date and amount of any
Advance or payment shall not adversely affect Brascan or Borrower. Each month, Brascan
shall send to Borrower a statement showing the accounting for the Advances made
and payments made or credited in respect thereof. The monthly statements shall
be deemed correct and binding upon Borrower in the absence of manifest error
and shall constitute an account stated between Brascan and Borrower unless Brascan
receives a statement in writing, by facsimile, or by email of Borrower’s
specific exceptions thereto within thirty (30) days after such statement is
received by Borrower. The records of Brascan with respect to the loan account
shall be conclusive evidence absent manifest error of the amounts of Advances
and other charges thereto and of payments applicable thereto.

 

2.8           Additional
Payments. Any sums expended by Brascan due to Borrower’s
failure to perform or comply with its obligations under this Agreement or any
Other Document, may be charged to Borrower’s Account as an Advance and added to
the Obligations.

 

2.9           Use
of Proceeds.

 

(a)           Borrower shall use the proceeds of
Advances for general working capital purposes.

 

(b)           Without limiting the generality of
Section 2.9(a) above, neither Borrower nor any other Person which may in the
future become a party to this Agreement or the Other Documents as Borrower,
intends to use nor shall they use any portion of the proceeds of the Advances,
directly or indirectly, for any purpose in violation of the Trading with the
Enemy Act.

 

11

 

III.           INTEREST AND FEES.

 

3.1           Interest.
Interest on each Advance shall be payable in arrears on the Repayment Date with
respect to such Advance. Interest charges shall be computed on the actual
principal amount of Advances outstanding at a rate per annum equal to the
Revolving Interest Rate. The Eurodollar Rate shall be adjusted with respect to
Eurodollar Rate Loans without notice or demand of any kind on the effective
date of any change in the Reserve Percentage as of such effective date. Upon
and after the occurrence of an Event of Default, and during the continuation
thereof, Eurodollar Rate Loans shall bear interest at the Revolving Interest
Rate for Eurodollar Rate Loans plus 3.75% per annum (as applicable, the “Default
Rate”).

 

3.2           Computation
of Interest Interest hereunder shall be computed on the basis
of a year of 360 days and for the actual number of days elapsed. If any payment
to be made hereunder becomes due and payable on a day other than a Business
Day, the due date thereof shall be extended to the next succeeding Business Day
and interest thereon shall be payable at the Revolving Interest Rate during
such extension.

 

3.3           Maximum
Charges. In no event whatsoever shall interest and other
charges charged hereunder exceed the highest rate permissible under law. In the
event interest and other charges as computed hereunder would otherwise exceed
the highest rate permitted under law, such excess amount shall be first applied
to any unpaid principal balance owed by Borrower, and if the then remaining
excess amount is greater than the previously unpaid principal balance, Brascan
shall promptly refund such excess amount to Borrower and the provisions hereof
shall be deemed amended to provide for such permissible rate.

 

3.4           Increased
Costs. In the event that any Applicable Law, treaty or
governmental regulation, or any change therein or in the interpretation or
application thereof, or compliance by Brascan\ and the office or branch where Brascan
makes or maintains any Eurodollar Rate Loans with any request or directive
(whether or not having the force of law) from any central bank or other
financial, monetary or other authority, shall:

 

(a)           subject Brascan to any tax of any
kind whatsoever with respect to this Agreement or any Other Document or change
the basis of taxation of payments to Brascan of principal, fees, interest or
any other amount payable hereunder or under any Other Documents (except for
changes in the rate of tax on the overall net income of Brascan by the
jurisdiction in which it maintains its principal office);

 

(b)           impose, modify or hold applicable any
reserve, special deposit, assessment or similar requirement against assets held
by, or deposits in or for the account of, advances or loans by, or other credit
extended by, any office of Brascan, including pursuant to Regulation D of the
Board of Governors of the Federal Reserve System; or

 

(c)           impose on Brascan or the London
interbank Eurodollar market any other condition with respect to this Agreement
or any Other Document;

 

and the result of any of the foregoing is to
increase the cost to Brascan of making, renewing or maintaining its Advances
hereunder by an amount that Brascan deems to be material or to reduce the
amount of any payment (whether of principal, interest or otherwise) in respect
of any of the 

 

12

 

Advances by an amount that Brascan deems to
be material, then, in any case Borrower shall promptly pay Brascan, upon its
demand, such additional amount as shall compensate Brascan for such additional
cost or such reduction, as the case may be, provided that the foregoing shall
not apply to increased costs which are reflected in the Eurodollar Rate. Brascan
shall certify the amount of such additional cost or reduced amount to Borrower,
and such certification shall be conclusive absent manifest error.

 

3.5           Basis
For Determining Interest Rate Inadequate or Unfair. In the
event that Brascan shall have determined that:

 

(a)           reasonable means do not exist for
ascertaining the Eurodollar Rate applicable pursuant to Section 2.2 hereof for
any Advance; or

 

(b)           Dollar deposits in the relevant
amount and for the relevant maturity are not available in the London interbank
Eurodollar market, with respect to an outstanding Eurodollar Rate Loan or a
proposed Eurodollar Rate Loan,

 

(c)           then Brascan shall give Borrower
prompt written, telephonic or telegraphic notice of such determination either
on the date Brascan receives the Notice of Borrowing or on the date of the
proposed borrowing. If such notice is given, (i) any such requested Eurodollar
Rate Loan shall be made according to Brascan’s cost of funds for such Advances
plus 4.00%. Until such notice has been withdrawn, Brascan shall have no
obligation to make Eurodollar Rate Loans or maintain outstanding Eurodollar
Rate Loans.

 

IV.           REPRESENTATIONS AND
WARRANTIES.

 

Borrower represents and warrants as follows:

 

4.1           Authority.
Borrower has full power, authority and legal right to enter into this Agreement
and the Other Documents and to perform all its respective Obligations hereunder
and thereunder. This Agreement and the Other Documents have been duly executed
and delivered by Borrower, and this Agreement and the Other Documents
constitute the legal, valid and binding obligation of Borrower enforceable in
accordance with their terms, except as such enforceability may be limited by
any applicable bankruptcy, insolvency, moratorium or similar laws affecting
creditors’ rights generally. The execution, delivery and performance of this
Agreement and of the Other Documents (a) are within Borrower’s corporate
powers, have been duly authorized by all necessary corporate action, are not in
contravention of law or the terms of Borrower’s by-laws, certificate of
incorporation or other applicable documents relating to Borrower’s formation or
to the conduct of Borrower’s business or of any material agreement or
undertaking to which Borrower is a party or by which Borrower is bound, (b) shall
not conflict with or violate any law or regulation, or any judgment, order or
decree of any Governmental Body applicable to Borrower or any agreement by
which it is bound, (c) shall not require the Consent of any Governmental Body
or any other Person, except those Consents set forth on Schedule 4.1 hereto,
all of which shall have been duly obtained, made or compiled prior to the
Closing Date and which are in full force and effect and (d) shall not conflict
with, nor result in any breach in any of the provisions of or constitute a
default under or result in the creation of any Lien except Permitted
Encumbrances upon any asset of Borrower under the provisions of any 

 

13

 

agreement, charter document, instrument, by-law or other instrument to
which Borrower is a party or by which it or its property is a party or by which
it may be bound.

 

4.2           Formation
and Qualification.

 

(a)           Borrower is duly incorporated and in
good standing under the laws of the state listed on Schedule 4.2(a) and is
qualified to do business and is in good standing in the states listed on Schedule 4.2(a)
which constitute all states in which qualification and good standing are
necessary for Borrower to conduct its business and own its property and where
the failure to so qualify could reasonably be expected to have a Material
Adverse Effect. Borrower has delivered to Brascan true and complete copies of
its certificate of incorporation and by-laws and shall promptly notify Brascan
of any amendment or material changes thereto.

 

(b)           The only Subsidiaries of Borrower are
listed on Schedule 4.2(b).

 

4.3           Survival
of Representations and Warranties. All representations and warranties of
Borrower contained in this Agreement and the Other Documents shall be true at
the time of Borrower’s execution of this Agreement and the Other Documents, and
shall survive the execution, delivery and acceptance thereof by the parties
thereto and the closing of the transactions described therein or related
thereto.

 

4.4           Tax
Returns. Borrower’s Federal tax identification number is set forth on Schedule
4.4. Borrower has filed all Federal, state and local tax returns and other
reports it is required by law to file and has paid all taxes, assessments, fees
and other governmental charges that are due and payable except those that are
being contested by Borrower in good faith and with respect to which reserves in
accordance with GAAP have been provided on the books of Borrower. Federal,
state and local income tax returns of Borrower have been examined and reported
upon by the appropriate taxing authority or closed by applicable statute and
satisfied for all fiscal years prior to and including the fiscal year ending December
31, 2006. The provision for taxes on the books of Borrower is adequate for all
years not closed by applicable statutes, and for its current fiscal year, and
Borrower has no knowledge of any deficiency or additional assessment in
connection therewith not provided for on its books.

 

4.5           Financial
Statements. The consolidated and consolidating balance sheets of Borrower,
its Subsidiaries and such other Persons described therein (including the
accounts of all Subsidiaries for the respective periods during which a
subsidiary relationship existed) as of June 30, 2007, and the related
statements of income, changes in stockholder’s equity, and changes in cash flow
for the period ended on such date, copies of which have been delivered to Brascan,
have been prepared in accordance with GAAP, consistently applied (subject to
normal year-end adjustments and the absence of footnote disclosures) and
present fairly the financial position of Borrower and its Subsidiaries at such
date and the results of their operations for such period. Since June 30, 2007 there
has been no change in the condition, financial or otherwise, of Borrower or its
Subsidiaries as shown on the consolidated balance sheet as of such date, except
changes in the Ordinary Course of Business, none of which individually or in
the aggregate has been materially adverse.

 

14

 

4.6           Entity
Name. Borrower has not been known by any other corporate name in the past
five years nor has Borrower been the surviving corporation of a merger or
consolidation or acquired all or substantially all of the assets of any Person
during the preceding five (5) years.

 

4.7           O.S.H.A.
and Environmental Compliance.

 

(a)           To the extent applicable to Borrower,
Borrower has duly complied with, and its facilities, business, assets,
property, leaseholds, real property and equipment  are in
compliance in all material respects with, the provisions of the Federal
Occupational Safety and Health Act, the Environmental Protection Act, RCRA and
all other Environmental Laws; there have been no outstanding citations, notices
or orders of non-compliance issued to Borrower or relating to its business,
assets, property, leaseholds or equipment under any such laws, rules or
regulations.

 

(b)           Borrower has been issued all required
Federal, state and local licenses, certificates or permits relating to all
applicable environmental laws necessary to the operations of the business of
Borrower.

 

4.8           Solvency;
No Litigation, Violation, Indebtedness or Default.

 

(a)           After giving effect to the
Transactions, Borrower shall be solvent, able to pay its debts as they mature, shall
have capital sufficient to carry on its business and all businesses in which it
is about to engage, and (i) as of the Closing Date, the fair present saleable
value of its assets, calculated on a going concern basis, is in excess of the
amount of its liabilities and (ii) subsequent to the Closing Date, the fair
saleable value of its assets (calculated on a going concern basis) shall be in
excess of the amount of its liabilities.

 

(b)           Except as disclosed in Schedule 4.8(b),
Borrower has no (i) pending or threatened litigation, arbitration, actions or
proceedings which could reasonably be expected to have a Material Adverse
Effect, and (ii) liabilities or indebtedness for borrowed money other than the
Obligations.

 

(c)           Borrower is not in violation of any
applicable statute, law, rule, regulation or ordinance in any respect which
could reasonably be expected to have a Material Adverse Effect, nor is Borrower
in violation of any order applicable to Borrower, of any court, Governmental
Body or arbitration board or tribunal.

 

(d)           Neither Borrower nor any member of
the Controlled Group maintains or contributes to any Plan other than those
listed on Schedule 4.8(d) hereto. (i) No Plan has incurred any “accumulated
funding deficiency,” as defined in Section 302(a)(2) of ERISA and Section
412(a) of the Code, whether or not waived, and Borrower and each member of the
Controlled Group has met all applicable minimum funding requirements under
Section 302 of ERISA in respect of each Plan; (ii) each Plan which is intended to
be a qualified plan under Section 401(a) of the Code as currently in effect has
been determined by the Internal Revenue Service to be qualified under Section
401(a) of the Code and the trust related thereto is exempt from Federal income
tax under Section 501(a) of the Code; (iii) neither Borrower nor any member of
the Controlled Group has incurred any liability to the PBGC other than for the
payment of premiums, and there are no premium payments which have become due
which are 

 

15

 

unpaid; (iv) no Plan has been terminated by
the plan administrator thereof nor by the PBGC, and there is no occurrence
which would cause the PBGC to institute proceedings under Title IV of ERISA to
terminate any Plan; (v) at this time, the current value of the assets of each
Plan exceeds the present value of the accrued benefits and other liabilities of
such Plan and neither Borrower nor any member of the Controlled Group knows of
any facts or circumstances which would materially change the value of such
assets and accrued benefits and other liabilities; (vi) neither Borrower nor
any member of the Controlled Group has breached any of the responsibilities,
obligations or duties imposed on it by ERISA with respect to any Plan; (vii) neither
Borrower nor any member of a Controlled Group has incurred any liability for
any excise tax arising under Section 4972 or 4980B of the Code, and no fact
exists which could give rise to any such liability; (viii) neither Borrower nor
any member of the Controlled Group nor any fiduciary of, nor any trustee to,
any Plan, has engaged in a “prohibited transaction” described in Section 406 of
the ERISA or Section 4975 of the Code nor taken any action which would
constitute or result in a Termination Event with respect to any such Plan which
is subject to ERISA; (ix) Borrower and each member of the Controlled Group has
made all contributions due and payable with respect to each Plan; (x) there
exists no event described in Section 4043(b) of ERISA, for which the thirty
(30) day notice period has not been waived; (xi) neither Borrower nor any
member of the Controlled Group has any fiduciary responsibility for investments
with respect to any plan existing for the benefit of persons other than
employees or former employees of Borrower and any member of the Controlled
Group; (xii) neither Borrower nor any member of the Controlled Group maintains
or contributes to any Plan which provides health, accident or life insurance
benefits to former employees, their spouses or dependents, other than in
accordance with Section 4980B of the Code; (xiii) neither Borrower nor any
member of the Controlled Group has withdrawn, completely or partially, from any
Multiemployer Plan so as to incur liability under the Multiemployer Pension
Plan Amendments Act of 1980 and there exists no fact which would reasonably be
expected to result in any such liability; and (xiv) no Plan fiduciary (as
defined in Section 3(21) of ERISA) has any liability for breach of fiduciary
duty or for any failure in connection with the administration or investment of
the assets of a Plan.

 

4.9           Licenses
and Permits. Except as set forth in Schedule 4.9, Borrower (a) is in
compliance with and (b) has procured and is now in possession of, all material
licenses or permits required by any applicable Federal, state or local law,
rule or regulation for the operation of its business in each jurisdiction
wherein it is now conducting or proposes to conduct business and where the
failure to procure such licenses or permits could reasonably be expected to have
a Material Adverse Effect.

 

4.10         Default
of Indebtedness. Borrower is not in default in the payment of the principal
of or interest on any Indebtedness or under any instrument or agreement under
or subject to which any Indebtedness has been issued and no event has occurred
under the provisions of any such instrument or agreement which with or without
the lapse of time or the giving of notice, or both, constitutes or would constitute
an event of default thereunder.

 

4.11         No
Default. Borrower is not in default in the payment or performance of any of
its contractual obligations and no Default has occurred that could reasonably
be expected to have a Material Adverse Effect.

 

16

 

4.12         No
Burdensome Restrictions. Borrower is not party to any contract or agreement
the performance of which could have a Material Adverse Effect. Borrower has
heretofore delivered to Brascan true and complete copies of all material
contracts requested by Brascan to which it is a party or to which it or any of
its properties is subject. Borrower has not agreed or consented to cause or
permit in the future (upon the happening of a contingency or otherwise) any of
its property, whether now owned or hereafter acquired, to be subject to a Lien
which is not a Permitted Encumbrance and which could reasonably be expected to have
a Material Adverse Effect.

 

4.13         Margin
Regulations. Borrower is not engaged, nor shall it engage, principally or
as one of its important activities, in the business of extending credit for the
purpose of “purchasing” or “carrying” any “margin stock” within the respective
meanings of each of the quoted terms under Regulation U of the Board of
Governors of the Federal Reserve System as now and from time to time hereafter
in effect. No part of the proceeds of any Advance shall be used for “purchasing”
or “carrying” “margin stock” as defined in Regulation U of such Board of
Governors.

 

4.14         Investment
Company Act. Borrower is not an “investment company” registered or required
to be registered under the Investment Company Act of 1940, as amended, nor is
it controlled by such a company.

 

4.15         Disclosure.
No representation or warranty made by Borrower in this Agreement or in any
financial statement, report, certificate or any other document furnished in
connection herewith or therewith contains any untrue statement of fact or omits
to state any fact necessary to make the statements herein or therein, in light
of the circumstances under which they were made,  not misleading. There is no fact known to
Borrower or which reasonably should be known to Borrower which Borrower has not
disclosed to Brascan in writing with respect to the transactions contemplated
by this Agreement which could reasonably be expected to have a Material Adverse
Effect.

 

4.16         Conflicting
Agreements. No provision of any mortgage, indenture, contract, agreement,
judgment, decree or order binding on Borrower conflicts with, or requires any
Consent which has not already been obtained to, or would in any way prevent the
execution, delivery or performance of, the terms of this Agreement or the Other
Documents.

 

4.17         Application
of Certain Laws and Regulations. There is no law, statute, rule or
regulation applicable to Borrower, which regulates the incurrence of any
Indebtedness.

 

4.18         Business
and Property of Borrower. Borrower does not propose to engage in any
business other than the business engaged in on the Closing Date.

 

4.19         Anti-Terrorism
Laws.

 

(a)           General. Neither Borrower nor
any Affiliate of Borrower is in violation of any Anti-Terrorism Law or engages
in or conspires to engage in any transaction that evades or avoids, or has the
purpose of evading or avoiding, or attempts to violate, any of the prohibitions
set forth in any Anti-Terrorism Law.

 

17

 

(b)           Executive Order No. 13224. Neither
Borrower nor any Affiliate of Borrower acting or benefiting in any capacity in
connection with the Advances or other transactions hereunder, is any of the
following (each a “Blocked Person”):

 

(i)            a
Person that is listed in the annex to, or is otherwise subject to the
provisions of, the Executive Order No. 13224;

 

(ii)           a
Person owned or controlled by, or acting for or on behalf of,  any Person that is listed in the annex to, or
is otherwise subject to the provisions of, the Executive Order No. 13224;

 

(iii)          a
Person or entity with which Brascan is prohibited from dealing or otherwise
engaging in any transaction by any Anti-Terrorism Law;

 

(iv)          a
Person or entity that commits, threatens or conspires to commit or supports “terrorism”
as defined in the Executive Order No. 13224;

 

(v)           a
Person or entity that is named as a “specially designated national” on the most
current list published by the U.S. Treasury Department Office of Foreign Asset
Control at its official website or any replacement website or other replacement
official publication of such list, or

 

(vi)          a
Person or entity who is affiliated or associated with a Person or entity listed
above.

 

(c)           Neither Borrower or, to the knowledge
of Borrower, any of its affiliates acting in any capacity in connection with
the Advances or other transactions hereunder (i) conducts any business or
engages in making or receiving any contribution of funds, goods or services to
or for the benefit of any Blocked Person, or (ii) deals in, or otherwise
engages in any transaction relating to, any property or interests in property
blocked pursuant to the Executive Order No. 13224.

 

4.20         Trading
with the Enemy. Borrower has not engaged, nor does it intend to engage, in
any business or activity prohibited by the Trading with the Enemy Act.

 

V.            AFFIRMATIVE
COVENANTS.

 

Borrower shall, until payment in full of the
Obligations and termination of this Agreement:

 

5.1           Reserved.

 

5.2           Conduct
of Business and Maintenance of Existence and Assets. (a) Conduct
continuously and operate actively its business according to good business
practices and maintain all of its properties useful or necessary in its
business in good working order and condition (reasonable wear and tear excepted
and except as may be disposed of in accordance with the terms of this
Agreement); (b) keep in full force and effect its existence and comply in all
material respects with the laws and regulations governing the conduct of its
business where the failure to 

 

18

 

do so could reasonably be expected to have a Material Adverse Effect;
and (c) make all such reports and pay all such franchise and other taxes and
license fees and do all such other acts and things as may be lawfully required
to maintain its rights, licenses, leases, powers and franchises under the laws
of the United States or any political subdivision thereof.

 

5.3           Violations.
Promptly notify Brascan in writing of any violation of any law, statute,
regulation or ordinance of any Governmental Body, or of any agency thereof,
applicable to Borrower which could reasonably be expected to have a Material
Adverse Effect.

 

5.4           Financial
Covenants. Beginning with the fiscal quarter ended September 30, 2007:

 

(a)           Net Worth. For each fiscal
quarter of Borrower, maintain Net Worth in an amount equal to not less than $300,000,000.

 

(b)           Quarterly Net Income. For each
fiscal quarter of Borrower, earn Net Income of not less than $4,000,000.

 

(c)           Rolling Four Quarter Income. For
the most recently ended fiscal quarter of Borrower and the three preceding
fiscal quarters of Borrower, earn Net Income of not less than $20,000,000.

 

(d)           Maximum Post Shock Test. Cause
at all times the result of the fair value, as set forth in the Borrower’s
balance sheet most recently delivered pursuant to Section 8.4 and 8.5 hereof,
of Borrower’s portfolio of mortgage-backed securities minus Adjusted Net
Portfolio Value of such mortgage-backed securities to be less than twenty-five
percent (25%) of Net Worth as set forth in such balance sheet.

 

(e)           Maximum Indebtedness to Total Net
Worth Ratio. Maintain as of the end of each fiscal quarter of Borrower, a
ratio of Indebtedness to Net Worth of not more than 9.0 to 1.0.

 

5.5           Execution
of Supplemental Instruments. Execute and deliver to Brascan from time to
time, upon demand, and such other instruments as Brascan may reasonably request,
in order that the full intent of this Agreement may be carried into effect.

 

5.6           Payment
of Indebtedness. Pay, discharge or otherwise satisfy at or before maturity
(subject, where applicable, to specified grace periods and, in the case of the
trade payables, to normal payment practices) all its obligations and
liabilities of whatever nature, except when the failure to do so could not
reasonably be expected to have a Material Adverse Effect or when the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and Borrower shall have provided for such reserves as Brascan may
reasonably deem proper and necessary.

 

19

 

5.7           Standards
of Financial Statements. Cause all financial statements referred to in
Sections 8.4, 8.5, 8.6, 8.7 and 8.8 as to which GAAP is applicable to be
complete and correct in all material respects (subject, in the case of interim
financial statements, to normal year-end audit adjustments) and to be prepared
in reasonable detail and in accordance with GAAP applied consistently throughout
the periods reflected therein (except as concurred in by such reporting
accountants or officer, as the case may be, and disclosed therein).

 

VI.           NEGATIVE COVENANTS.

 

Borrower shall not, until satisfaction in
full of the Obligations and termination of this Agreement:

 

6.1           Prohibition
on Fundamental Changes. enter into any transaction of merger or
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation, winding up or dissolution) or sell all or substantially
all of its assets or acquire or form any Subsidiaries (other than any finance
Subsidiaries, any Subsidiary formed for regulatory or structuring purposes to
facilitate any investment or any special purpose Subsidiary formed to own
and/or finance real property assets); provided, however, that
Borrower may merge or consolidate with (x) any wholly owned Subsidiary, or
(y) any other Person if Borrower is the surviving corporation; and provided,
further, that, if after giving effect thereto, no Event of Default would
exist hereunder. Borrower shall not change its fiscal year or method of
accounting without the consent of Brascan, and Borrower shall give Brascan at
least fifteen (15) days prior written notice of any such requested change,
which notice shall include a detailed explanation of the changes intended to be
made and pro forma financial statements demonstrating the impact thereof.

 

6.2           Guarantees.
Become liable upon the obligations or liabilities of any Person by assumption,
endorsement or guaranty thereof or otherwise (other than to Brascan or existing
under the Existing Credit Agreement) except (a) as disclosed on Schedule 6.3;
(b) the endorsement of checks in the Ordinary Course of Business; and (c)
guarantees of obligations of wholly-owned taxable REIT Subsidiaries of Borrower
under repurchase agreements and under agreements consisting of a “Master
Agreement” in a form published by the International Swaps and Derivatives
Association, Inc., together with a “Schedule” and/or “Annex” thereto and each “Confirmation”
thereunder confirming the specific terms of a transaction, provided that
(i) such guarantees are entered into in the Ordinary Course of Business, (ii)
in the case of a “Master Agreement”, “Schedule”, “Annex” and “Confirmation”,
the obligations of any such Subsidiary thereunder and the obligations of
Borrower under the related guarantee are not secured by any assets of such
Subsidiary or Borrower, as the case may be, and (iii) any transaction entered
into by such Subsidiary under any such repurchase agreement or “Master
Agreement”, “Schedule”, “Annex” and “Confirmation” is entered into in the
ordinary course of business of such Subsidiary and is in compliance with the
investment guidelines of Borrower.

 

6.3           Dividends.
Declare, pay or make any dividend or distribution on or in respect of any
Equity Interests of Borrower (other than dividends or distributions payable in
its stock, or split-ups or reclassifications of its stock) or apply any of its
funds, property or assets to the purchase, redemption or other retirement of
any Equity Interests of Borrower if a Default or Event of Default shall have
occurred and be continuing, provided, however, that after the 

 

20

 

occurrence and during the continuation of a Default or Event of
Default, Borrower shall be permitted to make such declaration or payment
necessary to maintain its status as a real estate investment trust under
Sections 856-860 of the Code.

 

6.4           Indebtedness.
Create, incur, assume or suffer to exist any Indebtedness (exclusive of trade
debt) except in respect of (i) Indebtedness to Brascan under this Agreement;
(ii) Indebtedness disclosed on Schedule 6.4; (iii)  Indebtedness incurred
to extend, renew or refinance any Indebtedness described in clause (ii) above, provided
that such Indebtedness is in an aggregate principal amount not greater than the
aggregate principal amount of the Indebtedness being extended, renewed or
refinanced; (iv) Indebtedness under repurchase agreements entered into in the
Ordinary Course of Business; (v) Indebtedness to Subsidiaries; and (vi) Indebtedness
under the Existing Credit Agreement.

 

6.5           Nature
of Business. Substantially change the nature of the business in which it is
presently engaged, nor except as specifically permitted hereby purchase or
invest, directly or indirectly, in any assets or property other than in the
Ordinary Course of Business for assets or property which are useful in,
necessary for and are to be used in its business as presently conducted.

 

6.6           Transactions
with Affiliates. Directly or indirectly, purchase, acquire or lease any
property from, or sell, transfer or lease any property to, or otherwise enter
into any transaction or deal with, any Affiliate, except to the extent any of
the foregoing are in the Ordinary Course of Business and on an arm’s-length
basis on terms and conditions no less favorable than terms and conditions which
would have been obtainable from a Person other than an Affiliate.

 

6.7           Fiscal
Year and Accounting Changes. Change its fiscal year from a year ending on
December 31, or make any change (i) in accounting treatment and reporting
practices except as required by GAAP or by law, or, with Brascan’s prior
written consent, as permitted by GAAP or (ii) in tax reporting treatment
except as required by law, or, with Brascan’s prior written consent, as
permitted by law.

 

6.8           Amendment
of Articles of Incorporation, By-Laws. Amend, modify or waive in any manner
that would be reasonably likely to adversely affect the Borrower or any material
term or material provision of its Articles of Incorporation, by-laws or any
other organizational document, unless required by law.

 

6.9           Compliance
with ERISA. (i) (x) Maintain, or permit any member of the Controlled Group
to maintain, or (y) become obligated to contribute, or permit any member of the
Controlled Group to become obligated to contribute, to any Plan, other than
those Plans disclosed on Schedule 4.8(d), (ii) engage, or permit any member of
the Controlled Group to engage, in any non-exempt “prohibited transaction”, as
that term is defined in section 406 of ERISA and Section 4975 of the Code,
(iii) incur, or permit any member of the Controlled Group to incur, any “accumulated
funding deficiency”, as that term is defined in Section 302 of ERISA or Section
412 of the Code, (iv) terminate, or permit any member of the Controlled Group
to terminate, any Plan where such event could result in any liability of
Borrower or any member of the Controlled Group or the imposition of a lien on
the property of Borrower or any member of the Controlled Group pursuant to
Section 4068 of ERISA, (v) assume, or permit any member of 

 

21

 

the Controlled Group to assume, any obligation to contribute to any
Multiemployer Plan not disclosed on Schedule 4.8(d), (vi) incur, or permit any
member of the Controlled Group to incur, any withdrawal liability to any
Multiemployer Plan; (vii) fail promptly to notify Brascan of the occurrence of
any Termination Event, (viii) fail to comply, or permit a member of the
Controlled Group to fail to comply, with the requirements of ERISA or the Code
or other Applicable Laws in respect of any Plan, (ix) fail to meet, or permit
any member of the Controlled Group to fail to meet, all minimum funding
requirements under ERISA or the Code or postpone or delay or allow any member
of the Controlled Group to postpone or delay any funding requirement with
respect of any Plan.

 

6.10         Anti-Terrorism
Laws. For itself and any Affiliate or Brascan:

 

(a)           Conduct any business or engage in any
transaction or dealing with any Blocked Person, including the making or
receiving any contribution of funds, goods or services to or for the benefit of
any Blocked Person.

 

(b)           Deal in, or otherwise engage in any
transaction relating to, any property or interests in property blocked pursuant
to the Executive Order No. 13224.

 

(c)           Engage in or conspire to engage in
any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set forth in the
Executive Order No. 13224, the USA PATRIOT Act or any other Anti-Terrorism Law.
Borrower shall deliver to Brascan any certification or other evidence requested
from time to time by Brascan in its sole discretion, confirming Borrower’s
compliance with this Section.

 

6.11         Trading
with the Enemy Act. Engage in any business or activity in violation of the
Trading with the Enemy Act.

 

VII.          CONDITIONS
PRECEDENT.

 

7.1           Conditions
to Initial Advances. The agreement of Brascan to make the initial Advances
requested to be made is subject to the satisfaction, or waiver by Brascan,
immediately prior to or concurrently with the making of such Advances, of the
following conditions precedent:

 

(a)           Execution and Delivery of Closing
Documents. Brascan shall have received each of this Agreement, the
Revolving Credit Note, and each Other Document to which Borrower is a party,
duly executed and delivered by an authorized officer of Borrower;

 

(b)           Corporate Proceedings of Borrower.
Brascan shall have received a copy of the resolutions in form and substance
reasonably satisfactory to Brascan, of the Board of Directors of Borrower
authorizing (i) the execution, delivery and performance of this Agreement, the
Revolving Credit Note and any related agreements, certified by the Secretary or
an Assistant Secretary of Borrower as of the Closing Date; and, such
certificate shall state that the resolutions thereby certified have not been
amended, modified, revoked or rescinded as of the date of such certificate;

 

22

 

(c)           Incumbency Certificates of
Borrower. Brascan shall have received a certificate of the Secretary or an
Assistant Secretary of Borrower, dated the Closing Date, as to the incumbency
and Brascan of the officers of Borrower executing this Agreement, the Other
Documents, any certificate or other documents to be delivered by it pursuant
hereto, together with evidence of the incumbency of such Secretary or Assistant
Secretary;

 

(d)           Certificates. Brascan shall
have received a copy of the Articles or Certificate of Incorporation of
Borrower and all amendments thereto, certified by the Secretary of State or
other appropriate official of its jurisdiction of incorporation, together with
copies of the by-Laws of Borrower and all agreements of Borrower’s
shareholders, certified as accurate and complete by the Secretary of Borrower;

 

(e)           Good Standing Certificates. Brascan
shall have received good standing certificates for Borrower dated not more than
twenty (20) days prior to the Closing Date, issued by the Secretary of State or
other appropriate official of Borrower’s jurisdiction of incorporation and each
jurisdiction where the conduct of Borrower’s business activities or the
ownership of its properties necessitates qualification;

 

(f)            No Litigation. (i) No
litigation, investigation or proceeding before or by any arbitrator or
Governmental Body shall be continuing or threatened against Borrower or against
the officers or directors of Borrower (A) in connection with this Agreement, the
Revolving Credit Note, the Other Documents or any of the transactions
contemplated thereby and which, in the reasonable opinion of Brascan, is deemed
material or (B) which could, in the reasonable opinion of Brascan, have a
Material Adverse Effect; and (ii) no injunction, writ, restraining order or
other order of any nature materially adverse to Borrower or the conduct of its
business or inconsistent with the due consummation of the Transactions shall
have been issued by any Governmental Body;

 

(g)           No Adverse Material Change. (i)
Since June 30, 2007, there shall not have occurred any event, condition or
state of facts which could reasonably be expected to have a Material Adverse
Effect and (ii) no representations made or information supplied to Brascan
shall have been proven to be inaccurate or misleading in any material respect;

 

(h)           Other Documents. Brascan shall
have received the executed Other Documents, all in form and substance
satisfactory to Brascan;

 

(i)            Closing Certificate. Brascan
shall have received a closing certificate signed by the Chief Financial Officer
of Borrower dated as of the date hereof, stating that (i) all representations
and warranties set forth in this Agreement and the Other Documents are true and
correct on and as of such date, (ii) Borrower is on such date in compliance
with all the terms and provisions set forth in this Agreement and the Other
Documents and (iii) on such date no Default or Event of Default has occurred or
is continuing;

 

(j)            Compliance with Applicable Laws.
Brascan shall be reasonably satisfied that Borrower is in compliance with all
pertinent Federal, state, local or territorial regulations applicable to
Borrower, including those with respect to the Federal Occupational Safety and
Health Act, the Environmental Protection Act, ERISA and the Trading with the
Enemy Act; and

 

23

 

(k)           Other. All corporate and other
proceedings, and all documents, instruments and other legal matters in
connection with the Transactions shall be satisfactory in form and substance to
Brascan and its counsel.

 

7.2           Conditions
to Each Advance. The agreement of Brascan to make any Advance requested to
be made on any Borrowing Date, is subject to the satisfaction of the following
conditions precedent as of the date such Advance is made:

 

(a)           Representations and Warranties.
Each of the representations and warranties made by Borrower in or pursuant to
this Agreement, the Other Documents and any related agreements to which it is a
party, and each of the representations and warranties contained in any
certificate, document or financial or other statement furnished at any time
under or in connection with this Agreement, the Other Documents or any related
agreement shall be true and correct in all material respects on and as of such
date as if made on and as of such date;

 

(b)           No Default. No Event of
Default or Default shall have occurred and be continuing on such date, or would
exist after giving effect to the Advance requested to be made, on such date;
provided, however that Brascan, in its sole discretion, may continue to make
Advances notwithstanding the existence of an Event of Default or Default and
that any Advance so made shall not be deemed a waiver of any such Event of
Default or Default; and

 

(c)           Maximum Advances. In the case
of any Advance requested to be made, after giving effect thereto, the aggregate
amount of such Advance shall not exceed the Maximum Advance Amount.

 

(d)           Net Worth. There has not have
occurred since the end of the most recently completed fiscal quarter of
Borrower a material reduction in the Net Worth of Borrower.

 

Each request for an Advance by Borrower
hereunder shall constitute a representation and warranty by Borrower as of the
date of such Advance that the conditions contained in this subsection shall
have been satisfied.

 

VIII.        INFORMATION AS TO
BORROWER.

 

Borrower shall, until satisfaction in full of
the Obligations and the termination of this Agreement:

 

8.1           Environmental
Reports. Upon the written request of Brascan, furnish Brascan with a
certificate signed by the President of Borrower stating, to the best of his
knowledge, that Borrower is in compliance in all material respects with all Federal,
state and local Environmental Laws. To the extent Borrower is not in compliance
with the foregoing laws, the certificate shall set forth with specificity all
areas of non-compliance and the proposed action Borrower shall implement in
order to achieve full compliance.

 

8.2           Litigation.
Promptly notify Brascan in writing, by facsimile, or by email of any claim,
litigation, suit or administrative proceeding affecting Borrower, whether or
not the claim is covered by insurance, and of any litigation, suit or
administrative proceeding, which could reasonably be expected to have a
Material Adverse Effect.

 

24

 

8.3           Material
Occurrences. Promptly notify Brascan in writing upon the occurrence of (a)
any Event of Default or Default; (b) any event, development or circumstance
whereby any financial statements or other reports furnished to Brascan fail in
any material respect to present fairly, in accordance with GAAP consistently
applied, the financial condition or operating results of Borrower as of the
date of such statements; (c) any accumulated retirement plan funding deficiency
which, if such deficiency continued for two plan years and was not corrected as
provided in Section 4971 of the Code, could subject Borrower to a tax imposed
by Section 4971 of the Code; (d) each and every default by Borrower which
permits the holders of any Indebtedness of Borrower the outstanding principal
amount of which exceeds $500,000, to accelerate maturity of such Indebtedness,
including the names and addresses of the holders of such Indebtedness, and the
amount of such Indebtedness; and (e) any other development in the business or
affairs of Borrower, which could reasonably be expected to have a Material
Adverse Effect; in each case describing the nature thereof and the action
Borrower proposes to take with respect thereto.

 

8.4           Annual
Financial Statements. Furnish Brascan within ninety (90) days after the end
of each fiscal year of Borrower, financial statements of Borrower, including,
but not limited to, statements of income and stockholders’ equity and cash flow
from the beginning of the current fiscal year to the end of such fiscal year
and the balance sheet as at the end of such fiscal year, all prepared in
accordance with GAAP applied on a basis consistent with prior practices, and in
reasonable detail and reported upon without qualification by an independent
certified public accounting firm selected by Borrower and satisfactory to Brascan.
In addition, the reports shall be accompanied by a Compliance Certificate.

 

8.5           Quarterly
Financial Statements. Furnish Brascan within forty-five (45) days after the
end of each fiscal quarter, an unaudited balance sheet of Borrower and
unaudited statements of income and stockholders’ equity and cash flow of
Borrower reflecting results of operations from the beginning of the fiscal year
to the end of such quarter and for such quarter, prepared on a basis consistent
with prior practices and complete and correct in all material respects, subject
to normal and recurring year end adjustments that individually and in the
aggregate are not material to Borrower’s business. The reports shall be
accompanied by a Compliance Certificate.

 

8.6           Other
Reports. Furnish Brascan as soon as available, but in any event within ten
(10) days after the issuance thereof, with copies of such financial statements,
reports and returns as Borrower shall send to its stockholders or file with the
SEC.

 

8.7           Additional
Information. Furnish Brascan with such additional information as Brascan
shall reasonably request in order to enable Brascan to determine whether the
terms, covenants, provisions and conditions of this Agreement and the Revolving
Credit Note have been complied with by Borrower including, without the
necessity of any request by Brascan, (a) copies of all environmental audits and
reviews, (b) at least thirty (30) days prior thereto, notice of Borrower’s
opening of any new office or place of business or Borrower’s closing of any
existing office or place of business, and (c) promptly upon Borrower’s learning
thereof, notice of any labor dispute to which Borrower may become a party, any
strikes or walkouts relating to any of its plants or other facilities, and the
expiration of any labor contract to which Borrower is a party or by which
Borrower is bound.

 

25

 

8.8           Notice
of Suits, Adverse Events. Furnish Brascan with prompt written notice of (i)
any lapse or other termination of any Consent issued to Borrower by any
Governmental Body or any other Person that is material to the operation of
Borrower’s business, (ii) any refusal by any Governmental Body or any other
Person to renew or extend any such Consent; and (iii) copies of any periodic or
special reports filed by Borrower with any Governmental Body or Person, if such
reports indicate any material change in the business, operations, affairs or
condition of Borrower, or if copies thereof are requested by Brascan, and (iv)
copies of any material notices and other communications from any Governmental
Body or Person which specifically relate to Borrower.

 

8.9           ERISA
Notices and Requests. Furnish Brascan with prompt written notice in the
event that (i) Borrower or any member of the Controlled Group knows or has
reason to know that a Termination Event has occurred, together with a written
statement describing such Termination Event and the action, if any, which
Borrower or any member of the Controlled Group has taken, is taking, or
proposes to take with respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, Department of Labor or PBGC with
respect thereto, (ii) Borrower or any member of the Controlled Group knows or
has reason to know that a prohibited transaction (as defined in Sections 406 of
ERISA and 4975 of the Code) has occurred together with a written statement
describing such transaction and the action which Borrower or any member of the
Controlled Group has taken, is taking or proposes to take with respect thereto,
(iii) a funding waiver request has been filed with respect to any Plan together
with all communications received by Borrower or any member of the Controlled
Group with respect to such request, (iv) any increase in the benefits of any
existing Plan or the establishment of any new Plan or the commencement of
contributions to any Plan to which Borrower or any member of the Controlled
Group was not previously contributing shall occur, (v) Borrower or any member
of the Controlled Group shall receive from the PBGC a notice of intention to
terminate a Plan or to have a trustee appointed to administer a Plan, together
with copies of each such notice, (vi) Borrower or any member of the Controlled
Group shall receive any favorable or unfavorable determination letter from the
Internal Revenue Service regarding the qualification of a Plan under Section
401(a) of the Code, together with copies of each such letter; (vii) Borrower or
any member of the Controlled Group shall receive a notice regarding the
imposition of withdrawal liability, together with copies of each such notice;
(viii) Borrower or any member of the Controlled Group shall fail to make a
required installment or any other required payment under Section 412 of the
Code on or before the due date for such installment or payment; (ix) Borrower
or any member of the Controlled Group knows that (a) a Multiemployer Plan has
been terminated, (b) the administrator or plan sponsor of a Multiemployer Plan
intends to terminate a Multiemployer Plan, or (c) the PBGC has instituted or shall
institute proceedings under Section 4042 of ERISA to terminate a Multiemployer
Plan.

 

8.10         Additional
Documents. Execute and deliver to Brascan, upon request, such documents and
agreements as Brascan may, from time to time, reasonably request in writing to
carry out the purposes, terms or conditions of this Agreement.

 

IX.           EVENTS OF DEFAULT.

 

The occurrence of any one or more of the
following events shall constitute an “Event of Default”:

 

26

 

9.1           Nonpayment.
Failure by Borrower to pay any principal or, subject to a three (3) day grace
period,  interest on the Obligations when
due, whether at maturity or by reason of acceleration pursuant to the terms of
this Agreement or by notice of intention to prepay, or by required prepayment
or failure to pay any other liabilities or, subject to a three (3) day grace
period,  make any other payment, fee or
charge provided for herein when due or in any Other Document in accordance with
its terms.

 

9.2           Breach
of Representation. Any representation or warranty made or deemed made by
Borrower in this Agreement, any Other Document or any related agreement or in
any certificate, document or financial or other statement furnished at any time
in connection herewith or therewith shall prove to have been misleading in any
material respect on the date when made or deemed to have been made;

 

9.3           Financial
Information. Failure by Borrower to (i) furnish financial information when
due or when requested in accordance herewith, or (ii) permit the inspection of
its books or records to the extent required hereunder;

 

9.4           Judicial
Actions. Except with respect to Permitted Encumbrances, the issuance of a
notice of Lien, levy, assessment, injunction or attachment against a material
portion of Borrower’s property which is not stayed or lifted within thirty (30)
days;

 

9.5           Noncompliance.
Failure or neglect of Borrower to (i) except as provided in (ii) below, perform,
keep or observe any term, provision, condition, covenant herein contained, or
contained in this Agreement or any Other Document (ii) perform, keep or observe
any term, provision, condition or covenant, contained in Sections 5.3 or 8.2 hereof, in each case, which
failure or neglect is not cured within ten (10) days from the earlier of (x)
Borrower’s knowledge of such failure or neglect; and (y) receipt by Borrower of
written notice thereof from Brascan; provided, however, that
Borrower’s failure to comply with Section 5.4(b) shall not constitute an Event
of Default unless such failure shall have occurred for two consecutive fiscal
quarters of Borrower.

 

9.6           Judgments.
Any judgment or judgments are rendered or judgment liens filed against
Borrower, singly, or in an aggregate amount, in excess of $500,000, except to
the extent that either (i) within thirty (30) days of such rendering or
filing, each such judgment is either satisfied, stayed, bonded or discharged of
record or (ii) Borrower is contesting each such judgment in good faith and
establishes reserves satisfactory to Brascan and enforcement of each such
judgment or liens are continuously stayed;

 

9.7           Bankruptcy
of Borrower. Borrower shall (i) apply for, consent to or suffer the
appointment of, or the taking of possession by, a receiver, custodian, trustee,
liquidator or similar fiduciary of itself or of all or a substantial part of
its property, (ii) make a general assignment for the benefit of creditors,
(iii) commence a voluntary case under any state or Federal bankruptcy laws (as
now or hereafter in effect), (iv) be adjudicated a bankrupt or insolvent, (v)
file a petition seeking to take advantage of any other law providing for the
relief of debtors, (vi) acquiesce to, or fail to have dismissed, within thirty
(30) days, any petition filed against it in any involuntary case under such
bankruptcy laws, or (vii) take any action for the purpose of effecting any of
the foregoing;

 

27

 

9.8           Inability
to Pay. Borrower shall admit in writing its inability, or be generally
unable, to pay its debts as they become due or cease operations of its present
business;

 

9.9           Material
Adverse Effect. Any change in Borrower’s results of operations or condition
(financial or otherwise) which in Brascan’s reasonable judgment has Material
Adverse Effect;

 

9.10         Cross
Default. A default of the obligations of Borrower under any other agreement
to which it is a party shall occur and such default is not cured within any
applicable grace period and could reasonably be expected to have a Material
Adverse Effect;

 

9.11         Change
of Control. Any Change of Control shall occur;

 

9.12         Invalidity.
Any material provision of this Agreement or any Other Document shall, for any
reason, cease to be valid and binding on Borrower, or Borrower shall so claim
in writing to Brascan;

 

9.13         Licenses.
(i) Any Governmental Body shall (A) revoke, terminate, suspend or adversely
modify any license or permit of Borrower, the continuation of which is material
to the continuation of Borrower’s business, or (B) commence proceedings to
suspend, revoke, terminate or adversely modify any such license or permit and
such proceedings shall not be dismissed or discharged within sixty (60) days,
or (c) schedule or conduct a hearing on the renewal of any license or permit
necessary for the continuation of Borrower’s business and the staff of such
Governmental Body issues a report recommending the termination, revocation,
suspension or material, adverse modification of such license or permit; (ii)
any agreement which is necessary or material to the operation of Borrower’s
business shall be revoked or terminated and not replaced by a substitute
acceptable to Brascan within thirty (30) days after the date of such revocation
or termination, and such revocation or termination and non-replacement would
reasonably be expected to have a Material Adverse Effect;

 

9.14         Pension
Plans. An event or condition specified in Sections 6.11 or 8.9 hereof shall
occur or exist with respect to any Plan and, as a result of such event or
condition, together with all other such events or conditions, Borrower or any
member of the Controlled Group shall incur, or in the opinion of Brascan be
reasonably likely to incur, a liability to a Plan or the PBGC (or both) which,
in the reasonable judgment of Brascan, would have a Material Adverse Effect.

 

X.            BRASCAN’S RIGHTS AND
REMEDIES AFTER DEFAULT.

 

10.1         Rights
and Remedies. Upon the occurrence of (i) an Event of Default pursuant to
Section 9.7 all Obligations shall be immediately due and payable and this
Agreement and the obligation of Brascan to make Advances shall be deemed
terminated (other than as may be required by an appropriate order of the
bankruptcy court having jurisdiction over Borrower); and (ii) any of the other
Events of Default and at any time thereafter (such default not having
previously been cured), at the option of Brascan all Obligations shall be
immediately due and payable and Brascan shall have the right to terminate this
Agreement and to terminate the obligation of Brascan to make Advances. Upon the
occurrence of any Event of Default, Brascan shall have the right to exercise
any and all rights and remedies provided for herein, under the Other Documents
and at law or equity generally.

 

28

 

10.2         Brascan’s
Discretion. Brascan shall have the right in its sole discretion to
determine which rights or remedies Brascan may at any time pursue, relinquish,
subordinate, or modify or to take any other action with respect thereto and
such determination shall not in any way modify or affect any of Brascan’s or Brascan’
rights hereunder.

 

10.3         Rights
and Remedies not Exclusive. The foregoing rights and remedies are not
intended to be exhaustive and the exercise of any rights or remedy shall not
preclude the exercise of any other right or remedies provided for herein or
otherwise provided by law, all of which shall be cumulative and not
alternative.

 

10.4         Allocation
of Payments After Event of Default. Notwithstanding any other provisions of
this Agreement to the contrary, after the occurrence and during the continuance
of an Event of Default, all amounts collected or received by Brascan on account
of the Obligations or any other amounts outstanding under any of the Other
Documents may, at Brascan’s discretion, be paid over or delivered as follows:

 

FIRST, to the payment of all reasonable
out-of-pocket costs and expenses (including reasonable attorneys’ fees) of Brascan
in connection with enforcing its rights and the rights of Brascan under this
Agreement and the Other Documents;

 

SECOND, to the payment of any fees owed to Brascan
under this Agreement or any Other Document;

 

THIRD, to the payment of all reasonable
out-of-pocket costs and expenses (including reasonable attorneys’ fees) of Brascan
in connection with enforcing its rights under this Agreement and the Other
Documents or otherwise with respect to the Obligations owing to Brascan;

 

FOURTH, to the payment of all of the
Obligations consisting of accrued fees and interest;

 

FIFTH, to the payment of the outstanding
principal amount of the Obligations;

 

SIXTH, to all other Obligations and other
obligations which shall have become due and payable under the Other Documents
or otherwise and not repaid pursuant to clauses “FIRST” through “FIFTH” above;
and

 

SEVENTH, to the payment of the surplus, if
any, to whoever may be lawfully entitled to receive such surplus.

 

In carrying out the foregoing, amounts
received shall be applied in the numerical order provided until exhausted prior
to application to the next succeeding category.

 

XI.           WAIVERS AND JUDICIAL
PROCEEDINGS.

 

11.1         Waiver
of Notice. Borrower hereby waives notice of demand, presentment, protest
and notice thereof with respect to any and all instruments, notice of
acceptance hereof, notice of loans or advances made, credit extended, or any
other action taken in reliance hereon,

29

 

and all other demands and notices of any description, except such as
are expressly provided for herein.

 

11.2         Delay.
No delay or omission on Brascan’s or Brascan’s part in exercising any right,
remedy or option shall operate as a waiver of such or any other right, remedy
or option or of any Default or Event of Default.

 

11.3         Jury
Waiver. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER
THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH, OR (B) IN ANY WAY CONNECTED WITH OR RELATED
OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT
TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO
IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE AND EACH PARTY HEREBY CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENTS OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

XII.         EFFECTIVE DATE AND
TERMINATION.

 

12.1         Term.
This Agreement, which shall inure to the benefit of and shall be binding upon
the respective successors and permitted assigns of Borrower, Brascan and Brascan,
shall become effective on the date hereof and shall continue in full force and
effect until the first anniversary of the Closing Date (the “Term”)
unless sooner terminated as herein provided.

 

12.2         Termination.
The termination of the Agreement shall not affect Borrower’s, Brascan’s rights,
or any of the Obligations having their inception prior to the effective date of
such termination, and the provisions hereof shall continue to be fully
operative until all transactions entered into, rights or interests created or
Obligations have been fully and indefeasibly paid, disposed of, concluded or
liquidated. The rights granted to Brascan hereunder shall continue in full
force and effect, notwithstanding the termination of this Agreement or the fact
that Borrower’s Account may from time to time be temporarily in a zero or
credit position, until all of the Obligations of Borrower have been
indefeasibly paid and performed in full after the termination of this Agreement
or Borrower has furnished Brascan with an indemnification satisfactory to Brascan
with respect thereto. All representations, warranties, covenants, waivers and
agreements contained herein shall survive termination hereof until all
Obligations are indefeasibly paid and performed in full.

 

30

 

XIII.        MISCELLANEOUS.

 

13.1         Governing
Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applied to contracts to be performed wholly
within the State of New York. Any judicial proceeding brought by or against
Borrower or Brascan with respect to any of the Obligations, this Agreement, the
Other Documents or any related agreement may be brought in any court of
competent jurisdiction in the State of New York, United States of America, and,
by execution and delivery of this Agreement, Borrower or Brascan accepts for
itself and in connection with its properties, generally and unconditionally,
the non-exclusive jurisdiction of the aforesaid courts, and irrevocably agrees
to be bound by any judgment rendered thereby in connection with this Agreement.
Each of Borrower and Brascan hereby waives personal service of any and all
process upon it and consents that all such service of process may be made by
registered mail (return receipt requested) directed to Borrower and Brascan, as
applicable, at its address set forth in Section
13.6 and service so made shall be deemed completed five (5) days after
the same shall have been so deposited in the mails of the United States of
America. Nothing herein shall affect the right to serve process in any manner
permitted by law or shall limit the right of Borrower and Brascan to bring
proceedings against any other party hereto in the courts of any other
jurisdiction. Each of Borrower and Brascan waives any objection to jurisdiction
and venue of any action instituted hereunder and shall not assert any defense
based on lack of jurisdiction or venue or based upon forum non conveniens. Any
judicial proceeding by Borrower against Brascan involving, directly or
indirectly, any matter or claim in any way arising out of, related to or
connected with this Agreement or any related agreement, shall be brought only
in a Federal or state court located in the County of New York, State of New
York.

 

13.2         Entire
Understanding. (a)  This Agreement
and the documents executed concurrently herewith contain the entire
understanding between Borrower and Brascan and supersedes all prior agreements
and understandings, if any, relating to the subject matter hereof. Any
promises, representations, warranties or guarantees not herein contained and
hereinafter made shall have no force and effect unless in writing, signed by
Borrower’s and Brascan’s respective officers. Neither this Agreement nor any
portion or provisions hereof may be changed, modified, amended, waived,
supplemented, discharged, cancelled or terminated orally or by any course of
dealing, or in any manner other than by an agreement in writing, signed by the
party to be charged. Borrower acknowledges that it has been advised by counsel
in connection with the execution of this Agreement and Other Documents and is
not relying upon oral representations or statements inconsistent with the terms
and provisions of this Agreement.

 

13.3         Successors
and Assigns This Agreement shall be binding upon and inure to the benefit
of Borrower, Brascan, all future holders of the Obligations and their
respective successors and assigns, except that Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the
prior written consent of Brascan.

 

13.4         Application
of Payments. To the extent that Borrower makes a payment or Brascan
receives any payment for Borrower’s benefit, which are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
to be repaid to a trustee, debtor in possession, receiver, custodian or any
other party under any bankruptcy law, common law or 

 

31

 

equitable cause, then, to such extent, the Obligations or part thereof
intended to be satisfied shall be revived and continue as if such payment or
proceeds had not been received by Brascan.

 

13.5         Indemnity.
Borrower shall indemnify Brascan, and each of their respective officers, directors,
Affiliates, attorneys, employees and Brascan’s from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses and disbursements of any kind or nature whatsoever
(including fees and disbursements of counsel) which may be imposed on, incurred
by, or asserted against Brascan in any claim, litigation, proceeding or
investigation instituted or conducted by any Governmental Body or
instrumentality or any other Person with respect to any aspect of, or any
transaction contemplated by, or referred to in, or any matter related to, this
Agreement or the Other Documents, whether or not Brascan is a party thereto,
except to the extent that any of the foregoing arises out of the willful
misconduct or gross negligence of the party being indemnified (as determined by
a court of competent jurisdiction in a final and non-appealable judgment). Without
limiting the generality of the foregoing, this indemnity shall extend to any
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses and disbursements of any kind or nature whatsoever
(including fees and disbursements of counsel) asserted against or incurred by
any of the indemnitees described above in this Section 13.5  by any
Person under any Environmental Laws or similar laws by reason of Borrower’s or
any other Person’s failure to comply with laws applicable to solid or hazardous
waste materials, including Hazardous Substances and Hazardous Waste, or other
Toxic Substances. Additionally, if any taxes (excluding taxes imposed upon or
measured solely by the net income of Brascan, but including any intangibles
taxes, stamp tax, recording tax or franchise tax) shall be payable by Brascan
on account of the execution or delivery of this Agreement, or the execution,
delivery, issuance or recording of any of the Other Documents, or the creation
or repayment of any of the Obligations hereunder, by reason of any Applicable
Law now or hereafter in effect, Borrower shall pay (or shall promptly reimburse
Brascan for payment of) to the extent not otherwise required to be paid
pursuant to the terms of this Agreement, all such taxes, including interest and
penalties thereon, and shall indemnify and hold the indemnitees described above
in this Section 13.5 harmless
from and against all liability in connection therewith.

 

13.6         Notice.
Any notice or request hereunder may be given to Borrower or to Brascan at their
respective addresses set forth below or at such other address as may hereafter
be specified in a notice designated as a notice of change of address under this
Section. Any notice, request,
demand, direction or other communication (for purposes of this Section 13.6 only, a “Notice”)
to be given to or made upon any party hereto under any provision of this
Agreement shall be given or made by telephone or in writing (which includes by
means of electronic transmission (i.e., “e-mail”) or facsimile transmission in
accordance with this Section 13.6.
Any such Notice must be delivered to the applicable parties hereto at the
addresses and numbers set forth under their respective names on Section 13.6 hereof or in accordance
with any subsequent unrevoked Notice from any such party that is given in
accordance with this Section 13.6.
Any Notice shall be effective:

 

(a)           In the case of hand-delivery, when
delivered;

 

(b)           If given by mail, four days after
such Notice is deposited with the United States Postal Service, with
first-class postage prepaid, return receipt requested;

 

32

 

(c)           In the case of a telephonic Notice,
when a party is contacted by telephone, if delivery of such telephonic Notice
is confirmed no later than the next Business Day by hand delivery, a facsimile
or electronic transmission, a Website Posting or an overnight courier delivery
of a confirmatory Notice (received at or before noon on such next Business
Day);

 

(d)           In the case of a facsimile
transmission, when sent to the applicable party’s facsimile machine’s telephone
number, if the party sending such Notice receives confirmation of the delivery
thereof from its own facsimile machine;

 

(e)           In the case of electronic
transmission, when actually received; and

 

(f)            If given by any other means
(including by overnight courier), when actually received.

 

Brascan giving a Notice to Borrower shall
concurrently send a copy thereof to Brascan, and Brascan shall promptly notify
the other Brascan of its receipt of such Notice.

 

If to Brascan at:

 

Brascan (U.S.)
Corp.

 

 

with a copy to:

 

Torys  LLP

79 Wellington
Street West

Suite 3000

Toronto,
Ontario, M5K 1N2

Attention:  Scott Kraag, Partner

Telephone:  (416) 865.7980

Facsimile:   (416) 865.7380

 

If to Borrower:

 

Crystal River
Capital, Inc.

c/o Hyperion
Brookfield Asset Management, Inc.

Three World
Financial Center

200 Vesey
Street, Floor 10

New York, New
York 10281-1010

Attention:  General Counsel

Telephone:
(212) 549-8400

Facsimile:  (212) 549-8310

 

33

 

13.7         Survival.
The obligations of Borrower under Sections 2.2(c), 3.4,  13.5 and 13.7 shall
survive termination of this Agreement and the Other Documents and payment in
full of the Obligations.

 

13.8         Severability.
If any part of this Agreement is contrary to, prohibited by, or deemed invalid
under Applicable Laws or regulations, such provision shall be inapplicable and
deemed omitted to the extent so contrary, prohibited or invalid, but the
remainder hereof shall not be invalidated thereby and shall be given effect so
far as possible.

 

13.9         Expenses.
All costs and expenses including reasonable attorneys’ fees (including the
allocated costs of in house counsel) and disbursements incurred by Brascan on
its behalf  (a) in connection with the
preparation, negotiation and execution and delivery of this Agreement and the
Other Documents, or (b) in all efforts made to enforce payment of any
Obligation, or (c) in connection with the entering into, modification,
amendment, administration and enforcement of this Agreement or any consents or
waivers hereunder or thereunder and all related agreements, documents and
instruments, or (d) maintaining, preserving or enforcing any of Brascan’s or Brascan’s
rights hereunder and under all related agreements, documents and instruments,
whether through judicial proceedings or otherwise, or (e) in defending or
prosecuting any actions or proceedings arising out of or relating to Brascan’s
transactions with Borrower, or (f) in connection with any advice given to Brascan
with respect to its rights and obligations under this Agreement and the Other
Documents, may be charged to Borrower’s Account and shall be part of the
Obligations.

 

13.10       Injunctive
Relief. Borrower recognizes that, in the event Borrower fails to perform,
observe or discharge any of its obligations or liabilities under this
Agreement, or threatens to fail to perform, observe or discharge such
obligations or liabilities, any remedy at law may prove to be inadequate relief
to Brascan; therefore, Brascan, if Brascan so requests, shall be entitled to
temporary and permanent injunctive relief in any such case without the
necessity of proving that actual damages are not an adequate remedy.

 

13.11       Damages.
Neither Borrower, Brascan nor any attorney for it, shall be liable to the other
parties hereto (or any Affiliate of any such Person) for indirect, punitive,
exemplary or consequential damages arising from any breach of contract, tort or
other wrong relating to the establishment, administration or collection of the
Obligations or as a result of any transaction contemplated under this Agreement
or any Other Document.

 

13.12       Captions.
The captions at various places in this Agreement are intended for convenience
only and do not constitute and shall not be interpreted as part of this
Agreement.

 

13.13       Counterparts;
Facsimile. This Agreement may be executed in any number of and by different
parties hereto on separate counterparts, all of which, when so executed, shall
be deemed an original, but all such counterparts shall constitute one and the
same agreement. Any copy delivered by a party by facsimile transmission shall
be deemed to be an original copy hereto.

 

13.14       Construction.
Each party and its respective counsel have reviewed this Agreement and the
normal rule of construction to the effect that any ambiguities are to be 

 

34

 

resolved against the drafting party shall not be employed in the
interpretation of this Agreement or any amendments, schedules or exhibits
thereto.

 

13.15       Sharing
Information.

 

(a)           From time to time financial advisory,
investment banking and other services may be offered or provided to Borrower or
one or more of its Affiliates (in connection with this Agreement or otherwise)
by Brascan or by one or more Subsidiaries or Affiliates of Brascan.

 

(b)           Notwithstanding anything herein to
the contrary, the information subject to this Section 13.15 shall not include,
and Brascan and Brascan may disclose without limitation of any kind, any
information with respect to the “tax treatment” and “tax structure” (in each
case, within the meaning of Treasury Regulation Section 1.6011-4) of the
transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are provided to Brascan relating to such
tax treatment and tax structure; provided that with respect to any document or
similar item that in either case contains information concerning the tax
treatment or tax structure of the transaction as well as other information,
this sentence shall only apply to such portions of the document or similar item
that relate to the tax treatment or tax structure of the Advances and
transactions contemplated hereby.

 

13.16       Publicity.
Brascan or any of its affiliates is hereby authorized to make appropriate
announcements of the financial arrangement entered into among Borrower and Brascan
in such publications and to such selected parties as Brascan shall in its sole
and absolute discretion deem appropriate.

 

13.17       Certifications
From Banks and Participants; US PATRIOT Act. Brascan or any assignee of it that
is not incorporated under the Laws of the United States of America or a state
thereof (and is not excepted from the certification requirement contained in
Section 313 of the USA PATRIOT Act and the applicable regulations because it is
both (i) an affiliate of a depository institution or foreign bank that
maintains a physical presence in the United States or foreign country, and (ii)
subject to supervision by a banking authority regulating such affiliated
depository institution or foreign bank) shall deliver to Brascan the
certification, or, if applicable, recertification, certifying that Brascan is
not a “shell” and certifying to other matters as required by Section 313 of the
USA PATRIOT Act and the applicable regulations: (1) within 10 days after the
Closing Date, and (2) as such other times as are required under the USA PATRIOT
Act.

 

35

 

Each of the parties has signed this Agreement
as of the day and year first above written.

 

	
   

  	
  CRYSTAL
  RIVER CAPITAL, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Clifford E. Lai

  	
   

  
	
   

  	
  Name: Clifford E. Lai

  
	
   

  	
  Title:  President and CEO

  
	
   

  	
   

  
	
   

  	
  BRASCAN (US) CORPORATION

  
	
   

  	
  as Lender and as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ G. Mark Brown

  	
   

  
	
   

  	
  Name:

  	
  G. Mark Brown

  	
   

  
	
   

  	
  Title:

  	
  PresidentConverted by EDGARwiz

Exhibit 10.1

TERMINATION OF INDEPENDENT CONSULTING AGREEMENT

BETWEEN

DataJungle Software Inc., a Nevada corporation having an office at 1 Hines Road, Suite 202, Ottawa, Ontario, K2K 3C7

(Hereinafter, the “Company”)

AND

The Del Mar Consulting Group, Inc., a California corporation having an office at 12220 El Camino Real, Suite 400, San Diego, CA, 92130

(Hereinafter, “Del Mar”)

WHEREAS:

i.

The Company and Del Mar entered into an Independent Consulting Agreement dated the 14th day of August, 2006 (the “Agreement”);

ii.

Del Mar is obligated to provide certain services to the Company for the period to July 31, 2007 as specified in paragraph 2 of the Agreement;

iii.

Company and Del Mar desire to terminate the Agreement prior to July 31, 2007. 

THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, Company and Del Mar agree as follows:

1.

The Agreement will terminate effective May 31, 2007.

2.

Del Mar will be entitled to a cash fee in accordance with the terms and conditions of the Agreement until May 31, 2007.  Company acknowledges owing Del Mar cash fees of $48,000 for the eight month period from October 1, 2006 to May 31, 2007.  The cash fee will be paid to Del Mar by the Company when the Company has sufficient cash resources to do so but in no event will payment in full be made later than December 31, 2007.  

3.

Del Mar will not be required to provide the Company any further consulting services as specified in paragraph 2 of the Agreement after termination of   the Agreement on May 31, 2007. 

4.

Del Mar agrees that agreement by the Company to pay the cash fee in paragraph 2 above and receipt by Del Mar of 1,500,000 shares of common stock of the Company in accordance with paragraph 4.1 of the Agreement is full and complete compensation to Del Mar for services rendered to May 31, 2007.  

5.

Del Mar agrees to waive effective immediately any rights it may have pursuant to paragraphs 4.2, 4.5 and 5 of the Agreement.   

6.

The Company agrees to use its best efforts to assist Del Mar with removal of the restrictive legend after August 14, 2008 from the 1,500,000 shares of common stock of the Company held by Del Mar.  The obligation of the Company pursuant to this paragraph will include providing any legal opinion required by the Company’s transfer agent in order to the remove the restrictive legend.    

In Witness Whereof, Company and Del Mar have executed this Termination of Independent Consulting Agreement this 24th day of May, 2007

The Del Mar Consulting Group, Inc.

DataJungle Software Inc.

____________________

____________________

Per:

Per:  

____________________

Per:

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