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    Government Gouvernement CAPITAL LEASING REGULATIONS of Canada du Canada NOTICE OF IMPROVEMENTS TO THE ORIGINAL EQUIPMENT

    Notes: 1) "CAPITAL LEASING REGULATIONS" means the Canada Small Business Financing (Establishment and Operation of Capital Leasing Pilot Project) Regulations. 2) "CAPITAL LEASE" means the capital lease registered under the Capital Leasing Regulations. 3) Please read the attached INSTRUCTIONS and fill in all of the lines or use N/A if not applicable. 4) The form must be submitted within 3 MONTHS following the date on which the amendment to the capital lease was made. CAPITAL LEASE IDENTIFICATION

1. Lessor's Name 2. Industry Canada Identification No. 3. Lessee's Name

4. Ind. Canada Capital 5. Original Date Capital 6. Original Total Financing Amount of Capital Lease Lease Registration No. Lease Entered Into

     (YYYY-MM-DD)

     7. Date on which the amendment to the capital lease was entered into: (YYYY-MM-DD) A) DETAILED COST OF THE IMPROVEMENTS

    8. Cost of improvements to the original "Purchase price of new equipment" +

    The lesser of a) or b) Cost of improvements to the original "Purchase price of used equipment" a)+ 9.

    b) Fair market value of improvements to the used equipment 10. Additional costs necessary for the operation of the improved equipment + 11. Cost of software related to the operation of the improved equipment, if applicable + 12. Non-refundable taxes and customs duties for the improvements to the equipment + 13. Total cost of improvements (total of Lines 8 to 12) = Additional Financed Cost of Equipment

    14. Total cost of improvements to the original "Cost of equipment"(Line 13) + 15. Deduct: Cost of improvements not financed, if applicable - 16. Additional "Financed cost of equipment" (Line 14 less Line 15) = Registration Fee

    17. Additional registration fee due (2% of Line 16) - Cheque payable to Receiver General (do not round to nearest dollar) B) OUTSTANDING BALANCE OF CAPITAL LEASE

    18. Outstanding balance of the capital lease before its amendment + 19. Cost of improvements to original "Financed cost of equipment"(Line 16) + 20. Additional "Registration fees included in the capital lease" (optional, but if financed, cannot exceed Line 17) + 21. New outstanding balance of the capital lease after its amendment = IC 2861e (2004/11)

     Capital Lease Registration No. Industry Canada

C) DETAILED CALCULATION OF THE REVISED PAYMENTS

    22. Purchase price of new equipment +

    The lesser of a) or b) Revised total "Purchase price of used equipment" a)+ 23. b) Revised total "Fair market value of the used equipment" 24. Revised total "Additional costs necessary for the operation of the equipment" + 25. Revised total "Cost of software related to the operation of the equipment" + 26. Revised total "Non-refundable taxes and customs duties" + 27. Revised total "Cost of equipment" (total of Lines 22 to 26) (cannot exceed $250,000) = 28. Deduct: Revised total "Amount not financed", if applicable - 29. Revised total "Financed cost of equipment" (Line 27 less Line 28) (cannot exceed 100% of Line 27) = 30. Revised total "Registration fees included in the capital lease" (if financed, cannot exceed 2% of Line 29) + 31. Revised total "Total financing amount of the capital lease" (Line 29 plus Line 30) (cannot exceed $250,000) = 32. Deduct: the lesser of the revised residual value or the revised bargain purchase option price of the equipment, if applicable - 33. Revised total "Amount to be amortized" (Line 31 less Line 32) =

     Original "Annual % + % = 34. Gov. of Canada Cannot exceed imputed rate of interest" bonds 13.25%

    35. Revised "Term of the capital lease", in months (cannot exceed 120 months from date in Line 5) 36. Revised "Basic monthly capital lease payment" = 37. GST / HST + 38. PST + 39. Revised "Total monthly capital lease payment" = LESSOR'S ACKNOWLEDGEMENT

    I, the responsible officer of the lessor, acknowledge that: a) to the best of my knowledge, the information contained herein is complete and accurate; and b) the capital lease complies with all the eligibility requirements of the Canada Small Business Financing (Establishment and Operation of Capital Leasing Pilot Project) Regulations.

    Fraudulent activities in respect of capital leases registered under the Capital Leasing Regulations could be subject to sanctions under the Criminal Code.

    Name and Title of Responsible Officer of the Lessor Signature

    (YYYY/MM/DD) Telephone No. Extension Fax No. E-mail Address

LESSOR'S CHEQUE PAYABLE TO "RECEIVER GENERAL FOR CANADA". Send this form with the cheque to: Capital Leasing Pilot Project Canada Small Business Financing Program 235 Queen Street Ottawa, Ontario K1A 0H5 Tel.: (613) 954-5540 Fax: (613) 952-0290 Email: csbfa-lfpec@ic.gc.ca Internet: strategis.gc.ca/csbfa

    IC 2861e (2004/11)

     INSTRUCTIONS TO LESSOR

    1. Enter the name of the lessor. 2. Enter the Identification number assigned to the lessor (8 digits) by the Industry Canada. 3. Enter the name of the lessee. 4. Enter the capital lease registration number (7 digits) assigned to the capital lease by Industry Canada. 5. Enter the date the capital lease was originally signed. 6. Enter the original "Total financing amount of the capital lease". 7. Enter the date on which the amendment to the capital lease was entered into. The lessor has to submit this form within 3 months after that date. 8. Enter, if applicable, the cost of improvements to the original "Purchase price of the equipment". 9. Enter, if applicable, the lesser of the following: a) Cost of improvements to the original "Purchase price of the used equipment". b) Fair market value of the improvements on the day on which the amendment to the capital lease is entered into. 10. Enter, if applicable, the additional costs necessary for the operation of the improvement to the equipment. 11. Enter, if applicable, the cost of software related to the operation of the improvement to the equipment. 12. Enter, if applicable, the non-refundable taxes and custom duties for the improvements to the equipment. 13. Add Lines 8 to 12 in order to get the total cost of improvements. 14. Enter the cost of improvements to the original "Cost of equipment" (Line 13). 15. Enter, if applicable, the amount of improvements not financed under the capital lease (e.g.: down payment or financing by another capital lease). 16. Deduct Line 15 from Line 14 in order to get the additional "Financed cost of equipment". 17. Enter the amount of additional registration fee that is due for the cost of improvements to the original "Financed cost of equipment". It must represent 2% of Line 16. The lessor must include a cheque payable to the "Receiver General for Canada" with the submission of this form. 18. Enter the outstanding balance of the capital lease before its amendment. 19. Enter the cost of improvements to the original "Financed cost of equipment" (Line 16). 20. Enter, if applicable, the amount of additional "Registration fees included in the capital lease". The financing of these additional fees is optional. If financed, the registration fee must be equal or lower than Line 17. 21. Add Lines 18 to 20 in order to get the new outstanding balance of the capital lease after its amendment. 22. Enter, if applicable, the total revised "Purchase price of the new equipment". This total must represent the original purchase price (according to Line 1 of the "Capital Lease Cost Form" submitted for the lease registration) plus the improvements (Line 9 of this form). The equipment must not be the subject of a conditional sale or a sale-lease back. 23. Enter, if applicable, the lesser of the following: a) Total revised "Purchase price of the used equipment". This total must represent the original price [according to Line 2 a) of the "Capital Lease Cost Form" submitted for the lease registration] plus the respective improvements [Line 10 a) of this form]. The equipment must not be the subject of a conditional sale or a sale-lease back; it must also have an economic life greater than the term of the capital lease. b) Total revised "Fair market value of the used equipment". This total must represent the original value [according to Line 2 b) of the "Capital Lease Cost Form" submitted for the lease registration] plus the added value of the improvements [Line 10 b) of this form]. 24. Enter, if applicable, the total revised "Additional costs necessary for the operation of the equipment". This total must represent the original cost (according to Line 3 of the "Capital Lease Cost Form" submitted for the lease registration) plus the improvements (Line 11 of this form). The financing of these costs is optional. Maintenance and training costs are ineligible. 25. Enter, if applicable, the total revised "Cost of software related to the operation of the equipment". This total must represent the original cost (according to Line 4 of the "Capital Lease Cost Form" submitted for the lease registration) plus the improvements (Line 12 of this form). The financing of these costs is optional. 26. Enter, if applicable, the total revised "Non-refundable taxes and custom duties". This total must represent the original cost (according to Line 5 of the "Capital Lease Cost Form" submitted for the lease registration) plus the improvements (Line 13 of this form). The financing of these costs is optional.

    27. Add Lines 22 to 26 in order to get the total revised "Cost of equipment". This amount cannot exceed $250,000. 28. Enter, if applicable, the total revised "Amount not financed under the capital lease" (e.g.: down payment or financing by another capital lease). This total must represent the original amount not financed (according to Line 7 of the "Capital Lease Cost Form" submitted for the lease registration) plus the present amount not financed (Line 15 of this form). 29. Deduct Line 28 from Line 27 in order to get the total revised "Financed cost of equipment". This amount must be equal or lower than the revised "Cost of equipment".

    IC 2861e (2004/11), p. 3

INSTRUCTIONS TO LESSOR

30. Enter, if applicable, the total revised "Registration fees included in the capital lease". This revised total must represent the original fees added to the capital lease" (according to Line 9 of the "Capital Lease Cost Form" submitted for the lease registration) plus the additional fees presently added (Line 20 of this form). The financing of these fees is optional. If financed, the registration fee must be equal or lower than 2% of the total revised "Financed cost of equipment" (Line 29). 31. Add Line 29 and Line 30 in order to get the total revised "Total financing amount of the capital lease". This amount cannot exceed $250,000. 32. Enter, If applicable, the lesser of the revised residual value or the revised bargain purchase option price indicated in the capital lease. 33. Deduct Line 32 from Line 31 in order to get the total revised "Amount to be amortized". 34. Enter the original annual imputed rate of interest (according to Line 13 of the "Capital Lease Cost Form" submitted for the lease registration). 35. Enter, revised or not, the term of the capital lease (in months). Cannot exceed 120 months beginning on the day on which the capital lease was originally entered into (Line 5). 36. Calculate the total revised "Basic monthly capital lease payment" using the "Amount to be amortized" (Line 33), the "Annual imputed rate of interest" (Line 34), and the "Term of the lease" (Line 35). 37. Enter, if applicable, the amount of GST or the HST for those provinces where the taxes are harmonized with the GST. 38. Enter, if applicable, the amount of provincial tax. 39. Add Lines 36 to 38 in order to get the revised "Monthly capital lease amount" payable by the lessee.

IC 2861e (2004/11), p. 4

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