a members guide to the merger of prospera credit … · prospera's governance & conduct...

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A MEMBERS’ GUIDE TO THE MERGER OF

PROSPERA CREDIT UNION AND

WESTMINSTER SAVINGS CREDIT UNION

- SUPPLEMENTAL INFORMATION PACKAGE -

FutureStrong

SUPPLEMENTAL INFORMATION PACKAGE

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TABLE OF CONTENTS

1. FICOM: LETTER OF CONSENT ........................................................................................ 3

2. ALTERNATIVES CONSIDERED ........................................................................................ 4

(a) Status Quo ................................................................................................................... 4

(b) Pursue a Federal Credit Union Mandate ...................................................................... 5

(c) Strategic Alliance/Joint Ventures .................................................................................. 5

(d) Merger/Amalgamation .................................................................................................. 5

(e) The Best Option ........................................................................................................... 6

3. CREDIT UNION LEADERSHIP........................................................................................... 8

(a) Governance Structure .................................................................................................. 8

(b) Board of Directors ........................................................................................................ 8

(c) Executive Leadership ..................................................................................................11

4. AMALGAMATION AGREEMENT

5. RESOLUTION OF THE DIRECTORS OF WSCU

6. NEW PROSPERA RULES

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1. FICOM: LETTER OF CONSENT

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2. ALTERNATIVES CONSIDERED

Several alternatives were considered by the boards of directors of both Credit Unions besides merging. These include maintaining the status quo, pursuing continuing as a federal credit union under the Bank Act as well as forming strategic alliances or joint ventures. However, the boards of directors concluded that combining their respective operations by way of merging provides the most sustainable platform to create a stronger competitive advantage for New Prospera in the future. Nonetheless, below is a brief description of each of the alternatives considered by the board of directors.

(a) Status Quo

Both Credit Unions have independently engaged in a pursuit of organic growth over recent years and made commensurate investments in their respective businesses to support this growth. Related to growth, the Credit Unions have also taken action to diversify their revenue streams and become more innovative and efficient in managing the evolving financial services landscape described above. The Credit Unions recognize the primary benefit of continuing this organic growth strategy is the ability to remain autonomous and to determine a future direction that best supports their strategy and value proposition to existing and prospective members. Notwithstanding this benefit, the Credit Unions also recognize the following significant and escalating challenges for continuing to operate as a stand-alone mid-sized credit union in British Columbia, such as:

difficulty meeting members’ ongoing and evolving banking needs around easier, faster and more convenient banking solutions;

limited capacity to drive innovation and offer products and services to compete with larger competitors;

resource limitations to build-out branch networks;

strong reliance on external parties to deliver both core and extended financial solutions;

lower single limit lending caps;

rising cost structures;

the ability to present a forward looking platform to attract and retain current and prospective employees; and

increasing cost of compliance and risk management.

As a result of the Amalgamation, New Prospera will be better positioned, with increased resources, to deal with the challenges identified above and to focus its strategy on delivering greater member value rather than working around existing limitations.

In the event the Amalgamation does not proceed, both Credit Unions would likely fall

behind other competitors in terms of innovative products and services, core financial wellness and ability to provide in-demand advisory services to current and prospective members. Given these limitations, the ability of either Credit Union to expand into new markets and launch new lines of business would be difficult and require likely trade-offs in respect of resource allocation and prioritization. Furthermore, the ability of either Credit Union to adequately focus on all, or any, of the key trends impacting financial services identified during the course of the Amalgamation discussions would be limited to the minimal resources available balanced against careful capital and liquidity considerations and constraints.

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(b) Pursue a Federal Credit Union Mandate

In 2012, the Government of Canada put in place a framework that allowed provincial credit unions to continue as federal credit unions under the Bank Act. The boards of directors and management of each Credit Union have frequently assessed in strategic planning sessions whether moving from a provincial to a federal credit union mandate was in the best interest of both its members and in support of its broader business strategy.

To this point, each Credit Union has concluded that continuing federally is not appropriate, as it does not generally align with their respective strategies of developing and serving a local geographic market. On a specific level, the following factors were also considered as unfavourable with respect to a regulatory switch:

the impact of a change in deposit insurance coverage, whereby only the first $100,000 is fully guaranteed;

greater restrictions on capital structure;

increased liquidity requirements; and

the associated costs related to change and compliance with a new and unfamiliar regulatory regime. Independently, the boards of directors of each Credit Union have determined that, at this

time, a federal credit union option would not be in the best interests of its members, communities and employees, as the effort and resources required would exceed the minimal benefit gained given the respective strategies of deepening their presence in local trade areas.

(c) Strategic Alliance/Joint Ventures

Each Credit Union has independently considered and explored potential complementary partnerships with other credit unions to diversify income streams, increase financial margins and offer members incremental value. Similar to switching to a federal mandate, the level of resources and commitment required to effectively build, develop and launch such relationships, while excluding a number of operating aspects of the business not subject to the alliance, is both complex and considerable and neither Credit Union has been presented an opportunity that merited further detailed exploration.

(d) Merger/Amalgamation

Mergers by way of amalgamation provide an alternative for British Columbia credit unions to generate incremental member value, reduce operating expenses, and support future growth aspirations. The limitations inherent with being a small and regional credit union are real and have a tangible impact on the respective Credit Union businesses. Smaller balance sheets, lower single member lending caps, the imperative to restrain growth to preserve capital, ageing membership bases, increasing membership churn and loyalty challenges, margin compression, technology disruptions, increasing regulatory and compliance expectations and increasing cost bases. In response, both Credit Unions have focused on ways to be innovative and to streamline internal operations so that growth can be accommodated without a corresponding increase in costs. New Prospera will have a solid capital base and greater resources available to enhance its ability to operate in the current and future environment.

While the Credit Unions understand that the proposed transaction carries with it certain risks, the boards of directors believe these risks are manageable, especially considering the

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numerous expected benefits resulting from the transaction for all key stakeholders (members, employees, local communities, and the broader credit union system) as well as for the financial health and long-term sustainability of the newly amalgamated entity. Some of the specific benefits include:

improve market competitiveness through resulting economies of scale;

potential for eventual expansion of combined branch networks and deployment of an innovative distribution model to better serve members;

a breakout opportunity for New Prospera to initiate its strategic vision (i.e., targeting SMEs and their related parties);

stronger capital base allows smart investment in technology with speed;

enhance capability of attract and retain talents by drawing from a bigger pool of candidates and offering a more attractive platform;

reduction of geographic and member concentration risk;

over time, improved operational efficiencies and synergies, making better use of member money – the financial model shows that the anticipated annual cost savings over time for New Prospera are approximately $10 - $16 million;

size and scale afford opportunity for operational enhancements to build an even more stable and secure enterprise;

stronger voice with suppliers and within the system and a better ability to advocate for changes that will benefit members;

improve and widen the ability to impact local economies and communities through charitable endeavours in operating markets;

a credit union that has the combined enhanced resources and capital to invest in members in ways neither legacy credit union could do, including:

o building out a more robust “digital first” strategy – likely not achievable at the same pace;

o reaching out to existing and potential younger members through technological innovation and applications; and

o providing additional service and products and enhancing existing ones – likely not achievable with status quo.

This increased size will allow New Prospera to strengthen its awareness initiatives and

have the financial resources to enhance the services and offerings it can provide to its members.

(e) The Best Option

The boards of directors and management of both Credit Unions have considered each of the alternatives described above and have concluded that combining their respective operations by way of merger provides the most sustainable platform to create a stronger competitive advantage for New Prospera in the future. The Amalgamation will be built around three primary pillars:

1. Member-centric Operating Principle and Value Proposition – The Amalgamation is responsive to member feedback and the premise that existing and future members will receive significant value in terms of service provided and products offered.

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2. Financial Sustainability and Resilience – The Amalgamation will be financially accretive and meaningful growth and synergies are projected resulting in a more stable and sustainable financial profile for New Prospera that will allow for deployment of resources in a way that can effectively respond to the challenges of the current and future operating environment.

3. Overall Impact to Stakeholders and the Financial Services Industry – The Credit Unions are stronger when combined than when separate and given the interconnectivity of all participants within the financial services industry, a strong New Prospera provides stable and sustainable benefits for the industry as a whole and will allow its members to enjoy a better banking experience. It is expected that all stakeholders from employees to the greater communities in which the Credit Unions operate will realize immediate and long term benefits from the Amalgamation.

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3. CREDIT UNION LEADERSHIP

(a) Governance Structure

(b) Board of Directors

New Prospera will rely on a nine (9) person board of directors who, together, bring decades of experience in various industries to help guide it through the Amalgamation and beyond. A brief biography of the proposed nine directors of New Prospera is provided below as well as which Credit Union, if any, the proposed director currently serves as a director.

Gina Arsens (External) Gina Arsens is a CPA, CA and also holds the designation of Chartered Business Valuator. From 2016 to late 2018, she was the Global Finance Leader for Finning Digital within Finning International. Since late 2018, she has acted as the Chief Financial Officer of Canada's Digital Technology Supercluster. Her background includes roles as a CEO, CFO and small business owner. She has experience in digital transformation, particularly as it relates to the need to get buy-in from the people who will be using the new technology in order for it to be successfully implemented. She is a long-time credit union member and was a board member of YWCA Metro Vancouver from 2012-2018.

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Stacey Crawford (Prospera)

Stacey Crawford was first elected as a Director of Prospera in 2012 and served as chair of the board of directors from 2015-2018. He is currently serving as the Chair of Prospera's Governance & Conduct Review Committee and represents Prospera on the Joint Merger Team (“JMT”). Previously, Mr. Crawford served as the Chair of Prospera's Nominations & Elections Committee, Member & Community Relations Committee, and was a member of the Audit, Human Resources, Merger, and CEO Hiring Committees. Since 2009, Mr. Crawford has been the Economic Development Officer for the District of Mission. He holds the CCD designation from the Rotman School of Management as a Certified Credit Union Director and will complete the Directors Education Program (Institute of Corporate Directors) in March, 2019. He is very active in his community as a volunteer on several other boards of directors.

Colin MacKinnon (Westminster)

Colin MacKinnon was first elected as a Director of Westminster in 2018 and is a member of their Audit & Risk Committee, Investment & Loan Committee and chairs the Nomination Committee. He is a CPA, CA and also holds the ICD.D designation from the Institute of Corporate Directors. In 2011, Mr. MacKinnon was recognized for his work in the accounting profession and community with a Fellowship in the Institute of Chartered Accountants. From 1996 until his retirement in 2013, he was with The British Columbia Automobile Association in several roles, including SVP and CRO, SVP and CFO and Corporate Secretary.

Eric Nadin (Prospera)

Eric Nadin was first elected as a Director of Prospera in 2011, is the current chair of the board of directors and represents Prospera on the JMT. He has chaired a number of committees, including Human Resources, Governance & Conduct Review, and the CEO Search Committee, and has been a member of the Audit, Risk Management/Investment & Lending Committee, and Community Relations Committee. Mr. Nadin retired in 2015 following a 35-year career as a professional engineer, his last role as Senior Manager - General Manager of Construction Services for BC Hydro. He has served on corporate and not-for-profit boards of directors and holds the ICD.D designation from the Institute of Corporate Directors.

Kam Raman (External)

Kam Raman is the Regional Vice President, Pacific for FCT Insurance, a provider of title insurance and related products and services. Prior to her current role, Kam was the SVP, Member Relations and Trade Services at Central 1 Credit Union for three years, following an 18-year career at First West Credit Union (and predecessors). Kam worked her way up from entry-level financial advisor to Assistant Vice President, Sales and Member Experience during her time at First West, gaining experience in retail banking, insurance, business services and branch management among other skills. Kam holds a Financial Management Certificate from BCIT, a BBA from KPU, and an MBA from Queen’s University. She serves on not-for-profit boards of directors and holds the ICD.D

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designation from the Institute of Corporate Directors.

Catherine Roome (External)

Catherine Roome is the President & CEO of Technical Safety BC, a position she has held since 2012, having previously served as Chief Operating Officer (2007-2012) and VP, Engineering & Research (2005-2007). An engineer by education, Ms. Roome is an accomplished executive who is guiding Technical Safety BC through a multi-year IT transformation project that will migrate it towards being a knowledge-based organization. Catherine has served on a number of community boards of directors in addition to being a long-standing credit union member. Ms. Roome earned a Bachelor of Electrical Engineering degree from the University of Victoria, attended Stanford for coursework in Finance and Accounting, Harvard Business School for coursework in Negotiation and Leading Professional Services Firms, and holds the ICD.D designation from the Institute of Corporate Directors.

Rod Thomson (Prospera) Rod Thomson was first elected as a Director of Prospera in 2018 and is a member of the Audit and Human Resources committees. From 2009 until 2018, he was a small business owner and client of Prospera. He has a long history in publishing and marketing. His philanthropic work includes serving on the boards of directors of St. Andrews Hall for six years, including a stint as chair of the board of directors, and University of the Fraser Valley for five years, where he also served as the chair of the board of directors. He is also very active in Rotary.

Art Van Pelt (Westminster) Art Van Pelt was first elected as a director of Westminster in 2013, is the current chair of the board of directors and represents Westminster on the JMT. He is a member of the Human Resource Committee and Nominations Committee. He has been a member of several committees, including Human Resources, Investment & Loan, Audit & Risk, Nominations, and Governance & Conduct review, and is a Director of the Westminster Savings Foundation. Mr. Van Pelt retired in 2012 following a long career with Overwaitea Food Group in various human resources functions, his last one being Vice President for People. Mr. Van Pelt holds the ICD.D designation from the Institute of Corporate Directors.

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Rita Virk (Westminster)

Rita Virk was first elected as a Director of Westminster in 2018 and is a member of its Audit & Risk Committee and Nominations Committee. Ms. Virk also chairs the Westminster Savings Foundation. She is a CPA, CA and has a Master of Professional Accounting degree. Ms. Virk is the Senior Manager, Internal Audit at Gateway Casinos & Entertainment Ltd. Prior to her current role, Ms. Virk held roles with ICBC and Cummins Western Canada. Among her other activities, Ms. Virk sits on the South Asian Committee for BC Children's Hospital Foundation. She also served on the Fraser Health Patient Care Quality Review Board from 2015 to 2018.

New Prospera considers staggered board of directors terms and term limits as a vital

governance component. New Prospera will have nine (9) directors. Each person elected as a director shall take office for a three-year term so that, for continuity purposes, one-third (⅓) of the board of directors shall retire each year. The terms of the proposed board of directors are as follows:

Director Name The Annual General Meeting

(AGM) that Initial Term Expires

Gina Arsens 2023 AGM

Stacey Crawford 2021 AGM

Colin MacKinnon 2021 AGM

Kam Raman 2021 AGM

Eric Nadin 2023 AGM

Catherine Roome 2022 AGM

Rod Thomson 2023 AGM

Art Van Pelt 2022 AGM

Rita Virk 2022 AGM

(c) Executive Leadership

New Prospera’s executive leadership team will consist of a group of experienced and talented individuals with a deep knowledge of the financial services industry. A brief biography of each of New Prospera’s executive leaders is provided below.

Executive profiles reflect the current positions each individual holds with Prospera or

Westminster, respectfully.

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GAVIN TOY President and Chief Executive Officer As President and CEO of Westminster Savings, Gavin leads a progressive and dynamic leadership team to help shape and guide the credit union’s strategic direction. Gavin joined Westminster Savings in 2011 as Senior Vice President and CFO and was appointed President and CEO in 2012. Prior to Westminster Savings, Gavin held a number of executive level positions with the British Columbia Automobile Association, another prominent BC member-based organization. In his most recent role, he was Senior Vice President and Chief Operations Officer and had responsibility for all customer-facing operations. Spanning a 16-year career at BCAA, other roles included Vice President Business Development, Director of Finance, and Treasurer. Gavin is a Chartered Accountant by training and a KPMG alumnus. He is a graduate of the Queen’s University Executive Leadership program, holds a business degree from Simon Fraser University and is an accredited Director through the Rotman School of Management Corporate Directors Program. Gavin is Past Chair at Canuck Place Children’s Hospice having served on the board of directors since 2013. He Chairs an industry forum responsible for unlocking strategic value for Canadian small business owners and is on the board of directors of the Canadian Credit Union Association of Canada. Gavin has previously been chair of the board of directors of two national finance companies, and has served on the board of directors of Credential Financial Inc.

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GREG OYHENART Chief Strategy & Integration Officer As Senior Vice President, Corporate Development and Chief Strategy Officer of Westminster, Greg leads the development of our corporate strategy and annual operating plans. This includes identifying potential strategic partnerships and new lines of business. He also oversees our Leasing sales and operations teams and the credit union’s government relations activities. Greg has a track record as a collaborative innovator and people-oriented leader with more than 25 years of diverse industry and business experience. Prior to joining Westminster in 2015, Greg held the position of Senior Vice President and Chief Member Experience Officer at The British Columbia Automobile Association (“BCAA”). Before joining BCAA, he was a Director at TELUS Ventures with responsibility for identifying and sourcing investments aligned to TELUS’ technology and business unit strategies. Greg holds an MBA from Queens University, an MA in Urban Planning from the University of British Columbia and a BA in History from Simon Fraser University. Greg has been an active member of his community through coaching youth soccer and baseball, and as a board trustee of the Stratford Hall Foundation. He currently serves on the board of directors of the Vancouver Public Library Foundation and as chair of the board of directors for Westminster’s leasing companies.

DIANE DOU Chief Operating Officer Diane Dou is currently the Chief Operating Officer of Prospera, a forward-thinking and courageous senior leader with extensive experience in all aspects of financial services distribution. Prior to joining Prospera, Diane was the COO and Country Head of Business Performance for Retail Banking and Wealth Management for HSBC Canada. At HSBC Canada, Diane’s senior portfolio included oversight of 144 branches with a combined retail and commercial balance sheet of $26 Billion and $10 Billion in Security trading. Diane joined Prospera in June 2016 and quickly transformed Prospera’s member value proposition and aligned Prospera’s business operating model to the newly refined proposition. Under her innovative and courageous leadership, Prospera welcomed more than 8,000 new members, grew assets under administration by more than 25% and improved employee engagement by 5%, which is a remarkable achievement given the scale of business

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transformation and the rapid pace of change. Diane obtained her MBA from Simon Fraser University in 2007 and her ICD.D designation in 2018. Diane currently serves as a director on the CUMIS Wealth Management Holding (AVISO Holding) board of directors and on the Hong Kong-Canada Business Association board of directors. She was one of two public directors on the board of directors for the BC Real Estate Association, and has served on multiple boards of directors in the health care and technology industries. In October 2015, the Canadian Board Diversity Council named Diane as one of its “2015 Canadian Diversity 50.”

BRIAN ROGERS Chief Risk Officer As Senior Vice President, Commercial Operations and Chief Credit Officer of Westminster, Brian has executive oversight for the credit union’s commercial lending operations. He also has responsibility for all credit functions across the organization including collections and credit risk management, as well as centralized clearing operations, payment systems and investment services. Prior to joining Westminster in 2015, Brian was Vice President, Corporate Development at Coast Capital Savings Credit Union. Prior to that, he was responsible for Coast Capital’s commercial credit risk function as Vice President, Commercial Credit Risk. In other roles, Brian spent 16 years with HSBC Bank Canada, where his last role was Head of Business Banking. He has a wealth of experience in credit, commercial operations, credit risk management and corporate development. Brian is a Chartered Financial Analyst (CFA) and has a Master’s of Business Administration from York University and a Bachelor of Commerce from the University of British Columbia.

GREG DYCK Chief Digital & Information Officer As Prospera’s Chief Information Officer, Greg’s portfolio includes Information Technology, Innovation, Procurement, Facilities and the Enterprise Project Management Office. His passion for technology and innovation allow him to be a key contributor to the organizational strategy and a driver of transformational change, bridging the digital and physical delivery of Prospera’s value proposition through innovation. Greg represents Prospera as a

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member of the Large Credit Union Coalition (LCUC) CIO group and as a member of the Community Innovation Partnership in Abbotsford. He is chair of board of directors of the Co-operative EFT Development Association (CEDA).

MARY FALCONER Chief Financial Officer As Senior Vice President, Chief Financial Officer and Corporate Secretary of Westminster, Mary provides financial oversight, leadership and strategic expertise for Westminster Savings and its subsidiaries, and plays a key role in helping position the organization for long-term sustainable growth and success. Mary has executive oversight for all financial and fiscal management aspects of company operations including budgeting, tax, accounting and financial reporting, treasury, business intelligence and enterprise risk management. She also oversees governance, information technology, premises, procurement and contract administration. Mary has 30 years of financial management experience. Prior to joining Westminster Savings in 2013, she was the Group Controller at Vancity Credit Union and spent seven years as the Chief Financial Officer at a wholly owned subsidiary of a Swiss bank with responsibility for its offshore activities in the Caribbean. Mary also spent 13 years in professional services firms, largely in senior audit management roles with PricewaterhouseCoopers and Ernst & Young. Mary is a Chartered Professional Accountant (CPA, CA), holds a Bachelor of Commerce degree from the University of Alberta, and the ICD.D designation from the ICD-Rotman Directors Education Program. Mary is a member of the Juvenile Diabetes Research Foundation and is involved in both personal and corporate fundraising for the Foundation.

ANGELA CHAMP Chief Human Resources Officer Angela Champ joined Prospera in 2018 and brings with her over 20 years of experience that includes roles such as Vice President Human Resources & Operational Performance. A transformative business leader, Angela is adept at developing and implementing programs and policies that enable businesses to grow and profit. Her work in the Human Resources field includes helping organizations transform the human resources function from the

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transactional to the strategic. Angela obtained her undergraduate degree in Political Science from the University of British Columbia, and an MBA from Royal Roads University. She is a published author of a book for Human Resources professionals.

MAURY KASK Chief Marketing Officer As Senior Vice President, Consumer Operations and Chief Customer Experience Officer (CXO) of Westminster, Maury is responsible for overseeing our end-to-end customer experience and the execution of customer-centric strategies to enhance customer loyalty and business growth. In this capacity, Maury provides executive level oversight to all of our primary customer service channels including our branch network, Member Service Centre and online/mobile banking channels. Maury also oversees our wealth management and corporate marketing functions. Maury has an extensive marketing background and has more than 30 years of experience across a wide range of business sectors including four years working abroad in the United States and in Europe. Maury is a graduate of Simon Fraser University and completed additional post-graduate education through the Wharton/AT&T School of Business. Maury is a certified Customer Experience Management professional (CCXP), a graduate of Leadership Vancouver’s community leadership program and a Chartered Director (C.Dir.). He currently serves as the President on the board of directors of Westminster Savings Foundation, chair of the board of directors of Westminster Savings Financial Planning Ltd. and as a director on both the WS Leasing Ltd. and Mercado Capital Corporation boards of directors. Maury is very active in the community. He currently serves as a director on the board of directors of the Delta Hospital Foundation.

4. AMALGAMATION AGREEMENT Please see attached.

Final Execution

AMALGAMATION AGREEMENT

Between:

PROSPERA CREDIT UNION

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Effective Date: September 26, 2019

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Table of Contents

ARTICLE 1 – INTERPRETATION .......................................................................................................................... 6

1.1 DEFINITIONS ................................................................................................................................................ 61.2 SCHEDULES ............................................................................................................................................... 131.3 CURRENCY ................................................................................................................................................ 131.4 DATE FOR ANY ACTION ............................................................................................................................ 131.5 ACCOUNTING PRINCIPLES ......................................................................................................................... 131.6 STATUTORY REFERENCES ......................................................................................................................... 141.7 KNOWLEDGE ............................................................................................................................................. 141.8 INTERPRETATION NOT AFFECTED BY HEADINGS....................................................................................... 141.9 NUMBER AND GENDER .............................................................................................................................. 141.10 SEVERABILITY ...................................................................................................................................... 141.11 TIME OF THE ESSENCE .......................................................................................................................... 151.12 GOVERNING LAW ................................................................................................................................. 151.13 MATERIAL ADVERSE CHANGE (OR EFFECT) ......................................................................................... 151.14 ENTIRE AGREEMENT ............................................................................................................................ 15

ARTICLE 2 – PRE-AMALGAMATION COVENANTS/CONDITIONS ........................................................... 15

2.1 COMPETITION ACT APPROVAL .................................................................................................................. 152.2 SPECIAL MEETINGS ................................................................................................................................... 152.3 CERTIFICATE OF AMALGAMATION ............................................................................................................ 16

ARTICLE 3 – THE AMALGAMATION ................................................................................................................ 16

3.1 CLOSING PROCEDURES .............................................................................................................................. 163.2 SHARES ..................................................................................................................................................... 163.3 EFFECTIVE DATE ....................................................................................................................................... 163.4 AMALGAMATED CREDIT UNION NAME ..................................................................................................... 173.5 REGISTERED OFFICE/HEAD OFFICE ........................................................................................................... 173.6 DIRECTORS/SENIOR OFFICERS .................................................................................................................. 173.7 AMALGAMATED CREDIT UNION RULES .................................................................................................... 173.8 INSURANCE ............................................................................................................................................... 17

ARTICLE 4 – REPRESENTATIONS AND WARRANTIES ............................................................................... 17

4.1 REPRESENTATIONS AND WARRANTIES ...................................................................................................... 17(a) Organization and Qualification............................................................................................................................. 18(b) Authority Relative to this Agreement ................................................................................................................... 18(c) Subsidiaries, Affiliates, Partnerships and Joint Ventures ..................................................................................... 18(d) Ownership of Subsidiaries .................................................................................................................................... 18(e) No Violations; Absence of Defaults and Conflicts ............................................................................................... 19(f) Litigation .............................................................................................................................................................. 20(g) Capitalization ....................................................................................................................................................... 20(h) Dividends, Distributions ....................................................................................................................................... 20(i) Non-Competition Agreements .............................................................................................................................. 21(j) Filings ................................................................................................................................................................... 21(k) Tax Matters .......................................................................................................................................................... 21(l) Reports ................................................................................................................................................................. 21(m) Absence of Undisclosed Liabilities ................................................................................................................. 22(n) No Material Adverse Change ............................................................................................................................... 22(o) Conduct of Business ............................................................................................................................................. 22(p) Title ...................................................................................................................................................................... 22(q) Material Contracts ................................................................................................................................................ 22(r) Approvals ............................................................................................................................................................. 23

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(s) Employment Agreements and Collective Agreements ......................................................................................... 23(t) Employee Benefit Plans ....................................................................................................................................... 24(u) Indebtedness to and by Officers, Directors and Others ......................................................................................... 25(v) Compliance with Laws ......................................................................................................................................... 25(w) Possession of Intellectual Property ....................................................................................................................... 25(x) Corrupt Practices Legislation ............................................................................................................................... 25(y) Disclosure ............................................................................................................................................................. 26(z) Due Diligence Reports ......................................................................................................................................... 26

4.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES ................................................................................ 26

ARTICLE 5 – COVENANTS AND RISK OF LOSS ............................................................................................. 26

5.1 CONDUCT OF BUSINESS BY THE CREDIT UNIONS....................................................................................... 26(a) Conduct of Business ............................................................................................................................................. 26(b) Cooperation .......................................................................................................................................................... 29(c) Closing Conditions ............................................................................................................................................... 29(d) Updates to Information ......................................................................................................................................... 29(e) Risk of Loss .......................................................................................................................................................... 30(f) Confidentiality ...................................................................................................................................................... 30(g) Compliance with Privacy Law.............................................................................................................................. 30(h) Notice of Certain Events ...................................................................................................................................... 30(i) Additional Instruments ......................................................................................................................................... 31(j) Special Meeting Materials and Public Announcements. ....................................................................................... 31(k) Competition Bureau.............................................................................................................................................. 31(l) Westminster Savings Credit Union Name. ........................................................................................................... 32

ARTICLE 6 – CONDITIONS PRECEDENT ......................................................................................................... 32

6.1 MUTUAL CONDITIONS ............................................................................................................................... 32(a) Approvals ............................................................................................................................................................. 32(b) No Adverse Litigation or Law .............................................................................................................................. 33(c) No Order or Decree Restricting the Transaction .................................................................................................. 33(d) No Law Prohibiting the Transaction ..................................................................................................................... 33(e) No Unsatisfactory Terms or Conditions ............................................................................................................... 33

6.2 CONDITIONS IN FAVOUR OF EACH PARTY ................................................................................................. 33(a) Accuracy of Representations and Warranties ....................................................................................................... 33(b) Compliance with Obligations ............................................................................................................................... 33(c) No Material Adverse Change ............................................................................................................................... 33

6.3 FRUSTRATION OF CLOSING CONDITIONS ................................................................................................... 34

ARTICLE 7 – TERMINATION ............................................................................................................................... 34

7.1 TERMINATION ........................................................................................................................................... 347.2 EFFECT OF TERMINATION .......................................................................................................................... 34

ARTICLE 8 – COMPLIANCE WITH CUIA ......................................................................................................... 35

8.1 BUSINESS PROPOSED TO BE CARRIED ON .................................................................................................. 358.2 PRODUCTS AND SERVICES PROPOSED TO BE OFFERED .............................................................................. 358.3 COMMON BOND OF MEMBERSHIP ............................................................................................................. 358.4 CONSTITUTION .......................................................................................................................................... 35

ARTICLE 9 GENERAL ........................................................................................................................................... 35

9.1 RELATIONSHIP OF THE PARTIES ................................................................................................................. 359.2 AMENDMENT ............................................................................................................................................. 359.3 NOTICES .................................................................................................................................................... 369.4 ASSIGNMENT ............................................................................................................................................. 37

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9.5 BINDING EFFECT ....................................................................................................................................... 379.6 WAIVER AND MODIFICATION .................................................................................................................... 379.7 SPECIFIC PERFORMANCE ........................................................................................................................... 379.8 THIRD PARTY BENEFICIARIES ................................................................................................................... 379.9 FURTHER ASSURANCES ............................................................................................................................. 379.10 EXPENSES ............................................................................................................................................. 389.11 DISPUTE OF THIS AGREEMENT .............................................................................................................. 389.12 COUNTERPARTS .................................................................................................................................... 38

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AMALGAMATION AGREEMENT

THIS AGREEMENT is made effective as of the 26th day of September, 2019

BETWEEN:

PROSPERA CREDIT UNION, a credit union created under the laws of British Columbia, and having its head office at: #500 - 32071 South Fraser Way Abbotsford, BC V2T 1W3

(“Prospera”)

- and -

WESTMINSTER SAVINGS CREDIT UNION, a credit union created under the laws of British Columbia, and having its head office at: 13450-102 Ave., Suite #1900, Surrey, BC V3T 5Y1

(“Westminster”)

WHEREAS Prospera and Westminster (each a “Credit Union” and together, the “Credit Unions” or the “Parties”) wish to combine their respective operations by way of amalgamation, with the intention of building on the strengths of each Credit Union and fostering an aligned corporate culture with a senior leadership team committed to recognizing the operational efficiencies and capturing the economies of scale of the proposed amalgamation to facilitate the advancement of a jointly developed vision and strategy, intended to enhance the value proposition for the benefit of the respective members of the Credit Unions

AND WHEREAS FICOM (as hereinafter defined) has consented to the amalgamation of the Credit Unions in accordance with the provisions of section 20 of the Credit Union Incorporation Act (the"FICOM Approval");

AND WHEREAS the Amalgamation (as hereinafter defined) shall be implemented in accordance with subsection 87(1) of the Tax Act (as hereinafter defined), section 271 of the Excise Tax Act (Canada) and the terms and conditions set forth herein;

AND WHEREAS the Credit Unions have made full disclosure to one another of the assets and liabilities of each that will become the assets and liabilities of the Amalgamated Credit Union (as hereinafter defined);

AND WHEREAS the Credit Unions have agreed to finalize their mutual understanding and agreements with respect to their amalgamation to form the Amalgamated Credit Union.

NOW THEREFORE in consideration of the mutual covenants contained in this Agreement and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the Credit Unions agree as follows:

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ARTICLE 1 – INTERPRETATION

1.1 Definitions

In this Agreement, the following terms shall have the meanings set forth below:

(a) “Affiliate” means, with respect to any Person, any other Person who directly or indirectly controls, is controlled by, or is under direct or indirect common control with, such Person, and includes any Person in like relation to an Affiliate. A Person shall be deemed to “control” another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise; and the term “controlled” shall have a similar meanings;

(b) “Agreement” means this amalgamation agreement, including the schedules hereto, and all amendments made in writing by the Parties, and “herein”, “hereof” and similar expressions mean and refer to this Agreement and not to any particular article, section, subsection or Schedule;

(c) “Amalgamation” means the amalgamation of Prospera and Westminster pursuant to Section 20 of the CUIA and the terms and conditions of this Agreement;

(d) “Amalgamated Credit Union” means the credit union resulting from the amalgamation of Prospera and Westminster;

(e) “Applicable Law” in respect of any Person, property, transaction or event, means all present laws, statutes, regulations, treaties, judgments and decrees applicable to that Person, property, transaction or event, including all applicable regulatory requirements and other requirements, rules, orders, directives and policies of any Governmental Authority having the force of law over that Person, property, transaction or event;

(f) “Application Agreement” means the application agreement dated February 28, 2019 between the Credit Unions;

(g) “Approvals” includes approvals, certificates, authorizations, consents, franchises, permits, grants, licences, notifications, privileges, rights, orders, judgments, rulings, directives, ordinances, decrees, registrations and filings binding upon a Party or its operations or property required from any Person (other than a Party hereto), including any Governmental Authority;

(h) “Assets” means, in respect of a Person: (i) all personal property of any nature and kind legally or beneficially owned by the Person or leased, operated, managed or controlled by the Person; (ii) any real property which such Party owns, leases, operates, manages or controls in any manner, and includes all land, buildings, structures, installations and fixtures, relating thereto; and (iii) all Intellectual Property of such Person;

(i) “Businesses” means, collectively, the business of operating as a credit union in accordance with Applicable Law in the Province of British Columbia, and all mater ancillary thereto;

(j) “Business Day” means any day, other than a Saturday or a Sunday, or statutory holiday,

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in British Columbia, Canada;

(k) “Change of Control Agreements” means, in respect of each Credit Union, the change of control agreements entered into with the members of their executive leadership team as set out in Schedule 3.1(s)(i) of the Disclosure Schedule, copies of which having been made available to the other Credit Union;

(l) “Closing” means the completion of the Amalgamation in accordance with this Agreement;

(m) “Closing Date” means the time of issuance of certificate of amalgamation by the Registrar under the CUIA, as set out in Section 2.3 hereof;

(n) “Commissioner of Competition” means the Commissioner of Competition appointed under subsection 7(1) of the Competition Act or his/her designee;

(o) “Competition Act” means the Competition Act (Canada), as amended, and the regulations thereunder;

(p) “Competition Act Approval” means (a) the issuance of an advance ruling certificate by the Commissioner of Competition under subsection 102(1) of the Competition Act to each of the Parties (and any other applicable person) submitting to the Competition Bureau of Canada a notification under Section 114 of the Competition Act in connection with the Amalgamation; or (b) both of (A) the waiting period, including any extension thereof, under Section 123 of the Competition Act shall have expired or been terminated, or the requirement to submit a notification under Section 114 of the Competition Act has been waived pursuant to Section 113(c) of the Competition Act, and (B) the issuance to each such person of a no-action letter by the Competition Bureau of Canada;

(q) “Competition Act Approval Date” shall have the meaning given in Section 2.1 of this Agreement;

(r) “Confidential Information” shall have the meaning given in Schedule 5.1(f) of this Agreement;

(s) “Constating Documents” means, as applicable with respect to any Person, its rules, common bond, articles or certificate of incorporation, continuance or amalgamation, amendment, amalgamation or continuance, memorandum of association, by-laws, constitutions, charter, declaration of trust, trust deed, partnership agreement, limited partnership agreement or other similar document, and all unanimous shareholder agreements, other shareholder agreements and similar arrangements applicable to the Person’s capital stock, all as amended and as in effect from time to time, and includes in respect of the Credit Unions, all documents for establishment and incorporation as required by the CUIA;

(t) “Contract” means any contract, agreement, lease, license, arrangement, commitment, letter of intent, memorandum of understanding, heads of agreement, promise, obligation, right, instrument, document, or other similar understanding, whether written or oral;

(u) “Credit Unions Employee Plans” has the meaning ascribed to that term in Section 4.1(t);

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(v) “Credit Unions Financial Statements” has the meaning ascribed to that term in Section 4.1(l)(ii);

(w) “CUIA” means the Credit Union Incorporation Act (British Columbia);

(x) “Disclosure Schedule” means the disclosure schedules delivered to the Parties concurrently with the execution and delivery of the Application Agreement and updated (only if such update is accepted, in accordance with the terms of this Agreement by the Credit Union to whom the representation and warranty relating to such Disclosure Schedule is made) in accordance with the terms of this Agreement, if applicable, and “Disclosure Schedules” means such Disclosure Schedule, collectively;

(y) “Effective Date” means the date of this Agreement;

(z) “Effective Time” means 12:01(PST) am on the Closing Date;

(aa) “Encumbrance” means any lien, pledge, hypothecation, charge, mortgage, deed of trust, security interest, encumbrance, restriction, equitable interest, claim, easement, right-of-way, servitude, right of possession, lease tenancy, Contract, encroachment, burden, intrusion, covenant, infringement, interference, option, pre-emptive rights or right of first refusal, and “Encumber” or “Encumbered” has a corresponding meaning;

(bb) “Enforcement Exceptions” means limitations on enforcement imposed by bankruptcy, insolvency, reorganization or other similar Applicable Laws affecting the enforcement of the rights of creditors and others and, to the extent equitable remedies such as specific performance and injunctions are only available, at the discretion of the court from which they are sought;

(cc) “FICOM” means the Financial Institutions Commission under the Financial Institutions Act (British Columbia);

(dd) “FICOM Approval” has the meaning ascribed to that term in the recitals of this Agreement;

(ee) “Governmental Authority” means any applicable domestic or foreign government, including any federal, provincial, state, territorial, local or municipal government, and any governmental agency or department, tribunal, board, commission, court or other authority exercising or purporting to exercise executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, government, as well as any arbitrator, arbitration tribunal or other tribunal or any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing and shall, for the purposes of this Agreement, include the Minister, FICOM and the Competition Bureau of Canada;

(ff) “Indebtedness” means, with respect to any Credit Union and its Subsidiaries, without duplication, (i) all indebtedness for borrowed money; (ii) all liabilities or other obligations evidenced by notes, bonds, debentures or similar instruments, and (iii) all liabilities of third Persons of the type referred to in (i) and (ii) above which are guaranteed by the Credit Unions or their Subsidiaries; as applicable;

(gg) “Intellectual Property” means, in respect of a Person, any and all names, business

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names, trade names, brand names, patents, designs (including industrial design rights), copyrights, trademarks and trade names, business processes, formulae, know-how, trade secrets and Confidential Information, integrated circuit topographies, computer programs, source code and documentation (whether in paper, electronic or other format), and all other analogous intellectual property or intangible proprietary rights, which may subsist anywhere in the world, whether registered or unregistered, including all applications for registration of same, registrations where available of any such intellectual property rights at either a national, regional or international level, all rights to file such applications and continuations, derivations or divisions thereof, and all reissues and re-examinations of any such registrations;

(hh) “Liability” means any debt, obligation, duty or liability of any nature (including any unknown, undisclosed, unfixed, un-liquidated, unsecured, un-matured, unaccrued, unasserted, contingent, conditional, inchoate, implied, vicarious, joint, several or secondary liability), strict liability (including, strict liability arising under Applicable Law) regardless of whether such debt, obligation, duty or liability would be required to be disclosed on a balance sheet;

(ii) “Loss” means any loss, damage, injury, harm, detriment, decline in value, Liability, exposure, settlement, judgment, award, damage award, fine, penalty, Tax, fee, charge, cost or expense actually incurred (including, without limitation, costs of attempting to avoid or in opposing the imposition thereof, interest, penalties, costs of preparation and investigation, and the fees, disbursements and expenses of legal counsel on a solicitor and his own client basis, accountants and other professional advisors), but for certainty “Loss” shall not include and neither party shall be liable to the other arty for (i) punitive damages; or (ii) any consequential or indirect damages, including lost profits, lost revenues, business interruptions or loss of business opportunity or reputation;

(jj) “Material Adverse Change (or Effect)” means, in respect of each Credit Union and its Subsidiaries, taken as a whole, a change or effect in the condition (financial or otherwise) of the Assets, Liabilities, rights, operations, business (but for certainty excluding prospects) of such Credit Union and its Subsidiaries, taken as a whole, which change (or effect), individually or in the aggregate, could reasonably be expected to be materially adverse to the condition (financial or otherwise), Assets, Liabilities, rights, operations, business, of such Credit Union and its Subsidiaries, taken as a whole, or ability to carry out the transactions contemplated by this Agreement, including any change or effect caused by, arising from, or relating to acts of terrorism or war (whether or not declared), or by interruption of utilities or other public or commercial products or services which materially impair the ability of such Credit Union and its Subsidiaries, taken as a whole, to conduct its operations (which shall include without limitation the Credit Union’s ability to maintain its capital and liquidity ratios above the minimum requirements imposed by FICOM and/or the Credit Union being able to maintain Stage – 0 ISR (Intervention Stage Rating) by FICOM) except on a temporary basis; provided, however, that changes to general economic or other conditions affecting the financial markets generally, or financial institutions, specifically, will not constitute a “Material Adverse Change (or Effect)” for purposes of this Agreement unless and only to the extent such changes have a materially disproportionate adverse effect on such Credit Union and its Subsidiaries, taken as a whole, relative to the adverse effect that such changes have on other Persons in the same industry;

(kk) “Material Contract” means, in respect of each Credit Union and its Subsidiaries, any

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Contract;

(i) involving one-time payments in excess of $1,000,000;

(ii) involving aggregate annual payments in excess of $1,000,000 during the past twelve (12) months or anticipated to be paid within the next twelve (12) months;

(iii) with a term or commitment that may reasonably extend beyond twelve (12) months and involving one-time payments in excess of $1,000,000 or involving aggregate annual payments in excess of $1,000,000 during the past twelve (12) months or anticipated to be paid within the next twelve (12) months and which cannot be terminated without penalty on less than thirty (30) days’ notice;

(iv) involving or evidencing indebtedness by way of loan, sale of debt securities, purchase money obligations, conditional sale, guarantee or otherwise, excluding trade payables incurred in the Ordinary Course of Business;

(v) involving the acquisition or licensing of any material technology or other Intellectual Property that has a one-time payment or aggregate annual payments in excess of $250,000, other than licenses for mass market software;

(vi) involving commitments to purchase securities or an interest in any Person or undertaking;

(vii) the absence, breach, termination or repudiation of which has, or could reasonably be expected to have, a Material Adverse Effect;

(viii) which is a lease of real property; or

(ix) which restricts in any way the scope of the Credit Union’s business or activities;

(ll) “Member Approval Date” has the meaning ascribed to that term in Section 2.2 hereof;

(mm) “Member Approval Outside Date” means June 1, 2020;

(nn) “Member Approvals” has the meaning ascribed to that term in Section 2.2 hereof;

(oo) “Members” means, collectively, the Prospera Members, and the Westminster Members, and “Member” means any one of them as the context requires;

(pp) “Milestone Events” has the meaning ascribed to that term in Section 6.1 hereof;

(qq) “Minister” means the Minister to the Government of British Columbia who has administration of the Financial Administration Act (British Columbia);

(rr) “Money Laundering Laws” has the meaning ascribed to that term in Section 4.1(x)(i) hereof;

(ss) “OHSL” means any Applicable Law relating to workers’ compensation or occupational health and safety;

(tt) “Ordinary Course of Business” means, in respect of a Party and its Affiliates, the

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ordinary course of business consistent with past custom and practice (including with respect to quantity, quality and frequency) of the relevant Party and its Affiliates in the industry in which the relevant Party and its Affiliates do business as of the Effective Date;

(uu) “Permitted Encumbrances” means:

(i) easements, rights of way, servitude, and similar rights in land for sewers, drains, gas and oil pipelines, gas and water mains, telephone or cable television conduits;

(ii) rights reserved to or vested in any Governmental Authority by the term of any lease, license, franchise, grant or permit pursuant to Applicable Law;

(iii) liens for Taxes which are not yet due and payable;

(iv) liens incurred, created and granted in the Ordinary Course of Business to a public utility, municipality or Governmental Authority;

(v) rights of lessors, including purchase money security interests, under equipment leases in respect of office equipment and other minor equipment entered into in the Ordinary Course of Business;

(vi) any privilege in favour of any lessor, licensor or permitter for rent to become due or for other obligations or acts, the performance of which is required under Contracts so long as the payment of such or the performance of such other obligation or act is not delinquent as at the Closing Date; and

(vii) those Encumbrances, if any, listed in Schedule 3.1(p) of the Disclosure Schedules;

(vv) “Person” means any natural person, sole proprietorship, partnership, limited partnership, corporation, trust, joint venture, Governmental Authority or incorporated or unincorporated entity or association of any nature;

(ww) “Personal Information” means information about an identifiable individual, as more particularly described in applicable Privacy Laws;

(xx) “Privacy Law” means the Personal Information Protection and Electronic Documents Act (Canada) and any comparable law of any province or territory of Canada governing the collection, use and disclosure of Personal Information including, in respect of the Credit Unions, the Personal Information Protection Act (British Columbia);

(yy) “Prospera Financial Statements” has the meaning ascribed to that term in Section 4.1(l)(i);

(zz) “Prospera Meeting” means such special meeting or meetings of the Prospera Members, including any adjournment thereof, that is convened to consider, and if deemed advisable approve, the transactions contemplated by this Agreement;

(aaa) “Prospera Members” means any holder of Class “A” Membership Equity Shares, as set out in the Prospera Credit Union Rules dated April 15, 2010;

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(bbb) “Prospera Shares” means any of the issued and outstanding shares of Prospera, as set out on Schedule 3.1(g) of the Disclosure Schedules;

(ccc) “Registrar” means the person appointed as the Registrar of Companies under section 400 of the Business Corporations Act (British Columbia);

(ddd) “Representative” means, with respect to any Party, any of its Affiliates and any of its or their respective directors, officers, employees, consultants, financial advisers, legal counsel, accountants and other agents, advisers or representatives of that Party;

(eee) “Special Meeting” means either of the Prospera Meeting or Westminster Meeting, as the context requires;

(fff) “Special Resolution” means, in respect of each Credit Union, a resolution passed by the requisite approval of the Members and the holders of each class of equity or investment shares, if any, of such Credit Union in accordance with the CUIA;

(ggg) “Subsidiary” means:

(i) when used to describe a relationship with a Credit Union, a “subsidiary” as defined in section 2.1 of the CUIA;

(ii) with respect to a corporation, a subsidiary as defined in the Business Corporations Act (British Columbia) and any partnership, joint venture or other Person which is controlled by the corporation or any Subsidiary of the corporation; and

(iii) with respect to any other Person, any other Person which is controlled by such Person or any Subsidiary of such Person;

For purposes of paragraphs (ii) and (iii) above, a Person “controls” another Person if that Person directly or indirectly possesses the power to direct or cause the direction of the management and policies of that other Person, whether through ownership of securities, by Contract or otherwise and “controlled by” and “under common control with” have similar meanings;

(hhh) “Tax Act” means the Income Tax Act (Canada);

(iii) “Tax Return” means, in respect of any Person, any return, declaration, report, estimate, information return, form, statement, election or other document required to be prepared or filed by or with respect to such Person or their business pursuant to Applicable Law in respect of any Taxes, events or reporting requirements;

(jjj) “Taxes” means all present and future taxes, surtaxes, duties, levies, imposts, rates, fees, assessments, withholdings, dues and other charges of any nature imposed by any Governmental Authority including income, capital (including large corporations), withholding, consumption, sales, use, transfer, goods and services or other value-added, excise, customs, anti-dumping, countervail, net worth, stamp, registration, franchise, payroll, employment, health, education, business, school, property, local improvement, development, education development and occupation taxes, surtaxes, duties, levies, imposts, rates, fees, assessments, withholdings, dues and charges, together with all fines, interest, penalties on or in respect of, or in lieu of or for non-collection of, those taxes,

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surtaxes, duties, levies, imposts, rates, fees, assessments, withholdings, dues and other charges;

(kkk) “Westminster Financial Statements” has the meaning ascribed to that term in Section 4.1(l)(ii);

(lll) “Westminster Meeting” means such special meeting or meetings of the Westminster Members, including any adjournment thereof, that is convened to consider, and if deemed advisable approve, the transactions contemplated by this Agreement;

(mmm) “Westminster Member” means any holder of Class A Membership Equity Shares of Westminster, as set out in the Westminster Savings Rules, dated November 17, 2015; and

(nnn) “Westminster Shares” means any of the issued and outstanding shares of Westminster, as set out on Schedule 3.1(g) of the Disclosure Schedules.

All other capitalized terms used herein shall, for the purposes of this Agreement and all instruments, certificates and other documents delivered by the Parties pursuant to or in connection with this Agreement (including, for certainty, communications between the Parties), have the meanings attributed to them throughout this Agreement unless something in the subject matter or context is inconsistent therewith.

1.2 Schedules

The following Schedules are attached to and form part of this Agreement:

Schedule 3.6(a) – Proposed Directors Schedule 3.6(b) – Proposed Officers Schedule 3.7 – Amalgamated Credit Union Rules Schedule 5.1(f) – Covenants regarding Confidentiality Schedule 8.2 – Proposed Products & Services Schedule 8.4 – Proposed Constitution

Any reference to a Schedule to this Agreement shall be deemed to be a reference to, and shall incorporate by reference all matters contained in such Schedule.

1.3 Currency

Unless otherwise stated, all references in this Agreement to sums of money are expressed in lawful money of Canada.

1.4 Date for Any Action

If the date on which any action is required to be taken hereunder by a Party is not a Business Day, such action shall be required to be taken on the next succeeding day which is a Business Day.

1.5 Accounting Principles

Wherever in this Agreement reference is made to generally accepted accounting principles or to International Financial Reporting Standards (“IFRS”), such reference shall be deemed to be to the generally accepted accounting principles from time to time approved by the Chartered Professional Accountants of Canada or any successor entity thereto (and, where applicable, as modified by the

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guidelines of FICOM), both applicable as at the date on which any calculation or determination is required to be made in accordance with generally accepted accounting principles, and in respect of each Party applied in a manner consistent with such Party’s past practice. Accounting terms used but not otherwise defined in this Agreement shall, if defined under IFRS, have the meanings ascribed thereto under IFRS or, where not defined under IFRS, shall be interpreted in accordance with IFRS.

1.6 Statutory References

Any reference to a statute or regulatory instrument shall be deemed to include a reference to such statute or regulatory instrument and to the regulations made pursuant thereto, with all amendments made thereto and in force from time to time, and to any statute or regulatory instrument that may be passed which has the effect of supplementing or superseding the statute or regulatory instrument so referred to or the regulations made pursuant thereto.

1.7 Knowledge

In this Agreement, references to “to the knowledge of” means the actual knowledge of the Executive Officers of Prospera or Westminster, as the case may be, without the requirement to make inquiry of any other members of their organization, as applicable. For purposes of this Section 1.7 “Executive Officers” means:

(a) in the case of Prospera, the President and Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Chief Information Officer, Senior Vice President – People and Culture and Vice President Governance and Corporate Affairs; and

(b) in the case of Westminster, the President and Chief Executive Officer, Senior Vice Presidents, Chief Financial Officer, Corporate Secretary, Consumer Operations and Chief Customer Experience Officer, Corporate Development and Chief Strategy Officer, Commercial Operations and Chief Credit Officer and Human Resources and Corporate Communications Officer.

1.8 Interpretation Not Affected by Headings

The division of this Agreement into articles, sections, subsections, paragraphs and subparagraphs and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of the provisions of this Agreement.

1.9 Number and Gender

Unless the context otherwise requires, words importing the singular number only shall include the plural and vice versa and words importing the use of any gender shall include all genders.

1.10 Severability

If any one or more of the provisions or parts thereof contained in this Agreement should be or become invalid, illegal or unenforceable in any respect in any jurisdiction, the remaining provisions or parts thereof contained herein shall be and shall be conclusively deemed to be, as to such jurisdiction, severable therefrom and:

(a) the validity, legality or enforceability of such remaining provisions or parts thereof shall not in any way be affected or impaired by the severance of the provisions or parts thereof

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severed; and

(b) the invalidity, illegality or unenforceability of any provision or part thereof contained in this Agreement in any jurisdiction shall not affect or impair such provision or part thereof or any other provisions of this Agreement in any other jurisdiction.

1.11 Time of the Essence

Time shall be of the essence in the Agreement.

1.12 Governing Law

This Agreement shall be construed, interpreted and enforced in accordance with, and the respective rights and obligations of the Parties shall be governed by, the laws of the Province of British Columbia and the federal laws of Canada applicable therein, and each Party irrevocably and unconditionally submits to the non-exclusive jurisdiction of the courts of such Province and all courts competent to hear appeals therefrom.

1.13 Material Adverse Change (or Effect)

For certainty, the Parties acknowledge that this Agreement has been intentionally drafted to include the defined term “Material Adverse Change (or Effect)” and undefined terms and qualifiers that relate to materiality like ‘materiality’, ‘material adverse impact’, and similar terms. It is not intended that such undefined terms are ascribed the same meaning as the defined term.

1.14 Entire Agreement

This Agreement constitutes the entire agreement between the Parties with respect to the transactions herein contemplated and supersedes any prior understandings, agreements, negotiations and discussions, written or oral, between the Parties with respect thereto. There are no representations, warranties, terms, conditions, undertakings or collateral agreements or understandings, express or implied, between the Parties with respect to the transactions contemplated herein, except as specifically set forth in this Agreement.

ARTICLE 2 – PRE-AMALGAMATION COVENANTS/CONDITIONS

2.1 Competition Act Approval

The Credit Unions shall request Competition Act Approval in accordance with Section 5.1(k). For the purposes of this Agreement, the date on which Competition Act Approval is obtained shall be referred to as the “Competition Act Approval Date”.

2.2 Special Meetings

Promptly after, and in no event later than ten (10) days following the Effective Date each Credit Union shall take all action necessary in accordance with the CUIA and their respective credit union rules to give notice to their respective Members and duly call a Special Meeting, that is to occur during the period that is between 18 days and 60 days of such notice, or later by mutual written agreement of the Credit Unions, to vote upon, and if deemed advisable, pass a Special Resolution in respect of the transactions contemplated by this Agreement, including the amalgamation of the Credit Unions pursuant to section 20 of the CUIA to form the Amalgamated Credit Union and any other matters as may be properly brought

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before the Special Meeting.

The date that is the later date that the requisite Special Resolutions in accordance with the CUIA approving the transactions contemplated by this Agreement have been approved by the Members of Prospera and Westminster which shall be hereinafter referred to as the “Member Approval Date”, and the passing of such Special Resolutions shall be hereinafter referred to as the “Member Approvals”.

2.3 Certificate of Amalgamation

Not later than ten (10) days following the Member Approval Date, the Credit Unions covenant and agree to deliver to the Registrar:

(a) this Agreement;

(b) a certified copy of the Special Resolution of Prospera; and

(c) a certified copy of the Special Resolution of Westminster.

The date on which the Registrar issues the certificate of amalgamation shall be hereinafter referred to as the “Closing Date”.

ARTICLE 3 – THE AMALGAMATION

3.1 Closing Procedures

Not later than ten (10) days following the Member Approval Date, each Credit Union covenants and agrees to obtain, execute and deliver to the other Credit Union, as applicable such closing documents, instruments and information required to permit the other Credit Union to satisfy the remaining conditions set forth in section 20 of the CUIA.

3.2 Shares

(a) At the Effective Time, the issued shares of Prospera and Westminster will be exchanged for shares of the Amalgamated Credit Union as follows:

(i). ONE (1) Class A Membership Equity Share of the Amalgamated Credit Union will be issued in exchange for each issued Class “A” Membership Equity Share of Prospera; and

(ii). ONE (1) Class A Membership Equity Share of the Amalgamated Credit Union will be issued in exchange for each issued Class A Membership Equity Share of Westminster.

(b) Immediately following the share exchanges set out in (a) above, the Amalgamated Credit Union shall redeem from any member holding in excess of FIVE (5) Class A Membership Equity Shares, those shares that are in excess.

3.3 Effective Date

The Amalgamation shall become effective on the Closing Date.

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3.4 Amalgamated Credit Union Name

The name of the Amalgamated Credit Union shall be “Prospera Credit Union”.

3.5 Registered Office/Head Office

The registered office of the Amalgamated Credit Union shall be located at 13450-102 Ave., Suite 1900, Surrey, British Columbia. The head office of the Amalgamated Credit Union shall be located at the same address.

3.6 Directors/Senior Officers

(a) The board of directors of the Amalgamated Credit Union shall initially consist of NINE (9) directors. The first directors of the Amalgamated Credit Union shall be the individuals whose names, addresses and occupations appear in Schedule 3.6(a). One-third of such first directors shall, subject to re-election, hold office until the second annual meeting of the Amalgamated Credit Union or until their successors are duly elected or appointed. Another one-third of such first directors shall, subject to re-election, hold office until the third annual meeting of the Amalgamated Credit Union or until their successors are duly elected or appointed. The remaining one-third of such first directors shall, subject to re-election, hold office until the fourth annual meeting of the Amalgamated Credit Union or until their successors are duly elected or appointed.

(b) The initial Chief Executive Officer and all other initial members of the senior executive leadership team of the Amalgamated Credit Union shall be those individuals whose names appear in Schedule 3.6(b).

3.7 Amalgamated Credit Union Rules

The Rules of the Amalgamated Credit Union shall be the Rules set out in Schedule 3.7 of this Agreement.

3.8 Insurance

(a) The Parties agree that the Amalgamated Credit Union will maintain in effect without any reduction in scope or coverage for 10 years from the Closing Date customary policies of directors’ and officers’ liability insurance providing protection comparable to the most favourable protection provided by the respective policies maintained by the Parties as are in effect immediately prior to the Closing Date and providing coverage on a “trailing” or “run-off” basis for all present and former directors and officers of the Parties with respect to claims arising from facts or events which occurred prior to the Closing Date.

(b) The Parties agree that all rights to indemnification or exculpation now existing in favour of present and former officers and directors of each of the Parties shall survive the Amalgamation and shall continue in full force and effect for a period of not less than 10 years from the Closing Date.

ARTICLE 4 – REPRESENTATIONS AND WARRANTIES

4.1 Representations and Warranties

In each case subject to the disclosure set forth in the Disclosure Schedules for the applicable Credit Union

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(as set forth herein), Prospera makes the following representations and warranties to Westminster (in respect of itself) and Westminster makes the following representations and warranties to Prospera (in respect of itself) with each Credit Union acknowledging that it is entering into this Agreement in reliance upon such representations and warranties.

(a) Organization and Qualification. The Credit Union is a credit union duly created, amalgamated or continued, validly existing and in good standing under the laws of the Province of British Columbia and has the requisite corporate power and authority to own its properties as now owned and to carry on its business as it is being conducted as at the Effective Date. The Credit Union is duly registered to do business and is in good standing in each jurisdiction in which the character of its Assets, owned or leased, or the nature of its activities makes such registration necessary, except where the failure to be so registered or in good standing would not, taken as a whole, have a material adverse impact on the Credit Union. Copies of the Constating Documents of the Credit Union together with all amendments to date have been provided to the other Party and are accurate and complete as of the Effective Date.

(b) Authority Relative to this Agreement. The Credit Union has the requisite corporate authority to enter into this Agreement and to carry out its obligations hereunder. The execution and delivery of this Agreement and the participation by the Credit Union in the transactions contemplated hereby have been duly authorized by the Credit Union’s board of directors and, subject to the requisite approval for the Special Resolution of the Credit Union’s Members as is stipulated by Section 2.1 hereof, no other corporate proceedings on the part of the Credit Union are necessary to authorize this Agreement or the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Credit Union and constitutes a legal, valid and binding obligation of the Credit Union enforceable against one another in accordance with its terms, subject to Enforcement Exceptions.

(c) Subsidiaries, Affiliates, Partnerships and Joint Ventures. Except as set forth in Schedule 3.1(c) of the Disclosure Schedules, the Credit Union has no Affiliates. The Credit Union is not a partner or participant in any partnership, joint venture or any other profit sharing arrangement of any kind, nor a party to any Contract under which it agrees to carry on any part of its business or any other activity in such manner or by which the Credit Union agrees to share any revenue or profit with any Person.

(d) Ownership of Subsidiaries. Except as pursuant to restrictions on transfer and investment contained in its Constating Documents and under Applicable Law, the Credit Union is the beneficial direct or indirect owner of all of the outstanding shares and other ownership interests of the Credit Union’s Subsidiaries with good title thereto free and clear of any and all Encumbrances. Other than the rights set forth in the CUIA that have been granted to the Minister in respect of investments by the Credit Union, there are no outstanding options, rights, entitlements, understandings or commitments (contingent or otherwise) regarding the right to acquire any such shares of capital stock or other ownership interests in any of the Credit Union’s Subsidiaries. All of the outstanding shares of capital stock and other ownership interests in the Credit Union’s Subsidiaries are validly issued, fully paid and non-assessable and are not subject to, nor were they issued in violation of, any pre-emptive rights.

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(e) No Violations; Absence of Defaults and Conflicts.

(i) Neither the Credit Union nor any of its Subsidiaries are in violation of their Constating Documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any Contract, Encumbrance or in respect of any Liability to which the Credit Union or any of its Subsidiaries are a party or to which any of them, or any of its respective Assets, may be subject or by which the Credit Union or any of its Subsidiaries are bound, except for such defaults which, taken as a whole, would not materially adversely affect the Credit Union.

(ii) Neither the execution and delivery of this Agreement by the Credit Union nor the consummation of the transactions contemplated hereby nor compliance by the Credit Union with any of the provisions hereof will (A) violate, conflict with, or result in a breach of any provision of, require any Approval (apart from the Member Approvals, the Competition Act Approval and the contractual consents referred to in Schedule 3.1(e) of the Disclosure Schedules), or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) or result in a right of termination or acceleration under or in respect of, or result in the creation of any Encumbrance upon any of the Assets of the Credit Union or any of its Subsidiaries or cause any Liability to come due before its stated maturity or cause any credit to cease to be available, under any of the terms, conditions or provisions of:

(A) its Constating Documents (in each case, excluding, such violations, conflicts, breaches, defaults, terminations, accelerations or creations of Encumbrances which, or any Approvals or notices which if not given or received, would not, taken as a whole, have a material adverse impact on the Credit Union),

(B) subject to obtaining the contractual consents referred to in Schedule 3.1(e) of the Disclosure Schedules any Contract, Encumbrance or Liability to which the Credit Union or any of its Subsidiaries are a party or to which any of them, or any of its respective Assets, may be subject or by which the Credit Union or any of its Subsidiaries are bound (in each case, excluding, such violations, conflicts, breaches, defaults, terminations, accelerations or creations of Encumbrances which, or any Approvals or notices which if not given or received, would not, taken as a whole, have a material adverse impact on the Credit Union),

(C) subject to compliance with the statutes and regulations referred to in (iii) below, violate any Applicable Laws in relation to the Credit Union or any of its Subsidiaries or any of its Assets in any material respect, or

(D) cause the suspension or revocation of any Approval currently in effect which would have a material adverse impact on the Credit Union or, following the Closing Date, the Amalgamated Credit Union.

(iii) Other than in connection with or in compliance with the provisions of Applicable Laws (including the provisions of the CUIA and any other Applicable Laws that regulate the amalgamation of the Credit Union under the CUIA, competition,

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antitrust, and investment and the requirements of the CUIA in relation to the consummation of the Amalgamation and as may be otherwise set out in this Agreement):

(A) there is no material legal impediment to the Credit Union consummation of the transactions contemplated hereby, and

(B) no filing or registration with, or Approval of, any Governmental Authority is required of the Credit Union in connection with the consummation of the transactions, except for such filings or registrations which, if not made, or for such Approvals which, if not received, would not, taken as a whole, have a material adverse impact on the Credit Union or, following Closing, the Amalgamated Credit Union, or significantly impede the ability of the Credit Union to consummate the transactions.

(f) Litigation. Except as set forth in Schedules 3.1(f) and 3.1(k) of the Disclosure Schedules, there are no actions, suits, proceedings or investigations by any Person pending or, to the knowledge of the Credit Union, threatened, affecting or that would reasonably be expected to affect the Credit Union or any of its Subsidiaries or that would reasonably be expected to affect any of its Assets at law or equity or before or by any Governmental Authorities which in each case involves a possibility of any judgment, order or decision of a Governmental Authority against or Liability of the Credit Union or any of its Subsidiaries which, if successful, would have a material adverse impact on the Credit Union or, following the Closing Date, the Amalgamated Credit Union. Neither the Credit Union nor its Subsidiaries are subject to any outstanding order, writ, injunction or decree that has had or would have a material adverse impact on the Credit Union or, following Closing, the Amalgamated Credit Union, or would significantly impede the ability of the Credit Union to consummate the transactions contemplated herein.

(g) Capitalization. The authorized and issued share capital of the Credit Union is set out in Schedule 3.1(g) of the Disclosure Schedules. Except as set out in Schedule 3.1(g) of the Disclosure Schedules, there are no shares or other securities, and there are no options, warrants or other rights, shareholder rights plans, agreements, Contracts or commitments of any character whatsoever requiring the issuance, sale or transfer by the Credit Union of any securities of the Credit Union or any securities convertible into, or exchangeable or exercisable for, or otherwise evidencing a right to acquire, any securities of the Credit Union. All outstanding Prospera Shares or Westminster Shares, as applicable, have been duly authorized and validly issued, are fully paid and non-assessable and are not subject to, nor were they issued in violation of, any pre-emptive rights. There are no issued and outstanding equity shares of the Credit Union within the meaning and for the purpose of section 20 and section 24 of the CUIA.

(h) Dividends, Distributions. Other than in the Ordinary Course of Business with respect to respect to the equity and investment shares in Prospera, neither the Credit Union nor any of its Subsidiaries, have, since September 30, 2018, directly or indirectly, declared or paid any dividends or declared or made any other payments or distributions on or in respect of any of their respective shares, nor have they, directly or indirectly, redeemed, purchased or otherwise acquired any of their respective shares or agreed to do so, or otherwise effected any return of capital with respect to such shares, in all cases in any material respect.

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(i) Non-Competition Agreements. Neither the Credit Union nor any of its Subsidiaries are a party to or bound by any non-competition agreement or any other agreement or obligation which purports to limit the manner or the localities in which all or any material portion of the business of the Credit Union or its Subsidiaries is or is reasonably expected to be conducted which, taken as a whole, would result in a material adverse impact on the Credit Union or, following Closing, the Amalgamated Credit Union.

(j) Filings. Other than the filings contemplated by this Agreement in respect of the transactions contemplated hereby and as set forth in Schedule 3.1(k) of the Disclosure Schedules, the Credit Union has filed all documents required to be filed by it with applicable Governmental Authorities, other than any documents, which, taken as a whole, would not result in a material adverse impact on the Credit Union.

(k) Tax Matters. Without limiting paragraph (j) above, and subject to those matters set out in Schedule 3.1(k) of the Disclosure Schedules, as applicable:

(i) the Credit Union and each of its Subsidiaries have filed all Tax Returns required to be filed by it in all applicable jurisdictions and have paid all Taxes (including all levies, assessments, reassessments, penalties, interest and fines) due and payable by each of them up to the Closing except for any Taxes, which if not paid would reasonably be expected to have a material adverse impact on the Credit Union, or, following the Closing, the Amalgamated Credit Union.

(ii) There are no actions, suits, assessments, reassessments or other proceedings or investigations or claims in progress, pending or, to the best of the knowledge of the Credit Union, threatened against the Credit Union or any of its Subsidiaries in respect of any Taxes, governmental charges or assessments which, if successful, would have a material adverse impact on the Credit Union or, following the Closing Date, the Amalgamated Credit Union.

(iii) The Credit Union and each of its Subsidiaries has withheld or collected from each payment made to each of its employees, the amount of all Taxes required to be withheld or collected therefrom, and has paid the same to the proper Tax authority.

(l) Reports. As of their respective dates:

(i) In respect of Prospera: (A) Prospera’s audited financial statements as at and for the fiscal year ended December 31, 2017 and all internal interim (unaudited) statements as at the period ending on September 30, 2018 (the “Prospera Financial Statements”); and (B) Prospera’s Annual Report to its members in respect of the fiscal year completed on December 31, 2017;

(ii) In respect of Westminster: (A) Westminster’s audited financial statements as at and for the fiscal year ended December 31, 2017 and all internal interim (unaudited) statements as at the period ending on September 30, 2018 (the “Westminster Financial Statements” and together with the Prospera Financial Statements, the “Credit Unions Financial Statements”); and (B) Westminster’s Annual Report to its members in respect of the fiscal year completed on December 31, 2017,

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did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading and complied in all material respects with all Applicable Laws, except for where such untruth, omission or non-compliance, taken as a whole, would not result in a material adverse impact on the Credit Union, or after Closing, the Amalgamated Credit Union. The Credit Union’s Financial Statements and all financial statements of the Credit Union and its Subsidiaries included or incorporated by reference in such forms, statements and other documents were prepared in accordance with IFRS (except: (i) as otherwise indicated in such financial statements and the notes thereto or, (ii) in the case of audited statements, in the related report of the Credit Union’s independent auditors, or (iii) in the case of unaudited interim statements, to the extent they are subject to normal year-end adjustments), and fairly present the consolidated financial position, results of operations and changes in financial position of the Credit Union and its Subsidiaries as of the dates thereof and for the periods indicated therein (subject, in the case of any unaudited interim financial statements, to normal year-end audit adjustments) and reflect appropriate and adequate reserves in respect of contingent Liabilities, if any, of the Credit Union and its Subsidiaries on a consolidated basis.

(m) Absence of Undisclosed Liabilities. Except as disclosed in the Prospera Financial Statements and the Westminster Financial Statements, as applicable, the Credit Union and its Subsidiaries have no material Liabilities of any nature, other than Liabilities incurred since the date of the Prospera Financial Statements or the Westminster Financial Statements, as applicable, in the Ordinary Course of Business.

(n) No Material Adverse Change. Since December 31, 2017: (i) the Credit Union and its Subsidiaries have conducted their respective operations only in the Ordinary Course of Business, (ii) no Liability to the Credit Union or any of its Subsidiaries has been incurred other than in the Ordinary Course of Business, and (iii) there has not been any Material Adverse Change in respect of the Credit Union and its Subsidiaries, taken as a whole, and no event has occurred or circumstance exists that could reasonably be expected to result in a Material Adverse Change.

(o) Conduct of Business. Since December 31, 2017, neither the Credit Union nor any of its Subsidiaries have taken any action that would be in violation of Section 5.1(a) of this Agreement if such provision had been in effect since that date, other than violations which would not have any Material Adverse Effect on the Credit Union or, following Closing, the Amalgamated Credit Union, or would not significantly impede the Credit Union ability to consummate the transactions contemplated hereby.

(p) Title. The Credit Union and its Subsidiaries, in all material respects have good and sufficient title to their respective Assets, free and clear of any Encumbrances other than Permitted Encumbrances and those Encumbrances disclosed in Schedule 3.1(p) of the Disclosure Schedules.

(q) Material Contracts. Schedule 3.1(q) of the Disclosure Schedules contains a list of all Material Contracts to which the Credit Union and its Subsidiaries are party to or bound, and which sets out for each such Material Contract, the name, date, parties and term thereof. A correct and complete copy of each Material Contract set out in Schedule 3.1(q) of the Disclosure Schedules has been provided to the other Party. Except as disclosed in Schedule 3.1(q) of the Disclosure Schedules, each such Material Contract is

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in full force and effect, unamended, and constitutes a valid and binding obligation of all parties thereto, subject to Enforcement Exceptions. The Credit Union and/or its Subsidiaries, as applicable, have in all material respects performed the obligations required to be performed by it and is not in material default or alleged to be in material default under any Material Contract included in Schedule 3.1(q) of the Disclosure Schedules. There exists no event or condition which, after notice or lapse of time, or both, could constitute a material default by any party to any Material Contract included in Schedule 3.1(q) of the Disclosure Schedules. Except as disclosed in Schedule 3.1(q) and Schedule 3.1(e) of the Disclosure Schedules, no consent is required to be obtained by the Credit Union or its Subsidiaries or the Parties, nor is any notice required to be given by the Credit Union or its Subsidiaries or the Parties, under any Material Contract in connection with the completion of the transactions contemplated herein. Neither the Credit Union nor its Subsidiaries has received any notice terminating or threatening to terminate any Material Contract.

(r) Approvals. The Credit Union and its Subsidiaries have obtained and are in material compliance with all Approvals (apart from the Member Approvals, the Competition Act Approval and the contractual consents referred to in Schedule 3.1(e) of the Disclosure Schedules) of or from any Governmental Authority necessary to conduct their respective businesses, as they are being or are proposed to be conducted as at the Effective Date, other than any approval which is required as a condition to Closing as set out in this Agreement and any other Approvals, the absence of which would, individually or in the aggregate, not have a material adverse impact on the Credit Union or, following Closing, the Amalgamated Credit Union.

(s) Employment Agreements and Collective Agreements.

(i) Other than the Change of Control Agreements entered into by the Credit Union and those executives listed in Schedule 3.1(s)(i) of the Disclosure Schedule, neither the Credit Union nor any of its Subsidiaries is a party to, or engaged in any negotiations with respect to any employment Contract with any employee or any written or oral Contract, arrangement or understanding, providing for severance, termination or change of control payments to an employee; providedthat, severance or termination payments made to non-officer employees in the Ordinary Course of Business shall not be subject to the foregoing.

(ii) Other than as listed on Schedule 3.1(s)(ii) of the Disclosure Schedule, neither the Credit Union nor any of its Subsidiaries are a party to, nor engaged in any negotiations with respect to any collective bargaining or union Contract, any actual or threatened application for certification or bargaining rights or letter of understanding, with respect to any current or former Credit Union employee. Other than as listed on Schedule 3.1(s)(ii) of the Disclosure Schedule, no trade union, council of trade unions, employee bargaining agency or affiliated bargaining agent holds bargaining rights with respect to the Credit Union or any of its Subsidiaries employees by way of certification, interim certification, voluntary recognition, or succession rights.

(iii) Other than as set forth on Schedule 3.1(s)(iii) of the Disclosure Schedule, to the knowledge of the Credit Union, there is no labour strike, dispute, lock-out work slowdown or stoppage pending or involving or, to the knowledge of the Credit Union, threatened against the Credit Union or any of its Subsidiaries. No trade

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union has applied to have the Credit Union or any of its Subsidiaries declared a related successor, or common employer pursuant to the Labour Relations Code (British Columbia) or any similar legislation in any jurisdiction in which the Credit Union or any of its Subsidiaries carries on business.

(iv) Neither the Credit Union nor any of its Subsidiaries have engaged in any unfair labour practice and no unfair labour practice complaint, grievance or arbitration proceeding is pending or, to the knowledge of the Credit Union, threatened against the Credit Union or any of its Subsidiaries.

(v) The Credit Union and each of its Subsidiaries is in compliance with all terms and conditions of employment and all Applicable Laws respecting employment, in all material respects, including pay equity, human rights, privacy, employment standards, worker’s compensation and occupational health and safety, and there are no outstanding any actual or threatened claims, complaints, investigations or orders under any such Applicable Laws, other than as in the aggregate do not have a material adverse impact on the Credit Unions, or following Closing, the Amalgamated Credit Union.

(vi) All amounts due or accrued for all salary, wages, bonuses, commissions, vacation with pay, and other employee benefits in respect of employees of the Credit Union and all of its Subsidiaries which are attributable to the period before the Effective Date have been paid or are accurately reflected in the books and records of the Credit Union or its Subsidiaries, as applicable.

(vii) There are no outstanding assessments, penalties, fines liens, charges, surcharges, or other amounts due or owing by the Credit Union or any of its Subsidiaries pursuant to any workers’ compensation legislation and the Credit Union has not been reassessed in any material respect under such legislation and, to the knowledge of the Credit Union, no audit of the Credit Union is currently being performed pursuant to any applicable worker’s compensation legislation.

(viii) There are no material charges pending with respect to the Credit Union or its Subsidiaries under OHSL. The Credit Union and each of its Subsidiaries has complied in all material respects with the terms and conditions of the OHSL, as well as with any orders issued under OHSL. There are no appeals of any material orders under OHSL currently outstanding.

(t) Employee Benefit Plans. The Credit Union has made available to the other Party true, complete and correct copies of each material health, medical, dental, welfare, supplemental unemployment benefit, bonus, option, insurance, incentive, incentive compensation, deferred compensation, disability, pension, retirement or supplemental retirement plan and each other material employee or director compensation or benefit plan, Contract or arrangement for the benefit of directors or former directors of the Credit Union and/or its Subsidiaries, consultants or former consultants of the Credit Union and/or its Subsidiaries, employees or former employees of the Credit Union and/or its Subsidiaries, which are maintained by, contributed to, or binding upon the Credit Union or any Subsidiaries thereof or in respect of which the Credit Union or any Subsidiaries thereof have any Liability (the “Credit Union Employee Plans”), and, in all material respects:

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(i) each Credit Union Employee Plan has been maintained and administered in material compliance with its terms and is funded in accordance with Applicable Laws;

(ii) all required material employer contributions under any such plans have been made in accordance with the terms thereof;

(iii) each Credit Union Employee Plan that is required or intended to be qualified under Applicable Law or registered or approved by a Governmental Authority has been so qualified, registered or approved by the appropriate Governmental Authority, and nothing has occurred since the date of the last qualification, registration or approval to materially adversely affect, or cause, the appropriate Governmental Authority to revoke such qualification, registration or approval; and

(iv) all material contributions, reserves or premium payments required to be made to the Credit Union Employee Plans have been made or accrued for in the books and records of the Credit Union.

(u) Indebtedness to and by Officers, Directors and Others. The Credit Union is not liable to any of its directors, officers, employees or consultants or any of their respective associates, Affiliates, family members or other parties not at arm’s length to the Credit union, except for, salaries, wages and other benefits payable in the Ordinary Course of Business, and for amounts which, taken as a whole, would not have a material adverse impact on the Credit Union.

(v) Compliance with Laws. Except as otherwise disclosed in Schedule 3.1(k) of the Disclosure Schedules, the Credit Union and its Subsidiaries have complied with and are not in violation of any Applicable Laws which, if not complied with or in violation of, and taken as a whole, would have a material adverse impact on the Credit Union or its Subsidiaries, or, following the Closing, the Amalgamated Credit Union.

(w) Possession of Intellectual Property. The Credit Union or its Subsidiaries owns or possess, or can acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other Intellectual Property necessary to carry on the business now operated by them, and neither the Credit Union nor any of its Subsidiaries has received any written notice or claim challenging the Credit Union or is Subsidiaries respecting the validity of, use of or ownership of any Intellectual Property used in their respective business, and to the knowledge of the Credit Union, there are no facts upon which such a challenge could be made.

(x) Corrupt Practices Legislation.

(i) To the knowledge of the Credit Union, it and any of its Subsidiaries have not, directly or indirectly: (A) made or authorized any contribution, payment or gift of funds or property to any official, employee or agent of any Governmental Authority of any jurisdiction or any official of any public international organization, or (B) made any contribution to any candidate for public office, in either case, where either the payment or the purpose of such contribution,

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payment or gift was, is, or would be prohibited under the Corruption of Foreign Public Officials Act (Canada) or the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) or the rules and regulations promulgated thereunder (“Money Laundering Laws”).

(ii) During the periods of the Credit Union’s Financial Statements, the operations of the Credit Union and its Subsidiaries are and have been conducted at all times in compliance with the Money Laundering Laws. No action, suit or proceeding by or before any Governmental Authority or body or any arbitrator involving the Credit Union or any of its Subsidiaries with respect to the Money Laundering Laws is pending or, to the best of the knowledge of the Credit Union, threatened.

(y) Disclosure. To the knowledge of the Credit Union, the Credit Union has not withheld from the other Party any material information or documents concerning the Credit Union or any of its Subsidiaries or their respective material Assets or Liabilities during the course of the other Party’s review of the Credit Union and its Assets. No representation or warranty contained in this Agreement or other disclosure document provided or to be provided to the other Party pursuant to this Agreement contains or will contain any untrue statement of a material fact or omits to state a material fact which is necessary in order to make the statements herein or therein not misleading.

(z) Due Diligence Reports. The Credit Union has received and reviewed the due diligence reports that have been provided to FICOM and such due diligence report, in the case of Prospera, as it relates to Prospera only and to the knowledge of Prospera, and in the case of Westminster, as it relates to Westminster only and to the knowledge of Westminster, is factually accurate in all material respects.

4.2 Survival of Representations and Warranties

The representations and warranties contained in this Agreement shall expire and be terminated on the earlier of the Closing Date and the date on which this Agreement is terminated pursuant to Article 7.

ARTICLE 5 – COVENANTS AND RISK OF LOSS

5.1 Conduct of Business by the Credit Unions

The Credit Unions each (as it relates to itself) covenant and agree with one another as follows:

(a) Conduct of Business. From the Effective Date until the earlier of the Closing Date and the time that this Agreement is terminated in accordance with its terms, unless otherwise: (A) agreed to in writing by the other Party (such agreement to be subject to Applicable Law and not to be unreasonably withheld, conditioned or delayed); (B) required or expressly permitted or specifically contemplated by this Agreement; (C) required by Applicable Law; or (D) to protect is Assets or carry on business in the Ordinary Course of Business:

(i) the business of the Credit Unions shall be conducted only in, and each Credit Union shall not take any action except in, the Ordinary Course of Business, and the Credit Union shall use all reasonable commercial efforts to maintain and preserve its business organization, Assets, key employees and advantageous business relationships, regulatory compliance with FICOM (including without limitation maintain the minimum capital and liquidity ratios required by FICOM) except where

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the failure to do so would not have material adverse impact on the Credit Union, or, follows the Closing, the Amalgamated Credit Union.

(ii) the Credit Unions shall not directly or indirectly:

i. unless set forth in the Credit Unions’ previously approved 2019 capital budget (which has been disclosed to the other Party on or before the Effective Date), sell, lease, pledge, dispose of or Encumber any Assets with a value (individually or in the aggregate) exceeding $500,000;

ii. acquire (by merger, amalgamation, consolidation or acquisition of shares or Assets) any Person or division thereof or make any investment (either by purchase of shares or securities, contributions of capital) or purchase of any property or Assets of any other Person;

iii. incur any Liability for borrowed money or any other Liability or issue any debt securities or assume, guarantee, endorse or otherwise as an accommodation become responsible for, the obligations of any other Person, or make any loans or advances, except in the Ordinary Course of Business, or for refinancing existing debt on commercially reasonable terms given market conditions at the applicable time;

iv. other than any payments related to any matter disclosed in section 3.1(k) of the Disclosure Schedule, pay, discharge or satisfy any claims or Liabilities (including any regulatory investigation) which are reasonably expected to have a material adverse impact on the Credit Unions, other than the payment, discharge or satisfaction, in the Ordinary Course of Business, or Liabilities reflected or reserved against in the Credit Union’s Financial Statements or, following the Closing, the Amalgamated Credit Unions’ most recently available financial statements as of the Effective Date or incurred in the Ordinary Course of Business;

v. except in the Credit Union’s reasonable business judgment, release or relinquish, or authorize or propose to do so, any Contractual right which is material to the business of the Credit Union;

vi. except in the Credit Union’s reasonable business judgment, waive, release, grant or transfer any rights of value or modify or change any existing Contract or other document which is material to the business of the Credit Union, other than in the Ordinary Course of Business;

vii. declare or pay any dividends or declare or make any other payments or distributions on or in respect of any of its shares;

viii. redeem, purchase or otherwise acquire any of its shares or agree to do so;

ix. otherwise effect any return of capital with respect to its shares; or

x. issue or authorize the issuance of any shares in the capital of the Credit Union;

(iii) except for the aggregate amount set forth in the Credit Unions’ previously approved

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2019 capital budget (which has been disclosed to the other Party on or before the Effective Date) and any capital expenditure for leasehold improvements to the proposed corporate head office of the Amalgamated Credit Union (being the current head office of Westminster), the Credit Union shall not incur or commit to capital expenditures prior to the Closing Date individually or in the aggregate exceeding $250,000;

(iv) except in the Ordinary Course of Business or pursuant to existing employment, collective bargaining, pension, supplemental pension, termination or compensation arrangements, policies or Contracts (copies of which have been provided to the other Party on or prior to the Effective Date), the Credit Union shall not grant to any executive officer or director an increase in compensation in any material form (including retention bonuses, other than, in the case of Westminster, retention bonuses paid to non-executive employees in relation to the Amalgamation up to a maximum of $850,000 and in the case of Prospera, retention bonuses paid to non-executive employees in relation to the Amalgamation up to a maximum of $850,000), grant to any other employee any increase in compensation in any form, or make any loan to any officer or director;

(v) other than in the Ordinary Course of Business, the Credit Union shall not hire or agree to hire, any employee who would earn annual compensation in excess of $150,000 (base salary);

(vi) the Credit Union shall not adopt or amend or make any material contribution to any bonus, profit sharing, option, pension, retirement, deferred compensation, insurance, retention, incentive compensation, other compensation or other similar plan, Contract, trust, fund or arrangement for the benefit of employees, except as is necessary to comply with Applicable Law or non-discretionary requirements of pre-existing plans;

(vii) the Credit Unions shall use their reasonable commercial efforts (taking into account insurance market conditions and offerings and industry practices) to cause its current insurance (or re-insurance) policies, including directors’ and officers’ insurance, not to be cancelled or terminated or any of the coverage thereunder to lapse, except where such cancellation, termination or lapse would not individually or in the aggregate be material to the Credit Unions, unless simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance or re-insurance companies of nationally recognized standing having comparable deductibles and providing coverage equal to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect;

(viii) the Credit Unions shall not take or agree or commit to take any commercially reasonable action or omit to take any commercially reasonable action within its reasonable control that would make any representations and warranties of the Credit Unions hereunder inaccurate in any respect except where the failure of a representation and warranty to be accurate and complete would not result or would not reasonably be expected to result in a Material Adverse Change in respect of the Party that made it, or would not reasonably be expected to impede completion of the transactions contemplated by this Agreement at (or, in the case of representations and warranties qualified by materiality or “Material Adverse Effect” or “Material

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Adverse Change”, in any respect), or as of any time prior to, Closing, or omit or agree or commit to omit to take any legal proceeding necessary to prevent any such representations or warranties from so being inaccurate in any respect at any such time;

(ix) the Credit Unions shall not change any material accounting policies or procedures or make any material change in any credit or underwriting policies and practices related to the Credit Union’s business except for any change in accounting policies and procedures after the Effective Date required by reason of a concurrent change in generally accepted accounting principles or industry standards;

(x) the Credit Union shall maintain at all times the appropriate capital and liquidity to ensure it is a credit union in good standing with FICOM in accordance with the CUIA and the Financial Institutions Act (British Columbia);

(xi) the Credit Union shall not take any action to shut down any branch or office (other than the branch shut down by Westminster of its branch located on Hastings Street in Burnaby, British Columbia);

(xii) the Credit Unions shall not agree, resolve, propose or commit to do any of the foregoing.

(b) Cooperation.

a. The Credit Unions, through their senior executive management teams and board members are committed to achieving the intended value of the Amalgamation and will use commercially reasonable efforts and act in good faith to do, or cause to be done, all things necessary or desirable to consummate the transactions contemplated hereby in a smooth, orderly and expeditious fashion including, but not limited to, taking all actions as is commercially reasonably required to obtain all necessary Approvals. Respecting any restriction imposed by Applicable Law, during the period that starts on the first month after the date of this Agreement and ends on the Closing Date, or the date upon which this Agreement is terminated in accordance with its terms, the Credit Unions agree, in good faith, to furnish each other with such information that is reasonably required to facilitate the planning of the integration of the two Credit Unions to ensure seamless integration for their members, including without limitation ‘board ready’ financial results and analysis and monthly capital adequacy reports.

b. In addition, each Credit Union, through its senior executive management team and board members, agrees to not take any deliberate action to not support or advance the consummation of the transactions contemplated hereby.

(c) Closing Conditions. The Credit Unions shall use commercially reasonable efforts to cause each of the conditions set forth in: (i) Sections 2.1, 2.2 and 2.3 hereof, and (ii) Article 6 hereof to be satisfied prior to the Member Approval Outside Date, to the extent that the fulfilment of such condition is within its reasonable control.

(d) Updates to Information. The Credit Unions shall update on or before the Member Approval Date, by amendment or supplement, any of the informational Disclosure Schedules and Schedules referred to in this Agreement and any other disclosure in writing from the Credit Unions to the other Party as soon as reasonably possible after new or

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conflicting material information disclosed on such Schedules comes to the attention of the Credit Unions. The other Party shall not be obligated to accept any such amendment or supplement if it would cause the covenant set out in Section 5.1(a)(viii) to be breached and receipt of any such amendment or supplement shall not be deemed to be a waiver or release by the other Party of any provision of this Agreement.

(e) Risk of Loss. Prospera’s Assets shall be at the risk of Prospera until the Closing Date and Westminster’s Assets shall be at risk of Westminster until the Closing Date.

(f) Confidentiality. The Parties hereby acknowledge and agree to (and are bound by) the confidentiality provisions set forth in Schedule 5.1(f) of this Agreement. For certainty, both this Section 5.1(f) and Schedule 5.1(f) of this Agreement will survive termination of this Agreement. Discussions between the Parties and the Competition Bureau of Canada with respect to the approval required pursuant to Article 2 shall be exempt from this confidentiality covenant.

(g) Compliance with Privacy Law. Each Party shall comply with Privacy Law in the course of collecting, using and disclosing Personal Information in connection with the transactions contemplated by this Agreement. Each Party shall collect and use Personal Information prior to Closing for the limited purposes of carrying out and completing the transactions contemplated hereby. During the period prior to Closing, no Party shall disclose Personal Information to any Person other than to its Representatives who are evaluating and advising on the transactions and shall cause such Representatives to observe the terms of this Section. During the period prior to Closing, each Party shall use appropriate security measures to safeguard all Personal Information against unauthorized collection, access, use or disclosure. If this Agreement is terminated at any time prior to Closing, each Party shall promptly return to the other Party, or destroy, all Personal Information then in such Party’s possession or in the possession of its Representatives.

(h) Notice of Certain Events. Each Party shall promptly notify the other Party of:

(i) any notice or other communication from any Person alleging that the Approval of such Person is, or may be, required in connection with the transactions contemplated by this Agreement;

(ii) any notice or other communication from any Governmental Authority in connection with the transactions contemplated by this Agreement, but not including routine correspondence from FICOM, the Competition Bureau of Canada and other Governmental Authorities;

(iii) any legal proceeding commenced or, to its knowledge, threatened against, relating to or involving or otherwise affecting such Party that relates to the consummation of the transactions contemplated by this Agreement or that will, or could reasonably be expected to have a Material Adverse Effect on the Credit Union, or the Amalgamated Credit Union, after Closing;

(iv) any event where any Assets (or part thereof) of such Party becomes or may become the subject of any legal proceeding; and

(v) the occurrence of any event, circumstance or state of affairs that would or could reasonably be expected to result in the inability of such Party to satisfy any of the

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conditions set forth in (i) Section 3.1, (ii) Section 3.2(b) and (iii) Article (l) hereof prior to the Closing Date.

(i) Additional Instruments. At the reasonable request of another Party, each Party will promptly execute and deliver, or cause to be executed and delivered, to the other Party such instruments of assignment, transfer, assumption, Approvals and other similar instruments in addition to those required by this Agreement, in form and substance satisfactory to the other Party, as the other Party may deem necessary or desirable, in its reasonable discretion, to carry out or implement any provision of this Agreement.

(j) Special Meeting Materials and Public Announcements. At the reasonable request of another Party, each Party will promptly provide the requesting Party with a copy of the materials to be provided to the Members for the Special Meeting for review and comment. In addition, except as may be required by Applicable Law, no Party shall make any public announcements in respect of this Agreement or the transactions contemplated hereby, make any notifications to third, or otherwise communicate with any news media, without the prior written consent of the other Party as to the form and content of such notice or announcement (which consent shall not be unreasonably withheld or delayed), and the Parties shall cooperate as to the timing and contents of any such announcement.

(k) Competition Bureau. With respect to obtaining the Competition Act Approval, the Credit Unions agree that:

(i) Filings. The Parties shall: (A) as soon as reasonably practicable following the Effective Date, jointly file a submission with the Commissioner of Competition in respect of the Amalgamation, to request an advance ruling certificate under section 102 of the Competition Act, or, in the alternative a no action letter; and (B) if agreed by the Parties, each Party shall also file with the Commissioner of Competition a pre-merger notification in respect of the Amalgamation, in accordance with Part IX of the Competition Act.

(ii) Assistance. The Parties shall co-operate with and assist each other in preparing the filings referenced in Section 5.1(k)(i) and all other submissions, filings, or responses to questions from the Commissioner of Competition. Neither Party shall provide any oral or written representations, statements, information or other filings to the Commissioner of Competition without first giving the other Party a reasonable opportunity to provide its comments, and each Party, as applicable, shall take the comments of the other Party into account before providing any such representations, statements, information or other filings to the Commissioner of Competition. Neither Party shall participate in any telephone or in-person meeting with the Commissioner of Competition unless the other Party has been given reasonable advance notice of the meeting and, unless not permitted at Applicable Law, the other Party shall be entitled to participate in any such meeting. At the request of a Party, the other Party shall participate in any telephone or in-person meeting with the Commissioner of Competition.

(iii) Exchange of Information. Each Party shall promptly supply the requesting Party with all information that the requesting Party requests on grounds that the requesting Party reasonably requires such information to make any submission, filing or response to questions from the Commissioner of Competition, and each Party shall promptly supply the other Party with copies of all written material

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supplied or filed by it after the date hereof under the Competition Act after such material is supplied or filed and shall indicate thereon the date of supply or filing. Each Party shall also promptly supply the other Party with copies of all notices or other correspondence received from or the details of any communications with the Commissioner of Competition after receipt of such notices or exchange of other correspondence or the occurrence of such communications. Notwithstanding any requirement under this Section 5.1(k), a Party shall not be required to provide the other Party with any information required to be provided under this Section 5.1(k) where the information is confidential and competitively sensitive, in which case the supplying Party shall provide a redacted version to the other Party and shall provide the information on a non-redacted basis to the receiving Party’s external counsel, and the receiving Party agrees that it shall neither request nor receive such non-redacted information from its external counsel.

(iv) Accuracy of Information Supplied. All information supplied by a Party to the other Party or to the Commissioner of Competition under this Section 5.1(k) shall be, to the supplying Party’s knowledge and belief, accurate and true and, if the supplying Party subsequently learns that the information is not accurate or true, such Party shall immediately in writing make such known to the other Party and, after giving the other Party advance notice and a reasonable opportunity to comment, provide corrected information to the Commissioner of Competition that is, to the supplying Party’s knowledge and belief, accurate and true.

(v) Provision of Information. Each Party shall promptly respond to all requests for information from the Commissioner of Competition.

(vi) Filing Fees. The Parties shall each be responsible for one-half of the premerger filing fee payable to the Receiver General of Canada in respect of the filings made under this Section 5.1(k).

(l) Westminster Savings Credit Union Name. The Parties agree that they shall use commercial reasonably efforts to register the business name “Westminster Savings” to the Amalgamated Corporation upon Closing.

ARTICLE 6 – CONDITIONS PRECEDENT

6.1 Mutual Conditions

The respective obligations of the Parties to; (a) hold the special meeting contemplated by Section 2.1 hereof; and (b) complete the Closing (together, the “Milestone Events”) shall be, except as set out below, subject to the satisfaction of each of the following conditions prior to each Milestone Event, which conditions are for the mutual benefit of the Parties and may, to the extent possible under Applicable Law, be waived in writing by the Parties, in whole or in part, and at any time:

(a) Approvals.

a. In respect of completion of the Closing only, the Parties shall have received the Competition Act Approval and the Member Approvals, and no such Approval shall have been set aside or modified in a manner inconsistent with this Agreement or in a way that would enjoin or prohibit the completion of the transactions contemplated by this

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Agreement; and

b. In respect of calling the special meeting as contemplated by Section 2.2 hereof, the FICOM Approval shall not have been set aside or modified in a manner inconsistent with this Agreement or in a way that would enjoin or prohibit the completion of the transactions contemplated by this Agreement.

(b) No Adverse Litigation or Law. There shall be no act, action, suit, proceeding, objection or opposition shall have been threatened or taken, entered or promulgated before or by any Governmental Authority, and no Applicable Law shall be in effect or have been proposed, enacted, promulgated, amended or applied, which restrains or enjoins or otherwise prohibits the transactions contemplated by this Agreement.

(c) No Order or Decree Restricting the Transaction. There shall not exist any order or decree of any Governmental Authority restraining, prohibiting, or invalidating the transactions contemplated by this Agreement.

(d) No Law Prohibiting the Transaction. Without limiting paragraph (b) or (c) above, there shall not exist any prohibition under Applicable Law against the completion of the transactions contemplated by this Agreement.

(e) No Unsatisfactory Terms or Conditions. In respect of holding the Special Meetings and the completion of the Closing only, the Competition Act Approval shall not contain any terms or conditions or require undertakings or security which either Party, in its reasonable discretion, deems unreasonable.

6.2 Conditions in Favour of Each Party

The obligations of each of the Parties to complete the Milestone Events shall be subject to the satisfaction of each of the following conditions on or prior to the date of such Milestone Event, which conditions are for the sole benefit of Prospera on the one hand, and Westminster on the other hand, and may, to the extent possible under Applicable Law, be waived in writing by Prospera or Westminster, as applicable, in whole or in part, and at any time:

(a) Accuracy of Representations and Warranties. Each representation and warranty made by the other Party shall be accurate and complete, except where the failure of a representation and warranty to be accurate and complete would not result or would not reasonably be expected to result in a Material Adverse Change in respect of the Party that made it, or would not reasonably be expected to impede completion of the transactions contemplated by this Agreement.

(b) Compliance with Obligations. The other Party shall have performed and complied with all of its covenants required hereby to be performed or complied with at or prior to the Milestone Event, except where the failure of a Party to perform and comply with such covenants would not result or would not reasonably be expected to result in a Material Adverse Change in respect of the Party that made it, and would not reasonably be expected to impede completion of the transactions contemplated by this Agreement.

(c) No Material Adverse Change. Since the Effective Date there shall have been no event, series of events or the lack of occurrence thereof which, singularly or in the aggregate, could reasonably be expected to have a Material Adverse Effect on the other Party.

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6.3 Frustration of Closing Conditions

Neither Party may rely on the failure of any condition set forth in this Article 6 to be satisfied if such failure was caused by such Party’s intentional breach of this Agreement or any ancillary agreement to this Agreement.

ARTICLE 7 – TERMINATION

7.1 Termination

This Agreement may be terminated at any time prior to Closing as follows and in no other manner:

(a) by mutual written agreement of the Parties for any reason or no reason;

(b) by Prospera, if there has been a violation or breach by Westminster of any covenant, representation or warranty contained in this Agreement such that the conditions to closing set forth in Sections 6.1 and 6.2 would not be satisfied and such violation or breach has not been waived by Prospera or cured by Westminster, as applicable, within 45 days after receipt by Westminster of written notice of the violation or breach from Prospera, provided that Prospera is not then in breach of this Agreement so as to cause any of the conditions set forth in Sections 6.1 and 6.2 not to be satisfied;

(c) by Westminster, if there has been a violation or breach by Prospera of any covenant, representation or warranty contained in this Agreement such that the conditions to closing set forth in Sections 6.1 and 6.2 not be satisfied and such violation or breach has not been waived by Westminster or cured by Prospera, as applicable, within 45 days after receipt by Prospera of written notice of the violation or breach from Westminster, provided that Westminster is not then in breach of this Agreement so as to cause any of the conditions set forth in Sections 6.1 and 6.2 not to be satisfied; or

(d) by either Party, if the Member Approval shall not have occurred by the Member Approval Outside Date.

7.2 Effect of Termination

(a) Except for this Section and the obligations under Section 5.1(b) and Schedule 5.1(f) (and any provisions necessary for the interpretation, construction or enforcement of Section 5.1(b) and Schedule 5.1(f)), if this Agreement is terminated under Section 7.1, then all further obligations of the Parties under this Agreement will terminate.

(b) Each Party’s termination rights under Section 7.1of this Agreement is in addition to any other rights it may have under this Agreement or otherwise, and the exercise of a termination right will not be an election of remedies.

(c) If a Party terminates this Agreement pursuant to Section 7.1(b) or 7.1(c), as the case may be, then the rights of the non-breaching Party to pursue all legal remedies for Losses such Party suffers will survive such termination unimpaired, and without limiting the generality of the foregoing, the breaching Party shall on demand made by the non-breaching Party

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reimburse the non-breaching Party for all costs and expenses incurred by the non-breaching Party in connection with the preparation, negotiation, execution and carrying out of the transactions contemplated by the Amalgamation including all legal, accounting and auditing fees, regulatory fees, meeting and mailing costs and any fees or commissions of brokers, finders or other third parties employed in connection with the transactions contemplated by this Agreement.

ARTICLE 8 – COMPLIANCE WITH CUIA

8.1 Business Proposed to be Carried On

The business proposed to be carried on by the amalgamated credit union is that of a deposit and trust business.

8.2 Products and Services Proposed to be Offered

All products and services currently offered by the respective Credit Unions are expected to form part of the Amalgamated Credit Union’s mix of product and services. At the time of Closing, no new products or services (that are not already being offered or provided by Prospera or Westminster) will be introduced and no existing products or services will be discontinued, other than the natural expiration of the normal life cycle of certain products offered by either of the Credit Unions in the ordinary course of business.

Please refer to Schedule 8.2 for a list of major lines of business proposed to be offered by the Amalgamated Credit Union, which, as noted above is consistent with the lines of business being offered by either, or both, of the Credit Unions immediately prior to the Amalgamation.

8.3 Common Bond of Membership

It is proposed that the common bond for the Amalgamated Credit Union will be: “All entities and natural persons who live, work or carry on business in the Province of British Columbia”.

8.4 Constitution

Please refer to Schedule 8.4 for a draft of the proposed constitution of the Amalgamated Credit Union.

ARTICLE 9GENERAL

9.1 Relationship of the Parties

It is understood and agreed that nothing herein contained shall be construed as constituting a partnership, joint venture, joint enterprise or agency between the Parties during the period between the Effective Date and Closing by virtue of having entered into this Agreement.

9.2 Amendment

No amendment of any provision of this Agreement shall be binding on any Party unless consented to in writing by such Party.

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9.3 Notices

Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be given by facsimile or by hand-delivery. Any such notice, if sent by facsimile, shall be deemed to have been received on the Business Day next following the day of sending, or if delivered by hand shall be deemed to have been received at the time it is delivered to the applicable address noted below either to the individual designated below or to an individual at such address having apparent authority to accept deliveries on behalf of the addressee. Notices and other communications shall be addressed as follows:

(a) to the Credit Unions:

Prospera Credit Union#500 – 32071 South Fraser Way Abbotsford, BC V2T 1W3

Attention: President & Chief Executive Officer Telephone: 888-440-4480

with a copy (which shall not constitute notice) to:

MLT Aikins LLP 30th Floor, 360 Main Street Winnipeg, Manitoba R3C 4G1

Attention: Peter F. Drazic Telephone: 204-957-4619 Facsimile: 204-957-4420

Westminster Savings Credit Union 13450 102 Avenue #1900 Surrey, BC V3T 5Y1

Attention: President & Chief Executive Officer Telephone: 604-517-0100

with a copy (which shall not constitute notice) to:

MLT Aikins LLP 30th Floor, 360 Main Street Winnipeg, Manitoba R3C 4G1

Attention: Peter F. Drazic Telephone: 204-957-4619 Facsimile: 204-957-4420

Any Party may change its address for service from time to time by giving not less than ten (10) calendar days’ notice to the other Party in accordance with the foregoing, and any subsequent notice will be sent to the Party at its changed address.

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9.4 Assignment

No Party may assign this Agreement or any of its rights, interests or obligations under this Agreement (whether by operation of law or otherwise) without the prior written consent of the other Party.

9.5 Binding Effect

This Agreement shall be binding upon and shall enure to the benefit of the Parties and their respective successors and permitted assigns.

9.6 Waiver and Modification

The Parties may waive or consent to the modification of, in whole or in part, any inaccuracy of any representation or warranty made to them in the Agreement or in any document to be delivered pursuant to the Agreement and may waive or consent to the modification of any of the covenants in the Agreement contained for their respective benefit or waive or consent to the modification of any of the obligations of the other Party in the Agreement; provided, however, that any such waiver or consent, to be effective, must be in writing executed by the Party granting such waiver or consent. No omission, delay or failure to exercise any right or power, or any waiver by any Party hereto of any breach or default, whether expressed or implied, or any failure to insist upon strict compliance with any provision of this Agreement, shall constitute a waiver of any other provision, nor shall any waiver of any provision of this Agreement constitute a continuing waiver unless otherwise expressly provided.

9.7 Specific Performance

The Parties agree that irreparable harm would occur for which money damages would not be an adequate remedy at law in the event that any covenants or obligations are not performed by the Parties and their Representatives in accordance with their specific terms or are otherwise breached. It is accordingly agreed that each Party shall be entitled to an injunction or injunctions and other equitable relief to prevent breaches or threatened breaches of the provisions of Schedule 5.1(f) or to otherwise obtain specific performance of any such provisions, any requirement for the securing or posting of any bond in connection with the obtaining of any such injunctive or other equitable relief hereby being waived.

9.8 Third Party Beneficiaries

The provisions of Section 3.8 are: (a) intended for the benefit of all present and former directors and officers of the Parties as and to the extent applicable in accordance with their terms, and shall be enforceable by each of such Persons and his or her heirs, executors administrators and other legal representatives (collectively, the “Third Party Beneficiaries”) and the Parties acknowledge and agree that the Parties and, following the Amalgamation, the Amalgamated Credit Union shall hold the rights and benefits of Section 3.8 in trust for and on behalf of the Third Party Beneficiaries and each of the Parties hereby accepts such trust and agrees to hold the benefit of and enforce performance of such covenants on behalf of the Third Party Beneficiaries, and (b) in addition to, and not in substitution for, any other rights that the Third Party Beneficiaries may have by Contract or otherwise. Except as provided in this Section, this Agreement shall not confer any rights or remedies upon any Person other than the Parties and their respective successors and permitted assigns.

9.9 Further Assurances

Notwithstanding that the transactions and events set out herein shall occur and shall be deemed to occur in the order set out in this Agreement, or otherwise in accordance with the direction of FICOM, in each

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case without any further act or formality, each of the Parties shall make, do and execute, or cause to be made, done and executed, all such further acts, deeds, Contracts, transfers, assurances, instruments or documents as may reasonably be required by either of them in order to further document, evidence or perform the transactions or events set out herein and intent of this Agreement.

9.10 Expenses

Each of the costs and expenses in connection with the preparation, negotiation, execution and carrying out of this Agreement, all instruments, certificates and other documents delivered by the Parties pursuant to or in connection with this Agreement and the transactions contemplated hereby, shall be shared equally by the Credit Unions (other than costs that have been incurred for the independent benefit of one party, as agreed between the Credit Unions, including without limitation the cost of any independent legal advice), including all legal, accounting and auditing fees, regulatory fees, meeting and mailing costs and any fees or commissions of brokers, finders or other third parties employed in connection with executing the Agreement.

9.11 Dispute of this Agreement

Notwithstanding the retainer agreement entered into between Westminster, Prospera and MLT Aikins LLP, the Credit Unions both acknowledge and agree that in the event that there is a dispute that arises and such dispute results in the initiation of legal proceedings by one Credit Union against the other in respect of this Agreement, that neither party shall be able to retain the services of MLT Aikins LLP in respect of its pursuit or defence of such legal proceeding.

9.12 Counterparts

This Agreement may be executed in any number of counterparts, by facsimile and by electronic means in portable document format, each of which when so executed shall be deemed to be an original and such counterparts together shall constitute one and the same instrument and notwithstanding the date of execution shall be deemed to be the Effective Date.

*** THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY ***

Signature Page to the Amalgamation Agreement

IN WITNESS WHEREOF this Agreement has been executed by the Parties with effect as of the Effective

Date.

PROSPERA CREDIT UNION

By:

Name: Eric Nadin

Title: Chair of the Board of Directors

By:

Name: Diane Dou

Title: President & Chief Executive Officer


By:

Name: Art Van Pelt

Title: Chair of the Board of Directors

By:

Name: Gavin Toy

Title: President and Chief Executive Officer

Schedule 3.6(a) – Proposed Directors

The names and place of ordinary residence of each proposed director of the Amalgamated Credit Union are set out below:

NAME ADDRESS CITY PROV. PHONE

Prospera Directors

Stacey Crawford Mission BC

Eric Nadin Surrey BC

Rod Thomson Abbotsford BC

Westminster Directors

Colin MacKinnon Delta BC

Art Van Pelt Maple Ridge BC

Rita Virk Langley BC

Independent Directors

Gina Arsens Vancouver BC

Kam Raman Surrey BC

Catherine Roome North Vancouver

BC

Schedule 3.6(b) to the Amalgamation Agreement

Schedule 3.6(b) – Proposed Officers

Office Appointee Function

President & Chief Executive Officer

Gavin Toy Management Overview, Management Leadership

Chief Strategy & Integration Officer

Greg Oyhenart Corporate Strategy, Integration Management, Corporate Development, Government Relations, Mergers and Acquisitions

Chief Operating Officer Diane Dou Line of Business, Contact Centre, Distribution Fulfillment, Distribution Strategy and Value Proposition

Chief Risk Officer Brian Rogers Credit Adjudication and Recovery, Enterprise Risk Management, Compliance

Chief Financial Officer Mary Falconer Finance and Administration, Treasury, Data Analytics, Procurement, Facilities, Audit, Governance

Chief Digital & Information Officer

Greg Dyck Information Technology, Digital Transformation, Enterprise Project Management, Business Process Improvement

Chief Human Resources Officer Angela Champ Human Resources, Culture, Labour Relations, Training and Development

Chief Marketing Officer Maury Kask Brand Development, Market Research and Insights, Communication, Community Impact

Schedule 3.7 to the Amalgamation Agreement

Schedule 3.7 – Amalgamated Credit Union Rules

See attached.

Schedule 5.1(f) to the Amalgamation Agreement

Schedule 5.1(f) – Covenants regarding Confidentiality

1. For the purposes of this Schedule 5.1(f), “Confidential Information” means all interpretations, data, reports, notes, computer printouts, financial statements, information, documents, Contracts, Intellectual Property and other material of a confidential or proprietary nature or pertaining in any way whatsoever to the business, operations, customers or capital of a Party or its Representatives, members or shareholders (collectively, the “Disclosing Party”) which is provided, obtained or accessed by the other Party or its Representatives (collectively, the “Receiving Party”), either directly or indirectly, in connection with this Agreement.

2. Each Party and their respective Representatives will keep the terms and conditions of this Agreement strictly confidential and secure, and will not disclose, directly or indirectly, any such terms or conditions to any Person except in accordance with the provisions of this Schedule 5.1(f). For certainty, neither Party (nor their Representatives) shall issue a press release or make other public disclosure relating to this Agreement without the other Party’s prior written consent.

3. Each Receiving Party will keep all Confidential Information of a Disclosing Party strictly confidential and secure, and no Receiving Party will: (a) disclose, directly or indirectly, any Confidential Information to any Person except in accordance with the provisions of this Schedule 5.1(f); or (b) use any Confidential Information except in accordance with the provisions of this Schedule 5.1(f). In addition, each Receiving Party will safeguard all Confidential Information in the same manner and to at least the same extent as they safeguard their own most sensitive confidential and business information.

4. The confidentiality obligations set forth in paragraphs 2 and 3 of this Schedule 5.1(f) will not apply to prevent any Party from disclosing the terms and conditions of this Agreement or Confidential Information:

(a) to their respective Representatives, as applicable, provided that such Representatives are made aware of the confidentiality provisions of this Agreement and there is a reasonable non-disclosure agreement or professional obligation of confidentiality in place with each such Representative, as applicable;

(b) to the Competition Bureau for purposes of seeking the Competition Act Approval;

(c) to their respective Members in connection with the Special Meetings to be conducted in accordance with Section 2.2 of this Agreement;

(d) as otherwise required by Applicable Law, provided that the Party or other Person subject to such requirement will invoke any confidentiality protection permitted by such Applicable Law;

(e) as is necessary in connection with any litigation or dispute resolution process commenced in respect of this Agreement; or

(f) as otherwise provided for in this Agreement.

5. The confidentiality obligations set forth in paragraphs 2 and 3 of this Schedule 5.1(f) with respect to the Confidential Information of a Disclosing Party will not extend to those particular portions

Schedule 5.1(f) to the Amalgamation Agreement

of a Disclosing Party’s Confidential Information which the Receiving Party can establish by written records:

(a) were, prior to the time of acquisition of such Confidential Information by the Receiving Party, already in the possession of the Receiving Party or its Representatives on a non-confidential and lawful basis;

(b) are or become lawfully and generally available to the public, without breach of this Schedule 5.1(f);

(c) are independently developed by the Receiving Party or its Representatives outside of the dealings and transactions contemplated by this Agreement; or

(d) subject to paragraph 6 of this Schedule 5.1(f), were legally required to be disclosed under any order granted by a court of competent jurisdiction or any regulatory or governmental board, agency or tribunal, of competent jurisdiction.

6. If a Receiving Party becomes legally required to disclose a Disclosing Party’s Confidential Information by Applicable Law, including under any order granted by a court of competent jurisdiction or any regulatory or governmental board, agency or tribunal, of competent jurisdiction, the Receiving Party will provide prompt written notice of such requirement to the Disclosing Party and, at the Disclosing Party’s request, cooperate in obtaining a protective order or other reliable assurances that confidential treatment will be afforded the Disclosing Party’s Confidential Information. The notice to the Disclosing Party will include identification of the information to be disclosed and a copy of the order. The Receiving Party may disclose only that portion of the Disclosing Party’s Confidential Information that in the reasonable opinion of its legal counsel is necessary to comply with the order.


Schedule 8.2 – Major Lines of Business

Below is a list of major lines of business proposed to be offered to members by the Amalgamated Credit Union.

• Consumer Banking and Personal Banking • Commercial Services and Small Business Banking • Wealth Management • Leasing (Automobile and Equipment)


Schedule 8.4 – Proposed Constitution

PROSPERA CREDIT UNION (the “Credit Union”) - CONSTITUTION -

1. The purpose of the Credit Union is the raising a fund by the subscriptions of the members and by such other means as the Credit Union Incorporation Act (British Columbia) (the “Act”) provides and providing financial products and services to and for the benefit of its members in accordance with the provisions of the Act.

2. The authorized capital of the Credit Union shall be an unlimited number of shares divided into such classes and designated with such par value or without par value and with such rights and restrictions among classes as set out in the Rules of the Credit Union, from time to time.

3. The registered office of the Credit Union shall be situate at its chief place of business located at Suite 1900, 13450 102 Avenue, Surrey, British Columbia V3T 5Y1 and notice of its address shall be given to every member.

4. The common bond of membership of the Credit Union is “All entities and natural persons who live, work or carry on business in the province of British Columbia”.

5. RESOLUTION OF THE DIRECTORS OF WSCU

RESOLUTION OF THE DIRECTORS OF

Westminster Savings Credit Union (“WSCU”)

WHEREAS the directors of WSCU deem it in the best interests of WSCU to combine its

operations with those of Prospera Credit Union (“Prospera” and together with WSCU, the “Credit Unions”) by way of amalgamation (the “Amalgamation”), with the intention of building on the strengths of each Credit Union and fostering an aligned corporate culture with a senior leadership team committed to recognizing the operational efficiencies and capturing the economies of scale of the proposed Amalgamation to facilitate the advancement of a jointly developed vision and strategy, intended to enhance the value proposition for the benefit of the respective members of the Credit Unions;

AND WHEREAS the Credit Unions intend to amalgamate in accordance with the provisions of section 20 of the Credit Union Incorporation Act (British Columbia) (the “Act”), and submit an amalgamation application (the “FICOM Application”), substantially in the form set out in Schedule “A” hereto, to the Financial Institutions Commission of British Columbia (“FICOM”) for their consent (the “FICOM Consent”) as required under the Act and the Financial Institutions Act (British Columbia) (the "FIA" and together with the Act, the "Acts");

AND WHEREAS the directors of WSCU deem it in the best interest of WSCU to enter

into an application agreement with Prospera (the “Application Agreement”), in substantially the form attached hereto as Schedule “B”, providing for the submission of the FICOM Application and governing certain other commitments between the Credit Unions between the time of such submission and the time of entering into the Amalgamation Agreement (as hereinafter defined);

AND WHEREAS the directors of WSCU deem it in the best interests of WSCU to, after

receipt of the FICOM Consent, enter into an amalgamation agreement with Prospera (the “Amalgamation Agreement”), substantially in the form set out in Schedule “C” hereto, to give effect to the Amalgamation;

AND WHEREAS WSCU will enter into certain other agreements and deliver certain

other documents and certificates to its members, Prospera and other third parties in order to obtain the FICOM Consent and complete the matters contemplated by the Application Agreement in accordance with the terms of the Application Agreement and to complete the Amalgamation in accordance with the Amalgamation Agreement, if and when entered into (collectively, the “Material Amalgamation Documents”); and

AND WHEREAS it is considered desirable and in the best interests of WSCU to

complete, enter into and deliver, or submit, as the case may be, the Application Agreement, the Amalgamation Agreement (if and when the terms and conditions in the Application Agreement requiring such action are satisfied and subject to the terms of the Application Agreement) and the Material Amalgamation Documents (collectively, the “Transactions Documents”), and to complete the submission to FICOM and the Amalgamation, on the terms and conditions contained in such documents.

NOW THEREFORE BE IT RESOLVED THAT: 1. the directors of WSCU hereby approve, authorize, sanction, ratify and confirm

the submission of the FICOM Application to obtain FICOM Consent and hereby authorize the entering into, execution, delivery and performance of the Application Agreement Amalgamation, on the terms and conditions set forth therein;

2. Both the Chairman of the Board and the President and Chief Executive Officer of WSCU be and are hereby authorized to and directed for and on behalf of WSCU and in its name and under its seal or otherwise to jointly execute and deliver the Application Agreement;

3. the directors of WSCU hereby approve, authorize, sanction, ratify and confirm

the Amalgamation (subject to the satisfaction of the terms and conditions set forth in the Application Agreement, including without limitation, receipt of the FICOM Consent and the Amalgamation Agreement, if and when entered into) and hereby authorize the entering into, execution, delivery and performance of the Amalgamation Agreement on the terms and conditions set forth in the Transactions Documents;

4. the directors of WSCU, upon receiving the FICOM Consent, hereby approve, authorize, sanction, ratify and confirm the completion, entering into, execution, delivery and performance of the Amalgamation Agreement by WSCU and both the Chairman of the Board and the President and Chief Executive Officer of WSCU be and are hereby authorized to and directed for and on behalf of WSCU and in its name and under its seal or otherwise to jointly execute and deliver the Amalgamation Agreement;

5. upon receipt of the FICOM Consent (and satisfaction of the conditions and covenants set forth in the Application Agreement) and the entering into of the Amalgamation Agreement, the directors of WSCU hereby approve, authorize, sanction, ratify and confirm the call for a vote of its members in respect of the Amalgamation, in accordance with its Rules and the Acts and the calling of a special meeting of the members to review the results of said vote on the Amalgamation in accordance with its Rules, the Acts and the Transaction Documents;

6. the directors of WSCU hereby approve, authorize, sanction, ratify and confirm the completion, entering into, execution, delivery and performance of the Transactions Documents by WSCU and both the Chairman of the Board and the President and Chief Executive Officer of WSCU be and are hereby authorized to and directed for and on behalf of WSCU and in its name and under its seal or otherwise to jointly execute and deliver the Transactions Documents;

7. the Chairman of the Board and the President and Chief Executive Officer of WSCU, jointly, be and are hereby authorized and directed for and on behalf of WSCU and in its name and under its seal or otherwise to do all such further and other acts and things and execute or cause to be executed such further and other elections, transfers, assignments instruments, agreements, certificates, acknowledgments, guarantees, declarations, documents, undertakings,

resolutions, powers of attorney and other writings which are, in the opinion of such individuals, necessary or desirable to obtain the FICOM Consent and to complete the Amalgamation as more particularly provided in the Transactions Documents and to give effect to the foregoing resolutions, and to further amend and negotiate any instruments or agreements to complete the Amalgamation, unless such amendments or negotiations results in a material change to the Transaction Documents or the Amalgamation which will require approval of the directors of WSCU;

8. all agreements, documents, deeds, instruments, certificates, writings, acts or proceedings connected with or pertaining to the matters contemplated by the Amalgamation, the Amalgamation Agreement, or pertaining to the matters contemplated by these resolutions which may heretofore have been executed, made, done or performed by or on behalf of WSCU in connection with the matters contemplated by the Amalgamation, the Amalgamation Agreement, or in connection with the matters contemplated herein are hereby ratified, confirmed, sanctioned and approved by the directors of WSCU;

9. this resolution is effective as of the 21st day of February, 2019.

6. NEW PROSPERA RULES

Please see attached.

PROSPERA

Rules

2020

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PROSPERA CREDIT UNION RULES

- 2020 -

INDEX RULE SUBJECT PAGE#

DEFINITIONS ......................................................................................... 3

INTERPRETATION ................................................................................. 5

RULE 1 MEMBERSHIP ........................................................................................ 5

RULE 2 VOTING .................................................................................................. 6

RULE 3 SHARES ................................................................................................. 8

RULE 4 DEPOSITS .............................................................................................. 8

RULE 5 BORROWING AND LENDING ................................................................ 9

RULE 6 BOARD OF DIRECTORS ....................................................................... 9

RULE 7 PROCEEDINGS OF THE BOARD OF DIRECTORS ............................ 11

RULE 8 ELIGIBILITY TO BE A DIRECTOR ....................................................... 14

RULE 9 NOMINATION AND ELECTION OF DIRECTORS ................................ 16

RULE 10 INDEMNIFICATION AND PROTECTION OF DIRECTORS,

OFFICERS AND CERTAIN AGENTS ................................................... 22

RULE 11 GENERAL MEETINGS ......................................................................... 23

RULE 12 ALTERATION ....................................................................................... 25

RULE 13 SPECIAL RESOLUTIONS .................................................................... 25

RULE 14 AUDITOR .............................................................................................. 27

RULE 15 FINANCIAL YEAR END ........................................................................ 28

RULE 16 SEAL .................................................................................................... 28

RULE 17 MISCELLANEOUS................................................................................ 28

SCHEDULE A SPECIAL RIGHTS AND RESTRICTIONS CLASS A MEMBERSHIP EQUITY SHARES ........................................ 30

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Prospera Credit Union Rules

DEFINITIONS The meaning of any words or phrases defined in the Credit Union Incorporation Act, the Financial Institutions Act, and, to the extent that it applies to the Credit Union, the Business Corporations Act, shall, if not inconsistent with the subject or context, have the same meaning in these Rules. Further, in these Rules, unless the subject or context is inconsistent therewith: (a) Annual General Meeting means the annual general meeting of the members of the

Credit Union; (b) Board of Directors or Board means the board of directors of the Credit Union;

(c) Board Committee means a committee of the Board of Directors appointed by the Board

of Directors pursuant to these Rules; (d) Business Corporations Act means the Business Corporations Act of British Columbia

from time to time in force and all amendments thereto and regulations made pursuant thereto;

(e) Candidate means an individual whose nomination to be a Director has been accepted by the Nominations Committee;

(f) Chair means the chair of the Board of Directors; (g) Chief Executive Officer means the chief executive officer of the Credit Union appointed

by the Board of Directors; (h) Credit Union means Prospera Credit Union; (i) Credit Union Incorporation Act means the Credit Union Incorporation Act of British

Columbia from time to time in force and all amendments thereto and regulations made pursuant thereto;

(j) Director means a director of the Credit Union for the time being; (k) Election Guidelines means the guidelines approved by the Board of Directors from time

to time for Candidates in relation to a Directors election;

(l) Electronic means created, recorded, transmitted or stored in digital or other intangible form by electronic, magnetic or optical means or by any other similar means, including without limitation by transmission of data or information through computer networks (including without limitation the Internet), and any other similar means;

(m) Electronic Transactions Act means the Electronic Transactions Act of British Columbia from time to time in force and all amendments thereto and regulations made pursuant thereto;

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(n) Employee includes a person who is paid to provide his or her services, directly or

indirectly, to the Credit Union or a subsidiary of the Credit Union, as the case may be, on a full-time or part-time basis as an employee. The Board of Directors may, in its discretion, determine additional criteria for determining whether a person is an “employee” for the purposes of these Rules;

(o) Financial Institutions Act means the Financial Institutions Act of British Columbia from time to time in force and all amendments thereto and regulations made pursuant thereto;

(p) Financial Literacy or Financially Literate means the ability of a person to:

(i) understand and interpret the Credit Union’s financial performance, and in particular, the relationship between the Credit Union’s strategic plan and its financial outcomes;

(ii) understand the basic principles of business and finance to enable him or her to make sound decisions on behalf of members of the Credit Union; and

(iii) to the extent not covered above, fulfil the Financial Institutions Commission's expectations of directors with respect to financial literacy as such may evolve from time to time;

(q) First Directors means the initial Directors of the Credit Union appointed on

amalgamation;

(r) Governance Policy means the Credit Union's policy, as approved and amended from time to time by the Directors, in respect of rules and policies of the Credit Union relating to governance matters;

(s) Immediate Family means (i) Spouse (including any persons living in a marriage-like relationship continuously for the past 2 years), child, stepchild, parent, step-parent or sibling; and (ii) any relative living in the same household as that person;

(t) Junior Member means a member who is below the age of majority as determined by

the Age of Majority Act of British Columbia; (u) Member in Good Standing means a member, including a Junior Member who, as at

the Voting Record Date has purchased, paid for and holds the number of Class A Membership Equity Shares required by these Rules;

(v) Ordinary Resolution means a resolution of the Credit Union passed at a general

meeting by a simple majority of the votes cast by members of the Credit Union eligible to vote pursuant to these Rules;

(w) Performance Standards means the standards approved by the Board of Directors from time to time and set out in the Governance Policy, that Directors must adhere to in the exercise of their role and responsibilities as Directors of the Credit Union;

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(x) Political Office means either (a) a government office that is obtained by election, or (b) an office created by a constitution or legislative act, having a definite tenure, and involving the power to carry out some governmental function;

(y) Pre-amalgamation Predecessor(s) means Westminster Savings Credit Union, incorporation number FI-69, and Prospera Credit Union, incorporation number FI-147;

(z) Registered Holder means with respect to an issued share in the capital of the Credit

Union, the person registered in the books and records of the Credit Union as being the member holding that share;

(aa) Returning Officer means a returning officer appointed pursuant to these Rules; (bb) Securities Act means the Securities Act of British Columbia from time to time in force

and all amendments thereto and regulations made pursuant thereto; (cc) Special Resolution means, subject to the requirements of the Credit Union

Incorporation Act and any amendments thereto, a resolution of the Credit Union passed at a general meeting by a majority of not less than ⅔ of the votes cast by members of the Credit Union eligible to vote pursuant to these Rules;

(dd) Spouse has the meaning given to it in the Credit Union Incorporation Act and includes a

Spouse of the same or opposite sex; (ee) Vice Chair means the vice chair of the Board of Directors; and (ff) Voting Record Date means the date determined by the Board of Directors pursuant to

these Rules, on which a Member in Good Standing is determined for the purposes of voting in the election of Directors, on Special Resolutions, on matters to be considered at a general meeting and any other matter.

INTERPRETATION These Rules are subject to and must be read and applied in conjunction with, the Credit Union Incorporation Act, the Financial Institutions Act, the Business Corporations Act and all amendments thereto and Regulations made pursuant to these Acts. Except where such Acts state the Rules may otherwise provide, any applicable provision of such Acts that is inconsistent with these Rules shall prevail. 1. MEMBERSHIP

1.1 Application for Membership. Every application for membership in the Credit Union shall be in writing or by Electronic means and be accompanied by payment in full of the number of Class A Membership Equity Shares required to be held by a member on the date of application for membership. The Board of Directors may, in its sole discretion, delegate the authority to approve or reject applications for membership.

1.2 Policies for Purchase, Payment, Redemption, and Ownership of Shares. Subject to the provisions of the Credit Union Incorporation Act that specify the minimum number of Class A Membership Equity Shares for which a member

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must subscribe and pay, the Board of Directors may establish policies to waive or delay purchase, payment, redemption, and ownership in whole or in part of Class A Membership Equity Shares as required by these Rules, and may set minimum or maximum limits.

1.3 Withdrawal From or Termination of Membership. A member may withdraw

from membership, and the membership of any person may be terminated in accordance with the Credit Union Incorporation Act.

1.4 Junior Members.

(a) A Junior Member is not entitled to vote or be a Director of the Credit Union.

(b) The restrictions under these Rules for a Junior Member shall cease upon such member reaching the age of majority as determined by the Age of Majority Act of British Columbia and such member shall enjoy the rights and obligations of all other non-Junior Members, provided that such member then holds the number of Class A Membership Equity Shares required to be held by these Rules.

2. VOTING

2.1 Voting Eligibility. Only those Members in Good Standing on the Voting Record Date established pursuant to Rule 2.2, except a Junior Member, are eligible to vote in the election of Directors, on Special Resolutions, on matters to be considered at general meetings, and any other matter.

2.2 Voting Record Date.

(a) The Board may fix in advance a Voting Record Date; and (b) The membership list of the Credit Union will, for the purpose of the vote,

be closed and only those Members in Good Standing as of the close of business of the Credit Union on such date will be eligible to cast ballots in the election of Directors, on Special Resolutions, on matters to be considered at general meetings, or on any other matter.

2.3 Who May Vote. Subject to the exception contained in Rule 11.10, eligible

Members in Good Standing are entitled to one (1) vote in the election of Directors, on Special Resolutions, on matters to be considered at general meetings and on any other matter, to be cast by:

(a) in the case of an individual by the member; (b) in the case of a society, corporation, partnership or any other entity, who

is not an individual, by its representative (who may, but need not be a member of the Credit Union, but must be of the age of majority as defined by the Age of Majority Act of British Columbia) duly appointed in writing and deposited with the Credit Union as provided in the Credit Union Incorporation Act and in a form prescribed by the Nominations Committee, is authorized to vote at the meeting on behalf of the member.

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Such representative, if an eligible Member in Good Standing in their individual capacity, may vote in their individual capacity as well in their capacity as representative for such member society, corporation, partnership or other entity they represent.

2.4 No Proxy Voting. No member may vote by proxy. 2.5 Proof of Membership. Individuals and representatives may be required to

provide evidence of identity, age and membership, if applicable, and may be required to provide a declaration that the individual or representative has not previously cast a vote in the election of Directors, Special Resolution, any matter being considered at a general meeting, or any other matter then in progress.

2.6 Method of Voting. Subject to the Credit Union Incorporation Act, the Financial Institutions Act and the Electronic Transactions Act, the Board of Directors shall, not less than sixty (60) days prior to the Annual General Meeting, determine whether the vote on an election of Directors or Special Resolution will be by: (a) mail ballot; (b) ballot at a branch office; (c) Electronic means; or (d) a combination of any of the above methods. For greater certainty, the Board of Directors may select either the same or a different method of voting for a Special Resolution and for a Directors' election.

2.7 Distribution of Ballots. In accordance with the determination made by Rule 2.6, the Board of Directors shall, not less than sixty (60) days prior to the Annual General Meeting, determine the method by which ballots for the election of Directors or Special Resolution may be distributed: (a) to members by request in accordance with Rules 9.16 and 13.3; (b) to members by making ballots available in branch offices; (c) by Electronic means; (d) by mail to all members eligible to cast a ballot; or (e) a combination of some or all of the above methods.

2.8 Multiple Ballots. If a member casts more than one ballot in their individual capacity or more than one ballot in their representative capacity, in a Director’s election or Special Resolution vote, in each case all such ballots cast by the member will be void and none of them will be counted in the tally of ballots.

2.9 Returning Officer. At least sixty (60) days prior to the date on which voting is to commence on an election of Directors or Special Resolution, the Board of Directors shall appoint a Returning Officer who shall be responsible for the supervision of elections and of the voting on a Special Resolution and may, but need not, be a member of the Credit Union, but shall not be a Director or employee of the Credit Union. The Returning Officer, with the agreement of the Nominations Committee, may engage such other resources as may be necessary for the proper conduct of the election; and with the agreement of the Board of Directors, may engage such other resources as may be necessary for

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the proper conduct of the voting on the Special Resolution. If a proposed Special Resolution and election of directors is being held concurrently, then the Returning Officer appointed shall supervise both the Special Resolution vote and the election of Directors.

3. SHARES

3.1 Authorized Capital. The shares of the Credit Union shall consist of an unlimited number of Class A Membership Equity Shares with a par value of $1.00 each and such shares are the membership shares of the Credit Union and shall have attached thereto the special rights and restrictions as set out in attached Schedule A.

3.2 Membership Share Requirements. As a condition of admission as a member

of the Credit Union, each member is required to subscribe for, fully pay for and hold the following number of Class A Membership Equity Shares: (a) each member who is an individual, including a Junior Member – five (5)

shares; (b) if shares are held jointly, each joint account holder must hold – five (5)

shares; and (c) each member that is an incorporated or unincorporated entity – five (5)

shares.

3.3 Joint Ownership. (a) Class A Membership Equity Shares may be held jointly and the joint

holders must each acquire the requisite number of Class A Membership Equity Shares.

(b) All jointly held Class A Membership Equity Shares shall carry the right of

survivorship unless a contrary statement, in writing, is given at the time of subscription and signed by all parties jointly holding the shares.

(c) The Credit Union shall not be required to redeem any Class A

Membership Equity Share that is jointly held until one of the events described in paragraph 1.4(a) of Schedule A, Special Rights and Restrictions occurs in respect of the last surviving joint holder.

4. DEPOSITS

4.1 Deposit, Withdrawal, and Redemption Forms. The Board of Directors may determine the forms and methods (including by Electronic means) by which a person may place monies on deposit, withdraw monies on deposit, and the Board of Directors may, by resolution, delegate the power to make such determination.

4.2 Interest on Deposits and Distributions. Interest on deposits, in the absence of an express contract or agreement, shall be paid or credited at times,

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intervals and in a manner determined by the Board of Directors and the Board of Directors may, by resolution, delegate the power to make such determinations.

4.3 Joint Accounts. Accounts may be held jointly.

5. BORROWING AND LENDING

5.1 Directors Shall Determine Terms of Loans. Subject to the Credit Union Incorporation Act and the Financial Institutions Act, the Board of Directors shall determine the terms and conditions of loans including, but not limited to, interest, other charges, term, repayment, security and approval and may, by resolution, delegate the power to make loans and such determination.

5.2 Directors May Borrow. Subject to the Credit Union Incorporation Act and the Financial Institutions Act, the Board of Directors may raise and borrow money for the purpose of the Credit Union upon such terms and conditions as to interest, terms, repayment and security as they determine by resolution.

6. BOARD OF DIRECTORS

6.1 Number of Directors. The Board of Directors shall consist of nine (9) members except if a vacancy occurs, there is an insufficient number of qualified candidates nominated or the number of members of the Board is increased by Directors resolution to not more than fifteen (15) members pursuant to Rule 6.6. At no time can the number of members on the Board be less than five (5). Where the number of Directors is reduced to less than five (5), the continuing Directors may act for the purpose of filling vacancies up to that number, or to summon a general meeting of the Credit Union, but for no other purposes.

6.2 Term of Office. Except where a Director is appointed or elected pursuant to

Rule 6.5 to fill the unexpired portion of a term and subject to the provisions of Rule 6.6, each person elected as a Director shall take office for a three-year term so that, for continuity purposes, one-third (⅓) of the Board of Directors shall retire each year. A term of office commences immediately following the close of the Annual General Meeting following such election and ends as at the close of the third Annual General Meeting following the commencement of such term. A retiring Director is eligible to be nominated for re-election subject to Rule 6.3.

6.3 Term Limits. Subject to Rules 6.5 and 8.4:

(a) Other than First Directors, a Director of the Credit Union is eligible to serve a maximum of four (4) three-year terms, whether the terms are served consecutively or intermittently;

(b) First Directors are eligible to serve an aggregate maximum of twelve (12)

years, inclusive of any director terms served at either Pre-Amalgamation Predecessor;

(c) A Director who has served four (4) three-year terms, or, in the case of a

First Director, a Director whose previous terms of service with the Credit Union (including its pre-amalgamation predecessors) when combined

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with another three-year Director term would result in exceeding the twelve (12) total years described in (b) above, shall not be eligible to be nominated for re-election at the Annual General Meeting coinciding with the expiry of such Director’s most recent term of office;

(d) Partial terms held to fill a vacancy shall not be counted towards a

Director's term; and (e) The restriction in paragraphs (a), (b) and (c) of this Rule 6.3 is a lifetime

limit and shall apply to all current and future Directors.

6.4 Varying Terms. Where the offices of Directors being filled at any election are for different term lengths, the term of each person elected shall be determined in proportion to the number of votes received by the person, with the person receiving the greatest number of votes to hold office for the longest term, provided that if there are two (2) or more persons who receive an equal number of votes, the candidate for Director who has been recommended by the Nominations Committee shall hold office for the longest term, if both or neither candidate has been recommended by the Nominations Committee, than their term of office shall be determined by the Returning Officer by random draw, and if there is an election by acclamation the respective terms of the persons so elected shall be determined by random draw by the Nominations Committee.

6.5 Vacancy. If the number of Directors of the Credit Union prescribed in this Rule 6 is reduced by death, resignation, disqualification, or removal from office or by failure to elect or appoint a Director pursuant to these Rules or for any other reason, the remaining Directors, save as may be provided by any other provision in these Rules, shall have all of the powers of the Board of Directors until the vacancy or vacancies caused thereby have been filled by appointment or election. Subject to Rule 6.6, the remaining Directors may appoint a person eligible under Rule 8.2 to fill any such vacancy. Any person so appointed shall hold office until the close of the next Annual General Meeting, at which time the unexpired portion of the term vacated shall be filled through the nominations and election process prescribed by these Rules.

6.6 Number of Directors After Asset Purchase (a) Notwithstanding anything else contained in this Rule 6, if the Credit Union

completes an agreement for the purpose of purchasing all or substantially all of the assets or all of the shares of another credit union, the Board of Directors may by resolution appoint such additional Directors, who are eligible to serve as Directors under Rule 8.2, as the Board of Directors shall determine, at their sole discretion, and may designate the length of their terms of office, but the total number of Directors following such appointment shall not in any event exceed fifteen (15), and the term of office of any such additional Director shall not continue beyond the close of the third Annual General Meeting following such appointment.

(b) Where the term of a Director appointed pursuant to this Rule 6.6 has

expired or where such position becomes vacant prior to the termination of the term, no vacancy shall be deemed to exist and, for greater certainty,

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no person shall be appointed or elected pursuant to Rule 6.5 to fill any unexpired portion of the term of a Director appointed pursuant to this Rule 6.6, and Rule 6.2 shall not apply to any person appointed pursuant to this Rule 6.6 but a person so appointed whose term has expired shall be eligible for election for any other vacancy for which an election is to be held.

6.7 Removal of Director. A person may be removed as a Director by resolution

passed by not less than two-thirds (⅔) of the remaining Directors if that Director: (a) has failed, without being excused by the Chair (or, in the case of the

Chair, the Vice Chair), to attend (i) three (3) consecutive meetings of the Board of Directors, (ii) three consecutive regular meetings of any Board Committee to which the Director is a member, or (iii) more than a total of four (4) meetings of the Board and any Board Committee to which the Director has been appointed or elected in any given financial year; or

(b) has breached the policies concerning Conflict of Interest or the Code of

Conduct and Ethics for Directors; or (c) has breached the confidentiality of any proceedings, deliberations, or

information of the Board of Directors; or (d) has failed to uphold or maintain the standards for Directors set out in the

Performance Standards, as determined by the remaining Directors in accordance with the Governance Policy. At least seven (7) days prior to the meeting at which the removal of a Director is to be considered, the Corporate Secretary will provide such Director with notice of the meeting and the grounds for considering the Director’s removal. The Director may appear and make submissions at the meeting prior to the Directors voting on the resolution for the Director’s removal. Once such submissions are made the decision of the Board is final and binding.

6.8 Director Remuneration. The maximum annual aggregate compensation that is available for the remuneration of Directors is $500,000. The Board has the discretion to determine compensation and, in the case of Directors serving in additional capacities (committees, chair, etc.), allocation to individual Directors within the approved maximum annual aggregate compensation limit. Any adjustment to the maximum annual aggregate compensation amount for Directors shall be subject to the approval of members in accordance with the Financial Institutions Act.

7. PROCEEDINGS OF THE BOARD OF DIRECTORS

7.1 Frequency of Meetings. The Board of Directors shall meet at least four (4) times in each calendar year and not less frequently than once in each quarter, and shall hold at least two (2) Board planning sessions in each calendar year.

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7.2 Appointment of Officers. The Board of Directors shall: (a) elect from its own members a Chair and Vice Chair; (b) appoint a Chief Executive Officer to be the senior management officer

and President of the Credit Union; (c) appoint a Corporate Secretary; and (d) appoint such additional officers as it deems necessary for the continuing

operations of the Credit Union.

7.3 Calling Meetings. Upon notice pursuant to Rule 7.4, the Chair: (a) at any time may call a meeting of the Board of Directors; and (b) within fourteen (14) days of receipt of a request in writing to call a meeting

signed by three (3) Directors, shall call a meeting of the Board of Directors.

7.4 Notice of Meetings. Notice of the day, time and place of a meeting of the Board

of Directors shall be given to each Director at the last address left by the Director for that purpose by personal delivery, mail or Electronic means, not less than three (3) days before the meeting, provided that notice to a Director may be waived by that Director. Attendance at a meeting shall be deemed to be a waiver of such notice. Accidental omission to give notice of a meeting to, or the non-receipt of notice of a meeting by any Director shall not invalidate the proceedings at that meeting.

7.5 Waiver of Notice. A Director may waive notice of any past or present meeting of the Directors.

7.6 Quorum. A majority of the Directors shall constitute a quorum but a lesser number may adjourn from time to time until a quorum is obtained. A Director who is interested, directly or indirectly, in a proposed contract or transaction with the Credit Union may be counted for the purposes of determining a quorum.

7.7 Duties of Chair and Vice Chair. If the Chair is absent or is unable for any reason to act, or if the office of the Chair becomes vacant, the Vice Chair, or in their absence another member of the Board appointed by the Board of Directors shall assume and discharge the duties and responsibilities of the Chair at the meeting in question.

7.8 Questions Arising at Meetings. Any motion for a resolution arising at any

meeting of the Board of Directors, except those that arise under Rule 6.7, shall be decided by a majority of votes, and the Chair shall be eligible to vote and, in the event of deadlock, the Chair's vote shall also act as the casting vote.

7.9 Appointment of Committees. Subject to the Credit Union Incorporation Act and Financial Institutions Act, the Board of Directors:

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(a) shall, by resolution, elect or appoint Board Committees as required by the Financial Institutions Act consisting of such of the Directors and not fewer than three (3), as the Board of Directors thinks fit;

(b) may, by resolution, appoint one (1) or more other Board Committees

consisting of such of the Directors and not fewer than three (3), as the Board of Directors thinks fit; and

(c) may, by resolution, delegate to any such Board Committee the powers of

the Board of Directors and may from time to time revoke such delegation, but shall not delegate the following powers: (i) power to fill vacancies in the Board of Directors; (ii) the power to change the membership or fill vacancies in any

Board Committee appointed by the Board of Directors; and (iii) the power to appoint or to remove officers appointed by the Board

of Directors, or the power to declare dividends.

7.10 Terms of Reference. Any Board Committee elected or appointed pursuant to Rule 7.9 shall: (a) conform to any regulations that may from time to time be imposed upon it

by the Board of Directors; and (b) keep regular minutes of their meetings and cause them to be recorded in

books kept for that purpose.

7.11 Authority. The Board of Directors shall have the power at any time to revoke or override any authority given to any Board Committee and to terminate the election or the appointment or change the membership of any Board Committee elected or appointed pursuant to Rule 7.9 and to fill vacancies in it.

7.12 Committee Proceedings. Unless otherwise determined by the Board of Directors, the members of a Board Committee may meet and adjourn as they think proper and questions arising at the meeting of a Board Committee shall be decided by a majority of votes and the chair of the Board Committee appointed in accordance with the Governance Policy shall not vote except in the event of an equality of votes.

7.13 Committee Quorum. A majority of the members of a Board Committee shall

constitute a quorum and a Director who is interested, directly or indirectly, in a proposed contract or transaction with the Credit Union may be counted for the purposes of quorum.

7.14 Ex officio Basis. Where the Chair serves as a member of a Board Committee

solely on an ex officio basis, the Chair shall not be counted in determining quorum for the Board Committee and shall not have a vote at meetings of that Board Committee, unless otherwise stated in the terms of reference adopted by the Board of Directors for such Board Committee.

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7.15 Meetings by Telecommunications. If a majority of the Directors present at or

participating in a meeting consent, a meeting of Directors or a Board Committee of Directors may be held by means of Electronic or other communications facilities that allow all Directors participating in the meeting to communicate with each other during the meeting, and a Director who participates in the meeting by those means shall be deemed to have so consented and to be present at the meeting and shall be counted in the quorum therefore and entitled to speak and vote thereat using those means. A meeting held under this Rule 7.15 shall be deemed to be held at the place where the records office of the Credit Union is located.

7.16 Consent Resolution. A resolution, whether or not in counterpart, consented to

in writing or by Electronic means, by all Directors or all the members of a Board Committee and filed with the minutes of the Board of Directors or the Board Committee shall be as valid and effectual as if it had been passed at a meeting of the Board of Directors or of the Board Committee, duly called and constituted.

8. ELIGIBILITY TO BE A DIRECTOR

8.1 Eligibility for Election/Appointment as a Director. Each person, other than a

Junior Member or a person disqualified by Rule 8.2, who: (a) has been a Member in Good Standing of the Credit Union, or who is at the

time a Member in Good Standing of the Credit Union and has been a member of another credit union of which all or substantially all of the assets or all of the shares of which have been purchased by the Credit Union, for at least ninety (90) days immediately before, in the case of a Directors election, the date of the Annual General Meeting at which the member is to be elected, or, in the case of filling a vacancy, the date the vacancy occurred; and

(b) is not more than ninety (90) days delinquent in any obligation to the Credit

Union, is eligible to be a Director.

8.2 Disqualification of Candidates and/or Board Members. A person is not

eligible to be elected or appointed to the office of Director and, if holding the office of Director, shall immediately vacate the office, if such person:

(a) is a person disqualified from becoming or acting as a Director, pursuant to

the Business Corporations Act, the Credit Union Incorporation Act or the Financial Institutions Act; or

(b) is not, or ceases to be, eligible to be insured as required under the

Financial Institutions Act; (c) is, or any member of their Immediate Family is, an employee of the Credit

Union Deposit Insurance Corporation of British Columbia, an auditor of a credit union or any person holding Political Office, who in the course of

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their duties in Political Office, has a direct or indirect influence over the affairs of the credit union industry;

(d) is an employee of the Credit Union, a subsidiary of the Credit Union or an

affiliated corporation of the Credit Union in which the Credit Union holds shares or a person who is a member of the Immediate Family of such an employee;

(e) a person who is a member of the Immediate Family of a person who is a

candidate or is an incumbent Director who would be on the Board at the same time as that person if that person was elected;

(f) a person who has received from the Credit Union or any of its

subsidiaries, or a person who was, or is a director or officer of a corporation, or a shareholder of a corporation controlled by that person, which has received from the Credit Union or any of its subsidiaries, payments for services of more than $10,000 during the one-year period prior to the date for the close of nominations determined in accordance with Rule 9.2 other than payment received as remuneration for the person acting in the capacity of Director of the Credit Union, or a person who is a member of the Immediate Family of such a person;

(g) has been an employee of the Credit Union (including its Pre-

amalgamation Predecessors), a subsidiary of the Credit Union (including its Pre-amalgamation Predecessors) or an affiliated corporation in which the Credit Union holds shares at any time during the seven (7) year period immediately before such member’s election or appointment, or has been an employee or director of a credit union duly registered to carry on business in the Province of British Columbia, a subsidiary of such credit union or an affiliated corporation in which the Credit Union holds shares at any time during the seven (7) year period immediately before such member’s election or appointment;

(h) has ever been in default under any obligation to the Credit Union

(including its Pre-amalgamation Predecessors) and has failed to pay the debt in full together with accrued interest;

(i) is a director, officer, agent, or employee, or the Immediate Family of a

director, officer, agent or employee of a credit union (except a person who is a director or officer of a Central Credit Union), bank, trust company, savings and loan association, loan company, leasing company or any other firm, association, syndicate, company, corporation or other business enterprise engaged in or concerned with or interested in any business or any part thereof from time to time carried on by the Credit Union or by any of its subsidiaries, except where the Board of Directors determines, by resolution, that this Rule 8.2(i) shall not apply to such person;

(j) while holding office as a Director, or while being a Candidate, has been

more than ninety (90) days delinquent in any obligation to the Credit Union;

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(k) being a Director, fails to complete the director training program, if any, required by the Credit Union Incorporation Act within the period specified under the Credit Union Incorporation Act;

(l) while holding office as a Director, or while being a candidate in a directors election, ceases to hold the number of membership shares required by these Rules;

(m) while holding office as a Director, runs for Political Office; (n) was previously removed at any time from the position of Director of the

Credit Union (including its Pre-amalgamation Predecessors) by the Board of Directors in accordance with Rule 6.7;

(o) was disqualified as a Candidate in any previous Directors election for not

complying with these Rules or the Election Guidelines; (p) has breached these Rules or the Election Guidelines when the Director

was a candidate for election as a Director; or (q) has exceeded the term limits described in Rule 6.3.

8.3 Statement of Disclosure. Every nominee for election or appointment as a

Director shall file with the Nominations Committee, if for election, or with the Board of Directors, if for appointment, in forms prescribed by the Board of Directors: (a) the declaration as set out in Rule 9.7; and (b) a statement of all known conflicts of interest between the nominee and

the Credit Union. The declaration and statement shall not excuse the nominee, if elected or appointed, from compliance with the Credit Union Incorporation Act, the Financial Institutions Act, and the Business Corporations Act, Credit Union policies and these Rules.

8.4 Financial Literacy. At least one-third (⅓) of the Directors on the Board must be Financially Literate. If at least one-third (⅓) of the Directors are not Financially Literate, the number of Directors on the Board shall be increased, and the Board of Directors must appoint such number of individuals to the Board of Directors that are Financially Literate to ensure that at least one-third (⅓) of the Directors are Financially Literate. The term of a Director appointed pursuant to this Rule shall be until the close of the next Annual General Meeting.

9. NOMINATION AND ELECTION OF DIRECTORS

9.1 Appointment of Nominations Committee. Not later than forty-five (45) days following each Annual General Meeting, the Board of Directors shall appoint a Nominations Committee of not less than three (3) Directors provided that no

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Director whose term of office expires at the next Annual General Meeting following the appointment of the committee may serve as a member of the committee.

9.2 Call for Nominations. At least ninety (90) days before an Annual General

Meeting, the Nominations Committee shall: (a) notify members of the Credit Union that an election of Directors is to take

place, specifying the number of positions known at that time that are required to be filled and the candidate criteria required;

(b) notify members of the Credit Union of the date on which a member must

be a Member in Good Standing to be eligible for nomination for the position of Director;

(c) invite members to submit to the Nominations Committee in such form or

forms the Nominations Committee shall from time to time prescribe for that purpose, the names of proposed candidates prior to the date specified in the notice, which date shall not be less than thirty (30) days from the date of the notice;

(d) advise members that, for purposes of being eligible to nominate a

member and to be eligible to vote in an election of Directors, a member, other than a Junior Member, must be a Member in Good Standing on the Voting Record Date established in accordance with Rule 2.2; and

(e) provide to members such information as the Nominations Committee

determines with respect to the role and responsibilities of the Board of Directors and individual Directors, and guidelines and qualifications for candidates for the position of Director.

9.3 Number of Nominations Required. Candidates for Director must be nominated

either by the Nominations Committee or in writing by three (3) Members in Good Standing as at the date stated in the Call for Nominations, and of the age of majority. No member, other than a member of the Nominations Committee, may nominate more than one (1) candidate in respect of an election of Directors.

9.4 Form of Nomination. Each nomination of a member as a Candidate must be in the form and accompanied by such information as is prescribed by the Nominations Committee from time to time.

9.5 Rejection of Nomination. If at least two-thirds (⅔) of the Nominations Committee resolved that a member’s nomination information is in any material respect false, incomplete or misleading, or that the candidacy is frivolous, vexatious or for the purpose of harming the Credit Union or is not in accordance with these Rules, the Nominations Committee may reject the member as a candidate for Director. The Nominations Committee will notify the Nominee of the rejection and provide its reasons in writing, within a reasonable amount of time following its decision, and such written notice shall be delivered to the Nominee by Electronic means and if such method was not provided by the Nominee the

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written notice shall be delivered to the Nominee by mail, and the decision made by the Nominations Committee will be final and binding.

9.6 Candidate Interview. Before the name of a member is placed in nomination as

a candidate for election as a Director the Nominations Committee may require that member to attend an interview with the Nominations Committee at the time and place specified by the Nominations Committee. If an individual is not able to attend an interview due to extenuating circumstances, the Nominations Committee may waive the applicable attendance requirement. The Nominations Committee may waive this attendance requirement for any member who is then currently serving on the Board of Directors.

9.7 Declaration of Candidate Required. Before the name of a person is placed in nomination as a Candidate, that person shall deliver to the Nominations Committee a declaration, in writing, stating that the member is willing: (a) to stand for election, and if elected or appointed, to serve as a Director; (b) to observe the provisions of applicable law, including, but not limited to,

the Credit Union Incorporation Act, the Financial Institutions Act, the Business Corporations Act and the Securities Act of British Columbia, as applicable;

(c) to comply with the policies concerning Conflict of Interest and the Code of

Conduct and Ethics, each as adopted by the Board of Directors from time to time; and

(d) to observe these Rules and the procedures relating to the election and

conduct of Directors contained herein, and that the person meets the criteria to serve as a director for which he or she has been proposed as set out in the notice issued by the Nominations Committee and that the member is not disqualified under Rule 8.2.

9.8 Acceptance of Nominations. The Nominations Committee shall examine each

nomination received and determine whether the nomination complies with the Financial Institutions Act and these Rules, and shall accept each nomination of a member qualified to be a candidate whose nomination complies with the Financial Institutions Act and these Rules and is otherwise in order and shall reject each nomination of a member who is not qualified to be a candidate under Rule 8.2 or whose nomination does not comply with the Financial Institutions Act or these Rules or is otherwise not in order and shall notify each nominee accordingly and shall, forthwith after the date on which nominations close: (a) inform each member whose nomination has been accepted of the

provisions of these Rules with respect to the conduct of the election and provide to each member whose nomination has been accepted a copy of these Rules, the Election Guidelines and any determinations of the Board of Directors relating to elections and the conduct thereof, including campaign rules;

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(b) request that each member whose nomination has been accepted complete and deliver to the Nominations Committee, the personal information return required to be submitted to the Superintendent pursuant to the Financial Institutions Act in the event such member becomes a Director of the Credit Union;

(c) place in nomination the names of all qualified Candidates nominated in

accordance with these Rules, including those qualified Candidates nominated by the Nominations Committee, at least equal to the number of vacancies to be filled in the election; and

(d) recommend any number of candidates and may communicate its

recommendation to the members in such manner as it deems fit. For further clarification, the Nominations Committee is not required to recommend any Candidates to the membership.

9.9 Campaigning Rules. Subject to applicable laws, the Board of Directors shall

from time to time determine the method and manner in which candidates shall be permitted to campaign for election and candidates shall campaign in accordance with the permitted method and manner as determined by the Board of Directors, and set out in the Election Guidelines.

9.10 Campaigning Prohibited. Notwithstanding Rule 9.9, no candidate shall:

(a) campaign, or permit any person to knowingly campaign in a manner prohibited by the Election Guidelines; or;

(b) interfere with, ingress or egress to the property of the Credit Union; in connection with any election, except in the method and manner permitted pursuant to these Rules, the Election Guidelines and any regulations as may be determined by the Board of Directors.

9.11 Campaigning Disqualification. Subject to applicable laws, a Candidate who campaigns or permits any person to campaign on his or her behalf in any method or manner which is not in compliance with these Rules, the Election Guidelines or is other than as determined by the Board of Directors shall be requested by the chair of the Nominations Committee to cease such action and to comply with the Rules and Election Guidelines. If the Candidate fails to comply immediately with the request made by the Nominations Committee, the Nominations Committee shall disqualify the Candidate and no vote cast in favour of that Candidate shall be counted in the tally of ballots, but the ballots shall not otherwise be deemed to be void. Within a reasonable amount of time following the disqualification of a Candidate by the Nominations Committee, the Nominations Committee shall deliver written notice of such disqualification to the Candidate and the notice shall specify the reason or reasons for the disqualification, and such written notice shall be delivered to the Candidate by Electronic means and if such method was not provided by the Candidate the written notice shall be delivered to the Candidate by mail. The determination of the Nominations Committee shall be final and binding.

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9.12 Conduct of Candidates. Notwithstanding Rule 9.9, no Candidate shall interfere with the election process or seek assistance in connection with the election from any employee of the Credit Union or subsidiary thereof, the Returning Officer or any person employed by the Returning Officer.

9.13 Acclamation. If the number of qualified candidates nominated for the offices for

which the election is to be held is less than or equal to the number of offices to be filled, the candidates so nominated shall be declared elected by acclamation by the Nominations Committee, and, for the remaining vacant position(s), the Board will appoint one or more individuals in accordance with Rule 6.5.

9.14 Elections to be Held. Where the number of qualified candidates nominated for

the offices for which the election is to be held exceeds the vacancies to be filled, an election will be held before the next Annual General Meeting of the Credit Union.

9.15 Validity of Ballots. A ballot cast in the election of directors must: (i) contain

votes for the number of persons to be elected and any ballot indicating another intention is void; and (ii) be received by the Returning Officer by the voting deadline and in the manner specified in the voting instructions otherwise the ballot is void.

9.16 Notice of Election to Members. Where an election is to be held, the Nominations Committee shall provide to all Members in Good Standing entitled to vote in the election:

(a) a list of conditions under which the member will be eligible to vote; (b) a description of all available options for voting and applicable process

for each; (c) notice of the dates during which voting in the election shall take place,

specifying the date by which the ballot must be received by the Returning officer in order to be counted, which day must be not less than seven (7) days from the date that voting commences;

(d) if the member is not an individual, the form of written authorization

required to appoint an authorized representative of the member to vote on behalf of the member and clear and precise instructions for completing and returning the authorization with the ballot;

(e) a brief description of each of the Candidates prepared by the

Nominations Committee and instructions on how additional information regarding the Candidates may be accessed or obtained;

(f) such other materials as the Nominations Committee deems necessary

or advisable in connection with the voting, including its recommendation of any candidate;

and in accordance with the determination made by the Board of Directors pursuant to Rule 2.6:

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(g) advise of the right of each member to either (i) request in writing or by

telephone that a ballot be provided to the member by mail, which ballot shall then be cast by mail or (ii) request in person at a branch of the Credit Union a ballot, which ballot shall then be cast by mail;

The Nominations Committee may provide these items by mail, or by Electronic or other means in accordance with the Electronic Transactions Act of British Columbia, including advertisement.

9.17 Non-Electronic Ballots. If, in accordance with Rule 2.6, the Board of Directors determines that the method of voting in a Directors election will include mail ballots, or if a member requests a mail ballot pursuant to Rule 9.16(g), the Nominations Committee will provide with the notice of election or to the member, as the case may be: (a) a ballot with the names of all candidates listed alphabetically, which

allows for verification that the member voting is a Member in Good Standing, and provides for confidentiality of voting; and

(b) clear instructions for casting and returning the ballot, which will specify the day and time by which the ballot must be received by the Returning Officer in order for the ballot to be considered valid.

9.18 Lost or Destroyed Ballot. If a member who is eligible to vote in the election,

does not receive a ballot pursuant to Rule 9.16(g), or loses or destroys the ballot before it is cast, then upon receipt prior to the close of voting of a declaration, in the form prescribed by the Nominations Committee, from that member that the ballot was not received, or has been lost or destroyed, and that the member has not cast a ballot in the election and signed by that member, the Credit Union shall make available to that member a replacement ballot and any other information to be provided pursuant to Rule 9.16.

9.19 Candidate Becomes Ineligible.

(a) If a Candidate dies, becomes ineligible for election under these Rules, withdraws their nomination, or is disqualified under these Rules before the end of the nomination period, the election will proceed as if the Candidate was not nominated.

(b) If a Candidate dies, becomes ineligible for election under these Rules, withdraws their nomination, or is disqualified under these Rules during the voting period for election, the election will proceed as if the Candidate was not nominated and no vote cast in favour of such candidate shall be counted in the tally of ballots, but the ballots shall not otherwise be deemed to be void. If, as a result of such death, ineligibility or withdrawal, the number of Candidates is equal to the number of vacancies to be filled in that director’s election, the Candidates will be elected by acclamation.

9.20 Supervision of Vote. The Returning Officer shall supervise the election of

Directors and:

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(a) may require a member to provide proof and particulars of membership

and may require a member to provide a declaration, in the form prescribed by the Nominations Committee, that the member has not previously cast a ballot in the election then in progress signed by the member;

(b) shall obtain all ballots and, after the close of balloting, shall cause a tally

to be made of all ballots, such tally to be made in a manner that ensures the secrecy of the balloting;

(c) notwithstanding anything herein contained, the final decision in

determining whether a ballot is to be accepted or rejected shall be made prior to the tallying of votes by the Returning Officer, whose discretion is absolute and not open to question or review.

9.21 Ties. If two or more Candidates receive the same number of votes in an election

of Directors:

(a) The Candidate who has been recommended by the Nominations Committee shall be elected; or

(b) If both or neither Candidate has been recommended by the Nominations

Committee, then the elected Candidate will be determined by random draw by the Returning Officer, prior to the Annual General Meeting.

9.22 Communication of Election Results. As soon as practicable, but no later than

ten (10) days from the closing of an election and no later than twenty-four (24) hours before the commencement of the Annual General Meeting, the Returning Officer shall communicate the results of the election to the Chair of the Nominations Committee, who will communicate such results to each of the Directors and each of the Candidates for election.

9.23 Announcement of Election Results. The results of the election shall be announced at the next Annual General Meeting following the election.

9.24 When Directors Take Office. A person elected as a Director shall take office at

the close of the Annual General Meeting next following his or her election or at such later date as the Superintendent accepts the person’s Personal Information Return for filing.

9.25 Notice of Directors. A notice of the election or appointment of a person as a Director of the Credit Union shall be filed with the Superintendent in accordance with all applicable laws.

10. INDEMNIFICATION AND PROTECTION OF DIRECTORS, OFFICERS AND CERTAIN AGENTS

10.1 Indemnification. Subject to the Financial Institutions Act, the Credit Union shall

indemnify:

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(a) each Director and officer of the Credit Union; (b) each former Director and officer of the Credit Union; and (c) each person who acts or who has acted at the request of the Credit Union

as a director or officer of a corporation of which the Credit Union is or was a shareholder or creditor;

against all costs, charges and expenses, including an amount paid to settle any action or proceeding or to satisfy any judgment, reasonably incurred by the Director, officer, former Director, former officer or person for any civil, criminal or administrative action or proceeding, whether threatened, pending, continuing or completed, to which the Director, officer, former Director, former officer or person is or may be made a party by reason of being or having been a Director or officer of the Credit Union or corporation, if the Director, officer, former Director or former officer of the Credit Union or corporation acted honestly and in good faith with a view to the best interests of the Credit Union or corporation, as the case may be, and, in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the Director or officer or former Director or former officer of the Credit Union or corporation has reasonable grounds for believing that his or her conduct was lawful, and if the Director, officer, former Director, former officer or person is required to include in income or in the income of that individual’s estate, any payment made under this indemnification for the purpose of determining income tax payable by the Director, officer, former Director, former officer or person, the Credit Union shall pay an amount by way of indemnity that will fully indemnify for the amount of all liabilities described herein and all income taxes payable as a result of the receipt of the indemnity payment.

11. GENERAL MEETINGS

11.1 Notice of General Meeting. In addition to the methods of giving notice of a

general meeting provided by the Credit Union Incorporation Act, notice may be delivered by Electronic means, in which case the provisions of Rule 17.3 apply.

11.2 Date of Annual General Meeting. Annual General Meetings of the Credit Union

shall be held annually on a date fixed by the Board of Directors and shall be convened and held in accordance with the provisions of the Credit Union Incorporation Act and these Rules.

11.3 Other General Meetings. Other general meetings may be convened and held in

accordance with the provisions of the Credit Union Incorporation Act. Every general meeting not being the annual meeting shall be considered a special general meeting.

11.4 Rules of Order. Subject to the Credit Union Incorporation Act and these Rules,

a general meeting may adopt rules of order for its conduct, but if no rules are adopted, the current edition of Robert’s Rules of Order Newly Revised shall be used.

11.5 Quorum. At general meetings of the Credit Union, fifty (50) Members in Good

Standing as at the Voting Record Date established pursuant to Rule 2.2, shall

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constitute a quorum, but a lesser number may adjourn from time to time until a quorum is obtained.

11.6 Member Verification. At general meetings each person must on request

present evidence of identity, age and being a Member in Good Standing.

11.7 Chair of General Meeting. The Chair or in the absence of the Chair, the Vice

Chair or in the absence of both of them, another member of the Board appointed by the Board of Directors, shall be the Chair of all general meetings.

11.8 Ordinary Resolutions. Except for Ordinary Resolutions proposed by the Board

of Directors, any member proposed Ordinary Resolution must be submitted to the Board for review at least ninety (90) days prior to the commencement of a general meeting in order for the resolution to be eligible for consideration by the members at such general meeting.

11.9 Manner of Voting. Subject to these Rules and the Credit Union Incorporation Act the Chair shall determine whether voting at a meeting of the Credit Union shall be undertaken by show of hands or by written vote on any matter, other than an election of directors or a Special Resolution, to be voted on at a meeting of the Credit Union. A declaration by the Chair that a resolution has been passed will be conclusive evidence of the fact.

11.10 Casting Vote. No member shall cast more than one (1) vote on a resolution

except that in the case of an equality of votes, whether by show of hands, poll or ballot, the Chair of the meeting shall have a second or deciding vote.

11.11 Order of Business. So far as practical the order of business at an Annual

General Meeting shall be:

(a) Call to Order

(b) Ascertainment of Quorum

(c) Appointment of Recording Secretary and Parliamentarian

(d) Adoption of Agenda

(e) Approval of Minutes of previous general meetings

(f) Pending Business

(g) Receipt of the Report of Board of Directors

(h) Receipt and Approval of the Report of the Auditor

(i) Appointment of Auditor

(j) Receipt of the Report of the Chief Executive Officer

(k) Receipt of the Financial Statements

(l) Receipt of Reports of any Board Committees

(m) Report of Election of Directors

(n) Other Resolutions

(o) Other Business

(p) Adjournment

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11.12 Decorum. The Chair of a general meeting may refuse entry to, or request removal from a general meeting, any individual the Chair determines, in his or her sole discretion, is acting in an inappropriate manner.

11.13 Multiple Locations. The Board of Directors may in their discretion determine that a general meeting (including without limitation an Annual General Meeting) may be held at two or more places by means of electronic or other communication facilities that allow all persons participating in the meeting to communicate with each other during the meeting, all of which together shall constitute one single meeting. A person who participates in a general meeting held in accordance with this Rule 11.13 shall be deemed to be present at the meeting and shall be counted in the quorum therefor. Any person participating in a meeting under this Rule 11.13 and entitled to vote at the meeting may, subject to the Credit Union Incorporation Act, the Financial Institutions Act and the Electronic Transactions Act, vote by means of the electronic or other communication facilities made available by the Credit Union for that purpose.

11.14 Permitted Attendees. The only persons entitled to be present at a general

meeting are:

(a) those entitled to vote; (b) the Directors of the Credit Union; (c) the auditors of the Credit Union; (d) others who, although not entitled to vote, are entitled or required under

any provision of the Credit Union Incorporation Act, the Financial Institutions Act or the Business Corporations Act or these Rules to be present at the meeting; and

(e) any other person may be admitted only on the invitation of the Board or with the consent of the meeting.

12. ALTERATION

12.1 Special Resolution Required. The Credit Union may alter its Constitution or these Rules by Special Resolution from time to time.

13. SPECIAL RESOLUTIONS

13.1 Notice of Special Resolution. In addition to the methods of giving notice of a Special Resolution provided by the Credit Union Incorporation Act, notice may be delivered by Electronic means, in which case the provisions of Rule 17.3 shall apply.

13.2 Special Resolutions. Subject to the Credit Union Incorporation Act, Special Resolutions:

(a) may be proposed by the Board of Directors; and

(b) may be proposed by the members, and if so proposed must be signed by

not less than five (5) per cent in number or three hundred (300) Members in Good Standing, whichever is the lesser, who are eligible to vote, and must be requisitioned in accordance with the provisions of the Credit

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Union Incorporation Act, and deposited at the registered office of the Credit Union at least ninety (90) days before a general meeting.

and such proposed Special Resolutions, whether proposed by the Board of Directors or requisitioned by a member, shall be brought before the membership to vote at the next Annual General Meeting, and the Directors may, but shall not be required to, convene a special general meeting in conjunction with any resolution proposed by the Board of Directors for consideration by the membership.

13.3 Voting Information. Subject to the Credit Union Incorporation Act, the Board of

Directors shall provide to all Members in Good Standing entitled to vote on a Special Resolution: (a) a list of conditions under which the member will be eligible to vote; (b) a description of all available options for voting and applicable process for

each; (c) notice of the dates during which voting on the Special Resolution shall

take place; specifying the date by which the ballot must be received by the Returning Officer in order to be counted, which day must be not less than seven (7) days from the date that voting commences;

(d) if the member is not an individual, the form of written authorization

required to appoint an authorized representative of the member to vote on behalf of the member and clear and precise instructions for completing and returning the authorization with the ballot;

(e) the wording of the Special Resolution with required or permitted

information as the Board of Directors deems necessary or advisable in connection with the voting;

and in accordance with the determination made by the Board of Directors pursuant to Rule 2.6: (f) advise of the right of each member to either (i) request in writing or by

telephone that a ballot be provided to the member by mail, which ballot shall then be cast by mail or (ii) request in person at a branch of the Credit Union a ballot, which ballot shall then be cast by mail;

The Board of Directors may provide these items by mail, by Electronic means in accordance with the Electronic Transactions Act, or by other means as permitted under the Act, including advertisement.

13.4 Lost or Destroyed Ballot. If a member, eligible to vote on the Special

Resolution, does not receive a ballot pursuant to Rule 13.3(f), or loses or destroys the ballot before it is cast, then upon receipt of a declaration, in a form prescribed by the Board of Directors, and signed by that member prior to the closing of voting that the ballot was not received, or has been lost or destroyed, and the member has not cast a ballot on the Special Resolution, the Credit Union

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shall make available to that member a replacement ballot and any other information to be provided pursuant to Rule 13.3.

13.5 Supervision of Vote. The Returning Officer shall supervise the voting on a

Special Resolution and:

(a) may require a member to provide proof and particulars of membership and may require a member to provide a declaration, in a form prescribed by the Board of Directors, and signed by the member declaring that the member has not previously cast a ballot on the Special Resolution vote then in progress;

(b) shall obtain all ballots, and, after the close of balloting, shall cause a tally

to be made of all ballots, such tally to be conducted in such manner so as to ensure the secrecy of the balloting;

(c) notwithstanding anything contained herein, the final decision in

determining whether a ballot is to be accepted or rejected shall be made prior to the tallying of votes by the Returning Officer, whose discretion is absolute and not open to question or review.

13.6 Results. As soon as practicable but in no event later than seven (7) days after

the close of voting, the Returning Officer shall communicate the results of the voting to the Chair of the Board of Directors.

13.7 Communication to Members. The Board of Directors shall communicate the

results of the vote on a Special Resolution to the members by mail or Electronic means no later than thirty (30) days after receiving the results from the Returning Officer. Until such time, the Board will keep the results confidential.

13.8 Filing with Superintendent. The Credit Union will file with the Superintendent

of the Financial Institutions Commission every Special Resolution approved by its members.

13.9 Voting on Special Resolutions Without a Meeting. A Special Resolution

passed in accordance with Rule 13 is valid as if it had been passed at a meeting of members and satisfies all the requirements of the Credit Union Incorporation Act and Financial Institutions Act relating to meetings of members.

14. AUDITOR

14.1 Appointment of Auditor. At each Annual General Meeting of the Credit Union an auditor shall be appointed to hold office until the close of the next Annual General Meeting and, if at that meeting a new appointment is not made, the auditor in office shall continue as auditor until a successor is appointed.

14.2 Remuneration. The Board of Directors shall fix the remuneration of the auditor.

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15. FINANCIAL YEAR END 15.1 Financial Year End. The financial year end of the Credit Union shall be

December 31.

16. SEAL 16.1 Seal. The Credit Union may have a corporate seal. 16.2 Custody of Seal. If the Credit Union has a corporate seal, the Board of

Directors shall provide for the safe custody of the corporate seal of the Credit Union at the registered office of the Credit Union or at such other place as the Board of Directors determines it shall be kept for safekeeping.

17. MISCELLANEOUS

17.1 Legislation. These Rules are subject to the provisions of all applicable legislation.

17.2 Vote by Electronic Means. Subject to the Credit Union Incorporation Act, the

Financial Institutions Act and the Electronic Transactions Act, if the Board of Directors determines pursuant to these Rules that members may vote by electronic means, the Board of Directors may prescribe such technological and other requirements for the use of such Electronic means as the Board of Directors in its discretion considers desirable in the circumstances.

17.3 Electronic Communication. Subject to the Credit Union Incorporation Act, the

Financial Institutions Act and the Electronic Transactions Act, unless these Rules expressly provide otherwise:

(a) where these Rules require the use of documents that are “written”, “in

writing” and other similar words, the Board of Directors may in its discretion permit the use of documents in such Electronic forms as the Board of Directors in its discretion considers desirable in the circumstances, provided that such Electronic documents are accessible in a manner useable for subsequent reference;

(b) where these Rules require the provision or delivery of documents, the Board of Directors may in its discretion permit the provision or delivery of such documents in such Electronic form and by such Electronic means (including without limitation making such Electronic documents accessible to the intended recipient by an Electronic means of which the intended recipient is notified) as the Board of Directors in its discretion considers desirable in the circumstances, provided that such Electronic documents are (i) accessible by the recipient in a manner useable for subsequent reference and (ii) capable of being retained by the recipient in a manner useable for subsequent reference; and

(c) for the purposes of this Rule 17.3, “document” includes without limitation

notices, instruments, resolutions and ballots.

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17.4 Omission of Notice. Where a call for nominations, a notice of a Board election, or a notice of a meeting of the Credit Union, including a Special Resolution, is received generally by members of the Credit Union, the omission to give notice to any member or the non-receipt of notice by any member will not invalidate the election, the Special Resolution, or any ordinary resolution passed or any proceedings taken at the meeting.

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SCHEDULE A

Special Rights and Restrictions Class A Membership Equity Shares

1. The Class A Membership Equity Shares shall have attached thereto the following rights

and restrictions:

1.1 Par Value. Class A Membership Equity Shares shall be issued at and shall have a par value of $1.00 each.

1.2 No Guarantee. Money invested in Class A Membership Equity Shares and dividends thereon shall not be guaranteed by the fund administered by the Credit Union Deposit Insurance Corporation of British Columbia.

1.3 Transfer of Shares. Unless permitted by a resolution of the Board of Directors, Class A Membership Equity Shares are not transferable.

1.4 Redemption of Shares.

(a) Subject to the Credit Union Incorporation Act, the Credit Union shall

redeem, in such manner and on such terms as the Board of Directors may determine from time to time, all the Class A Membership Equity Shares of a member if:

(i) the member withdraws from membership in the Credit Union; (ii) the Credit Union terminates the membership of the member; (iii) the member is a natural person and dies, subject to Rule 3.3; or (iv) the member is a society, corporation, partnership or any other

entity and is dissolved, wound-up, or otherwise ceases to be a legal entity according to the statute by or pursuant to which it was created;

(b) Subject to the Credit Union Incorporation Act and these Rules, the Credit

Union may redeem or purchase any Class A Membership Equity Shares held by a member on such terms and conditions and at such times as the Board of Directors, in their discretion, resolve;

(c) Class A Membership Equity Shares which are redeemed or purchased by the Credit Union shall be redeemed or purchased at par value, plus any dividends declared but unpaid thereon.

1.5 Liquidation, Dissolution or Winding-up. In the event of the liquidation,

dissolution or winding-up of the Credit Union, or any other distribution of assets of the Credit Union among the holders of its shares for the purpose of winding-up its affairs, whether voluntary or involuntary, the holders of Class A Membership Equity Shares shall be entitled to receive the remaining property and assets of the Credit Union.