COLLECTIVE AGREEMENT

Between:

WATERLOO TEXTILES LIMITEDCAMBRIDGE, ONTARIO

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UNITED FOOD & COMMERCIAL WORKERSCANADA, LOCAL 175

TERM: August 13 th, 2007 - August 12th, 2009

TABLE OF CONTENTS

Article 1 Purpose of the Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Article 2 Recognition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Article 3 Reservations of Management Functions . . . . . . . . . . . . . . . . . . . . . . . . . 2Article 4 Prohibition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Article 5 No Strikes or Lockouts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Article 6 Grievance Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Article 7 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Article 8 Seniority and Promotion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Article 9 Leave of Absence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Article 10 Bulletin Boards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Article 11 Hours of Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Article 12 Overtime . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Article 13 Reporting Time Allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Article 14 Vacation and Statutory Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Article15 Wages and Work Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Article 16 Productivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Article 17 Health and Welfare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Article 18 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Article 19 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Schedule “A” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Letter of Understanding #1 - Re Charity Fund . . . . . . . . . . . . . . . . . . . . . . . . . 18Letter of Understanding #2 - Re Time Limits . . . . . . . . . . . . . . . . . . . . . . . . . . 19

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B E T W E E N :

WATERLOO TEXTILES LIMITEDCAMBRIDGE, ONTARIO

(Hereinafter called the Company)Of the First Part

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UNITED FOOD AND COMMERCIAL WORKERS CANADAAND ITS LOCAL 175

(Hereinafter called the Union)Of the Second Part

In accordance with the right of employees to bargain and to be represented collectively, theparties hereto do agree as follows:

ARTICLE 1 - PURPOSE OF THE AGREEMENT

1.01 The general purpose of the Agreement is to maintain the favourable relationsexisting between the Company and the employees by setting forth a basicunderstanding relative to hours of work, rates of pay and all other conditions ofemployment.

ARTICLE 2 - RECOGNITION

2.01 The Company recognizes the Union as the sole collective bargaining agency for allits employees employed and it’s plant at Cambridge, Ontario, save and exceptforemen and foreladies, those above the rank of foreman and foreladies, and officestaff.

2.02 The word “employee” or “employees” wherever used in the Agreement shall meanonly the employees in the bargaining unit defined above.

2.03 The Company agrees to deduct weekly Union dues as established by the Unionfrom the pay cheque of each employee in the bargaining unit. The total amount ofmoney so deducted will be remitted to UFCW Local 175, Mississauga Office at 2200Argentia Road in Mississauga, Ontario.

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2.04 Dues & Initiation Fees

The remittance statement shall be documented by location containing a dues andinitiation report which will be provided in the form of e-mail (remit@ufcw175.com)or on a computer diskette as well as a hard copy of the dues report being attachedto the remittance cheque. The information provided shall be on a standardspreadsheet in Excel, Quattro Pro, Lotus or other software program acceptable andadaptable to the Union. The spreadsheet will be in a format provided by the Unionand the Company will provide the following information: as known to the Company.

1. S.I.N2. Employee number if applicable3. Full name (Last/First/Initials)4. Full address, including City and Postal Code5. Telephone number (including area code)6. Date of hire7. Rate of pay8. Classification9. Full-time or part-time designation10. Union dues deducted (or the reason a deduction was not made). If dues are

deducted weekly, report requires five (5) columns for reporting11. Total dues deducted12. Back dues owing13. Vacation pay breakdown of dues owing14. Initiation fees deducted15. Total Initiation Fees deducted

ARTICLE 3 - MANAGEMENT FUNCTIONS AND UNION REPRESENTATION

3.01 The responsibility for the Management operation, extension and curtailment of thebusiness as well as the authority to direct, transfer, promote, demote, discipline,suspend and discharge for just cause shall be vested in the Company, subject to theprovisions of this Agreement.

3.02 The Employer will use progressive discipline as follows, provided there is just cause:

First Offense Verbal warningSecond Offense Written warningThird Offense 1 day suspensionFourth Offense 3 day suspensionFifth Offense 5 day suspensionSixth Offense Termination

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3.03 The Employer agrees that all discipline on an employee’s record will be removedfrom his or her work record after fifteen (15) months from the time of the discipline.Once removed, this discipline cannot be used at any disciplinary or arbitrationhearing.

3.04 If an employee is to be disciplined, a Union steward must be present at the meetingin which the employee is to be disciplined. If a Union steward is not present at themeeting, then all discipline given to the employee will be deemed to be null and void.

3.05 The Employer agrees not to contract out any bargaining unit work to any personoutside the bargaining unit that results in the layoff of a member of the bargainingunit.

3.06 The Employer will pay fifty percent (50%) of the cost of the meeting rooms for allnegotiations, including conciliation, mediation and interest arbitration.

3.07 The Employer will pay fifty percent (50%) of the costs of the printing of the CollectiveAgreements up to a maximum of $250.00.

3.08 The Employer will pay one hundred percent (100%) of the wages of the NegotiatingCommittee for all negotiations, including conciliation, mediation and interestarbitration.

ARTICLE 4 - PROHIBITION

4.01 The Company and the Union agree that they will not discriminate against, coerceor unlawfully influence an employee.

4.02 The Union agrees that there will be no solicitation for membership, collection ofdues, or any other Union activity on the premises of the Company, during anemployee’s working hours, without written authorization from the Company, exceptas otherwise provided for in this Agreement. Such authorization shall not beunreasonably withheld.

ARTICLE 5 - NO STRIKES OR LOCKOUTS

5.01 The Company agrees that it will not cause or direct any lockouts of its employees,and the Union agrees that there will be no strikes, slow-down, sit-down or othercollective action that will stop or interfere with production during the term of thisCollective Agreement.

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ARTICLE 6 - GRIEVANCE PROCEDURE

6.01 The Company acknowledges the right of the Union to appoint or otherwise selectfour (4) stewards to assist employees in presenting their grievances to therepresentatives of the Company. The Union agrees that they shall, at all times,keep the Company supplied with a list of its stewards and officers.

6.02 If an employee has a grievance it shall be reduced to writing on forms supplied bythe Union. A grievance must be filed within fifteen (15) working days of the incidentgiving rise to the grievance, and shall be taken up in the following manner andsequence.

6.03 Step 1

At Step #1, the grievor, the Union steward and the foreman of the department willmeet and discuss the grievance. The decision of the foreman shall be stated inwriting within two (2) working days following this meeting.

6.04 Step 2

At Step #2, the grievance committee, which shall be composed of not more thanfour (4) employees, including the grievor, shall meet with the General Manager orsomeone designated by him within five (5) working days from the date of the Step#1 meeting. The General Manager or his designate shall render his written decisionwithin three (3) days after the Step #2 meeting.

6.05 Step 3

At Step #3, the grievance committee, the grievor and a representative of Local 175shall meet with the General Manager or his designate to discuss the grievance. ThisStep 3 meeting shall occur within fifteen (15) working days from the date of the Step2 meeting. The Employer will provide a written response to the grievance within five(5) working days from the date of the Step 3 meeting.

6.06 Any general difference or grievance arising directly between the Company and theUnion may be submitted in writing by either party directly to Step 3 of the grievanceprocedure.

6.07 All decisions arrived at between the representatives of the Company and the Unionshall be final and binding on the Company, the Union and the employee, oremployees concerned.

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6.08 Saturdays, Sundays and Statutory Holidays will not be counted in determining thetime within which any action is to be taken or completed in the grievance orarbitration procedures. Any and all time limits fixed by this Article and Article 7 maybe extended by mutual agreement.

6.09 A claim by a permanent employee that he/she has been unjustly discharged shallbe treated as a grievance if a written statement of such grievance is lodged with theCompany within five (5) working days after the employee ceased to work for theCompany. Such special grievance may be settled by confirming the management’saction in dismissing the permanent employee by reinstating the employee with fullcompensation for time lost; or by any other arrangement which may be deemed justand equitable.

6.10 It is clearly understood that stewards and other Union Officers will not absentthemselves from their regular duties without first securing permission from thedepartment foreman, and that they will not be absent from their work unreasonablyin order to deal with grievances of employees. Such permission will not beunreasonably withheld.

On such understanding, the Company will compensate such employees at theirregular rate of pay for time spent in handling grievances of employees. Employeeswill not be compensated for time spent on such matters outside of working hours.

ARTICLE 7 - ARBITRATION

7.01 In the event any dispute covered by this agreement cannot be settled through thegrievance procedure, either party may request that it be submitted to arbitration.Such request shall be submitted in writing to the other party, and shall state thenature and particulars of the grievance in question. The Arbitrator shall have noauthority to alter, modify or amend any provision of this agreement or to add to orsubtract therefrom. The decision of the Arbitrator shall be final and binding upon allparties concerned. Each of parties hereto, will equally bear the cost of the Arbitrator.

7.02 At any stage of the grievance procedure, including arbitration, the conferring partiesmay have the assistance of the employee or employees concerned, and anynecessary witnesses and records, and all reasonable arrangements will be madeto permit the conferring parties to have access to the plant to view disputedoperations and to confer with the necessary witnesses.

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ARTICLE 8 - SENIORITY AND PROMOTION

8.01 New employees will serve a probationary period of sixty (60) working days beforeacquiring seniority rights. If an employee works four (4) hours in any given day,then this will be counted as a day worked with regard to their probationperiod. Seniority will then date back to their starting date with the Company.

8.02 (a) Seniority shall mean the length of continuous employment with the Employerwhile in the bargaining unit.

(b) If the Company promotes a member of the bargaining unit to management,the employee will have a six (6) month window in which he/she may returnto the bargaining unit with full seniority.

8.03 (a) In the case of layoffs and recall, ability being sufficient, seniority shall be thegoverning factor. A conference will be held between the Company and theUnion to discuss the advisability of reducing the work week rather than theworking force, because of curtailment of production.

(b) In the event it becomes necessary to reduce the number of employeesworking on an occupation in a department for up to one complete shift, theemployee on that occupation with the least seniority on the seniority listestablished in paragraph 8.07 will have the option of taking the layoff ordisplacing the junior employee on any other occupation in his department ifhe or she has the qualification to do the job and has the necessary seniority.It is understood that employees so laid off will not have the right to displaceother employees on other shifts or other occupations.

(c) In the event it becomes necessary to reduce the number of employeesworking on an occupation in a department for two (2) shifts and up to five (5)full shifts, the employee on the occupation concerned with the least seniorityshall have the option of taking the layoff or displacing the junior employee onany other occupation and/or shifts in the employee’s department providedthat the employee is qualified to perform the work and has the necessaryseniority.

(d) In the event it becomes necessary to reduce the number of employeesworking on an occupation in a department for more than five (5) full shifts andthe employee to be laid off is not retained under 8.03 (b) or (c) above, theemployee will have the option of taking the layoff or transfer to anotherdepartment provided there is a permanent vacancy to be filled, or failingwhich, a job occupied by an employee having less seniority for which the

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employee is qualified to perform the work required within the normal trainingperiod.

Employees who option to take any layoffs may request to be recalledprovided that they have given the Company one week’s notice and have theproper qualifications and seniority.

Notwithstanding the above, an employee who is laid off for an aggregateperiod of five (5) shifts in a six month period will have the option providedunder 8.03 (d).

8.04 (a) All job vacancies within the bargaining unit will be posted in each departmentfor a period of five (5) working days before being permanently filled. Allinterested candidates must sign the posting. The Company will give acopy of the job posting to the Union Stewards. Trial period not to exceedone (1) month unless mutually agreed by the Company and the Union.

(b) When a permanent vacancy occurs on a particular shift and occupation amaximum of one change in assignment will be permitted upon request fromthe employee working on the occupation and shift concerned on the basis ofseniority.

(c) An employee shall be entitled to exercise his seniority in a transfer to apermanent vacancy in the same job classification on a different shift whensuch change represents a change in shift scheduling for such employee.The Company may delay the actual transfer for up to fifteen (15) days inorder to make a posting and find a replacement for the employee who isbeing transferred.

8.05 All new assignments shall be for a training period not exceeding thirty (30) workingdays, unless extended upon agreement between the Management and Union.

8.06 Except in the case of layoffs caused by emergencies, such as machine breakdowns,power failure, fire or flood, the Company shall give forty-eight (48) hours notice ofany layoff, the duration of which may exceed seven (7) days.

8.07 Seniority lists showing each employee’s status shall be established. These listsshall be brought up-to-date by quarterly revisions. Copies of these lists to be lodgedwith the Union and posted on the plant bulletin board.

8.08 An employee may lose all seniority if he/she:

a) voluntarily quits the employ of the Company;

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b) is discharged for just cause;c) is laid off and is not re-employed within eighteen (18) months from day of

layoff;d) fails to return to work after such layoff within eight (8) days after mailing by

the Company, by registered mail, of a notice to return to work, or fails toadvise the Company within eight (8) days of the receipt of such notice ofhis/her intention to return;

e) is absent for one year for any reason other than Workers’ Compensation,accident or illness. The Union and Company agree that the OntarioHuman Rights Code will take precedence over the above clause.

8.09 It shall be the duty of the employees to promptly notify the payroll office of anychange in their address or telephone number. If an employee should fail to do this,the Company shall not be responsible for failure of a notice to reach such employee.Any notice sent by the Company to an employee’s last address on the Company’srecords shall be sufficient and effective notice.

8.10 Promotions to supervisory position shall not be subject to the provisions of thisAgreement.

8.11 The Company requires two (2) weeks notice from an employee who is quitting,unless agreed otherwise by the parties.

ARTICLE 9 - LEAVE OF ABSENCE

9.01 The Company will grant leave of absence without pay to a delegated Union memberor members to attend Union conventions or conferences, and it is agreed by theUnion that in selecting the member or members every effort will be made to avoidaffecting the production of the plant, and the time so requested will be kept to theminimum. The Company will be notified at least one (1) week in advance of suchrequest.

9.02 The Company will grant leave of absence to any employee for legitimate personalreasons provided that such leave does not unduly interfere with production.Request for leave of absence must be in writing to the Personnel Manager, with thereason and duration clearly stated, and reply will be given in writing. Any leave ofabsence granted by the Company to such employee shall be limited to one (1) yearunless otherwise agreed between the Company and the Union with provision madefor return to their regular job when leave of absence expires. Permission for a leaveof absence will not be unreasonably withheld.

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9.03 If an employee overstays his leave of absence, he/she is presumed to have severedemployment with the Company, unless he can give a satisfactory explanation for hisinability to return to work on the expiry date of his leave of absence.

9.04 If an employee is unable to report for work owing to sickness, accident or otherlegitimate reason, he shall notify the Company at the start of his/her shift, or no laterthan noon of the first day of his absence, whenever possible.

(a) a doctor’s certificate will be required after three (3) consecutive days ofillness, or five (5) days in a thirty (30) day period.

9.05 In the event of the death of an employee’s husband or wife, child or parent, theemployee will be allowed time off and will be reimbursed for wages lost provided theamount to be reimbursed will not exceed five (5) days. In the event of the death ofan employee’s brother or sister, mother-in-law, father-in-law, daughter-in-law, son-in-law, brother-in-law, sister-in-law, grandparents and grandchildren, the employeewill be allowed time off and will be reimbursed for wages lost provided the amountto be reimbursed will not exceed three (3) days.

9.06 A female employee shall continue to work as long as her physical condition permits,but her leave of absence shall commence when she is unable to work regularly andperform her regular job satisfactorily. The Employer agrees to abide by the OntarioEmployment Standards Act with respect to maternity and parental leave.

Within thirty (30) days after confinement, she shall notify the Company of herintention of returning to work by registered mail. Under any circumstances she mustreturn to her previous job within a six month period after confinement unlessotherwise agreed upon by the Company and the Union.

ARTICLE 10 - BULLETIN BOARDS

10.01 The Company will provide Bulletin Boards in mutually satisfactory locationsthroughout the Plant, which are available for the Union in posting notices of Unionactivities. All such notices must be signed by the proper officers of the Union andsubmitted to an authorized official of the Company for approval before posting.Such approval will not be unreasonably withheld. A copy of the Union contract willbe posted on the Bulletin Board.

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ARTICLE 11 - HOURS OF WORK

11.01 The standard hours of work per week shall be eight (8) hours per day, Mondaythrough Friday. Starting and quitting times to be a matter for negotiations betweenthe Company and the Union.

ARTICLE 12 - OVERTIME

12.01 The rate of pay for overtime shall be time and one half the hourly rate in the caseof hourly-rated employees, and time and one half the average hourly earningsexcluding overtime and shift premiums in the case of pieceworkers.

12.02 Overtime will be paid for all hours worked in excess of eight (8) hours per day orforty (40) hours per week and for any work performed on Saturday. Employees willreceive double time for all hours of work performed on Sunday, except whenemployees start at 11:00 p.m. on Sunday evening. They will receive their regularrate for this hour on Sunday.

If an employee misses any hours in any given forty (40) hour work week, then theemployee will be allowed to work extra hours past eight (8) hours in a day or on theweekend to make up lost hours for that week only up to a maximum of forty (40)hours per week. This will be the only instance in which an employee can work pasteight (8) hours in a day without receiving premium pay of time and one half.

The Company agrees to equalize overtime work among the employees in thedepartment concerned. Employees will be offered overtime work in the order oftheir seniority. Employees refusing overtime will be credited with having worked forthe purpose of equalization.

12.03 In addition to holiday pay, any employee who works on any of the following holidaysshall receive pay at one and one half times his normal rate of pay for hours actuallyworked by him on the holiday:

New Year’s Day Civic HolidayGood Friday Labour DayVictoria Day Thanksgiving DayDominion Day Christmas DayBoxing Day

A tenth (10th) and eleventh (11th) statutory holiday to be paid and observed. Thedates of the tenth (10th) and eleventh (11th) holidays to be decided by mutual

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agreement between the Company and each employee during the term of theAgreement.

ARTICLE 13 - REPORTING TIME ALLOWANCE

13.01 Any employee who reports for work as usual and at the regular starting time of hisshift and is sent home because no work is available of any kind, will be paid theequivalent of four hours work at his regular rate of earnings. The above does notapply if he is notified by the Company not to report to work either orally, or by noticeposted on the bulletin board no later than the end of the previous shift.

13.02 If an emergency arises and an employee is called to work outside of his standardworking hours, he shall be paid time and one half his regular rate with a minimumguarantee of four (4) hours at time and one half.

ARTICLE 14 - VACATION AND STATUTORY HOLIDAYS

14.01 The Company will pay to all hourly rated day workers, after they have served theirprobationary period, an amount equal to the number of standard hours in theirnormal day at the established hourly rate, and will pay to all pieceworkers a sumequal to the number of standard hours in their normal day at their hourly pieceworkaverage rate of pay during the preceding two (2) calendar quarter-years, overtimeexcluded, or during such fraction of the said period as the employee shall have beenin the Company’s employ, for each of the following holidays, provided that theemployee shall have worked his full shift on the declared working day before andafter such holiday, unless absence on either such days was caused by provenillness or other excusable circumstances.

New Year’s Day Victoria Day Civic HolidayThanksgiving Day Good Friday Dominion DayLabour Day Christmas Day Boxing Day

A tenth (10th) and eleventh (11th) holiday to be paid and observed. The date of thetenth (10th) and eleventh (11th) day to be decided by mutual agreement between theCompany and each employee during the term of the Agreement. The holiday’seligibility is effective after sixty (60) working days.

14.02 The Company shall grant all employees subject to this Agreement, a vacation as setout during the period July 1 through September 1 inclusive. Such vacation periodwill be scheduled as fair as possible to coincide with the wishes expressed by theemployee taking into consideration the needs of production. Vacations priorities will

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be posted March 1. An employee having more continuous service will havepreference over an employee with less continuous service as to the choice of thedate of his vacation. Employees entitled to more than two (2) weeks vacation withpay will take their additional weeks at a time mutually agreeable to the employeeand the Company. The additional weeks vacation must be taken during the contractyear concerned.

14.03 The basis of payment for vacation will be as follows: payment will be calculated bytaking the percentage of each eligible employee’s earnings for the previous twelve(12) month period ending June 30th.

Less than 1 year service 4%1 year of service but less than 3 years 4% 2 weeks3 years of service but less than 5 years 5% 2 weeks5 years of service but less than 9 years 6% 3 weeks9 years of service but less than 10 years 7% 3 weeks10 years of service but less than 13 years 8% 4 weeks13 years of service but less than 17 years 9% 4 weeks17 years of service and over 10% 5 weeks

a) Absenteeism for other than sickness or accident will result in vacation paybeing paid on a percentage basis only.

14.04 Lost time while receiving Workman’s Compensation or sick benefits under Article17 shall, for the purpose of calculating vacation pay, be taken as if the employeewere being paid his full regular rate of pay during such absence.

14.05 Employees who are scheduled to remain on duty during a plant shut-down will beallowed to take their vacation at a time mutually satisfactory to the employee and theCompany, but in any case the employee shall take in the current year a number ofdays equal to his credit.

14.06 An employee on separation from employment will be paid his accumulated vacationcredits since the last vacation period.

ARTICLE 15 - WAGES AND WORK ASSIGNMENTS

15.01 (a) The Company agrees to pay and the Union agrees to accept for the term ofthis Agreement the schedule of wage rates in effect at the date hereof, andattached hereto as Schedule “A”.

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The Employer agrees to the following wage increases which areretroactive to the expiry date of the last collective agreement (August12, 2007). The wage increases are across the board wage increases onall wage rates and classifications:

Effective August 13, 2007 - 2.0% A.T.B.Effective August 13, 2008 - 2.0% A.T.B.

(b) In the event legislation required an adjustment to the minimum wage level,the following shall prevail:

All wages below the new minimums shall be raised to comply with legislation.

Before wage levels in all other classifications are raised to maintain theprevailing wage differentials a meeting will be held and the Company and theUnion will discuss the advisability of combining certain job classifications.

15.02 An employee assigned to another job will receive the established hourly rate or therate of the job to which he/she is transferred, whichever is higher for the period oftime in which the person does the higher rated job.

15.03 In the case of machine down-time resulting from causes beyond the employee’scontrol, the Company shall pay the employee concerned on the following basis:

Hourly-rated day workers shall be paid at the established hourly rate. Pieceworkersshall be paid at their hourly piecework average of the preceding two (2) calendarquarter years, overtime excluded.

15.04 Effective August 13, 2007, a premium of thirty cents (30¢) shall be paid toemployees working on the second shift.

Effective August 13, 2007, thirty-five cents (35¢) per hour shall be paid toemployees working on the third shift.

Effective August 13, 2007, the trainer rate becomes forty cents (40¢) per hour.

15.05 A one hundred dollar ($100.00) Christmas bonus will be paid each year.

15.06 In the event that the Company should establish a new job classification, theCompany and the Union shall agree on an appropriate rate for such newclassification. If there is no agreement on an appropriate rate, then this mattercan be subject to a grievance. The final rate will be determined by anarbitrator.

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ARTICLE 16 - PRODUCTIVITY

16.01 In the case of a change in product or a change in the construction of a machine ortechnological change or an increase in the work load, the Company will notify theUnion of the nature of the change at least ten (10) days prior to the date theproposed change is to be put into effect. If there is any question as to the feasibilityof the change or the suitability of the new rates, a trial period shall be institutedwhich shall not exceed thirty (30) days, in order to give the change a fair trial. If,during or subsequent to the trial period, the Company and the Union cannot agreeon the change or the establishment of the new rates, the matter may be submittedto Arbitration under provision of Article 7. During the trial period and until the matterhas been settled by the Board of Arbitration, the employee or employees concernedshall be paid on the basis of their average hourly earnings prior to the institution ofany change.

ARTICLE 17 - HEALTH AND WELFARE

17.01 (a) The Company agrees to pay the full cost of a Group Insurance Plan to coverall employees as set out below:

Life - - $28,000.00AD&D - - $28,000.00Sickness and Accident Benefit - - $275.00/week(The waiting period for sickness and/or accident benefits will be four (4)days).

(b) For employees with ten (10) years of service or more, the Employer agreesto contribute an amount matching the contribution of an employee to anRRSP for each employee, up to a maximum Employer contribution of threehundred fifty dollars ($350.00) per year. The employee is to provide proofof contribution.

17.02 The Company agrees to pay 100% of the premium for the life insurance in the eventof illness for one year.

17.03 One twenty minute paid lunch break per day and two fifteen (15) minute paid restperiods, one before lunch and one after. Second break to include wash-up.

17.04 The Company shall make reasonable provisions for the safety and health of itsemployees during working hours. The Employer will comply with the OntarioOccupational Health and Safety Act.

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17.05 Union and it’s members agree to cooperate with Company on all claims to WorkersCompensation Board and Company agrees to cooperate with union on all claims toWorkers Compensation Board.

ARTICLE 18 - NOTICES

18.01 Except wherein otherwise provided, any notice which either party desires, or isrequired to give to the other, shall be given by prepaid registered mail as follows:

If given to the Company: Waterloo Textiles LimitedP.O. Box 25009Cambridge, ON N3C 4B6

If given to the Union: United Food & Commercial WorkersCanada, Local 175Southwest Regional Office124 Sydney Street SouthKitchener, Ontario N2G 3V2

ARTICLE 19 - TERMINATION

19.01 Unless changed by mutual consent, the terms of this Agreement shall be bindingupon the parties hereto until the 12th day of August, 2009 and hereafter from yearto year, unless either party gives the other party written notice of desire to negotiateamendments within the period of ninety (90) days prior to the expiration date of theCollective Agreement.

19.02 If pursuant to negotiations, an agreement on the renewal or the amendment of thisAgreement is not reached prior to the current expiration date, this Agreement shallcontinue until a renewal thereof or a new Agreement is consummated, or until theconciliation proceedings prescribed under the Labour Relations Act, have beencompleted, whichever shall first occur.

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IN WITNESS WHEREOF each of the parties hereto has caused the Agreement to besigned by their duly authorized officials or representatives as of the ______ day of____________, 20 ____.

FOR THE COMPANY FOR THE UNION

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SCHEDULE “A”

JOB CLASSIFICATION AUG. 13/07 (2%) AUG. 13/08 (2%)

General Hand 12.28 12.53Card Tender 12.62 12.87Card Assistant 12.54 12.79Drawing Tenders 12.30 12.55Roving Tenders 12.30 12.55Spinner 12.30 12.55Twister Tender 12.30 12.55Winder Tender 12.18 12.42Packers 12.30 12.55Shipper 13.08 13.34Dip/Waxer 12.40 12.65Shipper/Receiver 14.19 14.47Truck Driver 15.53 15.85Polished Twine 15.23 15.53Mechanic - Head 15.86 16.18Mechanic 14.64 14.93Mechanic Learner 13.37 13.64Janitor 11.13 11.35

FOR THE COMPANY FOR THE UNION

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LETTER OF UNDERSTANDING #1

BETWEEN: WATERLOO TEXTILES LIMITEDHereinafter referred to as “the Employer”

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UNITED FOOD & COMMERCIAL WORKERS CANADA, LOCAL 175Hereinafter referred to as “the Union”

RE: UFCW Charity Fund

The Employer shall deduct from the weekly earnings of each employee, upon writtenauthorization from each employee, twenty-five cents (25¢) per week and shall, togetherwith a detailed list of the names, Social Insurance Numbers and amount deducted, remitsame by cheque payable to the UFCW Charity Fund before the fifteenth (15th) day of thefollowing month.

Receipt for the total amount deducted per employee in the calendar year will be providedby the Union on or before February 28th of each year, or noted by the Employer on theemployee’s T4 slip.

Dated at ___________________, this _______ day of _____________, 20 ___.

FOR THE COMPANY FOR THE UNION

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LETTER OF UNDERSTANDING #2

BETWEEN: WATERLOO TEXTILES LIMITEDHereinafter referred to as “the Employer”

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UNITED FOOD & COMMERCIAL WORKERS CANADA, LOCAL 175Hereinafter referred to as “the Union”

RE: Time Limits

Neither party shall raise or proceed with a timeliness issue argument regarding “filing forarbitration” without having notified the other party of its final position on any given grievancein writing.

Should either party serve such notice on the other party, the parties further agree that thefinal time frame in the Collective Agreement respecting “filing for arbitration” shall then betriggered.

The parties further agree that any Board of Arbitration or single arbitrator shall have fulljurisdiction to adjudicate the matter respecting timeliness in light of this agreement and shallnot be restricted by the Ontario Labour Relations Act in so doing.

Dated at ___________________, this _______ day of _____________, 20 ___.

FOR THE COMPANY FOR THE UNION