Common use of Inflation Clause in Contracts

Inflation. For Security Amounts and/or Participant Liabilities calculations, the assumed inflation rate will be determined by reference to be the difference between the CANSIM V39602 bond rate and an unadjusted real return long-term bond rate of CANSIM V39057 (the “Inflation Differential”) subject to the following: (a) three percent (3%) per annum would continue to be used for the assumed inflation rate if the Inflation Differential calculated in respect of any such Security Amount and/or Participant Liabilities calculation is between two percent (2%) and three percent (3%) per annum; (b) where the Inflation Differential calculated in respect of any such Security Amount and/or Participant Liabilities calculation is below two percent (2%) per annum, the assumed inflation rate to be used in such Security Amount and/or the Participant Liabilities calculation will reduce “proportionately”, that is, if the Inflation Differential were 1.75% or 1.35%, for example, the inflation assumption for discounting would be 2.75% and 2.35% respectively; (c) where the Inflation Differential exceeds three percent (3%) per annum, the inflation rate to be used in any such Security Amount and/or the Participant Liabilities calculation shall be equal to the Inflation Differential.