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HomeMy WebLinkAbout2000-09 THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON BY-LAW 2000 - 09 Being a By-Law to authorize the execution of an agreement between the Corporation of the Municipality of Clarington and Towns of Whitby and Ajax, Townships of Brock, Scugog and Uxbridge And the Region of Durham to enter into a Subscriber's Agreement and Indemnity Agreement respecting the provision of Municipal Insurance Coverage. THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON HEREBY ENACTS AS FOLLOWS: 1. THAT the Mayor and Clerk are hereby authorized to execute, on behalf of The Corporation of the Municipality of Clarington with the Corporation Seal, a Subscriber's Agreement respecting the provision of Municipal Insurance Coverage. 2. THAT the Subscriber's Agreement attached hereto as Schedule "A"form part of this By-Law 3. THAT the Mayor and Clerk are hereby authorized to execute, on behalf of The Corporation of the Municipality of Clarington with the Corporation Seal, An Indemnity Agreement with an insurer under one or more contracts of insurance made pursuant to the Subscriber's Agreement for the payment of claims within the Retention as provided for in the Subscriber's Agreement. 4. THAT the Indemnity Agreement attached hereto as Schedule "B"form part of this By- Law. By-Law read a first and second time this 24`h day of January, 2000. By-Law read a third time and finally passed this 24`.h day of January, 2000. Mayor t r::lerk f - - MUNICIPALITIES IN.DURHAM REGION FUNDING ARRANGEMENT FOR THE PURCHASE OF INSURANCE SUBSCRIBERS' AGREEMENT February 15, 2000 Municipalities in Durham Region Funding Arrangement for the Purchase of Insurance Subscribers Agreement Table of Contents PREAMBLE ARTICLE 1.00 - DEFINITIONS ARTICLE 2.00 -THE FUNDING ARRANGEMENT 2.01 Establishment of the Fund 2,02 Purpose of the Fund 2.03 Not a Partnership or Trust 2.04 No Authority to Bind 2.05 Indemnification for Unauthorized Acts 2.06 Several Liability ARTICLE 3.00 - BOARD OF DIRECTORS 3.01 Establishment 3.02 Constitution of the Board of Directors 3.03 Qualification of Members of Board of Directors 3.04 Rules 3.05 Power and Authority of the Board of Directors 3.06 Payment for Services 3.07 Term 3.08 Resignation 3.09 Vacancies 3.10 Decisions of the Board of Directors 3.11 Chair and Officers 3.12 Signing Officers 3.13 Meetings Generally 3.14 Teleconference Meetings 3.15 Notice 3.16 Location 3.17 Quorum. 3.18 Agreement Without Voting 3.19 Duty of Care 3.20 Conflicts of Interest 3.21 Limitation of Liability 3.22 Indemnity of Members 3.23 Liability Insurance ARTICLE 4.00 - ACCOUNTING AND FINANCIAL REPORTING 4.01 Fiscal Period 4.02 Books and Records 4.03 Subscriber Accounts 4.04 -Annual Report 4.05 Audit 4.06 Bank Accounts ARTICLE 5.00 - SUBSCRIBERS 5.01 Founding Subscribers , 5.02 .Additional Subscribers 5.03 Effective Date of Subscription 5.04 Minimum Period of Subscription 5.05 Termination of Subscription 5.06 Subscriber Dissolution, Merger or Break-Up 5.07 Continuing Liability ARTICLE 6.00 - OPERATION OF THE FUND 6.01 Insurance Policies 6.02 Determination of Levies Payable 6.03 Assessments 6.04 Obligation to Pay 6.05 Closure of Underwriting Period 6.06 Excess and Stop Loss Insurance 6.07 Retention ARTICLE 7.00 -TERMINKrION 7.01 Termination of this Agreement ARTICLE 8.00 - GENERAL PROVISIONS 8.01 Notice 8.02 Arbitration 8.03 Confidentiality 8.04 Currency 8.05 Calculation of Time Periods 8.06 Subscriber's Right of inspection 8.07 Severability 8.08 Entire Agreement 8.09 Waiver 8.10 Successors and Assigns 8.11 Further Acts 8.12 Applicable Law 8.13 Amendments 8.14 Gender and Number 8.15 Headings 8.16 Time of Essence SCHEDULES Schedule'A Founding Subscribers APPENDICES Appendix A Form of Subscription Appendix B Form of Termination Municipalities in Durham Region Subscribers'Agreement for the Purchase of Insurance THIS AGREEMENT dated the 15th day of February, 2000 AMONG THOSE MUNICIPALITIES THAT SUBSCRIBE TO THIS AGREEMENT BY EXECUTING A COPY OF THE FORM OF SUBSCRIPTION ATTACHED AS APPENDIX "A", SUBJECT TO AND IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT (hereinafter referred to collectively as"Subscribers"and individually as"Subscriber") WHEREAS the Subscribers to this Agreement wish to secure long-term, stable and economical insurance coverage; AND WHEREAS the Subscribers wish to enter into this Agreement, pursuant to which the Subscribers, among other things, will arrange to purchase policies of insurance, will enter into contracts of indemnity with the Insurer in respect of the Retention amount, and will agree to fund the purchase of such insurance policies; NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the mutual covenants of the parties hereinafter contained and for good and other valuable consideration, the receipt of which is hereby acknowledged, the Subscribers, one with each and each with all, covenant and agree as follows: ARTICLE 1.00 - DEFINITIONS In this Agreement and any amendment to this Agreement, the following terms will have the following meanings unless the context otherwise requires: 1.01 "Actuary" means the actuary retained by the Board of Directors from time to time; 1.02 "Board of Directors" means the Board of Directors established pursuant to Section 3.01; 1.03 "Alternate"' means the person who is designated pursuant to Section 3.02 to act in the place and stead of the Member, when unavailable; 1.04 "Annual Incurred Losses" means paid losses in respect of claims occurred, actuarially determined estimates for reported cases, and actuarially determined estimates for incurred but not reported claims; 1.05 "Assessment" means a charge against a Subscriber, as determined by the Board of Directors pursuant to Section 6.03, which is in addition to levies; Page ! - Final--February 15, 2000 Municipalities in Durham Region Subscribers'Agreement for the Purchase of Insurance 1.06 "Attorney-in-Fact" means the person appointed to act for the Subscribers pursuant to a power of attorney; 1.07 "Claims Fluctuation Reserve" means actuarially determined reserve funds maintained by the fund to adequately cover anticipated losses; 1.08 "Closure Date" for a particular Underwriting Period means the date that is three years after the last day of such Underwriting Period, or such other date as is determined by the Board of Directors on the advice of the Actuary that no further liability to or of the Subscribers exists; 1.09 "Deductible" means the amount which a Subscriber has elected for a particular coverage for which that Subscriber is responsible in respect of any claim with respect to that coverage; 1.10 "Eligibility Criteria" means the criteria which may be determined by the Board of Directors from time to time which must be met to be eligible to become a Subscriber; 1.11 "Extraordinary Resolution" means; (a) a resolution passed at a meeting of the Board of Directors by the affirmative vote of at least 80%of the Members of the Board of Directors; or (b) any written resolution signed in one or more counterparts by all of the Members; 1.12 "Fiscal Year" means the twelve month period ending 1.13 "Founding Subscriber" means each Subscriber who, as of February 15, 2000 has executed and delivered the Form of Subscription attached hereto as Appendix A; 1.14 "Fund" means the fund established pursuant to Section 2.01. 1.15 "Indemnity" means each agreement each Subscriber has entered into with the Insurer to indemnify the Insurer upon the payment of claims within the Retention and Indemnities means all of such agreements; 1.16 "Insurer" means the insurance company with whom each Subscriber has entered into a contract of insurance; 1.17 "Insurance Policy" means the policy of insurance purchased for each type of coverage from the Insurer by each Subscriber. It is understood that each Subscriber will purchase one or more Insurance Policies and that any references in this Agreement to Insurance Policy applies to each and all of them, as applicable. Page 2 Final--February 15. 2000 Municipalities in Durham Region Subscribers'Agreement for the Purchase of Insurance i 1.18 "Member" means a member of the Board of Directors as provided in Section 3.02 and includes, where the context requires, an Alternate; 1.19 "Municipality" means a municipality as defined in the Mitnicipal Act, R.S.O. 1990, M.45, as amended and includes a district, metropolitan and regional municipality; 1.20 "Ordinary Resolution" means: (a) any resolution passed at a duly constituted meeting of the Board of Directors by affirmative votes of a majority of the Members in attendance at such meeting, or (b) any written resolution signed in one or more counterparts by 80% of the Members of the Board of Directors; 1.21 "Prime" means the prime interest rate per annum established by the Toronto Dominion Bank from time to time as the reference rate of interest for the determination of interest rates that the Toronto Dominion Bank charges to customers of varying degrees of creditworthiness in Canada for Canadian dollar loans made by it in Canada and payable on demand and referred to by it as the"prime rate"; 1.22 "Regional Municipality" means the Regional Municipality of Durham; 1.23 "Retention" means the amount per claim, as determined from time to time by the Board of Directors on the advice of the Actuary,for which the Insurer is responsible on any claim, subject to any applicable excess of loss, stop loss or similar insurance, less the deductible, and for which each Subscriber is responsible under the Indemnity and the funds for which shall come from the Fund; 1.24 "Rules" means the rules and regulations established pursuant to Section 3.05(p). 1.25 "Subscriber" means a Municipality which has been accepted for participation and which has executed and delivered the Form of Subscription attached hereto. 1.26 "Subscriber Participation Percentage" means, with respect to a Subscriber, at any date during a given Underwriting period, a fraction, the numerator of which is the total of the levies paid and payable by such Subscriber to that date with respect to that Underwriting Period, and the denominator of which is the total of the levies paid and payable by all Subscribers to that date with respect to that Underwriting Period, expressed as a percentage, except that in the case of the use of this formula for determining Assessments, levies paid by any Subscribers which are not liable to pay Assessments will not be included. Page 3 - -- Final—February 1 S, 2000 Xhinicipalities in Durham Region Subscribers'Agreemeni for the Purchase of Insurance 1.27 "Subscription Date" means, for a particular Subscriber, the date referred to in Section 5.03. 1.28 "Underwriting Period" means the period of three years commencing 1 2:01 a.m. on 2000 and ending on 12:01 a.m. on 2003 and each successive three year period thereafter during which the Fund continues to operate. ARTICLE 2.00 -THE FUNDING ARRANGEMENT 2.01 Establishment of the Fund The Subscribers hereby agree to the establishment of the Fund. 2.02 Purpose of the Fund It is the intention of the Subscribers to use the Fund in order to purchase insurance, to pay the premiums for contracts of insurance arranged on behalf of the Subscribers, to enter into contract(s) of Indemnity with the Insurer in respect of such insurance, to refund and pay claims as and when required in respect of the Retention, to provide funds for the Claims Fluctuation Reserve, and to pay the administrative expenses of the Fund. The Fund shall have the power to do any.and every act and thing necessary, proper, convenient or incidental to the accomplishment of these purposes. 2.03 Not a Partnership or Trust Nothing in this Agreement is to be construed to constitute any of the Subscribers a partner, agent or representative of the others, or to create any trust, constructive, implied or otherwise, or any commercial or other partnership among the Subscribers. As among the Subscribers, it is agreed in matters involving this Agreement not to rely on the provisions of any partnership or trust legislation in any province or territory. 2.04 No Authority to Bind Except as expressly provided in this Agreement, a Subscriber does not have the authority to bind any other Subscriber or the Subscribers. 2.05 Indemnification for Unauthorized Acts Each Subscriber (in this section called the "lndemnitor") hereby 'irrevocably and unconditionally undertakes and agrees to indemnify and save harmless the-other. Subscribers (in this section called the "Indemnitees") from and against any and all liability, loss, harm, damage, cost or expense, including reasonable legal fees, which Page 4 - Final--Fehrua)y 15, 2000 hlrrnicipafities in Durham Region Subscribers',agreement for the Purchase of Insurance the Indemnitees may suffer, incur or sustain as a result of any act of the Indemnitor outside of the scope of or in breach of this Agreement. 2.06 Several Liability The obligations of each Subscriber with respect to the Fund and/or contracts and obligations entered into by or on behalf of the Subscribers in connection with the Fund will, in every case, be several and not joint and several. ARTICLE 3.00 - BOARD OF DIRECTORS 3.01 Establishment The Subscribers hereby establish an Board of Directors for the purpose of implementing this Agreement and operating the Fund. 3.02- Constitution of the Board of Directors The Board of Directors will be composed of one Member appointed by each Subscriber as confirmed by council resolution. Each Member will have one vote. Any Subscriber is entitled to designate by council resolution from time to time an Alternate who is entitled to act in the place and stead of such Member when such Member is unavailable. The Member and the Alternate, if designated, must meet the qualifications set out in Section 3.03. 3.03 Qualification of Members of Board of Directors Any individual may be a Member of the Board of Directors provided that, and for so long as, he or she: (a) is a person who is eighteen years of age or more; (b) is not a person who is of unsound mind, having been so found in Canada or elsewhere; (c) is not a person who has the status of a bankrupt; and (d) is an officer or employee of a Subscriber. No appointment of a person as a Member is effective unless he or she consents to act as a Member before or after the election or appointment. Page S - - --_ Final—Febrturn, 15. 2000 kunicipalities in Durham Region Subscribers'Agreentent for the Purchase of Insurance r 3.04 Rules For the purpose of administering this Agreement, the Board of Directors may establish from time to time such rules and regulations as it considers appropriate, provided that the Rules and any amendments thereto will be subject to the approval of the Board of Directors by Extraordinary Resolution. 3.05 Power and Authority of the Board of Directors Except as otherwise provided for in this Agreement, the Board of Directors has the power and authority, and the Subscribers hereby direct the Board of Directors to give any approvals and to matte any decisions and determinations required or permitted to be given or made by the Subscribers with respect to the Fund and any matter arising out of or under this Agreement. Without limiting the generality of the foregoing, it is acknowledged and agreed that the Board of Directors is authorized on behalf of and without further authority from the Subscribers: (a) to supervise the funding of the Retentions by the Subscribers in accordance with such terms and conditions as the Board of Directors may deem proper and to change, cancel, extend or insure such obligations and to secure insurance and/or reinsurance in excess of the Retentions as the Board of Directors may deem proper; (b) to set, by Ordinary Resolution, the levies and Assessments required of Subscribers pursuant to the provisions of this Agreement, which levies and assessments are to include each Subscriber's share of the expenses of the fund. (c) to effect policy changes affecting the operation of the Fund by Extraordinary Resolution. (d) to supervise the demanding, collection and receipt of all moneys which may become due by the Subscribers under this Agreement or under any contract of indemnity or insurance; (e) to give and receive all notices necessary or proper under the Indemnity or any contract of indemnity or insurance in respect of the Fund or the-Subscribers, and to adjust, compromise and settle all claims and losses thereunder; (0 to retain an auditor, Actuary, legal counsel and such other professional advisors as the Board of Directors considers appropriate in order to perform its duties under this Agreement; Page 6 Final-Februant 15. 2000 Municipalities in Durham Region Subscribers'agreement for the Purchase of Insurance (g) to open and operate in the name 'of the Fund an account or accounts in a Canadian chartered bank in order to deposit and to distribute funds with respect to the operation of the Fund; (h) to invest funds in accordance with any applicable law and to make or approve policies with respect to the investment of such funds and for the custody and safekeeping of any securities in which such funds may be invested; (i) subject to applicable law, to borrow such funds, in such amounts, on such terms and otherwise as the Board of Directors may determine are necessary or desirable to fulfill obligations under this Agreement provided that any borrowing for a term in excess of 30 days.must be approved by Extraordinary Resolution; Q) to pay all taxes, fees and other expenses relating to the orderly maintenance and management of the Fund; (k) to appoint a Manager and other staff, if considered appropriate, to manage the affairs of the Fund on behalf of the Subscribers on such terms and.conditions, ` including remuneration, as the Board of Directors may determine from time to time; (1) to establish such procedural rules with respect to the time, place and number of Board of Directors meetings; (m) to require such additional information from any Subscriber as the Board'of Directors deems reasonably necessary in order to perform its duties under this Agreement; (n) to appoint such committees including any or all of an Executive Committee, Claims Committee, Policy Committee, Investments Committee and Audit Committee as may be deemed by the Board of Directors to be necessary or advisable for the operation of the Fund; (o) to take such steps as are necessary to comply with all applicable legislation; (p) to make and amet id, by Extraordinary Resolution, such Rules as the Board of Directors considers appropriate pursuant to Section 3.04 including, without limitation, rules for the signing of cheques, negotiable instruments and other documents; (q) to establish and maintain such segregated balances as the Board of Directors determines should be established and maintained for the purposes of this .Agreement; Page 7 Final--February l.i, 2000 Atunicipalities in Durham Region Subscribers'Agreement for the Purchase of Insurance (r) to establish policies with respect to the promotion of loss control and risk management; (s) subject to the provisions of the Afunicipal Act, R.S.O. 1990, M.45. as amended, to do and perform every other act and all things required to be done under this Agreement or necessary or proper to be done in order to fully carry out and perform the terms of this Agreement; (t) to execute, by its attorney, and to carry out all other agreements which require execution by or on behalf of the Subscribers; (u) to establish the basis for apportioning the expenses of operating the Fund among the Subscribers; and (v) to determine policies and procedures with respect to the administration of claims. 3.06 Payment for Services Except as determined by the Subscribers from time to time, no payment will be made to any Member for his/her services in acting as a Member provided that any Member is entitled to reimbursement of any reasonable expenses incurred in so acting. 3.07 Term Notwithstanding anything else contained herein, any Subscriber may terminate the appointment of its Member and appoint a successor Member. Subject to Section 3.03, 3.08 and 3.09, an appointed Member of the Board of Directors will hold office until his/her successor is duly appointed. 3.08 Resignation A Member of the Board of Directors may resign from office upon giving a written resignation to the Board of Directors and such resignation becomes effective when received by the Board or at the time specified in the resignation,whichever is later. 3.09 Vacancies (a) Where there is a vacancy or vacancies in the Board of Directors, the remaining Members may exercise all of the powers of the Board of Directors. When a vacancy occurs, the Subscriber who appointed the Member no longer in office will fill the vacancy as soon as practicable. Page 8 - -- Final—February 15, 2000 Alunicipalities in Durham Region Subscribers'Agreement for the Purchase of Insurance (b) Among other reasons, a vacancy will be deemed to be created when neither a Member nor his/her Alternate attend two consecutive duly constituted meetings of the Board of Directors. Such vacancy will be deemed to exist from the end of the second such meeting and when written notice of such vacancy has been given by the Board of Directors to the Subscriber. (c) The vacancy shall no longer exist when a new Member and/or Alternate has been appointed by the Subscriber. Nothing herein shall prevent the Subscriber from re-appointing the Member or Alternate which led to the vacancy. 3.10 Decisions of-the Board of Directors All decisions of the Board of Directors require approval by Ordinary Resolution unless otherwise provided for in this Agreement. A decision of the Board of Directors with respect to any matter will be binding on all the Subscribers. 3.11 Chair and Officers (a) The Board of Directors will appoint a Chair and a Vice-Chair from amongst its Members. The Chair, and in his/her absence the Vice-Chair, will chair all meetings of the Board of Directors. In the absence of the Chair and the Vice- Chair, the Members of the Board of Directors in attendance at the meeting will appoint another Member to act as chair of such meeting. (b) The Board of Directors may appoint such other officers and designate'such responsibilities for such officers as the Board of Directors determines from time to time. (c) The Chair, the Vice-Chair and any officers appointed pursuant to Subsection 3.1 l(b) will hold office for one year or until a successor is appointed. The Chair will participate in all activities of the Board of Directors in the same manner as the other Members and, for greater clarity, will not have a second or casting vote in respect of any matter voted on by the Board of Directors. (d) The Board of Directors will appoint a Secretary (who need not be a Member of the Board of Directors) to keep complete and accurate minutes of all meetings of the Board of Directors. 3.12 Signing Officers Except as otherwise provided herein or where the Board of Directors has otherwise authorized the execution of documents on behalf of the Board of Directors, the execution of all documents required under this Agreement will be: Page 9 Final--February 15, 2000 X/unicipalities in Durham Region Subscribers'Agreement for the Purchase of Insurance (a) by both the Chair and the Vice-Chair, (b) by one of the Chair and the Vice-Chair together with one of two other Members designated by the Board of Directors, or (c) in the event that a Manager is appointed, by one of the Chair and Vice-Chair together with the Manager. Page 10 Final—February 15, 2000 - AluniciPalities in Durham Region Subscribers',4greement for the Purchase of Insurance 3.13 Meetings Generally (a) The Board of Directors will hold regular meetings at such time as the Board of Directors will determine from time to time. (b) The Chair may call additional meetings of the Board of Directors if he/she considers it advisable to do so, and will do so if requested by another Member. (c) Each Subscriber may have an additional attendee at each Board meeting (in addition to the Member, or the Altemate when the Member is unavailable) and, although such additional attendee may participate in discussions, he or she has none of the rights of a Member of the Board. 3.14 Teleconference Meetings When all Members present or participating in a meeting have consented, any Member may participate in a meeting of the Board of Directors by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and a Member participating in such a manner will be deemed to be present in person at the meeting. 3.15 Notice The Chair will give each Member written notice of the time and place of each meeting of the Board of Directors at least 24 hours (excluding any part of a Sunday or holiday as defined in the Interpretation Act of Ontario for the time being in force) before the time when the meeting is to be held, save that no notice of a meeting is necessary if all Members are present or if those absent have waived notice in writing to the holding of such meeting. Such waiver, whether given before or after the meeting of which notice is required to be given, will cure any default in giving such notice. 3.16 Location Meetings of the Board of Directors are to be held at such place as may be agreed upon by the Board of Directors from time to time. 3.17 Quorum A quorum for meetings of the Board of Directors is a majority of the number of Members in office at the particular time and no action is to be taken at a meeting of the Board of Directors unless a quorum is present. Page !1 Final—February 15. 2000 Municipalities in Durham Region Subscribers'Agreemeni for the Purchase of Insurance 3.18 Agreement Without Voting Any matter within the competence of the- Board of Directors that is agreed or consented to in writing by every Member is binding on all the Subscribers. 3.19 Duty of Care Every member, in exercising his/her powers and discharging his/her duties, must; (a) act honestly and in good faith, with a view to the best interests of the Subscribers as a group in respect of the Fund; and (b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. 3.20 Conflicts of Interest Members and/or Alternates shall not: (a) engage in any business or transaction or have a financial interest or other personal interest which is incompatible with the discharge of their official duties on the Board of Directors; (b) engage in any outside work or business undertaking in which the member has an advantage or appears to have an advantage derived from involvement with the Board of Directors; (c) place themselves in a position where they are under obligation to any person who might benefit from special consideration or favour on their part or who might seek, in any way, preferential treatment; (d) place themselves in positions where they could derive any direct or indirect benefit or interest from any contracts about .which the Member can influence decisions; (e) benefit from the use of information acquired during the course of their official duties as a member of the Board of Directors which is not generally available to the public; (f) accept a fee, gift or personal benefit that is connected directly or indirectly with the performance of his or her duties of office as a Member of the Board of Directors; Page 12 Final—February 15. 2000 Ultnicipatiries in Durham Region Subscribers'agreement for the Purchase of Insurance (g) participate in any decision or make any recommendation to the Board of Directors in which they or their immediate family has any financial interest. Whenever a Member considers that he or she could be involved in a conflict of interest as prohibited by this section, the Member shall immediately disclose the situation to the Board of Directors. Should a situation arise which appears to be a contravention of this section, the Board of Directors shall determine what action is appropriate to the circumstances. 3.21 Limitation of Liability No Member is liable for the acts, receipts, neglects or defaults of any other Member in any respect, or for any loss, damage or expense happening to any Subscriber in respect of the Fund, or for the insufficiency or deficiency of any security in or upon which any of the moneys of the Subscribers is invested, or for any loss or damage arising from the bankruptcy, insolvency or tortious acts of any person with whom any of the moneys, securities or effects of the Subscribers in respect of the Fund be deposited, or for any loss occasioned by any error of judgment or oversight on his/her part, or for any other loss, damage or misfortune whatever which happens in the execution of the duties of his/her office or in relation thereto, unless the same are occasioned by his/her own wilful neglect or default; provided that nothing herein will relieve any Member of the duty to act in accordance with this Agreement or of liability for any breach thereof. 3.22 Indemnity of Members Every Member and every former Member of the Board of Directors and every officer and every former officer appointed by the Board of Directors and their heirs and legal representatives will be indemnified and saved harmless by the Subscribers from and against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment reasonably incurred by him/her in respect of any action or proceeding to which he/she is made a party by reason of being or having been a Member or officer-if. ! (a) he/she acted in good faith with a view to the best interests of the Subscribers as a group in respect of the Agreement; and (b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he/she had reasonable grounds for believing that his/her conduct was lawful. 3.23 Liability Insurance The Board of Directors shall purchase and maintain insurance for the benefit of any person referred to in Section 3.22 against any liability incurred by him/her in respect of Page !3 Fi>i l—February 15, 2000 Municipalities in Durham Region Subscribers'agreement for the Purchase of Insurance hisiher duties. except where the liability relates to the failure to act honestly and in good faith, with a view to the best interests of the Subscribers as a group in respect of the Agreement. ARTICLE 4,00 - ACCOUNTING AND FINANCIAL REPORTING 4.01 Fiscal Period Accounts for the Fund will be prepared and settled as of the last day of each Fiscal Year or as of any other date the Board of Directors may agree upon. 4.02 Books and Records Proper and complete book's, records, reports and accounts of the Fund will be kept at the administrative office of the Fund and will be open and available for inspection and copying by any Subscriber or its authorized representative at any reasonable time during normal business hours. The said books and records will fully and accurately. reflect all transactions of the Fund and will be maintained in conformity with generally accepted accounting principles. 4.03 Subscriber Accounts Individual accounts will be kept for each Underwriting Period showing for each Fiscal Year each Subscriber's participation in the operations and the operating results of the Fund in the manner determined by the Rules. 4.04 Annual Report Within 120 days after the end of each Fiscal Year, the Board of Directors will cause the accountants of the Fund to furnish to each Subscriber an annual report consisting of: (a) the financial statements of the Fund at the end of the Fiscal Year; (b) the report of the Actuary; (c) the Subscriber Participation Percentage of each Subscriber for the Fiscal Year; (d) any additional information that may be required by the Board of Directors or any government or governmental authority under applicable legislation. 4.05 Audit Page 14 Final—February IS, 2000 - Xtuniclpalities in Durham Region Subscribers'Agreement for the Purchase of Insurance The accounting records and reports of the Fund will be audited annually by such firms as the Board of Directors may choose from time to time. Page 15 Final-February 15, 2000 _ ._ Municipalities in Durham Region Subscribers'Agreement for the Purchase of Insurance 4.05 Bank Accounts The bank of the Fund will be such Canadian chartered bank or banks as the Board of Directors may from time to time determine. All moneys received from time to time on account of the Fund will be paid forthwith into the bank account of the Fund in the same drafts, cheques, bills and cash in which they are received. Until changed by a decision of the Board of Directors, all cheques, negotiable instruments and withdrawals from bank accounts up to but not exceeding $10,000 require the signature of the Manager of the Fund, if any, and one signing officer appointed by the Board of Directors and, if there is no Manager, of two signing officers appointed by the Board of Directors and all cheques, negotiable instruments and withdrawals from bank accounts exceeding $10,000 require the signature of two signing officers appointed by the Board of Directors. ARTICLE 5.00 - SUBSCRIBERS 5.01 Founding Subscribers Each Municipality whose name appears in Schedule A attached hereto, and who executes and delivers the Form of Subscription attached hereto as of February 15, 2000 or before, will automatically become a Subscriber with effect from February 15, 2000 ("Subscription Date"). 5.02 Additional Subscribers The Board of Directors may accept additional qualified Municipalities to become parties to this Agreement and thereby become Subscribers in accordance with the following provisions: (a) any Municipality contained within the Regional Municipality of Durham at the effective date of this Agreement may apply to become a Subscriber provided that: W such Municipality submits a written application in acceptable form and remits the application together with such application fee as may be prescribed by the Board of Directors from time to time; (ii) such Municipality provides the historical claims information, data and other relevant information that the Board of Directors, the Actuary and the insurers/reinsurers deem necessary or appropriate to properly assess participation qualifications; Page 16 Final-February I S, 2000 - " "Inicipalities in Durham Region Subscribers'Agreement for the Purchase of Insurance (iii) such Municipality co-operates with the Board of Directors in providing such information and documentation as it may require, (b) The Board of Directors will review the application to become a Subscriber and will make a recommendation to the Councils of the participating Subscribers. A Municipality's application will be accepted if 80%of the Councils agree, subject always to the following: (i) receipt of a duly executed Form of Subscription from such Municipality in the form attached as Schedule A; (ii) receipt of a copy of the resolution of Council authorizing Subscription to the Fund; and (iii) receipt of any fees required to be paid by such Municipality. (c) After acceptance by the Councils in the manner indicated above, the Advisory Council will notify the Municipality of its acceptance by the Councils to become a Subscriber. 5.03 Effective Date of Subscription The effective date of Subscription ("Subscription Date") for any particular Subscriber, is: (a) if the Subscriber is a Founding Subscriber, February 15,2000, or (b) if the Subscriber is not a Founding Subscriber, the date specified by the Board of Directors in the notification to the Municipality accepting it as a Subscriber. 5.04 Minimum Period of Subscription If the Subscriber's Subscription Date is coincident with, or on or before the expiry of the first year in an Underwriting Period, the minimum period of subscription will be such Underwriting Period or the balance thereof. If the Subscriber's Subscription Date is after the expiry of the first year of an Underwriting Period, the minimum period of subscription will be the balance of the •then-current Underwriting Period plus the immediately subsequent Underwriting Period. 5.05 Termination of Subscription (a) The Board of Directors is empowered to remove, by Extraordinary Resolution, a Subscriber by providing such Subscriber with a notice in writing to that effect, in the event that the Subscriber: Page 17 Final-February 15. 2000 Ahmicipalwes in Durham Region Suhscribers'Agreemenifor the Purchase of Insurance (i) fails to comply with any term of this Agreement after having been given 30 days' written notice by the Board of Directors of the details of its failure to comply and the Subscriber has not yet rectified such non- compliance within 30'days after receipt of such notice; (ii) fails to pay any premium. levy or other fee or assessment within seven days when due hereunder; (iii) fails, in the opinion of the Board of Directors, to continue to meet the eligibility criteria for participation in the Fund and the Subscriber fails to rectify this condition to the satisfaction of the Board of Directors within 90 days after receipt of such notice. (b) The effective date of termination of participation in the Fund in the event of termination: 0) pursuant to Paragraph 5.05(a)(i), will be 30 days after receipt of the written notice, if the failure has not been rectified; pursuant to Paragraph 5.05(a)(ii), will be seven days after receipt of written notice that such premium, levy or other fee or assessment has not been paid; (iii) pursuant to paragraph 5.05(a)(iii), will be at the expiration of 90 days following the date of receipt of written notice of termination. (c) Subject to the minimum period of subscription set out in Section 5.04, a Subscriber may withdraw from participation in the Fund at the end of any Underwriting Period, provided that it provides the Fund with six months' written notice of its intention to withdraw, in which event, such withdrawal will take effect upon the expiry of that Underwriting Period. In the event there is a failure to give such notice, the Subscriber will be deemed to have elected to participate in the immediately succeeding Underwriting Period. 5.06 Subscriber Dissolution, Merger or Break-Up (a) If a Subscriber is dissolved, it will cease to be a Subscriber as of the date of its dissolution, this date being the date as approved by the Ontario Municipal Board in accordance with the provisions of the Municipal Act, R.S.O 1980, c.218, as amended, if such approval is applicable in law or if by statutory enactment, this date being the effective date of dissolution as set out in the legislation. Page 18 Final—Februaty 1 S, 2000 hlunicipalilies in Durham Region Subscribers'agreement for the Purchase of Insurance (b) Notwithstanding sub-paragraph (a) hereof, if as a result of municipal restructuring. (i) a Subscriber is merged or amalgamated with another Municipality that is not a Subscriber, the Subscriber will cease to be a Subscriber unless the merged entity elects to continue as a Subscriber and it meets the conditions set by the Board of Directors. The newly merged Municipality may only continue by applying to the Board of Directors as set out in Article 5.02; a Subscriber is merged with another Municipality that is a Subscriber, the merged entity will be deemed to be a Subscriber as of the effective date of the merger; a new Municipality is formed from a Subscriber and the'Subscriber is not a regional municipality and does not cease to exist, the Subscriber will remain a Subscriber and the new entity will be a Subscriber provided that it continues to meet the Eligibility Criteria set by the Board of Directors. 5.07 Continuing Liability If a Subscriber ceases to be a Subscriber, and the Subscriber is not a regional municipality and does not cease to exist it will continue to be liable for any Assessment(s) arising during or after such cessation in respect of claims incurred prior to the effective date of its cessation, unless satisfactory arrangements are made with the Board of Directors, satisfactory to the Board of Directors in its sole discretion, to buy out such liability. ARTICLE 6,00 - OPERATION OF THE FUND 6.01 Insurance Policies The Board of Directors will arrange for Insurance Policies for the Subscribers with Deductibles as elected by each Subscriber, for Indemnities and Detentions and limits of liability as determined by the Board of Directors. 6.02 Determination of Levies Payable The Board of Directors will, in respect of each Underwriting Period, on the advice of the Actuary determine the levy payable by each Subscriber. The levy with respect to any year will be sufficient to fund any insurance/reinsurance, excess or stop-loss Page 19 Final-February 15, 2000 Municipalities in Durham Region Subscribers'.-tgreement for the Purchase of Insurance insurance premiums to make payments under the Indemnities, to provide funds for the Claims Fluctuation Reserve and to fund the administrative expenses of the Fund. Such levies will be determined based upon the Annual Incurred Losses for that Subscriber as determined by the Board of Directors, by Ordinary Resolution, on the advice of the Actuary. 6.03 Assessments (a) Assessments in respect of an Underwriting Period will be made by the Board of Directors on the advice of the Actuary if the aggregate of the Ievies received for such Underwriting Period, after recognition of investment income earned thereon, is not sufficient to pay any insurance/reinsurance and excess and stop loss premiums attributable to 'such Underwriting Period, to pay the actual losses under the Indemnities, to provide funds for the Claims Fluctucation Reserve and to fund the administrative expenses of the Fund. (b) The Subscribers acknowledge that they may be responsible for additional assessments based on the actual loss experience of the Fund. (c) Loss claims experience for each Underwriting Period will be assessed annually. and potential deficits and surpluses shall be estimated and amortized over three years, or such other period as is determined by the Board of Directors. (d) In the event that an assessment is required, the Board of Directors will so notify each Subscriber of the amount of the Assessment which each Subscriber is to pay and the Assessment will be due 30 days following receipt of such notice or at such later date as may be prescribed in such notice. The notice will set out in reasonable detail the reasons for the Assessment and the basis upon which the Assessment is determined. (e) Assessments will be allocated on the basis of the Subscribers Participation Percentage for each Subscriber in the Underwriting Period. The Board of Directors will make all assessments on the advice of the Actuary. 6.04 Obligation to Pay (a) Each Subscriber covenants and agrees to pay forthwith when due any levy or Assessment required pursuant to the terms of this Agreement. If the levy or Assessment is not paid by a Subscriber when due, an interest charge of Prime plus 2%, compounded monthly, on the outstanding levy or Assessment payable will be 'payable by the Subscriber. (b) Interest will be payable as follows: Page 20 Final-February !S, 2000 ,t-hrniciPalities in Durham Region Subscribers'Agreement for the Purchase of Insurance (i) at an annual rate of interest expressed on the basis of a 365 or 366 day year. as the case may be, equal to Prime, (ii) interest shall be calculated-monthly based on the number of days actually elapsed, (iii) interest accrued is payable in arrears on the last day of each month except that, if the last day of the month is not a Business Day, on the immediately preceding Business Day (where Business Day means any day other than a Saturday, Sunday, statutory holiday or other day on banks in Ontario are required by law to close or are customarily closed), and (iv) changes in Prime cause immediate adjustment of the interest rate applicable thereto as and from the effective date of any such change without the necessity for any additional notice to the Subscriber. 6.05 Closure of Underwriting Period (a) Upon the Closure Date of an Underwriting Period, at the discretion of the Board of Directors, and subject to Section 7.01,'the excess, if any, of the realized value of the Fund's assets over outstanding obligations of the Fund, will be shared among all Subscribers in direct proportion to their Subscribers' Participation Percentage. Any deficit remaining upon the Closure Date will be dealt with in accordance with section 6:03. (b) Prior to the Closure Date of an Underwriting Period, as considered prudent by the Board of Directors, and subject to Section 7.0 1, excess assets of the Fund, or any part thereof, may be paid out to the Subscribers, applied to reduce the actuarially determined levy or retained and applied towards a Claims Fluctuation Reserve for the next Underwriting Period, in each case in direct proportion to their Subscribers Participation Percentage. (c) A Subscriber will not share in that part of the excess attributable, as determined by the Actuary, to the period prior to the date on which that Subscriber became a Subscriber. Further, any subscriber not participating in the next following Underwriting Period will not share in any excess of assets over liabilities for the preceding Underwriting Period during which the Subscriber participated. The foregoing restriction on the return of excess assets attributable to the immediately preceding Underwriting Period does not apply to the return of that portion of any levy paid by the Subscriber during such Underwriting Period which is determined by the Actuary, at the time such levy is paid, to be a contribution to a surplus account or contingency reserve, plus investment income attributable thereto, unless such amounts (or part thereof) have been allocated by the Board of Directors for other purposes. Page 21 Final—February 15, 2000 ,blunicivaliaes in Durham Region Subscribers'.tgreement for the Purchase of lnsarance 6.06 Excess and Stop Loss Insurance The Board of Directors will endeavour to arrange insurance policies providing excess insurance coverage over and above the Retention and stop loss insurance coverage. The insurance policies will name the Subscribers as insureds. In order to minimize the cost of such coverage, the Fund will perform the administrative services of collecting the premiums from the Subscribers for remittance to the Insurer and will report claims to the Insurer based on notices of claim given by the Subscribers to the Fund. 6.07 Retention The Board of Directors will endeavour to arrange the Indemnity between each Subscriber and the Insurer to cover claims for the Retention. The Retention required under the Indemnity shall provide for payment by the Subscriber to the Insurer of amounts within thq retention which shall come from the Fund. Claims are to be paid out to the insurer under the indemnity as they arise in accordance with its terms. ARTICLE 7.00 -' TERMINATION 7.01 Termination of this Agreement (a) The Subscribers may terminate this Agreement by resolution or by-law passed by a majority of each of the Subscribers. (b) Upon termination, as and when determined by the Board of Directors, the assets of the Fund will be liquidated and the excess, if any, of the realized value of such assets over outstanding obligations (including the setting aside of an adequate reserve for future claims), will be returned to the Subscribers in direct proportion to their Subscribers Participation Percentage for each Underwriting Period not yet closed on the date of termination. (c) Notwithstanding the termination of this Agreement, the Board of Directors, and the Fund, are empowered to continue in operation for the limited purpose of winding up their affairs and, for such purpose, this Agreement will remain in full force and effect until all obligations of the Subscribers have been fulfilled. (d) If this Agreement is terminated, all Subscribers will continue to be responsible for all liabilities and Assessments relating thereto in respect of all Underwriting Periods or portions thereof in which each Subscriber .participated. Unless satisfactory arrangements are made by the Board of Directors, satisfactory to the Board of Directors in its sole discretion, to buy out or bond such liability.' Page 22 - - Final—Febritary 15. 2000 Municipalities in Durham Region Subscribers'Agreement for the Purchase of Insurance ARTICLE 8.00 - GENERAL PROVISIONS 8.01 Notice All notices, requests, demands or other communications by the terms hereof required or permitted to be given by one party to another will be given in writing and served personally, or sent by registered mail, postage prepaid, addressed to: (a) each Subscriber at the address noted below its signature on the signature page hereof or on the Form of Subscription attached hereto as Schedule "A'; (b) the Board of Directors or the Fund, c/o: Attention: or at such other address as may be given by any of them to the others in writing from time to time, and such notices, requests, demands, acceptances and other communications are deemed to have been received when delivered, or if sent by registered mail, are deemed to have been received on the third day follo%i ing the date of mailing the letter. 8.02 Arbitration If any dispute occurs among the parties hereto, or the Board of Directors is unable to reach an agreement, the matter in dispute will be resolved by a single arbitrator pursuant to the provisions of the Arbitration Act, 1991 (Ontario) as amended. 8.03 Confidentiality The Board of Directors shall adopt appropriate procedures to ensure that all information received by the Board remains confidential. Members of the Board of Directors and members of any Committee established by the Board shall keep all information confidential and shall not divulge or use such information other than in the course of his/her duties as a member of the Board of Directors or other Committee. 8.04 Currency All payments contemplated herein are to be made in Canadian funds. Page 23 Final—February 13, 2000 Municipalities in Durham Region Subscribers'Agreement for the Purchase of Insurance 8.05 Calculation of Time Periods Unless otherwise specified in this Agreement, when calculating the period of tinge within which or following which any act is to be done or step taken pursuant to this Agreement, the date which is the reference day in calculating such period is to be excluded. If the last day of the period is a non-business day, the period in question is to end on the next business day. Page N Final—Februaty 15, 2000 ,Minicipalities in Durham Region Subscribers',4gree nent for the Purchase of Insurance 8.06 Subscriber's Right of Inspection Any subscriber by a duly authorized agent, upon reasonable notice, shall have the right, during regular business hours and subject to the reasonable demands of the business of the Fund, to inspect and, at its own expense, to copy the record books, the books of account, and any other book or document of the Fund other than such documents as the Board of Directors shall for time to time designate as confidential. . 8.07 Severability If any provision of this Agreement is held to be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Agreement are not in any way to be affected or impaired thereby. 8.08 Entire Agreement This Agreement constitutes the entire agreement among the parties relating to the establishment and operation of the Fund and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, among the parties with respect thereto. 8.09 Waiver { No waiver by any party to this Agreement of any breach of any of the provisions of this Agreement by any other party will take effect or be binding unless in writing and signed by the party intended to be bound. Unless otherwise provided therein, such waiver is not to limit or affect the rights of such party with respect to any other breach. 8.10 Successors and Assigns This Agreement will enure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and assigns provided that this Agreement may be assigned by a Subscriber only with the consent of the Board of Directors. 8.11 Further Acts The parties hereto agree to execute and deliver such further and other documents and perform and cause to be performed such further and other acts and things as may be necessary in order to give full effect to this Agreement and every part thereof. Page 2 Final-Febrtray 15. 2000 ,municipalities in Durham Region Subscribers'agreement for the Purchase of Insurance 8.12 Applicable Law This Agreement will be construed and enforced in accordance with the rights of the parties hereto and is to be governed by the laws of the province of Ontario and the laws of Canada applicable therein. 8.13 Amendments This Agreement may be amended by written agreement of all the Subscribers as confirmed by resolution or bylaw. 8.14 Gender and Number Words importing the singular number only shall include the plural and vice versa and words importing the masculine gender shall include the feminine gender and words importing persons shall include a natural person, firm, trust, partnership, association, corporation, government or governmental board agency or instrumentality. 8.15 Headings The division of this Agreement into Articles and Sections and the Article and Section headings are for convenience of reference only and shall not affect the interpretation or construction of this Agreement. 8.16 Time of Essence Time shall be of the essence of this Agreement. IN WITNESS WHEREOF the parties hereto have subscribed to this Agreement by execution Of two copies of the From of Subscription appended to this Agreement as fully as they would have by executing a copy of this Agreement. Page 16 Final—February 15, 2000 SCHEDULE A FOUNDING SUBSCRIBERS The following Municipalities may became Founding Subscribers pursuant to Section 5.01: Town of Ajax Township of Brock Municipality of Clarington Regional Municipality of Durham Township of Scugog Township of Uxbridge Town of Whitby i