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2009-131
THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON BY-LAW NO. 2009-131 Being a by-law to approve and authorize the execution of a note amending agreement made as of the 31st day of October, 2009 in respect of second amended and restated promissory notes dated October 1, 2006 issued by Veridian Corpomtion and Veridian Connections Inc. in favour of The Corporation of the Town of Ajax, The Corporation of the City of Belleville, The Corporarion of the Municipality of Clarington and The Corporation of the City of Pickering, and to approve the issue of third amended and restated promissory notes dated as of the 31st day of October, 2009. WHEREAS the Electricity Act, 1998 authorized a municipality to make by-laws transferring employees, assets, liabilities, rights and obligations of the municipal corporation and to receive securities as consideration therefor and Veridian Corporation ("VC") and Veridian Connecfions Inc. ("VCI") issued promissory notes (the "Original Notes") dated September 28, 2001 in favour of The Corporation of the Town of Ajax ("Ajax), The Corporation of the City of Belleville ("Belleville"), The Corporation of the Municipality of Clarington ("Clarington") and The Corporation of the City of Pickering ("Pickering") due on the 31st day of October, 2006; AND WHEREAS the Original Notes were amended and restated pursuant to a note amending agreement dated as of October 1, 2006 and second amended and restated promissory notes dated the 1st day of October, 2006 due on the 1st day of November, 2009 (the "Second Restated Notes"); AND WHEREAS VC and VCI have requested amendments to the Second Restated Notes including an extension of the maturity date; NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE MUNICH'ALffY OF CLARINGTON ENACTS AS FOLLOWS: 1. THAT Council approves the extension of the maturity date of the Second Restated Notes to the ] st day of November, 2012; 2. THAT Council approves and authorizes the note amending agreement (the "Agreement") made as of the 31st day of October, 2009 amongst Ajax, Belleville, Clarington and Pickering, as the holders of the Second Restated Notes and VC, VCI and Veridian Energy Inc. in the form of the draft agreement presented to Council and attached hereto as Schedule "A"; 3. THAT Council approves the issue of the third amended and restated promissory notes (each a "Third Restated Note") by VC and VCI pursuant to the Agreement. 4. THAT the Mayor and the Clerk are authorized to execute the Agreement; 5. THAT the Clerk is authorized and directed to surrender to VC the Second Restated Note in favour of this Municipality in the principal amount of $2,355,000 and to receive a Third Restated Note pursuant to the Agreement; 6. THAT the Clerk is authorized and directed to surrender to VCI the Second Restated Note in favour of this Municipality in the principal amount of $5,966,000 and to receive a Third Restated Note pursuant to the Agreement; 7. THAT the Clerk is authorized to affix the Corporate Seal of The Corporation of the Municipality of Clatington to the Agreement. THIS BY-LAW SHALL COME INTO FORCE AND TAKE EFFECT IMMEDIATELY ON AND AFTER THE PASSING THEREOF. Read a first time this 5`" day of October, 2009. Read a second time this Sa' day of October, 2009 Read a third time this 5~' day of October, 200Q. SCHEDULE "A" NpTE AMENDING AGREEMENT 1 HIS AGREEMEN'T' made as of the 31s` day of October, 2009. I3 I:'I'VJEEN: The Corporation of the Town of Ajax ("Ajax") - and - The Corporation of the Municipality of Clarington {"Clarington") - and - The Corporation of the City of Pickering ("Pickering") - and - The Corporation of the City of Belleville ("Belleville") {Ajax, Belleville, Clarington and Pickering are refen~ed to collectively herein as the "Veridian Shareholders") - and - Veridian Corporation, a corporation existing under the laws of Ontario ("VC") - and - Veridian Connections Inc., a corporation existing under the laws of Ontario ("VCI") - and - Veridian Energy Inc., a corporation existing under the laws of Ontario ("VET') (VC, VCI and VEI are referred to collectively herein as the "Veridian Group") -z- RECITALS: A. VCl has previously issued one promissory note to each of the Veridian Shareholders (collectively the "VCI Notes") issued pursuant to the applicabletransfer by-laws enacted pursuant to the authority granted under the Electricity~4ct, 1998, which VCI Notes are outstanding as of the date hereof; P. VC has previously issued one promissory note to each of the Veridian Shareholders (collectively the "VC Notes") issued pursuant to the applicable transfer by-laws enacted .pursuant to the authority granted under the Electricity Act, 1998, which VC Notes are outstanding as of the date hereof; C. The Veridian Shareholders wish to amend the VCI Notes and the VC Notes as provided herein; D. "The Veridian Shareholders have wnsulted with the Veridian Group in connection with the proposed amendments to the VC Notes and the VCI Notes; NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the respective covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Amendment: The Veridian Shareholders will surrender forthwith to VC and VCI the existing VC Notes and VCI Notes (the VC Notes and VCI Notes hereinafter collectively, the "Predecessor Nates") (descripfions of such Predecessor Notes being set out in Appendix "A" attached hereto) and VC and VCI will forthwith issue amended and restated promissory notes in the fin-m attached hereto as Appendix "I3". There shall be eight amended and restated promissory notes (the "Amended and Kestated Promissory Notes") in total. Four promissory notes will be issued by each of VC and VCl to each of the four Veridian Shareholders in the same principal amounts as the VC Notes and VCI Notes. For greater clarity, the amendment and restatement of the Predecessor Notes shall not extinguish the debt created pursuant to the transfer by-laws and Predecessor Notes and such debt is continued as amended and restated in the Amended and Restated Promissory Notes. 2. Counterparts: This Note Amending Agreement may be executed in any number of counterparts, each of which will be deemed to be an original and all of which taken together will be deemed to constitute one and the same agreement. -3- TN WITNESS WHEREOF the parties hereto have duly authorized and executed this Note Amending Agreement as of the day and yeaz first above written. THE CORPORATION OF THE TOWN OF AJAX By: Name: Steve Parish Title: Mayor By: Name: Marty de Rond Title: Clerk THE CORPORATION OF THE CITY OF BELLEVILLE By; cis Name: Neil Ellis Title: Mayor By: c/s Name: Julie C. Oram Title: Clerk THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON By. ~ eis Name ~ Z methy __ =___ T' e: ayor - _ ~-_ - Nam Anne Gre n e - - _ ' - ~ _ _- Title: Deputy Clerk --.--'- -4- THE CORPORATION OF THE CITY OF PICKERING Name: Dave Ryan Title: Mayor Name: Debi A. Bentley "Citle: Clerk VERIDIAN CORPORATION Name: Michael Angemeer Title: President By: Name: Glenn Rainbird Title: Chair VERIllIAN CONNECTIONS INC. By: Name: Michael Angemeer Title: President By; c/s Name: Glemi Rainbird Title: Chair -5- VERIDIAN ENERGY INC. sy: ~~5 Name: Michael Angemeer Title: President Name: Glenn Rainbird Title: Chair Appendix "A" Eight (8) Veridian Group Predecessor Notes described below. Issuer Holder Date Principal Amount 1. Veridian Corporation 'the Corporation of the October ls`; $5,550,000 Town of Ajax 2006 2. Veridian Corporation The Corporation of the October 151, $2,355,000 Municipality of 2006 Clarington 3. Veridian Corporation The Corporation of the October 1 ", $7,095,000 City of Pickering 2006 4. Veridian Corporation 'PheCorporation of the October 15`, $2,206,000 City of Belleville 2006 5. Veridian Connections Inc. The Corporation ofthe October IS`, $14,060,000 Town of Ajax 200b 6. Veridian Connections Ina The Corporation of the October l SY, $5,966,000 Municipality of 2006 Clarington 7. Veridian Connections Ina The Corporation ofthe October 151, $17,974,000 City of Fickering 2006 8. Veridian Connections Inc. The Corporation ofthe October 15`, $5,588,000 City of Belleville 2006 Appendix "B" Eight (8) Veridian Group Amended and Restated Promissory Notes attached hereto. ::ODM,Y~.PCDOCSCi'OR(i 1 `A i 5860x'~,a THIRD AMENDED AND RESTATED TERM PROMISSORY NOTE Maturity Date: November Ist, 2012 Principal Amount: $5,550,000 "['his note amends and restates a Second Amended and Restated Promissory Note (the "Predecessor Nate"} issued by Veridian Corporation to the Corporation of the'I'own of Ajax (the "Holder"} on October 151, 2006 for the Principal Amount. The Predecessor Note was issued pursuant to By-law No. 121-2006 of the Holder. This note amends the terms of repayment of, and does not extinguish, the debt created pursuant to the transfer by-law (enacted pursuant to the authority granted under the I~lectrieity flct, 1998) as set forth originally in By-Law 115-99 of the Holder, as amended by By-Law 121-2006, and ttre Predecessor Note. POR VALUE RECEIVED, Veridian Corporation (the "Corporation"), hereby promises to pay to or to the order of the Corporation of the Town of Ajax, in lawful money of Canada, on November 1, 2012 (the "Maturity Date") at the principal office of the Holder, the principal amount of FIVE MILLION, FIVE HU3VDRED AND FIFTY THOUSAND Dollars (55,550,000) (the "Principal Amount") together with interest on the unpaid Principal Amount. Interest Rate. Interest on the Principal Amount shall be calculated annually, not in advance, for the period from November 1st, 2009 until the Maturity Date, at a rate equal to the greater of: (a) six percent (6%), and (b) a rate equal to the Ontario Energy Board ("OEB") deemed long-terns debt rate as set forth on an annual basis in the OEB's Cost of Capital Parameter Updates for Cost of Service Applications, or as the deemed long-term debt rate may otherwise be established by the OEB (the "Interest Rate"). Interest at the Interest Rate shall be payable on November i in each year up to and including the Maturity Date. "I'he Corporation acknowledges that the Interest Rate payable pursuant to this note shall be automatically amended from time to time to reflect the deemed rate established by the OEB from time to time and this note shall be automatically amended from time to time to reflect any change to the Interest Rate as determined by the OEB provided that such deemed rate is greater than six percent (6%). Notwithstanding that the Interest Rate pursuant to this note shall be amended, the effective date of any change in the Interest Rate pursuant to this note will be as of May 1St each year with interest payable on the previous Interest Rate from November 1St of the previous year to April 30t~' of the next year, and interest payable at the amended Interest Rate from May 15' to October 31St of the current year. 2. Acceleration on Default. Upon default in the payment of any principal or interest due hereunder, or if the undersigned shall become insolvent or bankrupt or make a proposal in bankruptcy, the entire unpaid principal indebtedness owing by the undersigned to the Holder evidenced hereby and all interest accrued thereon to the date of pa}nnent shall forthwith become due and payable upon demand by the -2- Holder subject to any subordination and postponement to any other financial institution or lender. 3. Rankine of this Note. This Note shall rank equally in all respects as to the payment of principal and interest hereunder with promissory notes issued as of the dates hereof to the Corporation of the City of Pickering, to the Corporation of the Municipality of Clarington and to the Corporation of the City of Belleville (collectively the "Municipalities") described in Schedule "A" hereto (together the "Other Notes"). 4. Conversion of this Note. All (but not less than all) of the Principal Amount of this Note is convertible into fully-paid and non-assessable common shares of the Corporation based on the exchange ratio specified herein at the option of the Holder, which option may be exercised by the Holder by notice in writing to the Corporation on or before the Maturity Date. The exchange ratio for the conversion of the Principal Amount of this Note shall be on the basis that, for every $1,000.00 of Principal Amount, 1 fully paid and non-assessable common share of the Corporation shall be issued to the Holder. The conversion of the Principal Amount will be effected on the date determined by the Holder following consultation with the Corporation. 5. Subordination. The Holder acknowledges and agrees that the obligation of the Corporation to repay the Principal Amount and the principal amount of the Other Notes is subordinated and postponed to the obligations of the Corporation from time to time to any other financial institution or lender. The Holder will execute, promptly do, deliver or cause to be done, executed and delivered all further acts, documents and things as may be required to provide for the subordination and postponement of the Holder's rights evidenced by this Note. 6. Revisions and Replacement. At the sole option of the Holder, the Maturity Date and any of the terms of this Note may be revised, changed or restated by the Holder following eonsultaGon with the Corporation. If this Note is revised, changed or restated, the Corporation may cancel and replace this Note in which case, the Holder shall forthwith surrender this Note for cancellation. 7. Sale of Shares. In the event that the Holder transfers its common shares in the capital of the Corporation (in accordance with the terms of a shareholders' agreement among the Holder, the Municipalities, Veridian Connections Inc., Veridian Energy Ina and the Corporation dated September 28, 2001, as amended and/or restated from time to time) prior to the Maturity Date, the Note shall remain due to the Holder in accordance with its terms. 8. Note Non-negotiable and Non-assignable. The Note shall be non-negotiable and non-assignable -3- IN WITNESS WHEREOF Veridian Corporation has caused this Note to be signed under its corporate seal by its duly authorized officers as of this 31st day of October, 2009. VERIDIAN CORPORATION I3y: Sy: Glenn Rainbird, Chair Michael Angemeer, President -4- SCHEDULE °°A" Third Amended and Restated Term Promissory Note issued by Veridian Connections Inc. to the Corporation of the Municipality of Clarington in the principal amount of $5,966,000 and dated October 31, 2009. 2. Third Amended and Restated Tenn Promissory Note issued by Veridian Connections Inc. to the Corporation of the City of Pickering in the principal amount of $17,974,000 and dated October 31, 2009. 3. Third Amended and Restated Term Promissory Note issued by Veridian Corporation to the Corporation of the Municipality of Clarington in the principal amount of $2,355,000 and dated October 31, 2009. 4. Third Amended and Restated Term Promissory Note issued by Veridian Corporation to the Corporation of the City of Pickering in the principal amount of $7,095,000 and dated October 31, 2009. 5. Third Amended and Restated Tenn Promissory Note issued by Veridian Corporation to the Corporation of the City of Belleville in the principal amount of $2,206,000 and dated October 31, 2009. 6. Third Amended and Restated Term Promissory Note issued by Veridian Connections Inc. to the Corporation of the City of Belleville in the principal amount of $5,588,000 and dated October 3 i, 2004. ::ODMn`:P000CS\TOR01'~A 158623'3 THIRD AMENDED AND RESTATED TERM PROIVITSSORY NOTE Maturity Date: November 1", 2012 Principal Amotmt: $2,355,000 This note amends and restates a Second Amended and Restated Promissory Note (the "Predecessor Note"} issued by Veridian Corporatioi to the Corporation of the Municipality of Clarington (the "Holder"} on October 151, 2006 for the Principal Amount. The Predecessor Note was issued pursuant to By-law No. 06-191 of the Holder. This note amends the terms of repayment of, and does not extinguish, the debt created pursuant to the transfer by-law (enacted pursuant to the authority granted under the L'/ectricity Act, ]998) as set forth originally in By-Law 99-173 of the Holder, as amended by By-Law 06-191, and the Predecessor Note. FOR VALUE:- REChIVF.,D, V"eridian Corporation (the "Corporation"), hereby promises to pay to or to the order of the Corporation of the Municipality of Clarington, in lawful money of Canada, on November 1, 2012 (the "Maturity Date") at the principal office of the. Holder, the principal amount of TWO MILLION, THREE HUNDRED AND FIFTY-FIVE THOUSAND Dollars ($2,355,000) (the "Principal Amount") together with interest on the unpaid Principal Amount. 1. Interest Rate. Interest on the Principal Amount shalt be calculated annually, not in advance, for the period from November 15L, 2009 until the Maturity Date, at a rate equal to the greater of: (a) six percent (6%), and (b) a rate equal to the Ontario Energy Board ("OEB") deemed long-term debt rate as set forth on an aimua] basis in the OEB's Cost of Capital Parameter Updates for Cost of Service Applications, or as the deemed long-term debt rate may otherwise be established by the OEB (the "Interest Rate"). Interest at the Interest Rate shall be payable on November 1 in each year up to and including the Maturity Date. The Corporation acknowledges that the Interest Rate payable pursuant to this note shall be automatically amended from time to time to reflect the deemed rate established by the OEB from time to time and this note shall be automatically amended from time to time to reflect any change to the Interest Rate as determined by the OEB provided that such deemed rate is greater than six percent (6%). Notwithstanding that the Interest Rate pursuant to this note shall be amended, the effective date of any change in the Interest Rate pursuant to this cote will be as of May 151 each yeaz with inerest payable on the previous Interest Kate from November 1S1 of the previous year to April 30`h of the next year, and interest payable at the amended Interest Rate from May 1" to October 31" of the current year. 2. Acceleration on Default. Upon default in the payment of any principal or interest due hereunder, or if the undersigned shall become insolvent or bankrupt w• make a proposal in bankruptcy, the entire unpaid principal indebtedness owing by the undersigned to the Holder evidenced hereby azid all interest accrued thereon to the date of payment shall forthwith become due and payable upon demand by the -2- Holder subject to any subordination and postponement to any other financial institution or lender. 3. Ranking of this Nate. This Note shall rank equally in all respects as to the payment of principal and interest hereunder with promissory notes issued as of the dates hereof to the Corporation of the Town of Ajax, to the Corporation of the City of Pickering and to the Corporation of the City of Belleville (collectively the "Municipalities") described in Schedule "A" hereto (together the "Other Notes"). 4. Conversion of this Note. All (but not less than all) of the Principal Amount of this Note is convertible into fully-paid and non-assessable common shares of the Corporation based on the exchange ratio specified herein at the option of the Holder, which option may be exercised by the Holder by notice in writing to the Corporafion on or before the Maturity Date. The exchange ratio for the conversion of the Principal Amount of this Note shall be on the basis that, for every 51,000.00 of Principal Amount, l fully paid and non-assessable common share of the Corporation shall be issued to the Holder. The conversion of the Principal Amount will be effected on the date determined by the Holder following consultation with the Corporation. 5. Subordination. The Holder acknowledges and agrees that the obligation of the Corporation to repay the Principal Amount and the principal amount of the Other Notes is subordinated and postponed to the obligations of the Corporation from time to time to any other financial institution or lender. The Holder will execute, promptly do, deliver or cause to be done, executed and delivered ail further acts, documents and things as may be required to provide for the subordination and postponement of the Holder's rights evidenced by this Note. 6. Revisions and Replacement. At the sole option of the Holder, the Maturity Date and any of the terms of this Note may be revised, changed or restated by the Holder .following consultation with the Corporation. If this Note is revised, changed or restated, the Corporation may cancel and replace this Note in which case, the Holder shall forthwith sun•ender this Note for cancellation. 7. Sale of Shares. In the event that the Bolder transfers its common shares in the capital of the Corporation (in accordance with the terms of a shareholders' agreement among the Holder, the Municipalities, Veridian Connections Inc., Veridian Enetgy Inc. and the Corporation dated September 28, 2001, as amended and; or restated from lime to lime) prior to the Maturity Date, the Note shall remain due to the Holder in accordance with its terms. 8. Note Non-negotiable and Non-assignable. The Note shall be non-negotiable and non-assignable. -3- IN WITNESS WHEREOF Veridian Corporation has caused this Note to be signed under its corporate seal by its duly authorized officers as of this 31st day of October, 2001. VERIllIAN CORPOT2ATION By: By: Glenn Rainbird. Chair Michael Angemeer, President -4- SCHEDiILE "A" 1. Third Amended and Restated Term Promissory Note issued by V eridian Connections lnc. to the Corporation of the Town of Ajax in the principal amount of $14,060,000 and dated October 31, 2009. 2. Third Amended and Restated Term Promissory Note issued by Veridian Connections Inc. to the Corporation of the City of Pickering in the principal amount of $17,974,000 and dated October 31, 2009. 3. Third Amended and Restated Tenn Promissory Note issued by Veridian Corporation to the Corporation of the Town of Ajax in the principal amount of $5,550,000 and dated October 31, 2009. 4. "Third Amended and Restated '1"erm Promissory Note issued by Veridian Corporation to the Corporation of the City of Pickering in the principal amount of $7,095,000 and dated October 31, 2009. 5. Third Amended and Restated Term Promissory Note issued by Veridian Corporation to the Corporation of the City of Belleville in the principal amount of $2,20b,000 and dated October 31, 2009. 6. Third Amended and Restated Term Promissory Note issued by Veridian Connections Inc. to the Corporation of the City of Belleville in the principal amount of $5,588,000 and dated October 31, 2009. onnTn;NCOOCS,~ ottoiwi sseas~s THIRD AMENDED AND RESTATED TERM PROMISSORY NOTE Maturity Date: November 1~`, 2012 Principal Amount: $7,095,000 This note amends and restates a Second Amended and Restated Promissory Note (the "Predecessor Note") issued by Veridian Corporation to the Corporation of the City of Pickering (the "Holder") on October 1y`, 2006 for the Principal Amount. The Predecessor Note was issued pursuant to By-law No. 6706/06 of the Holder. This note amends the terms of repayment of, and does not extinguish, the debt created pursuant to the transfer by-law (enacted pursuant to the authority granted under the Electricity Act, 1998) as set forth originally in By-Law 5586/99 of the Holder, as amended by By-Law 6706/06, and the Predecessor Note. FOR VALUE RECF,IVED, Veridian Corporation (the "Corporation"), hereby promises to pay to or to the order of the Corporation of the City of Pickering in lawful money of Canada, on November l; 2012 (the "Maturity llate") at the principal office of the Holder< the principal amount of SEVEN MILLION i~iINTETY-FIVE THOUSAND Dollars ($7,095,000) (the "Principal Amount") together with interest on the unpaid Principal Amount. 1. Interest Rate. Interest on the Principal Amount shall be calculated annually, not in advance, for the period from November 1~`, 2009 until the Maturity Date, at a rate equal to the greater of: (a) six percent (6%), and (b) a rate equal to the Ontario Energy Board ("OEB") deemed long-term debt rate as set forth on an annual basis in the OEB's Cost of Capitial Parameter Updates for Cost of Service Applications, or as the deemed long-term debt rate may otherwise be established by the OEB (the "Interest Rate"). Interest at the Interest Rats shall be payable on November 1 in each year up to and including the Maturity Date. The Corporation acknowledges that the Interest Rate payable pursuant to this note shall be automatically amended from time to time to reflect the deemed rate established by the OEB from time to time and this note shall be automatically amended from time to time to reflect any change to the Interest Rate as determined by the OEB provided that such deemed rate is greater than six percent (6%). Notwithstanding that the Interest Rate pursuant to this note shall be amended, the effective date of any change in the Interest Rate pursuant to this note will be as of May ls` each year with interest payable on the previous Interest Rate from November 1" of the previous year to April 30"' of the next year, and interest payable at the amended Interest Rate from May ls` to October 31~` of the current year. 2. Acceleration on Default. Upon default in the payment of any principal or interest due hereunder, or if the undersigned shall become insolvent or bankrupt or make a proposal in bankruptcy, the entire unpaid principal indebtedness owing by the undersigned to the Holder evidenced hereby and all interest accrued thereon to the date of payment shall forthwith become due and payable upon demand by the -2- Holder subject to any subordination and postponement to any other financial institution or lender. 3. Ranking of this Note. This Note shall rank equally in all respects as to the payment of principal and interest hereunder with promissory notes issued as of the dates hereof to the Corporation of the Town of Ajax, to the Corporation of the Municipality of Clazington and to the Corporation of the City of Belleville (collectively the "Municipalities") described in Schedule "A" hereto (together the "Other Notes"). 4. Conversion of this Note. All (but not less than all) of the Principal Amount of this Note is convertible into fully-paid and non-assessable common shares of the Corporation based on the exchange ratio specified herein at the option of the Holder, which option may be exercised by the Holder by notice in writing to the Corporation on or before the Maturity Date. The exchange ratio for the conversion of the Principal Amount of this Note shall be on the basis that, for every $1,OOOAO of Principal Amount, 1 fully paid and non-assessable common share of the Corporation shall be issued to the Holder. The conversion of the Principal Amount will be etTected on the date determined by the Holder following consultation with the Corporation. 5. Subordination. The Holder acknowledges and agrees that the obligation of the Corporation to repay the Principal Amount and the principal amount of the Other Notes is subordinated and postponed to the obligations of the Corporation from time to time to any other financial institution or lender. The Holder will execute, promptly do, deliver or cause to be done, executed and delivered all further acts, documents and things as may be required to provide for the subordination and postponement of the Holder's rights evidenced by this Note. 6. Revisions and Replacement. At the sole option of the Holder, the Maturity Date and any of the terms of this Note may be revised, changed or restated by the Holder following consultation with the Corporation. If this Note is revised, changed or restated, the Corporation may cancel and replace this Note in which case, the Holder shall forthwith surrender this Note for cancellation. 7. Sale of Shares. In the event that the Holder transfers its common shazes in the capital of the Corporation (in accordance with the- terms of a shareholders' agreement among the Holder, the Municipalities, Veridian Connections lnc., Veridian Energy Inc. and the Corporation dated September 2A; 2001,, as amended and/or restated from time to time) prior to the Maturity Date, the Note shall remain due ko the Molder in accordance with its terms. 8. Note Non-negotiable and Non-assignable. The Note shall be non-negotiable and non-assignable. -3- N WITNESS 1VHEREOF Veridian Corporation has caused this Note to be signed under its corporate seal by its duly authorized officers as of this 31st day of October, 2009. VEI2IDIAN CO~RPOI2ATION By: By: Glenn Rainbird, Chair Michael Angemeer, President -4- SCHEDULE"A" 1. Third Amended and Restated Tenn Promissory Note issued by Veridian Connections Inc. to the Corporation of the Municipality of Clarington in the principal amount of $5,966,000 and dated October 31, 2009. 2. Third Amended and Restated "Tenn Promissory Note issued by Veridian Connections lnc. to the Corporation of the Town of Ajax in the principal amount of $14,060,000 and dated October 31, 2009. 3. Third Amended and Restated Term Promissory Note issued by Veridian Corporation to the Corporation of the Municipality of Clarington in the principal amount of $2,355,000 and dated October 31, 2009. 4. Third Amended and Restated Term Promissory Note issued by Veridian Corporation to the Corporation of the Town of Ajax in the principal amount of $5,550,000 and. dated October 31, 2009. 5. "fhird Amended and Restated Tenn Promissory Note issued by Veridian Corporation to the Corporation of the City of Belleville in the principal amount of $2,206,000 and dated October 3i, 2009. 6. Third Amended and Restated Tenn Promissory Note issued by Veridian Connections Inc. to the Corporation of the City of Belleville in the principal amount of $5,588,000 and dated October 31, 2009. :ODM A`~PCDOCS'i fOR01 `A] SX65X`.3 "CHIRD AMENllEll AND RESTATED TERM PROMISSORY NOTE Maturity Date: November 1~` X012 Principal Amount: $2,206,000 This note amends and restates a Second Amended and Restated Promissory Note (the "Predecessor Note") issued by Veridian Corporation to the Corporation of the City of Belleville (the "Holder"} on October 15`, 2006 for the Principal Amount. The Predecessor Note was issued pursuant to By-law No. 2006-159 of the Holder. This note amends the terms of repayment of, and does not extinguish, the debt created pursuant to the transfer by-law (enacted pursuant to the authority granted under the Electricity ~Ict, 1998) as set forth originally in By-Law 2000-170 of the Holder, as amended by By-Law 2006-159, and the Predecessor Note. F012 VALUE RECEIVED, Veridian Corporation (the "Corporation"), hereby promises to pay to or to the order of the Corporation of the City of Belleville, in lawful moneg of Canada, on November 1, 2012 (the "Maturity Date") at the principal office of the Holder, the principal amount of TWO MILLION, TWO HUNDRED AND SDf THOUSAND Dollars ($2,206,000} (the "Principal Amount") together with interest on the unpaid Principal Amount. i. Interest Rate. Interest on the Principal Amount shall be calculated annually, not in advance, for the period from November I", 2009 until the Maturity Date, at a rate eytial to the greater of: (a) six percent (6%}, and {b) a rate equal to the Ontario Energy Board ("OEi3"} deemed long-term debt rate as set forth on an annual basis in the OEB's Cost of Capital Parameter Updates for Cost of Service Applications, or as the deemed long-term debt rate may otherwise be established by the OEB (the "Interest Rate"). Interest at the Interest Rate shall be payable on November 1 in each year up to and including the Maturity Date. The Corporation acknowledges that the Interest Rate payable pursuant to this note shall be automatically amended from time to time to reflect the deemed rate established by the OEB from time to titne and this note shall be automatically amended from time to time to reflect any change to the Interest Rate as determined by the OEB provided that such deemed rate is greater than six percent (6%). Notwithstanding that the Interest Rate pursuant to this note shall be amended, the effective date of any change in the Interest Rate pursuant to this note will be as of May 1" each year with interest payable on the previous Interest Rate from November ls` of the previous year to April 30`s of the next year, and interest payable aY the amended Interest Rate from May ls` to October 31s' of the current year. 2. Acceleration on Default. Upon default in the payment of any principal or interest due hereunder, or if the undersigned shall become insolvent or bankrupt or make a proposal in bankruptcy, the entire unpaid principal indebtedness awing by the undersigned to the Holder evidenced hereby and all interest accrued thereon to the date of payment shall forthwith become due and payable upon demand by the -2- Holder subject to any subordination and postponement to any other financial institution or lender. 3. Rankine of this Note. This Note shall rank equally in all respects as to the payment of principal and interest hereunder with promissory notes issued as of the dates hereof to the Corporation of the Town of Ajax, to the Corporation of the Municipality of Clarington and to the Corporation of the City of Pickering (collectively the "Municipalities") described in Schedule "A" hereto (together the "Other Notes"). 4. Conversion of this Note. All (but not less than all) of the Principal Amount of this Note is convertible into fully-paid and non-assessable common shares of the Corporation based on the exchange ratiq specified herein at the option of the Holder, which option may be exercised by the Holder by notice in writing to the Corporation on or before the Maturity Date. The exchange ratio for the conversion of the Principal Amount of this Note shall be on the basis that, for every $1,000.00 of Principal Amount, 1 fully paid and non-assessable common share of the Corporation shall be issued to the Holder. The conversion of the Principal Amount will be effected on the date determined by the Holder following consultation with the Corporation. 5. Subordination. The Holder acknowledges and agrees that the obligation of the Corporation to repay the Principal Amount and the principal amount of the Other Notes is subordinated and postponed to the obligations of the Corporation from time to time to any other financial institution or lender. The Holder will execute, promptly do, deliver or cause to be done, executed and delivered all further acts, documents and things as may be required to provide for the subordination and postponement of the Holder's rights evidenced by this Note. 6. Revisions and Replacement. At the sole option of the Holder, the Maturity Date and any of the terms of this Note may be revised, changed or restated by the Holder following consultation with the Corporation. If this Note is revised, changed or restated, the Corporation may cancel and replace this Note in which case, the Holder shall forthwith surrender this Note for cancellation. 7. Sale of Shares. In the event that the Holder transfers its comrnon shares in the capita} of the Corporation (in accordance with the terms of a shareholders' agreement among the Holder, the Municipalities, Veridian Connections Inc., Veridian Energy Inc. and the Corporation dated September 28, 200], as amended and/or restated from time to time) prior to the Maturity Date, the Note shall remain due to the Holder in accordance with its terms. 8. Note Nou-negotiable and Non-asst ng able. The Note shall be non-negotiable and non-assignable. -3- IN WITNESS WHEREOF Veridian Corporation has caused this Note to be signed under its corporate seal by its duly authorized officers as of this 31st day of October, 2009. VERIDIAN CORPORATION By: By: Glenn Rainbird, Chair Michael Angetneer, President -4- SCHEDULE "A" Third Amended and Restated Tenn Promissory Note issued by Veridian Connections Inc. to the Corporation of the Municipality of Clarington in the principal amount of $5,966,000 and dated October 31, 2009. 2. Third Amended and Restated Term Promissory Note issued by Veridian Connections Inc. to the Corporation of the City of Pickering in the principal amount of $17,974,000 and dated October 31, 2009. 3. Third Amended and Restated Tenn Promissory Note issued by Veridian Corporation to the Corporation of the Municipality of Ctarington in the principal amount of $2,355,000 and dated October 3l, 2009. 4. Third Amended and Restated Term Promissory Note issued by Veridia~~ Corporation to the Corporation of the City of Pickering in the principal amount of $7,095,000 and dated October 31, 2009. 5. Third Amended and Restated Term Promissory Note issued by Veridian Corporation to the Corporation of the Town of Ajax in the principal amount of $5,550,000 and dated October 31, 2009. 6. Third Amended and Restated Term Promissory Note issued by Veridian Connections Inc. to the Corporation of the 'town of Ajax in the principal amount of$14,060,000 and dated October 31, 2009. ::ODMA\PCDOCS\TOR01 W 158552V3 THIRD AMENDED AND RESTATED TERM PROMISSORY NOTE Maturity Date: November I9`, 2012 Principal Amount: $14,060,000 This note amends and restates a Second Amended and Restated Promissory Note (the "Predecessor Note") issued by Veridian Connections Ine. to the Corporation of the Town of Ajax (the "Holder") on October 1s1, 2006 for the Principal Amount. The Predecessor Note was issued pursuant to By-law No. 12]-2006 of the Holder. This note amends the terms of repayment of, and does not extinguish, the debt created pursuant to the transfer by-law (enacted pursuant to the authority granted under the Electricity ~1ct, 1998) as set forth originally in By-Law 115-99 of the Holder, as amended by By-Law 121-2006, and the Predecessor Note. FOR VALUE RECENED, Veridian Connections Inc. (the "Corporation"), hereby promises to pay to or to the order of the Corporation of the Town of Ajax, in lawful money of Canada, on November 1, 2012 (the "Maturity Date") at the principal office of the Holder, the principal amount of FOURTEEN MILLION, AND SIXTY THOUSAND Dollars ($14,060,000) (the "Principal Amount") together with interest on the unpaid Principal Amount. Interest Rate. Interest on the Principal Amount shall be calculated annually, not in advance, for the period from November 151, 2009 until the Maturity Date, at a rate equal to the Ontario Energy Board ("OEB") deemed long-term debt rate as set forth on an annual basis in the OEB's Cost of Capital Parameter Updates for Cost of Service Applications, or as the deemed tong-teen debt rate may otherwise be established by the OEB (the "Interest Rate"). Interest at the Interest Rate shall be payable on November 1 in each year up to and including the Maturity Date. The Corporation acknowledges-that the Interest Rate payable pursuant to this note shall be automatically amended from time to time to reflect the deemed rate established by the OEB from time to time and this note shall be automatically amended from time to time to reflect any change to the Interest Rate as determined by the OEB. Notwithstanding that the Interest Rate pursuant to this note shall be amended, the effective date of any change in the Interest Rate pursuant to this note will be as of May 191 each year with interest payable on the previous Interest Rate from November I" of the previous year to April 30"' of the next year, and interest payable at the amended Interest Rate from May 151 to October 3151 of the current year. 2. Acceleration on Default. Upon default in the payment of any principal or interest due hereunder, or if the undersigned shall become insolvent or bankrupt or make a proposal in bankruptcy, the entire unpaid principal indebtedness owing by the undersigned to the Holder evidenced hereby and all interest accrued thereon to the date of payment shall forthwith become due and payable upon demand by the Holder subject to any subordination and postponement to any other financial institution or lender. -z- 3. Ranking of this Note. This Note shall rank equally in all respects as to the payment of principal and interest hereunder with promissory notes issued as of the dates hereof to the Corporation of the City of Pickering, to the Corporation of the Municipality of Clarington and to the Corporation of the City of Belleville (collectively the "Municipalities") described in Schedule "A" hereto (together the "Other Notes"). 4. Conversion of this Note. All (but not less than all) of the Principal Amount of this Note is convertible into fully-paid and non-assessable common shares of the Corporation based on the exchange ratio specified herein at the option of the Holder, which option may be exercised by the Holder by notice in writing to the Corporation on or before the Maturity Date. The exchange rario for the conversion of the Principal Amount of this Note shall be on the basis that, for every $1,000.00 of Principal Amount, 1 fully paid and non-assessable common share of the Corporation shall be issued to the Holder. The conversion of the Principal Amount will be effected on the date determined by the Holder following consultation with the Corporation. 5. Subordination. The Holder acknowledges and agrees that the obligation of the Corporatian to repay the Principal Amaunt acid the principal amount of the Other Notes is subordinated and postponed to the obligations of the Corporation from time to time to any other financial institution or lender. The Holder will execute, promptly do, deliver or cause to be done, executed and delivered all further acts, documents and things as may he required to provide for the subordination and postponement of the 1-Iolder's rights evidenced by this Note. 6. Revisions and Replacement. At the sole option of the Holder, the Maturity Date and any of the terms of this Note may be revised, changed or restated by the Holder following consultation with the Corporation. If this Note is revised, changed or restated, the Corporation may cancel and replace this Note in which case, the Holder shall forthwith surrender this Note for cancellation. 7. Sale of Shares. In the event that the Holder transfers its common shares in the capital of the Corporation (in accordance with the terms of a shareholders' agreement among the Holder, the Municipalities, Veridian Corporation, Veridian Energy Inc. and the Corporation dated September 28, 2001, as amended and/or restated from time to time) prior to the Maturity Date, the Note shall remain due to the Holder in accordance with its terms. $. Note Non-negotiable and Non-assi~rable• The Note shall be non-negotiable and non-assignable. -3- IN WITNESS WHEREOF Veridian Connections Inc. has caused this Note to be signed under its corporate seal by its duly authorized officers as of this 31st day of October, 2009. VF.RIllIAN CONNECTION'S INC. I3y: By: Glenn Rainbird, Chair Michael Angemeer, President -4- SCHEDULE ~~A" 1. Third Amended and Restated Tenn Promissory Note issued by Veridian Connections Inc. to the Corporation of the Municipality of Clarington in the principal amount of $5,966,000 and dated October 31, 2009. 2. Third Amended and Restated Term Promissory Note issued by Veridian Conmections Inc. to the Corporation of the City of Pickering in the principal amount of $17,974,000 and dated October 31, 2009. 3. Third Amended and Restated Term Promissory Note issued by Veridian Corporation to the Corporation of the Municipality of Clarington in the principal amount of $2,355,000 and dated October 31, 2009. 4. "fhird Amended and Restated Term Promissory Note issued by Veridian Corporation to the Corporation of the City of Pickering in the principal amount of $7,095,000 and dated October 31, 2009. 5, Third Amended and Restated Term Promissory Note issued by Veridian Corporation to the Corporation of the City of Belleville in the principal amount of $2,206,000 and dated October 31, 2009. 6. Third Amended and Restated Term Promissory Note issued by Veridian Connections Inc. to the Corporation of the City of Belleville in the principal amount of $5,588,000 and dated October 31, 2009. ::OUM A\PCnOCS\TORO H4158668\10 THIRD AMENDED AND RESTATED TERM PROMISSORY NOTE Maturity Date: Novc~rnber ]St, 2012 Principal Amount: $5,966,000 This note amends and restates a Second Amended and Restated Promissory Note {the "Predecessor Note") issued by Veridian Connections Inc. to the Corporation of the ivlunicipality of Clarington (the "Holder") on October 1 s`, 2006 for the Principal Amount. The Predecessor Note was issued pursuant to By-law No. 06-191 of the Holder. This note amends the terms of repayment of, and does not extinguish, the debt created pursuant to the transfer by-taw (enacted pursuant to the authority granted under the llectrici(p .4ci, 1998) as set forth originally in By-Law 99-173 of the Holder, as amended by By-Law 06-191, and Ehe Predecessor Note. FOR VALUE RECEIVED, Veridian Connections Inc. (the "Corporation"), hereby promises to pay to or to the order of the Corporation of the Municipality of Clarington, in lawful money of Canada, on November 1, 2012 (the "Maturity Date") at the principal office of the Holder, the principal amount of FIVE MILLION, NINE HUNDRED AND SIXTY-SIX THOUSAND Dollars {$5,966,000) (the "Principal Amount") together with interest on the unpaid Principal Amount. 1. Interest Rate. Interest on the Principal Amount shall be calculated annually, not in advance, for the period from November ls`, 2009 untii the Maturity Date, at a rate equal to the Ontario Energy Board ("OEB") deemed long-term debt rate as set forth on an annual basis in the OEB's Cost of Capital Parameter Updates for Cost of Service Applications, or as the deemed long-term debt rate may otherwise be established by the OEB (the "Interest Rate"). Interest at the Interest Rate shall be payable on November 1 in each year up to and including the Maturity Date. The Corporation. acknowledges that the Interest Rate payable pursuant to this note shaft be automatically amended from time to time to reflect the deemed rate established by the OEB from time to time and this note shall be automatically amended from time to time to reflect any change to the Interest Rate as determined by the OEB. Notwithstanding that the Interest Rate pursuant to this note shall be amended, the effective date of any change in the Interest Rate pursuant to this note will be as of May 151 each year with interest payable on the previous interest Rate from November 1" of the previous year to April 30"' of the next year, and interest payable at the amended Interest Rate from May 1~` to October 31 S` of the current year. 2. Acceleration on Default. Upon default in the payment of any principal or interest due hereunder, or if the undersigned shall become insolvent or bankrupt or make a proposal in bankruptcy, the entire unpaid principal indebtedness owing by the undersigned to the Holder evidenced hereby and all interest accrued thereon to the date of payment shall forthwith become due and payable upon. demand by the Holder subject to any subordination and postponement to any other financial institution or lender. -2- 3. Rankine of this Note. This Note shall rank equally in all respects as to the payment of principal and interest hereunder with promissory notes issued as of the dates hereof to the Corporation of the City of Pickering, to the Corporation of the Town of Ajax and to the Corporation of the City of Belleville (collectively the "Municipalities") described in Schedule "A" hereto (together. the "©ther Notes"). 4. Conversion of this Note. All (but not less than all) of the Principal Amount of this Note is convertible into fully-paid and non-assessable common shares of the Corporation based on the exchange ratio specified herein at the option of the Holder, which option may be exercised by the Holder by notice in writing to the Corporation on or before the Maturity Date. The exchange ratio for the conversion of the Principal Amount of this Note shall be on the basis that, for every $1,000.00 of Principal Amount, 1 fully paid and non-assessable common share of the Corporation shall be issued to the Holder. The conversion of the Principal Amount will be effected on the date determined by the Holder following consultation with the Corporation. 5. Subordination. The Holder acknowledges and al,~rees that the obligation of the Corporation to repay the Principal Amount and the principal amount of the Other Notes is subordinated and postponed to the obligations of the Corporation from time to time to any other financial institution or lender. The Holder will execute, promptly do, deliver or cause to be done, executed and delivered all further acts, documents and things as may be required to provide for the subordination and postponement of the Holder's rights evidenced by this Note. 6. Revisions and Replacement. At the sole option of the Holder, the Maturity Date and any of the terms of this Note may be revised, changed or restated by the Holder following consultation with the Corporation. If this Note is revised, changed or restated, the Corporation may cancel and replace this Note in which case, the Holder shall forthwith surrender this Note for cancellation. 7. Sale of Shares. In the event that the Holder transfers its common shares in the capital of the Corporation (in accordance with the terms of a shazeholders' agreement among the Holder, the Municipalities, Veridian Corporation, Veridian Energy lnc. and the Corporation dated September 28; 2001, as amended and/or restated from time to time) prior to the Maturity Date, the Note shall remain due to the Holder in accordance with its terms. 8. Note Non-negotiable and Non-assignable. 'fhe Note shall be non-negotiable and non-assignable. -3- IN WITNESS WHEREOF Veridian Connections Inc. has caused this I~`ote to be signed under its corporate seal by its duly aufhorized officers as of this 31st day of October, 2009. VERIDIAN CONNECTIONS INC. By: By: Glenn Rainbird, Chair Michael Angemeer, President -4- SCHEDULE"A" 1. Third Amended and Restated Term Promissory Note issued by Veridian Connections Inc. to the Corporation of the Town of Ajax in the principal amount of$14,060,OOU and dated October 3l, 2009. 2. Third Amended and Restated Term Promissory Note issued by Veridian Connections Inc. to the Corporation of the City of Pickering in the principal amount of $17,974,000 and dated October 31, 2009. 3. 'Third Amended and Restated Term Promissory Note issued by Veridian Corporation to the Corporation of the Town of Ajax in the principal amount of $5,550,000 and dated October 31, 2009. 4. Third Amended and Restated Term Promissory Note issued by Veridian Corporation to the Corporation of the City of Pickering in the principal amount of $7,095,000 and dated October 31, 2009. 5. Third Amended and Restated Term Promissory Note issued by Veridian Corporation to the Corporation of the City of Belleville in the principal amount of $2,20b,060 and dated October 31, 2009. 6. Third Amended and Restated Term Promissory Note issued by Veridian Connections Inc. to the Corporation of the City of Belleville in the principal amount of $5,588,000 and dated October 31, 2009. ::ODM.A'-P(: DOCS`~rOR01 `~ 1586Hd~6 THIRD AMENDED AND RESTATED TERM PROMISSORY NOTE Maturity Date: November ls`, 2012 Principal Amount: $17,974,000 This note amends and restates a Second Amended and Restated Promissory Note (the "Predecessor Note") issued by Veridian Connections Inc. to the Corporation of the City of Pickering (the "Holder") on October 1", 2006 for the Principal Amount. The Predecessor Note was issued pursuant to By-law No. 6706/06 of the Holder. This note amends the terms of repayment of, and does not extinguish, the debt created pursuant to the transfer by-law (enacted pursuant to the authority granted under the Electricity .Act, 1998) as set forth originally in By-Law 5586!99 of the Holder, as amended by By-Law 6706/06, and the Predecessor Note. POR VALUE RECEIVED, Veridian Connections Ina (the "Corporation"), hereby promises to pay to or to the order of the Corporation of the City of Pickering, in lawful money of Canada, on November 1, 2012 (the "Maturity Date"j at the principal office of the Holder, the principal amount of SEVENTEEN M[LLION NINE HUNDRED AND .SEVENTY-FOUR 'I"HOUSA.~~D Dollars {$17,974,000) (the "Principal Amount"} together with interest on the unpaid Principal Amount. 1. Interest Rate. Interest on the Principal Amount shall be calculated annually, not in advance, for the period from November ls`, 2009 until the Maturity Date, at a rate equal to the Ontario Energy Boazd ("OEB") deemed long-term debt rate as set forth on an annual basis in the OEB's Cost of Capital Parameter Updates for Cost of Service Applications, or as the deemed long-term debt rate may otherwise be established by the OEB (the "Interest Rate"}. interest at Che Interest Rate shall be payable ou November 1 in each year up to and including the Maturity Date. The Corporation acknowledges that the Interest Rate payable pursuant to this note shall be automatically amended from time to time to reflect the deemed rate established by the OEB from time to time and this note shall be automatically amended from time to time to reflect any change to the Interest Rate as determined by the OEB. Notwithstanding that the Interes# Rate pursuant to this note shall be amended, the effective date of any change in the Interest Rate pursuant to this note will be as of May ls` each year with interest payable on the previous Interest Rate from November 1S1 of the previous year to April 30`s of the next year, and interest payable at the amended hiterest Rate from May ls' to October 31 ~` of the cuiTent year. 2. Acceleration on Default. Upon default in the payment of any principal or interest due hereunder, or if the undersigned shall become insolvent or bankrupt or make a proposal in bankruptcy, the .entire unpaid principal indebtedness owing by the undersigned to the Holder evidenced hereby and all interest accrued thereon to the date of payment shall forthwith become due and payable upon demand by the Holder subject to any subordination and postponement to any other financial institution or lender. -2- ~. 12ankin~; of this Note. This Note shall rank equally in all respects as to the payment of principal and interest hereunder with promissory notes issued as of the dates hereof to the Corporation of the Town of Ajax, to the Corporation of the Municipality of Clarington and to the Corporation of the City of Belleville (collectively the "Municipalities' described in Schedule "A" hereto (together the "Other Notes"). 4. Conversion of this Note. All (but not less than all) of the Principal Amount of this Note is convertible into fully-paid and non-assessable common shares of the Corporation based on the exchange ratio specified herein at the option of the Holder, which option may be exercised by the Holder by notice in writing to the Corporation on or before the Maturity Date. The exchange ratio for the conversion of the Principal Amount of this Note shall be on the basis that, for every $1,000.00 of Principal Amount, 1 fully paid and non-assessable common share of the Corporation shall be issued to the Holder. The conversion of the Principal Amount will be effected on the date determined by the Holder following consultation with the Corporation. 5. Subordination. The Holder aclrnowledges and agrees that the obligation of the Corporation to repay the Principal Amount and the principal amount of the Other Notes is subordinated and postponed to the obligations of the Corporation from time to time to any other financial institution or lender. The Holder will execute, promptly do, deliver or cause to be done, executed and delivered all further acts, documents and things as may be required to provide for the subordination and postponement of the Holder's rights evidenced by this Note. 6. Revisions and Replacement. At the sole option of the Holder, the Maturity Date and any of. the terms of this Note may be revised, changed or restated by the Holder following consultation with the Corporation. If this Note is revised, changed or restated, the Corporation may cancel and replace this Note in which case, the Holder shall forthwith surrender this Note for cancellation. 7, Sale of Shares. In the event that the Holder transfers its common shares in the capital of the Corporation (in accordance with the terms of a shareholders' agreement among the Holder, the Municipalities, Veridian Corporation, Veridian Energy Inc. and the Corporation dated September 28, 2001, as amended and/or restated from time to time) prior to the Maturity Date, the Note shall remain due to the Holder in accordance with its temis. 8. Note Non-negotiable and Non-assiQnable• The Note shall be non-negotiable and non-assignable. -3- IN WITNESS WHEREOF Veridian Connections Inc. has caused this Note to be signed under its corporate seal by its duly authorized officers as of this 31st day of October, 2009. VERII)IAN CONNECTIONS INC. C3y: By: Glenn Kainbird, Chair Michael Angemeer, President -4- SCHEDULE"A" 1. Third Amended and Restated Term Promissory Note issued by Veridian Connections Inc. to the Corporation of the Municipality of Clarington in the principal amount of $5,966,000 and dated October 31, 2009. 2. .Third Amended and Restated Term Promissory Note issued by Veridian Connections lnc. to the Corporation of the Town of Ajax in the principal amount of $14,060,000 and,dated October 31, 2009. 3. Third Amended and Restated Term Promissory Note issued by Velidian Corporation to the Corporation of the Municipality of Clarington in the principal amount of $2,35,000 and dated October 31, 2009. 4. Third Amended and Restated Term Promissory Note issued by Veridian Corporation to the Corporation of the Town of Ajax in the principal aniount of $5,550,000 and dated October 31, 2009. 5. Third Amended and Restated Term Promissory Note issued by Veridian Corporation to the Corporation of the City of Belleville in the principal amount of $2,2D6,000 and dated October 31, 2009. 6. Third Amended and Restated Tenn Promissory Note issued by Veridian Connections Inc. to the Corporation of the City of Belleville in the principal amount of $5,588,000 and dated October 31, 2009. ::ODA7AIPCDOCSITOK01 W 158694\7 THIRD AMENDED AND RESTATED TERM PROMISSORY NOTE Maturity Date: November 1'`, 2012 Principal Amount: $5,588,000 This note amends and restates a Second Amended and Restated Promissory Note (the "Predecessor Note") issued by Veridian Connections Inc. to the Corporation of the City of Belleville (the "Bolder") on October 1~`, 2006 for the Principal Amount. The Predecessor Note was issued pursuant to By-law No. 2006-159 of the Holder. This note amends the terms of repayment of, and does not extinguish, the debt created pursua~rt to the transfer by-law (enacted pursuant to the authority granted under the Electricity Act, 1998) as set forth originally in By-Law 2000-170 of the Holder, as amended by By-Law 2006-159, and the Predecessor Note. FOR VALUE RECENED, Veridian Connections Inc. (the "Corporation"), hereby promises to pay to or to the order of the Corporation of the City of Belleville, in lawful money of Canada, on November 1, 2012 (the "Maturity Date"} at the principal office of the Holder, the principal amount of FIVE MILLION, FIVE HUNDRED AND EIGI3TY-EIGHT THOUSAND Dollars ($5,588,000) (the "Principal Amoun#") together with interest on the unpaid Principal Amount. I. Interest Rate. h~terest on the Principal Amount shall be calculated annually, not in advance, 'for fhc period from November l~', 2004 until the Maturity Date, at a rate equal to the Ontario Energy Board ("OEB") deemed long-term debt rate as set forth on an annual basis in the OEB's Cost of Capital Parameter Updates for Cost of Service Applications, or as the deemed long-term debt rate may otherwise be established by the OEB (the "Interest Rate"). Interest at the Interest Rate shall be payable on November 1 in each year up to and including the Maturity Date. The Corporation acknowledges that the Interest Rate payable pursuant to this note shall be automatically amended from time to time to reflect the deemed rate established by the OEB from time to time and this note shall be automatically amended from time to time to reflect any change to the Interest Rate as determined by the OEB. Notwithstanding that the interest Rate pursuant to this note shalt be amended, the effective date of any change in the Interest Rate pursuant to this note will be as of May l~` each year with interest payable on the previous Interest Rate from November 1 b' of the previous year to April 30`h of the next year, and interest payable at the amended Interest Rate from May ls` to October 315` of the current yeaz. 2. Acceleration on Default. Upon default in the payment of any principal or interest due hereunder, or if the undersigned shall become insolvent or bankrupt or make a proposal in bankruptcy, the entire unpaid principal indebtedness owing by the undersig~rcd to the Holder evidenced hereby and all interest accrued thereon to the date of payment shall forthwith become due and payable upon demand by the holder subject to any subordination and postponement to any other financial institution or lender. -2- 3. Rankine of this Note. This Note shall rank equally in all respects as to the payment of principal and interest hereunder with promissory noses issued as of the dates hereof to the Corporation of the City of Pickering, to the Corporation of the Municipality of Clarington and to the Corporation of the Town of Ajax (collectively the "Municipalities") described in Schedule "A" hereto (together the "Other Notes"). 4. Conversion of this Note. All (but not less than all) of the Principal Amount of this Note is convertible into fiilly-paid and non-assessable common shares of the Corporation based on the exchange ratio specified herein at the option of the Holder, which option may be exercised by the Holder by notice in writing to the Corporation on of before the Maturity Date. The exchange ratio for the conversion of the Principal Amount of this Note shall be on the basis that, for every $1,000.00 of Principal Amount, 1 fully paid and non-assessable common share of the Corporation shall be issued to the Holder. The conversion of the Principal Amount will be effected on the date determined by the Holder following consultation with the Corporation_ 5. Subordination. The Holder acknowledges azid agrees that the obligafion of the Corporation to repay the Principal Amount and the principal amount of the Other Notes is subordinated and postponed to the obligations of the Corporation from time to time to any other financial institution or lender. The Holder will execute, promptly do, deliver or cause to be done, executed and delivered all further acts, documents and things as may be required to provide for the subordination and postponement of the Holder's rights evidenced by this Note. b. Revisions and Keplacemcnt. At the sole option of the Holder, the Maturity Date and any of the terms of this Note may be revised, changed or restated by the Holder following consultation with the Corporation. If this Note is revised, changed or restated, the Corporation may cancel and replace this Note in which case, the Holder shall forthwith surrender this Note for cancellation. 7. Sale of Shares. Tn the event that the Holder transfers its common shares in the capital of the Corporation (in accordance with the terms of a shareholders' agreement among the Holder, the Municipalities, Veridian Corporation, Veridian Energy Inc. and the Corporation dated September 28, 2001, as amended and/or restated from time to time) prior to the Maturity Date, the Note shall remain due to the Holder in accordance with its terms. 8. Note Non-negotiable and Non-assignable. The Note shall be non-negotiable and non-assignable. -3- IN WITNESS WHEREOF Veridiau Connections Inc. has caused this Note to be sibned under its corporate seat by its duly authorized offcers as of this 31st day of October, 200). VERIllIAN CONNECTIONS INC. Fay: Fay: GFenn Rainbird, Chair Michael Angeinecr, President -4- SCHEDULE °°A" 1. "Third Amended and Restated Term Promissory Note issued by Veridian Connections Inc. to the Corporation of the Mu.nieipality of Clarington in the principal aznount of $5,966,000 and dated October 31, 2009. 2. Third Amended and Restated Term Promissory Note issued by Veridian Connections Inc. to the Corporation of the City of Pickering in the principal amount of $17,974,000 and dated October 31, 2009. 3. Third Amended and Restated Tenn Promissory Note issued by Veridian Corporation to the Corporation of the Municipality of Clarington in theprincipal amount of $2,355,000 and dated October 31, 2009. 4. Third Amended and Restated "Perm Promissory Note issued by Veridian Corporation to the Corporation of the City of Pickering in the principal amount of $7,095,000 and dated October 31, 2009. 5. Third Amended and Restated Tenn Promissory Note issued by Veridiazl Corporation to the Corporation of the Town of Ajax in the principal amount of $5,550,000 and dated October 31, 2009. 6. Third Amended and Restated Term Promissory Note issued by Veridian Connections lnc. to the Corporation of the Town of Ajax in the principal amount of $14,060,000 and dated October 31, 2009. OUMr,'d'000C3\"COR01\41 i857T,6