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HomeMy WebLinkAbout2010-024THE CORPORATION OF THE 1VIUNICIPALITY OF CLARINGTON BY-LAW NO. 2010-024 Being a by-law to (i) approve and authorize the execution of a note amending agreement made as of the 30"' day of March, 2010 in respect of fourth amended and restated promissory notes dated March 30`", 2010 issued by Veridian Connections Inc. in favour of The Corporation of the Town of Ajax, The Corporation of the City of Belleville, The Corporation of the Municipality of Clarington and The Corporation of the City of Pickering, (ii) to approve the issue of fourth amended and restated promissory notes dated March 30t°, 2010; and (iii) to approve and authorize the execution of a second amending agreement to a shareholders' agreement dated September 28, 2001, as amended by a first amending agreement dated September 30, 2003, among The Corporation of the Town of Ajax, The Corporation of the City of Belleville, The Corporation of the Municipality of Clarington and The Corporation of the City of Pickering, Veridian Corporation, Veridian Connections Inc. and Veridian Energy Inc. 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 Connections Ina ("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 1st day of November, 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 the Second Restated Notes were amended and restated pursuant to a note amending agreement dated as of October 31, 2009 and third amended and restated promissory notes dated the 31st day of October, 2009 due on the 1st day of November, 2012 (the "Third Restated Notes"); AND WHEREAS VCI participated in a settlement conference (the "Settlement Conference") with certain intervenors in respect of VCI's 2010 Distribution Rate Application (EB-2009-0140) and the parties to the Settlement Conference agreed to the settlement of various issues as set forth in a proposed settlement agreement dated March 10, 2010 (the "Proposed Settlement Agreement"), that provides for certain amendments to the Third Restated Notes which are subject to the prior approval of the Councils for each of Ajax, Belleville, Clarington and Pickering as the holders of the Third Restated Notes; AND WHEREAS pursuant to the terms of the Proposed Settlement Agreement, VCI has requested amendments to the Third Restated Notes including an extension of the maturity date, revised interest rates and the inclusion of earlier repayment rights. AND WHEREAS a shareholders' agreement dated September 28, 2001 was entered into among Ajax, Belleville, Clarington and Pickering, Veridian Corporation ("VC"), VCI and Veridian Energy Inc. ("VEP'), as amended by a first amending agreement dated September 30, 2003 (collectively, the "Shareholders' Agreement"); AND WHEREAS amendments are required to be made to Section 11.1 of the Shazeholders' Agreement to permit Ajax, Belleville, Clarington and Pickering the right to demand earlier repayment of their respective Fourth Restated Notes (as defined below) on an independent basis and to remove the reference to the conversion rights of Ajax, Belleville, Clarington and Pickering in respect of the Fourth Restated Notes (as defined below). NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON ENACTS AS FOLLOWS: 1. THAT Council approves the Fourth Restated Notes in the form of the draft notes presented to Council and attached. hereto as Schedule "A"; 2. THAT Council approves and authorizes the note amending agreement (the "Note Amending Agreement") made as of the 30"` day of Mazch, 2010 amongst Ajax, Belleville, Clarington and Pickering, as the holders of the Third Restated Notes, and VC and VCI in the farm of the draft agreement presented to Council and attached hereto as Schedule "B"; 3. THAT Council approves and authorizes the second amending agreement to the Shareholders' Agreement (the "Second Amendment to the Shareholders' Agreement") made as of the 30`~ day of March, 2010 amongst Ajax, Belleville, Clarington, Pickering, VC, VCI and VEI in the form of the draft agreement presented to Council and attached hereto as Schedule "C"; -2- 4. THAT Council approves the issue of the fourth amended and restated promissory notes (the "Fourth Restated Notes") by VCI pursuant to the Note Amending Agreement. 5. THAT the Mayor and the Clerk are authorized to execute and deliver the Note Amending Agreement and the Second Amendment to the Shareholders' Agreement; 6. THAT the Clerk is authorized and directed to surrender to VCI the Third Restated Note in favour of this Municipality in the principal amount of $5,966,000 and to receive a Fourth Restated Note pursuant to the Note Amending Agreement; 7. THAT the Clerk is authorized to affix the Corporate Seal of The Corporation of the Municipality of Clarington 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 22'~ day of Mazch, 2010. Read a second time this 22"d day of March, 2010. Read a third time this 22rd day of March, 2010. ~- = ~--_- mAbe et T hyor _ "`- - / _ - %!. ~. r C~Op~7 FOURTH AMENDED AND RESTATED TERM PROMISSORY NOTE Maturity Date: November ls`, 2039 Princinal Amount: $5,966,000 This note amends and restates a Third Amended and Restated Promissory Note (the "Predecessor Note") issued by Veridian Connections Inc. (the "Corporation") to the Corporation of the Municipality of Clarington (the "Holder") on October 31, 2009 for the Principal Amount. The Predecessor Note was issued pursuant to By-law No. 2009-131 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 99-173 of the Holder, as amended by By-Law 06-191, By-law No. 2009-131 and the Predecessor Note. FOR VALUE RECEIVED, the Corporation hereby promises to pay to or to the order of the Holder, in lawful money of Canada, on November 1, 2039 (the "Maturity Date"), subject to the right of the Holder to demand earlier repayment (in whole or in part) at any time in accordance with the terms set forth in Section 5, 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 following periods: (a) from November 1, 2009 to April 30, 2010 (the "First Period"), at a rate per annum equal to 7.62% which rate represents the Ontazio 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 during the First Period ("First Interest Rate"); (b) from May 1, 2010 to December 31, 2014 (the "Second Period"), at a rate per annum equal to 5.57%, which rate represents the OEB's 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 during the Second Period, less 30 basis points ("Second Interest Rate"); and (C) iur ~,.:, :: year period commend :g ?s^.»:« j S , 20' ~ "gtil TlPramhnr :1 2019 (the "Third Period"), the OEB's deemed long-term debt rate established by the OEB closest in time to the start of the Third Period, less 30 basis points ("Third Interest Rate"). -2- (d) for the five year period commencing January 1, 2020 until December 31, 2024 (the "Fourth Period"), the OEB's deemed long-term debt rate established by the OEB closest in time to the start of the Fourth Period, less 30 basis points ("Fourth Interest Rate"). (e) for the five year period commencing January 1, 2025 until December 31, 2029 (the "Fifth Period"), the OEB's deemed long-term debt rate established by the OEB closest in time to the start of the Fifth Period, less 30 basis points ("Fifth Interest Rate"). (f) for the five year period commencing January 1, 2030 until December 31, 2034 (the "Sixth Period"), the OEB's deemed long-term debt rate established by the OEB closest in time to the start of the Sixth Period, less 30 basis points ("Sixth Interest Rate"). (g) for the five year period commencing January 1, 2035 until the Maturity Date (the "Seventh Period"), the OEB's deemed long-term debt rate established by the OEB closest in time to the start of the Seventh Period, less 30 basis points ("Seventh Interest Rate"). Interest for the First Period at the First Interest Rate shall be due and payable on May 1, 2010. Interest for the Second Period at the Second Interest Rate shall be due and payable on January 15t of each yeaz from January 1, 2011 to and including January 1, 2015. Interest for the Third Period at the Third Interest Rate shall be due and payable on January 151 of each year from January 1, 2016 to and including January 1, 2019. Interest for the Fourth Period at the Fourth Interest Rate shall be due and payable on January 151 of each year from January 1, 2020 to and including Januazy 1, 2024. Interest for the Fifth Period at the Fifth Interest Rate shall be due and payable on January 151 of each year from January 1, 2025 to and including January 1, 2029. Interest for the Sixth Period at the Sixth Interest Rate shall be due and payable on Januazy 15c of each year from January 1, 2030 to and including January 1, 2034. Interest for the Seventh Period at the Seventh Interest Rate shall be due and payable on January 151 of each year from January 1, 2035 to and including the Matwity Date. 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 y -3- 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. 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 to the Corporation of the Town of Ajax, to the Corporation of the City of Pickering, to the Corporation of the City of Belleville and to Veridian Corporation (collectively the "Other Parties") described in Schedule "A" hereto (together the "Other Notes"). For greater clarity, nothing shall prevent the Holder to demand repayment of this Note at any time in accordance with the terms set forth in Section 5. 4. 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. 5. Renavment. Notwithstanding that this Note matures on the Maturity Date, the Holder of this Note shall have the right to demand repayment of this Note (in whole or in part) at any time upon six (6) months prior written notice (the "Prepayment Notice") to the Corporation provided that a duly enacted resolution or by-law is passed by the Holder certifying that the funds are required for municipal purposes, including but not limited to the following: (a) expenditures in respect of municipal capital projects; (b) acquisition of assets by the Holder; and (c) replenishing and/or increasing the level of the reserves/reserve funds held by the Holder. For greater clarity, the Holder of this Note is not permitted to demand repayment of this Note for the purpose of reinvesting the funds. The Prepayment Notice shall set forth the amount to be repaid by the Corporation and the purposes for which the funds are required by the Holder. Upon receipt by the Corporation of the Prepayment Notice, the Corporation shall be obliged to pay tba amonnr cef ~~~t in such Prenayment Notice to the Holder no later than six (6) months from the date of receipt of such Prepayment Notice. 6. Sale of Shares. In the event that the Holder transfers its common shares in the capital of Veridian Corporation (in accordance with the terms of a shareholders' agreement among the Holder, the Other Parties, Veridian Energy Inc. and the Corporation dated September 28, 2001, as amended and/or restated from time to -4- time) prior to the Maturity Date, the Note shall remain due to the Holder in accordance with its terms. 7• Note Non-negotiable and Non assienahlP The Note shall be non-negotiable and non-assignable. [SIGNATURE PAGE FOLLOWS] -5- 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 30`" day of March, 2010. VERIDIAN CONNEClt`inNC Tivr By: By: Michael A. { ,~ -6- SCHEDULE"A" 1. Fourth 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 March 30`h, 2010. 2. Fourth 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 March 30`h, 2010. 3. Fourth 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 March 30`", 2010. 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 $2,206,000 and dated October 31, 2009. 6. 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. 7• Amended and Restated Term Promissory Note issued by Veridian Connections Inc. to Veridian Corporation in the principal amount of $21,000,000 and dated March 30`h, 2010. ::ODMA~PCDOCS5TOR011431431311 NOTE AMENDING AGREEMENT THIS AGREEMENT made as of the 3c'~ day of Mazch, 2010. BETWEEN: 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 aze referred 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 ("VEI") (VC, VCI and VEI aze referred to collectively herein as the "Veridian Group") -2- RECITALS: A. VCI has previously issued one promissory note to each of the Veridian Shazeholders (collectively the "VCI Notes") issued pursuant to the applicable transfer by-laws enacted pursuant to the authority granted under the Electricity Act, 1998, which VCI Notes aze outstanding as of the date hereof; B. VCI participated in a settlement conference with certain intervenors in respect of VCI's 2010 Distribution Rate Application (EB-2009-0140) and the parties thereto agreed to the settlement of various issues as set out in proposed settlement agreement dated March 10, 2010 (the "Settlement Agreement"), including certain amendments to the VCI Notes; C. The Veridian Shazeholders wish to amend the VCI Notes pursuant the amendments set forth in the Settlement Agreement; D. The Veridian Shareholders have consulted with the Veridian Group in connection with the proposed amendments to 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 VCI the existing VCI Notes (the "Predecessor Notes") (descriptions of such Predecessor Notes being set out in Appendix "A" attached hereto) VCI will forthwith issue amended and restated promissory notes in the form attached hereto as Appendix "B". There shall be four amended and restated promissory notes (the "Amended and Restated Promissory Notes") in total. One promissory note will be issued by VCI to each of the four Veridian Shazeholders in the same principal amounts as the Predecessor 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. In addition, for greater clarity, no amendments are made to any promissory notes.. issued by VC in favour of the Veridian Shazeholders and any such existing promissory notes issued by VC in favour of the Veridian Shareholders shall remain unamended and in full force and effect. 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- IN WITNESS WHEREOF the parties hereto have duly authorized and executed this Note Amending Agreement as of the day and year first above written. THE CORPQRAYI~N OF THE TOWN OF AJAX c/s Name: Ste~Ge Parish Title: Mayor _ By: /~/~ . "f c/s Name: Marty de nd Title: Clerk THE CORPORATION OF THE CITY OF By: Title: Mayor By: 1~~2.- c/s Name: lie C. Oram Titl `• Clerk THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON THE CORPORATION OF THE CITY OF PICKERING Name: Dave Ryan - Title: Mayor - By: 1J • ~ c/s Name: Debbie Shields Title: City Clerk VERIDIAN CORPORATION -~ - c ~ ~;~~: - By: ~ _ e/s ' Name: Michael Angemeer = ~_ =_ Title: President < , ~~~~^ Name: Gl Ra~nbird ` Title: Ch VERIDIAN CONNECTIONS INC. ~-~ ~ _~:_ Name: Michael Angemeer = ___ ~ . Title: President - By: c/s Name: Glen£~ R'ainbird Title: Chair VERIDIAN ENERGY INC. Name: Michael Angemeer Title: President - -, BY~ _ c!s'~ Name: Gl ainbird Title: Chair Appendix "A" Four (4) VCI Predecessor Notes described below. Issuer Holder Date Princiual Amount 1. Veridian Connections Inc. The Corporation of the October 315`, $14,060 000 Town of Ajax 2009 , 2. Veridian Connections Inc. The Corporation of the October 31~`, $5,966,000 Municipality of 2009 Clarington 3. Veridian Connections Ina The Corporation of the October 31~, $17 974 000 City of Pickering 2009 , , 4. Veridian Connections Inc. The Corporation of the October 31 s`, $5,588 000 City of Belleville 2009 , Appendix i°B" Four (4) VCI Amended and Restated Promissory Notes attached hereto. ::ODMA\PCDOC S\TORO I \4311241\3 FOURTH AMENDED AND RESTATED TERM PROMISSORY NOTE Maturity Date: November 1~`, 2039 Principal Amount: $14,060,000 This note amends and restates a Third Amended and Restated Promissory Note (the "Predecessor Note") issued by Veridian Connections Inc. (the "Corporation") to the Corporation of the Town of Ajax (the "Holder") on October 31, 2009 for the Principal Amount. The Predecessor Note was issued pursuant. to By-law No. 103-2009 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 115-99 of the Holder, as amended by By-Law ]21-2006, By-law No. 103-2009 and the Predecessor Note. FOR VALUE RECEIVED, the Corporation hereby promises to pay to or to the order of the Holder, in ]awful money of Canada, on November 1, 2039 (the "Maturity Date"), subject to the right of the Holder to demand eazlier repayment (in whole or in part) at any time in accordance with the terms set forth in Section 5, at the principal office of the Holder, the principal amount of FOURTEEN MILLION, AND SD{TY 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 following periods: (a) from November 1, 2009 to April 30, 2010 (the "First Period"), at a rate per annum equal to 7.62% which rate represents the Ontario Energy Boazd ("OEB") deemed long-term debt rate established by the OEB during the First Period ("First Interest Rate"); (b) from May 1, 2010 to December 31, 2014 (the "Second Period"), at a rate per annum equal to 5.57%, which rate represents the OEB's deemed long- term debt rate established by the OEB during the Second Period, less 30 basis points ("Second Interest Rate"); and (c) for the five year period commencing January ], 2015 until December 31, 2019 (the "Third Period"), the OEB's deemed long-term debt rate established by the OEB closest in time to the start of the Third Period, less 30 basis points ("Third Interest Rate"). (d) for the five year period commencing January I, 2020 until December 31, 2024 (the "Fourth Period"), the OEB's deemed long-term debt rate established by the OEB closest in time to the start of the Fourth Period, less 30 basis points ("Fourth Interest Rate"). -z- (e) for the five year period commencing January 1, 2025 until December 31, 2029 (the "Fifth Period"), the OEB's deemed long-term debt rate established by the OEB closest in time to the start of the Fifth Period, less 30 basis points ("Fifth Interest Rate"). (f) for the five year period commencing Januazy 1, 2030 until December 31, 2034 (the "Sixth Period"), the OEB's deemed long-term debt rate established by the OEB closest in time to the start of the Sixth Period, less 30 basis points ("Sixth Interest Rate"). (g) for the five yeaz period commencing January 1, 2035 until the Maturity Date (the "Seventh Period"), the OEB's deemed long-term debt rate established by the OEB closest in time to the start of the Seventh Period, less 30 basis points ("Seventh Interest Rate"). Interest for the First Period at the First Interest Rate shall be due and payable on May 1, 2010. Interest for the Second Period at the Second Interest Rate shall be due and payable on January ls` of each year from Januazy 1, 2011 to and including January 1, 2015. Interest for the Third Period at the Third Interest Rate shall be due and payable on January 1~` of each year from January 1, 20]6 to and including January 1, 2019. Interest for the Fourth Period at the Fourth Interest Rate shall be due and payable on January ls` of each year from January 1, 2020 to and including January 1, 2024. Interest for the Fifth Period at the Fifth Interest Rate shall be due and payable on January ]~` of each year from January 1, 2025 to and including January 1, 2029. Interest for the Sixth Period at the Sixth Interest Rate shall be due and payable on January ls` of each year from January 1, 2030 to and including January 1, 2034. Interest for the Seventh Period at the Seventh Interest Rate shall be due and payable on Januazy ls` of each yeaz from Januazy 1, 2035 to and including the Maturity Date. 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 I-T "-- ~ ' '-- - ' -'• • _ ~ ,_ .. 1L/1L1VL L.V14t%ilii~rU l:\.l l.V~' 4.1U :!ll 1ll Ll.l 1.JL Ol.l.I IIVL: t51Fi1fN11 lV UIV 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 ]ender. -3- 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 to the Corporation of the City of Pickering, to the Corporation of the Municipality of Clarington, to the Corporation of the City of Belleville and to Veridian Corporation (collectively the "Other Parties") described in Schedule "A" hereto (together the "Other Notes"). For greater clarity, nothing shall prevent the Holder to demand repayment of this Note at any time in accordance with the terms set forth in Section 5. 4. 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. 5. Reyayment. Notwithstanding that this Note matures on the Maturity Date, the Holder of this Note shall have the right to demand repayment of this Note (in whole or in part) at any time upon six (6) months prior written notice (the "Prepayment Notice") to the Corporation provided that a duly enacted resolution or by-law is passed by the Holder certifying that the funds are required for municipal purposes, including but not limited to the following: (a) expenditures in respect of municipal capital projects; (b) acquisition of assets by the Holder; and (c) replenishing and/or increasing the level of the reserves/reserve funds held by the Holder. For greater clarity, the Holder of this Note is not permitted to demand repayment of this Note for the purpose of reinvesting the funds. The Prepayment Notice shall set forth the amount to be repaid by the Corporation and the purposes for which the funds are required by the Holder. Upon receipt by the Corporation of the Prepayment Notice, the Corporation shall be obliged to pay the amount set out in such Prepayment Notice to the Holder no later than six (6) months from the date of receipt of such Prepayment Notice. 6. Sale of Shazes. In the event that the Holder transfers its common shazes in the canital of Veridian Corporation (in accordance with the terms of a shareholders' agreement among the Holder, the Other Parties, 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. -4- Note Non-negotiable and Non-assimable. The Note shall be non-negotiable and non-assignable. [SIGNATURE PAGE FOLLOWS] -5- 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 30a' day of Mazch, 2010. VERIDIAN CONNECTIONS INC. By: Glenn Rainbird, Chair By: Michael Angemeer, President -6- SCHEDULE"A" 1. Fourth 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 March 30`h, 2010. 2. Fourth 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 March 30a', 20]0. 3. Fourth 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 March 30`", 2010. 4. 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. 5. 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. 6. 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. 7. Amended and Restated Term Promissory Note issued by Veridian Connections Inc. to Veridian Corporation in the principal amount of $21,000,000 and dated March 30a', 2010. ::ODM AIPCDOCSITOR01 \4310249\4 FOURTH AMENDED AND RESTATED TERM PROMISSORY NOTE Maturity Date: November 1 S`, 2039 Principal Amount: $5,966,000 This note amends and restates a Third Amended and Restated Promissory Note (the "Predecessor Note") issued by Veridian Connections Inc. (the "Corporation") to the Corporation of the Municipality of Clarington (the "Holder") on October 31, 2009 for the Principal Amount. The Predecessor Note was issued pursuant to By-law No. 2009-131 of the Holder. This note amends the teens 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 99-173 of the Holder, as amended by By-Law 06-191, By-law No. 2009-131 and the Predecessor Note. FOR VALUE RECENED, the Corporation hereby promises to pay to or to the order of the Holder, in lawful money of Canada, on November 1, 2039 (the "Maturity Date"), subject to the right of the Holder to demand eazlier repayment (in whole or in part) at any time in accordance with the terms set forth in Section 5, at the principal office of the Holder, the principal amount of FIVE MILLION, NINE HUNDRED AND SIXTY-SIX THOUSAND Dollazs ($5,966,000) (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 following periods: (a) from November 1, 2009 to April 30, 2010 (the "First Period"), at a rate per annum equal to 7.62% which rate represents the Ontario Energy Board ("OEB") deemed long-term debt rate as set forth on an annual basis in the OEB's Cost of Capital Pazameter Updates for Cost of Service Applications, or as the deemed long-term debt rate may otherwise be established by the OEB during the First Period ("First Interest Rate"); (b) from May 1, 2010 to December 31, 2014 (the "Second Period"), at a rate per annum equal to 5.57%, which rate represents the OEB's 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 during the Second Period, less 30 basis points ("Second Interest Rate"); and (c) for the five year period commencing lanuazy I, 2015 until December 31, 2019 (the "Third Period"), the OEB's deemed long-term debt rate established by the OEB closest in time to the start of the Third Period, less 30 basis points ("Third Interest Rate"). -2- (d) for the five year period commencing January 1, 2020 until December 31, 2024 (the "Fourth Period"), the OEB's deemed long-term debt rate established by the OEB closest in time to the start of the Fourth Period, less 30 basis points ("Fourth Interest Rate"). (e) for the five year period commencing January 1, 2025 until December 31, 2029 (the "Fifth Period"), the OEB's deemed long-term debt rate established by the OEB closest in time to the start of the Fifth Period, less 30 basis points ("Fifth Interest Rate"). (f) for the five year period commencing January 1, 2030 until December 31, 2034 (the "Sixth Period"), the OEB's deemed long-tenn debt rate established by the OEB closest in time to the start of the Sixth Period, less 30 basis points ("Sixth Interest Rate"). (g) for the five year period commencing January 1, 2035 until the Maturity Date (the "Seventh Period"), the OEB's deemed long-term debt rate established by the OEB closest in time to the start of the Seventh Period, less 30 basis points ("Seventh Interest Rate"). Interest for the First Period at the First Interest Rate shall be due and payable on May 1, 2010. Interest for the Second Period at the Second Interest Rate shall be due and payable on January 151 of each year from January 1, 2011 to and including January 1, 2015. Interest for the Third Period at the Third Interest Rate shall be due and payable on January 15' of each year from January 1, 2016 to and including January 1, 2019. Interest for the Fourth Period at the Fourth Interest Rate shall be due and payable on January l5[ of each year from January 1, 2020 to and including January 1, 2024. Interest for the Fifth Period at the Fifth Interest Rate shall be due and payable on January 151 of each year from January 1, 2025 to and including January 1, 2029. Interest for the Sixth Period at the Sixth Interest Rate shall be due and payable on January 15i of each yeaz from January 1, 2030 to and including January 1, 2034. Interest for the Seventh Period at the Seventh Interest Rate shall be due and payable on January 15' of each year from January 1, 2035 to and including the iYi4tuli~y Lal[.. 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 -3- 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. 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 to the Corporation of the Town of Ajax, to the Corporation of the City of Pickering, to the Corporation of the City of Belleville and to Veridian Corporation (collectively the "Other Parties") described in Schedule "A" hereto (together the "Other Notes"). For greater clarity, nothing shall prevent the Holder to demand repayment of this Note at any time in accordance with the terms set forth in Section 5. 4. 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. 5. Repavment. Notwithstanding that this Note matwes on the Maturity Date, the Holder of this Note shall have the right to demand repayment of this Note (in whole or in part) at any time upon six (6) months prior written notice (the "Prepayment Notice") to the Corporation provided that a duly enacted resolution or by-law is passed by the Holder certifying that the funds are required for municipal purposes, including but not limited to the following: (a) expenditures in respect of municipal capital projects; (b) acquisition of assets by the Holder; and (c) replenishing and/or increasing the level of the reserves/reserve funds held by the Holder. For greater clarity, the Holder of this Note is not permitted to demand repayment of this Note for the purpose of reinvesting the funds. The Prepayment Notice shall set forth the amount to be repaid by the Corporation and the purposes for which the funds are required by the Holder. Upon receipt by the Corporation of the Prepayment Notice, the Corporation shall be obliged to pay the amount set out in such Prepayment Notice to the Holder no later than six (6) months from the date of receipt of such Prepayment Notice. 6. Sale of Shares. In the event that the Holder transfers its common shares in the ~tal of Veridian Corporation (in accordance with the terms of a shareholders' capr agreement among the Holder, the Other Parties, Veridian Energy Inc. and the Corporation dated September 28, 2001, as amended and/or restated from time to -4- time) prior to the Maturity Date, the Note shall remain due to the Holder in accordance with its terms. 7. Note Non-negotiable and Non-assimable. The Note shall be non-negotiable and non-assignable. [SIGNATURE PAGE FOLLOWS) -5- 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 30`s day of March, 20]0. VERIDIAN CONNECTIONS INC. By: Glenn Rainbird, Chair By: Michael Angemeer, President -6- SCHEDULE"A" ]. Fourth .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 March 30th, 2010. 2. Fourth Amended and Restated Term Promissory Note issued by Veridian Cotmections Inc. to the Corporation of the Town of Ajax in the principal amount of $14,060,000 and dated March 30`", 2010. 3. Fourth 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 March 30`h, 20]0. 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 $2,206,000 and dated October 31, 2009. 6. 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. 7. Amended and Restated Term Promissory Note issued by Veridian Connections Inc. to Veridian Corporation in the principal amount of $21,000,000 and dated March 30`h, 2010. ::ODM A\PCDOC S\TOR01 k1314313 V FOURTH AMENDED AND RESTATED TERM PROMISSORY NOTE Maturity Date: November 151, 2039 Principal Amount: $17,974,000 This note amends and restates a Third Amended and Restated Promissory Note (the "Predecessor Note") issued by Veridian Connections Inc. (the "Corporation") to the Corporation of the City of Pickering (the "Holder") on October 31, 2009 for the Principal Amount. The Predecessor Note was issued pursuant to By-law No. 6994/09 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, ]998) as set forth originally in By-Law 5586/99 of the Holder, as amended by By-Law 6706/06, By-law No. 6994109 and the Predecessor Note. FOR VALUE RECEIVED, the Corporation hereby promises to pay to or to the order of the Holder, in ]awful money of Canada, on November 1, 2039 {the "Maturity Date"), subject to the right of the Holder to demand earlier repayment (in whole or in part) at any time in accordance with the terms set forth in Section 5, at the principal office of the Holder, the principal amount of SEVENTEEN MILLION NINE HUNDRED AND SEVENTY-FOUR 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 following periods: (a) from November 1, 2009 to April 30, 2010 (the "First Period"), at a rate per annum equal to 7.62% which rate represents the Ontario Energy Board ("OEB") deemed long-term debt rate as set forth on an annual basis in the OEB's Cost of Capita] Parameter Updates for Cost of Service Applications, or as the deemed long-term debt rate may otherwise be established by the OEB during the First Period ("First Interest Rate"); (b) from May ], 2010 to December 3l, 2014 (the "Second Period"), at a rate per annum equal to 5.57%, which rate represents the OEB's deemed long- term debt rate as set forth on an annual basis in the OEB's Cost of Capita] Parameter Updates for Cost of Service Applications, or as the deemed long-tenn debt rate may otherwise be established by the OEB during the Second Period, less 30 basis points ("Second Interest Rate"); and (r,) fnr rhP fve year period cnmmene;ne January 1, 2015 until December 'it 2019 (the "Third Period"), the OEB's deemed long-term debt rate established by the OEB closest in time to the start of the Third Period, less 30 basis points ("Third Interest Rate"). -2- (d) for the five yeaz period commencing January 1, 2020 until December 31, 2024 (the "Fourth Period"), the OEB's deemed long-term debt rate established by the OEB closest in time to the start of the Fourth Period, less 30 basis points ("Fourth Interest Rate"). (e) for the five year period commencing January 1, 2025 until December 3l, 2029 (the "Fifth Period"), the OEB's deemed long-term debt rate established by the OEB closest in time to the start of the Fifth Period, less 30 basis points ("Fifth Interest Rate"). (f) for the five yeaz period commencing January 1, 2030 until December 31, 2034 (the "Sixth Period"), the OEB's deemed long-term debt rate established by the OEB closest in time to the start of the Sixth Period, less 30 basis points ("Sixth Interest Rate"). (g) for the five yeaz period commencing January 1, 2035 until the Maturity Date (the "Seventh Period"), the OEB's deemed long-term debt rate established by the OEB closest in time to the start of the Seventh Period, less 30 basis points ("Seventh Interest Rate"). Interest for the First Period at the First Interest Rate shall be due and payable on May 1, 2010. Interest for the Second Period at the Second Interest Rate shall be due and payable on January 1st of each year from January 1, 20] 1 to and including January 1, 2015. Interest for the Third Period at the Third Interest Rate shall be due and payable on January 1~` of each year from January 1, 2016 to and including January 1, 2019. Interest for the Fourth Period at the Fourth Interest Rate shall be due and payable on January ls` of each year from January 1, 2020 to and including January 1, 2024. Interest for the Fifth Period at the Fifth Interest Rate shall be due and payable on January ls` of each yeaz from January 1, 2025 to and including January 1, 2029. Interest for the Sixth Period at the Sixth Interest Rate shall be due and payable on January 1 n of each year from January l , 2030 to and including Januazy 1, 2034. Interest for the Seventh Period at the Seventh Interest Rate shall be due and payable on January ]s` of each year from January 1, 2035 to and including the iviaiwrify Daie. 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 al] interest accrued thereon to the -3- 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. 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 to the Corporation of the Town of Ajax, to the Corporation of the Municipality of Clarington, to the Corporation of the City of Belleville and to Veridian Corporation (collectively the "Other Parties") described in Schedule "A" hereto (together the "Other Notes"). For greater clarity, nothing shall prevent the Holder to demand repayment of this Note at any time in accordance with the terms set forth in Section 5. 4. 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. 5. R_pe avment. Notwithstanding that this Note matures on the Maturity Date, the Holder of this Note shall have the right to demand repayment of this Note (in whole or in part) at any time upon six (6) months prior written notice (the "Prepayment Notice") to the Corporation provided that a duly enacted resolution or by-law is passed by the Holder certifying that the funds are required for municipal purposes, including but not limited to the following: (a) expenditures in respect of municipal capital projects; (b) acquisition of assets by the Holder; and (c) replenishing and/or increasing the level of the reserves/reserve funds held by the Holder. For Beater clarity, the Holder of this Note is not permitted to demand repayment of this Note for the purpose of reinvesting the funds. The Prepayment Notice shall set forth the amount to be repaid by the Corporation and the purposes for which the funds aze required by the Holder. Upon receipt by the Corporation of the Prepayment Notice, the Corporation shall be obliged to pay the amount set out in such Prepayment Notice to the Holder no later than six (6) months from the date of receipt of such Prepayment Notice. 6. Sale of Shazes. In the event that the Holder transfers its common shares in the capital of Veridian Corporation (in accordance with the terms of a shareholders' agreement among the Holder, the Other Parties, Veridian Energy Inc. and the Corporation dated September 28, 2001, as amended and/or restated from time to -4- time) prior to the Maturity Date, the Note shall remain due to the Holder in accordance with its terms. 7. Note Non-negotiable and Non-assimable. The Note shall be non-negotiable and non-assignable. [SIGNATURE PAGE FOLLOWS] -5- 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 30`"day of March, 2010. VERIDIAN CONNECTIONS INC. By: By: Glenn Rainbird, Chair Michael Angemeer, President -6- SCHEDULE"A" 1. Fourth 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 March 30a', 20]0. 2. Fourth Amended and Restated Term Promissory Note issued by Veridian Connections Inc. to the Corporation of the Town of Ajax in the principal amount of $]4,060,000 and dated March 30`h, 2010. 3. Fourth 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 Mazch 30`h, 2010. 4. 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. 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 Corporation to the Corporation of the Town of Ajax in the principal amount of $5,550,000 and dated October 31, 2009. 7. Amended and Restated Term Promissory Note issued by Veridian Connections Inc. to Veridian Corporation in the principal amount of $21,000,D00 and dated March 30`h, 2010. ::ODMA\PCDOCSITOR01 W314308\I FOURTH AMENDED AND RESTATED TERM PROMISSORY NOTE Maturity Date: November ls`, 2039 Principal Amount: $5,588,000 This note amends and restates a Third Amended and Restated Promissory Note (the "Predecessor Note") issued by Veridian Connections Inc. (the "Corporation") to the Corporation of the City of Belleville (the "Holder") on October 3l, 2009 for the Principal Amount. The Predecessor Note was issued pursuant to By-law No. 2009-161 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 2000,170 of the Holder, as amended by By-Law 2006-159, By-law No. 2009-16] and the Predecessor Note. FOR VALUE RECEIVED, the Corporation hereby promises to pay to or to the order of the Holder, in lawful money of Canada, on November 1, 2039 (the "Maturity Date"), subject to the right of the Holder to demand earlier repayment (in whole or in part) at any time in accordance with the terms set forth in Section 5, at the principal office of the Holder, the principal amount of FIVE MILLION, FIVE HUNDRED AND EIGHTY-EIGHT THOUSAND Dollars ($5,588,000) (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 following periods: (a) from November 1, 2009 to April 30, 2010 (the "First Period"), at a rate per annum equal to 7.62% which rate represents 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 during the First Period ("First Interest Rate"); (b) from May 1, 2010 to December 31, 2014 (the "Second Period"), at a rate per annum equal to 5.57%, which rate represents the OEB's deemed long- term debt rate as set forth on an annual basis in the OEB's Cost of Capital Pazameter Updates for Cost of Service Applications, or as the deemed long-term debt rate may otherwise be established by the OEB during the Second Period, less 30 basis points ("Second Interest Rate"); and (c; ~, 8:° `ve year period commer~~r~ 1-~.+~~?.-.- ? ?~?5 tantil Tleremht_ "il, 2019 V(the "Third Period"), the OEB's deemed long-term debt rate established by the OEB closest in time to the start of the Third Period, less 30 basis points ("Third Interest Rate"). -2- (d) for the five yeaz period commencing January 1, 2020 until December 31, 2024 (the "Fourth Period', the OEB's deemed long-term debt rate established by the OEB closest in time to the start of the Fourth Period, less 30 basis points ("Fourth Interest Rate"). (e) for the five yeaz period commencing January 1, 2025 until December 31, 2029 (the "Fifth Period"), the OEB's deemed long-term debt rate established by the OEB closest in time to the start of the Fifth Period, less 30 basis points ("Fifth Interest Rate"). (f) for the five year period commencing January 1, 2030 until December 31, 2034 (the "Sixth Period"), the OEB's deemed long-term debt rate established by the OEB closest in time to the start of the Sixth Period, less 30 basis points ("Sixth Interest Rate"). (g) for the five yeaz period commencing January 1, 2035 until the Maturity Date (the "Seventh Period"), the OEB's deemed long-term debt rate established by the OEB closest in time to the start of the Seventh Period, less 30 basis points ("Seventh Interest Rate"). Interest for the First Period at the First Interest Rate shall be due and payable on May 1, 2010. Interest for the Second Period at the Second Interest Rate shall be due and payable on January 151 of each yeaz from Januazy 1, 2011 to and including January 1, 2015. Interest for the Third Period at the Third Interest Rate shall be due and payable on January 1S1 of each yeaz from January 1, 2016 to and including January 1, 2019. Interest for the Fourth Period at the Fourth Interest Rate shall be due and payable on January 1S1 of each yeaz from January 1, 2020 to and including January 1, 2024. Interest for the Fifth Period at the Fifth Interest Rate shall be due and payable on January I51 of each yeaz from January 1, 2025 to and including January 1, 2029. Interest for the Sixth Period at the Sixth Interest Rate shall be due and payable on January 151 of each year from January 1, 2030 to and including January 1, 2034. Interest for the Seventh Period at the Seventh Interest Rate shall be due and payable on January 151 of each yeaz from January 1, 2035 to and including the Maturity Date. 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 -3- 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. 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 to the Corporation of the Town of Ajax, to the Corporation of the City of Pickering, to the Corporation of the Municipality of Clarington and to Veridian Corporation (collectively the "Other Parties") described in Schedule "A" hereto (together the "Other Notes"). For greater clarity, nothing shall prevent the Holder to demand repayment of this Note at any time in accordance with the terms set forth in Section 5. 4. 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. Repayment. Notwithstanding that this Note matures on the Maturity Date, the Holder of this Note shall have the right to demand repayment of this I~TOte (in whole or in part) at any time upon six (6) months prior written notice (the "Prepayment Notice") to the Corporation provided that a duly enacted resolution or by-law is passed by the Holder certifying that the funds are required for municipal purposes, including but not limited to the following: (a) expenditures in respect of municipal capital projects; (b) acquisition of assets by the Holder; and (c) replenishing and/or increasing the level of the reserves/reserve funds he]d by the Holder. For greater clarity, the Holder of this Note is not permitted to demand repayment of this Note for the purpose of reinvesting the funds. The Prepayment Notice shall set forth the amount to be repaid by the Corporation and the purposes for which the funds are required by the Holder. Upon receipt by the Corporation of the Prepayment Notice, the Corporation shall be obliged to pay the amount set out in such Prepayment Notice to the Holder no later than six (6) months from the date of receipt of such Prepayment Notice. 6. Sale of Shares. In the event that the Holder transfers its common shares in the capital of Veridian Corporation (in accordance with the terms of a shareholders' agreement among the Holder, the Other Parties, Veridian Energy Inc. and the Corporation dated September 28, 2001, as amended and/or restated from time to -4- time) prior to the Maturity Date, the Note shall remain due to the Holder in accordance with its terms. 7. Note Non,neeotiable and Non-assignable. The Note shall be non-negotiable and non-assignable. [SIGNATURE PAGE FOLLOWS] -5- 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 30`~ day of Mazch, 2010. VERIDIAN CONNECTIONS INC. By: Glenn Rainbird, Chair By: Michael Angemeer, President -6- SCHEDULE"A" 1. Fourth 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 March 30`h, 2010. 2. Fourth 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 March 30ei, 2010. 3. Fourth 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 March 30`x, 20]0. 4. 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. 5. 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. 6. 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 3l, 2009. 7. Amended and Restated Term Promissory Note issued by Veridian Connections Inc. to Veridian Corporation in the principal amount of $21,000,000 and dated March 30`h, 20] 0. ::ODMAIPCDOCSITOR01 W 314322V SECOND AMENDING AGREEMENT TO SHAREHOLDERS'AGREEMENT THIS SECOND AMENDING AGREEMENT made as of the 30ei day of March, 2010. BETWEEN: The Corporation of the Town of Ajax, a municipal corporation existing under the laws of Ontario ("Ajax") -and- The Corporation of the City of Belleville, a municipal corporation existing under the laws of Ontario ("Belleville") -and- The Corporation of the Municipality of Clarington, a municipal wrporation existing under the laws of Ontario ("Clarington") -and- The Corporation of the City of Pickering, .a municipal corporation existing under the laws of Ontario ("Pickering") -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 ("VEI") -2- (Ajax, Belleville, Clarington, Pickering, VC, VCI and VEI are collectively referred to herein as the "Parties") RECITALS: A. The Parties entered into ashazeholders' agreement made as of the 28a` day of September, 2001, as amended by a first amending agreement dated September 30, 2003 (collectively, the "Sharehotders' Agreement"); B. The Parties wish to amend Section 11.1 of the Shareholders' Agreement to (i) grant the Shazeholders the right to demand repayment of the Promissory Notes issued by VCI in favour of the Shareholders at any time during the term of such Promissory Notes; and (ii) to remove references to the Shareholder's conversion right in respect of the Promissory Notes issued by VCI in favour of the Shareholders. NOW THEREFORE THIS SECOND AMENDING AGREEMENT WITNESSES that in consideration of the respective covenants and agreements herein contained and other good and valuable considerafion, the receipt and sufficiency of which aze hereby acknowledged; the Parties agree as follows: All capitalized terms used in this Second Amending Agreement and not defined herein shall have the meanings given to them in the Shazeholders' Agreement. 2. All references herein to Sections and Subsections are references to Sections and Subsections in the Shazeholders' Agreement unless otherwise stated herein. Section 11.1 is hereby deleted and replaced with the following: "Promissory Notes. Each of the Promissory Notes shall rank equally VC Notes. No Shareholder may take any step to amend, convert, exchange or enforce those Promissory Notes issued by VC in favour of the Shazeholders (in this section, the "VC Notes") without the agreement of each other Shareholder which holds VC Notes on the identical terms and conditions. A Shareholder which proposes such a step shall give notice in writing of its proposal and the agreement of a Shazeholder to such proposal shall be given in writing by the Treasurer of that Shazeholder. In the event that all Shazeholders do not agree with the proposal, no Shazeholder shall proceed with the proposed action. VCI Notes. No Shareholder may take any step to amend or exchange those Promissory Notes issued by VCI in favour of the Shazeholders (in this section, the "VCI Notes") without the agreement of each other Shazeholder which holds VCI Notes on the identical terms and conditions. A Shazeholder which proposes such a step to amend or exchange shall give notice in writing of its proposal and the agreement of a Shazeholdet to such proposal shall be given in writing by the Treasurer of that Shazeholder. In the event that all Shazeholders do not agree with the proposal, no Shazeholder -shall proceed with the proposed action. Notwithstanding the foregoing and for greater clarity, any Shareholder may -3- demand repayment in accordance with the terms thereof, in whole or in part, of the aggregate amount outstanding (principal plus interest) on its respective VCI Note without having to consult with or obtain the agreement of the other Shazeholders holding VCI Notes. 4. Except as expressly set out herein, the Shazeholders' Agreement remains in full force and effect, unamended. 5. This Second Amending Agreement shall be governed by and construed in accordance with the laws of Ontario. 6. This Second Amending Agreement shall enure to the benefit of, and be binding on, the Parties and their respective successors and permitted assigns. 7. This Second Amending Agreement maybe 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. [SIGNATURE PAGES FOLLOW) ::ODMA\PCDOC 5\TORO l \4 3 1 3 27111 -51- IN WITNESS WHEREOF the Parties by their duly authorized representatives have executed this Second Amending Agreement as of the day and year fast above written. THE CORPOy~1')~'ION OF THE TOWN OF AJAX By: ~t i 1`--- e~~ Name: Steve~rish Title: Mayor By: c/s Name: Marry de Ronde Title: Clerk THE CO ORATION OF THE CITY OF BELLE LE By: ~s Name: Neil Ellis Title: Mayor _ By: ~~ ~ ~~ _ c/s N e• ulie C. Oram Tit City Clerk THE CORPORATION OF THE MUNICIPALITY OF Name: Title: Name: Patti e i Title: CTork- - - SIGNATURE PAGE TO THE SECOND AMENDING AGREEMENT TO THE SHAREHOLDERS' AGREEMENT . -S1- THE CORPORATION OF THE CITY OF PICKERING BY' - c/s Name: Dave Ryan -- Title: Mayor (~ aa 11 BY' `" ~1hti ~~ c/s Name: Debbie Shields Title: City Clerk VERH)IAN CORPORATION c/s Name: Mlchael Angeme > - Title: President BY' c/s Name: Glenn 'bird ~ ------ Title: Chai - VERIDIAN CONNECTIONS INC. '~,. - c - Name: Mlchael Angemeer - Title: President _ - BY' - e/s Name: Glenn R 'n ird Title: Chair ' VERIDIAN ENERGY INC. ~h-. -C . ~ - _- -. _ By: ~ =~-~ c%s. Name: Michael Angeme Title: President By. ~~ ~ ._ ~ c/s ~ _ Name: Glenn nbird ~ - - Title: Chair SIGNATURE PAGE TO THE SECOND AMENDING AGREEMENT TO THE SHAREHOLDERS' AGREEMENT