HomeMy WebLinkAbout99-173 CORPORATION OF THE MUNICIPALITY OF CLARINGTON
BY-LAW No. 99-173
To transfer the employees, assets, liabilities, rights and obligations of the Clarington Hydro-
Electric Commission and of the Corporation of the Municipality of Clarington in respect of the
generation, transmission, distribution and retailing of electricity to a corporation and its
subsidiary corporations which have been incorporated under the Business Corporations Act
(Ontario)pursuant to Section 142 of the Electricity Act, 1998 (Ontario).
RECITALS
1.) Pursuant to Subsection 145(1) of the Electricity Act, 1998 the Council may make by-
laws transferring employees, assets, liabilities, rights, and obligations of the Corporation of the
Municipality of Clarington ("Clarington") or of a commission or other body through which
Clarington generates, transmits, distributes or retails electricity, to a corporation incorporated
under the Business Corporations Act (Ontario) pursuant to Section 142 of the Electricity Act,
1998 (Ontario);
2.) Clarington transmits, distributes and retails electricity to parts of Clarington through the
Clarington Hydro-Electric Commission (the "Commission");
3.) Clarington together with the Corporation of the Town of Ajax and the Corporation of
the Town of Pickering (the "Municipalities") have agreed pursuant to a merger agreement
among Clarington and the Municipalities dated June 29, 1999 (the "Merger Agreement") to
merge the businesses of the Commission, the Ajax Hydro-Electric Commission and the
Pickering Hydro-Electric Commission;
4.) The Council and each Municipality has authorized Veridian Corporation and the
subsidiaries, Veridian Connections Inc. and Veridian Energy Inc. (the "Subsidiaries")
(collectively referred to herein as the "Corporations"), to be incorporated under the Business
Corporations Act (Ontario) pursuant to Subsection 142(1) of the Electricity Act, 1998 (Ontario)
and Sections 71 and 73 of the Ontario Energy Board Act, 1998, (Ontario) for the purpose of
generating, transmitting, distributing or retailing electricity and other business activities
permitted by the Ontario Energy Board Act, 1998, (Ontario) and Clarington hereby authorizes
the incorporation of such additional subsidiaries as may be necessary for conducting such
business activities;
5.) Pursuant to Subsection 145(1) of the Electricity Act, 1998 (Ontario), the Council deems
it appropriate to transfer the employees, assets, liabilities, rights and obligations of the
Commission and of Clarington to the Corporations on and subject to the terms and conditions
set forth herein;
NOW THEREFORE the Council of the Corporation of the Municipality of Clarington enacts
as follows:
ARTICLE I - INTERPRETATION
1.01 Definitions. Whenever used in this By-law, unless the context otherwise requires, the
capitalized words and terms set out in Schedule "A" hereto have the respective meanings
ascribed to them in Schedule "A".
1.02 Extended Meanings. In this By-law, words importing the singular number only
include the plural and vice versa and words importing gender shall include all genders.
1.03 Schedules. The following Schedules attached to this By-law shall be construed with
and are an integral part of this By-law to the same extent as if they had been set forth
herein:
Schedule "A" - Definitions
Schedule "B" - Distribution Employees
Schedule "C" - Retail Employees
Schedule "D" - Holding Company Employees
Schedule "E" - Distribution Assets
Schedule "F" - Distribution Liabilities
Schedule "G" - Collective Agreements
Schedule "H" - Excluded Assets
Schedule "I" - Excluded Liabilities
Schedule "J" - Holding Company Assets
Schedule "K" - Retail Assets
Schedule "L" - Holding Company Liabilities
Schedule "M" - Retail Liabilities
Schedule "N " - Allocation of Purchase Price
Schedule "O" - Merger Purchase Price and
Amending Agreement
1.04 Binding Effect. As provided in Section 145 of the Electricity Act, this By-law is
binding on Clarington, the Commission, Veridian Corporation, the Subsidiaries and all other
Persons, despite any general or special act or any rule of law, including any act or rule of law
which requires notice or registration of transfers and does not require the consent of
Clarington, the Commission, Veridian Corporation, the Subsidiaries or any other Person.
Section 161 of the Electricity Act provides that Part XI of the Electricity Act, which includes
Section 145, applies despite the Public Utilities Act (Ontario) and despite any other general or
special act. Veridian Corporation or any of the Subsidiaries may register such documents,
instruments and agreements, including, without limitation, certified copies of this By-law, as
may be necessary or desirable in order to evidence or confirm such transfers.
1.05 Successors and Assigns. This By-law shall ensure to the benefit of and shall be
binding on and enforceable by Clarington, the Commission, Veridian Corporation, the
Subsidiaries and their respective successors and assigns.
1.06 Applicable Law. This By-law and all documents, instruments, agreements and
transfers contemplated hereby shall be construed and enforced in accordance with the laws of
the Province of Ontario and the federal laws of Canada applicable therein.
1.07 Severability. If any section of this By-law or part thereof is invalid or ultra vires
Clarington, such section or part shall not affect the remaining sections or part of this By-law.
ARTICLE II - TRANSFERS
2.01 Transfer of All Assets and Assumed Liabilities. As of the Effective Date, Clarington
hereby sells, assigns and transfers all the assets, obligations and liabilities of the Commission
and of Clarington relating to the transmission, distribution or retailing of electricity to the
Corporations in accordance with this By-law including, without limitation, Article III.
2.02 Transfer of Distribution Assets and Distribution Liabilities. As of the Effective
Date, all of the Distribution Assets and Distribution Liabilities are hereby transferred to and
assumed by Veridian Connections Inc.
2.03 Transfer of Retail Assets and Retail Liabilities. As of the Effective Date, all of the
Retail Assets and Retail Liabilities are hereby transferred to and assumed by Veridian Energy
Inc.
2.04 Transfer of Holding Company Assets and Holding Company Liabilities. As of the
Effective Date, all of the Holding Company Assets and Holding Company Liabilities are
hereby transferred to and assumed by Veridian Corporation.
2.05 Transfer of Employees and Employee Plans.
On the Effective Date:
(a) the Employees listed in Schedule "B" are transferred to Veridian Connections Inc.;
(b) the Employees listed in Schedule "C" are transferred to Veridian Energy Inc.;
(c) the Employees listed in Schedule "D" are transferred to Veridian Corporation;
(d) the Employee Plans (other than pension plans) and Assumed Liabilities related to a
particular Employee shall be transferred to and assumed by the Corporations
respectively and in accordance with the transfer of Employees pursuant to
Subsections 2.05(a), (b) and (c); and
(e) the pension plans (which comprise part of the Employee Plans) relating to the
Employees shall be dealt with in the manner set out in Sections 17 and 18 of the
Merger Purchase Price and Amending Agreement.
2.06 Effective Time of Transfer. The transfer of the Assets and Assumed Liabilities
pursuant to this By-law shall be deemed to take effect as of the opening of business on the
Effective Date, notwithstanding the date of receipt of any approvals referred to in
Section 4.01, the actual date of the issuance of any consideration therefor or the date of
enactment of this By-law.
2.07 Excluded Assets and Excluded Liabilities. The transfer of the Assets and Assumed
Liabilities pursuant to this By-law shall not include the Excluded Assets and Excluded
Liabilities, which shall remain the assets and liabilities of Clarington. Without derogating
from the obligations of Veridian Connections Inc. to Clarington with respect to any municipal
or regional debentures as referred to in Schedule "F" hereto, Clarington shall be solely
responsible for the discharge of all Excluded Liabilities.
2.08 Reserves. The reserve funds held by the Commission, which are transferred to
Veridian Connections Inc., shall be used by such Subsidiary only to pay for capital costs in
respect of electrical power services for which such reserve funds were collected.
2.09 Non-Assignable Assets. Notwithstanding any other provision hereof, if,
notwithstanding Subsections 145(3) and (5) of the Electricity Act, any of the Assets shall not
be assignable, or shall only be assignable with the consent or approval of any other third party,
Clarington and/or the Commission shall:
(a) use all reasonable efforts in co-operation with but at the cost of the Transferee to secure
the consent required in connection with the assignment thereof; and
(b) pending the effective transfer thereof, hold all rights or entitlements that Clarington or
the Commission has thereto, in trust, for the exclusive benefit of the Transferee,
provided that the Transferee shall pay, perform and discharge all obligations arising or
accruing with respect thereto during such period and shall indemnify Clarington and the
Commission for such obligations.
2.10 Transfer and Delivery of Assets. Each of Clarington and the Commission shall
execute and deliver to Veridian Corporation and the Subsidiaries, as applicable, in form
suitable for registration, recording and filing with such public authorities as may be reasonably
required, all such bills of sale, assignments, instruments of transfer, assurances, consents and
other documents as shall be necessary to effectively record the transfer, to Veridian
Corporation and the Subsidiaries, of all Clarington's and the Commission's right, title and
interest in, to and under, or in respect of, the Assets and the Assumed Liabilities.
2.11 Employees. As and from the Effective Date, the applicable Corporation set out in
Section 2.05 shall employ, in accordance with Sections 145 and 147 of the Electricity Act, the
Employees on terms and conditions which are substantially the same as those upon which such
Employees are employed by the Commission immediately prior to the Effective Date, and
without limiting the generality of the foregoing, shall be bound by, assume, pay, satisfy,
discharge, observe, perform and fulfill all of the Employee Agreements and Employee Plans in
the place and stead of the Commission to the same extent and with the same effect as if it were
an original party thereto. The Employees transferred in accordance with Section 2.05 shall
cease to be employees of the Commission from and including the Effective Date and shall
thereupon be employees of one of the Corporations as set out in Section 2.05.
2.12 Subsequent Transfers. Any of the Assets, Employees and Assumed Liabilities
transferred under this By-law may, from time to time, subsequent to the Effective Date but
prior to November 7, 2000, be transferred to the Corporation or any Subsidiary, as may be
permitted by the Electricity Act, at such time, on such terms and for such consideration as the
directors of the transferring corporation may determine, and any such subsequent transfer shall
be made pursuant to the authority granted by this By-law and shall take effect in the sequence
and at such times as so determined by the directors of the transferring corporation.
2.13 Allocation of Assets and Assumed Liabilities. Following the transfer of the Assets,
Employees and Assumed Liabilities but prior to the dissolution of the Commission, a
certificate of the General Manager of the Commission shall be prepared to clarify and confirm
the allocation of assets and assumed liabilities of the Commission as Distribution Assets,
Distribution Liabilities, Retail Assets, Retail Liabilities, Holding Company Assets or Holding
Company Liabilities pursuant to this By-law.
2.14 Costs. All costs and expenses incurred or to be incurred by Clarington or by the
Commission and all taxes incurred or payable in connection with the transfer of the Assets
shall be borne by Veridian Corporation and/or one or more of the Subsidiaries which shall
reimburse Clarington and the Commission on demand for any such costs, expenses or taxes.
ARTICLE III - PURCHASE PRICE
3.01 Purchase Price. The Purchase Price payable by the Corporations for the Assets shall
be equal to the fair market value of the Assets as determined in the Merger Purchase Price and
Amending Agreement. Payment of the Purchase Price and any adjustment thereto shall be
made as described in the Merger Purchase Price and Amending Agreement and the Merger
Agreement.
3.02 Allocation of Purchase Price. The Purchase Price shall be allocated among the
Distribution Assets, the Holding Company Assets and the Retail Assets as determined in
Schedule "N" which shall be prepared by the President of Veridian Corporation within 150
days of the Effective Date, or such other later date as the President of Veridian Corporation
may determine.
3.03 Transfer of Shares. All of the common shares of Veridian Connections Inc. and the
common shares of Veridian Energy Inc. issued to Clarington pursuant to the Merger Purchase
Price and Amending Agreement (collectively "the Transferred Shares") shall be transferred to
Veridian Corporation by Clarington as of the Effective Date in consideration of the allotment
and issuance by Veridian Corporation to Clarington of fully paid and non-assessable common
shares of Veridian Corporation.
3.04 Assumption of Liabilities. Each of the Corporations shall be bound by, assume, pay,
satisfy, discharge, observe, perform and fulfil, and indemnify and save harmless Clarington
and the Commission from and against the Assumed Liabilities assumed by it. The transfer of
the Assumed Liabilities under Part XI of the Electricity Act and this By-law releases
Clarington and the Commission from any liability or obligation in connection with the
Assumed Liabilities pursuant to Section 153 of the Electricity Act. Pursuant to Subsection
145(2) of the Electricity Act, this By-law shall not transfer any liabilities or obligations arising
under a debenture issued or authorized to be issued by Clarington. However, Veridian
Connections Inc. shall assume the obligation to make payment to Clarington in amounts equal
to those amounts due under any debenture referenced above, which includes without limitation,
the debentures set out on Schedule "I" hereto.
ARTICLE IV - GENERAL MATTERS
4.01 Regulatory Approvals. The transfer of any of the Assets or of the Transferred Shares
which are issued and outstanding shares of Veridian Connections Inc. pursuant to this By-law
as of the Effective Date shall be subject to obtaining such regulatory approvals as may be
required by law, including, without limitation, any approval of the OEB pursuant to the OEB
Act, which approvals may be sought by Clarington, the Commission, Veridian Corporation or
the appropriate Subsidiary and following the receipt of any such approval the transfer shall be
completed with effect as of the Effective Date pursuant to this By-law.
4.02 Land Transfer Tax and Retail Sales Tax. The transactions contemplated by this By-
law are exempt from Ontario land transfer tax pursuant to the Land Transfer Tax Act (Ontario)
and retail sales tax pursuant to the Retail Sales Tax (Ontario) pursuant to Section 159 of the
Electricity Act.
4.03 Bulk Sales Compliance. The transactions contemplated by this By-law are exempt
from the provisions of the Bulk Sales Act (Ontario) pursuant to Section 159 of the Electricity
Act.
4.04 Goods and Services Tax. The transfers of Assets pursuant to this By-law will
constitute the transfers of all or substantially all of the Assets necessary for the Transferee to
carry on the business transferred to it. Clarington and each Transferee, being registered
pursuant to the Excise Tax Act (Canada) with respect to goods and services tax, shall sign the
election provided for in Section 167 of the Excise Tax Act (Canada) and the Transferee shall
file the election in accordance with that Section 167 of the Excise Tax Act (Canada) so that the
transfers are exempt from goods and services tax.
4.05 Execution of Merger Purchase Price and Amending Agreement. The Mayor and the
Clerk are hereby authorized and directed, for and on behalf of Clarington, to execute and
deliver the Merger Purchase Price and Amending Agreement and to do all such things and to
execute and deliver all such other documents, instruments and writings as may be necessary or
desirable to give effect to the provisions of this By-law and the Merger Purchase Price and
Amending Agreement.
4.06 Further Assurances. Each of Clarington and the Commission shall, at its expense,
promptly and duly execute and deliver such further documents and promptly take such further
action not inconsistent with the terms hereof as may from time to time be reasonably required
to more effectively carry out the intent and purpose of this By-law or to perfect and protect the
interest of Veridian Corporation and its Subsidiaries in the Assets. The Mayor and the Clerk
are hereby authorized and directed, for and on behalf of Clarington, to do all acts and things
and execute and deliver such other documents, instruments, agreements and transfers as may
be reasonably necessary or desirable to give effect to the provisions of this By-law.
4.07 Amendment of By-law. In the event of any omission or error made in connection with
the passage of this By-law, including, without limitation, the unintended transfer or failure to
transfer any assets or liabilities of the Commission and/or Clarington, Clarington may amend
this By-law in accordance with the procedures applicable to amend a by-law of Clarington.
Passed this 6th day of December , 1999.
M ane mre ay
Patti rrie
I
SCHEDULE "A"
TO BY LAW NO. #173 OF THE MUNICIPALITY OF CLARINGTON
DEFINITIONS
Whenever used in this By-law, unless the context otherwise requires, the following words and
terms shall have the respective meanings ascribed to them below:
(a) "Assets" means all of the Distribution Assets, Retail Assets and Holding Company
Assets;
(b) "Assumed Liabilities" means all of the Distribution Liabilities, Retail Liabilities and
Holding Company Liabilities;
(c) "By-law" means this By-law No. #173, all schedules and all documents, instruments,
agreements and transfers supplemental hereto or in amendment or confirmation hereof;
(d) "Clarington" shall have the meaning set out in the recitals hereto;
(e) "Commission" shall have the meaning set out in the recitals hereto;
(f) "Corporations" shall have the meaning set out in the recitals hereto;
(g) "Distribution Assets" means all assets, interests, property, rights and undertaking,
registered or unregistered, secured or unsecured, other than the Excluded Assets, the
Retail Assets and the Holding Company Assets, of the Commission and of Clarington
held or used by either of them as at the Effective Date which relate to or have been
used in connection with the transmission and distribution of electricity including,
without limitation, the distribution system of the Commission and the assets listed in
Schedule "E" hereto;
(h) "Distribution Liabilities" means all of the debts, liabilities and obligations of the
Commission and of Clarington related to, incurred or assumed by either of them as at
the Effective Date in connection with the transmission and distribution of electricity,
the distribution system of the Commission and the Distribution Assets including,
without limitation, all environmental, reclamation and decommissioning liabilities of the
Commission and the liabilities listed in Schedule "F" hereto, but other than the
Excluded Liabilities, the Retail Liabilities and the Holding Company Liabilities.
(i) "Effective Date" means November 1, 1999;
(j) "Electricity Act" means the Electricity Act, 1998 (Ontario) and all regulations
thereunder;
(k) "Employees" means all full-time and part-time, union and non-union, employees and
officers of the Commission (including all trainees and probationary employees) as at the
Effective Date;
(1) "Employee Agreements" means all contracts, agreements, and commitments written or
oral, in respect of Employees as at the Effective Date to which the Commission is a
parry or by which it is bound, including, without limitation,
(i) all collective agreements as set out in Schedule "G" hereto; and
(ii) all contracts of employment;
(m) "Employee Plans" means all employee benefit plans, pension plans, bonus or incentive
plans, employee medical insurance and disability plans and savings plans relating to
Employees;
(n) "Excluded Assets" means those assets of the Commission or of Clarington described in
Schedule "H" hereto;
(o) "Excluded Liabilities" means those liabilities of the Commission or of Clarington
described in Schedule "I" hereto;
(p) "Holding Company Assets" means all assets, interests, rights and undertaking,
registered or unregistered, secured or unsecured, other than the Excluded Assets, the
Distribution Assets and the Retail Assets, of the Commission and of Clarington held or
used by either of them as at the Effective Date which related to, have been or would be
used by either of them in connection with the provision of general administrative
support services including, without limitation, accommodation, fleet, information
technology services, warehousing and the assets listed in Schedule 'T' hereto;
(q) "Holding Company Liabilities" means all of the debts, liabilities and obligations of the
Commission and Clarington related to, incurred or assumed by either of them as at the
Effective Date in connection with the provision of general administrative support
services and the Holding Company Assets including, without limitation,
accommodation, fleet, information technology services, warehousing and the liabilities
listed in Schedule "L" hereto, but other than the Excluded Liabilities, the Distribution
Liabilities and the Retail Liabilities;
(r) "Merger Agreement" shall have the meaning set out in the recitals;
(s) "Merger Purchase Price and Amending Agreement" means an agreement among the
Municipalities and the Corporations relating to the payment of the Purchase Price
among other things dated as of November 1, 1999 in the form annexed as Schedule
"O" hereto;
(t) "Municipalities" shall have the meaning set out in the recitals;
(u) "OBCA" means the Business Corporations Act (Ontario) and all regulations thereunder;
(v) "OEB" means the Ontario Energy Board;
(w) "OEB Act" means the Ontario Energy Board Act, 1998 (Ontario) and all regulations
thereunder;
(x) "Person" means any individual, corporation, partnership, trust, unincorporated
association or joint venture;
(y) "Purchase Price" means the amounts payable for the Assets as set out in Section 3.01;
(z) "Retail Assets" means all assets, interests, property, rights and undertaking, registered
or unregistered, secured or unsecured, other than the Excluded Assets, the Distribution
Assets and the Holding Company Assets, of the Commission and of Clarington held or
used by either of them as at the Effective Date which related to, have been or would be
used in connection with the retailing of electricity, other related activities including,
without limitation, the assets listed in Schedule "K" hereto;
(aa) "Retail Liabilities" means all of the debts, liabilities and obligations of the Commission
and of Clarington related to, incurred or assumed by either of them as at the Effective
Date in connection with the retailing of electricity, other related activities and the Retail
Assets including, without limitation, the liabilities listed in Schedule "M" hereto, but
other than the Excluded Liabilities, the Distribution Liabilities and the Holding
Company Liabilities;
(bb) "Subsidiary" shall have the meaning set out in the recitals hereto;
(cc) "Transferred Shares" means the common shares of Veridian Connections Inc. and
Veridian Energy Inc. referred to in Section 3.03; and
(dd) "Transferee" means, with respect to any particular Asset, Employee or Assumed
Liability, Veridian Corporation or the Subsidiary which has received the transfer of
such Asset, Employee or Assumed Liability pursuant to Sections 2.01, 2.02, 2.03 or
2.04.
SCHEDULE "B"
TO BY LAW NO. #173 OF THE MUNICIPALITY OF CLARINGTON
VERIDIAN CONNECTIONS INC. EMPLOYEES
Attached hereto.
VERIDIAN CONNECTIONS - CLARINGTON
NAME PREVIOUS LOCATION UNION
JIM PALMER LINEPERSON CLARINGTON PWU
ROB WHITEHEAD LINEPERSON CLARINGTON PWU
BOB SCANLAN FIELD SUPERVISOR-CLARINGTON CLARINGTON
TOM WRIGHT LINEPERSON CLARINGTON
PWU
RAY GROSS LINEPERSON CLARINGTON PWU
FRANK LUSCHER LINEPERSON CLARINGTON PWU
FRANK SEBER SUBSTATION MECH./SCADA TECHNICIAN CLARINGTON PWU
e 1
SCHEDULE "C"
TO BY LAW NO. #173 OF THE MUNICIPALITY OF CLARINGTON
VERIDIAN ENERGY INC. EMPLOYEES
Attached hereto.
i
VERIDIAN ENERGY - CLARINGTON
NAME POSITION PREVIOUS LOCATION UNION
HEATHER CAMERON CUSTOMER CARE REPRESENTATIVE CLARINGTON IBEW
JACKIE HONE CUSTOMER CARE REPRESENTATIVE CLARINGTON IBEW
LORI HORVATH CUSTOMER CARE REPRESENTATIVE CLARINGTON IBEW
KAREN TROTTIER CUSTOMER CARE REPRESENTATIVE CLARINGTON IBEW
DON SNOWDEN METER TECHNICIAN CLARINGTON PWU
JANET WATSON (parthme) CLARINGTON
SCHEDULE "D"
TO BY LAW NO. #173 OF THE MUNICIPALITY OF CLARINGTON
VERIDIAN CORPORATION EMPLOYEES
Attached hereto.
i
VERIDIAN CORPORATION - CLARINGTON
NAME POSITION PREVIOUS LOCATION UNION
DAVE CLARK VICE PRESIDENT CORPORATE AFFAIRS CLARINGTON
ADRIENNE WINDSOR EXECUTIVE ASSISTANT CLARINGTON
IRENE D'AMOURS FINANCIAL ANALYST CLARINGTON
LAURIE STICKWOOD SYSTEMS ANALYST CLARINGTON {BEW
ROD PLAIN STOCKPERSON CLARINGTON PWU
SCHEDULE "E"
TO BY LAW NO. #173 OF THE MUNICIPALITY OF CLARINGTON
DISTRIBUTION ASSETS
(i) Real Property Interests: except as specified in Schedules "H", "J" and "K", all lands,
premises, freehold and leasehold property, interests, easements, rights of way, licences,
and rights to use or occupy real property whether registered or unregistered, liens,
mortgages, charges, agreements, notice of agreements, debentures and security
interests which create an interest in land and all other rights or interests therein, and
fixtures thereon, including, without limitation, the following lands, leases, easements
and rights:
Location Legal Description Legal Interest
1. Substation Part of Lot 13, Concession 1, Bowmanville, Parts 1 Fee Simple
#5 West Side and 2 on Plan 1OR1939
Spry Avenue
2. Substation Part of Lot 10, Concession 2, Bowmanville, Part 1 Fee Simple
#1 East Side on Plan 1OR2951
Liberty Street
(South of
Freeland
Avenue)
3. Substation Part of Reserved Lot Block "D" Plan H50077, Part Fee Simple
#11 3 on Plan 40R14760
Concession
Street and
Bradshaw
Street
4. Substation Lot 4, Block 30, Hanning's Plan Village of Fee Simple
#8 Church Newcastle dated 1868
Street and
Toronto
Street
5. Substation Lot 11, Block "O", Hanning's Plan Village of Fee Simple
#9 North Newcastle dated 1868
Side Wilmot
Street
6. Substation #6 Part of Lot 5, Block 4, CG Hanning's Plan, Right to own,
Vincent Bowmanville, as in N37118 operate and
Massey maintain
School, near substation #6
Wellington on the lands;
Street East Owned by
Kawartha Pine
Ridge District
School Board
7. Substation Part of Lot 10, Broken Front Concession, Lease expiring
10, Liberty Bowmanville, Parts 1 and 2 on Plan 10-1195 September 30,
Street South 2030, from
and Lake The
Road Corporation of
the Town of
Bowmanville
8. Substation 3, Part of Lot 13, Concession 1, Town of Bowmanville Town of
Wellington as in N30544 except Part 8 on Plan 1OR2975 Bowmanville
Street and By-law No.
Scugog Street 1956 passed
January 17,
1966
authorized the
purchase of the
land by the
Town for the
use of the
Public Utilities
Commission.
9. Trudeau (1) Parcel Block 74-2, Section 1OM800; Part of Fee Simple
Drive Block 74, Plan 1OM800, Part 14 on Plan 1OR2811.
(2) Parcel Block 74-1, Section 1OM800, Part of
Block 74, Plan 1OM800, Part 15 on Plan 1OR-2811
(ii) Plant, Building, Fixtures: all plant, buildings, structures, erections, improvements,
appurtenances and fixtures (including fixed machinery and fixed equipment),
transformer stations, substations, transformers, vaults, transmission lines, distribution
lines, conduits, ducts, pipes, wires, rods, cables, fibres and other apparatus, devices,
appliances and equipment, materials, works, poles, pipelines and fittings, excluding all
meters, wherever situate including, without limitation, situate on any of the lands,
premises, leaseholds, easements, rights of way or interests whether registered or
unregistered described in (i) above or forming part thereof or otherwise, or located on
property owned by the Commission, or Clarington, private property or public property
except as specified in Schedules "H", "J" and "K";
(iii) Machinery and Equipment: except as specified in Schedules "H", "J" and "K", all
machinery and equipment (except for all vehicles including , without limitation, trailers
and related vehicle equipment), all goods and chattels and other personal property,
tools, handling equipment, furniture, furnishings and accessories relating to the
distribution business of the Commission;
(iv) Accounts Receivable: all accounts receivable of the Commission including, without
limitation, all customer and trade accounts, notes receivable, book debts and other
debts due or accruing to the Commission and the benefit of all security and security
deposits for such accounts and debts;
(v) Reserves: The portion of any reserve fund established under Section 33 of the
Development Charges Act, 1997 that relates to development charges collected in respect
of electrical power services, and the portion of any reserve fund referred to in Section
63 of the Development Charges Act, 1997 that relates to development charges collected
in respect of electrical power services as follows;
(vi) Contracts, Rights: except as specified in Schedules "H", "J" and "K", the full benefit of
all franchise, licence or management agreements and all other contracts, commitments,
rights, choses in action, benefits, arrangements, understandings, and agreements,
written or oral, to which Clarington or the Commission is a party or otherwise relating
to the distribution business of the Commission including, with limitation the following:
(a) all written or oral contracts, agreements, commitments, undertakings, rights and
arrangements;
(b) all forward commitments to the Commission for supplies or materials entered
into in the usual and ordinary course of business whether or not there are any
written contracts with respect thereto;
(vii) Goodwill: the goodwill of the Commission including, without limiting the generality of
the foregoing:
(a) the exclusive right of Veridian Corporation or any of the Subsidiaries to
represent itself as carrying on any business in continuation of and in succession
to the Commission and the right to use any words indicating that its business is
so carried on; and
(b) all records of sales, customer lists, customer data and supplier lists of or used
by the Commission;
(viii) Licences and Permits: the full benefit of all licences, registrations, permits, consents,
quotas, approvals, certificates, and other authorizations including, without limitation,
the following:
(a) Radio Licence account no. 42-080004582 issued to the Commission by Industry
Canada;
(b) Waste Generator Licence No. ONO 415300 issued to the Commission by the
Ministry of the Environment;
(c) Interim Distribution Licence issued to Clarington Hydro-Electric Commission
pursuant to section 129 of the Ontario Energy Board Act, 1998 (Ontario); and
(d) PCB Storage Site Registration No. 304 8A 018 issued by the Ministry of the
Environment;
(ix) Know How: except as specified in Schedules "H", "J" and "K", all patterns, plans,
designs, research data, copyrights, trade secrets and other proprietary know-how,
processes, drawings, technology, unpatented blueprints, flow-sheets, equipment and
parts lists and descriptions and related instructions, manuals, data, records and
procedures relating to the distribution business of the Commission and any and all data
owned or used by the Commission, and all licences, agreements and other contracts and
commitments relating to any of the foregoing;
(x) Prepaid Expenses: except as specified in Schedules "H", "J" and "K", all pre-paid
expenses and deposits relating to the distribution business of the Commission the
benefit of which will accrue to Veridian Connections Inc.;
(xi) Warranties: except as specified in Schedules "H", "J" and "K", the full benefit of all
warranties and warranty rights (implied, express or otherwise) against manufacturers,
suppliers or sellers which apply to any of the Distribution Assets and the net realizable
value of any warranty claims relating to the Distribution Assets outstanding as of the
Effective Date;
(xii) Insurance Policies: the full benefit of all policies of insurance of the Commission
relating to the Distribution Assets;
(xiii) Records: all personnel records, inspection records and all other records, books,
documents and data bases relating to Distribution Employees, the Distribution
Liabilities, or the other Distribution Assets as are in the possession or under the
control of the Commission;
(xiv) Computer Hardware and Software: all computer hardware and software, including,
without limitation, all computer monitoring equipment and all rights under licences and
other agreements or instruments relating to the distribution system of the Commission;
and
(xv) Equity in Ontario Hydro: all equity in the former Ontario Hydro and any successor or
assign thereto accrued up to and including the Effective Date.
SCHEDULE "F"
TO BY LAW NO. #173 OF THE MUNICIPALITY OF CLARINGTON
DISTRIBUTION LIABILITIES
(i) All customer deposits of the Commission;
(ii) All obligations of the Commission to Clarington with respect to the outstanding
debentures issued by the Regional Municipality of Durham (as set out directly below)
for the benefit of the Commission:
By-Law # Original Principal Outstanding Maturity Date
Principal
@Dec. 31/98
84-93 $750,000.00 $437,000.00 Sept/2003
223-90 $900,000.00 $587,000.00 Dec/2000
(iii) All obligations related to the proceedings associated with Court File No. 71294/96,
Clarington Hydro-Electric Commission v. Mould. The plaintiff is claiming $200,000
in general damages and $200,000 in special damages with pre judgement interest and
legal costs;
(iv) All obligations related to the proceedings associated with Court File No. 99364/99,
Clarington Hydro-Electric Commission v. 418705 Ontario Ltd. The plaintiff claims
damages of$50,000 and punitive, aggravated and exemplary damages of$25,000 along
with pre judgement interest and legal costs;
(v) All obligations relating to a class action proceeding commenced against all municipal
electric utilities in Ontario which have charged late payment charges on overdue utility
bills at any time after April 1, 1981. The action was initiated against Toronto Hydro as
the representative of the defendant class of municipal electric utilities in Ontario. The
Municipal Electric Association is undertaking the defence of this class action;
(vi) All obligations of Clarington and the Commission arising out of the Employee Plans in
respect of the Employees listed in Schedule "B".
SCHEDULE "G"
TO BY LAW NO. #173 OF THE MUNICIPALITY OF CLARINGTON
COLLECTIVE AGREEMENT
(i) Collective Agreement between the Clarington Hydro-Electric Commission and Power
Workers' Union, CUPE Local 1000 having a term commencing April 1, 1999 to March
31, 2000; and
Collective Agreement between Clarington Hydro-Electric Commission and Local 636,
International Brotherhood of Electrical Workers AFL-CIO-CLC dated April 1, 1999 to
March 31, 2000.
SCHEDULE "H"
TO BY LAW NO. #173 OF THE MUNICIPALITY OF CLARINGTON
EXCLUDED ASSETS
NIL.
SCHEDULE "I"
TO BY LAW NO. #173 OF THE MUNICIPALITY OF CLARINGTON
EXCLUDED LIABILITIES
(i) Municipal or regional debentures issued pursuant to the by-laws set out below for the
benefit of the Commission:
By-Law # Original Principal Outstanding Maturity Date
Principal
@Dec. 31/98
84-93 $750,000.00 $437,000.00 Sept/2003
223-90 $900,000.00 $587,000.00 Dec/2000
SCHEDULE "J"
TO BY LAW NO. #173 OF THE MUNICIPALITY OF CLARINGTON
HOLDING COMPANY ASSETS
(i) Real Property Interests: the following lands including all related easements, rights or
way, licences, and rights to use or occupy the land whether registered or unregistered,
secured or unsecured:
Location Legal Description Legal Interest
South Side Part of Lots 67 and 68, Plan H50071, Part 1 on Plan Fee Simple
Highway 2 1OR-1976 except Part 1 on Expropriation Plan
1. (King Street) N164213
Plant, Building, Fixtures: all plant, buildings, structures, erections, improvements,
appurtenances and fixtures (including fixed machinery and fixed equipment) on any of
the lands described in (i) above;
(iii) Vehicles: all trucks, cars, trailers, vehicles and rolling stock of all kinds of the
Commission;
(iv) Inventories: except as specified in Schedule "K", all inventories and supplies including,
without limitation, production and shipping supplies, maintenance items and all other
materials and supplies on hand to be used or consumed in the business of Veridian
Corporation;
(v) Cash: all of the cash on hand of the Commission;
(vi) Contracts, Rights: the full benefit of all franchise, licence or management agreements
and all other contracts, commitments, rights, choses in action, benefits, arrangements,
understandings, and agreements, written or oral, relating to the general administrative
and support services provided by the Commission, to which Clarington or the
Commission is a party or otherwise including, with limiting the generality of the
foregoing:
(a) all written or oral contracts, agreements, commitments, undertakings, rights and
arrangements;
(b) all forward commitments to the Commission for supplies or materials entered
into in the usual and ordinary course of business whether or not there are any
written contracts with respect thereto;
(vii) Intellectual Property: all of the right, title, benefit and interest of the Commission in
and to all registered trade marks, trade names, brand names, patents and copyrights, all
unregistered trade marks, trade names and copyrights and all patent applications, trade
mark registration applications and copyright registration applications, both domestic
and foreign, owned or made by the Commission, including, without limitation, the
Clarington Hydro Trademark;
(viii) Know How: all patterns, plans, designs, research data, copyrights, trade secrets and
other proprietary know-how, processes, drawings, technology, unpatented blueprints,
flow-sheets, equipment and parts lists and descriptions and related instructions,
manuals, data, records and procedures and any and all data owned or used by the
Commission that relate to the general administrative and support services provided by
the Commission, and all licences, agreements and other contracts and commitments
relating to any of the foregoing;
(ix) Computer Hardware and Software: except as specified in Schedule "E", all computer
hardware and software, including all rights under licences and other agreements or
instruments relating thereto;
(x) Prepaid Expenses: all pre-paid expenses and deposits relating to the Holding Company
Assets the benefit of which will accrue to Veridian Corporation;
(xi) Warranties: the full benefit of all warranties and warranty rights (implied, express or
otherwise) against manufacturers, suppliers or sellers which apply to any of the Holding
Company Assets and the net realizable value of any warranty claims relating to the
Holding Company Assets outstanding as of the Effective Date;
(xii) Insurance Policies: the full benefit of all policies of insurance of the Commission
relating to the Holding Company Assets; and
(xiii) Records: all personnel records, inspection records and all other records, books,
documents and data bases relating to the Holding Company Employees, the Holding
Company Liabilities, or the Holding Company Assets as are in the possession or under
the control of the Commission.
SCHEDULE "K"
TO BY LAW NO. #173 OF THE MUNICIPALITY OF CLARINGTON
RETAIL ASSETS
(i) Inventories: all meter, hot water heaters and appliance inventory;
(ii) Equipment: all metering and measurement devices;
(iii) Contracts, Rights: the full benefit of all franchise, licence or management agreements
and all other contracts, commitments, rights, choses in action, benefits, arrangements,
understandings, and agreements, written or oral, not contained in Schedule "E" or "J"
to which Clarington or the Commission is a party or otherwise including, with limiting
the generality of the foregoing:
(a) all written or oral contracts, agreements, commitments, undertakings, rights and
arrangements;
(b) all forward commitments to the Commission for supplies or materials entered
into in the usual and ordinary course of business whether or not there are any
written contracts with respect thereto;
(iv) Know How: all patterns, plans, designs, research data, copyrights, trade secrets and
other proprietary know-how, processes, drawings, technology, unpatented blueprints,
flow-sheets, equipment and parts lists and descriptions and related instructions,
manuals, data, records and procedures and any and all data owned or used by the
Commission that are not contained in Schedules "E" or "J" and all licences, agreements
and other contracts and commitments relating to any of the foregoing;
(v) Prepaid Expenses: all pre-paid expenses and deposits the benefit of which will accrue to
the Veridian Energy Inc.;
(vi) Warranties: the full benefit of all warranties and warranty rights (implied, express or
otherwise) against manufacturers, suppliers or sellers which apply to any of the Retail
Assets and the net realizable value of any warranty claims relating to the Retail Assets
outstanding as of the Effective Date;
(vii) Insurance Policies: the full benefit of all policies of insurance of the Commission
relating to the Retail Assets; and
(viii) Records: all personnel records, inspection records and all other records, books,
documents and data bases relating to Retail Employees, the Retail Liabilities or to the
Retail Assets as are in the possession or under the control of the Commission.
SCHEDULE "L"
TO BY LAW NO. #173 OF THE MUNICIPALITY OF CLARINGTON
HOLDING COMPANY LIABILITIES
(i) All obligations of Clarington and the Commission arising out of the Employee Plans in
respect of the Employees listed in Schedule "D".
SCHEDULE "M"
TO BY LAW NO. #173 OF THE MUNICIPALITY OF CLARINGTON
RETAIL LIABILITIES
(i) All obligations of Clarington and the Commission arising out of the Employee Plans in
respect of the Employees listed in Schedule "C".
SCHEDULE "N"
TO BY LAW NO. #173 OF THE MUNICIPALITY OF CLARINGTON
ALLOCATION OF PURCHASE PRICE
To be prepared in accordance with Section 3.02.
SCHEDULE "O"
TO BY LAW NO. #173 OF THE MUNICIPALITY OF CLARINGTON
MERGER PURCHASE PRICE AND AMENDING AGREEMENT
Attached hereto.
MERGER PURCHASE PRICE AND AMENDING AGREEMENT
BETWEEN:
THE CORPORATION OF THE TOWN OF AJAX
(„Ajax„)
- and -
THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON
("Clarington")
- and-
THE CORPORATION OF THE TOWN OF PICKERING
("Pickering")
(Ajax, Clarington and Pickering collectively referred to herein as the
"Municipalities" and individually as a"Municipality")
- and-
AJAX HYDRO-ELECTRIC COMMISSION
("Ajax Hydro")
- and-
CLARINGTON HYDRO-ELECTRIC COMMISSION
("Clarington Hydro")
- and-
PICKERING HYDRO-ELECTRIC COMMISSION
("Pickering Hydro")
(Ajax Hydro, Clarington Hydro and Pickering Hydro collectively referred
to herein as the "Commissions" or individually as a"Commission")
- and-
VERIDIAN CORPORATION
("HoldCo")
- and-
VERIDIAN CONNECTIONS INC.
("Connections")
- and -
VERIDIAN ENERGY INC.
("Veridian Energy")
(HoldCo, Veridian Energy and Connections collectively referred to herein
as the "Corporations" and individually as a "Corporation")
RECITALS:
1. The Municipalities have agreed pursuant to a merger agreement among each of Ajax,
Pickering and Clarington dated June 29, 1999 (the "Merger Agreement") to merge the
businesses of Ajax Hydro, Pickering Hydro and Clarington Hydro;
2. Pursuant to Section 142 of the Electricity Act, 1998 (Ontario), Sections 71 and 73 of the
Ontario Energy Board Act, 1998 (Ontario), and the Merger Agreement, the
Municipalities have agreed to incorporate the Corporations;
3. The Municipalities and HoldCo entered into a shareholders' agreement dated July 1, 1999
(the "Shareholders' Agreement") to provide for the conduct of certain affairs of HoldCo,
to provide for certain restrictions on the transfer and ownership of shares of HoldCo and
to govern the mutual rights and obligations of the Municipalities with respect to HoldCo
and each other Municipality;
4. The Shareholders' Agreement provides certain restrictions on Ho1dCo, including, without
limitation, that HoldCo shall not enter into any commitments that would increase the
Debt/Equity Ratio (as defined in the Shareholders' Agreement) to greater than 60% Debt
(as defined in the Shareholders' Agreement) or issue any securities convertible into shares
in the capital of HoldCo;
5. Each of the Municipalities shall pass a by-law (a "By-law"), with an effective date as of
the date hereof, transferring the assets, liabilities and employees of its respective
Commission to the Corporations for consideration, to be determined in accordance with
the By-law, which shall include the issuance to each Municipality of a HoldCo Note and
Connections Note (the "Notes");
6. The Municipalities desire to set out herein certain terms relating to the payment of the
purchase price (the "Purchase Price")by the Corporations for the transfer of the Assets to
the Corporations;
7. It is the desire of each Municipality that the Notes rank equally and that each
Municipality act in the same manner with respect to its Notes as each other Municipality
with respect to its Notes;
NOW THEREFORE, in consideration of the premises, the mutual promises herein
contained and other good and valuable consideration, (the receipt and sufficiency of which are
hereby acknowledged) each of the parties agrees with each other party as follows:
1. Interpretation. Whenever used in this Agreement,unless the context otherwise requires,
the capitalized terms set out in Schedule "A" have the respective meanings ascribed to
them in Schedule "A".
2. Purchase Price. The Purchase Price payable by the Corporations for the Assets shall be
the fair market value of the Assets. An independent valuator selected by the President of
HoldCo shall determine the fair market value of the Assets as of the Effective Date in
accordance with the terms of this Agreement. For the purpose of the initial recording of
the transfer of Assets contemplated by each By-law on the books of the Corporations, as
at the date of this Agreement, the fair market value of the Assets shall be estimated to be
the book value of the Assets as of the Effective Date determined in accordance with the
Merger Agreement and this Agreement. The fair market value will be determined in
accordance with Section 3 of this Agreement.
3. Adjustment of Purchase Price by President of HoldCo.
(a) It is the intention of the Municipalities that the Assets shall be transferred at their
fair market value as at the Effective Date and the Purchase Price may be adjusted
as a result of any audit or valuation conducted after the Effective Date with
respect to the Assets as at the Effective Date.
(b) The basis for the fair market value of the Distribution Assets are estimates of
value which involve a consideration of the permitted rate of return on equity and
the distribution rates which the OEB will allow Connections to charge for the
distribution of electricity pursuant to the OEB Act. Since a final determination of
the fair market value of the Distribution Assets as at the Effective Date cannot be
made until the OEB determines the permitted rates under the OEB Act for the
years 2000 and following, the Purchase Price of the Distribution Assets may be
adjusted to reflect a revised determination of fair market value of the Distribution
Assets as at the Effective Date which takes account of the OEB permitted rates.
(c) The adjustments to the Purchase Price contemplated by this Section C may be
effected as determined by the President of HoldCo based on an audit or valuation
by an independent valuator or auditor and as approved by the Board of Directors
of HoldCo. For greater certainty, all necessary adjustments to the Purchase Price
shall have the same effect as if they were made on the Effective Date.
4. Satisfaction of Purchase Price.
(a) Distribution Assets and Distribution Liabilities - The Purchase Price for the
Distribution Assets shall be satisfied by:
(i) the assumption by Connections of the Distribution Liabilities; and
(ii) as to the balance (the "Distribution Equity Price"):
a. as to 57% of such balance, by the allotment
and issuance by Connections to each Municipality of fully paid
and non-assessable common shares, which amount shall be added
to the stated capital account for such class of shares; and
b. as to 43% of such balance, by the issuance by Connections to
each Municipality of a form of promissory note (the "Connections
Note"). The Connections Note shall be in the form attached hereto
as Schedule "B"; and
(b) Retail Assets and Retail Liabilities - The Purchase Price for the Retail Assets shall
be satisfied by:
(i) the assumption by Veridian Energy of the Retail Liabilities; and
(ii) as to 100% of the balance (the "Retail Equity Price"), by the allotment and
issuance by Veridian Energy to each Municipality of fully paid and non-
assessable common shares, which amount shall be added to the stated
capital account for such class of shares; and
(c) Holding Company Assets and Holding Company Liabilities - The Purchase Price
for the Holding Company Assets shall be satisfied by:
(i) the assumption by HoldCo of the Holding Company Liabilities; and
(ii) as to the balance (the "Holding Company Equity Price"):
a. as to 11%of the balance, by the allotment and issuance by HoldCo
to each Municipality of fully paid and non-assessable common
shares, which amount shall be added to the stated capital account
for such class of shares; and
b. as to 89% of such balance, by the issuance by HoldCo to each
Municipality of a form of promissory note (the "HoldCo Note").
The HoldCo Note shall be in the form attached hereto as Schedule
11CII
5. Allocation of Equity. The Merger Agreement provides the basis for the determination of
the percentage equity allocation (the "Equity Allocation") in HoldCo among the
Municipalities. Pursuant to the Merger Agreement, the Equity Allocation for each
Municipality shall be determined based upon the proportionate book value of the Assets
contributed to the Corporations by each Municipality as at the Effective Date, which is
estimated, as set out in the Merger Agreement, as follows:
Pickering 47.4%
Ajax 36.8%
Clarington 15.8%.
The above Equity Allocation will be subsequently adjusted based on the audited
financial statements of each Commission as at November 1, 1999 in accordance with the
Merger Agreement.
6. Payment of Purchase Price. Each of the Municipalities shall receive a proportionate
share of the Distribution Equity Price, Holding Company Equity Price and Retail Equity
Price based upon each Municipality's Equity Allocation as at the Effective Date, as
adjusted pursuant to Section 5 above.
7. Notes Considered Equity for Purpose of Shareholders' Agreement. Each Note, or
any replacement thereof, shall be considered Equity (as defined in the Shareholders'
Agreement) for the purpose of determining whether shareholder approval is required
pursuant to Subsection 3.9(e) of the Shareholders' Agreement.
8. Acknowledgement respecting Merger Agreement. Notwithstanding that Section 7 of
the Merger Agreement contemplates the use of a "Transfer Agreement" in connection
with the transfer of the Assets, Liabilities and Employees, a Transfer Agreement shall not
be required to effect the transfer of the Assets, Liabilities and Employees for any
Municipality.
9. Amendment to Merger Agreement. Section 10 of the Merger Agreement shall be
deleted in its entirety and replaced with the following:
"Valuation of Assets. Each of the Municipalities agrees that the Transferred Assets and
liabilities of each Predecessor Utility shall be transferred to HoldCo, or as applicable, the
HoldCo Subs, at their fair market value as at the Effective Date. For the initial transfer, it
shall be assumed that the book value of each respective Predecessor Utility equals the fair
market value and shall be based on the audited financial statements of each Predecessor
Utility as at the Effective Date. Each Municipality agrees to cause an audit of its
Predecessor Utility to be conducted as at the Effective Date. The audit shall be conducted
in accordance with generally accepted Canadian accounting principles on a basis
consistent with prior periods, with such audit to be completed and the audit report
delivered by each Municipality to HoldCo's auditors with 90 days after the Effective
Date. The value of the Assets shall be subsequently adjusted to the fair market value of
the Transferred Assets and liabilities of the Predecessor Utilities. The fair market value
of the Transferred Assets and liabilities of each Predecessor Utility shall be deemed to be
the proportionate share (on the basis of the Equity Allocation as described in Section 11)
of the fair market value of all of the Transferred Assets and liabilities."
10. Amendment to Merger Agreement. Section 13 of the Merger Agreement shall be
amended by adding to the fifth line after the word "HoldCo," the following:
"the transfer of Common Shares of HoldCo,".
i
�i
i
i
11. Amendment to Merger Agreement. Section 18 of the Merger Agreement should be
amended by deleting the section in its entirety.
12. Commissions Bound by Merger Agreement. Each of the Commissions shall be bound
by the terms and conditions of the Merger Agreement as amended by this Agreement as
if it were an original party to the Merger Agreement.
13. Obligations in By-laws Binding and Enforceable by Parties. Where a By-law refers to
obligations of any party hereto (an "Obligor"), that Obligor shall be required to perform
or fulfill the obligations as if they were covenants of the Obligor under this Agreement to
each other party hereto (the "Other Parties"). Accordingly, each Other Party shall have
the right to enforce the performance or fulfilment of the obligations under the respective
By-law against the Obligor in the event of a failure to perform or fulfill such obligations
as if they were covenants of the Obligor under this Agreement. The terms of each By-
law shall be incorporated by reference into this Agreement.
14. Municipalities and Commissions Consent to By-laws. Each Municipality (the
"Consenting Municipality") and its respective Commission consent to the passage of each
other Municipality's By-law in a form substantially the same as the Consenting
Municipality's own By-law and as set out in the Merger Agreement.
15. Inter Creditor Agreement. Each of the Notes shall rank equally. No Municipality may
take any step to amend, convert, exchange, or enforce its Notes without the agreement of
each other Municipality which holds Notes to amend, convert, exchange or enforce its
own Notes on the identical terms and conditions. A Municipality which proposes such a
step shall give notice in writing of its proposal and the agreement of a Municipality to
such proposal shall be given in writing by the Treasurer of that Municipality. In the
event that all Municipalities do not agree with the proposal, no Municipality shall
proceed with the proposed action.
16. Prepayment of Interest under the Notes. The interest payable pursuant to the Notes
shall be prepaid to the holder in two installments as follows: November 1, 1999 and
September 1, 2000. Interest prepaid under the Notes shall comprise the Special Payment
(as defined in the Merger Agreement) and shall constitute full payment thereof.
17. Representations of Municipalities and Commissions. Each Municipality and its
respective Commission hereby represent and warrant that:
(a) they are participants in OMERS; and
(b) each Employee of each Commission is a member of OMERS.
18. Representations of Corporations Regarding Pension Plans. Each of the Corporations
hereby represents warrants and covenants that:
(a) it is an associated employer within the meaning of the OMERS Act;
(b) Veridian Connections Inc. shall elect to participate in OMERS in respect of the
Employees of each Commission listed in Schedule "B" of each respective By-law
and shall perform and assume all of the obligations and duties of an associated
employer under the OMERS Act with respect to the Employees of each
Commission listed in Schedule "B" of each respective By-law in each case
effective the Effective Date;
(c) Veridian Energy Inc. shall elect to participate in OMERS in respect of the
Employees of each Commission listed in Schedule "C" of each respective By-law
and shall perform and assume all of the obligations and duties of an associated
employer under the OMERS Act with respect to the Employees of each
Commission listed in Schedule "C" of each respective By-law in each case
effective the Effective Date; and
(d) Veridian Corporation shall elect to participate in OMERS in respect of the
Employees of each Commission listed in Schedule "D" of each respective By-law
and shall perform and assume all of the obligations and duties of an associated
employer under the OMERS Act with respect to the Employees of each
Commission listed in Schedule "D" of each respective By-law in each case
effective the Effective Date.
19. Effective Date. This Agreement is made effective as of November 1, 1999
notwithstanding the date of execution.
IN WITNESS WHEREOF this Agreement has been duly executed by the parties under
their respective corporate seals as witnessed by the signatures of their proper officers in that
behalf.
DATED as of the 1 st day of November, 1999.
THE CORPORATION OF THE TOWN OF AJAX
By: c/s
Steve Parish, Mayor
By: c/s
Marty de Rond, Clerk
THE CORPORATION OF THE MUNICIPALITY OF
CLARINGTON
By: c/s
Diane Hamre, Mayor
By: c/s
Patti Barrie, Clerk
THE CORPORATION OF THE TOWN OF
PICKERING
By: c/s
Wayne Arthurs, Mayor
By: c/s
Bruce Taylor, Clerk
AJAX HYDRO-ELECTRIC COMMISSION
By:
Name: Duncan Jewell
Title: Chair
By:
Name: Axel Starck
Title: General Manager
CLARINGTON HYDRO-ELECTRIC COMMISSION
By:
Name: George Van Dyk
Title: Chair
By:
Name: David Clark
Title: General Manager
PICKERING HYDRO-ELECTRIC COMMISSION
By:
Name: James Mason
Title: Chair
By:
Name: John Wiersma
Title: General Manager
VERIDIAN CORPORATION
By: c/s
Name: James I. Mason
Title: Director
By: c/s
Name: John Wiersma
Title: President
VERIDIAN CONNECTIONS INC.
By: c/s
Name: James I. Mason
Title: Director
By: c/s
Name: John Wiersma
Title: President
VERIDIAN ENERGY INC.
By: c/s
Name: James 1. Mason
Title: Director
By: c/s
Name: John Wiersma
Title: President
SCHEDULE "A"
DEFINITIONS
Whenever used in this By-law, unless the context otherwise requires, the following words and
terms shall have the respective meanings ascribed to them below:
"Agreement" means this merger purchase price and amending agreement among the
Municipalities and the Corporations;
"Assets" means all of the Distribution Assets, Retail Assets and Holding Company Assets;
"By-law" shall have the meaning set out in the recitals;
"Connections Note" shall have the meaning set out in Subparagraph 4(a)(ii)(b);
"Consenting Municipality" shall have the meaning set out in Section 14;
"Distribution Assets" means all of the distribution assets of the Commissions and the
Municipalities as defined in each respective By-law;
"Distribution Equity Price" shall have the meaning set out in Paragraph 4(a)(ii);
"Distribution Liabilities" means all distribution Liabilities of the Commissions and the
Municipalities as defined in each respective By-law;
"Effective Date" means November 1, 1999;
"Employees" shall have the meaning ascribed thereto in Section(k) of Schedule "A" of each By-
law;
"Equity Allocation" shall have the meaning set out in Section 5;
"HoldCo Note" shall have the meaning set out in Subparagraph 4(c)(ii)(b);
"Holding Company Assets" means all of the holding company assets of the Commissions and the
Municipalities as defined in each respective By-law;
"Holding Company Equity Price" shall have the meaning set out in Paragraph 4(c)(ii);
"Holding Company Liabilities" means all of the holding company liabilities of the Commissions
and the Municipalities as defined in each respective By-law;
"Merger Agreement" shall have the meaning set out in the recitals;
"Notes" shall have the meaning of set out in the recitals;
"Obligor" shall have the meaning set out in Section 13;
"OEB" means the Ontario Energy Board;
"OEB Act" means the Ontario Energy Board Act, 1998(Ontario) and all regulations related
thereto, as amended from time to time;
"OMERS" means the Ontario Municipal Employees Retirement Systems;
"OMERS Act" means the Ontario Municipal Employees Retirement Systems Act;
"Other Parties" shall have the meaning set out in Section 13;
"Purchase Price" shall have the meaning set out in the recitals;
SCHEDULE "B"
CONNECTIONS NOTE
Attached hereto.
SCHEDULE "C"
HOLDCO NOTE
Attached hereto.
TERM PROMISSORY NOTE
Maturity Date: November 1,2003 Principal Amount: $!
FOR VALUE RECEIVED, Veridian Connections Inc. (the "Corporation"), hereby
promises to pay to or to the order of the Corporation of the[ Town of Ajax, the Town of
Pickering or the Municipality of Clarington] (the "Holder"), in lawful money of Canada, on
November 1, 2003 (the "Maturity Date") at the principal office of the Holder, the principal
amount of ! Dollars ($!) (the "Principal Amount") together with interest on the unpaid Principal
Amount calculated annually, not in advance, from the date hereof at the rate of 0% per annum
for the first period ending October 31, 2000 and at a rate of 7.6% per annum on and after
November 1, 2000 until the Maturity Date. Interest at the said rate shall be payable on
November 1 in each year up to and including the Maturity Date.
1. 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. 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 Pickering and 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 (the "Other Notes").
3. Subordination
The obligation of the Corporation to repay the principal amount of this Note and 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.
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 May 1, 2003. The option to convert shall expire if not
exercised on or before May 1, 2003. The exchange ratio for the conversion of the Principal
Amount of this Note shall be on the basis that, for every $1000 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 Maturity Date of this Note.
5. Extension of the Note
In the event that the Holder does not convert the Principal Amount of the Note on the
Maturity Date in accordance with Section 4 of this Note, the Corporation may, at its option,
extend the Maturity Date of some or all of the Principal Amount of the Note ("the Revised
Principal Amount") for an additional two-year period to November 1, 2005 (the "Extended
Term") with the rate of interest and terms of repayment to be agreed between the Holder and the
Corporation. Any Principal Amount for which the Corporation has not extended the Maturity
Date shall be paid to the Holder on the Maturity Date. In the event that the Corporation and the
Holder cannot agree on the rate of interest and the terms of repayment of the Revised Principal
Amount for the Extended Term of the Note, the Revised Principal Amount shall be due and
payable on November 1, 2005 with interest at the rate specified in the next paragraph.
If the Holder and the Corporation do not agree on the interest rate applicable for the
Extended Term, then interest shall be calculated and payable on the Revised Principal Amount
from the Maturity Date at the lesser of(i) the cash of the Corporation available for the payment
of interest and (ii) the rate paid for a Treasury Bill (issued within five business days of the
Maturity Date by the Government of Canada with a term of 182 days), calculated and payable
annually on November 1.
6. 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
and the Corporation dated July 1, 1999) prior to the conclusion of the Extended Term of the
Note, the Note shall remain due in accordance with its terms. If the Holder transfers its common
shares in the capital of the Corporation prior to the Maturity Date, the Corporation shall be
entitled to set-off any amount owing to the Holder against any amount of prepaid interest paid by
the Corporation to the Holder but not earned by the Holder.
7. Note Non-negotiable and Non-assignable
The Note shall be non-negotiable and non-assignable.
8. Surrender and Replacement
The Note is issued pursuant to By-law No. 173 of the Holder and the Principal Amount
may be adjusted in accordance with the By-law. Following such adjustment, at the request of the
Corporation, the Holder shall surrender this Note to the Corporation for cancellation, without
repayment of the Principal Amount, in exchange for the issuance of a replacement promissory
note of the Corporation payable to the Holder which reflects such adjustment.
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 1St day of November, 1999.
VERIDIAN CONNECTIONS INC.
By:
Name: James I. Mason
Title: Director
By:
Name: John Wiersma
Title: President
SCHEDULE "A"
[Details of Other Notes to be inserted.]
TERM PROMISSORY NOTE
Maturity Date: November 1,2003 Principal Amount: $!
FOR VALUE RECEIVED, Veridian Connections Inc. (the "Corporation"), hereby
promises to pay to or to the order of the Corporation of the[ Town of Ajax, the Town of
Pickering or the Municipality of Clarington] (the "Holder"), in lawful money of Canada, on
November 1, 2003 (the "Maturity Date") at the principal office of the Holder, the principal
amount of ! Dollars ($!) (the "Principal Amount") together with interest on the unpaid Principal
Amount calculated annually, not in advance, from the date hereof at the rate of 0% per annum
for the first period ending October 31, 2000 and at a rate of 7.6% per annum on and after
November 1, 2000 until the Maturity Date. Interest at the said rate shall be payable on
November 1 in each year up to and including the Maturity Date.
1. 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. 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 Pickering and 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 (the "Other Notes").
3. Subordination
The obligation of the Corporation to repay the principal amount of this Note and 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.
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 May 1, 2003. The option to convert shall expire if not
exercised on or before May 1, 2003. The exchange ratio for the conversion of the Principal
Amount of this Note shall be on the basis that, for every $1000 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 Maturity Date of this Note.
�I
5. Extension of the Note
In the event that the Holder does not convert the Principal Amount of the Note on the
Maturity Date in accordance with Section 4 of this Note, the Corporation may, at its option,
extend the Maturity Date of some or all of the Principal Amount of the Note ("the Revised
Principal Amount") for an additional two-year period to November 1, 2005 (the "Extended
Term") with the rate of interest and terms of repayment to be agreed between the Holder and the
Corporation. Any Principal Amount for which the Corporation has not extended the Maturity
Date shall be paid to the Holder on the Maturity Date. In the event that the Corporation and the
Holder cannot agree on the rate of interest and the terms of repayment of the Revised Principal
Amount for the Extended Term of the Note, the Revised Principal Amount shall be due and
payable on November 1, 2005 with interest at the rate specified in the next paragraph.
If the Holder and the Corporation do not agree on the interest rate applicable for the
Extended Term, then interest shall be calculated and payable on the Revised Principal Amount
from the Maturity Date at the lesser of(i) the cash of the Corporation available for the payment
of interest and (ii) the rate paid for a Treasury Bill (issued within five business days of the
Maturity Date by the Government of Canada with a term of 182 days), calculated and payable
annually on November 1.
6. 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
and the Corporation dated July 1, 1999) prior to the conclusion of the Extended Term of the
Note, the Note shall remain due in accordance with its terms. If the Holder transfers its common
shares in the capital of the Corporation prior to the Maturity Date, the Corporation shall be
entitled to set-off any amount owing to the Holder against any amount of prepaid interest paid by
the Corporation to the Holder but not earned by the Holder.
7. Note Non-negotiable and Non-assignable
The Note shall be non-negotiable and non-assignable.
8. Surrender and Replacement
The Note is issued pursuant to By-law No. 99-173 of the Holder and the Principal
Amount may be adjusted in accordance with the By-law. Following such adjustment, at the
request of the Corporation, the Holder shall surrender this Note to the Corporation for
cancellation, without repayment of the Principal Amount, in exchange for the issuance of a
replacement promissory note of the Corporation payable to the Holder which reflects such
adjustment.
IN WITNESS WHEREOF Veridian Corporation has caused this Note to be signed under
its corporate seal by its duly authorized officers as of this 1St day of November, 1999.
VERIDIAN CORPORATION
By:
Name: James I. Mason
Title: Director
By:
Name: John Wiersma
Title: President
SCHEDULE "A"
[Details of Other Notes to be inserted.]
MERGER PURCHASE PRICE AND AMENDING AGREEMENT
BETWEEN:
THE CORPORATION OF THE TOWN OF AJAX
("Ajax")
- and-
THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON
("Clarington")
- and -
THE CORPORATION OF THE TOWN OF PICKERING
("Pickering")
(Ajax, Clarington and Pickering collectively referred to herein as the
"Municipalities" and individually as a"Municipality")
- and-
AJAX HYDRO-ELECTRIC COMMISSION
("Ajax Hydro")
- and -
CLARINGTON HYDRO-ELECTRIC COMMISSION
("Clarington Hydro")
- and-
PICKERING HYDRO-ELECTRIC COMMISSION
("Pickering Hydro")
(Ajax Hydro,Clarington Hydro and Pickering Hydro collectively referred to
herein as the "Commissions" or individually as a "Commission")
- and-
VERIDIAN CORPORATION
("HoldCo")
- and -
- 2 -
VERIDIAN CONNECTIONS INC.
("Connections")
- and-
VERIDIAN ENERGY INC.
("Veridian Energy")
(HoldCo, Veridian Energy and Connections collectively referred to herein
as the "Corporations" and individually as a"Corporation")
RECITALS:
1. The Municipalities have agreed pursuant to a merger agreement among each of Ajax,
Pickering and Clarington dated June 29, 1999 (the "Merger Agreement") to merge the
businesses of Ajax Hydro, Pickering Hydro and Clarington Hydro;
2. Pursuant to Section 142 of the Electricity Act, 1998 (Ontario), Sections 71 and 73 of the
Ontario Energy Board Act, 1998(Ontario), and the Merger Agreement, the Municipalities
have agreed to incorporate the Corporations;
3. The Municipalities and HoldCo entered into a shareholders' agreement dated July 1, 1999
(the "Shareholders'Agreement")to provide for the conduct of certain affairs of HoldCo,to
provide for certain restrictions on the transfer and ownership of shares of HoldCo and to
govern the mutual rights and obligations of the Municipalities with respect to HoldCo and
each other Municipality;
4. The Shareholders' Agreement provides certain restrictions on HoldCo, including, without
limitation, that HoldCo shall not enter into any commitments that would increase the
Debt/Equity Ratio(as defined in the Shareholders'Agreement)to greater than 60%Debt(as
defined in the Shareholders'Agreement)or issue any securities convertible into shares in the
capital of HoldCo;
5. Each of the Municipalities shall pass a by-law(a"By-law"),with an effective date as of the
date hereof, transferring the assets, liabilities and employees of its respective Commission
to the Corporations for consideration,to be determined in accordance with the By-law,which
shall include the issuance to each Municipality of a HoldCo Note and Connections Note(the
"Notes");
6. The Municipalities desire to set out herein certain terms relating to the payment of the
purchase price (the "Purchase Price")by the Corporations for the transfer of the Assets to
the Corporations;
- 3 -
7. It is the desire of each Municipality that the Notes rank equally and that each Municipality
act in the same manner with respect to its Notes as each other Municipality with respect to
its Notes;
NOW THEREFORE, in consideration of the premises, the mutual promises herein
contained and other good and valuable consideration, (the receipt and sufficiency of which are
hereby acknowledged) each of the parties agrees with each other party as follows:
1. Interpretation. Whenever used in this Agreement, unless the context otherwise requires,
the capitalized terms set out in Schedule"A"have the respective meanings ascribed to them
in Schedule "A".
2. Purchase Price.The Purchase Price payable by the Corporations for the Assets shall be the
fair market value of the Assets. An independent valuator selected by the President of
HoldCo shall determine the fair market value of the Assets as of the Effective Date in
accordance with the terms of this Agreement. For the purpose of the initial recording of the
transfer of Assets contemplated by each By-law on the books of the Corporations,as at the
date of this Agreement,the fair market value of the Assets shall be estimated to be the book
value of the Assets as of the Effective Date determined in accordance with the Merger
Agreement and this Agreement. The fair market value will be determined in accordance with
Section 3 of this Agreement.
3. Adjustment of Purchase Price by President of HoldCo.
(a) It is the intention of the Municipalities that the Assets shall be transferred at their fair
market value as at the Effective Date and the Purchase Price may be adjusted as a
result of any audit or valuation conducted after the Effective Date with respect to the
Assets as at the Effective Date.
(b) The basis for the fair market value of the Distribution Assets are estimates of value
which involve a consideration of the permitted rate of return on equity and the
distribution rates which the OEB will allow Connections to charge for the
distribution of electricity pursuant to the OEB Act. Since a final determination of the
fair market value of the Distribution Assets as at the Effective Date cannot be made
until the OEB determines the permitted rates under the OEB Act for the years 2000
and following, the Purchase Price of the Distribution Assets may be adjusted to
reflect a revised determination of fair market value of the Distribution Assets as at
the Effective Date which takes account of the OEB permitted rates.
(c) The adjustments to the Purchase Price contemplated by this Section C may be
effected as determined by the President of HoldCo based on an audit or valuation by
an independent valuator or auditor and as approved by the Board of Directors of
-4 -
HoldCo. For greater certainty,all necessary adjustments to the Purchase Price shall
have the same effect as if they were made on the Effective Date.
4. Satisfaction of Purchase Price.
(a) Distribution Assets and Distribution Liabilities - The Purchase Price for the
Distribution Assets shall be satisfied by:
(i) the assumption by Connections of the Distribution Liabilities; and
(ii) as to the balance (the "Distribution Equity Price"):
a. as to 57% of such balance, by the allotment and issuance by
Connections to each Municipality of fully paid and non-assessable
common shares, which amount shall be added to the stated capital
account for such class of shares; and
b. as to 43%of such balance,by the issuance by Connections to each
Municipality of a form of promissory note(the"Connections Note").
The Connections Note shall be in the form attached hereto as
Schedule "B"; and
(b) Retail Assets and Retail Liabilities - The Purchase Price for the Retail Assets shall
be satisfied by:
(i) the assumption by Veridian Energy of the Retail Liabilities; and
(ii) as to 100% of the balance (the "Retail Equity Price"), by the allotment and
issuance by Veridian Energy to each Municipality of fully paid and non-
assessable common shares,which amount shall be added to the stated capital
account for such class of shares; and
(c) Holding Company Assets and Holding Company Liabilities-The Purchase Price for
the Holding Company Assets shall be satisfied by:
(i) the assumption by HoldCo of the Holding Company Liabilities; and
(ii) as to the balance (the "Holding Company Equity Price"):
a. as to 11% of the balance, by the allotment and issuance by HoldCo
to each Municipality of fully paid and non-assessable common
shares,which amount shall be added to the stated capital account for
such class of shares; and
- 5 -
b. as to 89% of such balance, by the issuance by HoldCo to each
Municipality of a form of promissory note(the"HoldCo Note").The
HoldCo Note shall be in the form attached hereto as Schedule "C".
5. Allocation of Equity. The Merger Agreement provides the basis for the determination of
the percentage equity allocation (the "Equity Allocation") in HoldCo among the
Municipalities. Pursuant to the Merger Agreement, the Equity Allocation for each
Municipality shall be determined based upon the proportionate book value of the Assets
contributed to the Corporations by each Municipality as at the Effective Date, which is
estimated, as set out in the Merger Agreement, as follows:
Pickering 47.4%
Ajax 36.8%
Clarington 15.8%.
The above Equity Allocation will be subsequently adjusted based on the audited financial
statements of each Commission as at November 1, 1999 in accordance with the Merger
Agreement.
6. Payment of Purchase Price. Each of the Municipalities shall receive a proportionate share
of the Distribution Equity Price, Holding Company Equity Price and Retail Equity Price
based upon each Municipality's Equity Allocation as at the Effective Date, as adjusted
pursuant to Section 5 above.
7. Notes Considered Equity for Purpose of Shareholders' Agreement. Each Note, or any
replacement thereof,shall be considered Equity(as defined in the Shareholders'Agreement)
for the purpose of determining whether shareholder approval is required pursuant to
Subsection 3.9(e)of the Shareholders' Agreement.
8. Acknowledgment respecting Merger Agreement. Notwithstanding that Section 7 of the
Merger Agreement contemplates the use of a"Transfer Agreement" in connection with the
transfer of the Assets,Liabilities and Employees,a Transfer Agreement shall not be required
to effect the transfer of the Assets, Liabilities and Employees for any Municipality.
9. Amendment to Merger Agreement. Section 10 of the Merger Agreement shall be deleted
in its entirety and replaced with the following:
"Valuation of Assets. Each of the Municipalities agrees that the Transferred Assets and
liabilities of each Predecessor Utility shall be transferred to HoldCo, or as applicable, the
HoldCo Subs, at their fair market value as at the Effective Date. For the initial transfer, it
shall be assumed that the book value of each respective Predecessor Utility equals the fair
market value and shall be based on the audited financial statements of each Predecessor
Utility as at the Effective Date.Each Municipality agrees to cause an audit of its Predecessor
Utility to be conducted as at the Effective Date. The audit shall be conducted in accordance
with generally accepted Canadian accounting principles on a basis consistent with prior
- 6 -
periods,with such audit to be completed and the audit report delivered by each Municipality
to HoldCo's auditors with 90 days after the Effective Date. The value of the Assets shall be
subsequently adjusted to the fair market value of the Transferred Assets and liabilities of the
Predecessor Utilities. The fair market value of the Transferred Assets and liabilities of each
Predecessor Utility shall be deemed to be the proportionate share(on the basis of the Equity
Allocation as described in Section 11) of the fair market value of all of the Transferred
Assets and liabilities."
10. Amendment to Merger Agreement. Section 13 of the Merger Agreement shall be amended
by adding to the fifth line after the word "HoldCo," the following:
"the transfer of Common Shares of HoldCo,".
11. Amendment to Merger Agreement. Section 18 of the Merger Agreement should be
amended by deleting the section in its entirety.
12. Commissions Bound by Merger Agreement Each of the Commissions shall be bound by
the terms and conditions of the Merger Agreement as amended by this Agreement as if it
were an original party to the Merger Agreement.
13. Obligations in By-laws Binding and Enforceable by Parties Where a By-law refers to
obligations of any party hereto (an "Obligor"),that Obligor shall be required to perform or
fulfill the obligations as if they were covenants of the Obligor under this Agreement to each
other party hereto(the"Other Parties"). Accordingly, each Other Party shall have the right
to enforce the performance or fulfilment of the obligations under the respective By-law
against the Obligor in the event of a failure to perform or fulfill such obligations as if they
were covenants of the Obligor under this Agreement. The terms of each By-law shall be
incorporated by reference into this Agreement.
14. Municipalities and Commissions Consent to By-laws Each Municipality (the
"Consenting Municipality") and its respective Commission consent to the passage of each
other Municipality's By-law in a form substantially the same as the Consenting
Municipality's own By-law and as set out in the Merger Agreement.
15. Inter Creditor Agreement. Each of the Notes shall rank equally. No Municipality may
take any step to amend, convert, exchange, or enforce its Notes without the agreement of
each other Municipality which holds Notes to amend,convert,exchange or enforce its own
Notes on the identical terms and conditions. A Municipality which proposes such a step
shall give notice in writing of its proposal and the agreement of a Municipality to such
proposal shall be given in writing by the Treasurer of that Municipality. In the event that all
Municipalities do not agree with the proposal, no Municipality shall proceed with the
proposed action.
- 7 -
16. Prepayment of Interest under the Notes. The interest payable pursuant to the Notes shall
be prepaid to the holder in two installments as follows: November 1, 1999 and September
1,2000.Interest prepaid under the Notes shall comprise the Special Payment(as defined in
the Merger Agreement) and shall constitute full payment thereof.
17. Representations of Municipalities and Commissions. Each Municipality and its
respective Commission hereby represent and warrant that:
(a) they are participants in OMERS; and
(b) each Employee of each Commission is a member of OMERS.
18. Representations of Corporations Regarding Pension Plans. Each of the Corporations
hereby represents warrants and covenants that:
(a) it is an associated employer within the meaning of the OMERS Act;
(b) Veridian Connections Inc. shall elect to participate in OMERS in respect of the
Employees of each Commission listed in Schedule "B" of each respective By-law
and shall perform and assume all of the obligations and duties of an associated
employer under the OMERS Act with respect to the Employees of each Commission
listed in Schedule"B"of each respective By-law in each case effective the Effective
Date;
(c) Veridian Energy Inc.shall elect to participate in OMERS in respect of the Employees
of each Commission listed in Schedule "C" of each respective By-law and shall
perform and assume all of the obligations and duties of an associated employer under
the OMERS Act with respect to the Employees of each Commission listed in
Schedule "C" of each respective By-law in each case effective the Effective Date;
and
(d) Veridian Corporation shall elect to participate in OMERS in respect of the
Employees of each Commission listed in Schedule "D" of each respective By-law
and shall perform and assume all of the obligations and duties of an associated
employer under the OMERS Act with respect to the Employees of each Commission
listed in Schedule"D"of each respective By-law in each case effective the Effective
Date.
- 8 -
19. Effective Date. This Agreement is made effective as of November 1, 1999 notwithstanding
the date of execution.
IN WITNESS WHEREOF this Agreement has been duly executed by the parties under
their respective corporate seals as witnessed by the signatures of their proper officers in that behalf.
DATED as of the 1st day of November, 1999.
THE CORPORATION OF THE TOWN OF AJAX
By. c/s
Steve Parish,Mayor
By. c/s
Marty de Rond, Clerk
THE CORPORATION OF THE MUNICIPALITY OF
CLARINGTON
By. c/s
Diane Hamr , ayor
By. c/s
Patt' arrie, erk
THE CORPORATION OF THE TOWN OF
PICKERING
By. c/s
Wayne Arthurs, Mayor
By. c/s
Bruce Taylor, Clerk
- 9 -
AJAX HYDRO-ELECTRIC COMMISSION
By:
Name: Duncan Jewell
Title: Chair
By:
Name: Axel Starck
Title: General Manager
CLARINGTON HYDRO-ELECTRIC COMMISSION
By:
Name: George Van Dyk
Title: Chair
By:
Name: David Clark
Title: General Manager
PICKERING HYDRO-ELECTRIC COMMISSION
By:
Name: James Mason
Title: Chair
By:
Name: John Wiersma
Title: General Manager
- 10 -
VERIDIAN CORPORATION
BY: c/s
Name: James I. Mason
Title: Director
BY: c/s
Name: John Wiersma
Title: President
VERIDIAN CONNECTIONS INC.
By: c/s
Name: James I. Mason
Title: Director
BY: c/s
Name: John Wiersma
Title: President
VERIDIAN ENERGY INC.
BY: c/s
Name: James I. Mason
Title: Director
BY: c/s
Name: John Wiersma
Title: President
SCHEDULE "A"
DEFINITIONS
Whenever used in this By-law,unless the context otherwise requires,the following words and terms
shall have the respective meanings ascribed to them below:
"Agreement"means this merger purchase price and amending agreement among the Municipalities
and the Corporations;
"Assets" means all of the Distribution Assets,Retail Assets and Holding Company Assets;
"By-law" shall have the meaning set out in the recitals;
"Connections Note" shall have the meaning set out in Subparagraph 4(a)(ii)(b);
"Consenting Municipality" shall have the meaning set out in Section 14;
"Distribution Assets"means all of the distribution assets of the Commissions and the Municipalities
as defined in each respective By-law;
"Distribution Equity Price" shall have the meaning set out in Paragraph 4(a)(ii);
"Distribution Liabilities" means all distribution Liabilities of the Commissions and the
Municipalities as defined in each respective By-law;
"Effective Date" means November 1, 1999;
"Employees"shall have the meaning ascribed thereto in Section(k)of Schedule"A"of each By-law;
"Equity Allocation" shall have the meaning set out in Section 5;
"HoldCo Note" shall have the meaning set out in Subparagraph 4(c)(ii)(b);
"Holding Company Assets" means all of the holding company assets of the Commissions and the
Municipalities as defined in each respective By-law;
"Holding Company Equity Price" shall have the meaning set out in Paragraph 4(c)(ii);
"Holding Company Liabilities" means all of the holding company liabilities of the Commissions
and the Municipalities as defined in each respective By-law;
"Merger Agreement" shall have the meaning set out in the recitals;
"Notes" shall have the meaning of set out in the recitals;
- 2 -
"Obligor" shall have the meaning set out in Section 13;
"OEB" means the Ontario Energy Board;
"OEB Act"means the Ontario Energy Board Act, 1998(Ontario)and all regulations related thereto,
as amended from time to time;
"OMERS" means the Ontario Municipal Employees Retirement Systems;
"OMERS Act" means the Ontario Municipal Employees Retirement Systems Act;
"Other Parties" shall have the meaning set out in Section 13;
"Purchase Price" shall have the meaning set out in the recitals;
"Retail Assets"means all of the retail assets of the Commissions and the Municipalities as defined
in each respective By-law;
"Retail Equity Price" shall have the meaning set out in Paragraph 4(b)(ii);
"Retail Liabilities" means all of the retail liabilities of the Commissions and the Municipalities as
defined in each respective By-law; and
"Shareholders'Agreement" shall have the meaning set out in the recitals.
SCHEDULE "B"
CONNECTIONS NOTE
Attached hereto.
TERM PROMISSORY NOTE
Maturity Date: November 1,2003 Principal Amount: $•
FOR VALUE RECEIVED,Veridian Connections Inc.(the"Corporation"),hereby promises
to pay to or to the order of the Corporation of the[ Town of Ajax, the Town of Pickering or the
Municipality of Clarington](the"Holder"),in lawful money of Canada,onNovember 1,2003(the
"Maturity Date") at the principal office of the Holder, the principal amount of• Dollars ($*)(the
"Principal Amount")together with interest on the unpaid Principal Amount calculated annually,not
in advance, from the date hereof at the rate of 0%per annum for the first period ending October 31,
2000 and at a rate of 7.6% per annum on and after November 1, 2000 until the Maturity Date.
Interest at the said rate shall be payable on November 1 in each year up to and including the Maturity
Date.
1. 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. 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
Pickering and 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 (the
"Other Notes").
3. Subordination
The obligation of the Corporation to repay the principal amount of this Note and 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.
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 May 1, 2003. The option to convert shall expire if not exercised on or
- 2 -
before November 1, 2002. The exchange ratio for the conversion of the Principal Amount of this
Note shall be on the basis that,for every$1000 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 Maturity Date of this Note.
5. Extension of the Note
In the event that the Holder does not convert the Principal Amount of the Note on the
Maturity Date in accordance with Section 4 of this Note,the Corporation may, at its option,extend
the Maturity Date of some or all of the Principal Amount of the Note ("the Revised Principal
Amount") for an additional two-year period to November 1, 2005 (the "Extended Term")with the
rate of interest and terms of repayment to be agreed between the Holder and the Corporation. Any
Principal Amount for which the Corporation has not extended the Maturity Date shall be paid to the
Holder on the Maturity Date. In the event that the Corporation and the Holder cannot agree on the
rate of interest,and the terms of repayment of the Revised Principal Amount for the Extended Term
of the Note, the Revised Principal Amount shall be due and payable on November 1, 2005 with
interest at the rate specified in the next paragraph.
If the Holder and the Corporation do not agree on the interest rate applicable for the Extended
Term, then interest shall be calculated and payable on the Revised Principal Amount from the
Maturity Date at the lesser of(i)the cash of the Corporation available for the payment of interest and
(ii) the rate paid for a Treasury Bill (issued within five business days of the Maturity Date by the
Government of Canada with a term of 182 days),calculated and payable annually on November 1.
6. 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 and
the Corporation dated July 1, 1999)prior to the conclusion of the Extended Term of the Note, the
Note shall remain due in accordance with its terms. If the Holder transfers its common shares in the
capital of the Corporation prior to the Maturity Date,the Corporation shall be entitled to set-off any
amount owing to the Holder against any amount of prepaid interest paid by the Corporation to the
Holder but not earned by the Holder.
7. Note Non-negotiable and Non-assignable
The Note shall be non-negotiable and non-assignable.
8. Surrender and Replacement
The Note is issued pursuant to By-law No.—of the Holder and the Principal Amount may
be adjusted in accordance with the By-law. Following such adjustment, at the request of the
Corporation, the Holder shall surrender this Note to the Corporation for cancellation, without
- 3 -
repayment of the Principal Amount,in exchange for the issuance of a replacement promissory note
of the Corporation payable to the Holder which reflects such adjustment.
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 15L day of November, 1999.
VERIDIAN CONNECTIONS INC.
By:
Name: James I. Mason
Title: Director
By:
Name: John Wiersma
Title: President
SCHEDULE "A"
[Details of Other Notes to be inserted.]
::ODMA\PCDOCS\CC M8350\l
SCHEDULE "C"
HOLDCO NOTE
Attached hereto.
::ODMA\PCDOCS\CCT,20285\1
TERM PROMISSORY NOTE
Maturity Date: November 1, 2003 Principal Amount: $•
FOR VALUE RECEIVED, Veridian Corporation (the "Corporation"), hereby promises to
pay to or to the order of the Corporation of the [Town of Ajax, the Town of Pickering or the
Municipality of Clarington] (the"Holder"),in lawful money of Canada,on November 1,2003(the
"Maturity Date") at the principal office of the Holder, the principal amount of• Dollars ($0) (the
"Principal Amount")together with interest on the unpaid Principal Amount calculated annually,not
in advance, from the date hereof at the rate of 0%per annum for the first period ending October 31,
2000 and at a rate of 7.6% per annum on and after November 1, 2000 until the Maturity Date.
Interest at the said rate shall be payable on November 1 in each year up to and including the Maturity
Date.
1. 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. 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
Pickering and to the Corporation of the Municipality of Clarington and the Corporation of
the Town of Ajax](collectively"the Municipalities")described in Schedule"A"hereto(the"Other
Notes").
3. Subordination
The obligation of the Corporation to repay the principal amount of this Note and 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.
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 May 1, 2003. The option to convert shall expire if not exercised on or
- 2 -
before November 1, 2002. The exchange ratio for the conversion of the Principal Amount of this
Note shall be on the basis that,for every$1000 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 Maturity Date of this Note.
5. Extension of the Note
In the event that the Holder does not convert the Principal Amount of the Note on the
Maturity Date in accordance with Section 4 of this Note,the Corporation may, at its option, extend
the Maturity Date of some or all of the Principal Amount of the Note ("the Revised Principal
Amount") for an additional two-year period to November 1, 2005 (the "Extended Term")with the
rate of interest and terms of repayment to be agreed between the Holder and the Corporation. Any
Principal Amount for which the Corporation has not extended the Maturity Date shall be paid to the
Holder on the Maturity Date. In the event that the Corporation and the Holder cannot agree on the
rate of interest and the terms of repayment of the Revised Principal Amount for the Extended Term
of the Note, the Revised Principal Amount shall be due and payable on November 1, 2005 with
interest at the rate specified in the next paragraph.
If the Holder and the Corporation do not agree on the interest rate applicable for the Extended
Term, then interest shall be calculated and payable on the Revised Principal Amount from the
Maturity Date at the lesser of(i)the cash of the Corporation available for the payment of interest and
(ii) the rate paid for a Treasury Bill (issued within five business days of the Maturity Date by the
Government of Canada with a term of 182 days),calculated and payable annually on November 1.
6. 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 and
the Corporation dated July 1, 1999)prior to the conclusion of the Extended Term of the Note, the
Note shall remain due in accordance with its terms. If the Holder transfers its common shares in the
capital of the Corporation prior to the Maturity Date,the Corporation shall be entitled to set-off any
amount owing to the Holder against any amount of prepaid interest paid by the Corporation to the
Holder but not earned by the Holder.
7. Note Non-negotiable and Non-assignable
The Note shall be non-negotiable and non-assignable.
8. Surrender and Replacement
The Note is issued pursuant to By-law No._of the Holder and the Principal Amount may
be adjusted in accordance with the By-law. Following such adjustment, at the request of the
Corporation, the Holder shall surrender this Note to the Corporation for cancellation, without
- 3 -
repayment of the Principal Amount,in exchange for the issuance of a replacement promissory note
of the Corporation payable to the Holder which reflects such adjustment.
IN WITNESS WHEREOF Veridian Corporation has caused this Note to be signed under its
corporate seal by its duly authorized officers as of this 1 S`day of November, 1999.
VERIDIAN CORPORATION
By:
Name: James I. Mason
Title: Director
By:
Name: John Wiersma
Title: President
SCHEDULE "A"
[Details of Other Notes to be inserted.]
::ODMA\PCDOCS\CCTM 8342\1
VERIDAgAV 09 Ph1 '99
C O R P O R A T I O N _ '920 Bayiy Street
Pickering, ON L1W 3R6
November 26, 1999 TEL (905)427-9870
TEL 1-888-420-0070
Mr. G. D. Kirkbride Ms. Marie Marano FAX (905) 427-4998
Director of Finance Treasurer www.veridian.on.ca
Town of Ajax Municipality of Clarington
65 Harwood Avenue South 40 Temperance Street
Ajax, Ontario Bowmanville,Ontario
L1S 2H9 UC 3A6
- and- I DISTRIBU 1!ON
ORIGINAL
Mr. G.A.Paterson or--CC -
Director of Finance and Treasurer ,
Town of Pickering
Pickering Civic Complex !
Re: Promissory Notes of Veridian Corporation and Veridian Connections Inc. 2
Restrictions on Municipalities' Right to Deal with the Notes
The terms and conditions of each promissory note (the "Notes") issued by the Debt Issuers are the
same except for the principal amount of each Note. Pursuant to the merger purchase price and
amending agreement among the Municipalities, Commissions, Debt Issuers and Veridian Energy
Inc. dated as of November 1, 1999, each of the Municipalities has agreed that the Notes shall rank
equally and that no Municipality make take any step to amend, convert, exchange, or enforce its
Notes without the agreement of each other Municipality which holds Notes to amend, convert,
exchange or enforce its own Notes on the identical terms and conditions.
Municipalities' Options with respect to the Notes
Subject to the foregoing, the Municipalities' will have the following options with respect to the
Notes.
Conversion
The Municipalities' may convert all of the principal amount of each of the Notes into common
shares of the Debt Issuer that issued such Notes on an exchange ratio of$1,000 of principal amount
for each common share issued by the respective Debt Issuer. The option to convert the Notes must
be exercised on or before April 1, 2003 (which is 6 months prior to the maturity date of the Notes).
The conversion of the principal amount of the Notes would be exercised on November 1, 2003,the
maturity date for each Note.
Payout/Defeasance
In the event that the Municipalities elect not to exercise their option to convert the Notes as set out
above, they will be entitled to receive the principal amount owing under their Notes on the maturity
date. I note that if the Debt Issuers are to pay out the Notes on the maturity date, they will likely
require third parry financing.
Extension
Each Municipality's right to receive the principal amounts on the maturity date, as noted directly
above, will be subject to the Debt Issuers' right to extend the term of each Note. Following the
extension of the term of each Note (in the event the Debt Issuers elect to do so), the Municipalities
will be entitled to be paid the principal amount plus any accrued interest thereon on either a date
agreed among the Debt Issuers and the Municipalities, or in the event the parties cannot agree on a
new maturity date, November 1, 2005. The main provisions related to each Debt Issuer's right to
extend the tern of its respective Notes are as follows:
■ Municipalities must elect not to convert the principal amount of the Notes;
The power to make your community better.
Re: Promissory Notes of Veridian Corporation and Veridian Connections Inc. 3
• Debt Issuers may extend the maturity date of the Notes for some or all of the principal amount
of each Note;
• Any principal amount not extended by the Debt Issuers must be repaid to the Municipalities,
respectively;
• Rate of interest for the period following the maturity date and the terms of repayment will need
to be agreed between the holder of the Note and the Debt Issuer, and
• If the parties cannot agree on the terms and conditions for the period following the maturity
date, then the due date for the principal amount for the extended period shall be November 1,
2005 and the interest rate shall be the lesser of (i) the cash of the Debt Issuer available for the
payment of interest and (ii) the rate paid for a Treasury Bill issued by the Government of
Canada,calculated and payable annually on November 1.
If you have any further questions, concerning your Municipality's options with respect to you Notes,
please do not hesitate to contact me.
Yours truly,
John Wiersma
President and CEO
::0DMA\Pm0(S\0M 19525\2
The power to make your community better.
VERIDIAN z- �
C O R P O R A T 1 0 N ----_-'__ ___. 1920 Bayly Street
-� Pickering, ON L1W 3R6
November 26, 1999 TEL (905) 427-9870
BY FACSIMILE TEL 1-888-420-0070
m� `�"
FAX (905) 427-4998
Ms.Patti Barre Mr.Marty de Rond www.veridian.on.ca
Municipal Clerk Town Clerk
The Municipality of Clarington Town of Ajax
40 Temperance Street 65 Harwood Avenue S.
Bowmanville,Ontario L1C 3A6 Ajax,Ontario L1S 2H9
- and-
Mr.Bruce Taylor
Town Clerk
Town of Pickering
1 The Esplanade
Pickering,Ontario L1V 3P4
Ladies and Gentlemen:
Re: Clarington Lands and Decommissioning and Cleanup
With respect to certain lands at Liberty Street South (the "Liberty Lands' and Lake Road in
Clarington upon which Substation # 10 currently sits, as more particularly described in item 7 of
Section (i) of Schedule "E" - Distribution Assets of the Clarington transfer by-law expected to be
passed on November 22, 1999 (the "By-law' , we confirm, for and on behalf of Veridian
Connections Inc. ("Connections"), that it is the intention of Connections to remove Substation #10
from the lands sometime within the next two to six years approximately, and that the current lease
existing between the Clarington Hydro-Electric Commission (the "Commission's and the
Corporation of the Municipality of Clarington ("Clarington") would be surrendered to Cla ington
prior to its expiry. Connections (as successor to the Commission under the lease) would not retain
any interest in the lands and would provide a quit claim deed to Clarington with respect to the lands,
if requested by Clarington.
With respect to certain lands at Wellington Street (the "Wellington Lands") and Scugog Street in
Clarington upon which substation #3 currently sits, as more particularly described in item 8 of
Section (i) of Schedule "E" - Distribution Assets of the By-law,we also confirm,for and on behalf
of Connections, that the current benefit to own, operate and maintain substation #3 on such lands
bestowed by Clarington on the Commission for $1 per year shall continue until the lands are no
longer needed by Connections (as evidenced by a letter from the corporation to Clarington) at which
time Connections shall not retain any interest in the lands. Further, Connections will provide a quit
claim deed to Clarington with respect to the lands,if requested by Clarington.
The power to make your community better. ED
Re: Clarington Lands and Decommissioning and Cleanup 2
With respect to the Liberty Lands, the Wellington Lands and the lands used by the Commission for
substation #6 at the Vincent Massey School, as more particularly described in item 6 of Section (i)
of Schedule "E" - Distribution Assets of the By-law, we confirm, for and on behalf of Connections,
its obligation to perform any clean-up obligations (as successor to the Commission with respect to
these obligations), including without limitation, all environmental, reclamation, and
decommissioning liabilities as also specified in Section (h) of Schedule `.a" to the By-law.
If you have any questions concerning the foregoing matters, please do not hesitate to contact me.
Yours tndy,
John Wiersma
President and CEO
cc: Gil Paterson
Marie Marano
Greg Kirkbride
Linda Bertoldi
::0DMA\PCD0CS\CCI120287k4
#20287 v -dm pickering letter to clerks re Clarington Real Estate
The power to make your community better.
-ASTRiLUT!Qiti
VERDIAN
C O R P O R A T I O N -- - 1920 Bayly Street
Pickering„ ON L1W 3R6
November 26, 1999 TEL(905) 427-9870
irrr� �,+.anag�r i
TEL 1-888-420-0070
BY FACSIMILE FAX (905)427-4998
www.veridian.on.ca
Ms Patti Barrie Mr. Marty de Rond
Municipal Clerk Town Clerk
The Municipality of Clarington Town of Ajax
40 Temperance Street 65 Harwood Avenue S.
Bowmanville, Ontario Ajax, Ontario
L1C 3A6 LIS 21-19
- and-
Mr.Bruce Taylor
Town Clerk
Town of Pickering
1 The Esplanade
Pickering, Ontario
L1V 3P4
Ladies and Gentlemen:
Re: Equity in Ontario Hydro and Claim Against Ontario Hydro
We are writing to you to confirm the treatment of certain matters relating to the former Ontario
Hydro ("OH") in connection with the equity allocation among the Corporation of the Town of
Ajax, the Corporation of the Municipality of Clarington and the Corporation of the Town of
Pickering (the "Municipalities") in Veridian Corporation.
Municipal electric utilities ("MEU") have, in the past, taken the position based on the origins of OH
that they held as an asset equity in OI-L The value of such equity to each MEU has been uncertain
and in the case of each of Pickering Hydro-Electric Commission, Ajax Hydro-Electric Commission
and Clarington Hydro-Electric Commission (the "Commissions") has not been recorded as a
balance sheet item in recent financial statements.
Additionally, the Municipal Electric Association has commenced an action on behalf of all MEUs
against OH with respect to certain rate setting practices. This matter has yet to be resolved. In the
event that the matter was resolved in favour of the MEUs, each of the Commissions would be
entitled to some amount.
The power to make your community better. is
'4000r�
41,
Re: Equity in Ontario Hydro and Claim Against Ontario Hydro 2
With respect to the foregoing two matters, we will instruct the auditors for each of the Commissions
to disclose and record the foregoing matters in accordance with (1) the merger agreement dated June
29, 1999 among the Municipalities, (u) generally accepted Canadian accounting principles and (in)
past practices. Veridian Corporation's auditors will review and confirm each auditor's prepared
statements. To the extent that the foregoing two matters are treated as balance sheet items,they will
be used to determine the adjusted equity allocation of the Municipalities in Veridian Corporation. In
the event that a zero value or no value is ascribed to these matters on the audited financial
statements of each Commission as of October 31, 1999, as reviewed and confirmed by Veridian
Corporation's auditors, these matters would have no effect on the equity allocation of the
Municipalities in Veridian Corporation.
Please do not hesitate to call me with any questions.
Yours truly,
ohn Wiersma
President and CEO
cc: Gil Paterson
Marie Murano
Greg Kirkbride
Linda Bertoldi
::0DMA\P®0CS\0M20295\1
N 20295 v1-r*pickeri j letter to clerk re equity in Ontario Hydro
The power to make your community better.
Borden Ladner Gervais LLP
Lawyers•Patent&Trade-mark Agents
Scotia Plaza,40 King Street West
Toronto,Ontario,Canada M5H 3Y4
tel.:(416)367-6000 fax:(416)367-6749
www.blgcanada.com
` Jonathan F.Dyck
direct tel.:416-367-6124
direct fax:416 361-2455
BORDEN e-mail:jdyck @blgcanada.com
L A D N E R January 8, 2002
GERVAIS
Delivered
Mr. Marty de Rond
Town Clerk
Town of Ajax
65 harwood Avenue S.
Ajax, ON L 1 S 2H9
W
7
Ms. Patti Barrie
Z
Municipal Clerk
The Municipality of Clarington
40 Temperance Street '
Bowmanville, ON L1C 3A6
0
Mr. Bruce Taylor
Town Clerk
City of Pickering
One The Esplanade f 1114AL `4'O--
L1 V 6K7 r �i�P=: E
Pickering, ON 1
Mr. Jary Plamondon
City Clerk _. �..
City of Belleville
459 Sydney St. j.. . . F .�.
Belleville, ON K8N 5136
4
1
Dear Sirs:
Re: Veridian Corporationmym ,x
}
Enclosed please find a fully executed copy of the Intercreditor Agreement dated
December 17, 2001 entered into between The Bank of Nova Scotia, The Corporation of
The Municipality of Clarington, The Corporation of the Town of Ajax, The Corporation
of the City of Pickering, The Corporation of the City of Belleville, Veridian Corporation,
and Veridian Connections Inc. for your records.
C�UAt PROpA
Op�F E IM1TF.'�w(.
Yours truly, N
1
Jonathan F. Dyck
JFD/cb
Enclosure
::ODMA\PCDOCS\CC11281882\1
2
INTER-CREDITOR AGREEMENT
tl
THIS AGREEMENT made as of the day of December, 2001.
BETWEEN:
THE BANK OF NOVA SCOTIA, a Canadian chartered bank
(herein called the "Senior Creditor")
- and -
THE CORPORATION OF THE MUNICIPALITY OF
CLARINGTON, a municipal corporation existing under the laws
of the Province of Ontario
(herein called"Clarington")
- and-
THE CORPORATION OF THE TOWN OF AJAX, a municipal corporation
existing under the laws of the Province of Ontario
(herein called "Ajax")
- and -
THE CORPORATION OF THE CITY OF PICKERING, a municipal
corporation existing under the laws of the Province of Ontario
(herein called "Pickering")
- and -
THE CORPORATION OF THE CITY OF BELLEVILLE, a municipal
corporation existing under the laws of the Province of Ontario
(herein called 'Belleville")
- and -
VERIDIAN CORPORATION, a corporation amalgamated under
the laws of the Province of Ontario
(herein called the"Borrower")
F#76523 Intercreditor Agreement
C#57 Execution Copy
- 2 -
- and-
VERIDIAN CONNECTIONS INC., a corporation amalgamated
under the laws of the Province of Ontario
(herein called "Connections")
WHEREAS the Obligors are or may become indebted to each of the Creditors and the
parties hereto desire to enter into this agreement in order to set out their respective rights and
obligations, including the respective priorities of the Creditors in connection with the
indebtedness of the Obligors to them;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the
mutual covenants herein contained and other good and valuable consideration, given by each of
the parties hereto (the receipt and sufficiency of which are hereby acknowledged by all of the
parties hereto),the parties hereto hereby agree with each other as follows:
ARTICLE 1
INTERPRETATION
1.01 Definitions. The following defined terms shall for all purposes of this agreement, or
any amendment hereto, have the following respective meanings unless the context otherwise
specifies or requires or unless otherwise defined herein:
"Business Day" means any day other than a Saturday or Sunday on which banks are generally
open for business in Toronto, Ontario.
"Credit Agreement" means the credit agreement made as of December 11 , 2001 between
the Borrower and the Senior Creditor, as the same may be amended, modified, supplemented or
replaced from time to time.
"Creditors" means the Senior Creditor and the Subordinated Creditors and "Creditor" means
any of the Creditors.
"Default" means any of the events of default specified in any Loan Agreement entitling a
Creditor to demand or accelerate payment of any Obligations.
"Demand" means any notification by any of the Creditors to either Obligor of a demand for
payment under any Loan Agreement.
"Insolvency Legislation" means the Bankruptcy and Insolvency Act (Canada), the Companies'
Creditors Arrangement Act (Canada), the Bankruptcy Code (United States) and any similar
statute or law in any jurisdiction.
"Loan Agreements" means the Senior Loan Agreements and the Subordinated Loan
Agreements and"Loan Agreement" means any one of the Loan Agreements.
F#76523 Intercreditor Agreement
C#57 Execution Copy
' - 3 -
"Obligations"means Senior Obligations and the Subordinated Obligations.
"Obligors" means the Borrower and Connections.
"Senior Loan Agreements" means all documents, instruments and agreements evidencing the
Senior Obligations, including, without limitation,the Credit Agreement.
"Senior Obligations"means all indebtedness, obligations and liabilities, present or future, direct
or indirect, absolute or contingent, matured or not, at any time owing by the Borrower to the
Senior Creditor or remaining unpaid by the Borrower to the Senior Creditor under or in
connection with the Senior Loan Agreements.
"Subordinated Creditors" means Clarington, Ajax, Pickering and Belleville.
"Subordinated Loan Agreements" means any agreement entered into from time to time
between either Obligor and any of the Subordinated Creditors evidencing any Subordinated
Obligations, including, without limitation,the following:
(a) the first amended and restated term promissory note in the principal amount of
$5,966,000 dated September 28, 2001 and made by Connections in favour of
Clarington;
(b) the first amended and restated term promissory note in the principal amount of
$5,588,000 dated September 28, 2001 and made by Connections in favour of
Belleville;
(c) the first amended and restated term promissory note in the principal amount of
$14,060,000 dated September 28, 2001 and made by Connections in favour of
Ajax;
(d) the first amended and restated term promissory note in the principal amount of
$17,974,000 dated September 28, 2001 and made by Connections in favour of
Pickering;
(e) the first amended and restated term promissory note in the principal amount of
$2,206,000 dated September 28, 2001 and made by the Borrower in favour of
Belleville;
(f) the first amended and restated term promissory note in the principal amount of
$5,550,000 dated September 28, 2001 and made by the Borrower in favour of
Ajax;
(g) the first amended and restated term promissory note in the principal amount of
$7,095,000 dated September 28, 2001 and made by the Borrower in favour of
Pickering; and
F#76523 Intercreditor Agreement
C#57 Execution Copy
- 4 -
(h) the first amended and restated term promissory note in the principal amount of
$2,355,000 dated September 28, 2001 and made by the Borrower in favour of
Clarington.
"Subordinated Obligations" means all indebtedness, obligations and liabilities, present or
future, direct or indirect, absolute or contingent, matured or not, at any time owing by either
Obligor to any of the Subordinated Creditors or remaining unpaid by either Obligor to any of the
Subordinated Creditors under or in connection with the Subordinated Loan Agreements, but
excluding any indebtedness in respect of municipal debentures of which $1,380,550.16 of
principal is currently outstanding.
1.02 Other Usages. References to "this agreement", "the agreement", "hereof', "herein",
"hereto" and like references refer to this Inter-Creditor Agreement and not to any particular
Article, Section or other subdivision of this Inter-Creditor Agreement. Any references to "this
agreement", "the agreement", "hereof', "herein", "hereto" and like references refer to this Inter-
Creditor Agreement as amended, supplemented or otherwise modified from time to time in
accordance with the terms hereof.
1.03 Plural and Singular. Where the context so requires, words importing the singular
number shall include the plural and vice versa.
1.04 Headings. The division of this agreement into Articles, Sections and the insertion of
headings in this agreement are for convenience of reference only and shall not affect the
construction or interpretation of this agreement.
1.05 Applicable Law. This agreement shall be governed by and construed and interpreted
in accordance with the laws of the Province of Ontario and the laws of Canada applicable
therein. Any legal action or proceeding with respect to this agreement may be brought in the
courts of the Province of Ontario and, by execution and delivery of this agreement, the parties
hereby accept for themselves and in respect of their property, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts. Each party irrevocably consents to the service
of process out of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to such party to the
address prescribed by Section 6.10, such service to become effective five Business Days after
such mailing. Nothing herein shall limit the right of any party to serve process in any manner
permitted by law or to commence legal proceedings or otherwise proceed against any other party
in any other jurisdiction.
1.06 Time of the Essence. Time shall in all respects be of the essence of this agreement.
1.07 Paramountcy. In the event of any conflict or inconsistency between the provisions of
this agreement and the provisions of any other agreement which is referred to herein or delivered
pursuant hereto, the provisions of this agreement shall prevail and be paramount.
1.08 No Rights Conferred on the Obligors. Nothing in this agreement shall be construed
as conferring any rights upon the Obligors or any third party. The terms and conditions hereof
are and shall be for the sole and exclusive benefit of the Creditors.
F#76523 Intercreditor Agreement
C#57 Execution Copy
- 5 -
ARTICLE 2
CONSENT
2.01 Consent of Creditors. Each Creditor consents to the incurring of the Obligations by
the Obligors and waives any Default that the incurring of the Obligations may have constituted
under the terms of the Loan Agreements.
ARTICLE 3
PRIORITY OF OBLIGATIONS
3.01 Priority of Obligations. Except as otherwise expressly provided in Section 3.03, the
Subordinated Obligations shall be and are hereby postponed and made subordinate in right of
payment to the prior payment in full in cash of the Senior Obligations.
3.02 Prohibited Payments to Subordinated Creditors. Except as otherwise expressly
provided in Section 3.03, the Obligors shall not make nor be entitled to make, and the
Subordinated Creditors shall not accept and shall not be entitled to accept, any payment or
prepayment of principal, interest or other amount under the Subordinated Loan Agreements,
whether in the form of cash, securities or otherwise and whether by way of payment, set off or
otherwise.
3.03 Permitted Payments to the Subordinated Creditors. The Obligors may make, and
the Subordinated Creditors may receive, payments (but not prepayments) on account of interest
owing by the Obligors to the Subordinated Creditors in accordance with the terms of the
Subordinated Loan Agreements at the maximum rate of 7.6 percent per annum, provided no
Default under the Credit Agreement exists at the time of such payment and no Default would
arise as a result of such payment. Notwithstanding the foregoing, the Senior Creditor
acknowledges that certain prepayments of interest were previously made under the Subordinated
Loan Agreements.
3.04 Certain Covenants of Subordinated Creditors. The Subordinated Creditors shall not
and shall not be entitled to:
(a) accelerate the time for payment of any of the Subordinated Obligations or
otherwise enforce or take any action to enforce payment of all or any part of the
Subordinated Obligations, whether by way of set off or otherwise,unless and until
all indebtedness of the Borrower to the Senior Creditor under or in connection
with the Credit Agreement has become immediately due and payable pursuant to
the terms thereof,
(b) petition either of the Obligors into bankruptcy or initiate any similar proceeding
under any applicable Insolvency Legislation or, unless and until the Senior
Creditor or any other person files a petition in bankruptcy against the Borrower
and such petition is not stayed or dismissed within 60 days of such filing,
participate in such bankruptcy or any similar proceeding under any applicable
Insolvency Legislation. For certainty, in no event shall any Subordinated Creditor
vote in any proceedings under any applicable Insolvency Legislation except as
directed in writing by the Senior Creditor;
F#76523 Intercreditor Agreement
C#57 Execution Copy
- 6 -
(c) amend, alter or otherwise modify the Subordinated Loan Agreements; or
(d) hold or obtain any security from the Obligors or any person on their behalf, for
payment or performance of the Subordinated Obligations.
3.05 Distributions.
(a) To the extent not otherwise permitted under the Credit Agreement, the Obligors
shall not make nor be entitled to make, and the Subordinated Creditors shall not
accept nor be entitled to accept the payment of any dividends or other distribution
on or in respect of any shares in the capital of the Obligors.
(b) The Obligors shall not make nor be entitled to make, and the Subordinated
Creditors shall not accept nor be entitled to accept the redemption, retraction,
purchase, retirement or other acquisition, in whole or in part, of any shares in the
capital of the Obligors or any securities, instruments or contractual rights capable
of being converted into, exchanged or exercised for shares in the capital of the
Obligors, including, without limitation, options, warrants, conversion or exchange
privileges and similar rights. Notwithstanding the foregoing, the Subordinated
Creditors shall be entitled to convert their interest under the Subordinated Loan
Agreements as provided for therein.
3.06 Effect of Non-Compliance.
(a) In the event any prepayments or other payments are made to or received by the
Subordinated Creditors in contravention of this agreement, the Subordinated Creditors shall hold
such prepayments or payments in trust for the Senior Creditor and shall not commingle such
proceeds with any of their own funds and shall forthwith pay such prepayments or payments to
the Senior Creditor for application to the payment or prepayment of the Senior Obligations as the
Senior Creditor sees fit.
(b) Any action taken or thing done by any Subordinated Creditors in contravention
of this agreement shall be null and void and of no effect.
ARTICLE 4
REMEDIES
4.01 Remedies. The Obligors and the Subordinated Creditors hereby agree that all
covenants, provisions and restrictions contained herein are necessary and fundamental in order to
establish the respective priorities of the Creditors in connection with the Obligations, and that a
breach by any of the Obligors or the Subordinated Creditors of any such covenant, provision or
restriction would result in damages to the Senior Creditor that could not adequately be
compensated by monetary award. Accordingly, it is expressly agreed by the Obligors and the
Subordinated Creditors that in addition to all other remedies available to it including, without
limitation, any action for damages, the Senior Creditor shall be entitled to the immediate remedy
of a restraining order, interim injunction, injunction or other form of injunctive or other relief as
may be decreed or issued by any court of competent jurisdiction to restrain or enjoin the Obligors
or the Subordinated Creditors from breaching any such covenant,provision or restriction.
F#76523 Intercreditor Agreement
C#57 Execution Copy
- 7 -
4.02 Default Notice. Each Creditor agrees to give written notice to each other Creditor
simultaneously with or immediately after the delivery to either of the Obligors of any written
notice of a Demand or a Default. Failure of a Creditor to give notice as provided in this Section
4.02 shall not affect the priorities established or other agreements provided for herein, nor shall
such Creditor be liable for failure to give any such notice nor shall any such failure in any way
limit or derogate from the obligations of the other Creditors.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE SUBORDINATED CREDITORS
5.01 Representations and Warranties of the Subordinated Creditors. Each of the
Subordinated Creditors hereby represents and warrants to the Senior Creditor as follows and
acknowledges and confirms that the Senior Creditor is relying upon such representations and
warranties in extending credit to the Borrower under the Senior Loan Agreements:
(a) Each Subordinated Creditor is a municipal corporation duly incorporated and
organized and validly subsisting under the laws of its jurisdiction of
incorporation. Each Subordinated Creditor has all requisite corporate capacity,
power and authority to enter into, and carry out the transactions contemplated by,
this agreement.
(b) All necessary action, corporate or otherwise, has been taken to authorize the
execution, delivery and performance of this agreement by each Subordinated
Creditor and each Subordinated Creditor has duly executed and delivered this
agreement. This agreement is a legal, valid and binding obligation of the
Subordinated Creditor, enforceable against each Subordinated Creditor by the
Senior Creditor in accordance with its terms.
ARTICLE 6
MISCELLANEOUS
6.01 Consent of the Obligors. Each Obligor, by its execution hereof, hereby agrees to be
bound by, and shall act in accordance with, the terms,provisions and intent of this agreement.
6.02 Information Exchange. Each Creditor agrees to disclose to each other Creditor upon
reasonable request from time to time the aggregate amounts then owing by the Obligors to it and
whether it has any actual knowledge of any Default. Each Obligor hereby consents to each
Creditor providing the other Creditor with such information, financial or otherwise, regarding the
Obligors and the Creditors' respective Obligations as may be deemed advisable by the Creditors
from time to time.
6.03 Non-Impairment of the Senior Creditors' Rights. No right of the Senior Creditor to
enforce its rights hereunder shall at any time or in any way be prejudiced or impaired by any act
or failure to act on the part of the Obligors or by any act or failure to act by the Senior Creditor,
or by any non-compliance by the Obligors or the Subordinated Creditors with the terms of this
agreement, regardless of any knowledge thereof which the Senior Creditor may have or be
otherwise charged with. Without the Subordinated Creditors' consent, the Senior Creditor may
extend, renew, modify, or increase the Senior Obligations or amend or waive the terms of the
F#76523 Intercreditor Agreement
C#57 Execution Copy
' - 8 -
Senior Loan Agreements and otherwise deal freely with the Borrower, all without affecting the
liabilities and obligations of the Obligors and the Subordinated Creditors hereunder and without
causing or constituting a breach of or default under any of the Subordinated Obligations.
6.04 Waivers and Amendments. No failure or delay by the Senior Creditor in exercising
any right hereunder shall operate as a waiver of such right nor shall any single or partial exercise
of any power or right preclude its further exercise or the exercise of any other power or right.
Any term, covenant, condition or obligation of this agreement may only be amended with the
written consent of all of the parties hereto or compliance therewith may only be waived (either
generally or in a particular instance and either retroactively or prospectively) by the Senior
Creditor in writing and in any such event the failure to observe, perform or discharge any such
term, covenant, condition or obligation, so amended or waived (whether such amendment is
executed or such consent or waiver is given before or after such failure), shall not be construed
as a breach of such term, covenant, condition or obligation.
6.05 Severability. Each provision of this agreement is intended to be severable and if any
provision is illegal, invalid or unenforceable, such illegality, unenforceability or invalidity shall
not affect the validity of this agreement or the remaining provisions.
6.06 Counterparts. This agreement may be executed in any number of counterparts, all of
which shall be deemed to be an original and such counterparts taken together shall constitute one
agreement, and any of the parties hereto may execute this agreement by signing any such
counterpart.
6.07 Further Assurances. The parties hereto agree to execute and deliver such further and
other documents and perform and cause to be performed such further and other acts and things as
may be necessary or desirable in order to give full effect to this agreement and every part thereof.
No party to this agreement shall take any action whereby the priorities and rankings set out in
this agreement might be impaired or defeated.
6.08 Assignment. This agreement shall enure to the benefit of and shall be binding upon the
respective successors (including, without limitation, any trustee in bankruptcy or liquidator) and
permitted assigns of the parties hereto. The Subordinated Creditors shall not assign any of their
rights and obligations hereunder or under the Subordinated Loan Agreements. The rights and the
obligations of the Senior Creditor hereunder may be assigned by the Senior Creditor in whole or
in part without the consent of the other parties hereto but only in connection with or as part of an
assignment by the Senior Creditor of its rights under the Credit Agreement.
6.09 Entire Agreement. This agreement contains the entire understanding of the parties
with respect to the priority of the Obligations and supersedes any prior agreements,undertakings,
declarations, representations and understandings, both written and verbal, in respect of the
priority of the Obligations. There are no restrictions, agreements, promises, warranties,
covenants or undertakings relating to the priority of the Obligations other than those set forth in
this agreement.
6.10 Notices. Except as otherwise provided herein, all notices and other communications
provided for herein shall be in writing and shall be personally delivered to an officer or other
F#76523 Intercreditor Agreement
C#57 Execution Copy
- 9 -
responsible employee of the addressee or sent by telefacsimile, charges prepaid, at or to the
applicable addresses or telefacsimile numbers, as the case may be, set out opposite the relevant
party's name below or at or to such other address or addresses,telefacsimile number or numbers
as any party hereto may from time to time designate to the other parties in such manner. Any
communication which is personally delivered as aforesaid shall be deemed to have been validly
and effectively given on the date of such delivery if such date is a Business Day and such
delivery was made during normal business hours of the recipient; otherwise, it shall be deemed
to have been validly and effectively given on the Business Day next following such date of
delivery. Any communication which is transmitted by telefacsimile as aforesaid shall be deemed
to have been validly and effectively given on the date of transmission if such date is a Business
Day and such transmission was made during normal business hours of the recipient; otherwise, it
shall be deemed to have been validly and effectively given on the Business Day next following
such date of transmission.
In the case of the Senior Creditor: The Bank of Nova Scotia
Corporate Banking
44 King Street West, 16'h Floor
Toronto, Ontario M5H 1H1
Attention: Director, Corporate Banking
Telefax: (416) 933-7399
In the case of the Obligors: Veridian Corporation/Veridian Connections Inc.
55 Taunton Road East
Ajax, Ontario
LIT 3V3
Attention: Vice President, Corporate Affairs and
Secretary Treasurer
Telefax: (905) 619-0210
In the case of Clarington: The Corporation of the Municipality of Clarington
40 Temperance Street
Bowmanville, Ontario
L1C 3A6
Attention: Mayor
Telefax: (905) 623-5717
In the case of Ajax: The Corporation of the Town of Ajax
65 Harwood Avenue South
Ajax, Ontario
LIS 2H9
Attention: Mayor
Telefax: (905) 683-1061
F#76523 Intercreditor Agreement
C#57 Execution Copy
- to -
In the case of Pickering: The Corporation of the City of Pickering
1 The Esplanade
Pickering, Ontario
L1V 3P4
Attention: Mayor
Telefax: (905) 420-9695
In the case of Belleville: The Corporation of the City of Belleville
459 Sidney Street
Belleville, Ontario
K8N 2Y7
Attention: Mayor
Telefax: (613) 967-3209
6.11 Termination of Agreement. This agreement shall terminate and shall be of no further
force or effect upon the earlier to occur of:
(a) all Senior Obligations being repaid in full and all commitments of the Senior
Creditor under the Senior Loan Documents having been terminated; and
(b) the written agreement of the Senior Creditor to such effect.
F#76523 Intercreditor Agreement
C#57 Execution Copy
- 12 -
IN WITNESS WHEREOF the parties hereto have executed this agreement.
THE BANK OF NOVA SCOTIA
By: OQ .
Name: Doe PMT
Title: Director
By: Il
Name: RAia Lkweityn
Title: Assure Director
THE CORPORATION OF THE
MUNICIPALITY OF CLARINGTON
By:
John Mutton
Mayor
By:
Patti Barrie
Clerk
THE CORPORATION OF THE TOWN
OF AJAX
By:
Steve Parish
Mayor
By:
Marty de Rond
Clerk
THE CORPORATION OF THE CITY
OF PICKERING
By:
Wayne Arthurs
Mayor
By:
Bruce Taylor
Clerk
F#76523 Intercreditor Agreement
C#57 Execution Copy
IN WITNESS WHEREOF the parties hereto have executed this agreement.
THE BANK OF NOVA SCOTIA
By:
Name:
Title:
By:
Name:
Title:
THE CORPORATION OF THE
MUNICIPALITY OF CLARINGTON
By.
/iv
JoIfn Mutton
Mayor
By: -
Pat e
Clerk
THE CORPO TIO OF THE TOWN
OF AJAX
By:
Steve Parish
Mayor 11
By: Z2
Marty de Rond
Clerk
THE CORPORATION OF THE CITY
OF PICKERING
By:
Wayne Arthurs
Mayor
By:
Bruce Taylor
Clerk
F#76523 Intercreditor Agreement
C#57 Execution Copy
* ' - 12 -
THE CORPORATION OF THE CITY
OF BELLEVILLE
By: �, P
George ego s
Mayor
By:
JlVaniondon
VERIDIAN CORPORATION
By: - Y/
J Wiersma
resident
By: Q� —
am I Mason
Director
VERIDLAN CONNECTIONS INC.
By:
Wiersma
President
By: �.
J .Trr /1�/I'•ft�e.
Director
::ODM A\PCDOCS\DOCS\1093447\4
F#76523 Intercreditor Agreement
C#57 Execution Copy