HomeMy WebLinkAboutCS 51-06
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REPORT TO
EXECUTIVE COMMITTEE
Report Number: CS 51-06
Date: September 25, 2006
From:
Gillis A. Paterson
Director, Corporate Services & Treasurer
Subject:
Veridian Corporation - Promissory Notes
Recommendation:
1. It is recommended that Report CS 51-06 of the Director, Corporate Services &
Treasurer be received for the Committee's consideration and recommendation to
Council; and,
2. That the maturity dates on the Promissory Notes in the amount of $7,095,000 to
Veridian Corporation and $17,974,000 to Veridian Connections Inc. be amended to
November 1, 2009 at their face value with the existing terms and conditions
including interest at 7.6% per annum;
3. That a By-law in the form attached providing for the approval and execution of a
Note Amending Agreement be passed;
4. That the Mayor and Clerk be authorized to execute the Note Amending Agreement
on behalf of the City of Pickering in the form attached;
5. That the Director, Corporate Services & Treasurer be authorized to undertake any
actions including negotiations or amendments to the terms and conditions
necessary in order to put the foregoing into effect; and,
6. That the appropriate officials at the City of Pickering be given authority to give effect
thereto.
Executive Summary: Veridian Corporation, at its meeting of Thursday, September
7, 2006 approved the terms and conditions including an interest rate of 7.6% per
annum and amending the maturity date to November 1,2009.
It is now appropriate for Council to provide the Director, Corporate Services & Treasurer
with the authority to complete any necessary discussions or negotiations to effect the
amending of the Notes.
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Report CS 51-06
Date: September 25,2006
Subject: Veridian Corporation - Renewal of Promissory Notes
Page 2
Financial Implications: Amending of the Promissory Notes will take place under
the same or similar terms and conditions as those in place on the existing Notes over
the last six years. This will provide for a continuation of the interest income of
approximately $1,852,000 per annum for another three years. This income forms an
important part of the City's annual budgeted revenues.
Background: Should the Council of the City of Pickering approve the
Recommendations, the amount of principal owing to the City of Pickering will remain
unchanged at approximately $25,100,000, as will the interest at 7.6% per annum. The
notes will however be extended for a further three years from October 31, 2006 to
November 1, 2009 and the other terms and conditions remain unchanged. According
to staff of Veridian Corporation, the extension will allow a level of comfort to other
lenders in that the notes will note have to be repaid until a later date, thereby providing
a further three years of assurance that there will not be a cash drain or a requirement
for other financing.
At the stated rate of interest, this investment provides the City's highest yielding rate of
return on corporate notes. At this time there is no other form of investment with the
same relatively low level of risk that would provide this level of return. The City also
owns approximately 41 % of Veridian providing a more than reasonable level of security.
Attachments:
1. By-law to Approve and Authorize the Execution of a Note Amending Agreement
Prepared I Approved I Endorsed By:
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Gillis A. Paterson
Director, Corporate Services & Treasurer
GAP:vw
Attachment
Co : Chief Administrative Officer
Recommended for the consideration of
Pickering Ci Coun iI \"
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THE CORPORATION OF THE CITY OF PICKERING
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BY-lAW NO.
Being a by-law to approve and authorize the execution of a note
amending agreement made as of the 1 st day of October, 2006 in respect
of promissory notes dated September 28, 2001 issued by Veridian
Corporation and Veridian Connections Inc. in favour of The Corporation of
the Town of Ajax, The Corporation of the City of Belleville, The
Corporation of the Municipality of Clarington and The Corporation of the
City of Pickering, and to approve the issue of seconded amended and
restated promissory notes dated as of the 1 st day of October, 2006.
WHEREAS the Electricity Act, 1998 authorized a municipality to make by-laws
transferring employees, assets, liabilities, rights and obligations of the municipal
corporation and to receive securities as consideration there for and Veridian
Corporation ("VC") and Veridian Connections Inc. ("VCI") have issued promissory notes
(the "Original Notes") dated September 28, 2001 in favour of The Corporation of the
Town of Ajax ("Ajax), The Corporation of the City of Belleville ("Belleville"), The
Corporation of the Municipality of Clarington ("Clarington") and The Corporation of the
City of Pickering ("Pickering") due on the 31 st day of October, 2006;
AND WHEREAS VC and VCI have requested an amendment to the maturity date of the
Original Notes;
NOW THEREFORE THE COUNCil OF THE CITY OF PICKERING ENACTS AS
FOllOWS:
1. THAT Council approves the amendment to the maturity date of the Original
Notes to the 1 st day of November, 2009;
2. THAT Council approves and authorizes the note amending agreement (the
"Agreement") made as of the 1 st day of October, 2006 amongst Ajax, Belleville,
Clarington and Pickering, as the holders of the Original Notes and VC, VCI and
Veridian Energy Inc. in the form of the draft agreement presented to Council and
attached hereto as Schedule "A";
3. THAT Council approves the issue of second amended and restated promissory
notes (each a "Restated Note") by VC and VCI pursuant to the Agreement.
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4. THAT the Mayor and the Clerk are authorized to execute the Agreement;
5. THAT the Clerk is authorized and directed to surrender to VC the Original Note
in favour of this Municipality in the principal amount of $7,095,000 and to receive
a Restated Note pursuant to the Agreement;
6. THAT the Clerk is authorized and directed to surrender to VCI the Original Note
in favour of this Municipality in the principal amount of $17,974,000 and to
receive a Restated Note pursuant to the Agreement;
7. THAT the Clerk is authorized to affix the Corporate Seal of The City of Pickering
to the Agreement.
BY-LAW read a first, second and third time and finally passed this 3rd day of October,
2006.
David Ryan, Mayor
Debi Bentley, Clerk
Schedule A
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NOTE AMENDING AGREEMENT
THIS AGREEMENT made as of the 1 st day of October, 2006.
BETWEEN:
The Corporation of the Town of Ajax ("Ajax")
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The Corporation of the Municipality of Clarington ("Clarington")
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The Corporation of the City of Pickering ("Pickering")
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The Corporation of the City of Belleville ("Belleville")
(Ajax, Belleville, Clarington and Pickering are referred to collectively herein
as the "Veridian Shareholders")
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Veridian Corporation, a corporation existing under the laws of
Ontario ("VC")
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Veridian Connections Inc., a corporation existing under the laws of
Ontario ("VCI")
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VeridianEnergy Inc., a corporation existing under the laws of
Ontario ("VEl")
(VC, vel and VEl are referred to collectively herein as the "Veridian
Group")
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RECITALS:
A. VCI has previously issued one promissory note to each of the Veridian Shareholders
(collectively the "VCI Notes") issued pursuant to the applicable transfer by-laws enacted
pursuant to the authority granted under the Electricity Act, 1998, which VCI Notes are
outstanding as of the date hereof;
B. VC has previously issued one promissory note to each of the Veridian Shareholders
(collectively the "VC Notes") issued pursuant to the applicable transfer by-laws enacted
pursuant to the authority granted under the Electricity Act, J 998, which VC Notes are
outstanding as of the date hereof;
C. The Veridian Shareholders wish to extend the maturity date of the vcr Notes and the VC
Notes;
D. The Veridian Shareholders have consulted with the Veridian Group in connection with
the proposed amendments to the VC Notes and the VCI Notes;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration
of the respective covenants and agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Amendment: The Veridian Shareholders will surrender forthwith to VC and VCI the
existing VC Notes and vcr Notes (the "Predecessor Notes") (descriptions of such Predecessor
Notes being set out in Appendix "A" attached hereto) and VC and VCI will forthwith issue
amended and restated promissorynotesinthe form attached hereto as Appendix "B". There
shall be eight amended and restated promissory notes (the "Amended and Restated Promissory
Notes") in total. Four promissory notes will be issued by each ofVC and VCI to each ofthe four
Veridian Shareholders in the same principal amounts as the VC Notes and VCI Notes. For
greater clarity, the amendment and restatement of the Predecessor Notes shall not extinguish the
debt created pursuant to the transfer by-laws and Predecessor Notes and such debt is continued
as amended and restated in the Amended and Restated Promissory Notes.
2. Counterparts: This Note Amending Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original and all of which taken together will
be deemed to constitute one and the same agreement.
IN WITNESS WHEREOF the parties hereto have duly authorized and executed this
Note Amending Agreement as of the day and year first above written.
THE CORPORATION OF THE TOWN OF AJAX
By:_
Name: Steve Parish
Title: Mayor
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C73
cis
By:
Name: Marty de Rond
Title: Clerk
THE CORPORATION OF THE CITY OF
BELLEVILLE
cis
By:
Name: Mary-Anne Sills
Title: Mayor
cis
By:
Name: Julie C. Gram
Title: Clerk
THE CORPORATION OF THE MUNICIPALITY OF
CLARINGTON
cis
By:
Name: John Mutton
Title: Mayor
cis
By:
Name: Patti L. Barrie
Title: Clerk
THE CORPORATION OF THE CITY OF
PICKERING
cis
By:
Name: Dave Ryan
Title: Mayor
cis
By:
Name: Debi A. Bentley
Title: Clerk
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VERIDIAN CORPORATION
By:
Name: Mike Angemeer
Title: President
cis
By:
Name: John Mutton
Title: Chair
cis
VERIDIAN CONNECTIONS INC.
By:
Name: Mike Angemeer
Title: President
cis
By:
Name: John Mutton
Title: Chair
cis
VERIDIAN ENERGY INC.
By:
Name: Mike Angemeer
Title: President
cIs
cis
By:
Name: John Mutton
Title: Chair
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Appendix" A"
Eight (8) Veridian Group Predecessor Notes described below.
Issuer Holder Date Principal Amount
1. Veridian Corporation The Corporation of the Sept. 28/01 $5,550,000
Town of Ajax
2. Veridian Corporation The Corporation of the Sept. 28/01 $2,355,000
Municipality of
Clarington
3. Veridian Corporation The Corporation of the Sept. 28/0 I $7,095,000
City of Pickering
4. Veridian Corporation The Corporation of the Sept. 28/01 $2,206,000
City of Belleville
5. Veridian Connections Inc, The Corporation of the Sept 28/01 $14,060,000
Town of Ajax
6. Veridian Connections Inc. The Corporation of the Sept. 28/01 $5,966,000
Municipality of
Clarington
7. Veridian Connections Inc. The Corporation of the Sept. 28/01 $17,974,000
City of Pickering
8. Veridian Connections Inc. The Corporation of the Sept. 28/0 1 $5,588,000
City of Belleville
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Appendix "B"
Eight (8) Veridian Group Amended and Restated Promissory Notes attached hereto.
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SECOND AMENDED AND RESTATED TERM PROMISSORY NOTE
Maturity Date: November 1,2009
Principal Amount: $5,550,000
This Note amends and restates the promissory note (the "Predecessor Note")
issued by Veridian Corporation to the Corporation ofthe Town of Ajax (the "Holder") on
September 28,2001 in the Principal Amount. The Predecessor Note was issued pursuant
to By-law No. 115-99 of the Holder. This Note amends the maturity date of the
Predecessor Note from November I, 2006 to November I, 2009. For certainty, this note
amends and does not extinguish the debt created pursuant to the transfer by-law (enacted
pursuant to the authority granted under the Electricity Act, J 998) referenced above and
the Predecessor Note.
FOR VALUE RECEIVED, Veridian Corporation (the "Corporation"), hereby
promises to pay to or to the order of the Corporation of the Town of Ajax, in lawful
money of Canada, on November 1,2009 (the "Maturity Date") at the principal office of
the Holder, the principal amount of FIVE MILLION, FIVE HUNDRED AND FIFTY
THOUSAND Dollars ($5,550,000) (the "Principal Amount") together with interest on the
unpaid Principal Amount calculated annually, not in advance, from October 1, 2006 at a
rate of7.6% per annum for the period up to and including October 31,2006 and at a rate
of 7.6% per annum on and after November 1, 2006 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.
t. 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. Rankin!! of this Note
This Note shall rank equally in all respects as to the payment of principal and
interest hereunder with promissory notes issued as of the dates hereof to the Corporation
of the City of Pickering, to the Corporation of the Municipality of Clarington and to the
Corporation of the City of Belleville (collectively the "Municipalities") described in
Schedule" A" hereto (together the "Other Notes").
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3.
Subordination
The Holder acknowledges and agrees that the obligation of the Corporation to
repay the Principal Amount and the principal amount of the Other Notes is subordinated
and postponed to the obligations of the Corporation from time to time to any other
financial institution or lender. The Holder will execute, promptly do, deliver or cause to
be done, executed and delivered all further acts, documents and things as may be required
to provide for the subordination and postponement of the Holder's rights evidenced by
this Note.
4. Conversion of this Note
All (but not less than all) of the Principal Amount of this Note is convertible into
fully-paid and non-assessable common shares of the Corporation based on the exchange
ratio specified herein at the option of the Holder, which option may be exercised by the
Holder by notice in writing to the Corporation on or before the Maturity Date. The
exchange ratio for the conversion of the Principal Amount of this Note shall be on the
basis that, for every $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 date determined by the Holder following consultation
with the Corporation.
5. Revisions and Replacement
At the sole option of the Holder, the Maturity Date and any of the terms of this
Note may be revised, changed or restated by the Holder following consultation with the
Corporation. If this Note is revised, changed or restated, the Corporation may cancel and
replace this Note in which case, the Holder shall forthwith surrender this Note for
cancellation.
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, Veridian Connections Inc., Veridian Energy Inc. and the
Corporation dated September 28, 2001, as amended and/or restated from time to time)
prior to the Maturity Date, the Note shall remain due to the Holder in accordance with its
terms.
7. Note Non-neeotiable and Non.,.assienable
The Note shall be non-negotiable and non-assignable.
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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 October,
2006.
VERIDIAN CORPORA nON
By:
Name: John Mutton
Title: Chair
By:
Name: Mike Angemeer
Title: President
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SCHEDULE "A"
1. Promissory Note issued by Veridian Connections Inc. to the Corporation of the
Municipality of Clarington in the principal amount of $5,966,000 and dated
October 1, 2006.
2. Promissory Note issued by Veridian Connections Inc. to the Corporation of the
City of Pickering in the principal amount of $17,974,000 and dated October 1,
2006.
3. Promissory Note issued by Veridian Corporation to the Corporation of the
Municipality of Clarington in the principal amount of $2,355,000 and dated
October 1, 2006.
4. Promissory Note issued by Veridian Corporation to the Corporation of the City of
Pickering in the principal amount of $7,095,000 and dated October 1,2006.
5. Promissory Note issued by Veridian Corporation to the Corporation of the City of
Belleville in the principal anlount of $2,206,000 and dated October 1, 2006.
6. Promissory Note issued by Veridian Connections Inc. to the Corporation of the
City of Belleville in the principal amount of $5,588,000 and dated October 1,
2006.
::ODMA \PCDOCS\ TOROl \3355154\4
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SECOND AMENDED AND RESTATED TERM PROMISSORY NOTE
Maturity Date: November 1, 2009
Principal Amount: $2,355,000
This Note amends and restates the promissory note (the "Predecessor Note")
issued by Veridian Corporation to the Corporation of the Municipality of Clarington (the
"Holder") on September 28, 2001 in the Principal Amount. The Predecessor Note was
issued pursuant to By-law No. 99-173 of the Holder. This Note amends the maturity date
of the Predecessor Note from November 1, 2006 to November 1, 2009. For certainty,
this note amends and does not extinguish the debt created pursuant to the transfer by-law
(enacted pursuant to the authority granted under the Electricity Act. 1998) referenced
above and the Predecessor Note.
FOR VALUE RECEIVED, Veridian Corporation (the "Corporation"), hereby
promises to pay to or to the order of the Corporation of the Municipality of Cia ring ton, in
lawful money of Canada, on November 1, 2009 (the "Maturity Date") at the principal
office of the Holder, the principal amount of TWO MILLION, THREE HUNDRED
AND FIFTY-FIVE THOUSAND Dollars ($2,355,000) (the "Principal Amount") together
with interest on the unpaid Principal Amount calculated annually, not in advance, from
October 1, 2006 at a rate of 7.6% per annum for the period up to and including October
31, 2006 and at a rate of 7.6% per annum on and after November 1, 2006 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. Rankine of this Note
This Note shall rank equally in all respects as to the payment of principal and
interest hereunder with promissory notes issued as of the dates hereof to the Corporation
of the Town of Ajax, to the Corporation of the City of Pickering and to the Corporation
of the City of Belleville (collectively the "Municipalities") described in Schedule "A"
hereto (together the "Other Notes").
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3. Subordination
The Holder acknowledges and agrees that the obligation of the Corporation to
repay the Principal Amount and the principal amount of the Other Notes is subordinated
and postponed to the obligations of the Corporation from time to time to any other
financial institution or lender. The Holder will execute, promptly do, deliver or cause to
be done, executed and delivered all further acts, documents and things as may be required
to provide for the subordination and postponement of the Holder's rights evidenced by
this Note.
4. Conversion of this Note
All (but not less than all) of the Principal Amount of this Note is convertible into
fully-paid and non-assessable common shares of the Corporation based on the exchange
ratio specified herein at the option of the Holder, which option may be exercised by the
Holder by notice in writing to the Corporation on or before the Maturity Date. The
exchange ratio for the conversion of the Principal Amount of this Note shall be on the
basis that, for every $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 date determined by the Holder following consultation
with the Corporation.
5. Revisions and Replacement
At the sole option of the Holder, the Maturity Date and any of the temlS of this
Note may be revised, changed or restated by the Holder following consultation with the
Corporation. If this Note is revised, changed or restated, the Corporation may cancel and
replace this Note in which case, the Holder shall forthwith surrender this Note for
cancellation.
6. Sale of Shares
In the event that the Holder transfers its common shares in the capital of the
Corporation (in accordance with the temlS of a shareholders' agreement among the
Holder, the Municipalities, Veridian Connections Inc., Veridian Energy Inc. and the
Corporation dated September 28, 2001, as amended and/or restated from time to time)
prior to the Maturity Date, the Note shall remain due to the Holder in accordance with its
terms.
7. Note Non-neeotiable and Non-assienable
The Note shall be non-negotiable and non-assignable.
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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 st day of October,
2006.
VERIDIAN CORPORA nON
By:
Name: John Mutton
Title: Chair
By:
Name: Mike Angemeer
Title: President
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SCHEDULE "A"
1. Promissory Note issued by Veridian Connections Inc. to the Corporation ofthe
Town of Ajax in the principal amount of $14,060,000 and dated October 1,2006.
2. Promissory Note issued by Veridian Connections Inc. to the Corporation of the
City of Pickering in the principal amount of $17,974,000 and dated October 1,
2006.
3. Promissory Note issued by Veridian Corporation to the Corporation of the Town
of Ajax in the principal amount of$5,550,000 and dated October 1,2006.
4. Promissory Note issued by Veridian Corporation to the Corporation of the City of
Pickering in the principal amount of $7,095,000 and dated October 1,2006.
5. Promissory Note issued by Veridian Corporation to the Corporation of the City of
Belleville in the principal amount of $2,206,000 and dated October 1, 2006.
6. Promissory Note issued by Veridian Connections Inc. to the Corporation of the
City of Belleville in the principal amount of $5,588,000 and dated October 1,
2006.
::ODMA\PCDOCS\ TORO I \3370599\2
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SECOND AMENDED AND RESTATED TERM PROMISSORY NOTE
Maturity Date: November 1, 2009
Principal Amount: $7,095,000
This Note amends and restates the promissory note (the "Predecessor Note")
issued by Veridian Corporation to the Corporation of the City of Pickering (the "Holder")
on September 28, 2001 in the Principal Amount. The Predecessor Note was issued
pursuant to By-law No. 5586/99 of the Holder. This Note amends the maturity date of
the Predecessor Note from November 1, 2006 to November 1, 2009. For certainty, this
note amends and does not extinguish the debt created pursuant to the transfer by-law
(enacted pursuant to the authority granted under the Electricity Act, 1998) referenced
above and the Predecessor Note.
FOR VALUE RECEIVED, Veridian Corporation (the "Corporation"), hereby
promises to pay to or to the order of the Corporation of the City of Pickering, in lawful
money of Canada, on November I, 2009 (the "Maturity Date") at the principal office of
the Holder, the principal amount of SEVEN MILLION, NINETY -FIVE THOUSAND
Dollars ($7,095,000) (the "Principal Amount") together with interest on the unpaid
Principal Amount calculated annually, not in advance, from October 1,2006 at a rate of
7.6% per annum for the period up to and including October 31, 2006 and at a rate of
7.6% per annum on and after November 1, 2006 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. Rankine of this Note
This Note shall rank equally in all respects as to the payment of principal and
interest hereunder with promissory notes issued as of the dates hereof to the Corporation
of the Town of Ajax, to the Corporation of the Municipality of Clarington and to the
Corporation of the City of Belleville (collectively the "Municipalities") described in
Schedule "A" hereto (together the "Other Notes").
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3. Subordination
The Holder acknowledges and agrees that the obligation of the Corporation to
repay the Principal Amount and the principal amount of the Other Notes is subordinated
and postponed to the obligations of the Corporation from time to time to any other
financial institution or lender. The Holder will execute, promptly do, deliver or cause to
be done, executed and delivered all further acts, documents and things as may be required
to provide for the subordination and postponement of the Holder's rights evidenced by
this Note.
4. Conversion of this Note
All (but not less than all) of the Principal Amount of this Note is convertible into
fully-paid and non-assessable common shares of the Corporation based on the exchange
ratio specified herein at the option of the Holder, which option may be exercised by the
Holder by notice in writing to the Corporation on or before the Maturity Date. The
exchange ratio for the conversion of the Principal Amount of this Note shall be on the
basis that, for every $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 date determined by the Holder following consultation
with the Corporation.
5. Revisions and Replacement
At the sole option of the Holder, the Maturity Date and any of the tenns of this
Note may be revised, changed or restated by the Holder following consultation with the
Corporation. If this Note is revised, changed or restated, the Corporation may cancel and
replace this Note in which case, the Holder shall forthwith surrender this Note for
cancellation.
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, Veridian Connections Inc., Veridian Energy Inc. and the
Corporation dated September 28, 2001, as amended and/or restated from time to time)
prior to the Maturity Date, the Note shall remain due to the Holder in accordance with its
terms.
7. Note Non-ne2otiable and Non-assi2nable
The Note shall be non-negotiable and non-assignable.
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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 st day of October,
2006.
VERIDIAN CORPORATION
By:
Name: John Mutton
Title: Chair
By:
Name: Mike Angemeer
Title: President
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SCHEDULE "A"
1. Promissory Note issued by Veridian Connections Inc. to the Corporation of the
Municipality of Cia ring ton in the principal amount of $5,966,000 and dated
October 1, 2006.
2. Promissory Note issued by Veridian Connections Inc. to the Corporation of the
Town of Ajax in the principal amount of$14,060,000 and dated October 1,2006.
3. Promissory Note issued by Veridian Corporation to the Corporation of the
Municipality of Clarington in the principal amount of $2,355,000 and dated
October 1, 2006.
4. Promissory Note issued by Veridian Corporation to the Corporation of the Town
of Ajax in the principal amount of$5,550,000 and dated October 1,2006.
5. Promissory Note issued by Veridian Corporation to the Corporation of the City of
Belleville in the principal amount of $2,206,000 and dated October 1, 2006.
6. Promissory Note issued by Veridian Connections Inc. to the Corporation of the
City of Belleville in the principal amount of $5,588,000 and dated October 1,
2006.
;:ODMA\PCDOCS\TORO 1 \3370635\2
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: d
SECOND AMENDED AND RESTATED TERM PROMISSORY NOTE
Maturity Date: November 1,2009
Principal Amount: $2,206,000
This Note amends and restates the promissory note (the "Predecessor Note")
issued by 1437864 Ontario Limited to the Corporation of the City of Belleville (the
"Holder") on September 28, 200 I in the Principal Amount. The Predecessor Note was
issued pursuant to By-law No. 2000-170 of the Holder as amended by By-law No. 2000-
172. This Note amends the maturity date of the Predecessor Note from November I,
2006 to November 1, 2009. For certainty, this note amends and does not extinguish the
debt created pursuant to the transfer by-law (enacted pursuant to the authority granted
under the Electrici(v Act, 1998) referenced above and the Predecessor Note.
FOR VALUE RECEIVED, Veridian Corporation (the "Corporation"), hereby
promises to pay to or to the order of the Corporation of the City of Belleville, in lawful
money of Canada, on November 1, 2009 (the "Maturity Date") at the principal office of
the Holder, the principal amount of TWO MILLION, TWO HUNDRED AND SIX
THOUSAND Dollars ($2,206,000) (the "Principal Amount") together with interest on the
unpaid Principal Amount calculated annually, not in advance, from October I, 2006 at a
rate of 7.6% per annum for the period up to and including October 31,2006 and at a rate
of 7.6% per annum on and after November 1, 2006 until the Maturity Date. Interest at
the said rate shall be payable on November I 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. Rankin!! of this Note
This Note shall rank equally in all respects as to the payment of principal and
interest hereunder with promissory notes issued as of the dates hereof to the Corporation
of the City of Pickering, to the Corporation of the Municipality of Clarington and to the
Corporation of the Town of Ajax (collectively the "Municipalities") described in
Schedule "A" hereto (together the "Other Notes").
'\ 9
U'U
-2-
3. Subordination
The Holder acknowledges and agrees that the obligation of the Corporation to
repay the Principal Amount and the principal amount of the Other Notes is subordinated
and postponed to the obligations of the Corporation from time to time to any other
financial institution or lender. The Holder will execute, promptly do, deliver or cause to
be done, executed and delivered all further acts, documents and things as may be required
to provide for the subordination and postponement of the Holder's rights evidenced by
this Note.
4. Conversion of this Note
All (but not less than all) of the Principal Amount of this Note is convertible into
fully-paid and non-assessable common shares of the Corporation based on the exchange
ratio specified herein at the option of the Holder, which option may be exercised by the
Holder by notice in writing to the Corporation on or before the Maturity Date. The
exchange ratio for the conversion of the Principal Amount of this Note shall be on the
basis that, for every $1000 of Principal Amount, I fully-paid and non-assessable common
share of the Corporation shall be issued to the Holder. The conversion of the Principal
Amount will be effected on the date determined by the Holder following consultation
with the Corporation.
S. Revisions and Replacement
At the sole option of the Holder, the Maturity Date and any of the terms of this
Note may be revised, changed or restated by the Holder following consultation with the
Corporation. If this Note is revised, changed or restated, the Corporation may cancel and
replace this Note in which case, the Holder shall forthwith surrender this Note for
cancellation.
6. Sale of Shares
In the event that the Holder transfers its common shares in the capital of the
Corporation (in accordance with the tenus of a shareholders' agreement among the
Holder, the Municipalities, Veridian Connections Inc., Veridian Energy Inc. and the
Corporation dated September 28, 2001, as amended and/or restated from time to time)
prior to the Maturity Date, the Note shall remain due to the Holder in accordance with its
terms.
7. Note Non~neeotiable and Non-assienable
The Note shall be non-negotiable and non-assignable.
C9i'
- 3 -
IN WITNESS WHEREOF Veridian Corporation has caused this Note to be
signed under its corporate seal by its duly authorized officers as of this 151 day of October,
2006.
VERIDIAN CORPORATION
By:
Name: John Mutton
Title: Chair
By:
Name: Mike Angemeer
Title: President
" () ...
l! '-J \.}
-4-
SCHEDULE "A"
1. Promissory Note issued by Veridian Connections Inc. to the Corporation of the
Municipality of Clarington in the principal amount of $5 ,966,000 and dated
October 1, 2006.
2. Promissory Note issued by Veridian Connections Inc. to the Corporation of the
City of Pickering in the principal amount of $17,974,000 and dated October I,
2006.
3. Promissory Note issued by Veridian Corporation to the Corporation of the
Municipality of Clarington in the principal amount of $2,355,000 and dated
October 1, 2006.
4. Promissory Note issued by Veridian Corporation to the Corporation of the City of
Pickering in the principal amount of $7,095,000 and dated October 1, 2006.
5. Promissory Note issued by Veridian Corporation to the Corporation of the Town
of Ajax in the principal amount of $5,550,000 and dated October 1, 2006.
6. Promissory Note issued by Veridian Connections Inc. to the Corporation of the
Town of Ajax in the principal amount of$14,060,000 and dated October 1,2006.
::ODMA \PCDOCS\ TORO 1 \3370664\2
09~j
SECOND AMENDED AND RESTATED TER1\f PROMJSSORY NOTE
Maturity Date: November 1,2009
Principal Amount: $14,060,000
This Note amends and restates the promissory note (the "Predecessor Note")
issued by Veridian Connections Inc. to the Corporation of the Town of Ajax (the
"Holder") on September 28, 2001 in the Principal Amount. The Predecessor Note was
issued pursuant to By~law No. 115-99 of the Holder. This Note amends the maturity date
of the Predecessor Note from November 1, 2006 to November 1, 2009. For certainty,
this note amends and does not extinguish the debt created pursuant to the transfer by-law
(enacted pursuant to the authority granted under the Electricity Act, 1998) referenced
above and the Predecessor Note.
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, in
lawful money of Canada, on November 1, 2009 (the "Maturity Date") at the principal
office of the Holder, the principal amount of FOURTEEN MILLION, AND SIXTY
THOUSAND Dollars ($14,060,000) (the "Principal Amount") together with interest on
the unpaid Principal Amount calculated annually, not in advance, from October I, 2006
at a rate of7.6% per annum for the period up to and including October 31,2006 and at a
rate of7.6% per annum on and after November 1,2006 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. Rankine: ofthis Note
This Note shall rank equally in all respects as to the payment of principal and
interest hereunder with promissory notes issued as of the dates hereof to the Corporation
of the City of Pickering, to the Corporation of the Municipality of Clarington and to the
Corporation of the City of Belleville (collectively the "Municipalities") described in
Schedule "A" hereto (together the "Other Notes").
.-. ("..
1 ~J U
-2-
3. Subordination
The Holder acknowledges and agrees that the obligation of the Corporation to
repay the Principal Amount and the principal amount of the Other Notes is subordinated
and postponed to the obligations of the Corporation from time to time to any other
financial institution or lender. The Holder will execute, promptly do, deliver or cause to
be done, executed and delivered all further acts, documents and things as may be required
to provide for the subordination and postponement of the Holder's rights evidenced by
this Note.
4. Conversion of this Note
All (but not less than all) of the Principal Amount of this Note is convertible into
fully-paid and non-assessable common shares of the Corporation based on the exchange
ratio specified herein at the option of the Holder, which option may be exercised by the
Holder by notice in writing to the Corporation on or before the Maturity Date. The
exchange ratio for the conversion of the Principal Amount of this Note shall be on the
basis that, for every $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 date determined by the Holder following consultation
with the Corporation.
5. Revisions and Replacement
At the sole option of the Holder, the Maturity Date and any of the tenns of this
Note may be revised, changed or restated by the Holder following consultation with the
Corporation. If this Note is revised, changed or restated, the Corporation may cancel and
replace this Note in which case, the Holder shall forthwith surrender this Note for
cancellation.
6. Sale of Shares
In the event that the Holder transfers its common shares in the capital of the
Corporation (in accordance with the tenns of a shareholders' agreement among the
Holder, the Municipalities, Veridian Corporation, Veridian Energy Inc. and the
Corporation dated September 28, 2001, as amended and/or restated from time to time)
prior to the Maturity Date, the Note shall remain due to the Holder in accordance with its
tenns.
7. Note Non-net!otiable and Non-assit!nable
The Note shall be non-negotiable and non-assignable.
- 3 -
IN WITNESS WHEREOF Veridian Connections Inc. has caused this Note to be
signed under its corporate seal by its duly authorized officers as of this 1 st day of October.
2006.
VERIDIAN CONNECTIONS INC.
By:
Name: John Mutton
Title: Chair
By:
Name: Mike Angemeer
Title: President
.. 0 ,..
It, .l
44 t'\ '
J.u~_
-4-
SCHEDULE "A"
1. Promissory Note issued by Veridian Connections Inc. to the Corporation of the
Municipality of Clarington in the principal amount of $5,966,000 and dated
October 1, 2006.
2. Promissory Note issued by Veridian Connections Inc. to the Corporation of the
City of Pickering in the principal amount of $17,974,000 and dated October 1,
2006.
3. Promissory Note issued by Veridian Corporation to the Corporation of the
Municipality of Clarington in the principal amount of $2,355,000 and dated
October 1, 2006.
4. Promissory Note issued by Veridian Corporation to the Corporation of the City of
Pickering in the principal amount of $7,095,000 and dated October 1,2006.
5. Promissory Note issued by Veridian Corporation to the Corporation of the City of
Belleville in the principal amount of $2,206,000 and dated October 1,2006.
6. Promissory Note issued by Veridian Connections Inc. to the Corporation of the
City of Belleville in the principal amount of $5,588,000 and dated October 1,
2006.
::ODMA\PCDOCS\TORO I \3370569\2
"0"
1. oJ
SECOND AMENDED AND RESTATED TERM PROMISSORY NOTE
Maturity Date: November 1, 2009
Principal Amount: $5,966,000
This Note amends and restates the promissory note (the "Predecessor Note")
issued by Veridian Connections Inc. to the Corporation of the Municipality of Clarington
(the "Holder") on September 28, 2001 in the Principal Amount. The Predecessor Note
was issued pursuant to By-law No. 99-173 of the Holder. This Note amends the maturity
date of the Predecessor Note from November 1, 2006 to November 1, 2009. For
certainty, this note amends and does not extinguish the debt created pursuant to the
transfer by-law (enacted pursuant to the authority granted under the Electricity Act, 1998)
referenced above and the Predecessor Note.
FOR VALUE RECEIVED, Veridian Connections Inc. (the "Corporation"),
hereby promises to pay to or to the order of the Corporation of the Municipality of
Clarington, in lawful money of Canada, on November I, 2009 (the "Maturity Date") at
the principal office of the Holder, the principal amount of FIVE MILLION, NINE
HUNDRED AND SIXTY-SIX THOUSAND Dollars ($5,966,000) (the "Principal
Amount") together with interest on the unpaid Principal Amount calculated annually, not
in advance, from October 1, 2006 at a rate of 7.6% per annum for the period up to and
including October 31,2006 and at a rate of 7.6% per annum on and after November I,
2006 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. Rankin!! of this Note
This Note shall rank equally in all respects as to the payment of principal and
interest hereunder with promissory notes issued as of the dates hereof to the Corporation
of the Town of Ajax, to the Corporation of the City of Pickering and to the Corporation
of the City of Belleville (collectively the "Municipalities") described in Schedule "A"
hereto (together the "Other Notes").
.. 0" "
l' iJ
- 2-
3. Subordination
The Holder acknowledges and agrees that the obligation of the Corporation to
repay the Principal Amount and the principal amount of the Other Notes is subordinated
and postponed to the obligations of the Corporation from time to time to any other
financial institution or lender. The Holder will execute, promptly do, deliver or cause to
be done, executed and delivered all further acts, documents and things as may be required
to provide for the subordination and postponement of the Holder's rights evidenced by
this Note.
4. Conversion of this Note
All (but not less than all) of the Principal Amount of this Note is convertible into
fully-paid and non-assessable common shares of the Corporation based on the exchange
ratio specified herein at the option of the Holder, which option may be exercised by the
Holder by notice in writing to the Corporation on or before the Maturity Date. The
exchange ratio for the conversion of the Principal Amount of this Note shall be on the
basis that, for every $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 date determined by the Holder following consultation
with the Corporation.
5. Revisions and Replacement
At the sole option of the Holder, the Maturity Date and any of the terms of this
Note may be revised, changed or restated by the Holder following consultation with the
Corporation. If this Note is revised, changed or restated, the Corporation may cancel and
replace this Note in which case, the Holder shall forthwith surrender this Note for
cancellation.
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, Veridian Corporation, Veridian Energy Inc. and the
Corporation dated September 28, 2001, as amended and/or restated from time to time)
prior to the Maturity Date, the Note shall remain due to the Holder in accordance with its
tenns.
7. Note Non-nee:otiable and Non-assienable
The Note shall be non-negotiable and non-assignable.
- 3 -
IN WITNESS WHEREOF Veridian Connections Inc. has caused this Note to be
signed under its corporate seal by its duly authorized officers as of this 1st day of October,
2006.
VERIDIAN CONNECTIONS INC.
By:
Name: John Mutton
Title: Chair
By:
Name: Mike Angemeer
Title: President
.. n .~~
1. U~J
10d
-4-
SCHEDULE "A"
1. Promissory Note issued by Veridian Connections Inc. to the Corporation of the
Town of Ajax in the principal amount of $14,060,000 and dated October 1,2006.
2. Promissory Note issued by Veridian Connections Inc. to the Corporation of the
City of Pickering in the principal amount of $17,974,000 and dated October 1,
2006.
3. Promissory Note issued by Veridian Corporation to the Corporation of the Town
of Ajax in the principal amount of $5,550,000 and dated October 1, 2006.
4. Promissory Note issued by Veridian Corporation to the Corporation of the City of
Pickering in the principal amount of $7,095,000 and dated October 1,2006.
5. Promissory Note issued by Veridian Corporation to the Corporation of the City of
Belleville in the principal amount of $2,206,000 and dated October 1, 2006.
6. Promissory Note issued by Veridian Connections Inc. to the Corporation of the
City of Belleville in the principal amount of $5,588,000 and dated October 1,
2006.
::ODMNPCDOCS\TORO I \3370617\2
..ow
J. l t
SECOND AMENDED AND RESTATED TERM PROMISSORY NOTE
Maturity Date: November 1,2009
Principal Amount: $17,974,000
This Note amends and restates the promissory note (the "Predecessor Note")
issued by Veridian Connections Inc. to the Corporation of the City of Pickering (the
"Holder") on September 28, 200 I in the Principal Amount. The Predecessor Note was
issued pursuant to By-law No. 5586i99 of the Holder. This Note amends the maturity
date of the Predecessor Note from November I, 2006 to November 1, 2009. For
certainty, this note amends and does not extinguish the debt created pursuant to the
transfer by-law (enacted pursuant to the authority granted under the Electricity Act, 1998)
referenced above and the Predecessor Note.
FOR VALUE RECEIVED, Veridian Connections Inc. (the "Corporation"),
hereby promises to pay to or to the order of the Corporation of the City of Pickering, in
lawful money of Canada, on November 1, 2009 (the "Maturity Date") at the principal
office of the Holder, the principal amount of SEVENTEEN MILLION, NINE-
HUNDRED AND SEVENTY FOUR THOUSAND Dollars ($17,974,000) (the "Principal
Amount") together with interest on the unpaid Principal Amount calculated annually, not
in advance, from October 1, 2006 at a rate of 7.6% per annum for the period up to and
including October 31, 2006 and at a rate of 7.6% per annum on and after November 1,
2006 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. Rankine: ofthis Note
This Note shall rank equally in all respects as to the payment of principal and
interest hereunder with promissory notes issued as of the dates hereof to the Corporation
of the Town of Ajax, to the Corporation of the Municipality of Clarington and to the
Corporation of the City of Belleville (collectively the "Municipalities") described in
Schedule "A" hereto (together the "Other Notes").
103
-2-
3. Subordination
The Holder acknowledges and agrees that the obligation of the Corporation to
repay the Principal Amount and the principal amount of the Other Notes is subordinated
and postponed to the obligations of the Corporation from time to time to any other
financial institution or lender. The Holder will execute, promptly do, deliver or cause to
be done, executed and delivered all further acts, documents and things as may be required
to provide for the subordination and postponement of the Holder's rights evidenced by
this Note.
4. Conversion of this Note
All (but not less than all) of the Principal Amount of this Note is convertible into
fully-paid and non-assessable common shares of the Corporation based on the exchange
ratio specified herein at the option of the Holder, which option may be exercised by the
Holder by notice in writing to the Corporation on or before the Maturity Date. The
exchange ratio for the conversion of the Principal Amount of this Note shall be on the
basis that, for every $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 date determined by the Holder following consultation
with the Corporation.
5. Revisions and Replacement
At the sole option of the Holder, the Maturity Date and any of the terms of this
Note may be revised, changed or restated by the Holder following consultation with the
Corporation. If this Note is revised, changed or restated, the Corporation may cancel and
replace this Note in which case, the Holder shall forthwith surrender this Note for
cancellation.
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, Veridian Corporation, Veridian Energy Inc. and the
Corporation dated September 28, 2001, as amended and/or restated from time to time)
prior to the Maturity Date, the Note shall remain due to the Holder in accordance with its
terms.
7. Note Non-neeotiable and Non-assienable
The Note shall be non-negotiable and non-assignable.
108
- 3 -
IN WITNESS WHEREOF Veridian Connections Inc. has caused this Note to be
signed under its corporate seal by its duly authorized officers as of this 1 st day of October,
2006.
VERIDIAN CONNECTIONS INC.
By:
Name: John Mutton
Title: Chair
By:
Name: Mike Angemeer
Title: President
.. '" ,~
1.1.U
-4-
SCHEDULE "A"
1. Promissory Note issued by Veridian Connections Inc. to the Corporation of the
Municipality of Cia ring ton in the principal amount of $5,966,000 and dated
October 1, 2006.
2. Promissory Note issued by Veridian Connections Inc. to the Corporation of the
Town of Ajax in the principal amount of$14,060,000 and dated October 1, 2006.
3. Promissory Note issued by Veridian Corporation to the Corporation of the
Municipality of Clarington in the principal amount of $2,355,000 and dated
October 1,2006.
4. Promissory Note issued by Veridian Corporation to the Corporation of the Town
of Ajax in the principal amount of$5,550,000 and dated October 1,2006.
5. Promissory Note issued by Veridian Corporation to the Corporation of the City of
Belleville in the principal amount of $2,206,000 and dated October 1, 2006.
6. Promissory Note issued by Veridian Connections Inc. to the Corporation of the
City of Belleville in the principal amount of $5,588,000 and dated October 1,
2006.
::ODMA IPCDOCSITORO 1 13370650\2
11J.
SECOND AMENDED AND RESTATED TERM PROMISSORY NOTE
Maturity Date: November 1, 2009
Principal Amount: $5,588,000
This Note amends and restates the promissory note (the "Predecessor Note")
issued by Belleville Electric Corporation to the Corporation of the City of Belleville (the
"Holder") on September 28, 2001 in the Principal Amount. The Predecessor Note was
issued pursuant to By-law No. 2000-170 of the Holder as amended by By-law No. 2000-
172. This Note amends the maturity date of the Predecessor Note from November 1,
2006 to November I, 2009. For certainty, this note amends and does not extinguish the
debt created pursuant to the transfer by-law (enacted pursuant to the authority granted
under the Electricity Act, 1998) referenced above and the Predecessor Note.
FOR VALUE RECEIVED, Veridian Connections Inc. (the "Corporation"),
hereby promises to pay to or to the order of the Corporation of the City of Belleville, in
lawful money of Canada, on November 1, 2009 (the "Maturity Date") at the principal
office of the Holder, the principal amount of FIVE MILLION, FIVE HUNDRED AND
EIGHTY EIGHT THOUSAND Dollars ($5,588,000) (the "Principal Amount") together
with interest on the unpaid Principal Amount calculated annually, not in advance, from
October 1,2006 at a rate of 7.6% per annum for the period up to and including October
31, 2006 and at a rate of 7.6% per annum on and after November 1, 2006 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. Rankinl;! of this Note
This Note shall rank equally in all respects as to the payment of principal and
interest hereunder with promissory notes issued as of the dates hereof to the Corporation
of the City of Pickering, to the Corporation of the Municipality of Clarington and to the
Corporation of the Town of Ajax (collectively the "Municipalities") described in
Schedule "A" hereto (together the "Other Notes").
.. .A
11 (..
- 2 -
3. Subordination
The Holder acknowledges and agrees that the obligation of the Corporation to
repay the Principal Amount and the principal amount of the Other Notes is subordinated
and postponed to the obligations of the Corporation from time to time to any other
financial institution or lender. The Holder will execute, promptly do, deliver or cause to
be done, executed and delivered all further acts, documents and things as may be required
to provide for the subordination and postponement of the Holder's rights evidenced by
this Note.
4. Conversion of this Note
All (but not less than all) of the Principal Amount of this Note is convertible into
fully-paid and non-assessable common shares of the Corporation based on the exchange
ratio specified herein at the option of the Holder, which option may be exercised by the
Holder by notice in writing to the Corporation on or before the Maturity Date. The
exchange ratio for the conversion of the Principal Amount of this Note shall be on the
basis that, for every $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 date determined by the Holder following consultation
with the Corporation.
5. Revisions and Replacement
At the sole option of the Holder, the Maturity Date and any of the terms of this
Note may be revised, changed or restated by the Holder following consultation with the
Corporation. If this Note is revised, changed or restated, the Corporation may cancel and
replace this Note in which case, the Holder shall forthwith surrender this Note for
cancellation.
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, Veridian Corporation, Veridian Energy Inc. and the
Corporation dated September 28, 2001, as amended and/or restated from time to time)
prior to the Maturity Date, the Note shall remain due to the Holder in accordance with its
terms.
7. Note Non-nef?:otiable and Non-assif?:nable
The Note shall be non-negotiable and non-assignable.
- 3 -
IN WITNESS WHEREOF Veridian Connections Inc. has caused this Note to be
signed under its corporate seal by its duly authorized officers as of this 1 st day of October,
2006.
VERIDIAN CONNECTIONS INC.
By:
Name: John Mutton
Title: Chair
By:
Name: Mike Angemeer
Title: President
.. ..
11 ~)
11~
- 4-
SCHEDULE "A"
1. Promissory Note issued by V eridian Connections Inc. to the Corporation of the
Municipality of Clarington in the principal amount of $5,966,000 and dated
October 1, 2006.
2. Promissory Note issued by Veridian Connections Inc. to the Corporation of the
City of Pickering in the principal amount of $17,974,000 and dated October 1,
2006.
3. Promissory Note issued by Veridian Corporation to the Corporation of the
Municipality of Clarington in the principal amount of $2,355,000 and dated
October 1,2006.
4. Promissory Note issued by Veridian Corporation to the Corporation of the City of
Pickering in the principal amount of $7,095,000 and dated October 1,2006.
5. Promissory Note issued by Veridian Corporation to the Corporation of the Town
of Ajax in the principal amount of$5,550,000 and dated October 1,2006.
6. Promissory Note issued by Veridian Connections Inc. to the Corporation of the
Town of Ajax in the principal amount of $ 14,060,000 and dated October 1, 2006.
::ODMA \PCDOCS\ TORO I \3370686\2