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Home My WebLink About00 132 Amended by No. 00-136 e - e - THE CORPORATION OF THE MUNICIPALITY OF KINCARDINE BY-LAW NO. 2000 -132 A BYLAW TO, INTER ALIA, AUTHORIZE, APPROVE AND RATIFY THE INCORPORATION OF VARIOUS CORPORATIONS UNDER THE BUSINESS CORPORATIONS ACT (ONTARIO) PURSUANT TO SECTION 142 OF THE ELECTRICITY ACT, 1998, AND; APPROVE THE FORM OF A SHAREHOLDERS' AGREEMENT IN RESPECT OF CORPORATIONS INCORPORATED UNDER THE BUSINESS CORPORATIONS ACT (ONTARIO) PURSUANT TO SECTION 142 OF THE ELECTRICITY ACT, 1998 AND AUTHORIZE THE EXECUTION THEREOF WHEREAS the Corporation of the Municipality of Kincardine (the "Municipality") distributes electricity through the Kincardine Hydro Electric Commission (the "Commission"); AND WHEREAS pursuant to section 142(1} of the Electricity Act, 1998 one or more municipal corporations may cause a corporation to be incorporated under the Business Corporations Act (Ontario) (the "OBCA") for the purpose of generating, transmitting, distributing or retailing elecbicity; AND WHEREAS the Municipality, together with the Corporation of the Town of Saugeen Shores, the Township of Huron-Kinloss, the Corporation of the Municipality of South Bruce, the Corporation of the Town of Wingham, and the Corporation of the Municipality of Brockton (collectively, the "Other Municipalities") desires to authorize, approve and ratify the incorporation of three corporations (collectively, the "Corporations") incorporated under the OBCA pursuant to section 142(1} of the Electricity Act, 1998 for the purpose of, in the case of one of the Corporations, inter alia, holding the issued and outstanding shares in the capital of the other two Corporations, and, in the case of such other two Corporations, inter alia, distributing elecbicity and marketing, selling and providing associated products and services; AND WHEREAS the Municipality, together with the Other Municipalities, the Corporation of the Town of Hanover and CNP, desires to enter into a shareholders' agreement (the "Shareholders' Agreemenr) which provides for, inter alia, certain arrangements in respect of the ongoing operation and control of the Corporations and for certain restrictions on and arrangements respecting dealings with shares of the Corporations; AND WHEREAS certain other persons (including, without limitation, municipal corporations) may wish to enter into the Shareholders' Agreement; NOW THEREFORE THE COUNCil OF THE CORPORATION OF THE MUNICIPALITY OF KINCARDINE ENACTS AS FOllOWS: 1. The incorporation, pursuant to Section 142 of the Electricity Act, 1998, of the following Corporations under the OBCA is hereby authorized, approved and ratified: . ../2 e By-law No. 2000 -132 Westario Omnibus By-law Page 2 of 3 (a) Westario Power Holdings Inc. (referred to herein as "Holdco"), being a company to hold certain assets, including without limitation, the shares of the companies referred to in (b) and (c) below, (b) Westario Power Inc. (referred to herein as "Wiresco"), being a future subsidiary of Holdco, to, inter alia, distribute electricity; and (c) Westario Power Services Inc. (referred to herein as "Servco"), being a future subsidiary of HoIdco, to, inter alia, market, sell and provide energy-related products and services, (Servco and Wiresco are hereinafter referred to, collectively, as the "Subsidiary Corporations"). 2. 3. e 4. 5. The Articles of Incorporation of Holdco, in the form attached hereto as Schedule "N, are hereby authorized, approved and ratified. The Articles of Incorporation of Servco, in the form attached hereto as Schedule "B", are hereby authorized, approved and ratified. The Articles of Incorporation of Wiresco, in the form attached hereto as Schedule "CO, are hereby authorized, approved and ratified. The appointment or election of the following individuals as first directors of the board of directors of Holdco is hereby authorized, approved and ratified: Stuart Reavie, Robert Jameson, Mark Kraemer, Ralph Kreutzwiser, Bruce Machan, William Roseborough, and William Joseph Daley. 6. The appointment or election of the following individuals as first directors of the board of directors of Servco is hereby authorized, approved and ratified: Stuart Reavie, Robert Jameson, Mark Kraemer, Ralph Kreutzwiser, Bruce Machan, William Roseborough, and William Joseph Daley. 7. The appointment or election of the following individuals as first directors of the board of directors of Wiresco is hereby authorized, approved and ratified: William Joseph Daley and Mark Kraemer. e 8. . The nominee(s) selected by the Corporation of the Municipality of Brockton for appointment or election to the board of directors of HoIdco, Servco and/or Wiresco, as permitted under the Shareholders' Agreement, are hereby approved and their appointment or election to the board of directors of Holdco, Servco and/or Holdco, as permitted under the Shareholders' Agreement, is hereby authorized, approved and ratified. 9. Each of the Other Municipalities, the Corporation of the Town of Hanover and CNP is entitled, at any time and from time to time, and without the consent of the Municipality, to replace the directors of Holdco and/or the Subsidiary Corporations that it is entitled to nominate. e 10. Any person (including, without limitation, a municipal corporation), other than the Other Municipalities, the Corporation of the Town of Hanover and CNP, that may enter into the Shareholders' Agreement (referred to herein as a "New Shareholder") and, pursuant to such Shareholders' Agreement, nominate one or more individuals to the board of directors of Holdco andlor the Subsidiary . Corporations, may nominate such director(s) and subsequently replace the director(s) that it is entitled to nominate, at any time and from time to time, without the consent of the Municipality. 11. The form of Shareholders' Agreement, attached hereto as Schedule "D" is hereby approved, with such modifications and amendments as may be necessary or desirable, as contemplated in Section 11 hereof. .. ./3 -. - - e e e . By-law No. 2000 - 132 Westario Omnibus By-law Page 3 of 3 12. The Mayor and Clerk of the Municipality are hereby authorized and directed, for and on behalf of the Municipality, to execute and deliver the Shareholders' Agreement with such modifications and amendments thereto as may be approved by them, at any time and from time to time, their signatures thereon to be conclusive evidence of their approval. 13. Without limiting the generality of Section 11 hereof, the Mayor and Clerk of the Municipality are hereby authorized and directed, for and on behalf of the Municipality, to execute and deliver all such other documents, instruments and writings as may be necessary or desirable for the purposes of permitting one or more New Shareholder(s) to enter into the Shareholders' Agreement, the signatures of the Mayor and Clerk thereon to be conclusive evidence of their approval. 14. Without limiting the generality of Section 11 hereof, should it be necessary or desirable to modify, amend or restate the Shareholders' Agreement subsequent to the execution thereof by the Municipality, the Other Municipalities, the Corporation of the Town of Hanover CNP and/or any New Shareholder(s), the Mayor and Clerk of the Municipality are hereby authorized and directed, for and on behalf of the Municipality to execute and deliver all such other documents, instruments and writings as may be necessary or desirable to give effect to such modification, amendment or restatement, their signatures thereon to be conclusive evidence of their approval. 15. Except as otherwise stipulated herein, anyone of the Mayor and Clerk are hereby authorized and directed, for and on behalf of the Municipality, to do all such acts and things and to execute and deliver all such documents, instruments and writings as may be necessary or desirable to give effect to the provisions of this By-law, their signature(s) thereon (in the case of documents, instruments and writings) to be conclusive evidence of their approval. 16. Schedules "A", "B", "CO and "D" attached hereto 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. 17. If any section of this By-law or part thereof is found by a court to be invalid or ultra viras the Municipality, such finding shall not affect the remaining sections of this By-law or parts thereof. 18. This By-law shall come into full force and effect upon the final passing thereof. 19. This by-law may be cited as the "Westario Omnibus 2000 By-law". READ a FIRST, SECOND, and THIRD time and DEEMED TO BE PASSED this 25th of October, 2000. ~~ Mayor - - - - e e SCHEDULE "A" TO BY-LAW NUMBER 2000 -132 OF THE CORPORATION OF THE MUNICIPALITY OF KINCARDINE ARTICLES OF INCORPORATION OF HOLDCO See attached. - -- '" OCT-20-00 16:17 FROM-PoweR BUDD LLP ror MInistry Use Onlf A (...S3Q8 exelusif dl.l ministers . Form 1 5c£J':ess corþor:31~1'I& 'let Fç(n'JIoIISro 1 LOÎ'ill.'f,e~ ";i"r;¡etè~ p~t oiIoHoi'l' - . SClfrOo~4.1 '1.{o.'""_DrOCuWlnœ't~.. ~,"Or..""rllQ'-"'t.61~ -.a....Gf:!t-/leu'cOI'WfI!:Ioft, ')rOll;~,CI"a~l. O~"Fð'1tI1\11DOI1 ® Mini.,,,, 01 CQMutnGf r.n\t OIItarlo ~III.~\I~". CERTIFICATe This 16 to c.r\if~ 111111 UIO" artiel.. are .fhIß"1IO 01'1 OCTOBER 0 4 416-640-2717 ~,.:t'atl:':r~CIa I" Oon~QA'\I'M.hl'lñ .,1 au Comme1u . OERTIFICAT . Ctlci ctlrtlUo que '"s ~resent$ atatua Ionlrenl en ",gueur Ie OCTQBRE, 2000 .............. ....06...'''...,. .....~....n... u~..... ......un. n'" on'...· ............ n.. ~j~,.~-' . a~l'\åQt COPo.ot'L~' ;'Qf ; U/I ~~f ~ ~ë'åS par &.CtJoon& T-m P.02 F-384 1 Ootario Corporation Number l Numéro de Is. aocij¡tè en Ontario 1442905 Tr¡afl~ ün. "- Me¡"Qd co.. N. SUil~ 1,.. 11'i'0I'? W W W IT] Q] ,. ~o 2& 2. .0 N.... Sh¡¡¡1'a ..... J\lrisdir.tiøn IT] W [g~Tf\!'I!q . . . . . : . . I S1 ~2 33 <7 ARTICLES OF INCORPORATION STATUTS CONSTITUTIFS 1. The name of Ihe corporation is: iW!EISITIAIR I 0 i ! I í I ; I ~ ¡ j 1 I I Iii P OiW E R Dénomination sociale de la $ociété : I N C . I ! ! I ! i I HO LIDI N G S I : I I I i I 2. The .ddr...s of the registered office is: ! 385 Queen Street Adr...se du ..¡ege social: (SU'øeI and No. at A..~. No. end. i1' murtJ..of'r1C8 buikSing. giv!) Room No.) ~U~ 01 n&lMéfo au numëro de III R.R. 81. sïl &'sgit d'un êuirlce à bUre.1ux. numêro du bureau) Kincardine, Ontario, Canada IN'121z 21Ri4! (Name of Municipality or Pœt Orficc) (postal Code) (Nom de Ií:s municipeflté ou du bureau de po&te) (COdð po'1a~ 3_ Number (or minimum and maximum number) of Nombre (au nombres mjnlmal et maximal) directo,,¡ is: d'admini'>trateurs : A minimum of one (1) director and a maximum of twenty (20) directors 4. The fir..! dir.ctor(s) is'are: , Premieres) administrateur(s) : ".sIden! Canadian State Ye:; crNø Résidenl cenadlon Cuj/Non Yes First nlrne, Initials and surname prénÞm. In¡t(ales et nom de flmile Addres. for Service, giving Street and No. (or R.R. No.), Muniolpallty aM Pootol Code Domicile élU, y eomprls la ruè I!It Ie n...méra (au Ie t'lurnêro de Is R.R.). ~e nom ae la muniçiplilllilé et Ie code PQ'tel Stuart Reavie I Robert Jameson Mark Kraemer Ralph Kreutzwiser I 343 Ross Street P.O. Box 340 LucknowÖ Ontario NOG 2H 1135 Princes Street Kincardine, Ontario N2Z 1W8 R. R.#1 I Pori 8gin, Ontario NOH 2C5 I RR. #2 Wingham, Ontario NOG 2WO Yes Yes Yes OCT-20-00 16:17 FROM-POWER BUDD LLP 416-640-2777 T-m P.03 F-384 ,.. 4. Contmued form 1 Bruce Machan 1255 Centre Street Yes auslnee'S P.O. Box 532 CorporalÎOl\& Wingham, Ontario Act NOG 2WO Formu!a 1 ~rlco William Roseborough 157 2nd Street Yes ·~ê& par 10" Hanover, Ontario i N4N 1A3 INilliam Joseph Daley 9 Overton Court No Lancaster, New York 14086 . . Sotrþoc¡.se4' V'''~'d;:oru;;uwr"".rlK' S~f1c.:C1 ,~ I rlll!~Itrø !laa. ".:.,"cofSI)':eiJ,C:.'pttillo4l, ;'GrGnl'll,t.:qn. ""C....O'1II11/'... OCT-20-00 16:17 Fcfm1 BU$ir'le$$ CorporaiicnB A« ~~rln\tl.a 1 E·,"'k>< 6piilr clions: - . SvfrD~4.' W61=pre~uIDl' \IIr~rf,)~e '¡~1\OOG'11 a I'tOin''''U11\' !'II~X jf ~"'I CorJiOQlIo... ,"~I~.::Ir,an. ¢~~IIMrl1111~" FROM-POWER BUDD LLP 5. Restrictions, il any. on business the corporation may carryon or on powelS the corporation may exercise: NONE 6. The classes and any maximum number of shares that the corporation is authorized to issue; 416-640-2777 T-m P04/Z1 F-384 ~ l.imites, s'il y a lieu, imposees aux activit"" commerciales ou aux pouvoir. de la soci!!tè : Categories et nombre maximal, s'il y a lieu, d'aclions que 18 societe est autorisee à emertre : The Corporation is authorized to issue an unlimited number of shares to be designated as "Common Shares'. OCT-20-00 16: 18 Fcrm1 Due/MSS Corporaûor.s Ao, Formt.de , .lIrles 1&9; par ..cllC:u: - . $gftOo~ .U Wfln::r. "C~eu~r ",Urt1.G~ $~t.Co.:$;S ~ ''''5Il....dIQ4cl '"~r~of:eI)'l-~.I:..,~ÕOI\o ':'~r)"16,C~I\ôI.u. coI,¡:...F.)I'ITI1,'n. FROM-POWER BUDD LLP 416-640-2777 T-228 P OS/21 F-384 3 1 Rights, privilegas, restrictions and conditions (if any) attaching to each class of shares and directors suthorlty with respect to eny class of shares which may be. i5$uad in series: Droits, privilèges, restrictions et oonditions, s'll y a lieu, rattachés a chaqlJs catégorie d'actiol1$ at pouvoirs des administreteuMI rP.latifs a cheque cetégotie d'sctions qui paut ètra émi.." en série : Subject to the Business Corporations Act (Ontario), the rights, privileges, restrictions and cOnditions attaching to the Common Shares are as follows: 1. tha right to one (1) vote at all meetin\s of shareholders of the Corporation, except meetings at which only holders of a specified class of shares are entitled to vote; 2. subject to the prior tights and privileges attaching to any other class of shares of the Corporation, the right to receive any dividend declared by the Corporation; and 3. subject to the prior rights and privileges attaching to any other class of shares of the Corporation, the right to receiva the ramaining property and assats of the Corporation upon dissolution. OCT-20-00 16:16 Ferm1 8u~iõ.c:;& C:orpðr&.tiona ...., fcrmtd6l1 ~'$U'IC$ të::sp;¡r I:OM . . $cf1C1~41 ~·l(.·i2i=.'~flr.¡if rhl,rQc.. t~tI~u:, II ....11,'.~OIIII....þ ""UK 01 SIYIIU, C4&'øcnl"", 1'crGnlO.:::J"OOI. ð">C,F_1tl!tfo' FROM-POWER BUDD LLP 416-640-2177 T-226 P. 06/21 F-364 4 8. The issue, transfer or ownership of sheres is X:/S(Jlllt restriç¡ed and the restrictions (if sny) er. es follows: L'émission, Ie trenslert ou Ie propriété d'ac~ons est XWö~ restreint. Les restriçtions, s'j y e lieu, sont les suiventes : No share or shares of the Corporation shall at any time be transferred to any person without either: a) the consent of the directors to be signified by a resolution fassed by the board or by an instrument or instruments in writing signed by a majority 0 the directors; or the consent of the shareholders of the Corporation to be signified by resolution passed by the shareholders or by an instrument or instruments in writing signed by the holders of the shares of the Corporation representing a majority of the votes attributable to all of the issued and outstanding shares of the Corporation. b) OCHO-OO 16: 18 Form 1 Businœs COrpotallo¡"\~ .... Formulo 1 .&UrIo5 'tÓ$par scHons . . Sor'lDoc" 4.1 WDt"F'ouaotlt\¡.te4uf ~=fI~~""_r4fl"M'ulItwI.... mlr~,·~""ulit;a~. T;ronl;,':an.dl. O~fotR'.1,¡,Ðr)& FROM-POWER BUDD LLP T-22S POr/2! F-384 416-640-2TTT 5 9. Other provi$ions, if any, ere: Autres disþositions, s'~ y a lieu: The number of shareholders of the Corporation, exclusive of persons who are in its employment and exclusive of persons who, having been formerly in the employment of the Corporation, were, while in that employment, and have continued after the termination of that employment to be, shareholders of the Corporation, is limited to not more than fifty, two or more persons who are the joInt registered owners of one or more shares being counted as one shareholder. 2. AIly invitation to the public to subscribe for securities of the Corporation is prohibited. 1, 3. The board of directors may from time to time on behalf of the Corporation, in such amounts and on such terms as it deems expedient borrow money on the credit of the Corporation; issue, reissue, sell or pledge bonds, debentures, notes or other evidences of indebtedness or guarantee of the Corporation, whether secured or unsecured; to the extent permitted by the Business Corporations Act (Ontario), give a guarantee on behalf of the Corporation to secure performance of any present or future indebtedness, liability or obligation of any person; and mortgage, hypothecate, pledge or otherwise create a security interest in all or any currenUy owned or subsequently acquired real or personal property, movable or immovable, property of the Corporation including book debts, rights, powers, franchises and undertakings, to secure any such bonds, debentures, notes or other evidences of indebtedness or guarantee clr any other person or future indebtedness, liability or obligation of the Corporation. 4. The board of directors may from time to time delegate to such one or more of the directors and officers of the Corporation as may be designated by the board, all or any of the powers conferred on the board above to such extent and in such manner as the board shall determine at the time of such delegation. a) b) c) d) 5. The Corporation is incorporated pursuant to Section 142(1} of the Electricity Act, 1998 (Ontario). OCT-20-00 16: 18 Form 1 $u$lneS$ Corporation. Ac< Fcrmule 1 .liIi)'fleS. iètèS Far actiom; . . ~ffÞocs4t 4~ \';,)I'~~,"nw Intlrlll" SaILCaU', ~ M;~I''''lwra ,"~r~9f;¡Y;tI.:,C~.atÞ:;. "!'ar~nlø.C:,r..dl. cl'l.....r_111CC~ FROM-POWER BUDD LLP 10. The names snd addresses of the incorporato," are: FI"S!: name, initials and surname or corporate name Prenorn. initiaJes et nom de femllle ou dénorrinltion $Ociale Stuart Reavie Robert Jameson Mark Kraemer Ralph Kreutzwiser Bruce Machan William Roseborough William Joseph Daley These articles are signed in duplicate. 416-640-2777 T-228 P 08/21 H84 & Nom et adresse des fonda!eu," : FuU addre&& for service. or address of registered office or of prinçiþal place of business, giving Street &. No. or R.R. No. Municipality and _I Code Dom¡~lIe 'Iu, adrasse du &1'9_ $ocia.1 0\.1 ildreS$8 de rétablissement principa~ y compris 18 rue at Ie numëro OU 10 num'¡", de 18 R.R. 10 nom d. la municipalit'¡ et Ie code poolsl 343 Ross Stree~ P.O. Box 340 Lucknow, Ontario, NOG 2HO 1135 Princes Street Kincardine, On1aOO, N2Z 1W8 R.R.#1 Poet Elgin, Ontario, NOH 2C5 R.R. #2 Wingham, Ontario, NOG 2WO 1255 Centre Str~eL P.O. Box 532 Wingham, Ontario, NOG 2WO 157 200 Street Hanover, Ontario, N4N 1 A3 9 Overton Court Lancaster" New YOrl<, 14086 Les présents ststuts sont signés en double exemplaire. Signaturc1i of Incorpondors Sign.,uras de6 fondaleurs , ~ ark. Krae~r ~~ Nce acha~- flJ ~ -.----- . Robert ~on e e e . SCHEDULE "B"TO BY-LAW NUMBER 2000 - 132 OF THE CORPORATION OF THE MUNICIPALITY OF KINCARDINE ARTICLES OF INCORPORATION OF SERVCO See attached. - ocr-zo-OO IS:18 FROM-POWER BUDD LLP - 4fS-640-Z777 T-m P091Z1 H84 1 Ontario COtPØfBlion NUmber L NlHnðro de Ja. ~ifté en Ontario J 1442903 T..... L~. COl"l'lø "'1M" ~ .... $10, r",. /AQørp ŒJ CD CD CIJ OJ " 20 21! .. SO ""- ....,. 1t"'4' .Nri5di~I CD CD [q~T,A~q . . . . , . , , ] ., 02 .. 4' F., /vi",,,, lis. o,,~ Ã r'\,:t;3se ~çkJ$!r du tninl»t6lo @ IoIlnlWy (It I..,",.,,~ Ja OOMoom "1\;1 16 ~~O__!lon I.. ''',,~ 11\ $I¡ eo......"'. CMtno C\MOMI(;,,,......_ , RTIFICAT Ce~TIFle~Te ce It I q.,e I&s p'4.ants TIlls t, 'Q 'I,!\ì\~ \lUll \!\Uti ~~~IS~~t':nl on .¡9Ue"~ 1& II'tIo106 tit !I~\;\I tll OCTOBER O.~....~.~!.~~~~...~~~?....... ·.....'........."'h........"",."",....".....".. .., . F¡¡:/m1 8u:siI'lC&' CorpOr'8tion$ Aot Formula 1 LOiz.wJø¡ SOCiOlé& p&r action;. . . Sð/tCxt$4,1 ...trç~rn.wln"'.,..; :¡~"C;¡.c.III.~~...:t19t .....at~ ~"'~It\.~ C"Wtt:u. 1'o:-or,I.1.t.v'¡Q. oei;~F_111a'c ... ,*~IIÞ . \)W!<;u"'\I _._. - "~>', .·~·,·..~··~t4spar__.... ûut\nøGe Q.Qf~""ç,¡,¡~ ......6.......· _'....... I , I I , f I 1. The name of the corporation is; ARTICLES OF INCORPORATION STATurs CONSTITUTIFS Dénomination soeiale de la &ooièté : ~ ggg T AIR I 0 p 0 W E R SJE R v I C E i ' i I ~ - j I ¡ , j J I i . I - '-- '-. 2, Ths address of Ine registered offioe is: Adrasse du sièg" Social: 385 Queen Street (Srr"ðt .nd No. or R.R. No, amt. if rttultlooffic6 ÞUUding, g\"'e Room No.) (1'/"" of numór..u ""more dol. ..~ .r. ,';¡ "'iil d'un óö."," ¡, bwoa"". numóro du bu".u) Kincardine, Ontario, Canada IN 12 ~ (Nama 01 Munioipali'y .r Poot 01'...) (Po""" Coda) (Nom d. fa municipaltè .u du """u ... -) (Cod. o....~ ~. Number (or minimum and maximum number) of Nombte (ou nombres minimal et maximal) directors is: d'administrateura : A minimum of one (1) director and a maximum of twenty (20) directors 4. The fif$t director(s) islare: Premier(s) administrateurls) : First n6t1'1ð, initials 81"'1d surname Þrénotn, initiaJu el nom de fltniHe Addf8$S for SONic.. giving Stre.! and No. (or R.R. No.), Muniçip.,í!y end Posta' eoa. ComicHe flu, y cornpriala rue et Ie nt.tmérQ (ou Ie nLJméro ~ ,_ R.R.), Ie nom de Ia IllUnicipalilð e! Ie COde postal I ~:~~':;:~ SI.Ce Ye. or No Ftésldenl canadien Oui/Non Yes Stuart Reavie 343 Ross Street P.O. Box 340 Lucknow, Ontario NOG 2HO Rebert Jameson 1135 Princes S1reel Kincardine, Ontarie N2Z 1Wa R. R. #1 POrf Elgin, Ontario NOH 2C5 I R.R. #2 , Wingham, Ontario i NOG 2WO I I I Yes Yes Mark Kraemer Yes Ralph Krel/l2wiser OCT-ZO-OO 16: 19 FROM-POWER BUDD LLP 416-640-Z777 T-Z28 P 10/21 F-384 I 1A 4. Continued Form 1 Bruce Machan 255 Centre Street Yes !usinQsli P.O. Box 532 Oorpol'l1i1iona Wingham, Ontario AcI NOG 2WO FQrm~ta 1 Loi sur lea William Roseborough 157 2nd Street Yes ,.~é6 par .... Hanover, Ontario N4N 1A3 William Joseph Daley 9 Overton Court No Lancaster, New York 14086 . . SðftDoc::øe (\ .wJltM.'$ðI''''I~atc ~~D<x$"'rr.l..Itr.lt:wIc I .1\~..k cf ef1;åJ~ Ctr~_to~. T"tn!~,C\ft&l:I. ,'c...f......t1/1t(ii OCT-20-00 16: 1 9 Fürrr.1 8usin&$G CcrpOr3lloflS Aot formWe 1 ~.~rlee ~Ie$¡»r 1iIclians . . SOftOoGft 4.' WO";~I~;'U;)l' Inl,rfllu ~~ft~..., ~ ....I~~,.a Irto' ,....r~ Df1\yl11,,:, ClJfp.w.¡;e". "'''I~''I..CI''''''' ~.t'"ø''''' I,ten FROM-POWER BUDD LLP 5. Restrictions, if any, on business ths oorporation may carryon or on powers the corporation may exercise: NONE 6. The ciasses and any maximum number of shares that the corporation is authorized to issue: 416-640-2717 T-228 P.11121 F-384 z Ioim<les, aïl y a lieu, imposées aux actJvités commercia¡es ou aux pouvoirs de Ie société : Catégories et nombre maximal, sïl y a lieu, d'actions que Ie sooiété est eutorisée à émettre : The Corporation is authorized to issue an unlimited number of shares to be designated as "Common Shares'. OCT-20-00 16:19 FoJm'l1 Business CorpQTii1Ik1n!J Act F,umulc 1 _&~rleiS is per cûons . . SOIt.?oc.&&4.'! ·~¡.,.Oit:.~erl,"er~~o $Q!¡OIUI>II....¡I...",dwllc .",.:11 ~ :n,.......,. hrpv..loGlI, ':'.'iHlle Cln.lI. ~FCll'lllt\"il!ll¡ FROLHOVlER BUDD LLP 416-640-2777 T-228 P.12/21 F-3S4 3 7. Rights, privileges, restrictions and conditions (if any) attaching to each Class of shares and directors authority with respecl to any class of shares which may be issued in series: Droits, pnvi1èges, restrIctions ei conditions, s'il y a lieu. rattaché. å chaque catligone d'actions et powoirs des administrateurs ralatifs à cheque calligone d'aclions qui paut être ém,se en séris: Subject to the Business Corporations Act (Ontario), the rights, privileges, restrictions and conditions attaching to the Common Shares are as follows: 1. the right to one (1) vote at all meetings of shareholders of the Corporation, except meetings at which only holders of a specified class of shares are entitled to vote; 2. subject to the prior rights and privileges attaching to any other class of shares of the Corporation, the right to receive any dividend declared by the Corporation; and 3. subject to the prior rights and privileges attaching to any other class of shares of the Corporation, the right to receive the remaining property and assets of the Corporation upon dissolution. OCT-20-00 16:19 Form 1 8IJslnaS8 Corporation;; Acl Formula 1 ....,Ias . tá1ó$ par ...:tion~ . . sotrDðâ't 4~ ~~I"1I."';.""''''WIK. :;ott~n"I'''''ltrH'JIo.se ,.-,~",oiSC'l;oUcCtl'l_"'" ,;,,)~~...:~~ .:a~...I!ONII·1I1"1 FRO""POWER BUDD LLP T-228 P13/21 F-384 416-640-2777 , 8. The issue. transfer or ownership of shares is XJOOCt restricted end the restrictions (if any) ara as follows: L'émlssíon, la transfer! Ou Ie prcprié!é d'actions est ,~ restraint. Les restrictions, s'ß y a lieu, sont lea suivantes: No share or shares of the Corporation shall at any time be transfarred to any person without either: a) the consent of the directors to be signified by a resolution fassed by the board or by an instrument or instruments in writing signed by a majority 0 the directors; or the consent of the shareholders of the Corporation to be signified by resolution passed by the shareholders or by an instrument or instruments in writing signed by the holders of the shares of the Corporation representing a majority of the votes attributable to all of the issued and outstanding shares of the Corporation. b) OCT-20-00 16:19 Ferm 1 Businsaa CotpOfa1iCn$ Act Formula 1 -=·~r¡e5 tea par ctlona . . ~~"-1 Wo~,,·t"nOl' '''I.~oe t~I:Q~, II" lt~/f:1If'~ tQu :':\a.rIIC1'6I~.oo!'Jo1t_". "~ro"¡G.C¡r.a"a.. ~p,::...F.r/'ll! 111~_o, FROII-POWER BUDD LLP 416-640-2717 T-228 P.14/21 F-384 ¡ 9. Other provisions, if any, are: Autres dispositic,ns, eol y B lieu: The number of shareholders of the Corporation, exclusive of persons who are in its employme·nt and exclusive of persons who, having been formerly 10 the employment of the Corporatioo, were, while in that employment, and have continued after the termination of that employment to be, shareholders of the Corporation. is limited to not more than fifty, two or more persons who are the joint registered owners of one or more shares being counted as one shareholder. 2. Any invitation to the public to subscribe for securities of the Corporation is prohibited. 1. 3. The board of directors may from time to time on behalf of the Corporation, in such amounts and on such terms as it deems expedìent a) borrow money on the credit of the Corporation; b) issue, reissue, sell or pledge bonds, debentures, noles or other evidences of indebtedness or guarantee of the Corporation, whether secured or unsecured; c) to the extent permitted by the Business Corporations Act (Ontario), give a guarantee on behalf of the Corporation to secure performance of any present or future indebtedness, liability or obligation of any person; and d) mortgage, hypothecate, pledge or otherwise create a security interest in all or any currently owned or subsequently acquired real or personal property, movable or immovable, property of the Corporation including book debts, rights, powers, franchises and undertakings, to secure any such bonds, debentures, notes or other evidences of indebtedness or guarantee or any other person or future indebtedness, liability or obligation of the Corporation, The board of directors may from time to time delegate to such one or more of the directors and officers of the Corporation as may be designated by the board, all or any of the powers conferred on the board above to such extent and in such manner as the board shall determine at the time of such delegation, The Corporation is incorporated pursuant to Section 142(1) of the Electricity Act, 1998 (Ontario). 4, 5. OCT-20-00 16:19 Ferro , Busineu CCltpotilaon~ Act FOImLlle 1 .$ut les. . ~bs par aclions . . SoItDo=- 4~ ~,",=ht",.·Þ.c.l'fab ~II)O;'",lr'II''''·'·lIIt''"' ".~""c1Ãty·eUtC;¡~oIQ("lI. "',)-O~'_C¡I\~. t:...... Ii","" ~ 11iw~ FROU-POWER BUDD llP 10. The names and addresses at the incorporators are: First name, init:ia.l:s and surname or corporate neme Pt'énom, initlales et nom de famille OU dénomlnation SOctale Stuart Reavie Robert Jameson Mark Kraemer Ralph Kreutzwiser Bruce Machan William Roseborough William Joseph Daley These artioles are signed in duplioatê. 416-640-2717 T-22S P 15/21 F-3S4 6 Nom et adrêSse des fondateurs : Full address for sarvice, or IIddreH of regiliterr.d offiçe or ofpnncipal place of business, giving Street & No. or R.R. No., Munioipality end Postal Code Domicile éhJ, adre$$e du 5Iêge ¡:oçrill 01.1 adl'éS$é dé I'établissemeni principa~ y eompris la rue et Ie n1.lméroou Ié numéro de ~ R.R. Ie nom de ~ munlcipallté et Ie code posœr 343 Ross Street, P.O. Box 340 Lucknow, Ontario, NOG 2HO 1135 Princes Sb'eet Kincardine. Ontario, N2Z 1W8 R.R. #1 Port Elgin, Ontario, NOH 2C5 R.R. #2 Wingham, Ontario, NOG 2WO 255 Centre Street, P.O. Box 532 Wingham, Ontario, NOG 2WO 157 2nd Street Hanover, Ontario, N4N 1A3 9 Overton Court Lancaster" New York, 14086 LêS présê~ts sta·(uts sont sig~és e~ double exempl8ire. Siillillt,lrft of Inc:Clrporamn. Si5Jn~ute:i" des rondatÐur& rk Ktaemer ~~ ~ ruce Machan ¿~...- Robert Jame e e e ~.- SCHEDULE "C"TO BY-LAW NUMBER 2000 -132 OF THE CORPORATION OF THE MUNICIPALITY OF KINCARDINE ARTICLES OF INCORPORATION OF WIRESCO See attached. - 4.,j - T-m P 16121 F-384 N"-"'-;'·d;~~¡¡·~~-':;~';;., L1442904 eCHO-DO 16 :20 A ~ usago axolU&11 dU l'I"Mi;;t6ro FRe~peWER BUDD lLP m-640-2m . FO,",1 Business COTpQr&tions Act Forma,le1 lc!8Ld1&1i aac~tb$ par ¡'¡;Iior.s . . ~frQoøð4.' ......t·"d,·~.~IIo:.lIi!:.~t f1:J~d;......;¡1t!"'Q~.J<I "~~T !llt\tI.;sCor;Ml'.r\IÞIa, le"lo,Cllla:l¡. u/;...hr""'tlU& g¡ 1,II1~1.!1y.' \.:g:) CQf\'~l¡W ¡lid - ~...-..... CE.RTIFICATE. 'TItòs ~ 10 o;orlify \n8' tnes.. .~ afe ettec1ive on wj;l'1l.t~tG Ca 16 C,qnaolt'ml,Üotl: el ~ Commerc$ CERTIFICAT Cecl cer1ìUa qUQ lilS ¡.JèSen\' statu& entreA! en V1QUfhU Ie OCTOBER 04 OCT08RE, 2000 ..............................~:~.......=..........,....,....,......,.. DhQC1Ot' Diteç,.,iC", Businc~~ C.Jtp¢ranons A':~ I ~I ·....n ~~ ~it\ts par aCfIOOS. Tran. .... Camp ....... Cooo No """ '>'P' ,_", W ŒJ W IT] W ,. .. 2S 2. 9. Nooo. $n~r. Recfd Jllr~icç,Qn m W I~ N.T f.~! C! . , I 31 >2 33 " ARTICLES OF INCORPORATION STATUTS CONSTITUTIFS 1. The ~ame of the corporat;o~ is; Denomination socia!.. de la sociéte : - 2. Tile address of the registered office is; Adree.e du siège social: 385 Queen Street (Str$Ot and No. O( k.R. No. 31'10, if /'nulli-oWce buildir,Q, give F{¢om No.) (Rue et r¡umàtO ou numéro d& tif, R.Ft at, 6;11 &';;¡gfr: d"un edifice à bLlfeal.l):. nurn8r0 du bt.Ireau) Kincardine, Ontario, Canada (Name of Mo.Ini~ipalily or Post Office) (Nom de Ia mloU1icipeij1é 0\1 fit.! bUI'CÐu de pasla) (Postal CCdo) (C¢do PC&IaQ 3. Number (or minimum and maximum numb~ri of directors is: A minimum of one (1) director and a max.imum of twenty (20) directors Nombre (ou nombr... minimal ..I maximal) d'administrateurs : 4. The first director(s) ielare: Premier(s) administrateur(s) : First n::tme. initials and sumame Prénom, tnttiale$ et nom de tamille Addres. for Service, 91v1n¡¡ Streel and No. (or R.R. No.), Municipality and Postal Code Domicile élu, y comp.sle rue el Ie numéro (ou Ie numéro de Ie R.R .), ka (10m Qe Is munic1palité .t Ie çodt postal Mark Kraemer R. R. #1 Pori Elgin, Ontario NOH 2C5 9 Overton Court Lancaster, New York 14086 William Joseph Daley Residant Canadian Støtø YéSQrNo R ésldent canadien Oui/Non Yes No OCT-20-00 16:20 F;)'11) 1 6utindU Ccr~rat¡Qr.s At! Form&.ll& 1 Lc{SLlfl$$ $$iélhp-..( in. . . &hOoGs' 4.~ ~·Jm"""..w -\I-u1~=. :¡=ft~~;. -to 1:6;'11.,..0:",46 mtri< ~ 51't<1~~ ~orÞ<Oroo!i.:In, ':'G~.IO.C""~.:a. Cooe., '~'1fI1 """ FROM-POWER BUDD LLP . .--..,-.,-..-," -"/' -,. ---...--- .,.- --................. may carry 011 or on powers the corporation may exercise: NONE 6. The classes and any maximum number 01 shares that the corporati:)n is zu1horized to issue: 416-640-2777 T-228 P.17/21 F-384 ~""""''''I'''' '" ............ ,...,........--............................... commer";"les au auX l)Ouvoirs de la soci.te ; Categories et nomora maximal, 011 y a nou, d'actions que la société eel autorisée à émettre ; The Corporation is authorized to issue an unlimited number of shares to be designated as "Common Shares". OCT-2D-DD 16:20 Form 1 Businé&8 Corporatmu¡ Ao, Formula 1 _üi au~ Ies a.ociétéspal .~ . . , SohD.xio$ ~ 1 I W~"IIt;"o.:.t~III:"'.;' I ·hf::>x.'L'~I'fI~;l!e:-ei:l\r.o1e 'I\~~, ~f SlyIN:I C:6r ~1II"n, \. ":'~"I\{:).~_d.. ¢Be.\';II'\\ ~11Ni I FROM-POWER BUDD LlP T-m P.18/21 F-384 4IS-64D-27Tr J. '~I::tII\41 t-'1.'fl....I;f......II.....~'I\"p.......,.... "'UII"t"'..........IU....tlð\1I any) attaching to aach class of shares and directors authority with respect to any ciass of shares which may be iss ued in series: ....,IUI~1 t-'llvm:=!::,ICIO, ICH:'II.II\.\.IV3 en wUI 1\.11 Ult,ll I., ~ II ].I GlII't:U, rattachës ã chaQu,) catëgorie d'actions at pouvoils des administlateurs relatifs à chaque C1ìtégorie d'actions qui peut ëtra ëmis~ an serte : Subject to the Business Corporations Act (Ontario), the rights, privileges, restrictions and conditions attaching to the Common Shares are as follows: 1. the right to one (1) vote at all meetings of shareholders of the Corporation, except meetings ¡¡t which only holders of a specified class of shares are entitled to vote; 2. subject to the prior rights and privileges attaching to any other class of shares of the Corporation, the right to receive any dividend declared by the Corporation; and 3. subject to the prior rights and privileges attaching to any' other class of shares of the Corporation. the right to receive the remaining property and assets of the Corporation upon dissolution. OCT-20-00 16:20 6. Fól'm 1 BU$int".$$ C'QrpCIr;aüO/IlS. ....\ rorn-oUb1 loiliutkr.;; soåðt6$ p;ør .". . . $GhÞa~$dI ..1 'W"JI'oe..norl\lll'fUf S.)f!DoU)f"r.Gì.1"'G1I1II~1 {.¿!Io.G'~I.kQ"I1~"Df\. ':'~'':'\IO.':~~I~I. "'::~ F~tM t 11\i!&I FROM-POWER BUDD LLP I ne Issue, trëtmilt:1 VJ UVVll!::lblll..,1"t1 ~II"I~~ is XJII!.J!1t restricted and the restrictions (if any) are as follows: 416-640-2771 T-228 P19/21 F-384 '-.;:;.llloI;o,¡tI....III'... u..."...·............... t'._,.......~.... ........-..- est~ res\feint Les restrictions, s'il y a lieu, sont les suivantes : No share or shares of the Corporation shall at any time be transferred to any person without either: a) the consent of the directors to be signified by a resolution passed by the board or by an instrument or instruments in writing signed by a majority of the directors; or . b) the consent of the shareholders of the Corporation to be signified by resolution ¡¡a$Sed by the shareholders or by an instrument or instruments in writing signed by the holders of the shares of the Corporation representing a majority ofthe votes attributable to all of the issued and outstanding shares of the Corporation, 416-640-2777 OCT-20-00 16:21 FR~POIER BUDD LLP 9. Other provISions. " any. are; Form 1 Business Corpor-..ItiOnii A<! Formt:lo 1 Loj sur Ic~ ¡o~1ó:¡ par en. . . SOItOcta:. .c.:. ~·"""p.ee.I~L't..l'au S~::;~.i""'S'.~'Dt:"de rl",~~16,*,J'C:"wtI.e.~. TCfill!~o.C:'nU.. ~1IIC.."'rm.' ~>1IN T-228 P20/2J F-384 "'Ull~~ YI¡;'I-'U~HI"""~I ..:0 111 ... "...... . The number of shareholders of the Corporation, exclusive of persons who are in its employment and exclusive of persons who, having been formerly in the employment of the Corporation, were, while in that employment. and have continued after the termination of that employment to be, shareholders of the Corporation, is limited to not more than fifty, two or more persons who are the joint registered owners of one or more shares being counted as one shareholder. 2, Any invitation to the public to subscribe for securities of the Corporation is prohibited, 1. 3. The board of directors may from time to time on behalf of the Corporation, in such amounts and on such terms as it deems expedient 4. borrow money on the credit of the Corporation; issue, reissue, sell or pledge bonds, debentures, notes or other evidences of indebtedness or guarantee of the Corporation, whether secured or unsecured; to the extent permitted by the Business Corporations Act (Ontario}. give a guarantee on behalf of the Corporation to secure performance of any present or future indebtedness, liability or obligation of any person; and mortgage, hypothecate, pledge or otherwise creale a security interest in all or any currently owned or subsequently acquired real or personal property, movable or immovable, property of the Corporation including book debts, rights, powers, franchises and undertakings, to secure any such bonds, debentures, notes or other evidences of indebtedness or guarantee or any other person or future indebtedness, liability or obliga~on of the Corporation. The board of directors may from time to time delegate to such one or more of the directors and o1Ïlcers of the Corporation as may be designated by the board, all or any of the powers conferred on the board above to such extent and in such manner as the board shall determine at the ~me of such delegation. a} b) c) d) 5. The Corporation is incorporated pursuant to Section 142(1) of the Electricity Act, 1998 (Ontario}. OCT-20-00 16:21 FROM-POWER BUDD LLP 10. The names and addrE!S'aes of the incorporators are: Porm1 au:e~1S CQf"1)oratial'La A,I Forrru.e 1 L~i$\l(lðS sc;çléW:s par en. . . &:I~"4:1 ;r\IJf~·D.;'~1o(l~l.rtU' S~D«:"51",i'tll",,1lr~df, 1...\o:oI$Iy.aU;C~r~ip Yllr{;III...~aN:iJ. ClI1:...follll\I11I1H First hiU1\t. initial$ and surname or corporate "am. Prfênom" iNtilll'" at nom ~ tilmñle 0\,1 dénomi'nation $Ocíafe Mark Kraemer William Joseph Daley These articles are signed in duplicate. 416-640-2777 T-228 P.21/21 F-384 Nom et saresse. Qas JOnt.;n:l~~ul:::¡ . FuU a~~ress for servKo, or a~t:lros. of "'91s~red offico or of principal placo of buolness, giving S"e.t & No. or R.R. No. Municipanly aM Postal Code Domicile élu, odteosa du siégo soclol QU odresse do rétabUsoement prinoipo~ Y cQmprislo rue et 10 numéroou 10 numerQ de I. R.R., 10 nom de 10 munlcipalilé el 10 cQde postal R.R, #1 Port Elgin, Ontario NOH 2C5 9 Overton Court Lancaster.. New York 14086 Lea présenla atatut. aont sígnéa en double exemplaire. SignaIlJI'8& orlncorporatOra Signatloltl!l$ des. fanóatc\H'$ - ~~ iIIiam Joseph aley e e e e SCHEDULE liD" TO BY-LAW NUMBER 2000 - 132 OF THE CORPORATION OF THE MUNICIPALITY OF KINCARDINE FORM OF SHAREHOLDER'S AGREEMENT See attached. " "'- , .': ~ - ,. '- .¡ NOTARIAL CERTIFICATE CANADA PROVINCE OF ONTARIO TO WIT ) ) ) ) ) TO ALL WHOM THESE PRESENTS MAY COME, BE SEEN OR KNOWN I, DAVID CROCKER, a Notary Public in and for the Province of Ontario, by Royal Authority duly appointed, residing in the City of Toronto, in the Province of Ontario, DO CERTIFY AND ATTEST that the paper-writing hereto . annexed is a true copy of a document produced and shown to me and purporting to be the Shareholders' Agreement dated as of October 26, 2000, the said copy having been compared by me with the said original document, an act whereof being requested I have granted under my Notarial Form and Seal of Office to serve and avail as occasion shall or may require. IN TESTIMONY WHEREOF I have hereto subscribed my name and affixed my Notarial Seal of Office at the City of Toronto, in the Province of Ontario, this 30th day of January, 200 I. .. -----...,,- " ., ,,"t' , ~ ~ . . . . SHAREHOLDERS' AGREEMENT Westario Power Holdings Inc. - and - Westario Power Services Inc. and- Westario Power Inc. \. . '. . . . ~ -,' SHAREHOLDERS' AGREEMENT TillS AGREEMENT made as of October 26, 2000 BETWEEN: ',~ The Corporation of the Township ofHuron-Kinloss (hereinafter called "Huron-Kinloss") - and- The Corporation of the Municipality of Kincardine (hereinafter called "Kincardine") - and- The Corporation of the Municipality of South Bruce (hereinafter called "South Bruce") - and- The Corporation of the Town ofSaugeen Shores (hereinafter called "Saugeen Shores") - and- The Corporation of the Town ofWingharn (hereinafter called "Wingham ") -and- The Corporation of the Municipality ofBrockton (hereinafter called "Brockton ") (Huron-Kinloss, Kincardine, South Bruce, Saugeen Shores, Wingharn and Brockton are hereinafter collectively referred to as the "Specified Municipalities") -and- The Corporation of the Town of Hanover (hereinafter called "Hanover") ". ...! ~. .' -2- - and- · 1445674 Ontario Inc. (hereinafter called "HServco") and- " Hanover Electric Services Inc. (hereinafter called "HWiresco") - and- The Town of Minto (hereinafter called "Minto") (Minto and Hanover are hereinafter collectively referred to as the . "Amalgamating Municipalities") · (The Specified Municipalities and the Amalgamating Municipalities are hereinafter collectively referred to as the "Municipalities") - and- Minto Hydro Inc. (hereinafter called "MWiresco") -and- Minto Hydro Services Inc, (hereinafter called "MServco") -and- Canadian Niagara Power Company Limited (hereinafter called "CNP") · (the Municipalities and CNP are hereinafter collectively referred to as the "Initial Shareholders") and- 1 _~ '. . . . > - 3 - 1446563 Ontario Inc (hereinafter called "CNPco ") - and- Westario Power Holdings Inc. (hereinafter called the "Corporation") -and- Westario Power Services Inc. (hereinafter called "Serveo") and- Westario Power Inc. (hereinafter called "Wireseo") WHEREAS: 1. It is intended that the authorized capital of the Corporation consist of an unlimited number of Common Shares; and 2. The Initial Shareholders desire to enter into an agreement providing for certain arrangements for the ongoing operation and control of the Corporation and the Subsidiaries and providing for certain restrictions on, and arrangements respecting, dealings with shares of the Corporation which are issued and outstanding from time to time; NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual covenants herein contained, the parties hereto agree as follows: ARTICLE 1 DEFINITIONS AND INTERPRETATION 1.1 Definitions In this Agreement, unless there is something in the subject matter or context inconsistent therewith, (a) "Act" means the Business Corporations Act (Ontario), and unless otherwise indicated, means such Act as amended and re-enacted from time to time; . -' , " (b) . -4- "Affiliate" of a particular body corporate means another body corporate which is affiliated with the particular body corporate and for such purposes one body shall be deemed to be affiliated with another body corporate if, but only if, one of them is the Subsidiary of the other or both of them are Subsidiaries of the same body corporate or each of them is Controlled by the same person, and if two bodies corporate are affiliated with the same body corporate at the same time, they are deemed to be affiliated with each other at that time; -' (c) "Accession Agreement" means an agreement in the fonn of Schedule l.l(c) hereto which has the effect of making a person (x) bound to each other person who is then bound by this Agreement by all the obligations by which the Initial Shareholders that are a Party are or would be bound and (y) subject to all the restrictions to which the Initial Shareholders that are a Party are or would be bound; (d) "Agreement" means this agreement including all schedules and exhibits to this agreement and includes any and every agreement made at any time (whether past, present or future) which amends or supplements or restates any agreement which is, or is included in, this Agreement; (e) . "Articles oflncorporation" of, or in relation to, a corporation means at any time such original or restated articles of incorporation, articles of amendment, articles of amalgamation, articles of continuance, articles of reorganization, articles of arrangement, articles of dissolution, articles of revival, letters patent, supplementary letters patent and any other instrument of a substantially similar nature to any of the foregoing, as are in effect at the time for or in relation to the corporation; (f) "Auditor" means the auditor designated pursuant to section 5.2; (g) "Business Day" means any day, other than a day that is a Saturday, a Sunday, a statutory holiday in Ontario or a day on which banks generally are not open to the public for business in the city, town or township that is the principal place of business of the Corporation; (h) "Business Plan" means the annual business plan of the Corporation approved by the Shareholders as provided herein; (i) "Businesses" has the meaning ascribed thereto in section 2.1; . G) (k) "Common Shares" means common shares in the capital of the Corporation; "Control" in relation to a body corporate means control of the body corporate and for purposes of this Agreement a person has, or two or more persons have, control of a body corporate, and a body corporate is "Control¡ed" by a person or by two or more persons, if , -' . . · (I) (m) (n) (0) (r) · (s) -5- (i) securities of the body corporate to which are attached more than fifty per cent (50%) of the votes that may be cast to elect directors of the body corporate are held, other than by way of security only, by or for the benefit of that person or by or for the benefit of those persons, and (ii) the votes attached to those securities are sufficient, if exercised, to elect a majority of the directors of the body corporat~ "Effective Date" means October 31, 2000; "GAAP" means Canadian genera11y accepted accounting principles; "Holdco" has the meaning set out in subsection (a) of Schedule 4.1; "Insolvency Event" has the meaning ascribed thereto in subsection 6(a); "Party" means a party to this Agreement including any person that becomes bound by this Agreement as provided herein; "person" means and includes any individual, corporation, body corporate, partnership, finn, joint venture, syndicate, association, trust, trustee, government, govermnentaJ agency or board or commission or authority or other fonn of entity or organization; (t) "Prime Rate" means, for and in relation to any particular day in a calendar month, the variable rate of interest, expressed as a rate per annum, equal to the rate of interest determined by the principal bank of the Corporation (hereinafter in this section referred to as the "Bank") as, or commonly known as, its prime rate of interest effective for the first day in such calendar month for Canadian dollar loans made by the Bank in Canada from time to time, being a variable per annum reference rate of interest adjusted automatically upon change by the Bank; (u) "Promissory Note" means a demand promissory note bearing interest at a rate of 7.25 per cent, calculated and payable quarterly; (v) "Related Shareholder" of a person means at any time a Shareholder that is an Affiliate of such person; · (w) "Satisfactory Closing Location" means a location whose address shall be specified in writing and which shall be the principal place of business of the Corporation or such other location as the parties hereto shall agree; (x) "Servco A" has the meaning set out in subsection (b) of Schedule 4.1; , .' ~- '. -6- (y) "Share" means a share of any class in the capital of the Corporation; . (z) "Shareholder" means at any time a person that is a party to this Agreement that is bound by this Agreement at the time and holds one or more Shares at the time or a person that becomes bound by this Agreement at any time and is bound by this Agreement at the time and holds one or more Shares at the time; ,~' (aa) "Shareholder Special Approval" means, with respect to any matter, the approval of such matter by Shareholders by (i) a resolution passed at a duly constituted meeting of the Shareholders by the favourable vote of at least fifty per cent (50%) of the Shareholders holding in the aggregate more than fifty per cent (50%) of the total number of Common Shares held by all Shareholders as at the beginning of such meeting; or (ii) one or more instruments in writing wlúch shall have been signed by at least fifty per cent (50%) of the Shareholders holding in the aggregate more than fifty per cent (50%) of the total number of Common Shares held by all Shareholders as at such time, . and any Shareholder Special Approval given by resolution as aforesaid shall become effective on the day on wlúch such resolution is duly passed and any Shareholder Special Approval given by one or more instruments in writing as aforesaid shall become effective on the effective date shown in such one or more instruments; (bb) "Share Proportion" of a Shareholder (determined in relation to one or more particular Shareholders) as at any time means, with respect to a class of shares, the number obtained when the number of shares of a given class held by the Shareholder as at such time is divided by the total number of shares of each class held by such one or more particular Shareholders as at such time; (cc) "Subsidiary" of a particular corporation (including, without limitation, a city, town, township or village) means a body corporate that is (i) Controlled by . (A) the particular corporation, (B) the particular corporation and one or more bodies corporate each of wlúch is Controlled by the particular cQrporatioD, or .' '. . (i) - 7 - (C) two or more bodies corporate each of which is Controlled by the particular corporation, or a Subsidiary of a body corporate that is a Subsidiary of the particular corporation; (dd) "Transfer By-laws" means the Transfer By-laws passed by each of the Specified Municipalities in respect of the transfer to Holdco, Servco A and/or Wiresco A by such Specified Municipality of employees, assets, liabilities, rights and obligations; (ee) "Wiresco A" has the meaning set out in subsection (c) of Schedule 4.1. 1.2 Interpretation In this Agreement, unless there is something in the subject matter or context inconsistent therewith, (a) (i) . (ii) (iii) words in the singular include the plural and such words shall be conslIued as if the plural had been used, words in the plural include the singular and such words shall be conslIued as if the singular had been used, words importing the masculine gender or the feminine gender include the feminine gender, the masculine gender and the neuter and shall be conslIued as if the corresponding word importing the feminine gender, the masculine gender or the neuter had been used, and (iv) words importing the neuter include the masculine gender and the feminine gender and shall be construed as if the corresponding word importing the masculine gender or the feminine gender had been used, where the context or a party hereto so requires, and the rest of the sentence shall be construed as if the grammatical and terminological changes thereby rendered necessary had been made; "this Agreement", "hereto", "herein", "hereby", "hereunder", "hereof' and similar expressions refer to this Agreement and not to any particular Article, section, paragraph, subparagraph, clause, subclause or other portion of this Agreement; (b) . (c) a reference to anyone or more parties to this Agreement shall be deemed to include a reference to the respective heirs, executors, administrators, legal representatives, successors and permitted assigns of each such party; . -, . . e- - 8 - (d) unless otherwise specifically provided, all references herein to dollar amounts are in Canadian funds; (e) unless otherwise specifically provided, each reference herein, which is to a time or contemplates a time refers to Ontario time; and (f) Unless otherwise provided, any term or expression defined in any Article of this Agreement (other than this Article) shall have such meaning only in such Article, 1.3 Schedules The following are the Schedules attached hereto and incorporated by reference and deemed to be a part hereof: Schedule U(c) Schedule 4.1 Schedule 7.7(a) Schedule 11.2 Accession Agreement Capitalization Determination of Fair Market Value Transferred Utilities 1.4 Unanimous Shareholder Agreement Each of the parties hereby acknowledges and agrees that this Agreement is intended to operate and be construed as a unanimous shareholder agreement with respect to the Corporation within the meaning of the Act. ARTICLE 2 BUSINESS AND PURPOSE OF THE CORPORATION 2,1 Business of the Corporation The parties acknowledge that the businesses (the "Businesses") which they intend that the Corporation and/or its Subsidiaries carry on are the following, namely: (a) the business of distributing electricity; (b) the business of holding shares in corporations that distribute electricity and/or market and sell associated products and services; and/or (c) other than retailing electricity, such other businesses as are permitted under the Energy Competition Act, 1998 and other applicable legislation. . " · · · , - 9- 2.2 Purpose of the Corporation, Servco and Wiresco The parties acknowledge and agree that the Corporation, Servco and WÎresco shall be operated with a view to profitability and maximizing shareholder value, including actively pursuing appropriate growth and merger opportunities relating to the Businesses while maintaining a commitment to respect for people, customer satisfaction, community involvement, and unrelenting commitment to safety and the environment. ARTICLE 3 COVENANTS, REPRESENTATIONS AND WARRANTIES 3.1 Representations and Warranties ofCNP CNP represents and warrants to the Municipalities as follows and acknowledges that each Municipality is relying on these representations and warranties in entering into this Agreement and the transactions contemplated hereby: (a) CNP has been duly incorporated and organized and is validly subsisting and in good standing lUlder the laws of the Province of Ontario. (b) No bankruptcy, insolvency or receivership proceedings have been instituted or are pending against CNP, (c) CNP has all necessary corporate power, authority and capacity to enter into this Agreement and to perfonn its obligations herelUlder; the execution and delivery of this Agreement has been duly authorized by all necessary corporate action on the partofCNP. (d) CNP is not a party to, bOlUld or affected by or subject to any indenture, mortgage, lease, agreement, instrument, statute, regulation, arbitration award, charter or bylaw provision, order or judgment which would be violated, contravened, breached by, or lUlder which any default would occur as a result of the execution and delivery of this Agreement or the consummation of any of the transactions contemplated lUlder this Agreement. (e) This Agreement constitutes valid and binding obligations of CNP enforceable against it in accordance with its terms, provided that enforcement may be limited by bankruptcy, insolvency, liquidation, reorganization, reconstruction and other similar laws generally affecting enforceability of creditor's rights and that equitable remedies such as specific perfonnance and injlUlction are in the discretion of the court from which they are sought. .. · · · , - 10- 3.2 Representations and Warranties of the Municipalities Each Municipality represents and warrants to each other Municipality and to CNP as follows and aclmowledges that each such other Municipality and CNP is relying on these representations and warranties in entering into this Agreement and the transactions contemplated hereby: (a) The Municipality is a municipal corporation validly subsisting and m good standing under the laws of the Province of Ontario. (b) No bankruptcy, insolvency, receivership or similar proceedings have been instituted or are pending against the Municipality. (c) The Municipality has all necessary corporate power, authority and capacity to enter into this Agreement and to perform its obligations hereunder; the execution and delivery of this Agreement has been duly authorized by all necessary corporate action on the part of the Municipality. (d) The Municipality is not a party to, bound or affected by or subject to any indenture, mortgage, lease, agreement, instrument, statute, regulation, arbitration award, charter or bylaw provision, order or judgment which would be violated, contravened, breached by, or under which any default would occur as a result of the execution and delivery of this Agreement or the consummation of any of the transactions contemplated under this Agreement. (e) This Agreement constitutes valid and binding obligations of the Municipality enforceable against it in accordance with its terms, provided that enforcement may be limited by bankruptcy, insolvency, liquidation, reorganization, reconstruction and other similar laws generally affecting enforceability of creditor's rights and that equitable remedies such as specific performance and injunction are in the discretion of the court from which they are sought. (f) Each Specified Municipality will transfer to Holdco, Servco and/or Wiresco all the electricity assets that are necessary to carry out the electricity distribution business of that Municipality as it was carried out by that Municipality prior to the transfer of such assets by that Municipality to Holdco, Servco and/or Wiresco. ü:) In the case of Hanover, it further represents and warrants as follows: (i) Hanover has duly incorporated HWiresco under the Act pursuant to section 142(1) of the Electricity Act, 1998; (ii) Hanover has duly incorporated HServco under the Act; ~~ .. - 11 - . (iii) HWiresco and HServco collectively are and on the Effective Date will be the absolute beneficial owners of, with good and marketable title to all the electricity assets that are necessary to carry out the electricity distribution business of Hanover as it was carried out prior to the transfer of such assets to HWiresco and HServco; (iv) Hanover holds all of the issued and outstanding shares in the capital of HWiresco and HServco; ~' (v) As of October 31, 2000, Hanover holds a Promissory Note issued to it by HWiresco having a principal amount equal to 50% of the net book value of the assets ofHWiresco; (vi) HWiresco and HServco are each corporations validly subsisting and in good standing under the laws of the Province of Ontario; (vii) No bankruptcy, insolvency, receivership or similar proceedings have been instituted or are pending against HWiresco or HServco; and . (viii) Neither HWiresco nor HServco are party to, bound or affected by or subject to any indenture, mortgage, lease, agreement, instrument, statute, regulation, arbitration award, charter or bylaw provision, order or judgment which would be violated, contravened, breached by, or under which any default would occur as a result of the execution and delivery of this Agreement or the consummation of any of the transactions contemplated under this Agreement. (h) In the case of Minto, it further represents and warrants as follows: (i) Minto has duly incorporated each of MWiresco and MServco under the Act pursuant to section 142(1) of the Electricity Act, 1998; (ii) MWiresco and MServco collectively are and on the Effective Date will be the absolute beneficial owners of, with good and marketable title to all the electricity assets that are necessary to carry out the electricity distribution business of Minto as it was carried out prior to the transfer of such assets to MWiresco and MServco; . (iii) Minto holds all of the issued and outstanding shares in the capital of each ofMWiresco and MServco: (iv) Minto holds a Promissory Note issued to it by MWiresco having a principal amount equal to 50% of the net 1;>ook value of the assets of MWiresco; .~ ... (v) . (vi) (vii) - 12- Each ofMWiresco and MServco is a corporation validly subsisting and in good standing under the laws of the Province of Ontario; No bankruptcy, insolvency, receivership or similar proceedings have been instituted or are pending against MWiresco or MServco; and Neither MWiresco nor MServco is a party. to, bound or affected by or subject to any indenture, mortgage, lease, agreement, instrument, statute, regulation, arbitration award, charter or bylaw provision, order or judgment which would be violated, contravened, breached by, or under which any default would occur as a result of the execution and delivery of this Agreement or the consummation of any of the transactions contemplated under this Agreement. ARTICLE 4 CAPITALIZATION 4.1 Capitalization . The Corporation, Servco and Wiresco shall be capitalized in accordance with the provisions of Schedule 4.1. 4.2 Credit Facilities Each Shareholder shall use reasonable efforts subject to applicable laws to facilitate the establishment by the Corporation of such credit facilities with ann's length financial institutions as the directors of the Corporation from time to time determine to be necessary or desirable for the conduct of the business of the Corporation or any Subsidiary of the Corporation. 4.3 Ongoing Financing Subject to any restrictions on Shareholders contained in applicable laws, if at any time the directors of the Corporation determine that (a) the Corporation requires an amount of money to enable the Corporation in the following six (6) months . (i) to carry on its business as contemplated in the then current budget approved by the board of directors of the Corporation, or (ii) to pay its liabilities as they become due, and " . . . '~ -13 - (b) the amount required by the Corporation exceeds the funds and credit available to the Corporation from its usual external sources of financing (the amount of the excess being hereinafter referred to as the "Required Amount"), and (c) the Shareholders be requested by the Corporation to provide the Required Amount to the Corporation, and the Corporation gives to all Shareholders a written notice ..wherein each Shareholder is requested to advance to the Corporation, by way of a loan with a term of one year bearing interest at the Prime Rate plus one per cent (1%) both before and after default calculated monthly, an amowlt equal to the amount obtained when the Required Amount is multiplied by the Share Proportion of the Shareholder with respect to the Common Shares, then within thirty (30) days after receiving such notice, each Shareholder shall advance to the Corporation, by way of an interest bearing loan, the amount that it is requested to advance as determined in accordance with the notice, Allor any portion of an amount that is to be advanced by a Shareholder may be advanced by a Related Shareholder of such Shareholder. If, within thirty (30) days after receiving such notice, all or any portion of the amount to be advanced by a Shareholder (a "Defaulting Shareholder") has not been advanced in accordance with this section, then, at any time before the Defaulting Shareholder advances such amount, the amount which has not been advanced by or in respect of the Defaulting Shareholder may be advanced by anyone or more other Shareholders (any such Shareholder that advances an amount in respect of the Defaulting Shareholder being referred to as a "Supporting Shareholder"). An amount advanced by a Supporting Shareholder in respect of a Defaulting Shareholder shall be a loan of such amount from the Supporting Shareholder to the Defaulting Shareholder which shall bear interest at the Prime Rate plus four per cent (4%) per annum calculated and payable monthly and the principal amount advanced shall be payable on demand. The Defaulting Shareholder shall, at the time the Supporting Shareholder makes an advance in respect of a Defaulting Shareholder, pledge in favour of the Supporting Shareholder the number of its Shares whose book value is equal to the amounts advanced by the Supporting Shareholder in respect of the Defaulting Shareholder. The Supporting Shareholder may, without advance notice to the Defaulting Shareholder, enforce on such security if the Defaulting Shareholder is in default of its obligation to the Supporting Shareholder. In the event the Supporting Shareholder enforces on such security. the shares pledged shall be valued at book value. Following a pledge of shares as contemplated herein, the Defaulting Shareholder shall retain the right to vote, to receive dividends, and the right to receive distributions upon dissolution of the Corporation and all other rights of a Shareholder as provided herein with respect to the pledged Shares. Each Shareholder hereby agrees that if any amount becomes payable by the Corporation to it at any time when it owes any amount in respect of one or more loans from Supporting Shareholders made pursuant to this section, then to the extent of the amounts owing in respect of such loans, the Corporation shall pay to such Supporting Shareholders the amount payable to the Defaulting Shareholder and each Shareholder hereby irrevocably authorizes and directs the Corporation to do so. ~ '. - 14- · ARTICLE S OPERATION AND CONTROL OF THE CORPORATION AND SUBSIDIARIES S.1 Operation and Control The parties hereto shall cause such meetings of directors and shareholders of the Corporation to be held, votes to be cast, resolutions to be passed, by-laws to be passed, documents to be executed and all things and acts to be done to ensure the following continuing arrangements with respect to the operation and control of the Corporation: (1) The initial directors of the Corporation shall be: · Stuart Reavie Robert Jameson Mark Kraemer Ralph Kreutzwiser Bruce Machan William Roseborough Audrey Webb William Daley The board of directors of the Corporation shall be composed of a number of members equal to the number of Shareholders holding Common Shares. Each Shareholder shall be entitled, from time to time, by notice to the Corporation and the other Shareholders, to designate a nominee for election or appointment to the board of directors of the Corporation. The Shareholders shall endeavor to ensure that the composition of the board of directors reflects expertise in the areas of the electricity industry, local business and industry, government, human resource management, the environment, and/or finance. The Corporation and the Shareholders shall act diligently and promptly to take such actions as are necessary in order that, at any time, the board of directors of the Corporation includes the then latest nominee designated by one Shareholder in accordance with this paragraph for election or appointment to the board of directors of the Corporation except for any such nominee as is not ready, willing or able to serve as a director of the Corporation. Each Shareholder shall appoint its permanent nominee director by March 3 I, 2001. (2) A quorum for a meeting of the directors of the Corporation shall be comprised of a majority of the directorsofthe Corporation. · (3) Except as otherwise provided herein, any resolution of the directors of the Corporation shall only be validly passed and effective if at a duly constituted meeting of the directors of the Corporation such resolution receives the affinnative vote of at least a majority of the directors participating in the meeting. <, . . . , -15 - (4 ) No person shall have a second or casting vote in any circumstances at any meeting of the directors of the Corporation or at any meeting of the Shareholders of the Corporation, (5) All written contracts made, and all cheques and negotiable instruments made or issued, by the Corporation shall be signed by such one or more directors or officers of the Corporation as are iÏ'om time to time designated or authorized to do so by the by-laws of the Corporation or by a resolution duly passed by the directors of the Corporation (6) Each of the following shall require Shareholder Special Approval: (a) any change in the number of directors of the Corporation; (b) the Corporation entering into an undertaking inconsistent with the operations of the Corporation contemplated in section 2,1 including, without limitation, retailing electricity; (c) any borrowing on the credit of the Corporation if the debt incurred would exceed by more than twenty-five per cent (25%) the debt provided in the Business Plan for the applicable fiscal year; (d) the issuance, sale or pledge of any debt obligations of the Corporation if such debt obligations would exceed by more than twenty-five per cent (25%) the debt provided in the Business Plan for the applicable fiscal year; (e) the charge, mortgage, hypothecation, pledge or encumbrance of any currently owned or subsequently acquired real or personal, movable or immovable, property of the Corporation, including book debts, rights, powers, franchises and undertaking, to secure any debt obligations or any money borrowed, or other debt or liability of the Corporation if the debt incurred would by more than twenty-five per cent (25%) the debt provided in the Business Plan for the applicable fiscal year; (f) the sale, lease, exchange or other disposal of any property of the Corporation in excess of one hundred thousand dollars ($100,000.00), other than in the ordinary course of the business of the Corporation, as provided for in the Business Plan for the applicable fiscal year, or where such disposal is in respect of assets that are obsolete or otherwise not required for operations of the Corporation; (g) any amendment of the Articles of Incorporation of the Corporation; (h) any continuation of the Corporation under the laws of another jurisdiction; . . . , - 16 - (i) the creation of any Subsidiaries by the Corporation or the acquisition by the Corporation of any shares or securities of any other corporation, unless for the purpose of short-tenn investments of surplus funds; the creation or issuance of any shares, or any rights to acquire shares of the Corporation; (j) (k) the taking of any proceedings with a view to.tþe dissolution, winding-up, or termination of the corporate existence of the Corporation; (1) the establishment or change of any dividend policy or other policy with respect to the distribution of surplus and the declaration or payment of any dividend or other distribution on any class of shares; (m) the making of agreements with any of the Shareholders not in the ordinary course of business; (n) the acquisition of all or substantially all of the assets of any other corporation or business entity or the entering into of any amalgamation, merger, partnership or joint venture, or other combination with any other corporation or business entity by the Corporation not in the ordinary course of business of the Corporation; (0) any purchase of Shares by the Corporation except as may be provided for herein and any redemption of Shares by the Corporation unless the same are required to be redeemed in accordance with the Articles of Incorporation of the Corporation and are being so redeemed; (P) any change in the auditors of the Corporation; (q) any commitment to make anyone or more capital expenditure(s) that would cause total capital expenditures in a fiscal year to exceed by more than twenty-five per cent (25%) the total capital expenditure amount provided for in the Business Plan for the applicable fiscal year; and (r) any advance or loan by the Corporation to any person who is an officer, director or employee of the Corporation, (7) December 31st in each calendar year shall be the end of a financial year of the Corporation and shall also be the end of a taxation year for which an applicable return shall be filed pursuant to the relevant taxation legislation. (8) Each of the directors and officers of the Corporation shall be reimbursed by the Corporation for reasonable out-of-pocket expenses incurred in çonnection with his or her participation in any meetings of the directors of the Corporation or his or her serving as a director of " . . . , -17 - the Corporation, Remuneration in respect of the initial interim board of directors shall be determined by the Shareholders. (9) Meetings of the board of directors of the Corporation may be called by any director of the Corporation and shall be held in a location detennined by the directors trom time to time, and at least one meeting of the directors of the Corporation shall be held in 2000. (10) If all the directors of the Corporation present at or participating in the meeting of the board of directors of the Corporation consent, a meeting of the board of directors of the Corporation may be held by means of such telephone, electronic or other communication facilities as permit all persons participating in the meeting to conununicate with each other simultaneously and instantaneously, and a director participating in such a meeting by such means is deemed for the purposes of this Agreement and the Act to be present at that meeting. (11) Meetings of the shareholders of the Corporation may be called by any director of the Corporation and shall be held in such location as detennined by the Shareholders from time to time. (12) The holders ofa majority of the Shares entitled to vote at a meeting of Shareholders, whether present in person or represented by proxy, constitute a quorum. 5.2 Auditor The auditor of the Corporation shall be the auditor selected by the Shareholders from time to time as provided herein. 5.3 Books of Account Proper books of account shall be kept by the Corporation and en1ries shall be made therein of all such matters, tenns, transactions and things as are usually written, recorded or entered in books of account kept by corporations engaged in an enterprise of a similar nature. The books of account for the Corporation shall be kept at the principal place of business of the Corporation. Each Shareholder shall have free access at all times during normal business hours to inspect, examine, copy and use the facilities of the Corporation to make copies of or take extracts from the books of account for the Corporation. 5.4 Budgets and Business Plans (1) In the case of the initial budget and Business Plan and for each and every subsequent financial year of the Corporation, the Corporation shall prepare a budget showing, among other things, in a reasonable degree of detail the anticipated revenues, expenditures and cash flow of the Corporation for such financial year of the Corporation and a Business Plan. The budget and Business Plan for any particular financial year of the Corporation shall be prepared and delivered to each Shareholder, " . . . ~ , - 18 - (a) in the case of the first budget and Business Plan, by November 1,2000, and (b) in the case of any other financial year commencing with the financial year 2001- 2002, at least sixty (60) days prior to the beginning of such financial year in the case of the budget and at least sixty (60) days prior to the beginning of such financial year in the case of the Business Plan. In the management and operation of the business, each Shareholder shall, and shall cause its nominee director to endeavour to the extent it is reasonable to do so, adhere to the final budget for a financial year and not exceed expenditures provided for therein, (2) A:n.y transfer, sale, exchange, encumbrance or pledge (an "Assignment"), directly or indirectly, of any Promissory Note held by a Municipality or CNP or any Affiliate thereof, is prohibited except in accordance with this Agreement or where such Assignment is included in the Business Plan in respect of the financial year in which such Assignment is proposed following submission by the party wishing to make such Assignment to the board of directors of the Corporation at least ninety (90) days prior to the beginning of such financial year. 5.5 Periodic Financial Statements For each quarter that commences after the last day of October, 2000 the Corporation shall prepare a financial statement which shall include statements of income, retained earnings and changes in financial position for the quarter and a balance sheet as at the end of the quarter and such statement shall be prepared in accordance with GAAP, but need not reflect accruals and adjustments ordinarily made only as at the end of a financial year. The financial statement prepared for such quarter shall be delivered to each Shareholder within forty-five (45) days following the end of such quarter. 5.6 Application of Sections 5.1 to 5.5 to Subsidiaries Unless the Shareholders otherwise agree in writing and except as provided herein, the provisions of sections 5.1 to 5,5, inclusive, shall apply to each and every Subsidiary of the Corporation; provided that in applying the provisions of such sections to any particular Subsidiary all references to the Corporation in such sections shall be read as a reference to the particular Subsidiary. 5.7 Dividends Unless otherwise agreed by the Shareholders in writing, the board of directors of the corporation shall declare and the Corporation shall pay, subject to applicable law and subject to any restrictions imposed upon the payment of dividends by lenders or other third parties, on or about the last day of the third month following the end of each fiscal year, if at such time the Corporation has net income arising from the immediately preceding fiscal year and has retained earnings as at the end of such fiscal year, as shown on the financial statements of the Corporation for such fiscal " . . . - 19 - year, out of the monies of the Corporation available for payment of dividends, cash dividends on the Common Shares equal in the aggregate to the consolidatèd after-tax net profit of the Corporation for such preceding fiscal year, less any reasonable reserves determined by the board of directors of the Corporation to be required for working capital or required to meet any obligations of the Corporation. 5.8 Restriction of Powers of Directors ,.- Pursuant to subsection 108(2) of the Act, the discretion and powers of the directors of the Corporation, ServcQ and Wiresco to manage and supervise the management of the business and affairs of the Corporation, Servco and Wiresco, respectively, are hereby restricted to the extent of the provisions of subsection 5.1(6). 5.9 Agreement Binds Corporation and Subsidiaries Each of the Corporation, Servco and Wiresco, by its execution hereof, acknowledges that it has actual notice of the terms of this Agreement, consents hereto and hereby covenants with each of the Shareholders that it will at all times during the term hereof: (i) give or cause to be given such notices, execute or cause to be executed such deeds, transfers and documents as may from time to time be necessary or conducive to the carrying out of the terms and intent hereof; (ii) do or cause to be done all such acts, matters and things as may from time to time be necessary or conducive to the carrying out of the terms and intent hereof; and (iii) take no action which would constitute a contravention of any of the terms and provisions thereof. ARTICLE 6 SERVCD AND WlRESCO 6.1 Subsidiaries (a) On or before the Effective Date, the Specified Shareholders agree to incorporate and organize Servco A and Wiresco A (b) Wiresco shall carty on the business of the distribution of electricity and Servco shall carry on the business of marketing and selling associated products and services, 6.2 Directors (a) The initial directors of Servco shall be: Stuart Reavie Robert Jameson Mark Kraemer Ralph Kreutzwiser " . . - 20- Bruce Machan William Roseborough Audrey Webb William Daley (b) The initial directors ofWiresco shall be: William Daley Mark Kraemer ~. (c) the board of directors of each of Servco and Wiresco shall be composed of such number of directors as the Shareholders shall determine from time to time. 6.3 Ownership of Shares All of the issued and outstanding shares in the capital of Servco and Wiresco shall be owned beneficially and held of record by the Corporation, ARTICLE 7 TRANSFER AND DISPOSITION OF SHARES 7.1 Restriction on Transfer No Shares of the Corporation or any interest therein shall be sold, exchanged, transferred, disposed of, encumbered, pledged, mortgaged, hypothecated and/or given, directly or indirectly, and no agreement or commitment shall be made to do any of the same except in each case with approval of all of the Shareholders or pursuant to the applicable provisions of this Agreement and any attempt to do so without such consent or not pursuant to such provisions shall be void and, because the parties hereto acknowledge the inadequacy of money damages in such circumstances, shall be subject to specific performance and injunctive relief at the instance of the other parties hereto. 7.2 Shareholder Consent The Shareholders shall vote the Shares owned by them to approve as required by the Articles of Incorporation any transfer of Shares permitted or required pursuant to this Agreement. . 7.3 Transfers to Affiliates Notwithstanding section 7.1 all or, with the consent of the board expressed by resolution, part of the Shares of a Shareholder may be transferred to an Affiliate of such Shareholder and Article 7 shall apply, mutatis mutandis, to such transfer. '. . . . '. - 21 - 7.4 Right of First Refusal Subject to the provisions of sections 7.6, 7.7 and 7.8, if any Shareholder (hereinafter in this section 7.4 called the "Offeror") desires to sell (other than pursuant to section 7.3) all but not less than all of the Common Shares owned by it and any Affiliate, the Offeror shall give notice (hereinafter in this section 7.4 called the "Selling Notice") to the other holders of Shares (hereinafter in this section 7.4 called collectively the "Offerees" and individually an "Offeree") of its intention to do so. Such Selling Notice shall set forth the number and class of the Shares (hereinafter in this section 7.4 called the "Offered Shares") which the Offeror wishes to sell, the price per share at which the Offeror is prepared to sell the Offered Shares and any other tenus and conditions, provided that such must not be contrary to the provisions of Article 7 of this Agreement, and the proposed date of sale (hereafter called the "Sale Date"), which shall not be less than thirty (30) days nor more than sixty (60) days after the date on which the Selling Notice is given to the Offerees. In such event, unless all the Shareholders otherwise agree, the following provisions of this section 7.4 shall govern such purchase and sale: (a) the Selling Notice shall be deemed to be an offer, irrevocable within the time hereinafter specified for acceptance, by the Offeror to sell the Offered Shares to the Offerees; (b) within thirty (30) days after receipt of the Selling Notice, each Offeree may give to the Offeror a notice of acceptance which shall set forth the number of Offered Shares which such Offeree is willing to purchase from the Offeror; (c) if the Offerees accepting the offer collectively are prepared to purchase all the Offered Shares, then they shall be entitled to purchase the Offered Shares as nearly as may be in proportion to the number of Common Shares of the Corporation then held by them respectively, provided that, if any such Offeree claims less than its respective proportion, the difference in unclaimed Offered Shares shall be used to satisfY the claims of those who claim in excess of their proportions and if the claims in excess are more than sufficient to exhaust such unclaimed Offered Shares, the unclaimed Offered Shares shall be divided pro rata among the Offerees desiring to purchase excess shares in proportion to their holdings of Shares of the Corporation immediately prior to the delivery of the Selling Notice, but no Offeree shall be bound to purchase any Offered Shares in excess of the number which it agreed to purchase in its notice of acceptance; (d) if none of the Offerees accepts the offer or the Offerees accepting the offer collectively are not prepared to purchase all of the Offered Shares, then the Offeror may sell all of the Offered Shares to any other person within sixty (60) days after the Sale Date at a price per security not less than and on terms and conditions not more favourable to such person than the price per security and the tenns and conditions set forth in the Selling Notice. ,In the event that the Offeror does not sell the Offered Shares to such person within such sixty (60) day period, . . . , , - 22- then the provisions of this Agreement shall once again apply and so on from time to time; . (e) if the Offeror has received a bona fide offer from a third party to purchase the Offered Shares prior to the date of the Selling Notice which he wishes to accept, then a copy of such offer shall be sent to each Offeree with the Selling Notice and the terms and conditions of sale set forth in the Selling Notice shall be the same as those set forth in such offer, and the Sale Date propOliled shall not be less than thirty (30) days nor more than sixty (60) days after the date on which the Selling Notice is given to each Offeree. By delivering a Selling Notice, the Offeror represents and warrants to each other Offeree that there is no direct or indirect supplementary consideration (whether or not in the nature of tangible or intangible assets, money, property, securities or other benefits) to be received by the third party or any other person in connection with such offer and that such offer is not made as part of or in connection with any other transaction; (f) if the Offered Shares shall not be capable, without division into fractions, of being offered to or being divided among such Offerees in the proportions above mentioned, the same shall be offered to or divided among such Offerees as nearly as may be in the proportions hereinbefore mentioned and any balance shall be offered to or divided among such Offerees or some of them in such manner as may be determined by the board of directors of the Corporation; 7.5 Piggyback Rights Where, after compliance with the provisions of section 7.4, any group of Shareholders desires and is entitled to sell to a third party all but not less than all of the Common Shares held by them and each of their Affiliates and such group holds in the aggregate more than fifty percent (50%) of the Common Shares, then any such sale, notwithstanding the provisions of section 7.4, shall be pennitted only if such third party makes an offer in writing irrevocable for forty-five (45) days to all other Shareholders holding Common Shares to purchase such Common Shares held by such Shareholders or their Affiliates at the same price and upon the same tenns and conditions. 7.6 Draw Along If, (i) an offer is made by a third party to purchase all outstanding Common Shares held by Shareholders holding more than eighty percent (80%) of the outstanding Common Shares; or (ii) an amalgamation, merger, plan of arrangement, or other reorganization of the Corporation, Jor greater certainty, excluding a municipal amalgamation or other restructuring, is proposed by a third party or an offer is made by a third party to purchase all or substantially all of the assets of the Corporation (collectively a "Reorganization"), all Shareholders are required to sell their Common Shares to the Offeror or approve such Reorganization, as the case may be, ifsuch sale or Reorganization is approved by the holders of more than eighty percent (80%) of the . . . , . - 23- outstanding Common Shares. 7.7 Insolvency of Shareholder (a) If any Shareholder makes an assignment for the benefit of creditors or a proposal under the Bankruptcy and Insolvency Act (Canada) or a similar filing or proposal under any other bankruptcy or insolvency legislation or is declared bankrupt or becomes insolvent, or any trustee, receiver, receiver and manager, liquidator or other officer with similar powers is appointed for such member or for all or any material part of his property (such member being hereinafter referred to as the "Insolvent Shareholder" and any such assignment, proposal, filing, declaration or insolvency or the appointment of any trustee, receiver or receiver and manager, liquidator or other officer with similar powers being hereinafter referred to as an "Insolvency Event"), the other Shareholders (the "Solvent Shareholders") shall be deemed to be entitled, effective immediately prior to the Insolvency Event, to purchase all but not less than all of the Common Shares held by the Insolvent Shareholder for a cash purchase price equal to the Fair Market Value of the Common Shares as determined in accordance with Schedule 7.7(a). Solvent Shareholders shall have ninety (90) days from the date of the final detennination of Fair Market Value of the Common Shares pursuant to Schedule 7.7(a) to deliver to the Insolvent Shareholder (with a copy to the Corporation) a notice in writing setting out therein their respective intentions to purchase, effective immediately prior to the Insolvency Event, all but not less than all of the Common Shares owned by the Insolvent Shareholders pro rata, based on their respective holdings of Common Shares, (b) If the said Common Shares shall not be capable, without division into ftactions, of being divided among such Solvent Shareholders in the proportions above mentioned, the same shall be divided among such Solvent Shareholders as nearly as may be in the proportions hereinbefore mentioned and any balance shall be divided among such Solvent Shareholders or some of them in such manner as may be determined by the board of directors of the Corporation. (c) Subject to the provisions of the Act, if within ninety (90) days of the final determination of the Fair Marlcet Value of the Common Shares pursuant to Schedule 7.7(a) a notice in writing shall not have been given to the Insolvent Shareholder (with a copy to the Corporation) by all or any of the Solvent Shareholders setting out therein the intention of such Solvent Shareholder or Shareholders to purchase, effective immediately prior to the Insolvency Event, all of the Common Shares owned by the Insolvent Shareholder, then the Corporation shall have the right to redeem and repurchase such portion of the Common Shares as shall not be the subject of a purchase and sale transaction with the Solvent Shareholder, effective immediately prior to the Insolvency Event, for a cash price equal to the value of the Common Shares as calculated by reference to the shareholders' equity of the . . . . . -24- Corporation as shown on the Corporation's most recent financial statements prior to the Insolvency Event prepared in accordance with this Agreement. (d) Any transaction of purchase and sale pursuant to this section 7.7 shall be completed in accordance with the provisions of Article 7 hereof but with effect and deemed completion as of the time immediately prior to the occurrence of an Insolvency Event. .. ARTICLE 8 GENERAL SALE PROVISIONS 8.1 Sale Provisions Each Shareholder who hereafter sells any Shares pursuant to the proVISIOns of this Agreement (such Shareholder being herein sometimes in this Article 8 called the "Seller") shall hereby be deemed to warrant to each other Shareholder or other person who purchases such Shares (such Purchasing Shareholder or other person being herein sometimes called the "Buyer") that, at the time of Closing of the transaction of purchase and sale in question, (a) the Seller shall have good and marketable title to such Shares, and (b) the Buyer will acquire such Shares ftee of any encwnbrance of any kind, and in addition the Seller shall hereby be deemed to agree to indemnify and save the Buyer harmless against any loss suffered by the Buyer as a result of there being any encwnbrance upon or any defect in the title of the Seller to such Shares. 8.2 Closing Each purchase and sale of Shares between Shareholders pursuant to this Agreement shall, unless otherwise expressly provided herein, be closed at the offices of the solicitors of the Corporation at 10:00 a.m. on the fifteenth (15~ day after the date of the last notice given (or deemed to be given) by the Buyer or the Seller, as the case may be, pursuant to the applicable sections of this Agreement or at such other time and/or on such other day as may be agreed upon by the Seller and the Buyer. 8.3 Conditions and Closing At the time of closing of any purchase of Shares of the Corporation as set forth in section 8.2, the Seller shall table: (a) in the case of a sale of Shares by a person which is not a natural person, such authorizing resolutions, orders and other instruments as the solicitors for the Buyer and Seller shall reasonably consider necessary to effect and evidence a valid transfer of such Shares; and (b) evidence of the consént of the Shareholders to the purçhase of Shares in question if such consent is required by this Agreement, ;, . . . '. - 25 - and each Buyer shall pay for such Shares by bank draft or certified cheque. If the Seller fails to comply with the requirements set out in this section, the Buyer shall, in addition to its other rights, including its right to specific performance, be entitled to rescind and shall have an action for damages. 8.4 Indebtedness of Seller to Corporation If, on the date of closing of any sale and purchase of Shares of the Corporation, the Seller is indebted to the Corporation in an amount recorded on the books of the Corporation and verified by the auditor of the Corporation, then unless otherwise agreed in writing between the Corporation and the Seller, each Buyer shall pay the purchase price payable therefor by him to the Corporation's solicitors, in trust, by tabling and delivering to the Corporation's solicitors, in trust, at the time of closing of such purchase and sale, the purchase price for such Shares. The Corporation's solicitor is hereby authorized by the Seller to apply the total purchase price proceeds to repayment of the indebtedness of the Seller to the Corporation. If such proceeds exceed such indebtedness, the Corporation's solicitors are hereby authorized by the Buyer to pay the excess over to the Seller at the time of closing of such purchase and sale. In the event that the Seller sells all of the Shares of the Corporation owned by him and the indebtedness of the Seller to the Corporation exceeds the proceeds of such sale, then the Seller shall at the time of closing of such purchase and sale pay the balance of such indebtedness to the Corporation to retire such indebtedness. 8.5 Indebtedness of Corporation to Seller If, on the date of closing of any sale and purchase of Shares of the Corporation, the Corporation is indebted to the Seller all of whose Shares are purchased by other Shareholders or other persons pursuant to Article 6, or if such Seller is the guarantor of any indebtedness of the Corporation, the Buyer or Buyers shall, at the time of closing, purchase such indebtedness at its face value or assume such guarantee in either case pro rata in accordance with the number of Shares purchased by it or them. 8.6 Agreement Binding on Transferees No Shares of the Corporation sha1l be effectively issued, sold, assigned, transferred, disposed of or conveyed, whether pursuant to any provision of Article 7 or otherwise, by the Corporation or a Shareholder to any person other than a Shareholder, until the proposed transferee or purchaser executes and delivers to the parties hereto an agreement to the same effect as this Agreement and any further agreement with respect to the Corporation to which the Shareholders are then, or are then required to be, a party, and unless the proposed transferee or purchaser, on becoming a party to this Agreement, would be in compliance with the provisions of this Agreement. Upon the proposed transferee or purchaser so doing, such agreements shall enure to them as if all had executed and delivered the same agreements, ~'< . . . '. - 26- 8.7 Continuing Obligations AI1y Shareholder who sells to a person, other than an Affiliate of the Shareholder, all of the Shares of the COIporation owned by it in accordance with the terms of this Agreement shall thereafter be released and discharged from the further performance of all of its covenants and obligations hereunder from and after the date of such sale and compliance by the transferee with section 8.6 except for any obligations under this Article 8 and any other obligations under this Agreement which expressly or impliedly are to survive any such sale. 8.8 Power of Attorney Each Shareholder hereby irrevocably nominates, constitutes and appoints the Corporation (the "Attorney''), its attorney and agent to act for, in the name of and on behalf of such Shareholder to do all acts and things and sign all documents which are necessary or desirable to complete the sale or pledge of any Shares by such Shareholder as provided herein or to perfonn, satisfY or discharge any obligations in relation to the sale of or pledge of any Shares by such Shareholder, and without limiting the foregoing, such Shareholder acknowledges and agrees that the Attorney is hereby granted authority to receive and accept delivery of and keep possession of, and to execute and deliver, in the name and on behalf of such Shareholder all such certificates, instruments and documents as may be necessary or desirable, in the opinion of the Attorney, to complete any sale or pledge of shares or to perfonn, satisfY or discharge any obligations in relation to a sale. Each Shareholder hereby acknowledges and agrees that the appointment hereby made and the powers hereby granted are coupled with an interest and are and shall be irrevocable and to the extent pennitted by applicable law shall survive the dissolution of, and the death or incapacity of, and the insolvency or bankruptcy of, anyone or more Shareholders and may be exercised by the Attorney in its own name or in the name of such Shareholder and shall survive any assignment or purported assignment of Shares by anyone or more Shareholders and to the extent pennitted by applicable law shall be binding on the respective heirs, executors, administrators, personal representatives, successors and pennitted assigns of such Shareholder. Each Shareholder hereby ratifies and confinns and agrees to ratifY and confirm in writing all that the attorney may lawfully do or cause to be done by virtue of the appointment made, and the power of attorney granted, by such Shareholder in this section, 8.9 Change in Control AI1y change in Control of a Shareholder or the holding body corporate (as defined in the Act) of a Shareholder shall be deemed to be a transfer by the Shareholder of Shares held by such Shareholder to the person acquiring such Control. . " . 9.1 '< - 27- ARTICLE 9 PRE-EMPTIVE RIGHT Pre-Emptive Right . Subject to subsection 5.1(6), if the Corporation wishes at any time hereafter to issue any Shares, such issue shall be approved by Shareholder Special Approval and the Corporation shall first offer them for purchase by the Shareholders by written notice gi.ven to each such Shareholder. Such notice shall be given within ten (10) days following approval by the board of directors of a proposal to issue Shares and shall set forth a description of the Shares to be offered, the proposed purchase price and the purchase date which shall be a date not earlier than thirty (30) days after the date of such notice. Upon receipt of such notice, each such Shareholder shall have the right to subscribe for and purchase at least a number of such Shares determined by multiplying the total number of Common Shares offered by a fraction the numerator of which shall be the number of Common Shares owned by such Shareholder at the date of such notice and the denominator of which shall be the total number of Common Shares outstanding as at the date of such notice. Such right shall be exercised by the Shareholder by giving notice of acceptance to the Corporation within ten (10) days after the receipt of the notice from the Corporation, which notice of acceptance shall set forth the number of Shares which such Shareholder is willing to purchase. In the event that the Shareholder does exercise such right, it shall subscribe, purchase and pay for such Shares on the purchase date set forth in the notice of the Corporation. If all the Shareholders do not subscribe for their respective proportions, the unsubscribed Shares shall be used to satisfy the subscriptions of Shareholders who subscribed for Shares in excess of their proportion and, if the subscriptions in excess are more than sufficient to exhaust such unsubscribed Shares, the unsubscribed Shares shall be divided pro rata among the Shareholders desiring Shares as nearly as may be in proportion to the number of Shares held by them respectively at the date of such notice, but no Shareholder shall be bound to take any such Shares in excess of the amount set out in its notice of acceptance. ARTICLE 10 LEGEND ON SHARE CERTIFICATES 10.1 Legend The certificates representing any Shares held by any Shareholder shall have typed or otherwise written thereon the following legend: . "The shares represented by this certificate are subject to the provisions of an agreement made as of the 2()'h day of October, 2000 between the shareholder(s) of the Corporation as at that date and the Corporation and such other persons as have or shall from time to time become bound by such agreement, as the same may be amended, supplemented and restated from time to time and notice of the terms and conditions of such agreement is hereby given. Such agreement includes restrictions on the transfer of, and the right to transfer, shares in the capital of the Corporation , ., t . . . . - 28- including the shares represented by this certificate. Such shares may not be sold, assigned, transferred, donated, mortgaged, pledged, hypothecated, charged or otherwise encumbered or dealt with except in accordance with such agreement. A copy of such agreement, as amended, supplemented and restated from time to time may be examined at the principal place of business of the Corporation". 10.2 Corporation to Keep a Copy ofthe Agreement The Corporation shall keep a true copy of this Agreement at its principal place of business and on reasonable prior notice from any Party shall make the same available for examination by such Party during the Corporation's regular hours of business at such office, ARTICLE 11 INDEMNIFICATION 11.1 Shareholderlndemnity Each particular Shareholder hereby agrees to indemnify, hold harmless, reimburse and defend the Corporation and its subsidiaries and each and every other Shareholder (hereinafter in this section referred to as an "Indemnified Party"), other than any Related Shareholder of the particular Shareholder, for, from and against any and all liability, loss, damage or expense (including, without limitation, reasonable legal fees and disbursements) and any claim thereof or therefor which (a) is asserted against, imposed on, or incurred or sustained by, any Indemnified Party (regardless of the form or nature of such liability, damage, loss, expense or claim), and (b) results from, arises out of or is connected with (i) the nonfulfillment or breach by any person (a "Designated Person") that is the particular Shareholder or any Related Shareholder of the particular Shareholder, of any covenant in or obligation under this Agreement; or (viii) the negligence or misconduct of (x) any Designated Person or (y) any shareholder, director, officer, employee or agent of any Designated Person or (z) any Affiliate (other than the Corporation or any Subsidiary of the Corporatio~ofaDesignatedPerso~ " . . , , - 29- 11.2 Initial Shareholder Indemnity Each Municipality and CNP (each, an "Indemnifying party'') hereby agrees to indemnify, hold harmless, reimburse and defend the Corporation and its subsidiaries and each and every other Shareholder (hereinafter in this section referred to as an "Indemnified party"), other than any Related Shareholder of the particular Shareholder, for, from and against any and all proceedings, lawsuits, causes of action, liability, loss, damage or expense (including, without limitation, reasonable legal fees and disbursements), whether contingent or non.contingent, and any claim thereof or therefor which (a) is asserted against, imposed on, or incurred or sustained by, any Indemnified party (regardless of the fonn or nature of such proceedings, lawsuits, causes of action, liability, damage, loss, expense or claim), and (b) arose in respect of or was incurred by the Indemnifying party or the electricity commission or public utility commission associated with such Indemnifying party, whether prior to or following the Effective Date; except as expressly set out in Schedule 11.2. . Except as expressly set out in Schedule 11.2, none of the Corporation or its subsidiaries assume or will be liable for any obligations, debt or liabilities of the Initial Shareholders, any electricity commission or public utility commission associated with any of them, HServco, HWiresco or CNPco. ARTICLE 12 TERMINATION 12.1 Termination If on any day (a) any particular person (any such person being referred to as a "Tenninated party") that was a Shareholder at any earlier time, does not hold any Shares; and (b) there is no Shareholder that is a Related Shareholder of the particular person then (unless and in any event until the particular person again becomes a Shareholder) after the expiration of such day (c) no further rights or obligations of the particular person shall arise or accrue under this Agreement other than in relation to any rights or obligations respecting or relating to the payment of any amount by or to the p311icular person pursuant to this Agreement; and I . . ... - 30· (d) this Agreement may be amended, tenninated, replaced or superseded at any time by agreement of the parties hereto, each of whom is not a Tenninated Party at that time, it being understood that the same shall not affect the rights or obligations under this Agreement of any person who is then a Terminated Party. ARTICLE 13 CONFIDENTIALITY 13.1 Confidentiality Each of the Shareholders and their respective Affiliates shall keep in the strictest confidence and shall not disclose and not use, in any manner whatsoever in connection with or relating to, directly or indirectly, any business engaged in or participating in the Businesses or the operation, ftanchising, development or sale of products or services similar to those of the Corporation or its Subsidiaries, all non-public infonnation pertaining to or concerning the Corporation and its Subsidiaries including, without limitation, budgets, forecasts, analyses, and financial results, costs, margins, wages and salaries, bids and other business activities, all supplier and customer lists, all non-public intellectual property including trade secrets, unfilled patents, trade-marks, technical expertise and know-how, documentation including standard tenns and agreements and all other infonnation not generally known outside the Corporation or its Subsidiaries except to persons through business dealings with the Corporation or its Subsidiaries. However, no Shareholder or Affiliate thereof shall be obliged to keep in confidence or shall incur any liability for disclosure of infonnation which: (a) was already in the public domain or comes into the public domain without any breach of this agreement; (b) is required to be disclosed pursuant to applicable law or court order; or (c) is made to the legal counsel, auditors and other professional advisors to such disclosing party, in which event such disclosing party shall, so far as reasonably possible, cause the recipient to comply with this section 13.1 as if it were a party to this agreement. ARTICLE 14 GENERAL PROVISIONS 14.1 Further Acts The parties hereto agree to do and to cause to be done all acts. and things as shareholders of the Corporation to effect compliance with or waiver of the restrictions on the transfer of shares '!...~ · · · " - 31 - contained in the Articles of Incorporation or by-laws of the Corporation to give effect to any transfer or intended transfer of Shares required or permitted to be made and recorded as a result of the application of the provisions of this Agreement in order that, notwithstanding such restrictions, the tenns and conditions of this Agreement may be carried out. 14.2 Extended Application The parties hereto agree that the provisions of this Agreement relating to Shares of a particular class (and series, if applicable) shall apply mutatis mutandis: (a) to any shares or securities which result, either directly or indirectly, trom the conversion, changing, reclassification, redivision, redesignation, subdivision or consolidation of Shares of such class (and series, if applicable); (b) to any shares or securities in the capital of, or issued by, the Corporation which are received by anyone or more parties hereto as a stock dividend or distribution on or in respect of Shares of such class (and series, if applicable); and (c) to any shares or securities in the capital of, or issued by, the Corporation or any successor or continuing body corporate to the Corporation which are received by anyone or more parties hereto (x) on a reorganization, amalgamation, consolidation or merger, statutory or otherwise and (y) on or in respect of Shares of such class (and series, if applicable), 14.3 Assignment Subject to the restrictions to assignment contained herein, this Agreement shall enure to the benefit of and be binding upon the parties hereto and their successors and permitted assigns. Except as expressly pennitted by this Agreement, the rights of any person under this Agreement shall not be assignable. Any person (the "Assignor"), other than the Corporation, having rights under this Agreement shall be permitted to assign such rights to another person (the "Assignee") provided (a) (i) the Assignor transfers all Shares owned by the Assignor to the Assignee and such transfer is otherwise permitted by this Agreement, and the Assignor assigns all rights of the Assignor under this Agreement to the Assignee; and (ü) (b) the Assignee is bound by this Agreement. J.... .~ - 32- 14.4 Notices · The provisions of this section apply to any notice, offer or other communication (any such notice, offer or communication being referred to in this section as a "Notice") contemplated or provided for in this Agreement: (1) Manner of Givin~ Notice. Any Notice required or pennitted by this Agreement to be given or sent or delivered to, or received by, a person (a) shall be in writing; (b) shall be addressed to such person at such person's Notice Address; (c) shall be given to such person (i) (ii) · (iii) by delivery, including delivery by courier, to such person, by prepaid registered or certified mail, return receipt requested, mailed in Ontario in an envelope addressed to such person's Notice Address, or by transmission by telecopier to such person at such person's Telecopier Number to the attention of such person's Telecopier Addressee; and (d) shall, if being given to the Corporation, also be given to each Shareholder other than the Shareholder giving such Notice or any Related Shareholder of such Shareholder. (2) Notices shall be given as follows: · ;"f .... - 33 - If to Hanover, HServco or HWiresco: 341 10111 Street . Hanover, Ontario N4N IP5 Attention: The Clerk Fax No.: (519) 364-6456 If to Huron-Kinloss: P.Q, Box 130 21 Queen Street Ripley, Ontario NOG 2RO Attention: The Clerk Fax No.: (519) 395-4107 If to Kincardine: 707 Queen Street Kincardine, Ontario . N2Z lZ9 Attention: The Clerk Fax No.: (519) 396-8288 . , . . ~~ - 34- Ifto Minto, 5941 Highway 89 PO Box 160 . Harriston, Ontario NOG lZ0 Attention: The Clerk Fax No,: (519) 338-2005 If to MWiresco or MServco: PO Box 538 215 William Street Palmerston, Ontario NOG 2PO Attention: President Fax No,: (519) 343-2763 If to South Bruce: P,O. Box 540 21 Gordon Street East . Teeswater, Ontario NOG 2S0 Attention: The Clerk Fax No.: (519) 392-6266 If to Saugeen Shores: 515 Goderich Street Maple Square Mall Port Elgin, Ontario NOH 2C4 Attention: The Clerk Fax No.: (519) 832-2140 If to Wingham: 235 Josephine Street Box 430 . Wingham, Ontario NOG 2WO Attention: The Clerk Fax No.: (519) 357-2540 , , . '" - 35- If to Brockton: 100 Scott Street Walkerton, Ontario NOG 2VO · Attention: The Clerk Fax No.: (519) 881-2991 If to CNP or CNPco: 1130 Bertie Street P.O. Box 1218 Fort Erie, Ontario L2A 5Y2 Attention: Bill Daley, Vice President, Corporate Development Fax No.: (905) 871-8676 · If to the Corporation, Wiresco or Servco: 385 Queen Street Kincardine, Ontario N2Z 2R4 Attention: The President Fax No.: (519) 396-7605 (3) Deemed DeliveJ:Y. Any Notice given to a person as aforesaid (a) if given by delivery (other than by mail), shall be deemed to have been given, sent and delivered to, and received by, such person on the day on which it is so delivered; (b) if given by mail, shall be deemed to have been given, sent and delivered to, and received by, such person on the day on which it is delivered as evidenced by a receipt, acknowledgement or other document issued by a postal authority; and · (c) if given by transmission by telecopier, shall be deemed to have been given, sent and delivered to, and received by, such person on the first Business Day after transmission. '. ~..+ . . . ~. - 36- 14.5 Remedies Cumulative The rights and remedies of the Parties under this Agreement are cumulative and in addition to and not in substitution for any rights or remedies provided for in law. 14.6 Titles The titles to the Articles and certain other provisions hereof-have been inserted for ease of reference only and shall not affect the construction or the interpretation of this Agreement. 14.7 Governing Law This Agreement shall be deemed to have been made in, and shall be govemed by, and be construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable in such Province. 14.8 Counterparts This Agreement may be executed in several counterparts, each of which so executed shall be deemed to be an original, and such counterparts together shall constitute but one and the same instrument. 14.9 Entire Agreement This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter of this Agreement. The parties hereto acknowledge that there is no representation, warranty, agreement or understanding between them which has induced any of the parties hereto to enter into this Agreement except as expressly stated herein. 14.10 Waiver Any Party which is entitled to any right or benefit under this Agreement may, and shall be entitled and have the right to, waive any tenn or condition relating to the application of this Agreement in relation to any matter or transaction provided that any such waiver shall only be effective if it is in writing signed by such Party and delivered to a Party to whom such waiver is directed. If a particular Party waives any tenn or condition relating to the application of this Agreement in relation to any matter or transaction as aforesaid, then in relation to the specific matter or transaction which is the subject matter of such waiver, each person that is then a Party or that subsequently becomes a Party shall be entitled to rely upon such waiver in the same manner and to the same extent as if such waiver had been directed and delivered to such person by the particular Party. No failure on the part of any Party to exercise, and no delay by any Party in exercising, any right under this Agreement shall operate as a waiver of such right. .. ':'.. " - 37- 14.11 Time . Time shall be of the essence in this Agreement 14.12 Inconsistency with By-Laws In the event of any inconsistency between the provisions hereof and the by-laws of any of the Corporation, Servco or Holdco, this Agreement shall prevail. 14.13 Survival The covenants and representations and warranties of each Party hereto made in this Agreement or in any instrument, agreement or document delivered pursuant hereto will survive the completion of the transactions herein provided for and notwithstanding such completion, will continue in full force and effect for the benefit of each other Party hereto indefinitely. 14.14 INDEPENDENT ADVICE. . EACH OF THE PARTIES HERETO ACKNOWLEDGES AND CONFIRMS THAT IT HAS BEEN ADVISED TO AND HAS HAD AN OPPORTUNITY TO RETAIN COUNSEL AND RECEIVE INDEPENDENT LEGAL ADVICE WITH RESPECT TO THIS AGREEMENT. IN WITNESS WHEREOF this Agreement has been executed by the parties hereto. SIGNED, SEALED AND DELIVERED . ) ) ) ) ) ) ) ) ) ) ) ) ) ) The Corporation of the Township of Huron-Kinloss By: ..--/Á~ '" cis ~~c;þ" r¿~{/lr!!"' Title: #7??'-- By: Au tCyt"T , ~. " · · · - 38- ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) The Corporation of the Municipality of Kincardine BY:,~-~~ Name:SIII9A'D,N þ!u,uR. Title: .Dr"''''7Y hO',Ý¿R.. By: ~ """"\".".... Name: .Rc.~= \ In Q.. bro.'^-O".... Title: C,112.v I¡(. cis The Town of Minto By: cIs Name: Title: By: Name: Title: The Corporation of the Municipality of South Bruce By:4tL r;,o. 1t."' ~.Ls ame: /?.cJplo. ~ i-.....w ......r- Title: ¡(..t2<è..r<i:.- By: ~¿'d...-& N : t:;. fSl..¡ Z.Ae¿;r,~ 5TO¡&> Title: C f-¡;/Gk f the Town of By: cis By: ~. ". - 39- ) The C0U(0ftbe To~~am ) . ) By: k ./'f w ) - Name: T>4~ A .. i> t:l 0. A TIC'.c: ) :w,~~ ) ) By: ) Name:....::n:>... ]'l:w ) Title: C .I-~-¡2"- ) ) The Corporation of the Town of Brock ton ) f)~U~ ) By: cIs ) PIIV/Ulffð",fVM ) ) ) By: ) ) ) . ) The Corporation of the Town of Hanover ) ) cis ) ) ) ) ) Nam~ ~ (J ) T~' I ~ ) ) 1445674 Ontari~. ) ) By:':4,'/I1A~ ~jc/s ) Name: ) e:~ ) ) ) . ) ) ~- '. "" - 40- ) :::nov~~ ) . ) ) Name:.1It? ~ ) Jtle: ." t:./ ) ) By: fð;.~,..f. r: À1~ ) ~:4 ¡tj"~J ('-Ø~ ) ) . A'-A £iJ_ ~ ) Minto Hydro Inc. ) ) By: cis ) Name: ) Title: ) ) By: ) Name: ) Title: ) . ) Minto Hydro Services Inc. ) ) By: cIs ) Name: ) Title: ) ) By: ) Name: ) Title: ) ) Canadian Niagara Power Company ) Limited ~ ) By: ~ cIs ) ) . ) Title: ) By. d!:i.'~~99-7- ) ) Name: ) Title: ) " "" - 41 - ) [~~ ) . ) cis ) By: Name: ) Title: ) 4!~9Ç}7 ) By: ) ) Title: ) ) Westario Power Holdings Inc. ) ) By: cis ) Name: ) Title: ) ) By: ) Name: ) Title: ) . ) Westario Power Services Inc. ) ) By: cis ) Name: ) Title: ) ) By: ) Name: ) Title: ) ) Westario Power Inc. ) ) By: cis ) Name: ) Title: ) ) By: ) Name: . ) Title: ) . ... " SCHEDULE 1.I(e) ACCESSION AGREEMENT . THIS AGREEMENT made. . BY: . (hereinafter referred to as the "Transferee") TO AND IN THE FAVOUR OF AND FOR THE BENEFIT OF: Each person that is now or hereafter becomes bound by the Shareholders Agreement (as hereinafter defined) WHEREAS. (the "Corporation") and certain shareholders of the Corporation are parties to the Shareholders Agreement; AND WHEREAS it is proposed that certain transfers of securities or other actions affecting securities be made or taken and that following the completion thereof the Transferee will, either directly or indirectly, have an interest in shares in the capital of the Corporation; AND WHEREAS the Shareholders Agreement includes provisions which restrict the right to transfer shares in the capital of the Corporation and provisions that may be applicable in relation to certain transactions which involve an indirect transfer of an interest in shares in the capital of the Corporation or a direct or indirect change in the ownership or control of securities issued by a shareholder of the Corporation; AND WHEREAS the Transferee desires to become a party to the Shareholders Agreement and to become bound by the terms (including, without limitation, all applicable obligations and restrictions) of the Shareholders Agreement to each party that is now or hereafter becomes bound by the Shareholders Agreement; AND WHEREAS in order for the Transferee to become bound by the Shareholders Agreement as aforesaid, the Transferee has executed and delivered this agreement; . NOW THEREFORE for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged by the Transferee and in consideration of rights and benefits to which the Transferee may become entitled under the Shareholders Agreement, the Transferee hereby covenants and agrees as follows: - . . . -2- 1. Defmitions In this agreement, unless there is something in the subject matter or context inconsistent therewith, (a) "person" means and includes any individual, corporation, body corporate, partnership, firm, joint venture, syndicate, association, trust, trustee, government, governmental agency or board or commission or authority or other fOIm of entity or organization; and (b) "Shareholders Agreement" means the agreement which (i) is dated the . day of ., 2000, (ii) is binding on two or more shareholders of the Corporation and includes provisions which restrict the rights of those shareholders to transfer shares in the capital of the Corporation, and (iii) shows at the beginning thereof that it is between persons that include the following as the only parties that are specified by their name, namely, [FIRST SHAREHOLDER CORPORATION], [SECOND SHAREHOLDER CORPORATION] and [SUBJECT CORPORATION], and includes any and every agreement which shall have been made prior to the date hereof which amends or supplements or restates any agreement which is, or is included in, the Shareholders Agreement. 2. Covenant to be Bound by the Shareholder Agreement The Transferee covenants and agrees to be bound by the terms of the Shareholders Agreement including, without limitation, all applicable obligations and restrictions, and (a) to be so bound to each party that is now bound by the Shareholders Agreement, and (b) effective at the time hereafter at which any other party becomes bound by the Shareholders Agreement, to be so bound to such other party, 3. Notices . Subject to the rights provided for in the Shareholders Agreement to establish or change the same, for purposes of the Shareholders Agreement, the Transferee hereby designates the following as the Notice Address and Telecopier Number of the Transferee: ., 4. Receipt of Shareholders Agreement ... . . ~, -3- The Transferee acknowledges that the Transferee has received a copy of the Shareholders Agreement and has had an opportunity to review the same and obtain such legal advice with respect thereto as the Transferee considers necessary or desirable, 5. Governing Law This agreeinent shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein, IN WITNESS WHEREOF the Transferee has duly executed this agreement as of the date first above written. · [Name ofTran.sferee] · (seal) · . ...". - SCHEDULE 4,1 CAPITALIZATION . (a) On or before the Effective Date each Specified Municipality shall subscribe for and, in consideration of certain of its electricity assets transferred to a corporation incorporated pursuant to section 142(1) of the Electricity Act, 1998 ("Holdco"), Holdco shall issue to each Specified Municipality common shares in the capital of Holdco having an ascribed value equal to the net book value of the assets transferred to Holdco by such Specified Municipality, as determined in the Transfer By-law of such Specified Municipality. (b) On or before the Effective Date each Specified Municipality shall subscribe for and, in consideration of certain of its assets used in respect of the marketing and selling of products and services associated with the distribution of electricity transferred to a corporation incorporated pursuant to section 142(1) of the Electricity Act, 1998 ("Servco A"), Servco A, shall issue to each Specified Municipality common shares in the capital of Servco A having an ascribed value equal to the net book value of the assets transferred to Servco A by such Specified Municipality, as determined in the Transfer By-law of such Specified Municipality. (c) On or before the Effective Date each Specified Municipality shall subscribe for and, . in consideration of certain of its assets used in respect of the distribution of electricity transferred to a corporation incorporated pursuant to section 142(1) of the Electricity Act, 1998 ("Wiresco A"), Wiresco A shall issue to each Specified Municipality common shares in the capital of Wiresco A having an ascribed value equal to 50% of the net book value of the assets transferred to Wiresco A by such Specified Municipality, as determined in the Transfer By-law of such Specified Municipality. (d) In consideration of certain of the assets transferred to Wiresco, on or before the Effective Date, Wiresco A shall deliver to each Specified Municipality a Promissory Note having a principal amount equal to 50% of the net book value of the assets transferred to Wiresco A by such Specified Municipality. (e) Following the transactions contemplated in subsections (a) to (d) and on the Effective Date, each Specified Municipality shall transfer all of its common shares in the capital of Servco A (the "Servco A shares") and all of its common shares in the capital of Wires co A (the "Wiresco A shares") to Holdco in consideration of the issue to each such Specified Municipality of common shares in the capital of . Holdco having a net book value equal to the aggregate value of the Servco A shares and the Wiresco A shares transferred to Holdco by each such Specified Municipality. (f) Following the transactions contemplated in subsection (a) to (e) and on the Effective Date, in consideration of the transfer by Hanover to Holdco of all of its common '<c "" . . . - 2- shares in the capital of HWiresco (the "HWiresco shares") and all of its common shares in the capital of HServco (the ''HServco shares''), Holdco shall issue to Hanover common shares in the capital of Holdco having a value equal to the aggregate value of the HWiresco shares and the HServco shares transferred to Holdco by Hanover. Following the transactions contemplated in subsection (a) to (e) and on the Effective Date, in consideration of the transfer by Minto to Holdco of all of its common shares in the capital of each ofMWiresco (the ''MWiresco shares") and MServco (the ''MServco shares''), Holdco shall issue to Minto.a number of common shares in the capital of Holdco equal to the aggregate value of the MWiresco shares and Mservco shares transferred to Holdco by Minto. Following the transactions contemplated in subsections (a) to (f) above, the total number of issued and outstanding shares in the capital of Hold co shall be 9,000. (g) Following the transactions contemplated in subsection (f) and on the Effective Date, (i) Wiresco A shall amalgamate with HWiresco (such amalgamated corporation hereinafter referred to as "HWiresco Amalco''); (ii) Servco A shall amalgamate with Hservco (such amalgamated corporation hereinafter referred to as ''HServco Amalco''); (iii) HWiresco Amalco shall amalgamate with MWiresco and the amalgamated corporation shall continue as Wiresco; and (iv) HServco Amalco shall amalgamate with MServco and the amalgamated corporation shall continue as Servco. The by-laws of the amalgamated corporations shall, in the case of the amalgamation described in subsection (g)(i), be those of Wiresco A in effect immediately prior to the amalgamation, and in the case of the amalgamation described in subsection (g)(ii), be those of Servco A in effect immediately prior to the amalgamation, The by-laws of the amalgamated corporations shall, in the case of the amalgamation described in subsection (g)(iii), be those of HWiresco Amalco in effect immediately prior to the amalgamation, and in the case of the amalgamation described in subsection (g)(iv), be those of HServco Amalco in effect immediately prior to the amalgamation. (h) On or before the Effective Date, CNP shall incorporate a corporation ("CNPco'') under the Act and, at the Effective Date, in consideration of a cash amount (the "CNPco Amount'') equal to 11.1 % of the total value of the assets of Holdco, Wiresco and Servco, purchase 1,000 shares in CNPco, and a Promissory Note (the "CNP Promissory Note'') of CNPco such that the debt to equity ratio of CNPco is <If : -' r -'f<., '" . . . - 3- equal to the weighted average of the debt to equity ratios of Holdco, Wiresco and Servco. (i) At the same time as the transactions contemplated in subsection (h) and on the Effective Date, CNPco shall amalgamate with Holdco, and the amalgamated corporation shall continue as the Corporation. The by-laws of the Corporation shal1 be those of Holdco in effect immediately prior to its amalgamation with CNPco. For each common share in Holdco, each Municipality shall receive one Common Share and CNP shall receive a number of Common Shares such that following the issue thereof CNP shall hold Common Shares equal.to ten per cent (10%) of all of the issued and outstanding Common Shares. (j) Following the transactions contemplated in subsection (i), (i) In consideration for a cash amount (the ''Transfer Amount'') equal to the principal amount of the CNP Promissory Note paid to Wiresco, the Corporation shall transfer to Wiresco and Wiresco shall assume the CNP Promissory Note; and (ii) the Corporation shall subscn'be for common shares in the capital of Servco the consideration for which shall be equal to the difference between the CNPco Amount and the Transfer Amount, less $100,000,00. (k) The Corporation, Servco, Wiresco, the directors thereof, the Shareholders and any other party hereto shall, to the full extent of their respective power, authority and right to do so, make all proposals, give all approvals, vote, pass all resolutions, give all notices, effect all transfers and do all other things necessary or required to facilitate and effect the transactions contemplated in this Schedule 4.1. ... { ~ .. ..,. ..... . (a) (b) . SCHEDULE 7.7(a) DETERMINATION OF FAIR MARKET VALUE For purposes of this Agreement, "Fair Market Value" means the price per Common Share, determined by an independent qualified business valuator (a ''Valuator') pursuant to this schedule as of the relevant date, that would be received upon a sale of all of the issued and outstanding Common Shares in a single transaction determined in an open and unrestricted market between prudent parties, acting at arm's length and under no compulsion to act, and having reasonable knowledge of all relevant facts concerning the Corporation. In detennining the Fair Market Value of the Common Shares, such Valuator shall be considered as an expert and shall not be construed as acting as an arbitrator within the meaning of the Arbitration Act, 1991 (Ontario). Such determination of the Fair Market Value of the Common Shares shall be made as if the Corporation were a "going concern" (except to the extent that market, financial, economic, business or other conditions shall dictate different criteria in the reasonable judgment of the Valuator) without any discount for a minority interest or any premium for control. The value of the Common Shares shall not be diminished because of the fact that the Shares are not publicly 1raded or the fact that the Insolvent Shareholder owns a minority interest in the Corporation. (c) Within ten (10) days of the receipt of a notice under subsection 7.7(a), the Solvent Shareholders and the Insolvent Shareholder shall jointly appoint a Valuator. If the Shareholders are unable to jointly appoint a Valuator within the specified period, the Insolvent Shareholder, on the one hand, and the Solvent Shareholders jointly, on the other, shall within ten (10) days of the expiry of such period each appoint a Valuator (the "Designated Valuators") and the two Designated Valuators so appointed shall, within ten (10) days of their appointment, jointly appoint a Valuator. (d) The Shareholders shall instruct the Valuator to prepare and deliver to the Shareholders, as soon as practicable and in any event within a period of thirty (30) days of its appointment, a report setting forth the Valuator's estimate as to the Fair Market Value of the Common Shares of the Insolvent Shareholder immediately prior to the Insolvency Event and the basis upon which such estimate has been calculated (the "Valuator's Report"). (e) . The Valuator shall prepare the Valuator's Report having regard to the factors identified in clauses (a) and (b). The Valuator may also have regard to any representations that any Shareholder may wish to make. The Valuator's Report shall be conclusive and binding, The Fair Market Value so deteITIÚned shall become the Fair Market Value of the Common Shares for purposes of the transactions contemplated in section 7.7. ."l "- ~ . <~ .... . . . -2- (f) The costs and expenses of the Designated Valuators incurred in connection with the appointment of the Valuator and/or the Valuator in connection with the preparation of the Valuator's Report shall be paid by the Corporation. (g) Capitalized terms used in this schedule and not defined shall have the meanings ascribed thereto in Article 6 of this Agreement ". ,,~ . ..JI~" '":."" .... . . SCHEDULE 11.2 TRANSFERRED LIABILITIES Hanover. HServco and HWiresco Trade accounts payable and accruals Customer deposits Note Payable to Hanover CNPco Note payable to CNP Specified Municipalities. Minto. MWiresco and MServco All debts, liabilities and obligations transferred to the Corporation, Wiresco, Servco, MWiresco and/or MServco in the Transfer By-Laws by each Specified Municipality or Minto, as the case may be, provided that as at the Effective Date the adjusted net book value of the debts, liabilities and obligations so transferred by such Specified Municipality or Minto do not exceed the adjusted net book value of the assets so transferred, and provided that all debts, liabilities and obligations, whether contingent or not contingent, that are not ascertained and deducted from the value of the assets contributed as at the Effective Date for the purposes of detennining the net book value of the assets transferred to the Corporation, Wiresco, Servco, MWiresco and/or MServco shall be excluded and shall be deemed not to have been so transferred, . IICMK11USERIGROUPlKincardinelGrey & BruceIDoe,lShareholders Agreement Final.doc I. .. ".,