PROJECT AGREEMENT

(Execution Version)

FINCH WEST LRT PROJECT

THIS PROJECT AGREEMENT is made as of the 3rd day of May, 2018

BETWEEN:

ONTARIO INFRASTRUCTURE AND LANDS CORPORATION, a Crown agent, continued under the Ontario Infrastructure and Lands Corporation Act, 2011, S.O. 2011, c.9, Schedule 32, as amended

AND:

METROLINX, a non-share capital corporation continued under the Metrolinx Act, 2006, S.O. 2006, c. 16 and a Crown agency within the meaning of the Crown Agency Act, R.S.O. 1990, c. 48, as amended in accordance with Section 3 of the Metrolinx Act, 2006 (Ontario)
(collectively, “Contracting Authority”)

AND:

MOSAIC TRANSIT PARTNERS GENERAL PARTNERSHIP, [REDACTED]
(“Project Co”)

WHEREAS:

Contracting Authority intends to develop a new light rapid transit system which includes the following elements:

(a)

Finch West MSF which is bounded by Norfinch Drive to the west, York Gate Boulevard to the east, Finch Road to the south and the Finch hydro corridor to the north;

(b)

approximately 10.0 kilometres of new semi-exclusive at-grade guideway within the Finch Avenue West right of way from Highway 27 to west portal, west of Keele Street;

(c)

approximately 0.5 kilometres of exclusive below grade guideway from Highway 27 from Finch Avenue West to south of Humber College Boulevard;

(d)

approximately 0.5 kilometres of tunnel between Romfield Lane (west of Keele Street) and Tangiers Road (east of Keele Street);

(e)

1 underground Station located at the Keele Street and Finch Avenue West intersection, to interchange with the TTC Finch West station;

(f)

1 below-grade Stop located south of Humber College Boulevard, adjacent to Humber College that will integrate with existing campus facilities;

(g)

16 at-grade Stops and 1 protected Stop;

(h)

Associated Facilities; and

(i)

integration, maintenance and storage of Revenue Vehicles.

[ Pages 2 to 185 to be added ]

47. RELIEF EVENT AND NON-DEFAULT TERMINATION

47.1 Termination for Relief Event

(a)

Subject to Section 47.1(b), if a Relief Event occurs and the effects of the Relief Event continue for 180 days from the date on which the Party affected gives Notice to the other Party pursuant to Section 43.3(c), either Party may, at any time thereafter, terminate this Project Agreement by written Notice to the other Party having immediate effect, provided that the effects of the Relief Event continue during such period to prevent either Party from performing a material part of its obligations under this Project Agreement.

(b)

Neither Party shall be entitled to exercise its right to terminate this Project Agreement in accordance with Section 47.1(a) if Project Co or a Project Co Party recovers, or is entitled to recover, under any insurance policy, or would have recovered if it had complied with the requirements of this Project Agreement in respect of insurance or the terms of any policy of insurance required under this Project Agreement, an amount which, together with the Monthly Service Payment, is equal to or greater than the Senior Debt Service Amount and the Junior Debt Service Amount for the relevant Payment Period.

47.2 Termination for Force Majeure

(a)

If an event of Force Majeure occurs and the Parties, having used commercially reasonable efforts, have failed to reach agreement on any modification to this Project Agreement pursuant to Section 44.5 within 180 days from the date on which the Party affected gives Notice to the other Party as set out therein, either Party may, at any time thereafter, terminate this Project Agreement by written Notice to the other Party having immediate effect, provided that the effects of the event of Force Majeure continue during such period to prevent either Party from performing a material part of its obligations under this Project Agreement.

47.3 Termination for Convenience

(a)

Contracting Authority shall, in its sole discretion and for any reason whatsoever, be entitled to terminate this Project Agreement at any time on 180 days’ written Notice to Project Co.

(b)

In the event of Notice being given by Contracting Authority in accordance with this Section 47.3, Contracting Authority shall, at any time before the expiration of such Notice, be entitled to direct Project Co to refrain from commencing, or allowing any third party to commence, the Works, or any part or parts of the Works, or the Maintenance and Rehabilitation Services, or any element of the Maintenance and Rehabilitation Services, where such Works or Maintenance and Rehabilitation Services have not yet been commenced.

47.4 Automatic Expiry on Expiry Date

(a)

This Project Agreement shall terminate automatically on the Expiry Date.

(b)

Project Co shall not be entitled to any compensation due to termination of this Project Agreement on expiry of the Project Term on the Expiry Date.

[ Pages 187 to 191 to be added ]

49. COMPENSATION ON TERMINATION

49.1 Compensation on Termination

(a)

If this Project Agreement is terminated in accordance with the terms hereof, then Schedule 23 - Compensation on Termination shall apply and Contracting Authority shall pay Project Co any applicable compensation on termination.

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Project Agreement – Schedule 23

Execution Version

[ Pages 1 to 6 to be added ]

2. Compensation on Termination For Contracting Authority Default or Convenience

2.1 Compensation

(a)

If Project Co terminates the Project Agreement pursuant to Section 46 of the Project Agreement or Contracting Authority terminates the Project Agreement pursuant to Section 47.3 of the Project Agreement, Contracting Authority shall pay to Project Co the Contracting Authority Default Termination Sum.

(b)

The “Contracting Authority Default Termination Sum” shall be an amount equal to the aggregate of:

(i)

the Senior Debt Amount and the Senior Debt Makewhole;

(ii)

the Junior Debt Amount and the Junior Debt Makewhole;

(iii)

any amount payable by Contracting Authority to Project Co in accordance with Sections 43.2(b) and 44.2(b) of the Project Agreement;

(iv)

the Employee Termination Payments and the Subcontractor Losses;

(v)

Construction Period Payments payable by Contracting Authority in accordance with Schedule 21 on or prior to the Termination Date;

(vi)

any reasonable costs properly incurred by Project Co to wind up its operations; and

(vii)

an amount which, if paid on the Termination Date and taken together with all dividends and other Distributions paid on or made in respect of the Equity Capital on or before the Termination Date and taking account of the actual timing of all such payments, but, in any event, excluding all amounts (whether for costs, overhead, profit or otherwise) after the Termination Date, gives a nominal internal rate of return to the Termination Date equal to the Base Case Equity IRR on the amount paid for the Equity Capital (to the extent that such Equity Capital has been applied by Project Co for the purposes of the Project);

LESS, the aggregate (without double counting) of the following, to the extent it is a positive amount:

(viii)

all credit balances on any bank accounts held by or on behalf of Project Co on the Termination Date and the value of any insurance proceeds due to Project Co or to which Project Co would have been entitled had insurance been maintained in accordance with the requirements of the Project Agreement (save where such insurance proceeds are to be applied in reinstatement, restoration or replacement, or, in the case of third party legal liability, in satisfaction of the claim, demand, proceeding or liability or where Contracting Authority is required to procure insurances and to make proceeds available to Project Co under the Project Agreement and it has failed to do so) or sums due and payable from third parties other than sums wholly unrelated to the Project Operations, the Project and the Project Agreement (but only when received from third parties) but excluding any claims under any Subcontracts or claims against other third parties which have not been determined or have been determined but not yet paid, provided that, in such case, Project Co shall assign any such rights and claims under the Subcontracts or claims against other third parties (other than claims against other third parties wholly unrelated to the Project Operations, the Project and the Project Agreement) to Contracting Authority and, at no additional cost to Project Co, give Contracting Authority reasonable assistance in prosecuting such claims;

(ix)

to the extent realized before the Invoice Date, the market value of any other assets and rights of Project Co (other than those transferred to Contracting Authority pursuant to the Project Agreement) less liabilities of Project Co properly incurred in carrying out its obligations under the Project Agreement as at the Termination Date, provided that no account should be taken of any liabilities and obligations of Project Co arising out of:

(A)

agreements or arrangements entered into by Project Co to the extent that such agreements or arrangements were not entered into in connection with Project Co’s obligations in relation to the Project; or

(B)

agreements or arrangements entered into by Project Co other than in the ordinary course of business and on commercial arm’s length terms, save to the extent that liabilities and obligations would have arisen if such agreements or arrangements had been entered into in the ordinary course of business and on commercial arm’s length terms; and

(x)

amounts which Contracting Authority is entitled to set off pursuant to Section 34.12(a)(i) of the Project Agreement,

provided that the Contracting Authority Default Termination Sum shall never be less than the aggregate of the Senior Debt Amount, the Senior Debt Makewhole, the Junior Debt Amount and the Junior Debt Makewhole.

(c)

To the extent that such assets and rights referred to in Section 2.1(b)(ix) are not realized and applied pursuant thereto, Project Co shall, on payment of the Contracting Authority Default Termination Sum, assign such assets and rights to Contracting Authority.

(d)

Contracting Authority shall pay the Contracting Authority Default Termination Sum in accordance with Section 8.

[Pages 10 to 19 to be added]