SCHEDULE 28

REFINANCING

  1. DEFINITIONS

    1. The following terms shall have the following meanings:
      • "Distribution" means, whether in cash or in kind, any:
        • dividend or other distribution in respect of the Equity Capital;
        • reduction of capital, redemption or purchase of shares or any other reorganization or variation to the Equity Capital;
        • payment, loan, contractual arrangement or transfer of assets or rights to the extent (in each case) it was put in place after Financial Close and was neither in the ordinary course of business nor on reasonable commercial terms; or
        • the receipt of any other benefit which is not received in the ordinary course of business nor on reasonable commercial ter ms,

        and where any such Distribution is not in cash, the equivalent cash value of such Distribution shall be calculated.

      • "Equity IRR" means the projected internal rate of return to the Equity Provider over the full term of this Project Agreement, taking into account the aggregate of all its investments and of all Distributions made and projected to be made.
      • "Exempt Refinancing" means:
        • any Refinancing that has the effect of replacing or extending any Mini-Perm Financing, provided that:
          • Project Co shall assume any and all risks and benefits associated with such Refinancing without adjustment to the Monthly OM&R Payments or any other form of compensation to Project Co under the Project Agreement, including any risk that such Refinancing results in higher financing costs than the financing costs assumed by Project Co in its Financial Model as of the date of this Project Agreement for the Refinancing of any Mini-Perm Financing; and
          • such Refinancing occurs on or before the Planned Mini-Perm Refinancing Date;
        • a change in taxation or change in accounting treatment pursuant to a Change in Law or change in Canadian GAAP;
        • the exercise of any right, the grant of any amendment, waiver or consent or any similar action under the Lending Agreements that does not provide for a financial benefit to Project Co under those agreements;
        • any sale of Equity Capital or securitization of the existing rights or interests attaching to such Equity Capital, unless such sale or securitization involves increasing the Senior Debt Amount or the Junior Debt Amount, as applicable, or amending the Senior Debt Makewhole or the Junior Debt Makewhole, as applicable, on terms more favourable to Project Co than contained in the Lending Agreements;
        • any Qualifying Bank Transaction;
        • any Rescue Refinancing;
        • any Refinancing that was approved by HMQ prior to the execution of this Project Agreement and occurs during the first six months following the date of this Project Agreement;
        • any amendment, variation or supplement of any agreement approved by HMQ as part of any Variation under this Project Agreement; or
        • any Permitted Borrowing.
      • "Mandatory Refinancing" means an Exempt Refinancing described in Section 1.1(c)(i).
      • "Mini-Perm Financing" means a financing facility under any Lending Agreement that, pursuant to the applicable Lending Agreement, is scheduled to be repaid in whole or in part from the proceeds of a new financing on or before the Planned Mini-Perm Refinancing Date.
      • "Planned Mini-Perm Refinancing Date" means the date(s) in which a Refinancing, in whole or in part, of the Mini-Perm Financing takes place, and with respect to the first Planned Mini-Perm Refinancing Date after Financial Close is [REDACTED], and in respect of other such dates, if any, shall be as scheduled pursuant to the applicable Lending Agreements and as consented to by HMQ.
      • "Qualifying Bank" means a lending institution that is:
        • a bank listed in Schedule I, II or III of the Bank Act (Canada); or
        • a bank, life insurance company, pension fund or fund managed by a professional fund manager that controls funds in excess of $[REDACTED],

        provided such institution is not a Restricted Person or a person whose standing or activities (1) are inconsistent with HMQ's role (in HMQ's reasonable opinion) in the Province of Ontario, or (2) may compromise the reputation or integrity of HMQ and/or any HMQ Party, or (3) may compromise the nature of the Province of Ontario's highway or parks system, so as to affect public perception of that system.


      • "Qualifying Bank Transaction" means:
        • the disposition by a Lender of any of its rights or interests in the Lending Agreements to a Qualifying Bank;
        • the grant by a Lender to a Qualifying Bank of any rights of participation in respect of the Lending Agreements; or
        • the disposition or grant by a Lender to a Qualifying Bank of any other form of benefit or interest in either the Lending Agreements or the revenues or assets of Project Co, whether by way of security or otherwise.
      • "Qualifying Refinancing" means any Refinancing that will give rise to a Refinancing Gain that is not an Exempt Refinancing.
      • "Refinancing" means:
        • any amendment, variation, novation, supplement or replacement of any Lending Agreement;
        • the exercise of any right, or the grant of any waiver or consent, under any Lending Agreement;
        • the disposition of any rights or interests in, or the creation of any rights of participation in respect of, the Lending Agreements or the creation or granting of any other form of benefit or interest in either the Lending Agreements or the contracts, revenues or assets of Project Co whether by way of security or otherwise; or
        • any other arrangement put in place by Project Co or another person which has an effect which is similar to any of the foregoing provisions of this definition above or which has the effect of limiting Project Co's ability to carry out any of the foregoing provisions of this definition.
      • "Refinancing Financial Model" means a comprehensive and detailed financial model satisfactory to HMQ, acting reasonably, prepared for the purpose of Section 2 of this Schedule 28, which financial model shall be similar in form and content to the Financial Model, suitable for the purposes for which it will be used in this Schedule 28, and shall take into account:
        • cash flows for the entire remaining Project Term;
        • any changes in structure and funding since the date of this Project Agreement;
        • the performance of the Project Operations to the date of the Refinancing;
        • macroeconomic assumptions; and
        • all other relevant factors.
      • "Refinancing Gain" means an amount equal to the greater of zero and (A - B), where:

        A = the net present value, discounted at a discount rate equal to the Base Case Equity IRR, of all Distributions as projected immediately prior to the Refinancing (using the Refinancing Financial Model and taking into account the effect of the Refinancing) to be made over the remaining term of this Project Agreement following the Refinancing.

        B = the net present value, discounted at a discount rate equal to the Base Case Equity IRR, of all Distributions as projected immediately prior to the Refinancing (using the Refinancing Financial Model but without taking into account the effect of the Refinancing) to be made over the remaining term of this Project Agreement following the Refinancing.

      • "Refinancing Notice" has the meaning given in Section 2.9.
      • "Rescue Refinancing" means any Refinancing which takes place due to the failure or prospective failure of Project Co to comply with any material financial obligation under the Lending Agreements, or any of them, which does not increase any liability of HMQ, whether actual or potential.
  2. REFINANCING

    1. Project Co shall not carry out any Qualifying Refinancing unless Project Co has obtained the prior written consent of HMQ, which consent, subject to Section 2.2, shall not be unreasonably withheld or delayed.
    2. HMQ may withhold its consent to any Qualifying Refinancing, in its sole discretion:
      • where any person with whom Project Co proposes to carry out a Qualifying Refinancing is a Restricted Person;
      • if, at the time the Qualifying Refinancing is contemplated and effected, the Qualifying Refinancing will materially adversely affect the ability of Project Co to perform its obligations under the Project Documents or this Project Agreement; or
      • if, at the time the Qualifying Refinancing is contemplated and effected, the Qualifying Refinancing will have the effect of increasing any liability of HMQ, whether actual or contingent, present or future, known or unknown.
    3. HMQ shall be entitled to receive:
      • a [REDACTED]% share of any Refinancing Gain arising from a Qualifying Refinancing, in respect of any Refinancing Gain up to (when considered in aggregate with all previous Qualifying Refinancings) a Refinancing Gain of $[REDACTED];
      • a [REDACTED]% share of any further Refinancing Gain arising from a Qualifying Refinancing, in respect of any Refinancing Gain in excess of $[REDACTED] and up to (when considered in aggregate with all previous Qualifying Refinancings) a Refinancing Gain of $[REDACTED]; and
      • a [REDACTED]% share of any further Refinancing Gain arising from a Qualifying Refinancing.
    4. Project Co shall promptly provide HMQ with full details of any proposed Qualifying Refinancing, including a copy of the proposed Refinancing Financial Model and the basis for the assumptions used in the proposed Refinancing Financial Model. HMQ shall (before, during and at any time after any Refinancing) have unrestricted rights of audit over the Refinancing Financial Model and any documentation (including any aspect of the calculation of the Refinancing Gain) used in connection with such Refinancing (whether or not such Refinancing is determined to be a Qualifying Refinancing). Project Co shall promptly, and, in any event, within 5 Business Days of receiving a written request from HMQ, provide any information in relation to a proposed Refinancing as HMQ may reasonably require. Project Co shall keep HMQ informed as to any changes to the material terms of the Refinancing.
    5. Subject to Section 2.6 of this Schedule 28, HMQ shall have the right to elect to receive its share of any Refinancing Gain as:
      • a single payment in an amount less than or equal to any Distribution made on or about the date of the Refinancing; and/or
      • a reduction in the Monthly OM&R Payments over the remaining Project Term, such that the total net present value, discounted at the Discount Rate, of the foregoing, calculated at the time immediately prior to the Refinancing, shall equal HMQ's share of the Refinancing Gain.
    6. HMQ and Project Co will negotiate in good faith to agree upon the basis and method of calculation of the Refinancing Gain and payment of HMQ's share of the Refinancing Gain (taking into account how HMQ has elected to receive its share of the Refinancing Gain under Section 2.5 of this Schedule 28 and the profile of the Refinancing Gain). If the parties fail to agree upon the basis and method of calculation of the Refinancing Gain or the payment of HMQ's share, the Dispute shall be determined in accordance with Schedule 27 - Dispute Resolution Procedure.
    7. The Refinancing Gain shall be calculated after taking into account the reasonable out-of-pocket costs that each Party directly incurs in relation to the Qualifying Refinancing and on the basis that, within 15 Business Days of any Qualifying Refinancing, Project Co will reimburse HMQ for all such reasonable out-of-pocket costs incurred by HMQ.
    8. If Project Co must, at a future date, undertake a Mandatory Refinancing, then HMQ may at any time request that Project Co provide to HMQ full and complete details and information with respect to the Mandatory Refinancing and its plan for the Mandatory Refinancing, including in respect to all relevant assumptions regarding the Mandatory Refinancing set out in the Financial Model (the "Refinancing Information"). For clarity, if Project Co must, at a future date, undertake a Mandatory Refinancing, HMQ must request Project Co to provide the Refinancing Information before it can issue a Refinancing Notice pursuant to Section 2.9. If HMQ and Project Co mutually agree, acting reasonably, that based on the Refinancing Information, a Refinancing prior to the Mandatory Refinancing would not have a negative material financial impact on the Mandatory Refinancing, then HMQ may provide Project Co with a Refinancing Notice pursuant to Section 2.9.
    9. If HMQ considers the funding terms generally available in the market to be more favourable than those reflected in the Lending Agreements, HMQ may, by notice in writing to Project Co (a "Refinancing Notice"), require Project Co to request potential funders to provide terms for a potential Refinancing.
    10. The Refinancing Notice shall set out in reasonable detail the grounds upon which HMQ believes such funding terms to be available. Project Co and HMQ shall meet to discuss the Refinancing Notice within 20 Business Days. Such a meeting will consider the evidence available to both parties about the availability of funding terms for a potential Refinancing. HMQ shall be entitled to withdraw the Refinancing Notice at or before such a meeting, or within 7 Business Days following the meeting.
    11. If HMQ serves a Refinancing Notice which is not withdrawn pursuant to Section 2.10, then Project Co shall:
      • act promptly, diligently and in good faith with respect to the potential Refinancing;
      • use all reasonable endeavours to obtain the most favourable available terms from existing and/or new lenders for any potential Refinancing (provided that Project Co shall not be required to propose refinancing in a manner which a prudent board of directors of a company operating the same business in Canada to that operated by Project Co, in similar circumstances, would not approve), for the avoidance of doubt also being terms which are likely to generate a positive Refinancing Gain after the deduction of costs in accordance with the provisions of Section 2.7; and
      • either:
        • as soon as reasonably practicable after receipt of the Refinancing Notice, provide to HMQ (I) full details of the proposed Refinancing, including a financial model and the basis for the assumptions used in the financial model and evidence to the reasonable satisfaction of HMQ that these assumptions represent the most favourable available terms for the potential Refinancing on the basis set out in Section 2.11(b) and (II) initial drafts of any changes to the Project Agreement including in relation to potential compensation on termination which might be required to give effect to the proposed Refinancing; or
        • if Project Co (acting reasonably) believes that it is not possible to obtain funding terms which are more favourable than those reflected in the Lending Agreements in accordance with the requirements of Section 2.11(b), provide evidence to the reasonable satisfaction of HMQ for such belief and evidence to the reasonable satisfaction of HMQ that Project Co has complied with its obligations in Sections 2.11(a) and (b) above.
    12. Following receipt of the information referred to in Section 2.11(c)(i), HMQ shall acting reasonably, either:
      • instruct Project Co to implement the proposed Refinancing; or
      • instruct Project Co to discontinue the proposed Refinancing

        • provided that if HMQ reasonably considers that the requirements of Sections 2.11(c)(i) or (ii) have not been satisfied, HMQ may require Project Co to satisfy its obligations under Sections 2.11(c)(i) or (ii). If Project Co must, at a future date, undertake a Mandatory Refinancing, HMQ shall not instruct Project Co to implement the proposed Refinancing unless both HMQ and Project Co, acting reasonably, agree that such Refinancing will be likely to generate a positive Refinancing Gain after the deduction of costs in accordance with the provisions of Section 2.7 and will not have a negative material financial impact on the Mandatory Refinancing.

    13. If HMQ instructs Project Co to implement the proposed Refinancing:
      • Project Co shall, as soon as reasonably practicable, use all reasonable endeavours to ensure that such proposed Refinancing is implemented;
      • such proposed Refinancing shall be deemed to be a Qualifying Refinancing; and
      • the provisions of Sections 2.1 to 2.7 shall apply.
    14. If:
      • HMQ instructs Project Co to discontinue the potential Refinancing pursuant to Section 2.12(b); or
      • the requirements of Section 2.11(c)(ii) are satisfied

        • then, HMQ shall reimburse Project Co for the reasonable and proper professional costs incurred by Project Co in relation to the potential Refinancing, such costs to be paid to Project Co by HMQ within 20 Business Days after receipt of a valid invoice in respect of such amount. Such costs shall not include any internal management costs incurred by Project Co except insofar as (i) it can be demonstrated to the reasonable satisfaction of HMQ that such costs have been incurred in place of professional costs which would in the normal course of such business have been paid to third parties and (ii) HMQ has, by prior written agreement, approved the use of such internal management resource.

    15. HMQ shall be entitled to issue a Refinancing Notice under Section 2.9 at any time but not more than once in any two-year period. For the avoidance of doubt, a Refinancing Notice that has been withdrawn under Section 2.10 has been issued for the purpose of this Section 2.15.