Kentville Electric Light and Power
Company Limited

and

Kentville Electric Commission

Historical Notes

Service area: the Town of Kentville, in Kings County, Nova Scotia




Index
The Asset Purchase Agreement, 9 September 1997
between the Town of Kentville and Nova Scotia Power Incorporated
Bill No. 20, 29 June 1998
An Act Respecting the Sale of Certain Assets of the Town of Kentville and Kentville Electric Commission to Nova Scotia Power Incorporated


General Overview

In 1891, the Kentville Electric Light and Power Company Limited was incorporated.

Chapter 149 of the Acts of 1891: An Act to Incorporate the Kentville Electric Light and Power Company Limited


In 1919, the Kentville Electric Commission, owned by the Town of Kentville, was established to purchase the electric power system of the Kentville Electric Light and Power Company, and to operate the electric power distribution system within the Town.  The Kentville Electric Commission continued to own and operate this system from 1919 until 1998.

Chapter 109 of the Acts of 1918: An Act to Enable the Town of Kentville to Borrow Money for Electric Light Purposes
Chapter 98 of the Acts of 1919: An Act Constituting an Electric Light and Power Commission for the Town of Kentville


In October 1998, the Kentville Electric Commission's electric power distribution system was sold to Nova Scotia Power Inc..  The Kentville Electric Commission was dissolved.

Chapter 20 of the Acts of 1998: Town of Kentville and Kentville Electric Commission Sale of Assets Act


On 1 January 1999, ownership of Nova Scotia Power Inc. (NSPI) was transferred to NS Power Holdings Inc. (NSPH). On that date, all NSPI common shares were transferred from the previous owners (individuals, pension funds, etc.) to NSPH — which issued to the former NSPI shareholders, one NSPH share for each NSPI share. Thus Nova Scotia Power Inc. became a wholly-owned subsidiary of NS Power Holdings Inc.

On 17 July 2000, the company name was changed to Emera Inc. from NS Power Holdings Inc. After this name change, Nova Scotia Power Inc. continued as a wholly-owned subsidiary of Emera Inc.




On 3 December 1996, the Kentville Advertiser reported that "the five full-time and two part-time employees of the Kentville Electric Commission are now officially members of the International Union of Operating Engineers. The results of a certification vote held on September 25 were finally released last Thursday, (28 November)... The vote was unanimous, 7-0 in favour" of joining the union... The Advertiser also reported on recent developments in the proposed sale of the KEC. There was a "Canada-wide call for expressions of interest in mid-October", which produced several responses from prospective bidders.



On 7 February 1997, the Kentville Advertiser reported that the "Kentville Town Council has confirmed that three proposals are still under consideration for the purchase of the Kentville Electric Commission (KEC)." CAO Bill Boyd announced on Tuesday, 4 February, that "the three bidders still in the running are Nova Scotia Power (NSPI), the Fortis Group (operators of Newfoundland Power, and Maritime Electric in PEI), and a group made up of current and former KEC employees." The ACRES consulting group, which is handling the details of the proposed sale of the utility for the Town, had "outlined a preliminary draft report to the Council and presented an outline of the three proposals". Boyd said that a recommendation from ACRES is expected to be made to Council "by the end of February". Council will then review the recommendation before a decision is made on whether to sell or retain the electric utility.



On 15 July 1997, the Kentville Advertiser reported that, on July 9th, the Kentville Town Council voted 5-2 to negotiate with Nova Scotia Power Inc., for the sale of the Kentville Electric Commission for $13,000,000. The terms of the sale must be approved by the Municipal Affairs Department of the provincial government, and by the Utility and Review Board. It was reported that more than $300,000 has been spent over the last two years on consultants' fees to study the proposed sale.



The Purchase Agreement, 9 September 1997 –

THIS ASSET PURCHASE AGREEMENT
made this 9th day of September, A.D., 1997.

BETWEEN:
TOWN OF KENTVILLE, a body corporate,
(hereinafter called the "TOWN")

OF THE FIRST PART

- and -

NOVA SCOTIA POWER INCORPORATED,
a body corporate, with Head Office at Halifax,
in the County of Halifax, Province of Nova Scotia,
(hereinafter called the "COMPANY")

OF THE SECOND PART

The Parties hereto hereby covenant and agree as follows:

INTERPRETATION
1.01 In this Agreement:
(a) "Agreement" means this Asset Purchase Agreement, including the Schedules contemplated herein or attached hereto;
(b) "Assets" means the Lands, Electrical Equipment, Inventory, Motor Vehicles, Receivables, and Documentation, all of which is owned and/or used by the TOWN and/or the COMMISSION in the operation of the Utility but does not include the property at Church Street, Kentville, the buildings and land used for pole yards and land used solely for the purpose of office space or administration for the Utility;
(c) "COMMISSION" means the Kentville Electric Commission, a body corporate, incorporated under the Statutes of Nova Scotia 1919, chapter 98, as amended;
(d) "Date of Transfer" means the fifth (5th) business day after the date of approval by the Nova Scotia Utility and Review Board of the purchase and sale of the Assets contemplated herein, or such later date as may be mutually agreed upon in writing by the Parties hereto;


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(e) "Documentation" means all the plans and detailed information of all description, including plans, deeds, easements and records of land, records of meter owners and readings, lists of all customers, suppliers and resellers, copies of all customer records, sizes, number and location of transformers and equipment, any joint use agreements (including details of joint use of poles and cable attachments), maps of the distribution system, records, cable attachment agreements and electric service contracts to the extent required by the COMPANY, technical data and all other records of every nature and kind used in the operation of the Utility;
(f) "Electrical Equipment" means all machinery, equipment, fixtures of all kinds of the TOWN and COMMISSION used in the Utility's business including all substations and switching facilities, both indoor and outdoor together with structures, equipment and improvements; all distribution systems including underground conductors, conduits, cables and subways, overhead conductors, poles and fixtures, street and highway lighting systems, including ornamental street lighting, (excluding cable reels and associated deposits), line transformers, including installations, capacitors, voltage regulators, services, meters and meter installations and other equipment pertaining to the distribution system of the Utility; structures of all types and for all purposes, shop equipment, stores equipment and all miscellaneous equipment used in the distribution of electricity including any warranty rights pertaining thereto;
(g) "Financial Statements" means the audited Financial Statements relating to the Utility prepared by Kent and Duffett, Chartered Accountants, dated March 31, 1997;
(h) "Inventory" means all of the items used or useful in the operation of the Utility and listed in a Schedule to be agreed upon by the Parties on or before September 30, 1997 and then appended hereto;
(i) "Land" means all the property and/or interests in lands owned by the TOWN or the COMMISSION and used in the operation of the Utility including, without limitation, the interests, as described in Schedule "A" attached hereto, excluding, however, the property at Church Street, Kentville, the buildings and land used for pole yards and land used solely for the purpose of office space or administration for the Utility;
(j) "Motor Vehicles" means all vehicles used in the operation of the Utility;
(k) "Purchase Price" means the amount to be paid by the COMPANY to the TOWN for the Assets on the Date of Transfer as set out in Section 4 hereof;
(1) "Receivables" means all of the electric service accounts receivable of the Utility as at the Date of Transfer; and

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(m) "Utility" means the electrical distribution business carried on by the TOWN and/or the COMMISSION in the Town of Kentville and certain parts of the County of Kings.
1.02 This Agreement, including Schedules "A", "B", "C" and "D" attached hereto and others contemplated herein, all of which are incorporated by reference, constitute the entire agreement between the Parties pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties and there are no warranties, representations or other agreements between the Parties in connection with the subject matter hereof except as specifically set forth herein.
1.03 The Section headings contained herein are included solely for convenience and are not intended to be full or accurate descriptions of the content thereof and shall not be considered part of this Agreement.

PURCHASE AND SALE
2.01 The TOWN agrees to sell to the COMPANY and the COMPANY agrees to purchase from the TOWN on the Date of Transfer all of the Assets. Any Assets in the name of the COMMISSION as of the date of this Agreement shall be transferred to the TOWN on or before the Date of Transfer in order to fulfil the TOWN's warranty in Section 7(g) hereof on the Date of Transfer.
2.02 Upon execution of this Agreement the COMPANY shall submit a cheque in the amount of $1,000,000 payable to the TOWN's solicitor as a deposit to be held in trust, pending completion of this Agreement to be credited on account of the Purchase Price on closing. Interest accruing on the deposit to the Date of Transfer shall be paid to the TOWN on closing over and above the Purchase Price. If the TOWN and the COMPANY do not complete this Agreement because the conditions precedent in Sections 5(a) and 5(b) cannot be met, the deposit shall be returned forthwith without adjustment, deduction or penalty, to the COMPANY with interest. If the COMPANY otherwise fails to complete this Agreement in accordance with the COMPANY's obligations hereunder, the deposit shall be forfeited to the TOWN with interest, in addition to any claim which the TOWN may have against the COMPANY for its failure to complete. If the TOWN otherwise fails to complete this Agreement in accordance with the TOWN's obligations hereunder, the deposit shall be returned forthwith without adjustment, deduction or penalty, to the COMPANY with interest, in addition to any claim which the COMPANY may have against the TOWN for failing to complete.

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SUBSTANCE OF AGREEMENT
3.01 This Agreement is for the purchase of the Assets only and it is understood and agreed that the COMPANY will not be purchasing any other property of the TOWN or the COMMISSION not specified herein and that the COMPANY will not assume:

(a) any obligations for the employees of the TOWN or the COMMISSION employed in connection with the Utility;
(b) any duties, liabilities, debts or obligations of the TOWN or the COMMISSION associated with the Utility or otherwise, except as provided for in this Agreement;
(c) any payables and/or other commitments (including any customer actions and/or claims) except outstanding purchase orders for inventory replacement.

3.02 The Town shall support and shall cause the COMMISSION to support as required an application by the Company to the Labour Relations Board of Nova Scotia for an order under Section 31 of the Trade Union Act, Revised Statutes of Nova Scotia 1989, chapter 475, as amended to revoke the certification of the International Union of Operating Engineers and declaring that the International Brotherhood of Electrical Workers, Local 1928, is the bargaining agent.
3.03 The employment of all employees of the TOWN or the COMMISSION employed exclusively in connection with the operation of the Utility shall be terminated effective the day before the Date of Transfer and the TOWN shall pay and/or shall cause the COMMISSION to pay as required all wages and salaries, benefits and vacation pay accruing to those employees in connection with their employment and termination by the TOWN or the COMMISSION.

PURCHASE PRICE
4. The Purchase Price, shall be the sum of Thirteen Million Three Hundred Thousand Dollars ($13,300,000). The Purchase Price shall be allocated in accordance with Schedule "B" to be agreed upon by the Parties on or before September 30, 1997 and then appended hereto. The portions of the Purchase Price allocated to Inventory and Receivables shall be subject to confirmation, final valuation, and adjustment at the Date of Transfer.

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CONDITIONS
5. This Agreement is subject to the following conditions precedent:

(a) the approval of the transaction by the Nova Scotia Utilities and Review Board;
(b) the written consent of the Minister of Municipal Affairs to this Agreement pursuant to section 4(3) of the Towns Act, Revised Statutes of Nova Scotia 1989, chapter 472, and section 48 of the Municipal Affairs Act, Revised Statutes of Nova Scotia 1989, chapter 296, as amended;
(c)from the date of this Agreement to the Date of Transfer, there shall have been and shall be no substantial loss to or destruction of the Assets. All of the Assets being purchased by the COMPANY shall be and remain at the risk of the TOWN and/or the COMMISSION, pending the completion of the transaction hereunder. The TOWN shall hold all insurance policies payable in respect of the Utility and the proceeds thereof in trust for the Parties as their interests may appear, and in the event that such loss to or destruction of the Assets shall occur, the COMPANY may either have the proceeds of the insurance and complete the transaction, or have the Purchase Price adjusted accordingly;
(d) all of the representations and warranties of the TOWN made in or pursuant to this Agreement, including, without limitation, the representations and warranties made by the TOWN in Section 7 hereof, shall be true and correct in all material respects as at the Date of Transfer and with the same effect as if made at and as of the Date of Transfer and the COMPANY shall have received a certificate from the chief administrative officer on behalf of the TOWN confirming, to the best of his/her knowledge, information and belief (after due inquiry), the truth and correctness in all material respects of the representations and warranties of the TOWN;
(e) the TOWN shall have performed or complied with, in all respects, all of its obligations, covenants and agreements hereunder including, without limitation, any obligation, express or implied, to cause the COMMISSION to act so as to allow, permit or support, directly or indirectly, the fulfilment by the TOWN of its obligations, covenants and agreements herein;
(f) (i) the COMPANY shall have received an opinion dated the Date of Transfer, in form and substance satisfactory to the COMPANY, from counsel for the TOWN confirming those matters which the COMPANY may reasonably require;

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(ii) the COMPANY shall have received a certificate or declaration at the COMPANY's option dated the Date of Transfer, in form and substance satisfactory to the COMPANY, from the chief administrative officer on behalf of the TOWN confirming the matters warranted in Sections 7(b), (c), (d), (e), (i), (k) and (m) hereto and covering such other matters as the COMPANY may reasonably request;
(g) the TOWN shall furnish to the COMPANY any and all Documentation relevant to the transaction hereunder, including Documentation within the possession or control of the COMMISSION, after receipt whereof the COMPANY shall have thirty (30) days to conduct such due diligence review as it may believe necessary in its sole discretion to complete the transaction, including, but not limited to, examining all Documentation, visiting or communicating with employees, customers, and obtaining further information and assurances as deemed necessary. In the event that such due diligence review gives rise to concerns or objections which materially affect the transaction hereunder and which the TOWN is unable or unwilling to correct or address to the COMPANY's satisfaction, this condition precedent shall be considered unfulfilled;
(h) receipt by the COMPANY of an interim audit conducted by the TOWN's external auditors focusing on receivables, assets and inventory, such audit to be completed and delivered to the COMPANY at least five (5) days prior to the Date of Transfer;
(i) at the COMPANY's option, the COMPANY and the TOWN shall execute jointly and provide to each other jointly executed copies of an election in prescribed form to have Section 22 of the Income Tax Act apply in respect of the sale and transfer of the Receivables to the COMPANY pursuant hereto and for purposes hereof the consideration to be paid by the COMPANY to the TOWN for the Receivables in respect of which such election applies shall be the amount equal to the fair market value of such Receivables as determined in accordance with generally accepted accounting principles and prudent collection practices;
(j) at the COMPANY's option, the COMPANY and the TOWN shall execute jointly and provide to each other jointly executed copies of an election in prescribed form to have Section 167 of the Excise Tax Act apply with respect to

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Harmonized Sales Tax in respect of the sale and transfer of all or part of the Assets to the COMPANY;
(k) the TOWN shall accept a declaration or declarations delivered pursuant to Section 221(2) of the Excise Tax Act, Revised Statutes of Canada 1985, chapter E-15, as amended, or pursuant to other provisions of the Act, such that it may lawfully decline to collect Harmonized Sales Tax which may arise in respect of the transfer of all or part of the Assets pursuant to this Agreement;
(1) The COMPANY shall apply to the Nova Scotia Utility and Review Board to keep the COMMISSION'S current electric service rates as at the Date of Transfer for residential and small commercial accounts for the two (2) year period following the Date of Transfer and then to phase in the rates over the next three (3) year period to the COMPANY's then current rates for the same customer classes. All other rate classes will move to the COMPANY's rates on the Date of Transfer. The phased in increase sought by the COMPANY in the third year following the Date of Transfer will be thirty-three percent (33%) of the difference between the COMMISSION'S current rates and the COMPANY's then current rates, thirty-three percent (33%) in the fourth year and whatever percentage increase is required in the fifth year to bring the rates equal with the COMPANY's residential customers.

FURTHER CONDITIONS

6. (a) Each of the Parties shall use its best efforts to secure fulfilment of the conditions set out herein. If, however, either of the conditions precedent in Sections 5(a) or (b) hereof cannot be fulfilled, this Agreement shall be rescinded automatically and no Party shall have any claim against the other in damages or otherwise and the COMPANY shall be entitled to the return of its deposit plus accrued interest in accordance with Section 2.02 hereof;
(b) If the Nova Scotia Utility and Review Board does not approve a five-year phase-in of the COMPANY's electric service rates on the terms set out in Section 5(1) hereof, then, at the option of the Town, after consultation with the COMPANY, this Agreement may be rescinded and no Party shall have any claim against the other in damages or otherwise and the COMPANY shall be entitled to the return of its deposit plus accrued interest in accordance with Section 2.02 hereof;
(c) If the application under Section 5(1) hereof is approved by the Nova Scotia Utility and Review Board, the COMPANY covenants not to apply for an

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adjustment to the five-year phase-in and undertakes to contest any applications made by third parties to change these approved rates;
(d) If at any time, the phased-in electric service rates approved by the Nova Scotia Utility and Review Board pursuant to clause 5(l) are higher than the corresponding electric service rates of the COMPANY, customers will be charged the electric service rates of the COMPANY.

WARRANTIES AND REPRESENTATIONS
7. The Parties hereto agree that the following warranties and representations on the part of the TOWN shall survive the completion of the purchase and sale of the Assets which takes place on the Date of Transfer:

(a) that the TOWN is a body corporate in good standing under the laws of the jurisdiction of incorporation;
(b) that every material fact in any way affecting or relating to the Utility at the date hereof has been disclosed to the COMPANY;
(c) that the Financial Statements are accurate and reflect the true financial position of the Utility, as of its date;
(d) that from the date of the Financial Statements to the Date of Transfer, the COMMISSION has operated the Utility in the ordinary course of business and not otherwise;
(e) that from the date of the Financial Statements to the Date of Transfer, there has been no material loss to or destruction of the Assets;
(f) the TOWN has all necessary corporate power and authority to enter into this Agreement and to carry out its obligations hereunder; the execution and delivery of this Agreement and the consummation of the transaction contemplated hereunder have been duly authorized by all necessary corporate action on the part of the TOWN;
(g) the TOWN and the COMMISSION are, collectively, the absolute beneficial owner of the Assets and the TOWN warrants that on the Date of Transfer it will have good and marketable title thereto, free and clear of any liens, charges,

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encumbrances or rights of others and shall be exclusively entitled to possess and dispose of the same;
(h) this Agreement constitutes a valid and binding obligation of the TOWN enforceable in accordance with the terms hereof, subject, however, to limitation with respect to enforcement imposed by law in connection with bankruptcy or similar proceedings and to the extent that equitable remedies such as specific performance and injunction are in the discretion of the court in which they are sought;
(i) all material tangible Assets are to the best knowledge of the TOWN following due inquiries with the COMMISSION carried out by the TOWN, in good operating condition, repair and (where applicable) proper working order, having regard to the use and age thereof except as otherwise disclosed in writing to the COMPANY;
(j) the TOWN is a resident of Canada for the purposes of the Income Tax Act (Canada);
(k) All Schedules attached hereto or contemplated by this Agreement and prepared by or for the TOWN and/or the COMMISSION, are true and complete in all respects;
(1) further warranties and representations as are reasonably required by the COMPANY flowing from the COMPANY's due diligence review;
(m) none of the foregoing representations and statements of fact contains any untrue statements of a material fact or omits to state any material fact necessary to make such statement or representation not misleading to a prospective purchaser of the Assets, seeking full information as to the Utility and its assets and properties. There is no circumstance of fact known to the TOWN which has not been disclosed to the COMPANY in this Agreement and the Schedules annexed hereto which materially and adversely affects the Utility or prevents the TOWN and the COMMISSION from operating the Utility as a going concern.

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NON WAIVER
8. No investigations made by or on behalf of the COMPANY at any time shall have the effect of waiving, diminishing the scope of or otherwise affecting any representation or warranty made by the TOWN herein or pursuant hereto. No waiver by the COMPANY of any condition, in whole or in part, shall operate as a waiver of any other condition.

INDEMNIFICATION

9. (a) The TOWN covenants to pay all outstanding liabilities and debts of the Utility and discharge any and all encumbrances which may exist to the Date of Transfer or arise thereafter as a result of the operation of the Utility by the TOWN or the COMMISSION prior to the Date of Transfer, whether billed or unbilled, including the TOWN's and the COMMISSION's liability to the COMPANY for electrical power and energy supplied prior to the Date of Transfer;
(b) The TOWN shall indemnify and save harmless the COMPANY from all claims for damages, losses, costs and expenses whatsoever for personal injury and property damage which the COMPANY may suffer or incur in respect of any act or omissions of the TOWN or the COMMISSION in operating the Utility or of any servant, employee, agent of the TOWN or the COMMISSION in operating the Utility prior to the Date of Transfer or which may arise thereafter as a result of the operation of the Utility by the TOWN or the COMMISSION;
(c) The TOWN covenants at all times hereafter to indemnify and save harmless the COMPANY from any and all claims for damages, losses, costs and expenses whatsoever for personal injury and property damage which the COMPANY may suffer or incur in respect of any misrepresentation or omission to state a material fact herein, in any way relating to the Assets and the Utility to which the COMMISSION or the TOWN is a party or in respect of which the COMMISSION or the TOWN has any liability or obligation not otherwise disclosed to the COMPANY;
(d) The COMPANY shall indemnify and save harmless the TOWN from any and all claims for damages, losses, costs and expenses arising and incurred after the Date of Transfer which the TOWN may suffer or incur as a result of the operation of the Utility by the COMPANY except as provided in

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subsections 9 (b) and 9(c) hereof, and further except for liabilities, if any, imposed by legislation and regulations respecting municipalities which do not otherwise apply to the COMPANY.

BULK SALES ACT

10. The COMPANY waives compliance by the TOWN with the Bulk Sales Act of the Province of Nova Scotia, provided that the TOWN shall indemnify the COMPANY against any loss or damage arising from such non-compliance.

GRANT IN LIEU OF TAXES
11. The COMPANY shall commence paying a grant in lieu of municipal taxes to the TOWN in the 1998 tax year pursuant to the Nova Scotia Power Privatization Act.

TAXES
12. There shall be no taxes of any nature payable by the COMPANY to the TOWN with respect to the transaction hereunder.

ACCESS TO ASSETS
13. At all reasonable times prior to the Date of Transfer, the COMPANY's representatives and agents shall have free access to all of the Assets and to the employees of the COMMISSION and the TOWN and the TOWN shall ensure that the COMMISSION cooperates fully with the COMPANY in this regard for the purposes of allowing the COMPANY to satisfy itself as to the validity of the TOWN's or the COMMISSION's interest in the Assets and to facilitate an orderly transition of the Utility to the COMPANY effective on the Date of Transfer.

ACTIONS ON DATE OF TRANSFER
14. On the Date of Transfer:

(a) the COMPANY shall pay the balance of the Purchase Price to the TOWN;
(b) the TOWN shall deliver to the COMPANY such assignments of contracts as are called for by the COMPANY in its sole discretion, deeds, leases, assignments, conveyances, bills of sale, transfers, evidences of corporate and municipal authority and such other documents as Counsel for the COMPANY may

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reasonably require for the purpose of vesting in the COMPANY good title to the Assets free and clear of any liens, charges or encumbrances. Such documents shall be in such form as the Counsel for the COMPANY may reasonably require;
(c) the TOWN shall deliver to the COMPANY such certificates and elections as the COMPANY may require under this Agreement and in relation to the Nova Scotia Revenue Act and the Excise Tax Act.

FINANCIAL STATEMENTS
15. The TOWN hereby undertakes to forward to the COMPANY when completed, a copy of the audited financial statements for the TOWN and the COMMISSION for the fiscal year ending March 31, 1998.

PLACE OF CLOSING
16. The transfer of the Assets will take place on the Date of Transfer at 12:01 p.m., in the Town of Kentville, Nova Scotia.

ADJUSTMENTS
17. Unbilled revenues from sales of electricity by the COMMISSION prior to the Date of Transfer will be determined to the Date of Transfer and mutually agreed upon by the Parties hereto and shall be dealt with in accordance with Schedule "C" to be agreed upon by the Parties on or before September 30, 1997, and then appended hereto. The COMMISSION will transfer the unbilled accounts and the right to collect such unbilled revenue to the COMPANY on the Date of Transfer.
18. The TOWN shall cause the COMMISSION to transfer all customer deposits and accrued interest in accordance with applicable regulations, if any, thereon on the same terms held by it together with all records relating thereto to the COMPANY on the date the Receivables are transferred to the COMPANY.
19. Any allocation of values to or among the Assets shall be subject to the direction of the Nova Scotia Utilities and Review Board. In the event of a disagreement between what the Parties have provided for herein and a direction or order of the Utility and Review Board, the direction or order shall prevail.

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NOTICE
20. Any notice which may be given under the provisions of this Agreement shall be given by one of the Parties hereto to the other Party hereto by letter, postage prepaid, or by facsimile. Such notice shall be deemed to have been received in the case of a letter on the first business day following posting, and in the case of a facsimile on the day that it is dispatched. The address of each of the Parties hereto is as follows:

Town of Kentville
PO Box 218
Kentville, Nova Scotia, BON 3 W4
Attention: Mr. Bill Boyd
FAX: (902) 679-2375

Nova Scotia Power Incorporated
P.O. Box 910
Halifax, Nova Scotia
Attention: Corporate Secretary
FAX: (902) 428-6171

AGREEMENT TO SUPPLY ELECTRICITY
21. The COMPANY hereby agrees and undertakes to supply and distribute electric power and energy to the TOWN prior to the Date of Transfer and to the TOWN and its residents and other customers of the Utility after the Date of Transfer, all in accordance with approved rates and regulations of the Nova Scotia Utilities and Review Board.
MISCELLANEOUS
22. This Agreement shall be interpreted in accordance with the laws of the Province of Nova Scotia.
23. This Agreement shall enure to the benefit of and be binding upon the Parties hereto their respective successors and assigns.
24. Time shall be of the essence hereof.

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25. All covenants, warranties, and representations of the Parties hereto shall survive the Date of Transfer.
IN WITNESS WHEREOF the Parties hereto have properly executed this Asset Purchase Agreement as of the day and year first above written.
SIGNED, SEALED AND DELIVERED
in the presence of

Kentville Electric Commission, contract signatures




The Advertiser, Kentville, 9 January 1998 —

KEC Sale Opponents
Dig In for Last-Ditch Effort
by Brent Fox

The Utility and Review Board hearing is the last chance to save Kentville Electric Commission as a town-owned entity, say those opposed to the sale of the utility to Nova Scotia Power.

The Nova Scotia Utility and Review Board will hear submissions concerning the proposed sale of the KEC to Nova Scotia Power at the Kentville town council chambers on Jan. 20-22, 1998.

Last fall, council approved the terms of the $13.3 million sale to Nova Scotia Power. The funds from the sale will be used to pay off some of the town's debts and to keep the tax rate low.

The sale of KEC to NSP and the protective legislation concerning the funds, are pending UARB and provincial ministerial approval.

During the two-year review and sale process, council considered the options of keeping the utility as a town asset, selling it to current and former KEC employees, as well as selling it to NSP. Those in favor of the sale are concerned about the town's finances and the future effects on the utility of electrical industry deregulation and increased competition.

Studies of the matter were done by ACRES International and SNC Lavelin.

Town resident Deborah Maddock, a member of the committee to stop the sale of KEC, said that a petition is being circulated calling for the town to keep the utility and a flyer has been distributed explaining the situation. Maddock said that "a lot of people feel that this is a done deal." The committee, however, wants to inform the public that they have a final chance to speak on the matter. "Just as long as everybody gets a chance."

Former Commission executive director Councillor Dennis Kehoe has been granted intervenor status for the hearings as a citizen. The hearing "is the only recourse we have ... It's the only input we have right now."

Kehoe said that he is "trying to assist the committee to understand the technical side" of the issue. He is not a member of the committee but is "participating with the committee as a source of expertise."

Elected to town council on October 18, 1997, Kehoe withdrew within a month from the group of current and former employees who wished to buy the utility.

Kehoe said that, "at the end of the day, the UARB will decide what will be done." If people opposed to the sale do not attend the hearing, the board "can only assume" that most are for the sale. "Citizens have to become involved."

Concerning his presentation to the board, Kehoe said that he will review the process and show where it "was faulty". He contended that the information on which town council made its decision to sell the utility was "incorrect in several areas. It's my obfigation to look at that process."

Kentville town council voted last month that if the current agreement is unsuccessful, subsequent proposed sales of the utility have to be approved in a plebiscite. Under the current sale agreement with NSP residential and small business customers would be assured two years without a power rate hike, and then a phased-in increase over three years. Larger businesses would go to NSP rates immediately upon the sale being completed.



UARB Letter, 27 January 1998 —

Nova Scotia
Utility and Review Board
Office: 3rd Floor, 1601 Lower Water Street, Halifax, N.S.
Tel: 902-424-4448, Fax: 902-424-3919
Mailing Address: Box 1692, Unit M, Halifax, N.S. B3J 3S3

January 27, 1998
By Fax: (902) 429-7347
Mr. Thomas M. Macdonald
Blois, Nickerson, & Bryson
1568 Hollis Street, Suite 500
P. O. Box 2147
Halifax, NS B3J 3B7
Dear Mr. Macdonald:
Joint Petition of Nova Scotia Power Incorporated and the Town of Kentville for the Transfer of Assets of Kentville Electric Commission – P-869 – Hearing
I have now completed hearing arrangements in the above noted matter. The hearing will reconvene on Wednesday, February 25, 1998 at 10:00 a.m. and continue on the 26th and 27th if so required. The hearing facilities have been changed as well to the Town Council Chambers, 354 Main Street, Kentville, Nova Scotia.
I am advising Mr. Gurnham and Ms. Rowe, Counsel; and the formal and informal intervenors of these hearing arrangements by copy of this letter. I am also attempting to notify all persons who made their interest in these proceedings known to the Board and for whom I have addresses, by copy of this letter, in the event they have a continuing interest in the hearing process itself.
Yours very truly,
(Signed) Nancy McNeil
Acting Clerk

cc:
Mr. Peter W. Gurnham, Fax: (902) 421-3130
Ms. Theresa Rowe, Fax: (902) 678-9455
Mr. Dennis Kehoe, Formal Intervenor, Fax: (902) 678-2355
Mr. Donald Regan, Formal Intervenor, Fax: (902) 538-3724
Mr. Richard Smith, NSPI, Fax: (902) 428-6200
Informal Intervenors
Interested persons



Bill No. 20, 29 June 1998 –

An Act Respecting the Sale
of Certain Assets of the Town of Kentville
and Kentville Electric Commission
to Nova Scotia Power Incorporated

First Reading: June 22, 1998
Second Reading: June 23, 1998
Third Reading: June 26, 1998 (with Committee amendment)
Royal Assent: June 29, 1998

Excerpts

1 This Act may be cited as the Town of Kentville and Kentville Electric Commission Sale of Assets Act.

2 In this Act,
•  (a) "Agreement" means the Agreement dated September 9, 1997, between the Town and Nova Scotia Power for the sale and transfer of certain assets of the Town and the Electric Commission to Nova Scotia Power;
•  (b) "assets" means all the property, assets and undertaking to be conveyed to Nova Scotia Power pursuant to the Agreement;
•  (c) "Electric Commission" means the Kentville Electric Commission, incorporated by Chapter 98 of the Acts of 1919;
•  (d) "Nova Scotia Power" means Nova Scotia Power Incorporated...

7
•  (1) The Electric Commission is dissolved.
•  (2) Chapter 149 of the Acts of 1891, An Act to Incorporate the Kentville Electric Light and Power Company, Limited, is repealed.
•  (3) Chapter 109 of the Acts of 1918, An Act to Enable the Town of Kentville to Borrow Money for Electric Light Purposes, is repealed.
•  (4) Chapter 98 of the Acts of 1919, An Act Constituting an Electric Light and Power Commission for the Town of Kentville, is repealed...


This Act does not come into force unless and until an order
of the Nova Scotia Utility and Review Board approving the
sale and transfer pursuant to the Agreement is issued.


Complete Text of Bill 20 Town of Kentville and Kentville Electric Commission Sale of Assets Act
Complete text of The Asset Purchase Agreement, 9 September 1997



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