EXHIBIT 4.5
This Agreement made this 7th day of December, 2002
BETWEEN: X. X. XXXXXX & SONS LTD. a body corporate, organized and
existing under the laws of the Province of New Brunswick, with
head office at Bristol, in the County of Carleton and Province
of New Brunswick, (the "Lessor")
-and-
EASTERN WIND POWER INC., a body corporate, organized and
existing under the laws of the Province of New Brunswick, with
head office at Quispamsis, in the County of Kings and Province
of New Brunswick, (the "Lessee")
WHEREAS the Lessor owns real property located at Dark Harbour,
in the Parish of Grand Xxxxx, in the County of Charlotte and Province of New
Brunswick, identified by Service New Brunswick Parcel Identifier Number
01286806, (the "Lessor's Property");
AND WHEREAS the Lessee wishes to establish a wind farm on
portions of the Lessor's Property;
AND WHEREAS the Lessee wishes to lease, on the terms and
conditions hereinafter set forth, portions of the Lessor's Property;
WITNESSETH THAT for and in consideration of the mutual
covenants herein and the sum of One Dollar ($1.00) now paid by the Lessee to the
Lessor and for other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
DEFINITIONS.
1. (a) "Test Site" and "Permanent Sites" are hereinafter collectively
referred to as the "Leased Property".
(b) "wind farm" means a wind energy conversion facility which
includes tubular steel towers of various heights with rotors
and blades of various dimensions and turbines of various
capacity, meteorological study towers, one or more
transmission distribution switch yards, rights-of-way, roads,
electrical distribution and transmission systems, all
necessary care taker and maintenance facilities, including a
residence, and other required equipment or facilities.
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(c) "operation of the wind farm" means the sale of power produced
on the Leased Property.
(d) "Permanent Site" means the area included within a radius of 20
meters from the situs of a wind tower.
TEST SITE.
2.1 The Lessor hereby leases to the Lessee a parcel of land
described in Schedule "A" hereto (the "Test Site) for a term
of 30 years, commencing on the 10th day of December, 2002 and
ending on the 10th day of December, 2032, (the "Test Site
Term").
2.2 It is agreed and understood that the Lessee will operate on
the Test Site a meteorological study tower for a minimum of
one (1) year from the commencement of the Test Site Terms,
(the "Testing Period").
2.3 At the conclusion of the Testing Period, but in no event later
than June 1, 2005, the Lessee shall commence construction of
permanent wind energy conversion facilities as hereinafter
provided.
2.4 In the event that the Lessee does not commence construction of
permanent wind energy conversion facilities by June 1, 2005,
this agreement shall terminate effective June 1, 2005.
PERMANENT SITES
3.1 Using the data collected from the operation of the
meteorological study tower on the Test Site, the Lessee shall
select locations for the sites for the permanent wind farm
facilities on the Lessor's Property, (the "Permanent Sites").
3.2 The location of the Permanent Sites and the Access Roads, as
hereinafter defined in this agreement, on the Lessor's
Property shall be as set forth in the sketch attached hereto
as Schedule "B", provided however, that if the Lessee's
engineering, environmental and meteorological studies dictate
that the location of any of the Permanent Sites and/or roads
shall be other than as depicted in the sketch attached hereto
as Schedule "B", the location of any of the Permanent Sites
and the Access Roads may be changed to the location or
locations required by the Lessee, which change
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of location may be made only with the written consent of the
Lessor, which consent shall not be unreasonably withheld.
Provided however that in the event that the location of the
Permanent Sites and the Access Roads are to be changed in
accordance with this paragraph, in no event, (except with the
written consent of the lessor), shall the location of the
Permanent Sites and the Access Roads be changed so that the
location of the wind turbines are closer than:
(a) 300 metres from the top of the cliffs along the
coastline;
(b) 300 metres from the edge of Wilsons Pond, which is
northeast of Dark Harbour and the centre of the said pond
having approximate UTM coordinates of Xxxx 00, 000 000
Xxxx and 4 958 180 North;
(c) 300 metres from the edge of Xxxxx Xxxx Pond, which is
southeast of Dark Harbour and the centre of the said pond
having approximate UTM coordinates of Xxxx 00, 000 000
Xxxx and 4 955 480 North;
(d) 300 metres from the edge of Round Pond, (also known as
Flat Iron Pond), which is due east of Xxxxxxx Cove
Heath and the centre of the said pond having
approximate UTM coordinates of Xxxx 00, 000 000 Xxxx
and 4 954 450 North.
(e) 225 metres from the edge of an unnamed pond west
northwest of Round Pond, and the centre of the said
unnamed pond having approximate UTM coordinates of Xxxx
00, 000 000 Xxxx and 4 954 680 North;
(f) 225 metres from the edge of Little Round Pond, being
southwest of Round Pond, and the centre of the said
Little Round Pond having approximate UTM coordinates of
Xxxx 00, 000 000 Xxxx and 4 953 600 North; and
(g) 130 metres from any camps existing at the date of
execution of this agreement.
3.3 Subject to the following subparagraphs, the Lessor shall lease
to the Lessee the Permanent Sites on the terms and conditions
set forth in a further lease, to be prepared by counsel for
the Lessee.
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3.4 The lease term for the Permanent Sites shall be 30 years
commencing on the day upon which construction of the Permanent
Sites begins.
3.5 The lease for the Permanent Sites shall be executed by the
parties to this agreement, however, if for any reason the
lease shall not be prepared or executed, this agreement shall
apply mutatis mutandis to the lease of the Permanent Sites.
3.6 Notwithstanding anything hereinbefore provided, the Lessor may
elect to have the fee simple of the Permanent Sites conveyed
to the Lessee, subject to adequate easements and rights of way
being provided for in the said conveyances for access to the
Permanent Sites and for establishing transmission lines.
LESSEE'S COVENANTS.
4. For the lease of the Permanent Sites, the Lessee shall pay the
Lessor as follows:
4.1 For the first three years after commencement of the "operation
of the wind farm" on the Permanent Sites, the Lessee shall pay
the Lessor annual rent equal to 1.55% of the Lessee's actual
annual sale revenue from energy production on the Permanent
Sites;
4.2 Commencing at the start of the fourth year after the
"operation of the wind farm" commences on the Permanent Sites,
and ending at the end of the seventh year after the "operation
of the wind farm" commences on the Permanent Sites, the Lessee
shall pay the Lessor annual rent equal to 1.9% of the Lessee's
actual annual sale revenue from energy production on the
Permanent Sites;
4.3 Commencing at the start of the eighth year after the
"operation of the wind farm" commences on the Permanent
Sites, and ending at the end of the eleventh year after the
"operation of the wind farm" commences on the Permanent Sites,
the Lessee shall pay the Lessor annual rent equal to 2.2% of
the Lessee's actual annual sale revenue from energy production
on the Permanent Sites;
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4.4. Commencing at the start of the twelfth year after the
"operation of the wind farm" commences on the Permanent Sites,
and ending at the end of the term of the lease, the Lessee
shall pay the Lessor annual rent equal to 2.5% of the Lessee's
actual annual sale revenue from energy production on the
Permanent Sites;
4.5 For the purposes of this section, "annual sale revenue from
energy production" means gross annual revenue generated by
power produced less cost of power consumed by the Lessee in
connection with the operation of the wind farm;
4.6 In the event that the Lessee receives additional revenue for
the sale of Co(2) emission reduction credits which do not form
an integral part of any power purchase agreement or other
sales agreement that the Lessor might have with a customer,
(the "CO(2) Credit Revenue"), the Lessee shall pay to the
Lessor, as annual rent, a percentage of the CO(2) Credit
Revenue at the same rates as set out in paragraphs 4.1 to 4.4
hereof as if the CO(2) Credit Revenue was actual annual sale
revenue from energy production on the Permanent Sites;
4.7 In the event that the Lessee, a subsidiary thereof, an
affiliated corporation thereof, or a related company thereof
as that term is known and defined in the Income Tax Act
(Canada), should, prior to June 1, 2007, begin construction of
a wind farm on the Island of Grand Xxxxx on property not owned
by the Lessor, (the "Additional Wind Farm"), the Lessee agrees
to pay to the Lessor a percentage of the actual annual sale
revenue from energy production on the Additional Wind Farm at
the same rates as set out in paragraphs 4.1 to 4.4 hereof; and
4.8 In the event that the Lessor elects to have the fee simple of
the Permanent Sites conveyed to the Lessee as provided for in
paragraph 3.6 hereof, all payments to be made by the Lessee to
the Lessor pursuant to this paragraph 4 shall be deemed to be
remuneration for access to the Permanent Sites, rather than
rent, and the payments shall continue, rather than terminate
for so long as the wind farm is operated by the Lessee or
until this agreement is otherwise terminated. In the event
that the fee simple of the Permanent Sites is so conveyed,
this agreement shall apply mutatis mutandis to the operation
of the Permanent Sites.
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4.9 Rent payable by the Lessee to the Lessor for the Permanent
Sites shall be paid on the same schedule as the payments
received by the Lessee from its customers, and the Lessee
shall pay the Lessor when payment is received by the Lessee
from its customers. In the event that the Lessee fails to pay
the Lessor within 30 days from the date that the Lessee
receives payment from a customer, the Lessor may:
(a) suspend the Lessee's right of access to the Permanent
Sites until such time as all arrears are paid; and
(b) obtain judgment for any amounts due and owing; and
(c) obtain injunctive relief which relief the Lessee
acknowledges is fair and reasonable.
4.10 The Lessee shall use the Permanent Sites only for the purpose
of operating a wind farm.
4.11 The Lessee shall pay all taxes, in respect of the Leased
Property, accruing by virtue of the Real Property Tax Act,
R.S.N.B, 1973, c. R-2.
4.12 The Lessee shall maintain in full force and effect liability
insurance in respect to the Permanent Sites and the Lessee's
operations thereon which insurance shall have minimum coverage
per occurrence in such amount as required by the Lessee's
financier or in such amount as is maintained by the Lessor in
its comprehensive general liability policy, whichever is
greater and the Lessee shall indemnify and save harmless the
Lessor from all liability and claims accruing to and arising
against the Lessor in connection with the Lessee's
construction and operation of the Test Site and the Lessees'
construction and operation of the wind farm on the Permanent
Sites. In respect of the Test Site and the Lessee's operations
thereon, during the time period that the Test Site is operated
as such, the Lessee shall maintain in full force and effect
liability insurance which insurance shall have minimum
coverage per occurrence of $1,000,000.00.
4.13 To the extent that the Leased Property is leased and not
conveyed absolutely to the Lessee, during the construction
phase on the Test Site and the Permanent Sites, the Lessee
shall provide to the Lessor satisfactory evidence of
performance and/or labour and material bonds.
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4.14 In respect of roads, either already existing at the
commencement of the term of this agreement or to be
constructed in accordance with the terms and conditions of
this agreement, which will in whole or part provide access to
the Leased Property, the Lessee shall forthwith repair any
damage caused by the Lessee, its servants and agents, to a
state of repair comparable to that which existed prior to the
occurrence of the damage.
4.15 With respect to roads not already existing at the commencement
of the term of this agreement, to be constructed in accordance
with the terms and conditions of this agreement and providing
access to the Leased Property, (the approximate location of
which is set forth in the sketch annexed to this agreement as
Schedule "B", and are hereinafter referred to as the "Access
Roads"), the parties hereto agree that the Access Roads which
are for the sole benefit of the Lessee are the three
kilometers of road shaded blue on Schedule "B", and shall be
constructed at the sole expense of the Lessee. The 17.5
kilometers of Access Roads shaded in magenta on Schedule "B"
are for the mutual benefit of the parties hereto and shall be
constructed to the same standard as the Lessor's existing
roads on Grand Xxxxx Island, (the "Road Standard"). The Lessor
shall construct all such Access Roads to the Road Standard and
the Lessee shall reimburse the Lessor at the rate of $5,000.00
for each kilometer of Access Road constructed by the Lessor.
If either party requires construction of Access Roads to a
higher standard than the Road Standard, the party requiring
the higher standard shall pay the additional construction
costs.
4.16 The Lessee's obligation to solely pay for or to contribute to
the cost of construction or upgrading roads shall not arise in
the event that construction on the Permanent Sites does not
take place by the time fixed in this agreement.
4.17 In the event that the Lessee determines that it does not
require 17.5 kilometers of roads of mutual benefit, the Lessee
will only be obligated to contribute to the construction cost
of roads of mutual benefit actually required by it, but in no
event shall the total length of roads of mutual benefit be
less than the following:
(a) if ail Permanent Sites are located South of Dark Harbour
road then the Lessee will be obligated to contribute to
the construction cost of a minimum of 12.5 kilometers of
roads.
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(b) if all Permanent Sites are located North of Dark Harbour
road then the Lessee will be obligated to contribute to
the construction cost of a minimum of 12.5 kilometers of
roads.
(c) if the Permanent Sites are located both South and North
of Dark Harbour road then the Lessee will be obligated to
contribute to the construction cost of a minimum of 17.5
kilometers of roads.
4.18 The 2.5 kilometers of roads shaded green on Schedule "B" are
existing roads in respect of which the lessee requires
upgrading, which upgrading shall be carried out at the sole
expense of the Lessee.
4.19 The Lessee shall construct with due diligence and dispatch all
structures required for the Lessee's operation and shall
maintain same in a good state of repair.
4.20 At the end of the lease term or in the event of earlier
termination of this Agreement, the Lessee shall remove all
equipment and structures and shall restore the Leased Property
to such state of repair as is reasonably required by the
Lessor. However, in no event shall removal of equipment and
structures exceed a soil depth of twelve inches.
4.21 The Lessee shall pay the rates and charges for all heat,
light, power and water or other public utilities supplied to
the Leased Property for the Lessee's operation of the wind
farm.
4.22 The Lessee shall operate the wind farm in a businesslike
manner.
4.23 The Lessee shall procure all necessary permits and licenses
required for the operation of the wind farm.
4.24 The Lessee shall prevent all unnecessary waste, loss or damage
to the Lessor's Property.
4.25 The Lessee shall construct the wind farm with a view to
establishing a facility that will produce the greatest amount
of power technologically, environmentally and economically
possible and, without limiting the generality of the
foregoing, if all of the Permanent Sites have not been
developed by June 1, 2007, those Permanent Sites not developed
shall be surrendered or reconveyed by the Lessee to the
Lessor.
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4.26 The Lessee shall grade once annually, all roads intended for
the use and enjoyment of both the Lessor and Lessee. Any
additional grading or maintenance of all such roads shall be
carried out and paid for by the party requiring such
maintenance.
4.27 During the term of this Agreement, no less than 50% of the
Lessee's directors shall be permanent New Brunswick residents.
4.28 During the term of this agreement, the Lessee shall allow Xxxx
Xxxxxxxxx, Xxx Xxxxxxxx and Xxxxxxx Xxxxxx, (the
"Principals"), to provide their input into the design,
construction and operation of the wind farm, and to ensure,
subject to their satisfactory performance and their
willingness to act, that the Principals occupy executive
positions with the Lessee.
4.29 The Lessee shall in connection with the construction of the
wind farm on the Leased Property use local labour whenever it
is reasonably possible.
4.30 The Lessee shall provide the Lessor with copies of all
agreements for the sale of power that the Lessee enters into
with its customers.
4.31 The Lessee shall provide the Lessor with copies of its audited
annual financial statements each fiscal year.
LESSOR'S COVENANTS.
5.1 The Lessor shall lease to the Lessee the Test Site on a rent
free basis.
5.2 The Lessor shall allow the Lessee quiet enjoyment of the
Leased Property.
5.3 The Lessor shall grant rights of way in form satisfactory to
counsel for the Lessee, over all roads, either existing at the
commencement of the term of this lease or to be constructed in
accordance with the provisions hereof, to enable the Lessee to
obtain access to the Leased Property for purposes related to
the construction, operation and maintenance of the wind farm.
The Lessee's right of access under the rights of way shall be
limited to this purpose only and for greater clarity shall not
include access for any other commercial or recreational
purpose.
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5.4 The Lessor shall comply with paragraph 4 with regard to
construction of Access Roads.
5.5 The Lessor shall provide to the Lessee and to all other
parties designated by the Lessee such rights-of-way and
easements as may be reasonably required for electrical
transmission and distribution systems, specifications and
standards for which access shall be determined upon completion
of engineering studies and design. It is agreed and understood
that where possible, transmission lines shall be buried
underneath roadways. However, with the mutual consent of the
parties, alternate routes or methods may be used.
5.6 The Lessor shall grade once annually, all roads intended for
the use and enjoyment of both the Lessor and Lessee. Any
additional grading or maintenance of all such roads shall be
carried out and paid for by the party requiring such
maintenance.
5.7 For more certainty with respect to the covenant for quiet
enjoyment, the Lessor shall not do any act designed to or
having the effect of in any way impeding or decreasing the
output or efficiency of the wind farm and in particular shall
not:
(a) within a radius of twenty (20) meters of the situs of
any tower, (the "Leased Property"), erect, construct,
place any object or in any way, block, limit or obstruct
access to the tower or equipment;
(b) within a radius of one hundred and thirty (130) meters of
the situs of any tower, (the "Safety Zone"), erect,
construct or place any object or structure, either on a
permanent or a temporary basis, natural vegetation
excluded; and
(c) within a 900 meter radius of the situs of any tower, (the
"Interference Zone"), erect, construct or place any
object or structure, temporary or otherwise, that exceeds
a height of 15.2 meters in elevation above the existing
topography where the base of the structure is located.
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5.8 The rights granted to the Lessee hereunder shall be exclusive
to the Lessee, its successor and assigns, and the Lessor shall
not, during the term of this agreement or any subsequent lease
of the Permanent Sites, grant to any other person or
corporation rights similar to those granted hereunder or any
subsequent lease of the Permanent Sites. This prohibition
shall apply to properties either now or hereafter owned or
under the control of the Lessor within the geographic area of
Grand Xxxxx Island.
5.9 It is acknowledged and understood that the Lessor will, from
time to time, access the Permanent Sites for purposes of
harvesting timber. In that regard, in the event of loss or
damage to persons or property occasioned by the acts or
omissions of the Lessor, its servants and agents, wherever
occurring, the Lessor shall indemnify and save harmless the
Lessee in respect of all liability and claims accruing to and
arising against the Lessee. The Lessor shall maintain in full
force and effect, at all material times hereto, liability
insurance in respect of the Permanent Sties and the Lessor's
operations thereon.
GENERAL.
6.1 This agreement shall terminate effective June 1, 2003 in the
event that a meteorological study tower is not erected on the
Test Site by June 1, 2003.
6.2 This agreement shall terminate effective June 1, 2005 in the
event that construction on the Permanent Sites has not
commenced by June 1, 2005.
6.3 The Lessee shall have two years from the termination of the
Lease to remove all equipment and structures from the Leased
Property and to restore the Leased Property to the standard
hereinabove described. In the event that all such equipment
and structures are not so removed by the Lessee within two
years, any remaining equipment and structures shall become the
property of the Lessor and the Lessor may then dispose of any
such equipment and structures as it sees fit.
6.4 For greater certainty, upon termination of this Agreement, the
parties hereto shall be released from their obligations under
this Agreement except the Lessee's obligation to remit unpaid
amounts due to the Lessor prior to the termination of the
Agreement and the Lessee's obligation to remove equipment and
structures from the Permanent Sites as hereinabove set out.
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6.5 It is understood and agreed that all timber on the Leased
Property remains the property of the Lessor and the Lessor
shall have the sole and exclusive right to harvest said
timber, which harvesting of timber shall take place at such
times and in such a manner so as to not interfere with the
operation of the wind farm.
6.6 The provisions hereof are in lieu of all covenants and powers
implied by the Landlord and Tenant Act, R.S.N.B. 1973, c. L-l.
The covenants and powers are expressly excluded and the
provisions of this Lease are to be read without reference to
the Landlord and Tenant Act.
6.7 The Lessee may at any time assign this agreement or sublet the
Leased Property in its entirety, but the Lessee shall not
assign or sublet any portion of this agreement or any portion
of the Leased Property.
6.8 Any dispute arising with respect to the interpretation of this
agreement shall be submitted to arbitration, which arbitration
proceedings shall be conducted by a single arbitrator in
accordance with the Arbitration Act, R.S.N.B. 1992,c. A-10.1.
6.9 This Agreement shall enure to the benefit of and be binding
upon the parties hereto and their respective successors and
assigns.
IN WITNESS WHEREOF the parties hereto have executed this Agreement the
day and year first herein above written.
[STAMP OF X. X. XXXXXX & SONS LTD.]
X. X. XXXXXX & SONS LTD.
Per: -s- Xxxxxx Xxxxxx
-----------------------------
Xxxxxx Xxxxxx - President
EASTERN WIND POWER INC.
Per: -s- Xxxx Xxxxxxxxx
------------------------------
Xxxx Xxxxxxxxx - President
SCHEDULE "B"
[MAP]
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SCHEDULE "A"
Legal Description of Test Site
ALL that certain lot, piece or parcel of land situate, lying and being in the
Parish of Grand Xxxxx, in the County of Charlotte and Province of New Brunswick,
known and described as Lot 02-1 as shown on a Plan of Survey, entitled "Plan of
Survey, Showing Lands to be Leased from X. X. Xxxxxx & Sons Ltd. Property, Xxx
00-0, Xxxx xx Xxxxx Xxxxxxx, Xxxxxx xx Xxxxx Xxxxx, Xxxxxx of Charlotte,
Province of New Brunswick", dated October 4, 2002, prepared by Xxxxx Surveys
Ltd., per Xxxxxx X. Xxxxx, N.B.L.S., approved for registration by Development
Officer, Village of Grand Xxxxx, dated ___________________________, 2002, and
filed in the Office of the Registry of Deeds in and for the County of Charlotte
on _______________________________, 2002.
PROVINCE OF NEW BRUNSWICK
COUNTY OF CARLETON
I, XXXXXX XXXXXX, of Bristol, in the County of Carleton and
Province of New Brunswick, MAKE OATH AND SAY THAT:
1. I am the President of X. X. Xxxxxx & Sons Ltd., (the
"Corporation") and as such I have personal knowledge of the matters herein
deposed to except where otherwise stated.
2. The signature "Xxxxxx Xxxxxx" subscribed to the foregoing
indenture as the President of the Corporation is my signature.
3. The seal affixed to the said indenture purporting to be the
seal of the Corporation is the seal of the Corporation and was affixed by me by
order of the board of directors of the Corporation.
4. The President of the Corporation is an officer of the
Corporation duly authorized to execute documents for and on behalf of the
Corporation.
SWORN TO BEFORE ME at )
Florenceville, in the County of )
Carleton and Province of New )
Brunswick, this 6th day of ) -s- Xxxxxx Xxxxxx
December, 2002 ) ---------------------
) Xxxxxx Xxxxxx
-s- [ILLEGIBLE] )
----------------------------------------
A Commissioner of Oaths,
Being a Solicitor
PROVINCE OF NEW BRUNSWICK
COUNTY OF CARLETON
I, XXXX XXXXXXXXX, of Quispamsis, in the County of Kings and
Province of New Brunswick, MAKE OATH AND SAY THAT:
1. I am the President of Eastern Wind Power Inc., (the
"Corporation") and as such I have personal knowledge of the matters herein
deposed to except where otherwise stated.
2. The signature "Xxxx Xxxxxxxxx" subscribed to the foregoing
indenture as the President of the Corporation is my signature.
3. The seal affixed to the said indenture purporting to be the
seal of the Corporation is the seal of the Corporation and was affixed by me by
order of the board of directors of the Corporation.
4. The President of the Corporation is an officer of the
Corporation duly authorized to execute documents for and on behalf of the
Corporation.
SWORN TO BEFORE ME at )
City of Saint Xxxx, in the County of )
Saint Xxxx and Province of New ) -s- Xxxx Xxxxxxxxx
Brunswick, this 7th day of ) ------------------
December, 2002. ) Xxxx Xxxxxxxxx
)
-s- [ILLEGIBLE] )
----------------------------
A Commissioner of Oaths,
Being a solicitor
