O. Reg. 225/02: NON-PERMANENTLY FINANCED DEBT OF DISTRICT SCHOOL BOARDS

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Education Act

ONTARIO REGULATION 225/02

NON-PERMANENTLY FINANCED DEBT OF DISTRICT SCHOOL BOARDS

Note: This Regulation was revoked on February 26, 2010. See: O. Reg. 45/10, ss. 1, 2.

Last amendment: O. Reg. 45/10.

This is the English version of a bilingual regulation.

Definitions

1. In this Regulation,

“assignee” means the trustee of a trust or another person to whom a portion of a legislative grant is assigned by a district school board under an agreement prescribed by this Regulation; (“cessionnaire”)

“non-permanently financed debt” means, in respect of a district school board, the amount as of August 31, 2001 that is listed in Column (e) under the heading “Not Permanently Financed” opposite the name of the board in Table 2, “Capital Related Debt Eligible for Funding Support, by District School Board”, in the document entitled School Board Capital Related Debt (June 17, 2002), published by the Ministry and available on the School Facilities Inventory System Website (sfis.edu.gov.on.ca) and at the Business Services Branch of the Ministry, Mowat Block, 21st Floor, 900 Bay Street, Toronto, Ontario, M7A 1L2; (“dette sans financement permanent”)

“participating board” means a district school board that enters into an agreement prescribed by this Regulation with an assignee; (“conseil participant”)

“refinanced debt” means the debt incurred by the assignee in respect of the financing arranged to refinance the non-permanently financed debt of district school boards; (“dette refinancée”)

“unreimbursed costs” means the costs, expenses or liabilities for which an assignee that is a trustee of a trust is held to be personally liable in connection with administering the trust or arranging for the financing to refinance the non-permanently financed debt. (“frais non remboursés”) O. Reg. 225/02, s. 1; O. Reg. 416/02, s. 1.

Prescribed instrument

2. (1) An agreement that contains the following is prescribed for the purposes of clause 247 (3) (f) of the Act as an instrument that may be executed by a district school board:

1. The agreement provides for the irrevocable assignment by the board to the assignee named in the agreement of the portion of each legislative grant that is paid under the Act in respect of,

i. the board’s non-permanently financed debt, other than amounts referred to in clause 37 (1) (b) of Ontario Regulation 154/01 or clause 37 (1) (b) of Ontario Regulation 156/02, or

ii. the portion of the refinanced debt attributable to the board.

2. The agreement requires the board to give a direction to the Minister to pay the assigned portion of each legislative grant directly to an account specified in the agreement.

3. The agreement requires the assignee to,

i. assume the board’s liability to pay its non-permanently financed debt,

ii. arrange financing to refinance the non-permanently financed debt of the board and other participating boards by,

A. creating and issuing, pursuant to one or more trust indentures, bonds, debentures or other evidences of the refinanced debt,

B. entering into one or more underwriting agreements in respect of the bonds, debentures or other evidences of the refinanced debt,

C. obtaining ratings of the bonds, debentures or other evidences of the refinanced debt from one or more nationally recognized rating agencies, and

D. causing an offering document to be prepared in respect of the bonds, debentures or other evidences of the refinanced debt and making it available to underwriters and other potential purchasers of the bonds, debentures or other evidences of the refinanced debt,

ii.1 out of the proceeds of the refinanced debt, pay the board’s non-permanently financed debt, and

iii. obtain from the holder of the non-permanently financed debt a receipt for the payment of the board’s non-permanently financed debt.

4. If the assignee is the trustee of a trust, the agreement requires the board to do the following:

i. indemnify the trustee in its personal capacity for all unreimbursed costs, if any, to the extent that the assets of the trust out of which the trustee is entitled at law or in equity to be indemnified for the unreimbursed costs are insufficient to satisfy the unreimbursed costs, and

ii. make just and equitable contribution to satisfy the claims giving rise to the unreimbursed costs in an amount that is in the same proportion to the aggregate of the unreimbursed costs that the board’s non-permanently financed debt bears to the sum of the non-permanently financed debt of all the participating boards and the amount of fees paid to the trustee, if the indemnity referred to in subparagraph i is for any reason held by a court to be unenforceable.

5. The agreement provides that if the board is required, pursuant to a provision in an agreement described in paragraph 4, to indemnify the trustee or make just and equitable contribution to satisfy the claims giving rise to the unreimbursed costs, the liability of the board under the rights of indemnity or contribution,

i. shall be several and not joint, and

ii. shall not exceed the amount by which the board’s non-permanently financed debt exceeds the cumulative amount of the legislative grants in respect of the principal amount of the refinanced debt paid to the account referred to in paragraph 2 established by the board. O. Reg. 225/02, s. 2; O. Reg. 416/02, s. 2 (1, 2).

(2) An agreement is prescribed for the purposes of clause 247 (3) (f) of the Act if it satisfies the requirements of subsection (1) and it contains provisions that are not inconsistent with the requirements of subsection (1). O. Reg. 416/02, s. 2 (3).

Board to provide copy to the Minister

3. If a district school board enters into an agreement prescribed by this Regulation, it shall give a written direction described in paragraph 2 of subsection 2 (1) and a copy of the agreement to the Minister. O. Reg. 225/02, s. 3; O. Reg. 416/02, s. 3.

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