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Message: Tonbridge Power Inc. to be Acquired by Enbridge Inc. At 116% Premium

Tonbridge Power Inc. to be Acquired by Enbridge Inc.

Tuesday, August 16, 2011

TSX Venture Exchange

Symbol: TBZ

TORONTO, Aug. 16, 2011 /CNW/ - Tonbridge Power Inc. (TSXV-TBZ) ("Tonbridge" or the "Corporation"), announced today that it has entered into a definitive agreement to be acquired by Enbridge Inc. (TSX:ENB) ("Enbridge") through a plan of arrangement for
.54 per share in cash (the "Arrangement"), representing a premium of 116% to Tonbridge's closing share price of
.25 on August 8, 2011 and a premium of 74% to the 20-day volume weighted average trading price of
.31 as of August 8, 2011. The Tonbridge shares were halted from trading at the request of Tonbridge before market open on August 9, 2011. Pricing in respect of the Arrangement was based, in part, on management's updated determination that at least US$50 million in additional funding is required to complete the construction of the Corporation's Montana Alberta Tie Ltd. ("MATL") transmission line project (the "MATL Project"). The agreement is subject to Tonbridge shareholder approval, regulatory approval and other closing conditions.

Tonbridge also announced that it has entered into a settlement agreement with its EPC contractor in respect of construction activities on the MATL Project. The Corporation is in negotiations with a number of parties in order to effect a resumption of construction as quickly as possible with a view to meeting the Corporation's goal of delivering an operating transmission line by mid-2012.

"We are pleased to effect this transaction as it addresses both Tonbridge's capital and project needs while at the same time giving our shareholders value for their investment. We look forward to completing the MATL Project and accelerating our development of future projects as a part of Enbridge," said Robert van Beers, Tonbridge Chief Executive Officer.

Acquisition of Tonbridge

Under the Arrangement, in addition to acquiring all of the outstanding common shares of Tonbridge, Enbridge will repay approximately $50 million of debt incurred in the development of the Corporation's MATL Project to date. Enbridge may be entitled to receive approximately $9 million in a combination of cash and warrants should the Arrangement not be completed.

Tonbridge's Board of Directors, after receiving the recommendation of its Special Committee and consulting with its financial and legal advisors, has unanimously determined that the Arrangement is in the best interest of the Corporation and its shareholders and to recommend that Tonbridge shareholders vote in favour of it. Stephens Inc. and J.J.R. Capital Corp. have acted as financial advisors to the Corporation. Clarus Securities Inc., acting as financial advisor to the Special Committee, has provided an opinion that the consideration to be received by Tonbridge shareholders is fair, from a financial point of view, to Tonbridge shareholders. A complete copy of the opinion will be appended to Tonbridge's management information circular in respect of the Arrangement.

The directors, senior officers and certain institutional shareholders of Tonbridge, holding together approximately 22.4% in the aggregate of the issued and outstanding common shares of Tonbridge, have entered into lock-up agreements under which they have agreed to vote in favour of the Arrangement.

Additional Transaction Details

The terms and conditions of the Arrangement will be summarized in a management information circular, which is expected to be mailed to Tonbridge shareholders before the end of August and filed on SEDAR.

The Arrangement will be subject, among other things, to the approval of at least 66 ?% of the votes cast at a special meeting of Tonbridge shareholders to be called to consider the Arrangement. In addition, the Arrangement will be subject to certain customary conditions, including court approval, relevant regulatory approvals and the absence of any material adverse effect with respect to the Corporation.

The transaction is expected to close before September 30, 2011, subject to the satisfaction or waiver of various closing conditions.

Settlement Agreement with EPC Contractor

Tonbridge has settled all outstanding disputes with Rocky Mountain Contractors ("RMC"), and has terminated all aspects of its contractual relationship with respect to the engineering, procurement and construction contract with RMC to build the MATL Project.

In consideration for unpaid invoices, change requests and other claims as well as for agreeing to terminate this contract on amicable terms, MATL has agreed to forfeit US$12 million in security that RMC is holding in escrow against payables in respect of labour, equipment and certain materials as well as pay a further US$1 million. The Corporation has also agreed to the following other elements in respect of the settlement agreement: (i) MATL has agreed to take assignment of all of RMC's subcontractors associated with the MATL Project and will take responsibility, at its expense, for all remediation work in connection with the MATL Project; and (ii) MATL will also pay RMC approximately US$1.7 million for materials and equipment invoiced and payable under an arrangement with under the Western Area Power Administration. Under this arrangement, MATL will receive reimbursement once it has settled this account. Future purchase orders under this arrangement will become the responsibility of MATL. MATL has also agreed to release RMC from all future liabilities and obligations arising from the EPC contract including RMC's specific warranty obligations under the contract related to the MATL Project.

In consideration of the above, RMC has agreed to remove all liens associated with MATL and the MATL Project. RMC has also covenanted to work quickly to enable an efficient transfer of all MATL Project related assets and materials including, crossing agreements, IFC drawings, subcontractor information, yards, residual equipment, MATL Project related data, permits, matting and other matters necessary for MATL to smoothly transition the contract to a new contractor(s). RMC retains responsibility for any financial obligations to subcontractors that occurred up to the date of this agreement and covenants to ensure that all subcontractors, leases and suppliers will be paid within 30 days of this agreement for work completed but not yet invoiced and any liens resulting from failure to pay will be RMC's responsibility. All transferable manufacturers and subcontractor warranties will be transferred to MATL and in the event that these are not transferrable RMC will hold those warranties for MATL's benefit. RMC has agreed to release MATL from all future liabilities and obligations arising from the EPC contract and the MATL Project with the exception of those spelled out in the agreement.

The settlement and the termination of its relationship on amicable terms with RMC enables MATL to re-start construction of the MATL Project with other contractors and avoids costly and time consuming litigation.

Tonbridge Power Inc. is a Toronto-based developer of electrical transmission assets, whose principal asset is a 100% interest in Montana Alberta Tie Ltd. Shares of the Corporation are traded on the TSX Venture Exchange under the symbol "TBZ". The Corporation's financial statements and other filings can be found on SEDAR.

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