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EXHIBIT 10.26
GORAN CAPITAL INC.
- and -
MONTREAL TRUST COMPANY OF CANADA
AMENDED AND RESTATED TRUST INDENTURE
December 29, 1992
SMITH, LYONS, TORRANCE, XXXXXXXXX & XXXXX
XXXXXXX & XXXXXXX
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PARTIES 1
RECITALS 1
ARTICLE ONE - GENERAL
Section 1.01 Interpretation 2
Section 1.02 Meaning of "Outstanding" 14
Section 1.03 References to Dollars 15
Section 1.04 Calculation of Interest 15
Section 1.05 Prescription 16
Section 1.06 Headings, etc. 16
Section 1.07 Applicable Law 16
Section 1.08 Entire Agreement 16
Section 1.09 Severability 16
Section 1.10 Time 16
ARTICLE TWO - THE NOTES
Section 2.01 Limitation of Issue 17
Section 2.02 Amendments to Notes 17
Section 2.03 Terms of Series A Notes 18
Section 2.04 Terms of Series B Notes 20
Section 2.05 Forms of Notes 21
Section 2.06 Signature of Notes 22
Section 2.07 Certification and Commencement
of Interest 22
Section 2.08 Registers of Notes 23
Section 2.09 Payments and Paying Agents 25
Section 2.10 Mutilation, Loss, Theft or
Destruction of Notes 27
Section 2.11 Transfer and Exchange of Notes 28
Section 2.12 Payment of Additional Amounts 29
ARTICLE THREE - REPLACEMENT OF NOTES
Section 3.01 Replacement of Registered
Original Notes for Registered
Amended Notes 31
Section 3.02 Procedures for Replacement of Bearer
Original Notes and Coupons for Bearer
Amended Notes and Coupons 32
Section 3.03 Effect of Effective Date 32
Section 3.04 Certification of Notes 33
ARTICLE FOUR - SUBORDINATION OF NOTES
Section 4.01 Subordination of Series B Notes
to Unsubordinated Indebtedness 33
Section 4.02 Subordination of Series A Notes 33
Section 4.03 Payment on Dissolution or Winding-up 35
Section 4.04 Senior Indebtedness Default 36
Section 4.05 Subrogation of Series A Notes 36
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Section 4.06 Subrogation of Series B Notes 37
Section 4.07 Rights of Noteholders Reserved 38
Section 4.08 Exceptions to Subordination 38
Section 4.09 Renewal or Extension of Senior Indebtedness 39
Section 4.10 Renewal or Extension by Holders of
Series A Notes and of Other Indebtedness 39
ARTICLE FIVE - RANKING OF SERIES A NOTES AND SERIES B NOTES
Section 5.01 Postponement of Series B Notes to Prior
Indebtedness 39
Section 5.02 Payment on Series A Notes and Series B
Notes on Dissolution or Winding Up 39
Section 5.03 Subrogation of Series B Notes 42
Section 5.04 Renewal or Extension by Holders of Series A
Notes and of Other Indebtedness 42
Section 5.05 Ranking of Notes 42
Section 5.06 Trustee Not Charged with Knowledge 43
ARTICLE SIX - COVENANTS OF THE COMPANY
Section 6.01 General Covenants 43
Section 6.02 Covenants Solely for Benefit of
Holders of Series A Notes 49
Section 6.03 Registrations and Deliveries 56
Section 6.04 After-Acquired Property and Further
Assurances 57
Section 6.05 Special Covenant 59
Section 6.06 Trustee's Remuneration and Expenses 59
Section 6.07 Not to Extend Time for Payment
of Principal or Interest 59
Section 6.08 Good Standing Certificate 59
Section 6.09 Warrant Indenture 60
Section 6.10 Performance of Covenants by Trustee 60
Section 6.11 Negative Pledge 60
Section 6.12 Discretion of Trustee as to Dealing with
Charged Property 61
Section 6.13 Effective Date of Security Documents 62
ARTICLE SEVEN - REDEMPTION OF NOTES
Section 7.01 Redemption 62
Section 7.02 Places of Payment 62
Section 7.03 Partial Redemption 62
Section 7.04 Selection for Redemption 63
Section 7.05 Notice of Redemption 63
Section 7.06 Payment of Redemption Price 63
Section 7.07 Deposit of Redemption Moneys 64
Section 7.08 Home Office Payment 64
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ARTICLE EIGHT - DEFAULT AND ENFORCEMENT
Section 8.01 Events of Default 65
Section 8.02 Acceleration on Default 67
Section 8.03 Waiver of Default 68
Section 8.04 Proceedings by the Trustee 68
Section 8.05 Suits by Noteholders 69
Section 8.06 Application of Moneys Received by the Trustee 70
Section 8.07 Distribution of Proceeds 71
Section 8.08 Remedies Cumulative 72
Section 8.09 Judgment Against the Company 72
Section 8.10 Trustee Appointed Attorney 72
ARTICLE NINE - SUCCESSOR COMPANIES
Section 9.01 Certain Requirements in Respect of
Merger, etc. 72
Section 9.02 Vesting of Powers in Successor 73
ARTICLE TEN - INVESTMENT OF TRUST FUNDS
Section 10.01 73
ARTICLE ELEVEN - MEETINGS OF NOTEHOLDERS
Section 11.01 Right to Convene Meetings 74
Section 11.02 Notice 74
Section 11.03 Chairman 74
Section 11.04 Quorum 74
Section 11.05 Power to Adjourn 75
Section 11.06 Show of Hands 75
Section 11.07 Poll 75
Section 11.08 Voting 75
Section 11.09 Regulations 75
Section 11.10 Company and Trustee May be Represented 76
Section 11.11 Powers Exercisable by Extraordinary
Resolution 76
Section 11.12 Meaning of "Extraordinary Resolution" 78
Section 11.13 Powers Cumulative 79
Section 11.14 Minutes 79
Section 11.15 Instruments in Writing 79
Section 11.16 Binding Effect of Resolutions 79
Section 11.17 Serial Meetings 80
ARTICLE TWELVE - SUPPLEMENTAL INDENTURES
Section 12.01 81
3.
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ARTICLE THIRTEEN - SATISFACTION AND DISCHARGE
Section 13.01 Cancellation and Destruction 82
Section 13.02 Non-Presentation of Notes 83
Section 13.03 Discharge of Security 83
Section 13.04 Release from Covenants 83
ARTICLE FOURTEEN - NOTICES
Section 14.01 Notice to Noteholders 84
Section 14.02 Notice to the Trustee or the Committee 85
Section 14.03 Notice to the Company 85
ARTICLE FIFTEEN - CONCERNING THE TRUSTEE
Section 15.01 Trust Indenture Legislation 85
Section 15.02 Rights and Duties of Trustee 86
Section 15.03 Evidence, Experts and Advisors 87
Section 15.04 Documents, Moneys, etc. Held by Trustee 88
Section 15.05 Action by Trustee to Protect Interests 88
Section 15.06 Trustee Not Required to Give Security 88
Section 15.07 Protection of Trustee 88
Section 15.08 Replacement of Trustee 89
Section 15.09 Conflict of Interest 90
Section 15.10 Acceptance of Trust 90
Section 15.11 Future Conflict of Interest 90
ARTICLE SIXTEEN - COMMITTEE OF SERIES A NOTEHOLDERS
Section 16.01 Establishment of Committee 91
Section 16.02 Indemnity of Committee Members 92
ARTICLE SEVENTEEN - EXECUTION
Section 17.01 Counterparts and Formal Date 93
EXHIBITS
Exhibit A - Form of Series Al Note (Registered) A-1
Exhibit B - Form of Series A2 Note (Registered) B-1
Exhibit C - Form of Series B Note (Registered) C-1
Exhibit D - Form of Series A2 Note (Bearer) D-1
Exhibit D.l - Interest Coupon (Series A2 Note) D-1
Exhibit E - Form of Series B Note (Bearer) E-l
Exhibit E.l - Interest Coupon (Series B Notes) E-1
Exhibit F - Form of Letter of Transmittal G-1
Exhibit G - Form of Warrant Indenture I-1
Exhibit H - Form of Agency Agreement J-1
Exhibit I - Form of General Security Agreement I-1
Exhibit J - Form of Share Pledge Agreement J-1
Exhibit K - Form of Guarantee K-1
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Exhibit L - Form of Guarantee Pledge Agreement L-1
Exhibit M - Form of Guarantee Security Agreement X-0
Xxxxxxx X - Xxxxx xx Xxxxxxxx (Xxxxx) N-1
Exhibit O - Power of Attorney (Guarantor) O-1
SCHEDULE
Schedule 1 - List of 1992 Related Party Compensation (s.6.02)
Schedule 2 - List of Existing Transactions within Goran Group (s.6.02)
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THIS AMENDED AND RESTATED TRUST INDENTURE made as of the 29th day of
December, 1992.
B E T W E E N:
GORAN CAPITAL INC., a corporation incorporated under
the laws of Canada
(hereinafter called the "Company")
OF THE FIRST PART
- and -
MONTREAL TRUST COMPANY OF CANADA, a trust company
incorporated under the laws of Canada
(hereinafter called the "Trustee")
OF THE SECOND PART
WHEREAS the Company (formerly called Pafco Financial Holdings Ltd.)
entered into a trust indenture dated as of December 30, 1986 (such trust
indenture as supplemented and amended prior to the date of this Trust Indenture
is referred to herein as the "Original Indenture") with Guaranty Trust Company
of Canada;
AND WHEREAS pursuant to a supplemental trust indenture dated as of
March 9, 1992, the Trustee replaced Guaranty Trust Company of Canada as the
trustee under the Original Indenture;
AND WHEREAS the Company now wishes to, and has been authorized
pursuant to an extraordinary resolution of the Original Noteholders passed at a
meeting held on December 8, 1992, amend and restate the Original Indenture;
AND WHEREAS all necessary resolutions of the directors of the Company
have been passed and other proceedings have been taken and complied with to
make this Trust Indenture and the execution thereof by the Company legal and
valid;
AND WHEREAS the foregoing recitals are made as representations and
statements of fact by the Company and not by the Trustee;
NOW THEREFORE THIS INDENTURE WITNESSES THAT AND IT IS HEREBY
COVENANTED, AGREED AND DECLARED as follows:
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ARTICLE ONE
GENERAL
Section 1.01 Interpretation: In this Trust Indenture, in addition to the terms
defined elsewhere herein:
(a) "affiliate" means any person who or which, directly or
indirectly, controls or is controlled by or is under common
control with the Company, and, for the purposes of this
definition, "control" (including with correlative meanings,
the terms "controlled by" and "under common control with")
means the power to direct or cause the direction of the
management and policies of any person, whether through the
ownership of voting shares or by contract or otherwise;
(b) "After-Acquired Property" has the meaning attributed to it in
Section 6.04;
(c) "Agency Agreement" means an amended and restated paying agency
agreement made as of the Effective Date among the Company, the
Principal Paying Agent, the Paying Agents, the Transfer
Agents, the Registrar and the Trustee substantially in the
form of the amended and restated paying agency agreement
attached hereto as Exhibit H;
(d) "Amended Notes" means, collectively, the Series Al Notes, the
Series A2 Notes and the Series B Notes;
(e) "Applicable Legislation" has the meaning attributed to it in
Section 15.01;
(f) "auditors of the Company" means an independent public
accountant or independent firm of public accountants appointed
as auditor or auditors of the Company and approved by the
Trustee;
(g) "Bearer Amended Notes" means Amended Notes in bearer form;
(h) "Bearer Notes" has the meaning attributed to it in Subsection
2.05(c);
(i) "Bearer Original Notes" means Original Notes in bearer form;
(j) "Borrowed Money" means money borrowed, premium, if any, and
interest in respect thereof and all other liabilities under
any note, bond, debenture or other evidence of indebtedness
whether or not issued as consideration for assets or services
but excluding all such indebtedness and liabilities incurred
solely in relation to the
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ordinary course of business of any Subsidiary as an insurance
company;
(k) "business day" means any day other than a Saturday or Sunday
on which banks are open for business in the relevant place of
payment and, in the case of payment by transfer to a Canadian
dollar account, on which dealings in foreign currencies may be
carried on both in Toronto and in such place of payment;
(l) "certificate of the Company", "order of the Company" and
"request of the Company" mean respectively a written
certificate, a written order and a written request, in each
case signed in the name of the Company by its chairman of the
board or president or executive vice-president or a
vice-president or a director and, in addition, by its
secretary or treasurer, or secretary treasurer if the offices
of secretary and treasurer shall be combined, or
assistant-secretary or assistant-treasurer or a director, and
may consist of one or more instruments so executed;
(m) "certified resolution" means a copy of a resolution certified
by the secretary or an assistant-secretary of the Company
under its corporate seal to have been passed by the directors
and to be in full force and effect on the date of such
certification, without modification or amendment;
(n) "Charged Property" means all property and assets, present and
future, of the Company or any Subsidiary which at the
particular time are subject to (or required by this Indenture
to be subject to) the Series A Lien;
(o) "Collateral" means cash, a bank draft or letter of credit of a
Canadian chartered bank acceptable to the Trustee, a surety
bond of an insurer carrying on business in Canada acceptable
to the Trustee or other security satisfactory to the Trustee;
(p) "Committee" means the committee of holders of Series A Notes
established pursuant to Article Sixteen;
(q) "Common Shares" means the common shares which the Company is
authorized to issue from time to time;
(r) "Company" means the Party of the First Part and also every
successor company which shall have complied with the
provisions of Article Nine;
(s) "Compensation Limit" means:
(i) in respect of the Company's fiscal year ending
December 31, 1992, U.S. $1,050,000 ; and
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(ii) in respect of each fiscal year of the Company ending
after December 31, 1992, the amount equal to the
aggregate of:
(A) the Compensation Limit established for the
immediately preceding fiscal year (the "Base
Amount"), plus
(B) the amount determined by multiplying the Base
Amount by the lesser of
(I) 5%, and
(II) expressed as a percentage, the U.S.
consumer price index for the 12
month period ended on September 30
of the preceding year;
and for purposes of this definition of "Compensation Limit" the
term "U.S. consumer price index" means the measure of change in
consumer prices as determined by a monthly survey conducted by
the U.S. Bureau of Labour Statistics;
(t) "Consolidated" means the consolidation of the accounts of each
Subsidiary with those of the Company, if and to the extent the
accounts of each such Subsidiary would normally be
consolidated with those of the Company, all in accordance with
Generally Accepted Accounting Principles;
(u) "counsel" means a barrister and solicitor or firm of
barristers and solicitors (who may be counsel for the Company)
acceptable to the Trustee;
(v) "Coupons" means, as and when applicable, the interest coupons
originally attached to the Bearer Original Notes or the
interest coupons attached to the Bearer Amended Notes being in
the form or substantially in the form attached hereto as
Exhibit D.1 (in the case of Series A2 Notes) and Exhibit E.1
(in the case of Series B Notes);
(w) "Debt" means, at any time, all amounts that, in conformity
with Generally Accepted Accounting Principles, would be
classified as debt on a Consolidated balance sheet of the
Company including, without limitation, all bank and other
operating and term debt, all Prior Indebtedness, all
indebtedness evidenced by the Series B Notes and all debt
subordinated to the Series A Notes, but excluding trade
accounts payable in the ordinary course of business;
(x) "deemed" means deemed conclusively;
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(y) "Delivery Event" has the meaning attributed to it in Subsection
6.02(a);
(z) "director" means a director of the Company for the time being,
and reference without more to action by the directors means
action by the directors of the Company as a board or, whenever
empowered, action by an executive committee of the board;
(aa) "Effective Date" means the date of this Trust Indenture, being
December 29, 1992;
(bb) "Election" means the election made by or on behalf of an
Original Noteholder on a proxy submitted for use at the
meeting of the Original Noteholders at which this Trust
Indenture was authorized, sanctioned, and approved to amend
the attributes of his Original Notes to the attributes of one
or more of the Amended Notes;
(cc) "Equity" means, at any particular time, the outstanding share
capital of the Company and other amounts, including retained
earnings and minus any deficit, that, in conformity with
Generally Accepted Accounting Principles, would be classified
as shareholders' equity on a Consolidated balance sheet of the
Company;
(dd) "Euro-clear" means The Euro-clear System;
(ee) "Event of Default" has the meaning attributed to it in Section
8.01;
(ff) "Extraordinary Resolution" has the meaning attributed to it in
Article Eleven and "Series A Extraordinary Resolution" means
an Extraordinary Resolution passed solely and exclusively by
the holders of Series A Notes at a meeting of the holders of
Series A Notes called for such purpose and "Series B
Extraordinary Resolution" means an Extraordinary Resolution
passed solely and exclusively by the holders of Series B Notes
at a meeting of holders of Series B Notes called for such
purpose;
(gg) "Financing Leases" means (i) any lease of property, real or
personal, the then present value of the minimum rental
commitment thereunder of which should (in accordance with
generally accepted accounting principles of the jurisdiction
in which the lessee is located) be capitalized on a balance
sheet of the lessee, and (ii) any other lease of property,
real or personal, the obligations under which are capitalized
on a Consolidated balance sheet of the Company;
(hh) "General Security Agreement" means a general security
agreement in substantially the form of the general security
agreement attached hereto as Exhibit I and includes any
instrument supplemental or ancillary thereto or in
implementation thereof;
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(ii) "Generally Accepted Accounting Principles" means generally
accepted accounting principles, consistently applied, that are
in effect from time to time in Canada or, in the case of any
Subsidiary, in the jurisdiction of its incorporation;
(jj) "Goran Group" means, collectively, the Company and each
corporation that is, at the relevant time, a Subsidiary of the
Company;
(kk) "Guarantee Agreement" means a guarantee agreement
substantially in the form of the guarantee agreement attached
hereto as Exhibit K and includes any instrument supplemental
or ancillary thereto or in implementation thereof;
(ll) "Guarantee Pledge Agreement" means a share pledge agreement
substantially in the form of the pledge agreement attached
hereto as Exhibit L and includes any instrument supplemental
or ancillary thereto or in implementation thereof;
(mm) "Guarantee Security Agreement" means a general security
agreement substantially in the form of the guarantee security
agreement attached hereto as Exhibit M and includes any
instrument supplemental or ancillary thereto or in
implementation thereof;
(nn) "Indebtedness" means the aggregate of (i) all indebtedness for
Borrowed Money or for the deferred purchase price of property
or services, (ii) all monetary or other financial obligations
under Financing Leases and (iii) all monetary or other
financial obligations in respect of letters of credit (except
letters of credit issued by any Subsidiary that is principally
engaged in the insurance business to provide credit support
for insurance obligations undertaken in the ordinary course of
such business), acceptances or similar obligations;
(oo) "Initial Principal Amount" means, in respect of Series Al
Notes, Series A2 Notes or Series B Notes, as applicable, the
principal amount thereof outstanding at 12:02 a.m. on the
Effective Date;
(pp) "Interest Payment Date" means each date on which interest on
the Notes, or any of them, is payable pursuant to this
Indenture;
(qq) "Letter of Transmittal" means a letter of transmittal
substantially in the form of the letter of transmittal
attached hereto as Exhibit F;
(rr) "Lien" means any mortgage, charge, pledge, lien, privilege,
security intrest, hypothec, cessation and
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transfer, lease of real property or other encumbrance, whether
fixed or floating, upon or with respect to any property of any
kind of the Company whether real, personal or mixed, tangible
or intangible, moveable or immoveable, now owned or hereafter
acquired;
(ss) "Noteholders" or "holders" means,, in respect of the Bearer
Notes, the bearers from time to time of such Notes and, in
respect of the Registered Notes, the registered owners from
time to time of such Notes;
(tt) "Noteholders" Request" means an instrument signed in one or
more counterparts by the holder or holders of not less than
25% in principal amount of the Notes outstanding for the time
being, requesting the Trustee to take some action or
proceeding specified therein and "Series A Noteholders'
Request" means an instrument making such a request so signed
by the holder or holders of not less than 25% in principal
amount of the Series A Notes outstanding for the time being
and "Series B Noteholders' Request" means an instrument making
such a request so signed by the holder or holders of not less
than 25% in principal amount of the Series B Notes outstanding
for the time being;
(uu) "Notes" means the notes of the Company issued and certified
hereunder and for the time being outstanding including, as and
when applicable, the original Notes and the Amended Notes and,
for purposes of Article Four, the term "Notes" shall include
the Coupons relating to the Bearer Amended Notes;
(VV) "Original Indenture" has the meaning attributed to it in the
first recital hereof;
(ww) "Original Notes" means the Notes,, whether in bearer form or
registered form, having the attributes prescribed in the
Original Indenture and "Original Noteholders" means, in
respect of Bearer Original Notes, the bearers of the Bearer
Original Notes and, in respect of Registered Original Notes,
the registered owners of the Registered Original Notes;
(xx) "Paying Agents" means the paying agents appointed from time to
time pursuant to the Agency Agreement;
(yy) "Periodic Payments" has the meaning attributed to it in
Subsection 2.09(a);
(zz) "Permitted Indebtedness" means, at any particular time, with
respect to the company and its Subsidiaries, any Indebtedness
that is:
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(i) owed by one member of the Goran Group to another member of the
Goran Group provided and to the extent that the incurring or
creation of such Indebtedness does not directly or indirectly
result in or cause any default under the Senior Indebtedness;
(ii) an amount not exceeding U.S. $468,408 in respect of a mortgage
bond registered against the head office premises (the "IGF
Premises") of IGF Insurance Corporation (the "IGF Bond");
(iii) Indebtedness outstanding on the Effective Date under
Financing Leases in an aggregate principal amount not
exceeding U.S. $850,000 in respect of the Goran Group as a
whole;
(iv) unsecured Indebtedness in an amount not exceeding U.S.
$1,500,000 payable by the Company to Pembridge Capital Inc. in
respect of unallocated loss adjustment expenses;
(v) unsecured Indebtedness incurred in the ordinary course of
business of the Goran Group for (A) trade accounts payable or
(B) operating leases for premises and equipment used by the
Goran Group for the purpose of carrying on its insurance
business;
(vi) Prior Indebtedness;
(vii) Indebtedness owing under a line of credit in favor of IGF
Insurance Corporation relating to crop insurance written by
such Subsidiary in the United States not exceeding in the
aggregate U.S. $2,000,000;
(viii) fully subordinated and postponed to the indebtedness evidenced
by the Series A Notes in a manner satisfactory to the
Committee such that no principal, interest or other payments,
except as permitted by the Committee, may be made in respect
of such Indebtedness so long as any Series A Notes are
outstanding;
(ix) Indebtedness evidenced by the Series B Notes; and
(x) any other Indebtedness that has been disclosed in writing by
the Company or any Subsidiary to, and which has been accepted
by, the holders of Series A Notes by way of Series A
Extraordinary Resolution or in writing by the Committee;
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(aaa) "Permitted Liens" means, at any particular time, with respect to the
Company and its Subsidiaries, any one or more of the following:
(i) any Lien for taxes, rates and assessments not yet due or, if
due, the validity of which is being contested diligently and
in good faith by appropriate proceedings by the Company or any
Subsidiary, as the case may be, and liens for the excess of
the amount of any past due taxes for which a final assessment
has not been received over the amount of such taxes as
estimated and paid;
(ii) any Lien in respect of any judgment rendered, which is being
contested diligently and in good faith by appropriate
proceedings by the Company or any Subsidiary, as the case may
be, and which does not have a material adverse effect on the
ability of the Company or any of the Subsidiaries to conduct
their respective businesses;
(iii) any Lien howsoever ranking for which provision has been made
by the deposit with the Trustee of Collateral in an amount
sufficient to pay the same and all interest and costs in
connection therewith at maturity;
(iv) any Liens against the IGF Premises securing the IGF Bond;
(v) the Series A Lien;
(vi) Liens securing Purchase Money Obligations, limited in each
case to the property acquired in the transaction in which such
Purchase Money Obligation was incurred;
(vii) any Liens securing the Senior Indebtedness;
(viii) Liens representing Financing Leases;
(ix) any Liens against the property on which the Highlander Inn is
located securing the U.S. $2,000,000 and U.S. $650,000
mortgages registered against the property on which the
Highlander Inn is located; and
(x) any other Lien that has been disclosed in writing by the
Company or any Subsidiary to, and which has been accepted by
the holders of Series A Notes by way of Series A Extraordinary
Resolution or in writing by the Committee;
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(bbb) "person" means an individual, a corporation, an unincorporated
association, a partnership, a trust or trustee, an
unincorporated organization or a government or political
subdivision thereof; and pronouns have a similar extended
meaning;
(ccc) "Principal Paying Agent" means the principal paying agent
appointed from time to time pursuant to the Agency Agreement;
(ddd) "Principal Repayment Date" means each date on which a
principal payment on the Series A Notes, or any of them, is
payable pursuant to this Indenture;
(eee) "Prior Indebtedness" means the Senior Indebtedness and the
principal of, accrued and unpaid interest on and all other
liabilities and obligations (including, without limitation,
fees, costs and expenses) in respect of the Indebtedness
evidenced by the Series A Notes;
(fff) "Purchase Money Obligations" means obligations of the company
or any Subsidiary incurred or assumed in the ordinary course
of business in connection with the purchase of property to be
used in its business;
(ggg) "Record Date" means the fifteenth day prior to the applicable
Interest Payment Date as set out in Subsection 2.03(a) or
Subsection 2.04(a) or applicable Principal Repayment Date as
set out in Subsections 2.03(b) or (c), as the case may be;
(hhh) "redemption date" means, in respect of the redemption of any
Note, the date specified in the notice of such redemption as
the date on which such Note shall be redeemed;
(iii) "Registered Amended Notes" means Amended Notes in registered
form;
(jjj) "Registered Notes" has the meaning attributed to it in
Subsection 2.05(b);
(kkk) "Registered Original Notes" means Original Notes in registered
form;
(lll) "Registrar" means the registrar appointed from time to time
pursuant to the Agency Agreement;
(mmm) "Related Party" at any particular time means any person who is
at any time related or not at arm's length (within the meaning
of the Income Tax Act (Canada)) to, or is an associate (within
the meaning of the Securities Act (Ontario)) of (i) G. Xxxxxx
Xxxxxx or any member of his immediate family at such time,
(ii) the controlling
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shareholders of the Company at such time or (iii) any member
of the Goran Group at such time;
(nnn) "Relevant Date" means the later of (i) the date on which
payment in respect of a Note or Coupon becomes due and payable
and (ii) if the full amount of the moneys payable on such due
date has not been received in Toronto by the Principal Paying
Agent or the Trustee on or prior to such due date, the date on
which the full amount of such moneys having been received,
notice that such moneys have been so received is published in
accordance with the notice provisions set out in Section
14.01;
(ooo) "Replacement Notice" has the meaning attributed to it in
Subsection 3.02(a);
(ppp) "Replacement Shares" has the meaning attributed to it in
Subsection 2.02(c);
(qqq) "Security Documents" means, collectively, the General Security
Agreement, the Share Pledge Agreement, each Guarantee
Agreement, each Guarantee Security Agreement and each
Guarantee Pledge Agreement and each other document deemed to
be a Security Document pursuant to this Indenture including,
without limitation, Subsection 6.02(m) and Subsection 6.03(a);
(rrr) "Senior Indebtedness" means the Indebtedness outstanding on
December 8, 1992 and as reduced from time to time pursuant to
the amended and restated credit agreement dated as of June 3,
1992 between SIG Indiana and the Senior Lender as the same may
be amended, supplemented or otherwise modified from time to
time and, subject to the approval of the Committee, any
Indebtedness in replacement of, or substitution for, such
Indebtedness; provided that, notwithstanding any other
provision of this Indenture or any other document, at no time
shall the principal amount of the Senior Indebtedness be
greater than the amount (the "Maximum Senior Indebtedness")
equal to the lesser of (i) U.S. $5,500,000, and (ii) the
minimum principal amount to which such Indebtedness has been
reduced and provided further that any such Indebtedness in
excess of the Maximum Senior Indebtedness shall not be Senior
Indebtedness for the purposes of this Trust Indenture;
(sss) "Senior Indebtedness Default" means:
(i) the declaration of the Senior Indebtedness to be due
and payable prior to the stated maturity thereof
following the occurrence of an event which permits
the Senior Lender to make such declaration; or
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12.
(ii) the non-payment in full of any principal amount of
the Senior Indebtedness upon its stated maturity
(other than maturity pursuant to any instalment
payment obligation);
(ttt) "Senior Lender" and "holder(s) of Senior Indebtedness" means
Chemical Bank, as successor by merger to Manufacturers Hanover
Trust Company, and its successors and assigns and any other
holder(s) of Senior Indebtedness approved by the Committee
from time to time, in each case in its capacity, or their
capacities, as lender or lenders of the Senior Indebtedness;
(uuu) "Series A Default" has the meaning attributed to it in
Subsection 8.01(b);
(vvv) "Series A Lien" means each and every Lien held by the Trustee
for the benefit of the holders of Series A Notes including,
without limitation, pursuant to the Security Documents;
(www) "Series A Noteholders' Resolution" means a resolution, other
than a Series A Extraordinary Resolution, of the holders of
Series A Notes passed in the manner prescribed in Article
Eleven;
(xxx) "Series A Notes" means Notes having the attributes prescribed
in Section 2.03 and, for purposes of Article Four, the term
"Series A Notes" shall include the Coupons relating to Series
A Notes in bearer form;
(yyy) "Series A1 Notes" means Series A Notes having the attributes
as to repayment of principal prescribed in Subsection 2.03(b);
(zzz) "Series A2 Notes" means Series A Notes having the attributes
as to repayment of principal prescribed in Subsection 2.03(c);
(aaaa) "Series B Notes" means Notes having the attributes prescribed
in Section 2.04 and, for the purposes of Article Four, the
term "Series B Notes" shall include the Coupons relating to
Series B Notes in bearer form;
(bbbb) "Share Pledge Agreement" means a share pledge agreement in
substantially the form of the share pledge agreement attached
hereto as Exhibit J;
(cccc) "Specific Series A Lien" means the Series A Lien on the
Specifically Charged Property;
(dddd) "Specifically Charged Property" means the property and assets
of the Company now or hereafter secured, granted, transferred,
assigned, mortgaged, pledged and/or charged
19
13.
hereunder, or required by any Security Documents to be, as and
by way of a fixed and specific mortgage, pledge, assignment
and charge to and in favour of the Trustee;
(eeee) "Subsidiary" means any corporation of which more than 50% of
the voting shares (provided that the ownership of such shares
confers the right at all times to elect at least a majority of
the board of directors of such corporation) are now or
hereafter owned, directly or indirectly, by or for the Company
and/or by or for any corporation in like relation to the
Company and includes any corporation in like relation to a
Subsidiary;
(ffff) "successor company" has the meaning attributed to it in
Article Nine;
(gggg) "SIG Indiana" means Xxxxxx International Group, Inc., an
Indiana corporation and a Wholly-Owned Subsidiary of the
Company;
(hhhh) "Transfer Agents" has the meaning attributed to it in Section
2.08;
(iiii) "Trust Indenture", "Indenture", "herein", "hereby" and similar
expressions mean or refer to this amended and restated trust
indenture and any indenture, deed or instrument supplemental
or ancillary hereto; and the expressions "Article",
"Section", "Subsection", "paragraph", "subparagraph" and
"clause" followed by a number and/or letter mean and refer to
the specified Article, Section, Subsection, paragraph,
subparagraph or clause of this Trust Indenture;
(jjjj) "Trustee" means the Party of the Second Part and its successor
for the time being in the trusts hereby created;
(kkkk) "U.S. person" means any natural person resident in the United
States, a corporation, partnership or other entity organized
under the laws of the United States or, any estate of which
any executor or administrator is a U.S. Person, any trust of
which any trustee is a U.S. Person, any agency or branch of a
foreign entity located in the United States, any
non-discretionary custodial account or similar account held by
a dealer or other fiduciary for the benefit or the account of
a U.S. person and any discretionary custodial account or
similar account held by a dealer or other professional
fiduciary organized or incorporated, or, if an individual,
resident, in the United States or any corporation, partnership
or other entity organized or incorporated under the laws of a
jurisdiction other than the United States if formed by a U.S.
person principally for the purpose of investing in
20
14.
securities not registered under the Securities Act of 1933
(United States);
(llll) "Underlying Shares" means the Common Shares or other
securities issuable on exercise of the Warrants;
(mmmm) "United States" means the United States of America, its
territories and possessions, any state thereof and the
District of Columbia;
(nnnn) "voting shares" means shares of any class of any corporation
having under all circumstances the right to elect at least a
majority of the board of directors of such corporation,
provided that, for the purposes of this definition, shares
which only carry the right to vote conditionally on the
happening of an event shall not be considered voting shares
nor shall any shares be deemed to cease to be voting shares
solely by reason of a right to vote accruing to shares of
another class or classes by reason of the happening of such
event;
(oooo) "Warrant Indenture" means a warrant indenture substantially in
the form of the warrant indenture attached hereto as Exhibit G;
(pppp) "Warrants" means the common share purchase warrants of the
Company to be issued under the Warrant Indenture, each one of
which will initially entitle the holder thereof to purchase
one Common Share at a price per share equal to the greater of
(i) $3.00 and (ii) 110% of the average closing price of the
Common Shares on The Toronto Stock Exchange for the 15 trading
days immediately following December 8, 1992; and
(qqqq) "Wholly-Owned Subsidiary" means a Subsidiary all of the shares
of every class of which are owned, directly or indirectly, by
the Company.
Words importing the singular number shall include the plural
and vice versa and words importing the masculine gender shall include the
feminine and neuter genders.
Any reference in this Indenture to any Act or section thereof
shall be deemed to be a reference to such Act or section as amended or
re-enacted from time to time.
Section 1.02 Meaning of "Outstanding": Every Note certified or authenticated
and delivered by or on behalf of the Trustee hereunder shall be deemed to be
outstanding until it shall be cancelled or delivered to the Registrar or the
Principal Paying Agent for cancellation or moneys for the payment thereof shall
be set aside under Section 13.04, provided that:
21
15.
(a) Notes which have been partially redeemed shall be deemed to be
outstanding only to the extent of the unredeemed part of the
principal amount thereof;
(b) where a new Note has been issued in substitution for a Note
which has been lost, stolen or destroyed, only one of them
shall be counted for the purpose of determining the aggregate
principal amount of Notes outstanding;
(c) Notes which have become void pursuant to Section 1.05 shall
be deemed not to be outstanding; and
(d) for the purpose of any provision of this Indenture entitling
holders of outstanding Notes to vote, sign consents, requests
or other instruments or take any other action under this
Indenture, Notes owned, directly or indirectly, legally or
equitably, by the Company or any affiliate thereof shall be
disregarded except that:
(i) for the purpose of determining whether the Trustee
shall be protected in relying on any such vote,
consent, request or other instrument or other action
only the Notes which the Trustee knows are so owned
shall be so disregarded; and
(ii) Notes so owned which have been pledged in good faith
other than to the Company or any affiliate thereof
shall not be so disregarded if the pledgee shall
establish to the satisfaction of the Trustee the
pledgee's right to vote such Notes in his discretion
free from the control of the Company or such
affiliate.
Section 1.03 References to Dollars: As used herein and unless
otherwise provided, the dollar sign ($) and the expressions "dollars" and
"Canadian dollars" shall be deemed to refer to currency of Canada.
Section 1.04 Calculation of Interest: In the event that interest
payable hereunder on any Notes is required to be calculated for a period of
less than one year, it will be calculated on the basis of a 360 day year
consisting of 12 months of 30 days each and in the case of an incomplete month
the actual number of days elapsed. For the purposes of the Interest Act
(Canada) the yearly rate of interest for that portion of any period of less
than one year falling within a particular year is the interest rate set forth
herein for such interest period multiplied by a fraction of which:
(a) the numerator is the product of (i) the actual number of days
in the year commencing on the first day of such period,
multiplied by (ii) the sum of (y) the product of 30 multiplied
by the number of complete months elapsed in such period and
(z) the actual number of days elapsed in any incomplete month
in such period; and
22
16.
(b) the denominator is the product of (i) 360 multiplied by (ii)
the actual number of days in such period.
For the purposes of clause (a) of this Section, each month
shall be deemed to commence on the same day as the day of the month from which
interest is calculated.
Section 1.05 Prescription: Each Note and Coupon shall become void
unless presented for payment within a period of 10 years and five years,
respectively, from the Relevant Date in respect thereof.
Section 1.06 Headings, etc.: The division of this Indenture
into Articles, Sections and Subsections, the provision of a table of contents
and the insertion of headings are for convenience of reference only and shall
not affect the construction or interpretation hereof.
Section 1.07 Applicable Law: This Indenture, the Notes and the
Coupons shall be construed in accordance with the laws of the Province of
Ontario and the laws of Canada applicable therein and shall be treated in all
respects as Ontario contracts. The Company and the Trustee hereby attorn to the
non-exclusive jurisdiction of the courts of Ontario.
Section 1.08 Entire Agreement: This Indenture constitutes the
entire agreement between the Company, the Trustee and the Noteholders and
supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether oral or written between the Company, the
Trustee and the Noteholders, including but not limited to any correspondence
exchanged between the Company and any Noteholder in connection with the subject
matter hereof and any information set forth in the management information
circular and proxy statement dated November 4, 1992 of the Company mailed and
distributed in connection with the meeting of Original Noteholders held on
December 8, 1992 and there are no warranties, representations or other
agreements between the Company, the Trustee and the Noteholders in connection
with the subject matter hereof except as specifically set forth herein.
Section 1.09 Severability: Any provision of this Indenture which
is prohibited or unenforceable in any applicable jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without affecting the validity or enforceability of such
provision in any other jurisdiction.
Section 1.10 Time: Time shall be of the essence of this Indenture.
23
17.
ARTICLE TWO
THE NOTES
Section 2.01 Limitation of Issue: The aggregate principal amount
of Notes that may be issued and outstanding hereunder is limited to $20,000,000
in principal amount and the aggregate principal amount of Series B Notes that
may be issued and outstanding hereunder is limited to $2,400,000 in principal
amount and it is hereby acknowledged that Notes aggregating $20,000,000 in
principal amount were created and issued pursuant to the Original Indenture.
Section 2.02 Amendments to Notes:
(a) The attributes of the Original Notes are hereby amended
effective at 12:01 a.m. on the Effective Date in the following
manner:
(i) in the case of Original Noteholders who made an
Election, in accordance with the Elections of the
Original Noteholders so that the attributes of the
Original Notes of such Original Noteholders become
the attributes of one or more of the following:
(A) Series A1 Notes, with $1.00 principal amount
of Series Al Notes replacing $1.00 principal
amount of Original Notes held at 12:01 a.m.
on the Effective Date;
(B) Series A2 Notes, with $1.00 principal amount
of Series A2 Notes replacing $1.00 principal
amount of Original Notes held at 12:01 a.m.
on the Effective Date; or
(C) subject to Subsections 2.02(d) and (e),
Series B Notes, with $0.60 principal amount
of Series B Notes and 0.1 of a Common Share
replacing $1.00 principal amount of Original
Notes held at 12:01 a.m. on the Effective
Date; and
(ii) in the case of Original Noteholders who did not make
an Election, so that the attributes of the Original
Notes of such Noteholders become the attributes of
the Series A2 Notes, with $1.00 principal amount of
Series A2 Notes replacing $1.00 principal amount of
Original Notes held at 12:01 a.m. on the Effective
Date.
(b) Effective as of the Effective Date, the Company shall issue
to each Original Noteholder on the Effective Date 25 Warrants
for each $1,000 principal amount of Amended Notes which each
such original Noteholder is entitled to receive pursuant to
Subsection 2.02(a). The Warrants
24
18.
shall be issued pursuant to the Warrant Indenture and
certificates representing such Warrants shall be delivered to
the original Noteholders in accordance with the provisions of
Section 3.01 or 3.02, as the case may be.
(c) Effective as of the Effective Date, the Company shall issue to
each Original Noteholder who has made an Election, and is
entitled, to receive Series B Notes, in replacement of 40% of
the aggregate principal amount of the Original Notes held by
such Original Noteholder (as contemplated by subparagraph 2.02
(a)(i)(C)), 100 Common Shares (the "Replacement Shares") for
each $1,000 principal amount of Original Notes in respect of
which such Election was made by such Original Noteholder.
(d) If Elections are made requesting the amendment of the
attributes of the Original Notes to the attributes of the
Series B Notes such that the Initial Principal Amount of the
Series B Notes would exceed $2,400,000, then each original
Noteholder making such an Election shall be deemed:
(i) to have made such Election only in respect of
Original Notes having an aggregate principal amount
equal to the amount obtained by multiplying the
aggregate principal amount of the Original Notes in
respect of which such Original Noteholder actually
made such Election by a fraction of which
(A) the numerator is $2,400,000, and
(B) the denominator is the aggregate principal
amount of the Original Notes in respect of
which such Elections were actually made; and
(ii) with respect to the balance of the aggregate
principal amount of the Original Notes in respect of
which such Original Noteholder actually made such
Election, to have elected to have the attributes of
such Original Notes become the attributes of Series
A2 Notes on the terms set out in subparagraph 2.02(a)
(i)(B).
(e) No certificates evidencing Notes other than in the
denominations set out in Section 2.05 will be issued. Each
holder of an Original Note who would otherwise be entitled to
an Amended Note in a denomination other than a denomination
set out in Section 2.05 will receive, in lieu of any such
certificate, a cash payment equal to the principal amount of
the Original Note for which such holder is not entitled by
virtue of this Subsection to receive a certificate evidencing
an Amended Note.
25
19.
Section 2.03 Terms of Series A Notes:
(a) The Series A Notes shall be dated as of the Effective Date,
shall mature on December 30, 1998, and shall bear interest
from and including December 31, 1992 at the rate of 8% per
annum, with interest on overdue interest at the same rate,
calculated and payable semi-annually in arrears on June 30 and
December 30 in each year, the first such payment to be made on
June 30, 1993, but, in the case of Bearer Series A2 Notes,
only upon presentation and surrender of the Coupons relating
thereto as they shall severally mature.
(b) Beginning December 30, 1993 the Company shall repay to the
holders of Series Al Notes the principal amount of the Series
Al Notes outstanding in proportion to the principal amount of
Series Al Notes held by each such Noteholder at the applicable
Record Date in accordance with the following schedule:
Principal Aggregate Principal Amount of
Repayment Date Series Al Notes to be Repaid
----------------------- ---------------------------------
December 30, 1993 5% of Initial Principal Amount
December 30, 1994 10% of Initial Principal Amount
December 30, 1995 15% of Initial Principal Amount
December 30, 1996 20% of Initial Principal Amount
December 30, 1997 25% of Initial Principal Amount
December 30, 1998 25% of Initial Principal Amount
(c) Beginning December 30, 1993 the Company shall repay to the
holders of Series A2 Notes the principal amount of the Series
A2 Notes outstanding in proportion to the principal amount of
the Series A2 Notes held by each such Noteholder at the
applicable Record Date in accordance with the following
schedule:
Principal Aggregate Principal Amount of
Repayment Date Series A2 Notes to be Repaid
------------------ --------------------------------
December 30, 1993 5% of Initial Principal Amount
December 30, 1994 5% of Initial Principal Amount
December 30, 1995 5% of Initial Principal Amount
December 30, 1996 5% of Initial Principal Amount
26
20.
December 30, 1997 5% of Initial Principal Amount
December 30, 1998 75% of Initial Principal Amount
For purposes of determining the entitlement of holders of a
Bearer Series A2 Note to receive a principal repayment constituting a Periodic
Payment, as provided for in this Subsection, the holder of such Note who
presents it for payment as provided for in Subsection 2.09(b) shall be
irrevocably deemed to have been the holder thereof on the applicable Record
Date.
Section 2.04 Terms of Series B Notes:
(a) The Series B Notes shall be dated as of the Effective Date,
shall mature on December 30, 1998, and shall bear interest
from and including December 31, 1992 at the rate of 8% per
annum, with interest on overdue interest at the same rate,
calculated and, subject to Subsection 2.04(d), payable
semi-annually in arrears on June 30 and December 30 in each
year, the first such payment to be made on June 30, 1993, but,
in the case of Bearer Series B Notes, only upon presentation
and surrender of the Coupons as they shall severally mature.
(b) Subject to Subsection 2.04(c), the Series B Notes shall be
repaid in full at maturity on December 30, 1998.
(c) Notwithstanding Subsections 2.04(a) and (b), no principal,
interest, or other obligations or any other amounts shall be
paid, redeemed or repaid on or in respect of the Series B
Notes until:
(i) the Prior Indebtedness and all principal, interest
and other obligations on or in respect thereof have
been paid, redeemed or repaid in full; and
(ii) all other Indebtedness ranking prior to the Series B
Notes and permitted pursuant to the terms of this
Indenture which is due and payable on or before
December 30, 1998 and all principal, interest and
other obligations on or in respect thereof have been
paid, redeemed or repaid in full;
provided that interest may be paid on the Series B Notes in
accordance with Subsection 2.04(a) unless and until an
Event of Default has occurred or an event of default under the
Senior Indebtedness has occurred, in which event no interest
shall be paid on the Series B Notes until such Event of
Default, or event of default, has been waived in accordance
with the provisions of this Trust Indenture or the instruments
or instruments evidencing the Senior Indebtedness, as the case
may be and, in the latter case, the Trustee or the Registrar
has received actual notice thereof. If an Event of Xxxxxxx
00
00.
or an event of default under the Senior Indebtedness has
occurred which has not been waived in accordance with the
provisions of this Trust Indenture or the instrument or
instruments evidencing the Senior Indebtedness, as the case
may be, and the Trustee or the Registrar has actual notice of
such Event of Default or the Trustee or the Registrar has
received actual notice of an event of default under the Senior
Indebtedness from the Company or the Senior Lender, if the
Trustee or the Registrar or any other registrar or Transfer
Agent or the Principal Paying Agent or any other Paying Agent
shall receive from the Company or shall hold any amount for
payment in respect of the Series B Notes, such amount shall be
received and held in trust for the benefit of the Senior
Lender, the holders of the Series A Notes or the holders of
other Indebtedness ranking prior to the Series B Notes and
permitted pursuant to the terms of this Indenture, as the case
may be, and shall be paid over to the Senior Lender, the
holders of the Series A Notes, or the holders of other
Indebtedness ranking prior to the Series B Notes and permitted
pursuant to the terms of this Indenture, as the case may be,
for application to the payment of all liabilities and
obligations in respect of the Senior Indebtedness, the Series
A Notes or other Indebtedness ranking prior to the Series B
Notes and permitted pursuant to the provisions of this
Indenture remaining unpaid after giving effect to any payment
or distribution, or provision therefor, to the Senior Lender,
the holders of the Series A Notes or other Indebtedness
ranking prior to the Series B Notes and permitted pursuant to
the provisions of this Indenture. If the Trustee or the
Registrar or any other registrar or Transfer Agent or the
Principal Paying Agent or any other Paying Agent shall make
any payment to any holder of Series B Notes contrary to the
provisions of the preceding sentence, then such holder of
Series B Notes shall repay any amount so received to the
Trustee, to be held and applied by the Trustee in accordance
herewith.
Section 2.05 Forms of Notes:
(a) Notwithstanding any other provision of this Indenture:
(i) all Series Al Notes shall be issued as fully registered
Notes,
(ii) all Series A2 Notes and Series B Notes may be issued
either as fully registered Notes or in bearer form, and
(iii) Notes issued in Canada or to residents of Canada shall
be issued as fully registered Notes.
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22.
(b) All Notes issued as fully registered Notes shall be in
denominations of $5,000 and integral multiples thereof, shall
be substantially in the form of Exhibit A (for Series Al
Notes), Exhibit B (for Series A2 Notes) or Exhibit C (for
Series B Notes) attached hereto (the "Registered Notes")
without interest coupons attached and with such appropriate
insertions, omissions, substitutions and variations as are
required or permitted by this Indenture and shall bear such
distinguishing letters and/or numbers as the Trustee may
approve.
(c) The Notes in bearer form shall be issued in denominations of
$5,000, $50,000 and $500,000, substantially in the form of
Exhibit D (for Series A2 Notes) or Exhibit E (for Series B
Notes) (the "Bearer Notes") with Interest Coupons attached
representing the semi-annual interest payable thereon. The
Bearer Notes shall contain such appropriate insertions,
omissions, substitutions and other variations as are required
or permitted by this Indenture and may have such letters,
numbers or other marks or identifications and such legends or
endorsements placed thereon as may, consistent herewith, be
determined by the officers of the Company executing such Notes,
as evidenced by their execution of such Notes.
Section 2.06 Signature of Notes: All Notes shall be under the corporate seal
of the Company and shall be signed (either manually or by facsimile signature)
by the chairman of the board or the president or the executive vice-president or
a vice-president and by the secretary or an assistant-secretary or the treasurer
or a vice-president of the Company. A facsimile signature upon any of the Notes
shall for all purposes of this Indenture be deemed to be the signature of the
person whose signature it purports to be and to have been signed at the time
such facsimile signature is reproduced and notwithstanding that any person whose
signature, either manual or in facsimile, may appear on the Notes is not at the
date of this Indenture or at the date of the Notes or at the date of the
certifying and delivery thereof the chairman of the board, the president, the
executive vice-president, a vice-president, the secretary, an
assistant-secretary or the treasurer, as the case may be, of the Company, such
Notes shall, subject to authentication as provided below, be valid and binding
upon the Company and entitled to the benefits of this Indenture.
Section 2.07 Certification and Commencement of Interest:
(a) Except for Original Notes, no Note shall be issued or, if
issued, shall be obligatory, or shall entitle the holder to
the benefits of this Indenture,until it has been certified by
or on behalf of the Trustee substantially in the applicable
form set out in Exhibit A, Exhibit B, Exhibit C, Exhibit D, or
Exhibit E attached hereto, as the case may be, or in some other
form approved by the Trustee. Such certification on any Note
shall be
29
23.
conclusive evidence that such Note was duly issued, is a valid
and binding obligation of the Company and that the holder is
entitled to the benefits hereof.
(b) The certificate of the Trustee signed on Notes shall not be
construed as a representation or warranty by the Trustee as to
the validity of this Indenture or of the Notes or their
issuance.
(c) The certificate of the Trustee signed on the said Notes shall,
however, be a representation or warranty by the Trustee that
the said Notes have been duly certified by or on behalf of
the Trustee pursuant to the provisions of this Indenture.
Section 2.08 Registers of Notes:
(a) The Company shall cause to be kept by and at the principal
office of the Registrar in the City of Toronto, and at such
other place or places, if any, and by the Registrar or by
such other registrar or registrars or transfer agent or
transfer agents appointed pursuant to the Agency Agreement (the
"Transfer Agents"), if any, as the Company with the approval of
the Trustee may designate, registers in which shall be entered
the names and addresses of the holders of the Registered Notes
of each series and particulars of the Registered Notes held by
such holders respectively. Such registration shall be noted on
the Registered Notes by the Registrar or other registrar or
Transfer Agents. No transfer of a Registered Note shall be
valid unless made on one of such registers by the registered
holder or his executors or administrators or other legal
representatives or his or their attorney duly appointed by an
instrument in writing in form and execution satisfactory to the
Registrar, upon compliance with such reasonable requirements
as the Company may from time to time agree upon with the
Registrar, the Trustee, the Transfer Agents and/or other
registrar and unless such transfer shall have been duly noted
on such Registered Note by the Registrar or other registrar or
Transfer Agents.
(b) The registers referred to in this Section shall at all
reasonable times be open for inspection by the Company,
by the Trustee and by any holder of Notes.
(c) The holder of a Registered Note may at any time and from time
to time have such Registered Note transferred at any of the
places at which a register is kept for the Registered Notes
pursuant to the provisions of this Section, in accordance with
such reasonable regulations as the Registrar may prescribe.
30
24.
(d) The holder of a Registered Note may at any time and from time
to time have the registration of such Registered Note
transferred from the register in which the registration thereof
appears to another register kept pursuant to the provisions of
this Section, in accordance with such reasonable regulations as
the Registrar may prescribe.
(e) Neither the Company nor the Registrar nor any other registrar or
Transfer Agent shall be required (i) to make transfers or
exchanges of any Registered Notes on the day of or during the
10 business days next preceding any selection by the Trustee of
Registered Notes to be redeemed; or (ii) to make transfers or
exchanges of any Registered Note which has been selected or
called for redemption in whole or in part unless upon due
presentation of such Registered Note for redemption such
Registered Note or part shall not be redeemed.
(f) The Registrar and/or any registrar or Transfer Agent for any of
the Registered Notes and/or the Company shall not be charged
with notice of or be bound to see to the execution of any
trust, whether express, implied or constructive, in respect
of any Registered Note and may transfer the same on the
direction of the holder thereof, whether named as trustee or
otherwise, as though that person were the beneficial owner
thereof.
(g) Except in the case of the register required to be kept at the
City of Toronto, the Company, with the approval of the
Registrar, may at any time close any register for Registered
Notes and in that event shall transfer the records thereof to
another existing register or to a new register and thereafter
Registered Notes which were registered on such closed register
at the time of its closing shall be deemed to be registered on
such existing or new register as the case may be. In the event
that the register in any place is closed and the records
transferred to a register kept in another place, notice of such
change shall be given, in the manner provided in Section 14.01,
to the holders of the Registered Notes registered in the
register so closed.
(h) Every registrar and Transfer Agent shall, whenever requested so
to do by the Company or by the Registrar, furnish the Company
or the Registrar, as the case may be, with a list of the names
and addresses of holders of the Registered Notes registered on
the register or registers maintained by such registrar showing
the principal amount and serial numbers of such Registered
Notes held by each holder.
31
25.
Section 2.09 Payments and Paying Agents:
(a) The person in whose name any Registered Note is registered
shall be deemed to be and regarded as the owner thereof for all
purposes of this Indenture. Payment of the principal due on
maturity on December 30, 1998 of any Registered Note shall be
made in lawful money of Canada, at the holder's option, subject
to any applicable laws or regulations, against presentation
and surrender of such Registered Note, at the specified
office of the Registrar or any of the Paying Agents. Subject to
Section 7.08, payments of interest and principal repayments,
other than those due on maturity on December 30, 1998
(collectively "Periodic Payments"), on any Registered Note
shall be made to any such registered holder whose name is shown
on the register at the close of business on the applicable
Record Date. Subject to Section 7.08, Periodic Payments on such
Registered Note shall be made in lawful money of Canada and
mailed to the registered holder thereof (or to the first-named
of joint holders) at his address appearing in the register
maintained by the Registrar or other registrar or Transfer
Agent. Upon application by such registered holder to the
specified office of the Registrar or any Paying Agent not less
than 15 business days prior to the due date for any Periodic
Payment in respect of a Registered Note, such payment may be
made by transfer to a Canadian dollar account maintained by the
payee with a bank in Toronto. Any payment made in accordance
with the foregoing provisions shall be a good and sufficient
discharge to the Company and to the Trustee and the Registrar
and to any other registrar and to any Paying Agent for the
amounts so paid.
The holder for the time being of any Registered Note shall be
entitled to the principal moneys and interest evidenced by
such Registered Note, free from all equities or rights of
set-off or counterclaim between the Company and the original
or any intermediate holder thereof, and all persons may act
accordingly and a transferee of a Registered Note shall,
after the appropriate form of transfer is lodged with the
Registrar or other registrar or Transfer Agent and upon
compliance with all other conditions in that behalf required
by this Indenture or by any conditions contained in or
endorsed on such Registered Note or by law, be entitled to be
entered on any one of the said registers as the owner of such
Registered Note free from all equities or rights of set-off or
counterclaim between the Company and his transferor or any
previous holder thereof, save in respect of equities of which
the Company is required to take notice by statute or by order
of a court of competent Jurisdiction.
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(b) The Company, the Trustee, the Principal Paying Agent and the
Paying Agents may deem and treat the bearer of any Bearer Note
or Coupon appertaining thereto as the absolute owner of such
Note or Coupon, as the case may be, for the purpose of
receiving any payment due hereunder and for all other purposes
of this Indenture and the Agency Agreement whether or not any
such Note or Coupon shall be overdue and notwithstanding any
notation of ownership or other writing on such Note or Coupon.
Any payment in accordance with the foregoing provisions shall
be a good and sufficient discharge to the Company and to the
Trustee and to the Registrar and to any Paying Agent for the
amounts so paid. Payment of interest on the Bearer Notes shall
be made in lawful money of Canada, at the holder's option,
subject to any applicable laws or regulations, against
surrender of the Coupons at any specified office of any Paying
Agent. Payment of principal on the Bearer Notes payable at
maturity shall be made in lawful money of Canada, at the
holder's option, subject to any applicable laws or regulations,
against surrender of the Bearer Note at any specified office
of any Paying Agent. Payment of principal constituting a
Periodic Payment on the Bearer Notes shall be made in lawful
money of Canada, at the holder's option, subject to any
applicable laws or regulations against delivery of the Bearer
Note at any specified office of any Paying Agent and such
Paying Agent shall, in accordance with the Agency Agreement,
be authorized to make a notation of such payment on such Bearer
Note. Payments at the offices referred to above shall be made
by a cheque drawn on a Canadian dollar account or, at the
option of the holder, by wire transfer to a Canadian dollar
account maintained by the payee with a bank in Toronto.
Each Bearer Note should be presented for redemption
together with all unmatured Coupons appertaining thereto,
failing which the amount of any such missing unmatured Coupon
(or, in the case of payment not being made in full, that
proportion of the amount of such missing unmatured Coupon which
the sum of principal so paid bears to the total amount due on
redemption) will be deducted from the sum due for payment.
Each amount so deducted will be paid in the manner mentioned
above against surrender of the relevant missing Coupon not
later than five years from the Relevant Date. If the redemption
date is not an Interest Payment Date the interest accrued from
the preceding Interest Payment Date or the issue date, as the
case may be, shall be payable only against presentation of the
relevant Coupon.
If the due date for payment of any amount of principal or
interest in respect of any Bearer Note is not at any place of
payment a business day, then the holder thereof
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will not be entitled to payment at the relevant place of
payment of the amount due until the next following business
day at the relevant place of payment and will not be entitled
to any further interest or other payment in respect of any such
delay.
(c) The Company shall pursuant to the Agency Agreement initially
appoint the Principal Paying Agent and the Paying Agents at
their specified offices as set out in the Agency Agreement.
The Company reserves the right at any time, with the prior
written approval of the Trustee, to vary or terminate the
appointment of any Paying Agent and appoint additional or other
Paying Agents or approve any change in the office through
which any Paying Agent acts, provided that it shall at all
times maintain a Paying Agent in Toronto and in a European city
which, so long as the Notes are listed on the Luxembourg Stock
Exchange, will be Luxembourg. Any removal or appointment of a
Paying Agent or any change in the specified office of a Paying
Agent shall only take effect (other than in the case of the
insolvency of the Paying Agent being removed when it shall be
of immediate effect) after not more than 60 nor less than 45
days' notice thereof shall have been given to Noteholders in
accordance with Section 14.01 hereof.
Section 2.10 Mutilation, Loss, Theft or Destruction of Notes: In case any Note
or Coupon shall at any time become mutilated, defaced, destroyed, stolen or
lost and such Note or Coupon (with the Note to which such Coupon appertains) or
evidence of the loss, theft or destruction thereof (together with the indemnity
hereinafter referred to and such other documents or proof as may be required)
shall be delivered to the specified office of the Registrar or to the specified
office of the Paying Agent in London, England, a new Note of like tenor and
date with appropriate Coupons, if any, shall be certified and delivered by the
Trustee at the office of the Registrar or at the office of the Paying Agent
in London, England in exchange for the Note so mutilated, or the Note to which
such mutilated Coupon appertains, or in lieu of the Note so destroyed, stolen
or lost, or in exchange for the Note to which such destroyed, stolen or lost
Coupon appertains (upon surrender of such Note with all appurtenant Coupons not
destroyed, stolen or lost), but, in the case of a defaced, destroyed,
stolen or lost Note or Coupon, only upon receipt by the Registrar or the said
Paying Agent of evidence satisfactory to the Trustee and the Company that such
Note or Coupon was defaced, destroyed, stolen or lost, and, if required by the
Trustee or the Company, upon receipt by the Registrar or the said Paying Agent
also of indemnity satisfactory to the Trustee and the Company. All expenses and
reasonable charges associated with procuring such indemnity and with the
preparation, authentication and delivery of a new Note or Coupon shall be borne
by the applicant for a new Note or Coupon. Any new or substituted Note
certified and delivered by the Trustee pursuant to the provisions of this
Section shall be in a form
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approved by the Trustee and shall be entitled to the benefits of this Indenture
and rank equally in accordance with its terms with all other Notes of the same
series issued or to be issued hereunder.
Section 2.11 Transfer and Exchange of Notes:
(a) At the option of any Noteholder upon request confirmed in
writing Registered Notes may be exchanged for an equal
aggregate principal amount of Bearer Notes of the same series
upon certification that the beneficial owner thereof is not a
U.S. person. Bearer Notes issued upon exchange of a Registered
Note between a Record Date and the relevant Interest Payment
Date will be issued without the Coupon relating to such
Interest Payment Date and any Periodic Payment due on such
Interest Payment Date shall be made to the registered holder of
the Note on the Record Date.
(b) At the option of any Noteholder upon request confirmed in
writing Bearer Notes (with all unmatured Coupons
attached, except as provided below) may be exchanged for an
equal aggregate principal amount of Registered Notes of the
same series. Bearer Notes surrendered in exchange for
Registered Notes between a Record Date and the relevant
Interest Payment Date should be surrendered without the Coupon
relating to such Interest Payment Date.
(c) A Noteholder may exchange one $500,000 Bearer Note for 10
$50,000 Bearer Notes or 100 $5,000 Bearer Notes, and
vice versa, one $50,000 Bearer Note for 10 $5,000 Bearer
Notes, or 10 $5,000 Bearer Notes for one $50,000 Bearer Note at
any time prior to the date of final redemption of the Notes on
presentation of such Bearer Notes at the specified office of
the Principal Paying Agent or the Registrar or any other
registrar. Registered Notes of any denomination or series may
be exchanged for Registered Notes of any other authorized
denomination or denominations of the same series, any such
exchange to be for an equal principal amount of Registered
Notes.
(d) Bearer Notes may be presented for exchange, and Registered
Notes may be presented for exchange or transfer, at the
specified office of any Transfer Agent or, in the case of
Registered Notes at the specified office of the Registrar or
any other registrar, without service charge (other than the
cost of delivery) but upon payment of any taxes and other
governmental charges required to be paid. Any exchange or
transfer will be effected by the Transfer Agents or the
Registrar or any other registrar, as the case may be, being
satisfied with the documents of title and identity of the
person making the request, and subject to such requirements as
the
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Company may from time to time agree upon with the Transfer
Agents, the Registrar and any other registrar and the Trustee.
Registered Notes may be exchanged or transferred (in whole or
in part) in the amount of $5,000 or integral multiples
thereof.
(e) Any Notes tendered for exchange shall be cancelled in
accordance with the provisions of Section 13.01 hereof.
Notes issued in exchange for Notes which at the time of
such issue have been selected or called for redemption at a
later date shall be deemed to have been selected or called for
redemption in the same manner and shall have noted thereon a
statement to that effect.
(f) The Company has, pursuant to the Agency Agreement, appointed the
Transfer Agents and Registrar at their specified offices as
set out therein. The Company reserves the right at any time,
with the prior approval of the Trustee, to vary or terminate
the appointment of any Transfer Agent or Registrar and appoint
additional or other Transfer Agents or Registrars or approve
any change in the office through which such Transfer Agent or
Registrar acts, but it will at all times maintain a Registrar
in Toronto and a Transfer Agent in a European city which, so
long as the Notes are listed on the Luxembourg Stock Exchange,
shall be Luxembourg. Any removal or appointment of a Transfer
Agent or Registrar or any change in the specified office of a
Transfer Agent or Registrar shall only take effect (other than
in the case of the insolvency of a Transfer Agent or Registrar
being removed when it shall be of immediate effect) after not
more than 60 nor less than 45 days' notice thereof shall have
been given to the Noteholders in accordance with Section 14.01
hereof.
Section 2.12 Payment of Additional Amounts:
(a) The Company covenants and agrees with the Trustee for the
benefit of the Trustee and the holders of Series A2
Notes, holders of Series B Notes and holders of Coupons
relating thereto (and for greater certainty not for the benefit
of holders of Series A1 Notes or holders of Coupons relating
thereto) that, so long as any Series A2 Notes or Series B Notes
remain outstanding, it will pay as additional interest on the
Series A2 Notes and Series B Notes such additional amounts as
are necessary in order that the net payment by the Company of
the principal of and interest payable on the Series A2 Notes,
Series B Notes or the Coupons relating thereto to any holder
thereof, after deduction or withholding of any present or
future taxes or duties of whatever nature imposed, levied,
collected, withheld or assessed in respect of any payments
hereunder, including additional amounts, by or within Canada or
any authority therein or thereof having
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power to tax, will not be less than the amount provided in the
Series A2 Notes, Series B Notes or Coupons relating thereto to
be then due and payable had no such taxes or duties been
required to be withheld or deducted; provided, however, that
the foregoing obligation to pay additional amounts shall not
apply:
(i) to a person with whom the Company is not dealing at arm's
length within the meaning of the Income Tax Act (Canada);
(ii) to a holder who is subject to such taxes or duties (except
for any taxes exigible pursuant to Part XIII of the Income
Tax Act (Canada) or any replacement thereof) solely by
reason of his having some connection with Canada other
than the mere holding of such Series A2 Note, Series B
Note or Coupon relating thereto; or
(iii) to any Series A2 Note or Series B Note in respect of which
a holder thereof has delivered a certificate as to
Canadian residence upon a redemption of Series A2 Notes
or Series B Notes in accordance with Section 7.01,
following the time of delivery of such certificate.
Any reference in this Indenture to the payment of the principal of and
interest payable on the Series A2 Notes, Series B Notes or Coupons
relating thereto shall be deemed to refer also to any additional
amounts which may be payable under this Section.
(b) If at any time the Company or the Principal Paying Agent is
required by law to make any deduction or withholding
from any amount payable by it hereunder or under the Agency
Agreement (or if there is any change in the rates at which or
the manner in which such deductions or withholdings are
calculated), the Company shall promptly notify the Trustee.
(c) If the Company makes any payment hereunder in respect of which
it is required by law to make any deductions or withholdings,
in addition to the additional amounts required to be paid to
the holders of the Series A2 Notes, Series B Notes and Coupons
under Subsection 2.12(a), it shall pay the full amount
required to be deducted or withheld to the relevant taxation
or other authority within the time allowed for such payment
under applicable law and shall deliver to the Trustee within 30
days after it has made such payment to the applicable
authority, an original receipt (or a certified copy thereof)
issued by such authority evidencing the deduction or
withholding of all amounts so required to be deducted or
withheld.
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ARTICLE THREE
REPLACEMENT OF NOTES
Section 3.01 Replacement of Registered Original Notes for Registered Amended
Notes:
(a) As soon as practicable after the Effective Date, the Company
shall send to all holders of Registered Original Notes
as of the close of business on the Effective Date a Letter of
Transmittal with respect to the replacement of Registered
Original Notes with Registered Amended Notes, Warrants and, in
the case of those Original Noteholders who made an Election.
and are entitled to receive Series B Notes, Replacement Shares.
Within 10 days following receipt of the Letter of Transmittal,
each holder of Registered Original Notes shall complete the
Letter of Transmittal and deliver the same, together with the
certificate or certificates representing the Registered
Original Notes of such holder, to the address set out in the
Letter of Transmittal. Within 10 days following receipt from a
holder of Registered Original Notes of the Letter of
Transmittal and the certificate or certificates representing
the Registered Original Notes of such holder, the Company shall
forward or cause the Trustee to forward to such holder
certificates representing the appropriate number and type of
Registered Amended Notes registered in the name of such holder,
a bearer certificate representing the appropriate number of
Warrants and, in the case of those holders who made an Election
and are entitled to receive Series B Notes, a certificate
representing the appropriate number of Replacement Shares
registered in the name of such holder. Certificates
representing Registered Amended Notes, Warrants and Replacement
Shares, if any, held by the Trustee that are not so replaced on
or before December 30, 1998 shall be redelivered by the Trustee
to the Company on demand and thereupon the Trustee shall be
released from all further liability with respect to the
issuance or replacement of certificates representing any such
Registered Amended Notes, Warrants and Replacement Shares.
Subject to Section 1.05, after such Registered Amended Notes,
Warrants and Replacement Shares are so redelivered to the
Company, holders of Registered Original Notes shall be entitled
to obtain the Registered Amended Notes, Warrants and
Replacement Shares from the Company.
(b) Despite Subsection 3.01(a), neither the Company nor the Trustee
shall be required to distribute Registered Amended Notes,
Warrants, Replacement Shares or Underlying Shares to any holder
of Registered Original Notes if such distribution would be
contrary to Applicable Legislation
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or to the securities or other laws of Canada or any other
jurisdiction.
Section 3.02 Procedures for Replacement of Bearer Original Notes and Coupons
for Bearer Amended Notes and Coupons:
(a) As soon as practicable after the Effective Date, the Company
shall publish a notice in the Financial Times and through
Euro-clear (the "Replacement Notice") advising all holders of
Bearer Original Notes of the exercise price of the Warrants.
The Replacement Notice shall also instruct (i) the Bearer
Original Noteholders how the certificates representing Bearer
Original Notes may be replaced with certificates representing
Bearer Amended Notes and Warrants and, in the case of those
holders who made an Election, and are entitled to receive
Series B Notes, Replacement Shares and (ii) the holders of
Coupons relating to the Bearer Original Notes how such
Coupons may be replaced with Coupons relating to the Bearer
Amended Notes. Certificates representing Bearer Amended Notes,
the Coupons relating to Bearer Notes, Warrants and Replacement
Shares, if any, held by the Trustee that are not so replaced on
or before December 30, 1998 shall be redelivered by the Trustee
to the Company on demand and thereupon the Trustee shall be
released from all further liability with respect to the
issuance or replacement of certificates representing any such
Bearer Amended Notes, Coupons related to Bearer Amended Notes,
Warrants and Replacement Shares. Subject to Section 1.05, after
such Bearer Amended Notes, Coupons relating to Bearer Amended
Notes, Warrants and Replacement Shares are so redelivered to
the Company holders of Bearer Original Notes or Coupons
relating to Bearer Original Notes shall be able to obtain the
certificates representing such Bearer Amended Notes, Coupons
related to Bearer Amended Notes, Warrants and Replacement
Shares from the Company.
(b) Despite Subsection 3.02(a), neither the Company nor the Trustee
shall be required to distribute Bearer Amended Notes, Coupons
related to Bearer Amended Notes, Warrants, Replacement Shares
or Underlying Shares to any holder of Bearer original Notes if
such distribution would be contrary to Applicable Legislation
or to the securities or other laws of Canada or any other
jurisdiction.
Section 3.03 Effect of Effective Date: Notwithstanding any other provision of
this Trust Indenture, after the Effective Date, holders of Original Notes shall
have no rights under the Original Notes (except that each Coupon pursuant to
which interest was payable on or prior to December 31, 1992 shall be honoured
by and shall remain an obligation of the company as if such Coupon were issued
pursuant to this Trust Indenture) but holders of Original Notes shall have all
the rights and remedies under this Trust Indenture as if they had replaced the
certificates representing
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their original Notes and, if applicable, Coupons with certificates representing
Amended Notes, Warrants and, if entitled thereto, Coupons or Replacement
Shares, in accordance with Section 3.01 or 3,02.
Section 3.04 Certification of Notes: Upon receipt of a written direction from
the Company, Amended Notes shall be certified by or on behalf of the Trustee
and delivered in accordance with the provisions hereof without any further act
or formality on the part of the Company and without the Trustee receiving any
consideration therefor. The Trustee shall have no duty or responsibility with
respect to the use or application of any of the Amended Notes so certified and
delivered.
ARTICLE FOUR
SUBORDINATION OF NOTES TO SENIOR INDEBTEDNESS
Section 4.01 Subordination: The payment of the principal of, and interest
payable on the Notes shall be subordinate and rank junior, to the extent and in
the manner set out in this Article Four, to the prior payment in full of all
present or future Senior Indebtedness, Upon the maturity of any Senior
Indebtedness by lapse of time, acceleration or otherwise, then, except as
hereinafter in Section 4.06 otherwise provided, the principal of, and premium,
if any, and interest on such matured Senior Indebtedness shall first be paid in
full or payment duly provided for before any payment on account of the
principal of and interest on the Notes is made.
Section 4.02 Payment on Dissolution or Winding-UP:
(a) in the event of any payment or distribution of assets of the
Company upon any liquidation, dissolution or winding-up (or
arrangement or other reorganization that is similar thereto) of
the Company, whether or not pursuant to any bankruptcy,
insolvency or analogous law of Canada or of any province
thereof, subject to Section 4.06:
(i) the holders of all Senior Indebtedness shall first be
entitled to receive payment in full thereof, or such
payment shall be duly provided for, before the holders of
the Notes shall be entitled to receive any payment upon
the principal of, or interest on, the Notes;
(ii) the holders of Notes by their acceptance thereof assign to
the holders of the Senior Indebtedness or the designated
representatives thereof, for the purposes and to the
extent set forth in this paragraph 4.02 (a) (ii) all their
right and title and
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interest to and in any payment or distribution of assets of
the Company of any kind or character, whether in cash, property
or securities, to which the Noteholders or the Trustee (for
their benefit) would be entitled but for the provisions of this
Section 4.02, and the Trustee shall take such steps as may be
necessary or appropriate to entitle the holders of Senior
Indebtedness or the designated representatives thereof to
receive such payment or distribution directly from the
liquidating trustee or agent or other person making such
payment or distribution, whether a trustee in bankruptcy, a
receiver or other liquidating agent, rateably according to the
aggregate amounts remaining unpaid on the Senior Indebtedness
held or represented by each, all to the extent necessary to
provide for payment of the Senior Indebtedness in full (after
giving effect to any concurrent payment or distribution to the
holders of such Senior Indebtedness or provision therefor),
prior to any payment upon the principal of or interest on the
Notes;
(iii) in the event, notwithstanding the provisions of paragraphs 4.02
(a) (i) and (ii), any payment or distribution of the assets of
the Company of any kind or character in respect of the
principal of or interest on, the Notes, whether in cash,
property or securities, shall be received by the Trustee or any
other registrar, by the Principal Paying Agent, by any other
Paying Agent or by any Noteholder before all Senior
Indebtedness shall have been paid in full or duly provided for,
such payment or distribution shall be held by the recipient in
trust (which trust is hereby declared) for the benefit of, and
shall be paid over to, the holders of senior Indebtedness or
the designated representatives thereof, rateably according to
the aggregate amount remaining on such Senior Indebtedness
represented by each, to the extent necessary to pay all Senior
Indebtedness in full (after giving effect to any concurrent
payment or distribution to the holders of such Senior
Indebtedness or provision therefor); and
(iv) when all Senior Indebtedness shall have been paid in full the
holders of the Notes shall be entitled to receive payment from
any assets of the Company then available for such payment.
The reconstruction or reorganization of the Company, the consolidation,
amalgamation or merger of the Company with another corporation or the
transfer, lease or sale of its undertaking and assets as an entirety,
or substantially
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as an entirety, to another corporation, in each case upon the terms
and conditions provided in Article Nine, shall be deemed not to be a
liquidation, dissolution or winding-up of the Company for the purposes
of this Section if such reconstruction, reorganization, consolidation,
arrangement, amalgamation, merger, transfer, lease or sale may be and
is carried out in compliance with the terms and conditions set out in
Article Nine.
(b) For the purposes of ascertaining the persons entitled to
participate in any payment or distribution, the holders of Senior
Indebtedness and other Indebtedness, the amount thereof or payable
thereon, the amount or amounts distributed thereon and all other facts
pertinent thereto, the Trustee and the Noteholders shall be entitled
to rely upon a certificate of the Company or a certificate, in similar
form, of a trustee in bankruptcy or other liquidating trustee or agent
or an order or decree of a court of competent jurisdiction and, upon
the request of the Trustee, the Company will use its best efforts to
provide to or obtain for the Trustee such a certificate, order or
decree.
Section 4.03 Senior Indebtedness Default: In the event that a Senior
Indebtedness Default shall have occurred and be continuing and written notice
of such Senior Indebtedness Default, containing reasonable particulars thereof,
shall have been received by the Trustee and the Company from the holder of the
affected Senior Indebtedness or the designated representative thereof, subject
to Section 4.06, unless and so long as the Company shall in good faith dispute
the existence of such Senior Indebtedness Default:
(a) the Company shall not purchase or redeem any Notes or make any payment
of the principal of, or interest on, the Notes; and
(b) if the Trustee or the Registrar or any other registrar or Transfer
Agent or the Principal Paying Agent or any other Paying Agent shall
receive from the Company or shall hold any amount for payment of the
principal of, or interest on, the Notes, such amount shall be received
and held in trust for the benefit of the holders of such senior
Indebtedness and shall be paid over to the holders of such Senior
Indebtedness or to the representatives thereof for application to the
payment of all Senior Indebtedness remaining unpaid to the extent
necessary to pay all such Senior Indebtedness after giving effect to
any concurrent payment or distribution, or provision therefor, to the
holders of such Senior Indebtedness;
provided, however, that if such Senior Indebtedness Default shall be cured or
waived, or all amounts that shall have become due for principal of, and
interest on, all Senior Indebtedness shall have
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been paid or duly provided for (whether by the Company or by application as
aforesaid), and the Trustee shall have received a certificate of the Company to
that effect and either (i) shall have received a similar certificate from the
holders of each class of Senior Indebtedness or the designated representative
thereof as to the payment in full or due provision for the payment of all
amounts due in respect of such class, or (ii) shall not, within 10 days after
written request by the Trustee to each such holder or the designated
representative thereof, have received a statement to the contrary from any
such holder or designated representative, such trusts for the benefit of the
holders of Senior Indebtedness and the designated representatives thereof shall
terminate and any amount still held by the Trustee or the Registrar or any
other registrar or Transfer Agent or the Principal Paying Agent or any other
Paying Agent shall be applied by them for the purposes for which such amount
shall have been received from the Company as aforesaid. In the event that the
Trustee or the Registrar or any other registrar or Transfer Agent or the
Principal Paying Agent or any other Paying Agent shall make any payment to any
Noteholder contrary to the provisions of clause (b) above, then such Noteholder
shall repay any amount so received to the Trustee, to be held and applied by
the Trustee in accordance with the provisions of clause (b) above. The Trustee
shall not have any obligation to institute a suit, action or proceeding to
recover such amount unless the holders of any class of Senior Indebtedness or
the designated representative thereof shall have made written request upon the
Trustee to institute such suit, action, or proceeding and shall have provided
to the Trustee reasonable indemnity and security against the costs, expenses
and liabilities to be incurred therein or thereby.
Section 4.04 Subrogation to Senior Indebtedness: Subject to the payment in full
of all Senior Indebtedness or the making of due provision for such payment, the
holders of the Notes and/or Coupons shall be subrogated to the rights of the
holders of the Senior Indebtedness to receive payments or distributions of the
assets of the Company applicable to such Senior Indebtedness, to the extent of
the application thereto of moneys or other assets which would have been
received by the holders of Notes and/or Coupons but for the provisions of this
Article Four, until the principal of and interest on the Notes shall be paid in
full or duly provided for.
Section 4.05 Rights of Noteholders Reserved: The provisions of this Article
Four are and are intended solely for the purpose of defining the relative
rights of the holders of the Notes and/or Coupons on the one hand, and the
holders of the Senior Indebtedness, on the other hand. Nothing in this Article
Four or elsewhere in this Indenture or in the Notes is intended to or shall
impair the obligation of the Company, subject to the rights of the holders of
the Senior Indebtedness, to pay to the holders of the Notes the principal of,
and interest on, the Notes as and when the same shall become due and payable in
accordance herewith, or affect the relative rights of the holders of the Notes
and/or the Coupons, and creditors of the Company other than the holders of the
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Senior Indebtedness, nor shall anything herein or in the Notes prevent the
Trustee or the holder of any Note and/or Coupon from exercising all remedies
otherwise permitted by this Indenture upon default under the Note or this
Indenture, subject to the rights (if any) under this Article Four of the
holders of Senior Indebtedness in respect of any payment or distribution of
cash, property or securities of the Company received upon the exercise of any
such remedy.
Section 4.06 Exceptions to Subordination: Notwithstanding any other provision
of this Article Four or any provision of the Notes relating to subordination:
(a) if notice of redemption of any Notes has been given in accordance
with Section 7.05, the amount necessary to provide for the redemption
of such Notes may be paid to the Trustee or the Principal Paying Agent
by the Company;
(b) any amounts (other than the amounts referred to in Subsection (c) of
this Section 4.06) received by the Trustee or the Registrar or any
other registrar or Transfer Agent or the Principal Paying Agent or any
other Paying Agent from the Company in compliance with the provisions
of this Indenture or the Agency Agreement for the purpose of making
any payments to holders of the Notes shall be held in trust solely for
the purpose of making such payments and the Trustee or the Registrar
or any other registrar or Transfer Agent or the Principal Paying Agent
or any other Paying Agent may pay or make, and any such holder may
receive, any payment or distribution from any such amounts and the
holders of the Senior Indebtedness shall have no right to, or claim in
respect of, such amounts, payments or distributions, either against
the Trustee or such holders, if,
(i) in case of a redemption or principal repayment of the
Notes, the Trustee shall not have received, on or before the 40th
day prior to the redemption date or the applicable Principal
Repayment Date from the Company or from the holders of any class
of Senior Indebtedness or the designated representative thereof,
written notice that a Senior Indebtedness Default has occurred
and is continuing, or
(ii) in case of a deposit for the purposes of any other payment to
holders of Notes, the Trustee shall not have received, on or
before the tenth day prior to the date on which such payment to
such holders is to be made, from the Company or from the holders
of any class of Senior Indebtedness or the designated
representative thereof, written notice that a Senior Indebtedness
Default has occurred and is continuing;
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(c) this Article Four shall not be applicable to any funds which are
deposited with the Trustee or the Principal Paying Agent for the
purposes of the redemption of Notes and which constitute the proceeds
of the substantially concurrent issue of other debentures or notes
maturing not earlier than the Notes which have subordination
provisions (if any) not less favourable to the holders of Senior
Indebtedness than those contained herein or the substantially
concurrent sale by the Company of shares of its capital or both;
(d) this Article Four shall not be applicable to any cash received by the
Trustee pursuant to Section 4.04 or by the Trustee or the holder of
any Note as a holder of Senior Indebtedness.
Notwithstanding this Article Four or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts which
would prohibit the making of any payment of moneys to the Trustee or any other
registrar or the Principal Paying Agent or any other Paying Agent, or the
application of such moneys by the Trustee or any other registrar or the
Principal Paying Agent or any other Paying Agent in accordance with the terms
hereof, unless and until such person shall have received written notice
thereof as provided in Section 4.03.
Section 4.07 Renewal or Extension of Senior Indebtedness:
(a) The holders of any Senior Indebtedness may at any time in their
discretion renew or extend the time of payment of the Senior
Indebtedness so held or exercise any other of its rights under the
Senior Indebtedness, including, without limitation, the waiver of
default thereunder, all without notice to or assent from the holders
of the Notes or the Trustee,
(b) No compromise, alteration, amendment, modification, extension, renewal
or other change of, or waiver, consent or other action in respect of,
any liability or obligation under or in respect of any Senior
Indebtedness, or of any of the terms, covenants or conditions of any
indenture or other document under which the Senior Indebtedness shall
have been advanced, shall in any way alter or affect any of the
provisions of this Article Four or of the Notes relating to the
subordination thereof.
Section 4.08 Authorization to Trustee: Each holder of Notes by his acceptance
thereof irrevocably authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to further assure the
subordination provided for in this Article Four, and appoints the Trustee his
agent for any and all such purposes. Without limitation of the foregoing, the
Trustee, for and on behalf of the holders from time to time of all
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of the Notes, is authorized and directed to execute deeds of subordination
from time to time upon receipt of a written request of the Company to that
effect specifying the amount and nature thereof. Any deed of subordination
executed pursuant to this Section 4.08 shall be conclusive evidence that the
Indebtedness therein specified is Senior Indebtedness. The Trustee shall keep
on file at its principal office in Toronto, and shall deliver to the Company, a
copy of each deed of subordination executed and delivered by it pursuant to
this Section 4.08. Nothing contained in this Section 4.08 shall impair the
rights of any holders of Senior Indebtedness in whose favour a deed of
subordination has not been so executed and delivered.
Section 4.09 Relationship of Trustee: The Trustee shall not have any duty or
obligation to the holders of Senior Indebtedness other than to perform such
duties and obligations, and only such duties and obligations, as are
specifically set out in this Article Four for the benefit of the holders of the
Senior Indebtedness,
Section 4.10 Restriction on Purchase of Notes: Subject to Section 4.06, the
Company shall not purchase any Notes or make any payment of the principal of or
interest on the Notes or make any other payments or distributions to any
persons with respect thereto if, at the time of such action or after giving
effect to such action, there would exist any Senior Indebtedness Default.
ARTICLE FIVE
RANKING OF SERIES A NOTES AND SERIES B NOTES
Section 5.01 Postponement of Series B Notes to Prior Indebtedness: Except as
provided in Subsection 2.04(c), the payment of the principal of and interest
payable on the Series B Notes shall be fully postponed, subordinate and rank
junior to the extent and in the manner set out in this Article Five, to the
prior payment in full of all present and future Prior Indebtedness and all
other Indebtedness ranking prior to the Series B Notes and permitted pursuant
to the terms of this Indenture. All Prior Indebtedness and all other
Indebtedness ranking prior to the Series B Notes and permitted pursuant to the
provisions of this Indenture which is due and payable on or before December 30,
1998 shall first be paid in full before any payment is made on account of the
principal of the Series B Notes, or except as provided in Subsection 2.04(c),
on account of interest on the Series B Notes,
Section 5.02 Payment on Series A Notes and Series B Notes on Dissolution or
Winding Up:
(a) In the event of any payment or distribution of assets of the
Company upon any liquidation, dissolution or winding up or arrangement
or other reorganization that is similar thereto of the Company,
whether or not pursuant to any bankruptcy, insolvency or analogous law
of Canada or of
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any province thereof, and subject to Sections 4.02 and 4.06:
(i) after payment in full of the Senior Indebtedness, the
holders of Series A Notes shall be entitled to receive
payment in full of all liabilities in respect thereof, or
such payment shall be duly provided for, before the holders
of Series B Notes or the holders of any other Indebtedness
or other liabilities of the Company (other than Series A
Notes) shall be entitled to receive any payment in respect
thereof;
(ii) after payment in full of the Prior Indebtedness, the holders
of all other Indebtedness ranking prior to the Series B
Notes and permitted pursuant to the terms of this Indenture
shall be entitled to receive payment in full of liabilities
in respect thereof, or such payment shall be duly provided
for, before the holders of Series B Notes or the holders of
any other Indebtedness or other liabilities of the Company
shall be entitled to receive any payment in respect
thereof;
(iii) subject to paragraph 5.02(a)(ii), the holders of Series B
Notes by their acceptance thereof assign to the Trustee for
the benefit of holders of Series A Notes and the holders of
all other Indebtedness ranking prior to the Series B Notes
and permitted pursuant to the provisions of this Indenture,
for the purposes and to the extent set out in this
paragraph (iii), all of their right, title and interest in
and to any payment or distribution of the assets of the
Company of any kind or character, whether in cash, property
or securities, to which the holders of Series B Notes or
the Trustee (for the benefit of the holders of Series B
Notes) would be entitled but for the provisions of this
Section, and the Trustee shall take such steps as may be
necessary or appropriate to entitle the holders of Series A
Notes and the holders of all other Indebtedness ranking
prior to the Series B Notes and permitted pursuant to the
provisions of this Indenture or the Trustee (for the
benefit of the holders of Series A Notes) to receive such
payment or distribution directly from the liquidating
trustee or agent or other person making such payment or
distribution, whether a trustee in bankruptcy, a receiver
or other liquidating agent, all to the extent necessary to
provide for the payment of all principal of and interest
payable on and all other amounts in respect of the Series A
Notes and all other Indebtedness ranking prior to the
Series B Notes and permitted pursuant to the
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provisions of this Indenture in full (after giving effect
to any payment or distribution to the holders of Series A
Notes and to holders of all other Indebtedness ranking
prior to the Series B Notes and permitted pursuant to the
provisions of this Indenture or provision therefor), prior
to any payment on the principal of or interest on or any
other amount in respect of the Series B Notes;
(iv) after all Senior Indebtedness has been paid in full, if,
despite the provisions of paragraphs 5.02 (a)(i) to
(iii) inclusive, any payment or distribution of the
assets of the Company of any kind or character in respect
of the principal of or interest payable on or any other
amount in respect of the Series B Notes, whether in cash,
property or securities, shall be received by the Trustee or
any other Registrar, by the Principal Paying Agent, by any
other Payment Agent or by any holder of Series B Notes
before all principal of and interest payable on and all
other amounts in respect of the Series A Notes and all
other Indebtedness ranking prior to the Series B Notes and
permitted pursuant to the provisions of this Indenture
shall have been paid in full or duly provided for, such
payment or distribution shall be held by the recipient in
trust (which trust is hereby declared) for the benefit of,
and shall be paid over to, the holders of Series A Notes
and the holders of all other Indebtedness ranking prior to
the Series B Notes and permitted pursuant to the provisions
of this Indenture or the Trustee (for the benefit of the
holders of the Series A Notes) to the extent necessary to
pay all principal of and interest payable on and all other
amounts in respect of the Series A Notes and all other
Indebtedness ranking prior to the Series B Notes and
permitted pursuant to the provisions of this Indenture
(after giving effect to any payment or distribution to the
holders of the Series A Notes or the holders of other
Indebtedness ranking prior to the Series B Notes and
permitted pursuant to the provisions of this Indenture or
provision therefor); and
(v) when the Series A Notes and all amounts in respect thereof
and all other Indebtedness ranking prior to the Series B
Notes and permitted pursuant to the provisions of this
Indenture shall have been paid in full, the holders of the
Series B Notes shall be entitled to receive payment from
any assets of the Company then available for such payment.
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Section 5.03 Subrogation of Series B Notes: Subject to the payment in full of
all Prior Indebtedness and of all other Indebtedness ranking prior to the
Series B Notes and permitted pursuant to the provisions of this Indenture or
the making of due provision for such payment, the holders of the Series B Notes
shall be subrogated to the rights of the holders of the Prior Indebtedness and
of all other Indebtedness ranking prior to the Series B Notes and permitted
pursuant to the provisions of this Indenture to receive payments or
distributions of the assets of the Company, to the extent of the application
thereto of moneys or other assets which would have been received by the holders
of Series B Notes but for the provisions of this Article Five, until all
principal and interest on the Series B Notes shall be paid in full or duly
provided for.
Section 5.04 Renewal or Extension by Holders of Series A Notes and of Other
Indebtedness: The holders of Series A Notes may at any time in their discretion
renew or extend the time for payment of the Series A Notes or exercise any
other of their rights under this Indenture, including, without limitation, the
waiver of default thereunder, all without notice to or assent from the holders
of the Series B Notes or the Trustee (on behalf of the holders of Series B
Notes). The holder of any Indebtedness ranking prior to the Series B Notes and
permitted pursuant to the provisions of this Indenture may at any time in its
discretion renew or extend the time for payment of such Indebtedness or
exercise any other of its rights including, without limitation, the waiver of
default thereunder, all without notice to or assent from the holders of such
Indebtedness or the Trustee (on behalf of the holders of Series B Notes). For
greater certainty, any renewed or extended Series A Notes or Indebtedness
ranking prior to the Series B Notes shall be and remain subject to the
provisions of this Article Five.
Section 5.05 Ranking of Notes:
(a) Notwithstanding any other provision hereof, except as contained in
Article Seven, the holders of all Series A Notes and all their
rights hereunder and under any documentation delivered pursuant
hereto (except the rights to principal repayments set out in
Subsection 2.03(b) and (c)) shall rank pari passu and the Company
shall not make or permit to be made any purchase of Notes or any
payment or grant or permit to be granted any preference to any
such holder that is not made or granted to any other such holder,
pro rata in each case in accordance with the respective aggregate
principal amount of each holder's Series A Notes.
(b) Notwithstanding any other provision hereof, except as contained in
Article Seven, the holders of all Series B Notes and all their
rights hereunder and under any documentation delivered pursuant
hereto shall rank pari passu and the Company shall not make or
permit to be made
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any purchase of Notes or any payment or grant or permit to be
granted any preference to any such holder that is not made or
granted to any other such holder, pro rata in each case in
accordance with the respective aggregate principal amount of each
holder's Series B Notes.
(c) Notwithstanding any other provision of the Indenture or any other
document, the relative rights of the holders of the Series A Notes
and the Series B Notes shall be governed by this Article Five.
Section 5.06 Trustee Not Charged with Knowledge: Notwithstanding this Article
Five or any other provision of this Indenture, the Trustee shall not be charged
with knowledge of the existence of any facts which would prohibit the making of
any payment of moneys to the Trustee or any other registrar or the Principal
Paying Agent or any other Paying Agent, or the application of such moneys by
the Trustee or any other registrar or the Principal Paying Agent or any other
Paying Agent in accordance with the terms hereof, unless and until such person
shall have received written notice thereof, The Trustee shall not be charged
with knowledge of the existence of any Indebtedness ranking prior to the Series
B Notes other than the Prior Indebtedness unless it has received written notice
of the existence thereof.
ARTICLE SIX
COVENANTS OF THE COMPANY
Section 6.01 General Covenants: The Company covenants and agrees with the
Trustee for the benefit of the Trustee and the Noteholders that, so long as any
Notes remain outstanding:
(a) It will well, duly and punctually pay or cause to be paid the
principal thereof and all interest and interest on overdue
interest, if any, and all other liabilities and obligations
(including, without limitation, for fees, costs and expenses) in
respect thereof to the persons, at the dates and places, in the
currencies and in the manner mentioned herein, in the Agency
Agreement and in the Notes. For the purposes of this Indenture,
the Trustee shall not be required to take notice of any
non-payment of any liabilities or obligations (except the
non-payment of principal of or interest on the Notes) unless and
until it has received a certificate to that effect from the person
or persons alleging such non-payment.
(b) Subject to the express provisions hereof, it will at all times
maintain its corporate existence and diligently maintain, use and
operate, or cause to be maintained, used and operated, its
property and that of its Subsidiaries and carry on and conduct, or
cause to be carried on and conducted, its business and the
businesses
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of its Subsidiaries in a proper, business-like and efficient
manner and in accordance with good business practice, so as to
preserve and protect its properties and those of its Subsidiaries
and the earnings, incomes, rents, issues and profits thereof;
provided that nothing herein contained shall prevent the Company
from ceasing to maintain, use or operate or to cause to be
maintained, used or operated any property of the Company or of any
Subsidiary that is not (alone or aggregated with any other such
property ceased or having ceased to be maintained, used or
operated), a material asset of such corporation.
(c) It will pay or cause to be paid all taxes, rates, levies,
assessments, ordinary or extraordinary, government fees or dues
levied, assessed or imposed upon or in respect of the property or
any part thereof or upon the income or profits of the Company or
of the Subsidiaries as and when the same become due and payable,
and it will exhibit or cause to be exhibited to the Trustee, when
required, the receipts and vouchers establishing such payment and
will duly observe and conform to all valid requirements of any
governmental authority relative to any of the property or rights
of the Company or the Subsidiaries and all covenants, terms and
conditions upon or under which any such property or rights are
held; but the Company and the Subsidiaries shall have the right to
contest by legal proceedings any such taxes, rates, levies,
assessments, government fees or dues, and, upon such contest, may
delay or defer payment or discharge thereof, if it shall satisfy
the Trustee and, if required, furnish Collateral satisfactory to
the Trustee, that such contestation will involve no forfeiture of
any property of the Company or the Subsidiaries,
(d) If and whenever from time to time the Company or any Subsidiary
shall be entitled to obtain a renewal or renewals of any leases,
licences, concessions, franchises or agreements or to obtain any
new lease of any premises or other property leased to the Company
or to any Subsidiary or to obtain any new licences, concessions,
franchises or agreements, it will from time to time duly exercise
or cause to be exercised every such right, if the same shall be of
value to its operations, and will obtain or cause to be obtained
such new leases, licences, concessions, franchises or agreements
for the longest time or times, if advantageous, and upon the most
favourable terms obtainable, including all rights of further
renewal.
(e) It will cause all property of the Company and the Subsidiaries
which is of a character usually insured by prudent persons
operating properties of a similar nature in the same or
similar localities to be properly insured
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and kept insured with reputable insurers (which may include
associations or other organizations for mutual or reciprocal
insurance) against loss or damage by fire or other hazards of
the nature and to the extent that such properties are usually
insured by prudent persons operating properties of a similar
nature in the same or similar localities.
(f) It will at any and all times upon written request of the
Trustee permit the Trustee, by its agents and attorneys, to
examine all the books of account, records, reports and other
papers of the Company and the Subsidiaries and to make copies
thereof and take extracts therefrom. The Trustee, however,
shall be under no obligation to make such examination.
(g) It will deliver to the Trustee:
(i) as soon as available, but in any event within 120 days
after the end of each fiscal year of the Company
(A) a copy of the audited Consolidated financial
statements for the Company, including,
without limitation, its balance sheet,
statement of operations and retained earnings
and statement of changes in cash resources
with respect to such fiscal year setting out
in comparative form the figures for the
previous fiscal year of the Company together
with notes thereto, all in reasonable detail
and accompanied by an unqualified opinion of
the auditors of the Company, and
(B) a copy of the unaudited, unconsolidated
financial statements of the Company and each
other member of the Goran Group with respect
to such fiscal year; and
(ii) as soon as available, but in any event within 60 days
after the end of each fiscal quarter in each fiscal
year of the Company, (A) a copy of the unaudited,
Consolidated financial statements for the Company,
including, without limitation, its balance sheet,
statement of operations and retained earnings and
statement of changes in cash resources to the end of
such fiscal period, certified by a senior officer of
the Company, setting out, in each case in comparative
form, the figures for the same fiscal period in the
previous fiscal year of the Company, all in reasonable
detail, and (B) a copy of the unaudited, unconsolidated
financial statements of the Company and each other
member of the Goran Group for the same fiscal period;
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(iii) as soon as possible, but in any event within 75 days
after the end of each fiscal year of the Company, a
copy of all statutory financial statements for each
Subsidiary which is principally engaged in the
insurance business in Canada filed as at the end of
such fiscal year, including in detail the calculations
in support of the requirements of Section 516 of the
Insurance Companies Act (Canada) and the regulations
made thereunder;
(iv) as soon as possible, but in any event within 75 days
after the end of each of the first three fiscal
quarters of each fiscal year of the Company, a copy of
the financial statements (prepared in a manner
consistent with paragraph 6.01(g)(iii), of each
Subsidiary which is principally engaged in the
insurance business in Canada for such fiscal period,
including in detail the calculations in support of the
requirements of Section 516 of the Insurance Companies
Act (Canada) and the regulations made thereunder;
(v) concurrently with the delivery of the financial
statements referred to in subparagraph 6.01(g)(i)(A),
a certificate of the auditors of the Company
reporting on such financial statements certifying
(A) solely and exclusively for the benefit of the
holders of Series A Notes that Subsections
6.02(d) and (e) have been complied with in
respect of such fiscal year and that they
have conducted such investigations as they
considered reasonably necessary in order to
provide such certification, and
(B) in making the examinations necessary to
render their audit opinion (but without
having made any special review for the
purposes of rendering such certificate other
than the investigations contemplated by
subparagraph 6.01 (g)(v)(A)) no knowledge
was obtained by them of any Event of Default,
except as specified in such certificate;
(vi) concurrently with the delivery of the financial
statements referred to in subparagraph 6.01(g)(i)(A),
a certificate of the Company stating that, to the
best of the knowledge, information and belief of the
officer executing such certificate, the Company
during such period has observed or performed all of
its covenants and other agreements, and satisfied
every condition
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contained in this Indenture to be observed, performed
or satisfied by it, and that such officer has
obtained no knowledge of any Event of Default, except
as specified in such certificate;
(vii) concurrently with the delivery of the financial
statements referred to in subparagraph 6.01 (g)(ii),
a certificate of the Company describing in
reasonable detail all transactions and agreements
other than those transactions described in Schedule 2
hereto, that occurred during the immediately
preceding fiscal quarter of the Company between one
member of the Goran Group and one or more other
members of the Goran Group involving the transfer,
disposition, loan, advance or lease of assets
(including cash) having, in each transaction or
agreement, an aggregate value exceeding $50,000 on an
annualized basis, as well as any change in the
corporate structure of the Goran Group (including,
without limitation, any transaction referred to in
paragraph 6.02(k)(iv);
(viii) not later than the end of each fiscal year of the
Company, a copy of the projections by the Company of
the operating budget and cash flow of the Company and
the Subsidiaries on a Consolidated basis for the next
succeeding fiscal year, such projections to be
accompanied by a certificate of the Company to the
effect that such projections have been prepared on
the basis of sound financial planning practice and
that the officer executing the certificate has no
reason to believe that they are incorrect or
misleading in any material respect;
(ix) within five days after the same are sent, a copy of
all financial statements and reports which the
Company sends to its shareholders, and within five
days after the same are filed, a copy of all
financial statements and reports which the Company
may make to, or file with, The Toronto Stock
Exchange;
(x) within 10 days of receipt thereof by the Company, a
copy of any management letter prepared by the
auditors of the Company; and
(xi) promptly, such additional financial and other
information as the Trustee may from time to time
reasonably request.
All financial statements delivered pursuant to this Subsection
6.01(g) shall be prepared in accordance with Generally
Accepted Accounting Principles except that (i)
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any unconsolidated statements that must be prepared in
accordance with applicable statutory or regulatory
requirements may be prepared solely in accordance with such
requirements and (ii) any unconsolidated statements for any
Subsidiary incorporated in the United States shall be prepared
in accordance with generally accepted accounting principles,
consistently applied, that are in effect from time to time in
the United States.
(h) Subject to the express provisions hereof, it will do, observe
and perform or cause to be done, observed and performed and it
will cause its Subsidiaries to do, observe or perform, all
matters and things necessary or expedient to be done, observed
or performed by virtue of any law of Canada or any province or
municipality thereof or any other jurisdiction, including,
without limitation, the Applicable Legislation, for the
purpose of creating, performing or maintaining the trust
herein referred to for the benefit of the Trustee and the
Noteholders and will do, observe and perform all the
obligations hereby imposed upon it.
(i) It will at all times repair and keep in repair and good order
and condition, or cause to be so repaired and kept in repair
and good order and condition, all buildings and erections used
in or in connection with its business and which are necessary
in connection with the efficient operation of such business up
to a modern standard of usage, and renew and replace or cause
to be renewed and replaced all and any of the same which may
become worn, dilapidated, unserviceable, inconvenient or
destroyed even by a fortuitous event, fire or other cause and
which are necessary for efficient operation.
(j) It will well and truly perform and carry out all of the acts
or things to be done by it as provided in this Indenture, the
Warrant Indenture and all instruments and other documents
contemplated hereby and thereby.
(k) It will give notice in writing to the Trustee of the
occurrence of any Event of Default (or any condition, event or
act which with the lapse of time and/or upon the giving of
notice and/or the giving of a certificate would constitute an
Event of Default) promptly upon becoming aware thereof and
without waiting for the Trustee to take any action.
(l) It will at all times execute all such further documents and do
all such further acts and things as may be necessary at any
time in the reasonable opinion of the Trustee to give effect
to the terms and conditions of this Indenture, the Warrant
Indenture and all instruments and other documents contemplated
hereby and thereby.
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49.
(m) It will at all times use its best efforts to obtain and
maintain the listing of the Notes on the Luxembourg Stock
Exchange or, if it is unable to do so having used such best
efforts or if the maintenance of such listing is agreed by the
Trustee to be unduly onerous, use its best efforts to obtain
and maintain the quotation of or listing of the Notes on such
other stock exchange or exchanges as it may (with the prior
written approval of the Trustee) decide upon and give notice
of the identity of such stock exchange or exchanges to the
Noteholders in accordance with Section 14.01 and also use its
best efforts to procure that there will at all times be
furnished to any stock exchange on which the Notes are for the
time being quoted or listed such information and undertakings
as such stock exchange may require to be furnished in
accordance with its normal requirements or in accordance with
any arrangements for the time being made with any such stock
exchange.
(n) (i) It will obtain the prior approval of the Trustee to
the form of all notices to be given to Noteholders
pursuant to Section 14.01 unless the Trustee shall,
in its discretion, dispense with the requirement to
obtain such approval.
(ii) It will send to the Trustee, not later than the date
of publication, four copies of each notice regarding
the Notes published in accordance with Section 14.01
and if publication in the manner provided in Section
14.01 is not practicable, consult with, or if not
practicable notify, the Trustee, as soon as
practicable after publication has been made.
(o) It will not, without the prior written approval of the
Trustee, such approval not to be unreasonably withheld,
appoint additional or other Paying Agents or Transfer Agents
or Registrar or registrars or vary or terminate the
appointment of any Paying Agent, Transfer Agent or the
Registrar or any other registrar or registrars.
Section 6.02 Covenants Solely for Benefit of Holders of Series A Notes: The
Company covenants and agrees with the Trustee for the benefit of the Trustee
and the holders of Series A Notes (and for greater certainty not for the
benefit of the holders of Series B Notes) from and after December 8, 1992
(except as set out in Subsections 6.02(a) and (b)) that so long as any Series A
Notes remain outstanding:
(a) Upon the earliest of (i) the date on which all amounts owing
to the Senior Lender under the instrument or instruments
evidencing the Senior Indebtedness are repaid in full, (ii)
the date on which the Senior Lender consents to the execution
and delivery of the Security
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Documents referred to in this Subsection and (iii) the
occurrence of any Event of Default (each of (i), (ii) and (iii)
being herein called a "Delivery Event") it will:
(i) execute and deliver to the Trustee (on its own behalf and
on behalf of the holders of Series A Notes)
(A) a share pledge agreement containing a pledge in favour
of the Trustee of 1,000 common shares of SIG Indiana,
125,000 common shares of Granite Reinsurance Company
Ltd, 155,295 common shares of Granite Insurance
Company and of all other shares of any member of the
Goran Group beneficially owned by the Company from time
to time (except as otherwise approved by the
Committee) in the form of the Share Pledge Agreement,
and
(B) a general security agreement granting a first fixed
and floating charge and security interest in all of
the property, assets and undertaking of the Company in
favour of the Trustee in the form of the General
Security Agreement; and
(ii) cause each Subsidiary (including, without limitation, any
Subsidiary hereafter created or acquired) from time to
time to execute and deliver to the Trustee (on its own
behalf and on behalf of the holders of Series A Notes) a
Guarantee Agreement, a Guarantee Pledge Agreement and a
Guarantee Security Agreement, as applicable, if and to the
extent that the execution and delivery thereof is (A)
permitted by applicable law and (B) not prohibited by any
regulatory security restrictions on the ability of an
insurance company to grant security on its assets.
(b) For purposes of giving effect to Subsection 6.02(a), it
will:
(i) concurrently with the execution and delivery of this
Indenture
(A) execute and deliver to the Trustee (on behalf of the
attorneys referred to therein) a power of attorney in
the form annexed hereto as Exhibit N, and
(B) cause SIG Indiana to execute and deliver to the Trustee
(on behalf of the attorneys referred to therein) a
power of attorney in the form annexed hereto as Exhibit
0; and
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51.
(ii) thereafter from time to time in order to give full effect
to paragraph 6.02(a)(ii), cause each Subsidiary that is
required to execute and deliver the Security Documents
referred to therein to execute and deliver a power of
attorney in the form annexed hereto as Exhibit N or Exhibit
O, as applicable, with such amendments or modifications as
may be required to give effect thereto.
The execution and delivery of powers of attorney pursuant to this
Subsection shall not derogate from the primary obligation (the
"Primary Obligation") of the Company to execute and deliver, or
cause to be executed and delivered, Security Documents pursuant to
Subsection 6.02(a) but the execution and delivery of any such
Security Document by any attorney so appointed shall be deemed to
fulfill the Primary Obligation of the Company with respect to such
Security Document. The attorney so appointed shall not be required
to await any default of the Company in fulfilling its Primary
Obligation and may carry out the authority conferred by the
applicable power of attorney immediately upon the occurrence of a
Delivery Event. For purposes of determining whether a Delivery
Event has occurred, such attorney may, in the absence of actual
knowledge to the contrary, rely upon a certificate to that effect
from the Trustee or any member of the Committee.
(c) It will cause SIG Indiana to take all steps necessary or desirable
to ensure that $50,000 of the loan in the principal amount of
$100,000 made by it to a Related Party in calendar 1992 is
repaid no later than December 31, 1993 and the balance of such
loan is repaid no later than December 31, 1994.
(d) It will not, and will ensure that each other member of the Goran
Group does not, pay, directly or indirectly, any compensation,
benefits or other amounts in any fiscal year of the Company
commencing after December 31, 1992, to the five highest paid
employees (the "Five Employees"), not more than three of whom
shall be Related Parties of the Goran Group (including for this
purpose officers, directors and consultants), whether by way of
salary, bonus, dividend (other than dividends paid by the Company
itself in accordance with Subsection 6.02 (h)), fees or otherwise,
in an aggregate amount for the Goran Group exceeding the
Compensation Limit for the applicable fiscal year. For greater
certainty, any amount received or receivable by or on behalf of
Highlander Inn Inc. or by any other Related Party in respect of the
management of the Highlander Inn, Las Vegas, shall be included (net
of cash expenses) within the Compensation Limit, unless at the
applicable time Highlander Inn Inc. is a Subsidiary.
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(e) Except as specifically permitted under Subsection 6.02 (d) or
paragraphs 6.02 (h)(vi) and (vii), it will not, and will ensure
that each member of the Goran Group does not, pay, directly or
indirectly, any compensation, benefits or other amounts in any
fiscal year of the Company commencing after December 31, 1992
whether by way of salary, bonus, dividend, fees or otherwise to any
Related Party of the Goran Group in an aggregate amount for the
Goran Group exceeding U.S. $50,000 and for greater certainty, any
amount paid to Symtech Micro Computer Services Inc. or Tritech
Financial Systems Inc. in respect of computer services, supplies or
software provided to any member of the Goran Group shall be
included within this U.S. $50,000 limit, but payment at
commercially competitive rates for hardware and included operating
system software purchased by the Goran Group in the ordinary course
of business shall not be included in such amount.
(f) It will not create or assume or permit to be outstanding, and will
ensure that each Subsidiary does not create or assume or permit to
be outstanding, any Indebtedness except Permitted Indebtedness.
(g) Notwithstanding the provisions of Article Nine, it will not enter
into, and will ensure that each Subsidiary does not enter into,
any transaction involving the transfer of all or substantially all
of its property or assets to another person or to another entity
with which it amalgamates other than, in either case, any one or
more Wholly-Owned Subsidiaries.
(h) It will not enter into or permit to continue, and will ensure that
each Subsidiary does not enter into or permit to continue, any
transaction with any Related Party except for:
(i) transactions specifically permitted under Subsections
6.02(d), (e) or (g),
(ii) subject to Subsection 6.02(d), transactions required by a
hotel management agreement between Pafco General Insurance
Company and Highlander Inn Inc.,
(iii) subject to Subsections 6.02(d) and (e), the payment of
amounts due to the Goran Group as described in Notes 14(a),
(d) and (e) to the audited Consolidated financial
statements of the Company for the fiscal year ended
December 31, 1991,
(iv) computer services provided by a corporation in which Xxxxxx
Xxxxxx has an interest, provided that such transactions
comply with Subsection 6.02(e),
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(v) transactions relating to the loans by SIG Indiana or the
Company to Related Parties, as disclosed and described under
"Indebtedness of Officers and Directors to the Corporation"
on page 5 of the management information circular and proxy
statement of the Company prepared for the annual meeting of
shareholders held in connection with the fiscal year of the
Company ended December 31, 1991, which disclosure is full,
true and not misleading as at the date of such disclosure,
(vi) transactions relating to the acquisition of the Waste
Purification System Division from Xxxxxx International
Group Ltd. for a purchase price not exceeding $100,000,
which price shall include all liabilities (whether absolute
or contingent), directly or indirectly, assumed or arising
in connection with such transaction, and
(vii) any other transaction authorized by the Committee.
(i) It will not, and will ensure that each Subsidiary does not, declare
or pay any dividend or make any other distribution to its
shareholders (other than to another member of the Goran Group)
unless and until:
(i) at least 50% of the Initial Principal Amount of the Series
A Notes has been repaid or been redeemed pursuant hereto,
and
(ii) the Equity to Debt ratio exceeds 2.5:1.0,
whereupon, so long as, after the payment of any dividend or
other distribution, the Equity to Debt ratio will continue
to exceed 2.5:1.0, the Company may establish a dividend
policy at the discretion of its directors, which policy
shall not permit more than one-third of the Consolidated
after-tax earnings of the Company in any fiscal year to be
distributed to its shareholders.
(j) It will not, and will ensure that each Subsidiary does
not:
(i) redeem or purchase any of its outstanding shares (including,
without limitation, any preference shares of the Company)
from any person other than a member of the Goran Group
unless the proceeds therefrom are used exclusively to repay
the Senior Indebtedness or Permitted Indebtedness, or
(ii) issue any shares to any person other than a member of the
Goran Group without the prior consent of the Committee;
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but IGF Insurance Company shall be entitled to purchase for
cancellation any currently outstanding shares held by
persons other than members of the Goran Group for aggregate
consideration not exceeding U.S. $115,000.
(k) It will pay all reasonable legal and other professional fees and
disbursements incurred by or on behalf of the Trustee or the
holders of Series A Notes in connection with the negotiation,
preparation, settlement, approval, execution, delivery,
registration, monitoring, enforcement and realization of or under
this Indenture, the Warrant Indenture and all instruments and other
documents contemplated herein and therein, and all provisions of
and transactions relating to any of the foregoing documents.
(l) It will not, and will ensure that each Subsidiary does not, make
or enter into any investment, acquisition or other transaction out
of the ordinary course of business, directly or indirectly, using
any cash or other property (including, without limitation, the
direct or indirect proceeds of any primary or secondary offering or
distribution of shares) unless and until:
(i) at least 50% of the Initial Principal Amount of the Series
A Notes has been repaid or redeemed, and
(ii) the Equity to Debt ratio exceeds 2.5:1.O, whereupon, so
long as, after such investment, acquisition or transaction,
the Equity to Debt ratio will continue to exceed 2.5:1.0,
the Company may make or enter into such an investment,
acquisition or other transaction;
provided, however, that this Subsection shall not prevent:
(iii) any member of the Goran Group from making prudent
investments in deposits and securities that would, in
conformity with Generally Accepted Accounting Principles,
be classified as current assets on a balance sheet of
such member;
(iv) the incorporation and operation of any new Wholly-Owned
Subsidiary in the insurance business if such Subsidiary is
regulated by insurance regulatory authorities in the United
States of America or Canada;
(v) any Wholly-Owned Subsidiary entering into any investment,
acquisition or other transaction with any other
Wholly-Owned Subsidiary; or
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(vi) any member of the Goran Group entering into an agreement with another
member of the Goran Group to
(A) make loans or advances used exclusively to reduce the Senior
Indebtedness, or
(B) enter into reinsurance arrangements in the ordinary course of
business.
(m) It shall ensure, no later than March 31, 1993, that all of the amounts
or loans (the "Related Party Loans") referred to in paragraphs
6.02(g)(iii) and (v) are properly documented in accordance with the
practices of a prudent lender or creditor, and that all Related Party
Loans which were incurred or made in respect of any purchase(s) of
shares of any member of the Goran Group are properly secured by a fully
perfected pledge of all such shares purchased and that the amount
described in Note 14(a) to the audited Consolidated financial statements
of the Company for the fiscal year of the Company ended December 31,
1991 (the "SUM Loan") is secured by a guarantee of Xxxxxx International
Group Ltd. and that such guarantee is properly secured by a fully
perfected pledge of 1,200,000 common shares of the Company. The Company
agrees to, and to cause each Subsidiary to, maintain all security
referred to in this Subsection once it has been entered into. The
Company further agrees to specifically assign to the Trustee, at the
request of the Trustee or the Committee after any Delivery Event, all
Related Party Loans and all security referred to in this subsection as
collateral security for the obligations of the Company hereunder all
subject to the provisions of Subsection 6.02(b) and Section 6.13. The
Company shall take all available action to ensure the collection of all
Related Party Loans and realization of all security referred to in this
subsection in the event that any Related Party receives any proceeds of
any sale or other disposition of any shares of any member of the Goran
Group or any shareholder thereof.
(n) It shall not sell, transfer, assign or otherwise deal with the SUM
Loan without the prior written consent of the Committee.
(o) If all or substantially all of the assets of the Company or of any
Subsidiary are seized, compulsorily purchased or expropriated by any
governmental authority or agency, it shall replace, or cause to be
replaced, such assets.
(p) It shall ensure that the Senior Indebtedness and all guarantees and
other security in connection therewith is fully paid, released and
discharged by no later than December 31, 1994.
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(q) It shall not change its name or amalgamate with another corporation
under a different name without giving at least ten business days prior
written notice to the Trustee of the new name and the date upon which
such change of name or amalgamation is to take effect, and within five
business days of the change of name or amalgamation, the company shall
provide the Trustee with:
(i) a notarial or certified copy of the articles of amendment or
articles of amalgamation effecting the change of name; and
(ii) an opinion from legal counsel satisfactory to the Trustee as to
the correct name of the Company and confirming that all
appropriate registrations, filings or recordings have been made
on behalf of the Trustee to fully and effectively maintain the
perfection and priority of the security interests created
hereby.
(r) It shall, within three business days of receipt of a written request
from the Trustee, furnish to the Trustee, or such other person as the
Trustee may direct, a true copy of this Trust Indenture, any security
delivered in connection herewith and any instrument supplemental or
ancillary hereto or thereto.
The Company hereby represents and warrants to the Trustee for the benefit of
the Trustee and the holders of Series A Notes (and for greater certainty not
for the benefit for the holders of Series B Notes) that (i) all of the
covenants and agreements contained in Section 6.02 (other than Subsections
6.02(a) and (b)) have been fully complied with as and from December 8, 1992 as
if this Indenture had been dated, and the Effective Date had occurred on,
December 8, 1992, and (ii) the Goran Group did not pay, directly or indirectly,
any compensation, benefits on other amounts in the fiscal year of the Company
ending December 31, 1992 to any Related Party, whether by pay of salary,
bonus, dividend (other than dividends paid by the Company itself in accordance
with Subsection 6.02(i)), fees or otherwise, in an aggregate amount for the
Goran Group except as set out in Schedule 1 hereto.
Section 6.03 Registrations and Deliveries: The Company agrees that:
(a) promptly after any Delivery Event or the execution of any document
relating to the Series A Lien and after the execution of each
instrument supplemental or ancillary hereto or thereto, as the case
may be, it shall, and shall cause each Subsidiary to, register, file
or record a financing statement or other prescribed statement in
respect thereof at all offices where, the opinion of counsel, such
registration, filing or recording may be necessary or of advantage in
preserving or protection the
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Series A Lien provided that the Trustee or any agent of the Committee
shall be entitled to register, file or record same at any time after the
occurrence of any Delivery Event;
(b) from time to time after the occurrence of any Delivery Event, it shall,
and shall cause each of the Subsidiaries to, renew such registrations,
filings or recordings as required to maintain the Series A Lien as valid
and effective security;
(c) promptly after any such registrations, filings, recordings or renewals,
it shall cause to be delivered to the Trustee certificates establishing
such registrations, filings, recordings or renewals evidencing that the
provisions of this Section have been complied with;
(d) promptly after execution of this Indenture and of any Security
Document from time to time executed and after the execution of each
instrument supplemental or ancillary hereto or thereto, as the case may
be, it shall, and shall cause each of the Subsidiaries to, deliver to
the Trustee such documents of title, opinions of counsel, security
certificates and other documents as, in the opinion of counsel, are
necessary or of advantage to be delivered to preserve or protect the
Series A Lien in the property represented by such documents of title,
security certificates and other documents; and
(e) if the Series A Lien shall have become enforceable and the Trustee
shall have determined or become bound to enforce the same, it shall
and shall cause each Subsidiary to from time to time execute and do
all such assurances and things as the Trustee may reasonably require
for facilitating the realization of the Charged Property and for
exercising all the powers, authorities and discretions hereby
conferred upon the Trustee and for confirming to any purchaser of the
Charged Property or any part thereof, whether sold by the Trustee
hereunder or by judicial proceedings, the title to the property so
sold, and that it shall give and shall cause each Subsidiary to give
all notices and directions which the Trustee may consider expedient.
Section 6.04 After-Acquired Property and Further Assurances: The Company agrees
that after any Delivery Event:
(a) all property acquired by the Company after any of the Security
Documents become effective including, without limitation, any property
acquired by the Company to replace any property released from the
Specific Series A Lien and all improvements, extensions or additions
to the property owned by the Company which by this Indenture is, or is
intended to become, part of the Specifically
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Charged Property (all such property, improvements, extensions and
additions being hereinafter referred to as "After-Acquired Property")
shall, upon the acquisition thereof, without any further conveyance,
mortgage, pledge, charge, assignment or act on the part of the Company
or the Trustee, become and be subject to the Specific Series A Lien as
fully and completely as though now owned by the Company and specifically
described or referred to herein;
(b) notwithstanding Subsection 6.04(a), the Company shall from time to time
execute and deliver all such further deeds or other instruments of
conveyance, assignment, transfer, mortgage, pledge or charge of the
After-Acquired Property or of any property intended to be subject to the
Specific Series A Lien, as are required by the provisions hereof or as,
in the opinion of counsel, are requisite or desirable for the purpose of
effectively mortgaging, assigning, pledging or charging such
After-Acquired Property or other property to and in favour of the Trustee
as and by way of a fixed and specific mortgage, pledge and charge for
the purpose and upon the conditions specified herein or for the purpose
of registering, filing, recording, re-registering, re-filing or
re-recording any such mortgage, pledge or charge, including without
limitation, any notice to an account debtor of any assignment hereunder;
provided that the foregoing obligation of the Company to execute and
deliver deeds and other instruments shall apply:
(i) whenever the Trustee may (and shall, pursuant to a
Series A Noteholders' Request authorizing the Trustee to do
so) request that the Company execute and deliver such deeds
and other instruments; or
(ii) whenever the Company has been required to specifically
mortgage its property pursuant to this Indenture;
(c) the Company shall from time to time execute and deliver all such
further deeds or instruments of conveyance, assignment, transfer or
charge of any property intended to be subject to the floating charge
created by a Security Document to which it is a party as are required by
the provisions of this Indenture or as, in the opinion of counsel, are
requisite or desirable for the purpose of effectively charging such
property in favour of the Trustee as and by way of a floating charge for
the purpose of and upon the conditions specified herein; and
(d) it will cause each Subsidiary from time to time to execute and
deliver all such further deeds or other instruments of conveyance,
assignment, transfer, mortgage, pledge or charge of any property of such
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Subsidiary required to be subject to a Lien in favour of the
Trustee pursuant to the provisions of this Indenture.
Section 6.05 Special Covenant: The Company covenants and agrees with the
Trustee for the benefit of the Trustee and the Noteholders that, so long as any
Notes remain outstanding but subject to Subsection 6.02(h) it will, to the
fullest extent permitted by applicable laws, cause its Subsidiaries to pay to
it, by way of dividend or otherwise, all such sums as it shall require in order
to enable it to duly and punctually perform its covenants and obligations
hereunder.
Section 6.06 Trustee's Remuneration and Expenses: The Company covenants
that it will pay to the Trustee from time to time reasonable remuneration for
its services hereunder and will pay or reimburse the Trustee on demand for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in the administration or execution of the trusts hereby created (including the
reasonable compensation and the disbursements of its counsel and all other
advisers and assistants not regularly in its employ) both before any default
hereunder and thereafter until all duties of the Trustee under the trusts
hereof shall be finally and fully performed, except any such expense,
disbursement or advance as may arise from the Trustee's negligence or bad
faith. Any amount due under this Section and unpaid 30 days after request for
such payment shall bear interest at the rate of 8% per annum from the
expiration of such 30 days. After default all amounts so payable and the
interest thereon shall be payable out of any funds coming into the possession
of the Trustee or its successors in the trusts hereunder in priority to the
repayment of principal of and interest payable on the Notes.
Section 6.07 Not to Extend Time for Payment of Principal or Interest:
In order to prevent any accumulation after the maturity of any unpaid interest
or unpaid Notes, the Company covenants with the Trustee that it will not,
except with the approval of the Noteholders expressed by an Extraordinary
Resolution, directly or indirectly extend or assent to the extension of time
for the payment of any interest or principal payable hereunder or under the
Notes or directly or indirectly be a party to or approve any such arrangement
by purchasing or funding any of said interest or principal or in any other
manner. In case the time for payment of any such interest or principal shall
be so extended, whether for a definite period or otherwise, such interest or
principal shall not be entitled in case of default hereunder to the benefit of
this Indenture except subject to the prior payment in full of the principal of
all Notes issued hereunder then outstanding and of all interest payable on such
Notes, the payment of which has not been so extended, and of all other moneys
payable hereunder.
Section 6.08 Good Standing Certificate: The Company covenants with the
Trustee that, so long as any of the Notes remain outstanding, it will deliver
to the Trustee upon the execution and delivery hereof and concurrently with the
delivery of the financial
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statements referenced in subparagraph 6.01(g)(i)(A) , and at any other time
if so requested by the Trustee:
(a) a certificate of the Company that the Company has complied
with all covenants, conditions or other requirements contained
in this Indenture, that each Subsidiary that carries on an
insurance business is in full compliance with all laws,
regulations, orders and directives pertaining thereto, or, if
such is not the case, specifying the laws, regulations, orders
or directives which are not being complied with and giving
particulars of such non-compliance, and that no Event of
Default has occurred which has not been waived or, if such is
not the case, specifying the covenant, condition or other
requirement which has not been complied with and giving
particulars of such non-compliance and setting out the Equity
to Debt ratio as of the date of the financial statements
delivered; and
(b) a certificate of the Company that none of the Company or any
of the Subsidiaries except 137171 Canada Inc. is an "insolvent
person" within the meaning of the Bankruptcy and Insolvency
Act (Canada).
Section 6.09 Warrant Indenture: Concurrently with the execution and delivery of
this Indenture the Company and the Trustee shall enter into the Warrant
Indenture and shall execute and deliver all documentation required to be
executed and delivered thereunder.
Section 6.10 Performance of Covenants by Trustee: If the Company shall fail to
perform any covenant on its part herein contained, the Trustee may in its
discretion, but (subject to Applicable Legislation and to the provisions of
Section 8.01) need not, notify the Noteholders of such failure or itself may
perform any of the said covenants capable of being performed by it and, if any
such covenant requires the payment or expenditure of money, may make such
payment or expenditure with its own funds, or with money borrowed by or
advanced to it for such purpose, but shall be under no obligation so to do; and
all sums so expended or advanced shall be repayable by the Company in the
manner provided in Section 6.06, but no such performance or payment shall be
deemed to relieve the Company from any default hereunder.
Section 6.11 Negative Pledge:
(a) Except for Permitted Liens and subject to Subsection 6.11
(b) , the Company shall not, and will ensure that each
Subsidiary does not, sell, assign, transfer, xxxxx x Xxxx on
or dispose of, or permit to be sold, assigned, transferred,
subjected to a Lien or disposed of, or permit any Lien to
continue on or in respect of, any asset or property, now owned
or hereafter acquired by the Company or any Subsidiary
including, without limitation, any Charged Property or any
property or asset subject to
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a Lien under any Security Document without the Trustee's prior
written consent, such consent not to be unreasonably withheld.
The proceeds of any Permitted Lien, if any, shall be received
by the Company and used by the Company in the normal course of
its business provided that such uses are on commercially
reasonable terms and conditions and are not in breach of this
Indenture.
(b) Nothing in Subsection 6.11(a) shall prevent the Company or any
Subsidiary from selling or transferring for valuable
consideration (but not as security) any asset or property, now
or hereafter acquired by the Company or any Subsidiary:
(i) to any other member of the Goran Group, or
(ii) in the normal course of its own insurance business
and on commercially reasonable terms and conditions.
Section 6.12 Discretion of Trustee as to Dealing with Charged Property:
Whether or not the Series A Lien shall have become enforceable and the Trustee
shall have determined or become bound to enforce the same, the Trustee may at
any time and from time to time upon the written request of the Company and at
the expense of the Company but without any consent of the holders of Series A
Notes, but only if and so far as in the opinion of the Trustee the interests of
the holders of Series A Notes will not be prejudiced thereby, do or concur in
doing all or any of the following things:
(a) consent to any modification of or change in any agreements,
leases, licences, privileges, franchises, concessions and
contracts forming or which may be subsisting in respect of any
part of the Charged Property, provided the Trustee shall not
consent to any such modification or change unless the other
party to any such agreement, lease, licence, privilege,
franchise, concession or contract is not a Related Party and
the Company has delivered a certificate to the Trustee to that
effect;
(b) settle, adjust, refer to arbitration, compromise or arrange
all accounts, reckonings, controversies, questions, claims and
demands whatsoever in relation to any of the Charged Property;
(c) execute and do all such contracts, deeds, documents and things
and bring, defend and abandon all such actions, suits and
proceedings in relation to any of the Charged Property for
purposes not inconsistent with the provisions of this
Indenture as may seem expedient; and
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(d) generally act in relation to the Charged Property in such
manner and on such terms as to the Trustee may seem in the
interests of the holders of Series A Notes.
Section 6.13 Effective Date of Security Documents: Upon delivery of any
Security Document pursuant to Subsection 6.02 (a) or by an attorney pursuant to
Subsection 6.02 (b), such Security Document and all security, rights and
remedies in respect thereof (including, without limitation, the Series A Lien
constituted thereby) so delivered shall be automatically deemed to be effective
as of the Effective Date or, to the extent that any Security Document or any
provision thereof may not, in accordance with applicable law, be able to become
effective on the Effective Date, the earliest such date thereafter as such
Security Document or such provision may, in accordance with applicable law,
become effective without, in each case, any declaration or action on the part
of the Trustee or any other person.
ARTICLE SEVEN
REDEMPTION OF NOTES
Section 7.01 Redemption: Subject to Subsection 2.04(c) and Article Five, the
Company shall have the right, at its option and in the manner hereinafter in
this Article provided, to redeem the whole or from time to time any part of the
principal amount of the Notes outstanding upon payment of 100% of the principal
amount thereof plus accrued and unpaid interest to the date specified for
redemption, the whole constituting the redemption price.
Section 7.02 Places of Payment: The redemption price of Notes called for
redemption under the provisions of this Article shall be payable upon
presentation and surrender thereof, together, in the case of Bearer Notes, with
all appurtenant Coupons, if any, maturing subsequent to the redemption date, at
any of the places where the principal and interest payable in respect of the
Notes is expressed to be payable and at such other places (if any) as may be
specified in the notice of redemption.
Section 7.03 Partial Redemption:
(a) Subject to Article Four, any part, being $5,000 or an integral
multiple thereof, of a Note of a denomination in excess of
$5,000 may be selected and called for redemption as
hereinafter provided and all references in this Indenture to
redemption of Notes shall be deemed to include redemption of
such parts; but any partial redemption of Notes must be of
Notes having an aggregate principal amount of $1,000,000 or a
higher integral multiple of $500,000 thereof.
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(b) The holder of any Note of which part only is redeemed shall,
upon presentation of his said Note and upon receiving the
moneys payable to him by reason of such redemption, surrender
the said Note, together, in the case of Bearer Notes, with all
appurtenant Coupons, if any, maturing subsequent to the
redemption date, to the Trustee or, alternatively, pursuant to
the Agency Agreement, to any Paying Agent, and the Trustee or
such Paying Agent shall either make the appropriate notation
of such partial redemption on the Note and return the same to
the holder or cancel the same and without charge forthwith
certify and deliver to the said holder a new Note or Notes of
an aggregate principal amount equal to the unredeemed part of
the principal amount of the said Note so surrendered.
Section 7.04 Selection for Redemption: In case less than all of the Notes are
to be redeemed, the Company shall in each such case, at least twenty-one days
before the date upon which the notice of redemption is to be given, notify the
Trustee and the Principal Paying Agent in writing of its intention to redeem
Notes and of the aggregate principal amount of Notes so to be redeemed. Subject
to Section 4.13, the Notes so to be redeemed shall be selected by the Trustee,
or, if so requested by the Company and approved by the Trustee, by the
Principal Paying Agent, by lot in such manner as the Trustee shall deem
equitable. For this purpose, the Trustee may make regulations with regard to
the manner in which such Notes may be so selected, and regulations so made
shall be valid and binding upon all holders of Notes.
Section 7.05 Notice of Redemption: Notice of redemption of any Notes shall be
given by or on behalf of the Company to the holders of the Notes which are to
be redeemed, not more than 60 days nor less than 30 days prior to the
redemption date, in the manner provided in Section 14.01. Every such notice
shall specify the aggregate principal amount of Notes called for redemption,
the date on which such Notes are to be redeemed, the redemption price and the
places of payment, shall state that interest upon the principal amount of Notes
called for redemption shall cease to be payable from and after the redemption
date. In addition, unless all the Notes are being redeemed, the notice of
redemption shall specify the distinguishing letters and/or numbers of the Notes
which are to be redeemed and of the Notes previously called for redemption and
not presented for payment and, if any such Note is to be redeemed in part only,
the principal amount of such part.
Section 7.06 Payment of Redemption Price: Upon notice being given in
accordance with the provisions of Section 7.05 and upon presentation and
surrender of the Notes, and in the case of Bearer Notes the Coupons appurtenant
thereto, in accordance with Section 7.02 , the principal amount of each Note so
called for redemption and the principal amount to be redeemed of each Note so
called for redemption in part shall be paid and redeemed at the places and in
the manner and currency specified herein and in the
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Agency Agreement and at the redemption price, together with interest accrued to
the redemption date, on the redemption date and with the same effect as if it
were the date of maturity specified in such Note; but all unpaid interest
instalments represented by Coupons appertaining to such Notes which shall have
matured on or prior to the redemption date shall continue to be payable to the
bearers of such Coupons severally and respectively, and the holders of such
Notes shall receive such unpaid instalments of interest only upon their
presentation and surrender of the Coupons representing such instalments. From
and after the redemption date, unless moneys for the redemption of the Notes
called for redemption shall not have been made available at any of the places
specified pursuant to Section 7.02 for redemption of the Notes upon surrender
and presentation thereof at any of such places on the redemption date, the
Notes shall cease to bear interest, the Coupons appertaining thereto (whether
or not attached) maturing subsequent to the redemption date, if any, shall be
void and no payment shall be made in respect thereof, and the only right of the
holders of such Notes shall be to receive payment of the redemption price
together with interest accrued to the redemption date as aforesaid. If moneys
for the redemption of the Notes called for redemption are not made available at
any of the places specified pursuant to Section 7.02 for redemption of the
Notes until after the redemption date, the Notes shall continue to bear
interest until such moneys have been so made available.
Section 7.07 Deposit of Redemption Moneys: The Company shall provide for
every such redemption by paying to or to the order of the Trustee or, in
accordance with the Agency Agreement, the Principal Paying Agent, not later
than the last business day preceding the redemption date, such sums as may be
sufficient to pay the redemption price of such Notes, From the sums so
deposited the Trustee or the Paying Agents, as the case may be, shall, in
accordance with the provisions of the Agency Agreement, pay or cause to be paid
to the holders of such Notes so called for redemption, upon surrender of such
Notes, the principal and interest to which they are respectively entitled on
redemption.
Section 7.08 Home Office Payment: Notwithstanding any of the other provisions
of this Article or of Section 2.09, payment of the redemption price or
principal repayment of a portion of any Registered Note may be made to the
holder thereof without presentation or surrender thereof if there shall have
been filed with the Trustee a certificate of the Company stating that the
Company has entered into an agreement with such holder or the person for whom
such holder is acting as nominee to the effect that (i) payments will be so
made, (ii) such holder or other person shall make a notation on such Note or a
paper attached thereto of the portions thereof so redeemed, and (iii) such
holder or other person will not dispose of such Note or permit its nominee to
dispose of such Note without prior to the delivery thereof presenting such Note
to the Trustee for appropriate notation or confirmation of the notation thereon
of the portion of the principal amount thereof which has been redeemed or
surrendering
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the same to the Trustee in exchange for a Note or Notes in authorized
denominations aggregating the same principal amount as the principal amount of
such Note so surrendered which shall remain unpaid. A copy of such agreement
or of the appropriate portion of such agreement shall be filed with the Trustee
along with said certificate of the Company, The Trustee shall not be under any
duty to determine that such notations shall have been made.
ARTICLE EIGHT
DEFAULT AND ENFORCEMENT
Section 8.01 Events of Default:
(a) Each of the following events is herein sometimes called an
"Event of Default":
(i) the Company fails to pay any principal of the Series A
Notes within five days of the due date or fails to pay any
interest due thereon or other amount relating thereto
within 10 days of the due date; or
(ii) the Company fails to pay any principal of the Series B
Notes within five days of the due date or fails to pay
any interest due thereon or other amount relating thereto
within 10 days of the due date; or
(iii) the Company or any Subsidiary defaults in the performance
or observance of or compliance with any of the covenants
contained or referred to in Subsection 6.02(a), (c), (d),
(e), (g), (h), (i), (j), (1) or (n); or
(iv) the Company or any Subsidiary defaults in performance or
observance of or compliance with any of the covenants
contained or ref erred to in this Indenture (other than
the covenants referred to in paragraph 8.01(a) (iii)) or
any document executed pursuant hereto which default is
incapable of remedy or which, if capable of remedy, is not
in the opinion of the Trustee remedied within 30 days
after notice of such default shall have been given to the
Company by the Trustee; or
(v) any obligation to repay any indebtedness for Borrowed Money
of the Company or any Subsidiary, having an aggregate
outstanding principal amount of at least $500,000 (or its
equivalent in any other currency or currencies), becomes
due and payable before its stated maturity by reason of
default in respect of the terms thereof or any
indebtedness
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for Borrowed Money having an aggregate outstanding
principal amount of at least $500,000 (or its equivalent
in any other currency or currencies) is not paid at its
stated maturity (or by the expiry of any applicable grace
period) or if due on demand is not paid on demand (or by
the expiry of any applicable grace period); or
(vi) a distress or execution or other legal process is levied
or enforced upon or against any part of the assets or
revenues of the Company or any Subsidiary and is not
satisfied or the Company has not taken bona fide action to
dispute the same within 30 days of the Company having
become aware of same; or
(vii) an encumbrancer takes possession or a Receiver or person
with similar powers is appointed of the whole or any
part of the assets or revenues of the Company or any
Subsidiary; or
(viii) the Company or any Subsidiary shall make a general
assignment for the benefit of its creditors or a
proposal under bankruptcy or similar laws, or shall be
declared bankrupt, or shall become insolvent or if a
custodian or a sequestrator or a receiver and manager or
any other officer with similar power shall be appointed of
the Company or any Subsidiary or the whole or any part of
the undertaking, property, assets or revenues of the
Company or any Subsidiary or ceases or threatens to cease
to carry on its business or any substantial part of its
business; or
(ix) a judgment or decree shall be made or an effective
resolution be passed for the winding up, liquidation or
dissolution of the Company or a Subsidiary except for the
purpose of giving effect to a merger, consolidation,
reconstruction, amalgamation or arrangement permitted
under this Indenture;
provided that in, the case of paragraphs 8.01(a), (vi) and
(vii), the Trustee shall have certified that, in its opinion,
such event is materially prejudicial to the interests of the
holders of Series A Notes or the holders of Series B Notes or
both.
(b) For purposes of this Indenture, each Event of Default except that
specified in paragraph 8.01 (a)(ii) is called a "Series A
Default".
(c) The Trustee shall give to the Noteholders, in the manner
provided in Section 14.01 and within 30 days after the Trustee
becomes aware of the occurrence of an Event of
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Default, notice of every Event of Default so occurring and
continuing at the time the notice is given, unless the Trustee
in good faith determines that the withholding of such notice
is in the best interests of the Noteholders and gives written
notice of such determination to the Company.
Section 8.02 Acceleration on Default:
(a) Subject to Subsection 8.02(b) and Section 8.03, in case any
Event of Default hereunder has occurred which has not been
waived, the Trustee may in its discretion, and shall upon
receipt of a Noteholders' Request or if so directed by the
provisions of any Extraordinary Resolution that may be passed by
the Noteholders, by notice in writing to the Company declare the
principal of and interest payable on one or more series of Notes
then outstanding and other moneys payable hereunder to be due
and payable and, subject to Article Four, the same shall
forthwith become immediately due and payable to the Trustee,
anything therein or herein to the contrary notwithstanding, and
the Company shall forthwith pay to the Trustee for the benefit
of the Noteholders the full principal amount of all Notes
outstanding applicable to the date of repayment together with
all accrued and unpaid interest to such date and all other
liabilities in respect thereof. Such payment when made shall be
deemed to have been made in discharge of the Company's
obligations hereunder and any moneys so received by the Trustee
shall be applied as provided in Section 8.06.
(b) Notwithstanding Subsection 8.02(a):
(i) the Trustee shall not accelerate the payment of principal
and interest payable on the Series B Notes if the Event
of Default that would be relied upon for such purpose is
one specified in paragraphs 8.01(a)(i) or (iii) unless
it has received a Series A Noteholders' Request to do so
or is so permitted by a Series A Extraordinary Resolution;
(ii) if the Event of Default to be relied upon for purposes of
an acceleration hereunder is a Series A Default, the
Trustee shall be required to accelerate the payment of
principal and interest payable on the Series A Notes upon
receipt of a Series A Noteholders' Request to do so or if
so required by a Series A Extraordinary Resolution; and
(iii) if the Event of Default to be relied upon for purposes of
an acceleration hereunder is one specified in paragraph
8.01(a)(ii), the Trustee shall not be required to
accelerate the payment of principal and interest payable
on the Notes unless it has received a Series B
Noteholders' Request to
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do so or is so required by a Series B Extraordinary
Resolution and may not accelerate the payment of principal
and interest payable on the Notes unless it has given not
less than 7 days notice to the holders of Series A Notes,
such notice to be given in accordance with Subsection
14.01.
Section 8.03 Waiver of Default: In case any Event of Default hereunder has
occurred otherwise than by default in payment of any principal moneys due on
December 30, 1998:
(a) subject to Subsection 8.03(b), the holders of not less than 75%
of the principal amount of the Notes then outstanding shall
have the power (in addition to and subject to the powers
exercisable by Extraordinary Resolution as hereinafter provided)
by requisition in writing to instruct the Trustee to waive the
default and/or cancel any declaration made by the Trustee
pursuant to Section 8.02 and the Trustee shall thereupon waive
the default and/or cancel such declaration upon such terms and
conditions as shall be prescribed in such requisition;
(b) despite Subsection 8.03(a) , no waiver of a Series A Default
given pursuant to Subsection 8.03(a) shall be effective unless
such requisition is signed by the holders of not less than 75%
of the principal amount of the Series A Notes then outstanding
and no waiver of an Event of Default specified in paragraph
8.01(a)(ii) shall be effective unless such requisition is signed
by the holders of not less than 75% of the principal amount of
the Series B Notes then outstanding; and
(c) the Trustee, so long as it has not become bound to institute any
proceedings hereunder, shall have power to waive the default if,
in the Trustee's opinion, the same shall have been cured or
adequate satisfaction made therefor, and in such event to cancel
any such declaration theretofore made by the Trustee in the
exercise of its discretion, upon such terms and conditions as
to the Trustee may seem advisable;
but no act or omission either of the Trustee or of the Noteholders in the
premises shall extend to or be taken in any manner whatsoever to affect any
subsequent default hereunder or the rights resulting therefrom.
Section 8.04 Proceedings by the Trustee:
(a) Whenever any Event of Default hereunder has occurred and the
Trustee has given notice to the Company in accordance with
Section 8.02, but subject to the provisions of Article Four,
Subsection 8.02(b) and Section 8.03 and to the provisions of any
Extraordinary Resolution that may
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be passed by the Noteholders or the holders of Notes of either
series as a series:
(i) the Trustee, in the exercise of its discretion, may
proceed to enforce the rights of the Trustee and the
Noteholders by any action, suit, remedy or proceeding
authorized or permitted by law or by equity and may file
such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of
the Trustee and of the noteholders lodged in any
bankruptcy, winding-up or other judicial proceedings
relative to the Company; and
(ii) upon receipt of a Noteholders' Request, or upon being so
directed by the provisions of an Extraordinary
Resolution and upon being indemnified to its satisfaction
as provided in Section 15.02, the Trustee shall exercise
or take such one or more of the said remedies as the
Noteholders' Request or Extraordinary Resolution may
direct or, if such Noteholders' Request or Extraordinary
Resolution contains no direction, as the Trustee may deem
expedient.
(b) No such remedy for the enforcement of the rights of the Trustee
or of the Noteholders shall be exclusive of or dependent on any
other such remedy but any one or more of such remedies may from
time to time be exercised independently or in combination.
(c) Subject to Subsection 8.02(b), upon the exercising or taking by
the Trustee of any of such remedies whether or not a declaration
and demand have been made pursuant to Section 8.02, the
principal of and interest payable on all Notes then outstanding
and the other moneys payable under Section 8.02 shall forthwith
become due and payable to the Trustee as though such a
declaration and a demand therefor had actually been made.
(d) All rights of action hereunder may be enforced by the Trustee
without the possession of any of the Notes or the production
thereof on the trial or other proceedings relative thereto.
Section 8.05 Suits by Noteholders:
(a) No holder of any Note or Coupon shall have any right to
institute any action, suit or proceeding at law or in equity
for the purpose of enforcing payment of the principal of or
interest payable on the Notes or for the execution of any trust
or power hereunder or for the appointment of a liquidator or
receiver or for a receiving order under applicable bankruptcy
law or to
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have the Company wound up or to file or prove a claim in any
liquidation or bankruptcy proceeding or for any other remedy
hereunder, unless (i) such holder shall previously have given
to the Trustee written notice of the happening of an Event of
Default hereunder; and (ii) subject to Subsection 8.02(b), the
Noteholders by Extraordinary Resolution or by Noteholders'
Request shall have made a request to the Trustee and the
Trustee shall have been afforded reasonable opportunity either
itself to proceed to exercise the powers hereinbefore granted
or to institute an action, suit or proceeding in its name for
such purpose; and (iii) the Noteholders or any of them shall
have furnished to the Trustee, if so required by the Trustee,
the funds and indemnity required to be furnished to the
Trustee pursuant to Subsection 15.02 (b) ; and (iv) the
Trustee shall have failed to act within a reasonable time
after such notification and request and an offer of such funds
and indemnity.
(b) All conditions, constraints and limitations pursuant to this
Indenture of or on the Trustee's rights and remedies
hereunder, including, without limitation, upon, after or in
respect of any Event of Default are for the sole and exclusive
benefit of the Noteholders and not the Company or any other
person. Neither the Company nor any other person shall be
entitled to inquire into whether any such condition,
constraint or limitation has been breached or complied with,
nor to rely upon or assert any such breach or non-compliance
as a defence or otherwise.
Section 8.06 Application of Moneys Received by the Trustee: Except as
otherwise herein provided, all moneys received by the Trustee and arising from
any enforcement hereof shall be held by the Trustee and applied by it, together
with any other moneys then or thereafter in the hands of the Trustee available
for the purpose, as follows:
(a) firstly, in payment or reimbursement to the Trustee of the
remuneration, expenses, disbursements and advances of the
Trustee earned, incurred or made in the administration or
execution of the trusts hereunder or otherwise in relation to
this Indenture with interest thereon as herein provided;
(b) secondly, but subject to the provisions of Section 6.04, in
payment of the principal amount outstanding on the Series A
Notes together with all accrued and unpaid interest to such
date on and all other liabilities relating to the Series A
Notes which shall then be outstanding and which are known to
the Trustee ratably and proportionately and without preference
or priority or discrimination as between principal and
interest unless otherwise directed by a Series A Extraordinary
Resolution and in that case in such order of priority as
between
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principal and interest as may be directed by such Series A
Extraordinary Resolution;
(c) thirdly, but subject to the provisions of Section 6.04, in
payment of the principal amount outstanding on the Series B
Notes together with all accrued and unpaid interest to such
date on and all other liabilities relating to the Series B
Notes which shall then be outstanding ratably and
proportionately and without preference or priority or
discrimination as between principal and interest unless
otherwise directed by a Series B Extraordinary Resolution and
in that case in such other order of priority as between
principal and interest as may be directed by such Series B
Extraordinary Resolution; and
(d) the surplus, if any, of such moneys shall be paid to the
Company or its assigns;
but no payment shall be made pursuant to Subsection (b) or (c) above in respect
of the principal of or interest payable on any Note held, directly or
indirectly, by or for the benefit of the Company or any affiliate (other than
any Note pledged for value and in good faith to a person other than the Company
or any affiliate but only to the extent of such person's interest therein)
except subject to the prior payment in full of the principal and interest of
all Notes which are not so held, provided that the Trustee shall not be liable
in respect of any such payment unless it had actual knowledge that the Note in
respect of which payment was made was held, directly or indirectly, by or for
the benefit of the Company or any affiliate thereof.
Section 8.07 Distribution of Proceeds: Payments to Noteholders pursuant to
Subsection 8.06(b) and (c) shall be made as follows:
(a) At least 15 days' notice of every such payment shall be given
in the manner provided in Section 14.01 specifying the time
when and the place or places where the Notes are to be
presented and the amount of the payment and the application
thereof as between principal and interest.
(b) Payment of any Note shall be made upon presentation thereof at
any one of the places specified in such notice and any such
Note thereby paid in full shall be surrendered, otherwise a
memorandum of such payment shall be endorsed thereon; but the
Trustee may in its discretion dispense with presentation and
surrender or endorsement in any special case upon such
indemnity being given as it shall deem sufficient.
(c) From and after the date of payment specified in the notice,
interest shall accrue only on the amount owing on each Note
after giving credit for the amount of the payment specified in
such notice unless such Note is duly
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presented on or after the date so specified and payment of
such amount is not made.
(d) The Trustee shall not be required to make any interim payment
to Noteholders unless the moneys in its hands, after reserving
thereout such amount as the Trustee may think necessary to
provide for the payments mentioned in Subsection 8.06 (a),
exceed two per cent of the principal amount of the then
outstanding Notes.
Section 8.08 Remedies Cumulative: No remedy herein conferred upon or
reserved to the Trustee, or upon or to the holders of Notes or any of them, is
intended to be exclusive of any other remedy, but each and every such remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now existing or hereafter to exist by law or in equity or by
statute.
Section 8.09 Judgment Against the Company: The Company covenants and agrees
with the Trustee that, in case of any judicial or other proceedings to enforce
the rights of the Noteholders, judgment may be rendered against it in favour of
the Noteholders or in favour of the Trustee, as trustee for the Noteholders,
for any amount which may remain due in respect of the Notes and the interest
payable thereon and all other liabilities in respect thereof.
Section 8.10 Trustee Appointed Attorney: The Company hereby irrevocably
appoints the Trustee to be the attorney of the Company for and in the name and
on behalf of the Company to execute any instruments and do any things which the
Company ought to execute and do hereunder or under any document executed
pursuant hereto and which the Company has not executed or done and generally to
use the name of the Company in the exercise of all or any of the powers hereby
conferred on the Trustee, with full powers of substitution and revocation.
ARTICLE NINE
SUCCESSOR COMPANIES
Section 9.01 Certain Requirements in Respect of Merger etc.: In addition
to the covenants contained in Section 6.02, so long as any of the Notes remain
outstanding, the Company shall not enter into any transaction (whether by way
of reconstruction, reorganization, consolidation, arrangement, amalgamation,
merger, transfer, lease, sale or otherwise) whereby all or substantially all of
its undertaking or assets would become the property of another person or, in
the case of any such amalgamation, of the continuing company resulting
therefrom unless, but may do so if:
(a) such other person or continuing company is a corporation
(herein called the "successor company") incorporated under the
laws of Canada or one of its provinces;
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(b) the successor company shall execute, prior to,
contemporaneously with or forthwith after the consummation of
such transaction, such instruments as are satisfactory to the
Trustee and in the opinion of counsel are necessary or
advisable either to evidence the assumption by the successor
company of liability for the due and punctual payment of the
principal of and interest payable on all the Notes and all
other moneys payable hereunder and the covenant of the
successor company to pay the same and its agreement to observe
and perform all the covenants and obligations of the Company
under this Indenture; or evidence the agreement by the
successor company to unconditionally guarantee the due and
punctual payment of all amounts payable under this Indenture;
(c) such transaction shall to the satisfaction of the Trustee and
in the opinion of counsel be upon such terms as to
substantially preserve and not to materially impair the Series
A Lien or not to materially prejudice any of the rights and
powers of the Trustee or of the Noteholders hereunder; and
(d) no condition or event shall exist in respect of the Company or
the successor company either at the time of or immediately
after the consummation of such transaction and after giving
full effect thereto or immediately after the successor company
complying with the provisions of Subsection (b) above which
constitutes or would constitute an Event of Default hereunder.
Section 9.02 Vesting of Powers in Successor: Whenever the conditions of
Section 9.01 have been duly observed and performed the successor company shall
possess and from time to time may exercise each and every right and power of
the Company under this Indenture in the name of the Company or otherwise and
any act or proceeding by any provision of this Indenture required to be done or
performed by any directors or officers of the Company may be done and performed
with like force and effect by the like directors or officers of such successor
company.
ARTICLE TEN
INVESTMENT OF TRUST FUNDS
Section 10.01 Unless otherwise provided in this Indenture, any moneys held
by the Trustee, which under the trusts of this Indenture may or ought to be
invested, shall be invested and reinvested by the Trustee in its name or under
its control in any securities in which trustees are, by the laws of the
Province of Ontario, authorized to invest trust moneys, provided that such
securities are expressed to mature within two years after their purchase by the
Trustee, and unless and until the Trustee shall have declared the principal of
and interest payable on the Notes to
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be due and payable, the Trustee shall so invest such moneys at the request of
the Company. Unless an Event of Default shall have occurred and be continuing,
all interest or other income received by the Trustee in respect of such
investments shall belong to the Company.
ARTICLE ELEVEN
MEETINGS OF NOTEHOLDERS
Section 11.01 Right to Convene Meetings: The Trustee may at any time and
from time to time and shall, on receipt of a request of the Company or a
Noteholders' Request and upon being indemnified to its reasonable satisfaction
by the Company or by the Noteholders signing such Noteholders' Request against
the costs which may be incurred in connection with the calling and holding of
such meeting, convene a meeting of the Noteholders. In the event of the
Trustee failing within 30 days after receipt of such request and indemnity to
give notice convening such meeting, the Company or such Noteholders, as the
case may be, may convene such meeting. Every such meeting shall be held in the
Cities of Toronto or London, England or at such other place as may be approved
or determined by the Trustee.
Section 11.02 Notice: At least 30 days notice of any meeting shall be given
to the Noteholders in the manner provided in Section 14.01 and a copy thereof
shall be sent by post to the Trustee unless the meeting has been called by it
and to the Company unless the meeting has been called by it. Such notice shall
state the time when and the place where the meeting is to be held and shall
state briefly the general nature of the business to be transacted thereat and
it shall not be necessary for any such notice to set out the terms of any
resolution to be proposed or any of the provisions of this Article Eleven.
Section 11.03 Chairman: Some person, who need not be a Noteholder, nominated
in writing by the Trustee shall be chairman of the meeting and if no person is
so nominated, or if the person so nominated is not present within 15 minutes
from the time fixed for the holding of the meeting, the Noteholders present in
person or by proxy shall choose some person present to be chairman.
Section 11.04 Quorum: Subject to the provisions of Section 11.12, at any
meeting of the Noteholders a quorum shall consist of Noteholders present in
person or by proxy and holding at least 25% in principal amount of the then
outstanding Notes. If a quorum of the Noteholders shall not be present within
half-an-hour from the time fixed for holding any meeting, the meeting, if
convened by the Noteholders or on a Noteholders' Request, shall be dissolved;
but if otherwise convened the meeting shall stand adjourned to the same day in
the next week (unless such day is not a business day in which case it shall
stand adjourned to the next following business day thereafter) at the same time
and place, and no notice shall be
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required to be given in respect of such adjourned meeting. At the adjourned
meeting the Noteholders present in person or by proxy shall form a quorum and
may transact the business for which the meeting was originally convened
notwithstanding that they may not hold 25% in principal amount of the then
outstanding Notes.
Section 11.05 Power to Adjourn: The chairman of any meeting at which a quorum
of the Noteholders is present may with the consent of the holders of a majority
in principal amount of the Notes represented thereat adjourn any such meeting
and no notice of such adjournment need be given except such notice, if any, as
the meeting may prescribe.
Section 11.06 Show of Hands: Every question submitted to a meeting shall be
decided in the first place by a majority of the votes given on a show of hands
except that votes on Extraordinary Resolutions shall be given in the manner
hereinafter provided. At any such meeting, unless a poll is duly demanded as
herein provided, a declaration by the chairman that a resolution has been
carried or carried unanimously or by a particular majority or lost or not
carried by a particular majority shall be conclusive evidence of the fact.
Section 11.07 Poll: On every Extraordinary Resolution, and on any other
question submitted to a meeting when demanded after a vote by show of hands by
the chairman or by any Noteholder or proxy for a Noteholder, a poll shall be
taken in such manner and either at once or after an adjournment as the chairman
shall direct. Questions other than Extraordinary Resolutions shall, if a poll
be taken, be decided by the votes of the holders of a majority in principal
amount of the Notes represented at the meeting and voted on the poll.
Section 11.08 Voting: On a show of hands every person who is present and
entitled to vote, whether as a Noteholder or as proxy for one or more absent
Noteholders or both, shall have one vote. On a poll each Noteholder present in
person or represented by a proxy duly appointed by instrument in writing shall
be entitled to one vote in respect of each $5,000 principal amount of Notes of
which he shall then be a holder. A proxy need not be a Noteholder.
Section 11.09 Regulations: The Trustee or the Company with the approval of the
Trustee may from time to time make and from time to time vary such regulations
as it shall from time to time think fit:
(a) for the deposit of instruments appointing proxies at such
place as the Trustee, the Company or the Noteholders
convening the meeting, as the case may be, may in the notice
convening the meeting direct; and
(b) for the deposit of instruments appointing proxies at some
approved place or places other than the place at which the
meeting is to be held and enabling particulars of such
instruments appointing proxies to be mailed, cabled
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or telegraphed before the meeting to the Company or to the
Trustee at the place where the same is to be held and for the
voting of proxies so deposited as though the instruments
themselves were produced at the meeting.
Any regulations so made shall be binding and effective and the votes given in
accordance therewith shall be valid and shall be counted. Save as such
regulations may provide, the only persons who shall be recognized at any
meeting as the holders of any Notes, or as entitled to vote or be present at
the meeting in respect thereof, shall be the holders of Notes and persons whom
holders of Notes have by instrument in writing duly appointed as their proxies.
Section 11.10 Company and Trustee May be Represented: The Company and the
Trustee, by their respective officers and directors, and the legal advisers of
the Company and the Trustee, may attend any meeting of the Noteholders but
shall have no vote as such.
Section 11.11 Powers Exercisable by Extraordinary Resolution: In addition to
all other powers stated in this Indenture to be exercisable by Extraordinary
Resolution or conferred upon them by any other provisions of this Indenture or
by law, a meeting of the Noteholders shall have the following powers
exercisable from time to time by Extraordinary Resolution:
(a) power to agree to any modification, abrogation, alteration,
compromise or arrangement of the rights of Noteholders and/or
the Trustee against the Company or against its undertaking,
property and assets or any part thereof whether such rights
arise under this Indenture or the Notes or otherwise;
(b) powers to direct or authorize the Trustee to exercise any
power, right, remedy or authority given to it by this
indenture or the Notes in any manner specified in such
Extraordinary Resolution or to refrain from exercising any
such power, right, remedy or authority;
(c) power to waive and direct the Trustee to waive any default on
the part of the Company in complying with any provision of
this Indenture or the Notes and/or to cancel and to direct the
Trustee to cancel any declaration in respect of such default
made by the Trustee pursuant to Section 8.02, either
unconditionally or upon any conditions specified in such
Extraordinary Resolution;
(d) power to restrain any Noteholder from taking, instituting or
maintaining any suit, action or proceeding for the payment of
principal or interest or for the execution of any trust or
power hereunder or for the appointment of a trustee in
bankruptcy or to have the Company wound up or for any other
remedy hereunder;
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(e) power to sanction the exchange of Notes for or the conversion
of Notes into shares, bonds, debentures, notes or any other
securities or obligations of the Company or any other
corporation which shall be agreed to by the Company and, if
applicable, such other corporation;
(f) power to assent to any modification of or change in or
omission from the provisions contained herein or any deed or
instrument supplemental hereto which shall be agreed to by the
Company and to authorize the Trustee to concur in and execute
any deed or instrument supplemental hereto embodying such
modification, change or omission;
(g) power to repeal, modify or amend any Extraordinary Resolution
previously passed by the Noteholders; and
(h) power to appoint and remove a committee to consult with the
Trustee and to delegate to such committee (subject to such
limitations, if any, as may be prescribed in such
Extraordinary Resolution) all or any of the powers which the
Noteholders could exercise by Extraordinary Resolution under
the foregoing Subsections (b), (c) and (d). The Extraordinary
Resolution making such appointment may provide for payment of
the expenses and disbursements of and compensation to such
committee. Such committee shall consist of such number of
persons as shall be prescribed in the Extraordinary Resolution
appointing it, and the members need not be themselves
Noteholders. Subject to the Extraordinary Resolution
appointing it, every such committee may elect its chairman and
may make regulations respecting its quorum, the calling of its
meetings, the filling of vacancies occurring in its number,
the manner in which it may act and its procedure generally and
such regulations may provide that the committee may act at a
meeting at which a quorum is present or may act by minutes
signed by a majority of the members thereof or the number of
members thereof necessary to constitute a quorum, whichever is
the greater. All acts of any such committee within the
authority delegated to it shall be binding upon all
Noteholders. Neither the committee nor any member thereof shall
be liable for any loss arising from or in connection with any
action taken or omitted to be taken by them in good faith.
Notwithstanding the foregoing, no committee appointed pursuant
to this Subsection 11.11(h) by Extraordinary Resolution shall
have the power to:
(i) change the maturity of any Note or the dates on which
principal or interest is payable in respect thereof
or reduce the principal amount or interest on the
Notes, without the consent of the holders of each
Note so affected; or
(ii) change the currency of payment of the Notes; or
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(iii) affect or impair any of the rights of the Trustee
hereunder, without the approval of the Trustee.
Section 11.12 Meaning of "Extraordinary Resolution":
(a) The expression "Extraordinary Resolution" when used in this
Indenture means, subject as hereinafter in this Section and in
Section 11.15 provided, a resolution proposed to be passed as
an Extraordinary Resolution at a meeting of Noteholders duly
convened for the purpose and held in accordance with the
provisions of this Article at which the holders of more than
50% (unless such business involves consideration of a proposal
to: (i) change the maturity of the Notes or the dates on
which interest is payable in respect of the Notes; or (ii)
reduce the principal amount of or interest owing under the
Notes; or (iii) change the currency of payment of the Notes,
in which case the necessary quorum shall consist of persons
present in person or by proxy and holding at least 75%), in
principal amount of the Notes then outstanding are present in
person or by proxy and passed by the favourable votes of the
holders of not less than 75% of the principal amount of Notes
represented at the meeting and voted on a poll upon such
resolution.
(b) If at any such meeting the holders of more than 50% in
principal amount of the Notes then outstanding are not present
in person or by proxy within half-an-hour after the time
appointed for the meeting, then the meeting, if convened by
Noteholders or on a Noteholders' Request, shall be dissolved;
but if otherwise convened the meeting shall stand adjourned to
such date, being not less than 21 nor more than 60 days later,
and to such place and time as may be appointed by the
chairman. Not less than 10 days notice shall be given of the
time and place of such adjourned meeting in the manner
provided in Section 14.01. Such notice shall state that at
the adjourned meeting at least two Noteholders present in
person or by proxy shall form a quorum but it shall not be
necessary to set forth the purposes for which the meeting was
originally called or any other particulars. At the adjourned
meeting at least two Noteholders present in person or by proxy
shall form a quorum, whatever the principal amount of the
Notes held or represented, and may transact the business for
which the meeting was originally convened (unless such
business involves consideration of a proposal to: (i) change
the maturity of the Notes or the dates on which interest is
payable in respect of the Notes; or (ii) reduce the principal
amount of or interest owing under the Notes; or (iii) change
the currency of payment of the Notes, in which case the
necessary quorum for an adjourned meeting shall consist of
persons present in person or by proxy and holding at least 50%
in principal amount of the then outstanding
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Notes); and a resolution proposed at such adjourned meeting
and passed by the requisite vote as provided in Subsection (a)
of this Section shall be an Extraordinary Resolution within
the meaning of this Indenture, notwithstanding that the
holders of more than 50% in principal amount of the Notes then
outstanding are not present in person or by proxy at such
adjourned meeting.
(c) Votes on an Extraordinary Resolution shall always be given on
a poll and no demand for a poll on an extraordinary resolution
shall be necessary.
Section 11.13 Powers Cumulative: It is hereby declared and agreed that any
one or more of the powers and/or combination of the powers in this Indenture
stated to be exercisable by the Noteholders by Extraordinary Resolution or
otherwise may be exercised from time to time and the exercise of any one or
more of such powers or any combination of powers from time to time shall not be
deemed to exhaust the right of the Noteholders to exercise such power or powers
or combination of powers then or any power or powers or combination of powers
thereafter from time to time.
Section 11.14 Minutes: Minutes of all resolutions and proceedings at every
such meeting as aforesaid shall be made and duly entered in books to be from
time to time provided for that purpose by the Trustee at the expense of the
Company, and any such minutes as aforesaid, if signed by the chairman of the
meeting at which such resolutions were passed or proceedings had, or by the
chairman of the next succeeding meeting of the Noteholders, shall be prima
facie evidence of the matters therein stated and, until the contrary is proved,
every such meeting, in respect of the proceedings of which minutes shall have
been made, shall be deemed to have been duly held and convened, and all
resolutions passed thereat or proceedings had, to have been duly passed and
had.
Section 11.15 Instruments in Writing: All actions which may be taken and
all powers which may be exercised by the noteholders at a meeting held as
hereinbefore in this Article provided may also be taken and exercised by the
holders of 66-2/3% of the principal amount of all the then outstanding Notes by
an instrument in writing signed in one or more counterparts and the expression
"Extraordinary Resolution" when used in this Indenture shall include an
instrument so signed.
Section 11.16 Binding-Effect of Resolutions: Subject to Section 11.17, every
resolution and every Extraordinary Resolution passed in accordance with the
provisions of this Article at a meeting of Noteholders shall be binding upon
all the Noteholders, whether present at or absent from such meeting, and every
instrument in writing signed by Noteholders in accordance with Section 11.15
shall be binding upon all the Noteholders, whether signatories thereto or not,
and each and every Noteholder and the Trustee (subject to the provisions for
its indemnity herein contained)
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shall be bound to give effect accordingly to every such resolution,
Extraordinary Resolution and instrument in writing.
Section 11.17 Serial Meetings:
(a) If any business to be transacted at a meeting of Noteholders, or
any action to be taken or power to be exercised by instrument in
writing under Section 11.15, affects the rights of the holders
of Notes of one or more series (for which purpose, series Al Notes
and Series A2 Notes shall be deemed to be separate series to the
extent that any such business affects the principal repayment
obligations of the Company in respect thereof) in a manner or to
an extent substantially different from that in or to which it
affects the rights of the holders of Notes of any other series (as
to which an opinion of counsel shall be binding on all
Noteholders, the Trustee and the Company for all purposes hereof)
then:
(i) reference to such fact, indicating each series so affected,
shall be made in the notice of such meeting and the meeting
shall be and is herein called a "serial meeting"; and
(ii) the holders of Notes of a series so affected shall not be
bound by any action taken at a serial meeting or by
instrument in writing under Section 11.15 unless in
addition to compliance with the other provisions of this
Article:
(A) at such serial meeting:
(I) there are present in person or by proxy holders
of at least 25% (or for the purpose of passing an
Extraordinary Resolution more than 50%) in
principal amount of the then outstanding Notes of
such series, subject to the provisions of this
Article as to adjourned meetings; and
(II) the resolution is passed by the favourable votes
of the holders of more than 50% (or in the case
of an Extraordinary Resolution not less than 75%)
in principal amount of the Notes of such series
voted on the resolution or Extraordinary
Resolution as, the case may be; or
(B) in the case of action taken or power exercised by
instrument in writing under Section 11.15, such
instrument is signed in one or more counterparts by
the holders of not less than
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66 2/3% in principal amount of the then outstanding
Notes of such series.
(b) If in the opinion of counsel any business to be transacted at any
meeting, or any action to be taken or power to be exercised by
instrument in writing under Section 11.15, does not materially
adversely affect the rights of the holders of Notes of one or more
particular series, the provisions of this Article Eleven shall
apply as if the Notes of such series were not outstanding and
no notice of any such meeting need be given to the holders of Notes
of such series. Without limiting the generality of the foregoing,
a proposal to modify or terminate any covenant or agreement which
by its terms is effective only so long as Notes of a particular
series are outstanding shall be deemed not to adversely affect the
rights of the holders of Notes of any other series.
(c) A proposal (i) to extend the maturity of Notes of any particular
series or reduce the principal amount thereof or the rate of
interest payable thereon or (ii) to modify or terminate any
covenant or agreement which by its terms is effective only so long
as Notes of a particular series are outstanding, shall be deemed to
especially affect the rights of the holders of such series in a
manner substantially different from that in which it affects
the rights of holders of Notes of any other series, whether or not
a similar extension, reduction, modification or termination is
proposed with respect to Notes of any or all other series.
ARTICLE TWELVE
SUPPLEMENTAL INDENTURES
Section 12.01 From time to time the Company (when authorized by a resolution of
its directors) and the Trustee may, subject to the provisions of this
Indenture, and they shall, when so required by this Indenture, execute and
deliver by their proper officers, indentures or other instruments supplemental
hereto, which thereafter shall form part hereof, for any one or more or all of
the following purposes:
(a) evidencing the succession of successor companies in accordance
with the provisions of Article Nine;
(b) giving effect to any Extraordinary Resolution passed as provided in
Article Eleven;
(c) adding to or altering the provisions hereof in respect of the
registration and transfer of Notes, making provision for the issue
of Notes in forms or denominations other than those herein provided
for and for the exchange of
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Notes of different forms and denominations; and making any
modification in the forms of the Notes which does not affect the
substance thereof;
(d) making any additions to, deletions from or alterations of the
provisions of this Indenture which, in the opinion of the Trustee,
do not materially and adversely affect the interests of the
Noteholders;
(e) any other purpose not inconsistent with the terms of this
Indenture, provided that in the opinion of the Trustee the rights
of the Trustee and of the Noteholders are in no way prejudiced
thereby.
The Trustee may also, without the consent or concurrence of the Noteholders, by
supplemental indenture or otherwise, concur with the Company in making any
changes or corrections in this Indenture which it shall have been advised by
counsel are required for the purpose of curing or correcting any ambiguity or
defective or inconsistent provision or clerical omission or mistake or manifest
error contained herein or in any deed or indenture supplemental or ancillary
hereto, provided that in the opinion of the Trustee the rights of the Trustee
and of the Noteholders are in no way prejudiced thereby.
ARTICLE THIRTEEN
SATISFACTION AND DISCHARGE
Section 13.01 Cancellation and Destruction:
(a) Subject to the provisions of Section 7.03 as to Notes redeemed in
part, all Notes which are redeemed and surrendered for cancellation
together, in the case of Bearer Notes, with such unmatured Coupons
as are attached thereto or are surrendered therewith at the time of
redemption or surrender and all Coupons which are paid, shall be
forthwith delivered to and cancelled by the Trustee or,
alternatively, pursuant to the provisions of the Agency Agreement,
delivered to and cancelled by the Paying Agent, the Transfer
Agent or the Registrar by or through which they are redeemed,
exchanged, surrendered or paid.
(b) All matured Notes and Coupons shall be forthwith cancelled by the
Registrar or, alternatively, pursuant to the Agency Agreement, be
delivered to and cancelled by any Paying Agent.
(c) All Notes or Coupons cancelled or required to be cancelled under
this or any provision of this Indenture shall be destroyed by or
under the direction of the Trustee by cremation or otherwise (in
the presence of
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a representative of the Company if the Company shall so require)
and the Trustee shall prepare and retain a certificate of such
destruction and deliver a duplicate thereof to the Company,
Section 13.02 Non-Presentation of Notes: Any moneys paid by the Company to the
Trustee or the Principal Paying Agent or any other Paying Agent for the payment
of the principal of or interest payable on any Notes, and remaining unclaimed
at the end of 10 years, in the case of moneys relating to the payment of
principal on the Notes, and five years, in the case of moneys relating to the
payment of interest payable on the Notes, after such principal or interest
shall have become due and payable (whether at maturity or upon call for
redemption, purchase or otherwise), shall then be repaid to the Company, upon
its written request, and upon such repayment all liability of the Trustee or
the Principal Paying Agent or any other Paying Agent, as the case may be, with
respect thereto shall thereupon cease, without, however, limiting in any way
any obligation the Company may have to pay the principal of or interest payable
on such Notes as the same shall become due. Payment at any agency will be made
by a cheque drawn on a Canadian dollar account at a bank in Toronto or, at the
option of the holder, by wire transfer to a Canadian dollar account at a bank
in London.
Section 13.03 Discharge of Security: Upon proof being given to the reasonable
satisfaction of the Trustee that the principal amount of all Series A Notes and
all interest (including interest on overdue interest, if any) payable thereon
and other moneys thereby secured have been paid or upon provision satisfactory
to the Trustee being made therefor, the Trustee shall, at the request and at
the expense of the Company, execute and deliver to the Company such deeds or
other instruments as shall be requisite to evidence the satisfaction and
discharge of the Series A Lien and to release or reconvey the Charged Property
to the Company freed and discharged from the trusts and provisions contained in
the applicable Security Documents.
Section 13.04 Release from Covenants: Upon proof being given to the reasonable
satisfaction of the Trustee that all the Notes and interest (including interest
on amounts in default) payable thereon and other moneys payable hereunder have
been paid or satisfied or that, all the outstanding Notes having matured or
having been duly called for redemption, or the Trustee having been given
irrevocable instructions by the Company to publish within 90 days notice of
redemption of all the outstanding Notes, such payment and/or redemption has
been duly and effectually provided for by payment to the Trustee or otherwise;
and upon payment of all costs, charges and expenses properly incurred by the
Trustee in relation to this Indenture and all interest payable thereon and the
remuneration of the Trustee, or upon provision satisfactory to the Trustee
being made therefor, the Trustee shall, at the request and at the expense of
the Company, execute and deliver to the Company such deeds or other instruments
as shall be requisite to release the Company from
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its covenants herein contained except those relating to the indemnification of
the Trustee.
ARTICLE FOURTEEN
NOTICES
Section 14.01 Notice to Noteholders: Unless herein otherwise expressly
provided, any notice to be given hereunder to Noteholders shall be deemed to be
validly given:
(a) to holders of Registered Notes, if such notice is sent by surface
or air mail, postage prepaid, addressed to such holders at their
respective addresses appearing on any of the registers above
mentioned; but if in the case of joint holders of any Registered
Note more than one address appears in the register in respect of
such joint holding, such notice shall be addressed only to the
first address so appearing. Any notice so given shall be deemed to
have been given on the fifth day after the day of mailing.
Notwithstanding the foregoing, in the event that the Company is
prevented by circumstances beyond its control, including but not
limited to a work stoppage, threatened or actual, by postal
employees, from giving notice by mail to holders of Registered
Notes in the manner provided herein, the Company may, with the
consent of the Trustee, give notice to holders of Registered Notes
by publishing a notice once in each of the Cities of Toronto,
Montreal, Winnipeg and Calgary, each such publication to be made in
an English language daily newspaper of general circulation in the
designated city and approved by the Trustee and the giving of such
notice by publication shall have the same effect as if it had been
given by mail in the manner provided herein. In determining under
any provision hereof the date when notice of any meeting,
redemption or other event must be given, the date of giving the
notice shall be included and the date of the meeting, redemption or
other event shall be excluded; and
(b) to holders of Bearer Notes, if such notice is published once in the
Financial Times of London, England, and once through Euro-clear.
If, because of temporary suspension of publication or general
circulation of either of such services or for any other reason, it
is impossible or impracticable, in the opinion of the Trustee, to
make any publication of any notice required by this indenture in
the manner herein provided, such notice may be published, in
lieu of publication in either of such services, in an English
language newspaper having general circulation in Western Europe.
If either of such services shall cease to be published, any notice
to be given hereunder to Noteholders shall be deemed to be validly
given if such
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notice is published in another leading newspaper of general
circulation in London.
Couponholders will be deemed for all purposes to have notice of the contents of
any notice given to holders of Bearer Notes in accordance with this Section.
Accidental error or omission in giving notice or accidental failure to mail
notice to any one or more noteholders shall not invalidate any action or
proceeding founded thereon.
Section 14.02 Notice to the Trustee or the Committee: Any notice, request or
direction to the Trustee or the Committee under the provisions of this
Indenture shall be valid and effective if delivered to an officer of the
Trustee or if sent by registered mail, postage prepaid, addressed to the
Trustee (or, in the case of a notice, request or direction to the Committee,
addressed to the Committee, c/o The Trustee) at the Trustee's principal office
in Toronto, 00 Xxxx Xxxxxx Xxxx, 0xx Xxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx, X0X 0X0,
Attention: Corporate Trust Department. Notice by mail shall be deemed to have
been effectively given at the time when in the ordinary course of post the same
should have reached its destination.
Section 14.03 Notice to the Company: Any notice to the Company under any
provision of this Indenture shall be valid and effective if delivered to an
officer of the Company or if sent by registered mail, postage prepaid,
addressed to the Company at Suite 1101, 000 Xxxxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxx, X0X 0X0, Attention: Vice-President. Notice by mail shall be deemed to
have been effectively given at the time when in the ordinary course of post the
same should have reached its destination. The Company may from time to time
notify the Trustee of a change in address which thereafter, until changed by
like notice, shall be the address of the Company for all purposes of this
Indenture.
ARTICLE FIFTEEN
CONCERNING THE TRUSTEE
Section 15.01 Trust Indenture Legislation:
(a) In this Indenture, the term "Applicable Legislation" means the
provisions, if any, of the Canada Business Corporations Act and
any other statute of Canada or a province thereof, and of any
regulations under any such named or other statute, relating to
trust indentures and/or to the rights, duties and obligations of
trustees under trust indentures and of corporations issuing debt
obligations under trust indentures, to the extent that such
provisions are at the time in force and applicable to this
Indenture or the Company.
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(b) If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with a mandatory requirement of Applicable
Legislation, such mandatory requirement shall prevail.
(c) The Company and the Trustee agree that each will, at all times in
relation to this Indenture and any action to be taken hereunder,
observe and comply with and be entitled to the benefits of
Applicable Legislation.
Section 15.02 Rights and Duties of Trustee:
(a) In the exercise of the rights and duties prescribed or conferred
by the terms of this Indenture, the Trustee shall exercise that
degree of care, diligence and skill that a reasonably prudent
trustee would exercise in comparable circumstances.
(b) Subject only to Subsection (a) of this Section, the Trustee shall
not be bound to do, observe or perform or see to the observance
or performance by the Company of any of the obligations herein
imposed upon the Company or of the covenants on the part of the
Company herein contained, nor to taken any steps to enforce the
Series A Lien, nor in any way to supervise or interfere with the
conduct of the Company's business, unless and until the Series A
Lien shall have become enforceable and the Trustee shall have
determined or become bound to enforce the same and unless the
Trustee shall have been directed to do so by a Noteholders'
Request or by an Extraordinary Resolution; and then the obligation
of the Trustee to take any action or to commence or continue any
act, action or proceeding for the purpose of enforcing any rights
of the Trustee or the Noteholders hereunder shall be conditional
upon the Noteholders furnishing, when required by notice by the
Trustee given in accordance with Section 14.01 hereof, sufficient
funds to commence or continue such act, action or proceeding and
indemnity reasonably satisfactory to the Trustee to protect and
hold harmless the Trustee against the costs, charges, expenses and
liabilities to be incurred thereby and any loss and damage it may
suffer by reason thereof. None of the provisions contained in
this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur financial liability in the performance of
any of its duties or in the exercise of any of its rights or
powers unless indemnified as aforesaid.
(c) The Trustee may, before commencing or at any time during the
continuation of any such act, action or proceeding, require the
Noteholders at whose instance it is acting to deposit with the
Trustee the Notes held by them, for which Notes the Trustee
shall issue receipts.
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(d) Every provision of this Indenture that by its terms relieves the
Trustee of liability or entitles it to rely upon any evidence
submitted to it, is subject to the provisions of Applicable
Legislation and of this Section and of Section 15.03.
Section 15.03 Evidence, Experts and Advisors:
(a) In addition to the reports, certificates, opinions and other
evidence required by this Indenture, the Company shall furnish
to the Trustee such additional evidence of compliance with any
provision hereof, and in such form, as may be prescribed by
Applicable Legislation or as the Trustee may reasonably require by
written notice to the Company.
(b) In the exercise of its rights and duties, the Trustee may, if it is
acting in good faith, rely as to the truth of the statements and
the accuracy of the opinions expressed therein, upon statutory or
other declarations, opinions, reports, certificates or other
evidence, including evidence furnished by means of cable, telex or
other electronic means of communication, furnished to the Trustee
pursuant to any provision hereof or of Applicable Legislation or
pursuant to a request of the Trustee provided that such evidence
complies with Applicable Legislation and that the Trustee examines
the same and determines that such evidence complies with the
applicable requirements of this Indenture.
(c) Whenever Applicable Legislation requires that evidence referred to
in Subsection (a) of this Section be in the form of a statutory or
other declaration, the Trustee may accept such statutory or
other declaration in lieu of a certificate of the Company required
by any provision hereof. Any such statutory or other declaration
may be made by one or more of the chairman of the board,
president, executive vice-president, vice-presidents, secretary,
treasurer, or secretary-treasurer, if the offices of secretary
and treasurer be combined, assistant secretaries or assistant
treasurers of the Company.
(d) Proof of the execution of an instrument in writing, including a
Noteholders' Request, by any Noteholder may be made by the
certificate of a notary public, or other officer with similar
powers, that the person signing such instrument acknowledged to
him the execution thereof, or by an affidavit of a witness to
such execution or in any other manner which the Trustee may
consider adequate.
(e) The Trustee may employ or retain, and may rely upon any opinion
furnished by, such solicitors, accountants engineers appraisers or
other experts or advisers as it may reasonably require for the
proper discharge of its
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duties hereunder, and may pay reasonable remuneration for all
services so performed by any of them, without taxation of
costs of any solicitor, and shall not be responsible for any
misconduct or negligence on the part of any of them if retained in
good faith by the Trustee. Any solicitors employed or consulted
by the Trustee may, but need not, be solicitors for the Company.
Section 15.04 Documents, Moneys, etc. Held by Trustee: Any securities,
documents of title or other instruments that may at any time be held by the
Trustee subject to the trusts hereof may be placed in the deposit vaults of the
Trustee or of any Canadian chartered bank or deposited for safekeeping with any
such bank. Unless herein otherwise expressly provided, any moneys held by the
Trustee pending the application or withdrawal thereof under any provisions of
this Indenture, may be deposited in the name of the Trustee in any Canadian
chartered bank at the rate of interest (if any) then current on similar
deposits or, with the consent of the Company, may be deposited in the deposit
department of the Trustee or any other loan or trust company authorized to
accept deposits under the laws of Canada or a province thereof. Unless an
event of default shall have occurred and be continuing, all interest or other
income received by the Trustee in respect of such deposits shall belong to the
Company.
Section 15.05 Action by Trustee to Protect Interests: The Trustee shall have
power to institute and to maintain such actions and proceedings as it may
consider necessary or expedient to preserve, protect or enforce its interests
and the interests of the holders of Notes.
Section 15.06 Trustee Not Required to Give Security: The Trustee shall not be
required to give any bond or security in respect of the execution of the trusts
and powers of this Indenture or otherwise in respect of the premises.
Section 15.07 Protection of Trustee: By way of supplement to the provisions of
any law for the time being relating to trustees, it is expressly declared and
agreed as follows:
(a) The Trustee shall not be liable for or by reason of any statements
of fact or recitals in this Indenture or in the Notes (except the
representation contained in Section 15.09 or in the certificate of
the Trustee on the Notes) or required to verify the same, but all
such statements or recitals are and shall be deemed to be made by
the Company.
(b) Nothing herein contained shall impose any obligation on the
Trustee to see to or to require evidence of the registration or
filing (or renewal thereof) of this Indenture or any instrument
ancillary or supplemental hereto.
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(c) The Trustee shall not be bound to give notice to any person or
persons of the execution hereof.
(d) The Trustee shall not incur any liability or responsibility
whatever or be in any way responsible for the consequence of any
breach on the part of the Company of any of the covenants
herein contained or of any acts of the agents or servants of the
Company or of any acts or omissions of any Paying Agent or other
agent appointed hereunder or under the Agency Agreement or as a
result of a conflict of interest arising in its role as a
fiduciary hereunder.
(e) The Company hereby agrees to indemnify the Trustee against any
losses, liabilities, costs, claims, actions and demands which it
may incur or which may be made against it, including those
attributable to the arising or elimination of a conflict of
interest relating to the Trustee's role as a fiduciary hereunder
or as a result of or in connection with its appointment or the
exercise of its powers and duties hereunder, except such as may
result from its own willful misconduct, negligence or bad faith or
that of its directors, officers, employees or agents. This
indemnity shall survive the termination and discharge of this
Indenture.
Section 15.08 Replacement of Trustee: The Trustee may resign its trust and be
discharged from all further duties and liabilities hereunder by giving to the
Company not less than 90 days notice in writing or such shorter notice as the
Company may accept as sufficient. The Noteholders by Extraordinary Resolution
shall have power at any time to remove the Trustee and to appoint a new
Trustee. In the event of the Trustee resigning or being removed or being
dissolved, becoming bankrupt, going into liquidation or otherwise becoming
incapable of acting hereunder, the Company shall forthwith appoint a new
Trustee unless a new Trustee has already been appointed by the Noteholders;
failing such appointment by the Company the retiring Trustee or any noteholder
may apply to a Justice of the Ontario Court (General Division) (or of any
successor of such Court), on such notice as such Justice may direct, for the
appointment of a new Trustee; but any new Trustee so appointed by the Company
or by the Court shall be subject to removal as aforesaid by the Noteholders.
Any new Trustee appointed under any provision of this section shall be a
corporation authorized to carry on the business of a trust company in the
Province of Ontario and, if required by Applicable Legislation of any other
province, in such other provinces as may be required. On any such appointment
the new Trustee shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named herein as Trustee without
any further assurance, conveyance, act or deed; but there shall be immediately
executed, at the expense of the Company, all such conveyances or other
instruments as may, in the opinion of counsel, be necessary or advisable for
the purpose of assuring the same to the new Trustee.
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Any company into which the Trustee may be merged or with which it may be
consolidated or amalgamated, or any company resulting from any merger,
consolidation or amalgamation to which the Trustee shall be a party, shall be
the successor Trustee under this Indenture without the execution of any
instrument or any further act.
Section 15.09 Conflict of Interest:
(a) The Trustee represents to the Company that at the time of the
execution and delivery hereof no material conflict of interest
exists in the Trustee's role as a fiduciary hereunder and agrees
that in the event of a material conflict of interest arising
hereafter it will, within 90 days after ascertaining that it has
such material conflict of interest, either eliminate the same or
resign its trust hereunder.
(b) Subject to Subsection (a) of this Section, the Trustee, in its
personal or any other capacity, may buy, sell, lend upon and deal
in Notes and other securities of the Company and generally may
contract and enter into financial and other business transactions
with the Company or any affiliate of the Company without being
liable to account for any profit made thereby.
Section 15.10 Acceptance of Trust: The Party of the Second Part hereby accepts
the trusts in this indenture declared and provided for, agrees to perform
the same upon the terms and conditions herein set forth and has required this
Indenture to be in the English language.
Section 15.11 Future Conflict of Interest: In the event that the Trustee
determines that in discharging its role as a fiduciary hereunder and as trustee
for both the holders of Series A Notes and holders of Series B Notes a material
conflict of interest exists, then the Trustee may (notwithstanding and in
addition to its general right to resign provided for in Section 15.08 ) resign
as the Trustee of one of the series of Notes (for which purpose the Series Al
Notes and the Series A2 Notes shall be deemed to be one series and the Series B
Notes shall be deemed to be another series) in order to eliminate the conflict
of interest by giving the Company not less than 90 days notice in writing or
such shorter notice as the Company may accept as being sufficient. In the event
of the Trustee so resigning, the Company shall forthwith appoint a new Trustee
unless a new Trustee has already been appointed by the Noteholders for whom
the retiring Trustee is no longer acting as Trustee; failing such appointment
by the Company the retiring Trustee or any Noteholder may apply to a Justice of
the Ontario Court (General Division) (or of any successor of such Court), on
such notice as such Justice may direct, for the appointment of a new Trustee;
but any new Trustee so appointed by the Company or by the Court shall be
subject to removal by the Noteholders in accordance with Section 15.08. Any new
Trustee appointed pursuant
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91.
to this Section shall enter into a new Indenture which shall be identical to
the form hereof, subject to the deletion of the provisions governing those
series of Notes for whom the new Trustee is not acting as Trustee. Any new
Trustee appointed under this Section shall be a corporation authorized to carry
on the business of a trust company in the Province of Ontario and, if required
by Applicable Legislation of any other province, in such other provinces as may
be required. On any such appointment the new Trustee shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named herein as Trustee without any further assurance, conveyance, act or deed;
but there shall be immediately executed, at the expense of the Company, all
such conveyances or other instruments as may, in the opinion of counsel, be
necessary or advisable for the purpose of assuring the same to the new Trustee.
The Company agrees to do, file, record, make, execute and deliver all such
acts, deeds, things, notices and instruments as may be necessary or desirable
in the opinion of the Trustee in order to effectively carry out the intent and
purpose of this Section 15.11. In the event that the Company fails to execute
and deliver such documents as are necessary to carry out the intent and purpose
of this Section 15.11 then the Trustee, after giving the Company notice of its
intention to do so, shall be empowered to execute such documents and the
Company hereby appoints two authorized signatories of the Trustee, acting
jointly, as its attorneys in fact to execute and deliver such documents.
ARTICLE SIXTEEN
COMMITTEE OF SERIES A NOTEHOLDERS
Section 16.01 Establishment of Committee: In addition to the powers conferred
on the Noteholders pursuant to Subsection 11.11(h), a committee of the holders
of Series A Notes is hereby constituted from among their members consisting of
one representative of the holder of the largest principal amount of Series Al
Notes and one representative of the holder of the largest principal amount of
Series A2 Notes as at the Effective Date, to the extent ascertainable by the
Trustee, each such holder to nominate its representative in writing in form
reasonably satisfactory to the Company and the Trustee, and provided that each
such representative has consented in writing so to act. Either such
representative may resign from the Committee at any time, and shall resign
forthwith after any transfer of Series A Notes such that the holder of Series A
Notes whom he is representing is not, directly or indirectly, the holder of the
largest principal amount of the applicable series of Series A Notes by written
notice to the Trustee and the Company and by notice given to the Noteholders in
accordance with Section 14.01, in which event the holder of Series A Notes
entitled to appoint such representative shall promptly appoint a
representative. A quorum for the transaction of any business of the Committee
shall consist of the two individuals so appointed. To be effective, all
decisions of the Committee must be the unanimous decision of the two
representatives.
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92.
Notwithstanding any other provision of this Indenture, the Committee shall have
the following powers:
(a) power to authorize any transaction provided for in Paragraph
6.02(h)(vii); and
(b) power to waive and direct the Trustee to waive any Series A
Default, to direct the Trustee to cancel any declaration in
respect of such default made by the Trustee pursuant to Section
8.02 and to direct the Trustee not to exercise any remedy
hereunder or in respect hereof, either unconditionally or upon any
conditions specified by the Committee provided that the Committee
shall, acting in good faith, be satisfied that such action is not
materially prejudicial to the interest of the holders of Series A
Notes when the Goran Group is taken as a whole.
All acts of the Committee within the authority delegated to it in this Section
shall be binding upon all holders of Series A Notes. For greater certainty, the
Committee shall not have the power to amend or modify any term or condition of
this Indenture or to deal with any proposal to: (i) change the maturity of the
Notes or the dates on which interest is payable in respect of the Notes; or
(ii) reduce the principal amount of or interest owing under the Notes; or (iii)
change the currency of payment of the Notes.
Section 16.02 Indemnity of Committee Members: The members of the Committee
shall not be liable for any loss arising from or in connection with any action
taken or omitted to be taken by them in good faith and the Company and, by
acceptance of any Notes, each Noteholder hereby releases, indemnifies and saves
harmless each such member from and against any losses, liabilities, costs,
claims, actions and demands that they may incur or that may be made against
them as a result of or in connection with any such action or omission. This
indemnity shall survive the termination and discharge of this Indenture.
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93.
ARTICLE SEVENTEEN
EXECUTION
Section 17.01 Counterparts and Formal Date: This Indenture may be
simultaneously executed in several counterparts, each of which so executed
shall be deemed to be an original, and such counterparts together shall
constitute one and the same instrument.
IN WITNESS WHEREOF the parties hereto have executed these presents under
their respective corporate seals and the hands of their proper officers in that
behalf.
GORAN CAPITAL INC.
Per: /s/ Xxxx X. Xxxxxx
------------------------------
Authorized Signature
Per: /s/ Cannot read signature c/s
------------------------------
Authorized Signature
MONTREAL TRUST COMPANY OF CANADA
Per: /s/ Cannot read signature c/s
APPROVED ------------------------------
FOR EXECUTION Authorized Signature
BY M.T.C. of C.
............... Per: /s/ Cannot read signature c/s
------------------------------
Authorized Signature
100
THE FIRST SUPPLEMENTAL INDENTURE is made as of the 30th day of April, 1996.
BETWEEN:
GORAN CAPITAL INC.
- and -
MONTREAL TRUST COMPANY OF CANADA
WHEREAS the Company and the Trustee are parties to an Amended and
Restated Trust Indenture made as of the 29th day of December, 1992
(the "Indenture");
WHEREAS pursuant to Section 11.15 of the Indenture, Noteholders holding
in excess of 66 2/3% of the aggregate outstanding principal amount of the Series
A Notes and 100% of the aggregate principal amount of the Series B Notes have
consented to the passage of a resolution in writing (the "Resolution") which,
among other things, authorizes the amendment of certain provisions of the
Indenture and waives compliance by the Company with certain provisions thereof;
WHEREAS the Resolution provides that the Indenture is to be amended by
one or more Supplemental Indentures;
NOW THEREFORE, in consideration of the mutual premises and covenants
set forth herein, the parties hereto agree as follows:
Section 1 - Definitions
Capitalized terms used herein shall, unless otherwise defined herein,
have the meanings ascribed to such terms in the Indenture.
Section 3 - Amendments to Indenture
The Indenture is hereby amended as follows:
(a) the definition of "Compensation Limit" set forth in Section 1.01
of the Indenture is amended, for greater certainty with respect to
fiscal years following December 31, 1995, by inserting the
following phrase at the beginning of Paragraph (ii)(A) thereof:
"the greater of U.S. $2,000,000 or"
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(b) by the addition of the following definition immediately following the
definition of "Prior Indebtedness" in Section 1.01 and by renumbering the
following definitions accordingly:
"Public Offering" means the sale to the public in the United
States of America and elsewhere of 50% of the shares of common
stock of IGF Holdings, Inc.;"
(c) the definition of "Subsidiary" set forth in Section 1.01 of the
Indenture is amended by inserting the following immediately before the
semi-colon at the end thereof:
"for greater certainty, none of the following corporations or
their respective Subsidiaries shall be deemed to be Subsidiaries
for the purpose of this Indenture: GGS Management Holdings Inc.,
GGS Management Inc., Pafco General Insurance Company or Superior
Insurance Company."
(d) Subsection 2.03(a) of the Indenture is amended by inserting the following
proviso immediately before the period at the end thereof:
"provided, however, that if the Public Offering is not completed
on or before December 31, 1996, the Series A Notes shall bear
interest from and including January 1, 1997 at the rate of 10%
per annum with interest on overdue interest at the same rate,
calculated and payable in the manner hereinbefore provided";
(e) Subsection 2.04(a) of the Indenture is amended by inserting the following
proviso immediately before the period at the end thereof:
"provided, however, that if the Public Offering is not completed
on or before December 31, 1996, the Series B Notes shall bear
interest from and including January 1, 1997 at the rate of 10%
per annum with interest on overdue interest at the same rate,
calculated and payable in the manner hereinbefore provided";
(f) Section 2.05 of the Indenture is amended by inserting the following as
Subsection (d) thereof:
"(d) If the interest rate payable pursuant to the Notes
increases from 8% per annum to 10% per annum as at January 1,
1997 pursuant to the provisions of Sections 2.03(a) and 2.04(a)
hereof, the outstanding forms of Notes shall be deemed to
represent an obligation of the Company to pay interest at the
rate of 10% per annum in accordance with the provisions of
Sections 2.03 (a) and 2.03 (b) hereof notwithstanding the lack
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of, and without the necessity for, any amendment to the
provisions thereof provided, however, that if, in the
opinion of counsel, the issue of coupons evidencing the
obligation to pay such increased interest is necessary,
the Company covenants that it will cause such additional
coupons to be issued.";
(g) Subsection 6.02(a) is amended by deleting the word "and" at
the end of paragraph (ii)(B) thereof and the period at the end of paragraph
(ii) thereof and inserting a semi-colon and by inserting the following
paragraphs:
"(iii) notwithstanding the provisions of paragraph
(ii), the Company shall not be required to cause
any of the following corporations to execute,
and such corporations shall not required to
execute a Guarantee Agreement, a Guarantee
Pledge Agreement or a Guarantee Security
Agreement: GGS Management Holdings Inc., GGS
Management Inc., Pafco General Insurance Company
or any other present or future Subsidiary of GGS
Management Holdings Inc.;
(iv) the Company shall be entitled to request that
the Trustee release, and the Trustee shall
release, from the Lien created in favour of the
Trustee for the benefit of the Noteholders, up
to 50% of the issued and outstanding common
shares of IGF Holdings Inc. upon receipt by the
Trustee of a certificate of the Company stating
that such shares are to be sold to the public
pursuant to the Public Offering.".
Section 3 - Release
The Trustee hereby releases: (a) the 10,000 shares of common stock of
Pafco General Insurance Company; and (b) the assets to be contributed by SIG
Indiana to GGS Management Holdings Inc. held by the Trustee from the Liens
created in its favour on behalf of the Series A Noteholders and acknowledges
and agrees that neither the Company nor any of its Subsidiaries is obligated to
charge such shares or assets in favour of the Trustee or the Series A
Noteholders pursuant to Section 6.02 of the Indenture or otherwise.
Section 4 - Consent
The entry by the Company and certain of its Subsidiaries into the transactions
described below (the "Transactions") is hereby consented to for and on behalf
of the Noteholders:
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(a) Pafco General Insurance Company ("PGIC") will incorporate a new
subsidiary, IGF Holdings, Inc. ("IGF Holdings").
(b) PGIC will transfer the issued and outstanding shares of IGF
Insurance Company ("IGF Insurance") to IGF Holdings in exchange
for 100% of the shares of IGF Holdings, U.S. $7,500,000 in cash
(to be obtained by way of loan from Union Federal Bank) and a
subordinated promissory note of IGF Holdings in the principal
amount of $3,475,269 payable to PGIC both of which will be
secured by a pledge of 966,666 shares of the Company by Xxxxxx
International Group Limited and a pledge of the issued and
outstanding shares of IGF Insurance by IGF Holdings;
(c) PGIC will distribute its shares of IGF Holdings to SIG Indiana
and SIG Indiana will pledge all such shares to the Trustee
pursuant to a Guarantee Pledge Agreement free and clear of all
Liens except Permitted Liens;
(d) SIG Indiana will contribute all of the shares of PGIC and
certain other assets consisting of furniture and other personal
property having an aggregate value of approximately U.S.
$250,000 to GGS Management Holdings, Inc. ("GGS Holdings") in
exchange for 52% of the shares of GGS Holdings and GS Capital
Partners II, L.P. will subscribe for the remaining 48% of the
shares in consideration of US $21,200,000 payable in cash. The
Company will pledge its shares of GGS Holdings to the Trustee
pursuant to a Guarantee Pledge Agreement free and clear of all
Liens except Permitted Liens;
(e) GGS Holdings will incorporate a wholly owned subsidiary, GGS
Management Holdings Inc. ("GGS Management") and all of the
issued and outstanding shares of PGIC will be contributed by GGS
Holdings to GGS Management in exchange for 100% of the GGS
Management shares;
(f) SIG Indiana and the Company will contribute their rights under
that certain Stock Purchase Agreement dated January 31, 1996
(the "Stock Purchase Agreement") and made among the Company,
SIG Indiana, Fortis, Inc. and Interfinancial Inc. to GGS
Holdings which will, in turn, contribute such right to GGS
Management;
(g) GGS Management will borrow US$48 million from a financial
institution, which loan will be non-recourse to the Company, SIG
Indiana or GGS Holdings;
(h) GGS Management will acquire all of the issued and outstanding
shares of Superior Insurance Company in accordance with the
terms of the Stock Purchase Agreement;
(i) the Public Offering may, but shall not be required to be,
completed; and
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(j) the Company and its Subsidiaries will take such further actions as may
be necessary to effect or facilitate the completion of the foregoing
transactions.
Section 5 - Representations and Warranties
(a) The Company hereby represents and warrants to the Trustee, on its own
behalf and on behalf of the members of the Committee and each of the
Noteholders, as follows, and acknowledges that the Trustee, in entering
into this First Supplemental Indenture (and the Committee and the
Noteholders in authorizing the Trustee to enter into this First
Supplemental Indenture) is relying on these representations and warranties:
(i) Except as expressly waived or modified pursuant to this First
Supplemental Indenture, all covenants and agreements of the
Company and each of its Subsidiaries contained in the Indenture
or any document delivered pursuant thereto or in connection
therewith have been fully performed, complied with and
satisfied;
(ii) No Event of Default or event, circumstance or condition which,
with the giving of notice or lapse of time or both, would
constitute an Event of Default, has occurred and is continuing to
the date hereof or would occur as a result of any of the
Transactions, subject to the waivers and amendments to the
Indenture provided for in this First Supplemental Indenture;
(iii) The Company and each of its Subsidiaries is not in default or
violation of any judgment, order, writ, injunction, decree,
award, notice, citation, directive, request, summons, claim or
other communication of any court, arbitrator, board or other
governmental or regulatory entity and is in compliance with and
will, after completion of the Transactions, remain in compliance
with, all applicable laws, statutes, codes, ordinances, rules,
regulations, by-laws and regulatory policies and guidelines of
any jurisdiction, whether federal, state, local or provincial.
(b) All waivers, modifications, amendments, releases and discharges in
favour of the Company or any of its Subsidiaries set out in this First
Supplemental Indenture or any document delivered pursuant hereto or in
connection herewith are expressly conditioned on each of the
representations and warranties of the Company set out in this First
Supplemental Indenture being true upon the date hereof and shall cease to
be of any force and effect if any such representation or warranty is not
true.
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Section 6 - Indemnity
The Company hereby indemnifies and saves harmless the Committee and
each of its members from and against all claims, liabilities, obligations,
suits, actions, proceedings, damages, costs and expenses arising out of or in
connection with the execution and delivery of this First Supplemental
Indenture, the Transactions described herein and all documentation executed or
delivered in connection herewith.
Section 7 - Continuing Obligations
The Company confirms that its obligations pursuant to Section 2.12 of
the Indenture shall continue to apply at all times from and after the date
hereof notwithstanding the amendment of the Indenture by this First
Supplemental Indenture. The Company hereby indemnifies and saves harmless each
holder of Series A Notes or Series B Notes from any taxes, interest and
penalties for which such Noteholder may become liable as a result of any
failure of the Company to pay any taxes when due to the appropriate taxing
authority.
Section 8 - Governing Law
This First Supplemental Indenture shall be governed by and construed in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein and shall be treated in all respects as Ontario contracts.
The Company and the Trustee hereby attorn to the non-exclusive jurisdiction of
the Courts of Ontario.
Section 9 - Counterpart Execution
This First Supplemental Indenture may be executed in separate
counterparts, each of which shall be deemed to be an original and all of
which, taken together, shall constitute one and the same instrument.
Section 10 - Confirmation
The Company hereby acknowledges and confirms that, except as
specifically amended by the provisions of this First Supplemental Indenture, all
of the terms and conditions contained in the Indenture and the Security
Documents are and shall remain in full force and effect, unamended, in
accordance with the provisions thereof.
Section 11 - Further Assurances
The parties hereto covenant and agree to execute and deliver such
further and other instruments and to take such further and other action as may
be necessary or advisable to give effect to this First Supplemental Agreement
and the provisions hereof.
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Section 12 - Effective Date
Notwithstanding the date of execution of this First Supplemental
Indenture, this First Supplemental Indenture shall be, and be deemed to be,
effective as of and from the date first above written.
IN WITNESS WHEREOF the parties hereto have executed these presents
under their respective corporate seals and the hands of their proper officers
in that behalf.
GORAN CAPITAL INC.
Per: /s/ Xxxxx X. Xxxxx
-----------------------------
MONTREAL TRUST COMPANY OF CANADA
APPROVED Per: /s/ X. Xxxxx
FOR EXECUTION -----------------------------
BY M.T.C. of C.
MJB
--------------- Per: /s/
-----------------------------
107
Extraordinary Resolution of the
Holders of 8% Notes
issued by Goran Capital Inc.
WHEREAS Goran Capital Inc. (the "Corporation") has created and issued
$18,855,000 aggregate principal amount of 8% Series A Notes and $685,000
aggregate principal amount of 8% Series B Notes pursuant to an Amended and
Restated Trust Indenture dated as of December 29, 1992 (the "Trust Deed") and
made between the Corporation and Montreal Trust Company of Canada, as Trustee
(the "Trustee") of which $14,447,250 aggregate principal amount of Series A
Notes are outstanding and $685,000 aggregate principal amount of Series B Notes
are outstanding;
WHEREAS capitalized terms defined in the Trust Deed and used herein
shall have the meanings ascribed to such terms in the Trust Deed;
WHEREAS the Corporation and certain of its subsidiaries propose to
enter into a series of transactions, some of which are prohibited or restricted
by the terms of the Trust Deed or otherwise require waivers or consents on the
part of the Noteholders;
WHEREAS the Corporation has also proposed that certain amendments be
made to the terms and conditions of the Notes and the provisions of the Trust
Deed;
WHEREAS Section 11.11 of the Trust Deed provides that the Noteholders
may, by Extraordinary Resolution, agree to any modification, abrogation,
alteration, compromise or arrangement of the rights of the Noteholders and/or
the Trustee against the Corporation or assent to any modification of or change
in or omission from the provisions of the Trust Deed which is agreed to by the
Corporation;
WHEREAS the Trust Deed also provides, in Section 11.15 thereof, that
all actions which may be taken by the Noteholders by Extraordinary Resolution at
a meeting may be taken and exercised by the holders of 66 2/3% of the principal
amount of the then outstanding Notes by an instrument in writing signed in one
or more counterparts;
NOW THEREFORE the undersigned, being the holders of in excess of
66 2/3% of the principal amount of all the Series A Notes now outstanding and
100% of the principal amount of the Series B Notes now outstanding DO HEREBY:
1. RESOLVE THAT, subject to the Corporation delivering to the Trustee, the
Committee and their counsel, such representations, warranties, indemnities
and other assurances and such opinions of counsel to the Corporation as are
required by the Committee and its counsel, the entry by the Corporation
into the transactions described below (the
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"Transactions") be and the same is hereby authorized and approved and the
application of any provision of the Trust Deed which would otherwise prohibit
or restrict the Corporation from completing the Transactions or require the
Corporation or any of its Subsidiaries to grant security or give a guarantee
upon completion of any Transaction (including, without limitation, Section 6.02
thereof) be and the same is hereby waived:
(a) Pafco General Insurance Company ("PGIC") will incorporate a new
subsidiary, IGF Holdings, Inc. ("IGF Holdings");
(b) PGIC will transfer the issued and outstanding shares of IGF Insurance
Company ("IGF Insurance") to IGF Holdings in exchange for 100% of the
shares of IGF Holdings and a promissory note in the principal amount of
approximately US$11.5 million payable to PGIC;
(c) PGIC will distribute, as a dividend, its shares of IGF Holdings to
Xxxxxx International Group, Inc. (SIG) and SIG will pledge all such
shares to the Trustee free and clear of encumbrances;
(d) SIG will contribute all of the shares of PGIC and certain other assets
to GGS Management Holdings, Inc. ("GGS Holdings") in exchange for 52%
of the shares of GGS Holdings and GS Capital Partners II, LP will
subscribe for the remaining 48% of the shares in consideration of
US$20,000,000 payable in cash;
(e) GGS Holdings will incorporate a wholly owned subsidiary, GGS Management
Inc. ("GGS Management") and all of the issued and outstanding shares of
PGIC will be contributed by GGS Holdings to GGS Management in exchange
for 100% of the GGS Management shares;
(f) SIG will contribute its rights under that certain Stock Purchase
Agreement dated January 31, 1996 (the "Stock Purchase Agreement") and
made among the Corporation, SIG, Fortis Inc. and International Inc.
to GGS Holdings which will, in turn, contribute such right to GGS
Management;
(g) GGS Management will borrow US$44 million from a financial institution,
which loan will be non-recourse to the Corporation, SIG or GGS
Holdings;
(h) GGS Management will acquire all of the issued and outstanding shares of
Superior Insurance Company in accordance with the terms of the Stock
Purchase Agreement; and
(i) SIG may cause an initial public offering of the shares of IGF Holdings
to be made to the public before December 31, 1996 (the "Public
Offering").
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2. RESOLVE THAT, subject to the Corporation delivering to the Trustee, the
Committee and their counsel, such representations, warranties,
indemnities and other assurances and such opinions of counsel to the
Corporation as are required by the Committee and its counsel, the Trust
Deed be amended:
(a) to provide that, in the event that the Public Offering has not
been completed on or before December 31, 1996, the interest rate
payable on the Notes shall be increased, effective January 1, 1997,
to 10% per annum;
(b) to provide for the release of the shares of IGF Insurance from the
security created or required to be created in favour of the Series A
Noteholders by PGIC;
(c) to provide for the release of the shares of PGIC from the security
created in favour of the Series A Noteholders by SIG;
(d) to amend the definition of "Compensation Limit" and the provisions
of Section 6.02(d) of the Trust Deed to increase the maximum amount
which may be paid as salary and bonus to the five highest paid
employees of the Goran Group to US$2.0 million;
(e) to provide that SIG shall charge, in favour of the Trustee, the IGF
Holdings shares as security for its obligations under its guarantee
of the Notes provided that up to 50% of such shares shall be
released from such charge by the Trustee, without the necessity of
any further authorization from or on behalf of the Noteholders, upon
receipt of a Certificate of the Company stating that such shares are
to be sold to the public; and
(f) to the extent and in the manner determined to be necessary or
desirable by the Committee and the Corporation in order to give
effect to the foregoing resolutions and the resolution set forth in
paragraph (1) hereof;
all such amendments to be made by one or more supplemental indentures
from time to time (the "Supplemental Indentures") in form and content
satisfactory to the Committee.
3. RESOLVE THAT the Trustee be and is hereby authorised and instructed to
execute and deliver the Supplemental Indentures and any other document or
instrument deemed necessary or desirable by the Committee in order to
carry the foregoing resolutions into effect.
4. RESOLVE THAT in addition to its powers pursuant to Section 16.01 of the
Trust Deed, the Committee is hereby authorized to act on behalf of the
Noteholders in respect of the matters set forth in the foregoing
resolutions and, without limitation, is hereby authorized to waive
compliance with any term, condition or provision of the Trust Deed,
consent to any Transaction which is a Related Party transaction, release
and take any action
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110
required to facilitate the release of any security, accept substitute
security for any security required to be provided pursuant to the Trust
Deed and amend any term of the Trust Deed for and on behalf of the
Noteholders, in each case with respect to any Transaction.
5. RESOLVE THAT, without limiting Section 16.02 of the Trust Deed, each
member of the Committee be and is hereby released, indemnified and saved
harmless from and against any losses, liabilities, costs, claims,
actions, and demands that they may incur or which may be made against
them as a result of or in connection with any action taken or omitted to
be taken by them in good faith in furtherance of the foregoing
resolutions.
THE FOREGOING EXTRAORDINARY RESOLUTION is hereby consented to in
writing pursuant to Section 11.15 of the Trust Deed by the holders of in excess
of 66 2/3% of the aggregate principal amount of the Series A outstanding as of
the date hereof and 100% of the aggregate principal amount of the Series B Notes
outstanding as of the date hereof.
DATED this day of March, 1996.
Lombard Odier & Cie Royal Trust Corporation of Canada,
7 March 1996 Account: New York Life Insurance
Company of Canada
By: /s/ Xxxx Xxxxxxx By:
------------------------------------ -------------------------------
Xxxx Xxxxxxx (under power of attorney) representing $3,500,000 aggregate
representing $3,735,750 aggregate principal amount of Series A Notes
principal amount of Series A Notes
The Canada Trust Company, Account: Gee & Co., Account:
000-000000-0\0000000 Brewin Dolphin
By: By:
------------------------------------ --------------------------------
representing $700,000 aggregate representing $1,932,000 aggregate
principal amount of Series A Notes principal amount of Series A Notes
and $495,000 aggregate principal
amount of Series B Notes
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Brewin Nominees Limited C.E.P.A., X.X.
XXXXXX NOMINEES LIMITED
By: /s/ cannot read signature DIRECTOR By:
----------------------- ------------------------
representing $190,000 aggregate representing $978,000 aggregate
principal amount of Series B Notes principal amount of Series A Notes
Xxxxxxx Xxxxxx
By:
-----------------------
representing $250,000 aggregate
principal amount of Series A Notes
5
