Exhibit 4.1
DATED AS OF JANUARY 7, 1997
MDC COMMUNICATIONS CORPORATION
AND
THE R-M TRUST COMPANY
(AS TRUSTEE)
TRUST INDENTURE
PROVIDING FOR THE ISSUE OF $50,000,000 7% SUBORDINATED
UNSECURED CONVERTIBLE DEBENTURES DUE JANUARY 8, 2007
I N D E X
ARTICLE 1 INTERPRETATION.......................................................................2
1.1 Definitions......................................................................... 2
1.2 Meaning of "outstanding" for Certain Purposes....................................... 6
1.3 Interpretation not Affected by Heading, etc..........................................6
1.4 Statute References...................................................................7
1.5 References...........................................................................7
1.6 Not a Business Day...................................................................7
1.7 Invalidity of Provisions.............................................................7
1.8 Governing Law........................................................................7
ARTICLE 2. THE DEBENTURES.......................................................................7
2.1 Limitation on Issue and Designation..................................................7
2.2 Terms of Debentures..................................................................7
2.3 Form of Debentures...................................................................8
2.4 Issue of Debentures..................................................................9
2.5 Execution of Debentures..............................................................9
2.6 Certification........................................................................9
2.7 Concerning Interest..................................................................9
2.8 Debentures to Rank Equally..........................................................10
2.9 Registration of Debentures..........................................................10
2.10 Payment of Principal and Interest in respect of Debentures..........................11
2.11 Ownership of Debentures.............................................................12
2.12 Exchange of Debentures..............................................................12
2.13 Replacement of Debentures...........................................................13
2.14 Interim Debentures..................................................................13
2.15 Transfer of Legended Debentures.....................................................14
ARTICLE 3. REDEMPTION AND PURCHASE FOR CANCELLATION OF
DEBENTURES AND ISSUE OF SUBORDINATE VOTING
SHARES..............................................................................15
3.1 Redemption of Debentures............................................................15
3.2 Limitation on Redemption............................................................15
3.3 Partial Redemption of Debentures....................................................15
3.4 Notice of Redemption................................................................16
3.5 Debentures Due on Redemption Dates..................................................16
3.6 Deposit of Redemption Moneys........................................................17
3.7 Failure to Surrender Debentures Called for Redemption...............................17
3.8 Surrender of Debentures for Cancellation............................................17
3.9 Payment in Subordinate Voting Shares on Redemption of
Debentures or Maturity Date.........................................................17
3.10 Issue of Subordinate Voting Shares Redemption of Debentures
or Maturity Date....................................................................18
3.11 General Requirement.................................................................19
3.12 No Requirement to Issue Fractional Shares...........................................21
3.13 Purchase of Debentures for Cancellation.............................................21
3.14 Cancellation of Debentures..........................................................21
ARTICLE 4. CONVERSION..........................................................................22
4.1 Conversion Privilege................................................................22
4.2 Manner Exercise of Right to Convert.................................................22
4.3 Adjustment of Conversion Price......................................................23
4.4 Other Adjustment of Conversion Price................................................28
4.5 Rules Regarding Calculation of Adjustment of Conversion Price.......................28
4.6 No Requirement to Issue Fractional Shares...........................................29
4.7 Corporation to Reserve Shares.......................................................29
4.8 Corporation to Qualify Shares.......................................................30
4.9 Taxes and Charges on Conversion.....................................................30
4.10 Cancellation of Converted Debentures................................................30
4.11 Certificate as to Adjustment........................................................30
4.12 Notice of Special Matters...........................................................30
4.13 Notice of Expiry of Conversion Right................................................31
4.14 Revival of Right to Convert.........................................................31
4.15 Protection of Trustee...............................................................31
4.16 U.S. Legend.........................................................................31
ARTICLE 5. SUBORDINATION OF DEBENTURES.........................................................32
5.1 Agreement to Subordinate............................................................32
5.2 Distribution on Insolvency or Winding-up............................................32
5.3 Subrogation of Debentures...........................................................32
5.4 No Payment to Debentureholders if Senior Indebtedness in Default....................33
5.5 Payment of Debentures Permitted.....................................................33
5.6 Subordination Not to be Impaired....................................................34
5.7 Authorization of Debentureholder to Trustee to Effect
Subordination.......................................................................36
5.8 Trustee Not Fiduciary for Holders of Senior Indebtedness............................36
ARTICLE 6. COVENANTS OF THE CORPORATION........................................................37
6.1 General Covenant....................................................................37
6.2 Not to Extend Time for Payment of Interest or Principal.............................38
6.3 To Provide Annual Certificate of Compliance.........................................38
6.4 To Give Notice of Event of Default..................................................38
6.5 To Pay Trustee's Remuneration.......................................................38
6.6 Trustee may Perform Covenants.......................................................39
ARTICLE 7. DEFAULT AND ENFORCEMENT.............................................................39
7.1 Events of Default...................................................................39
7.2 Notice of Events of Default.........................................................40
7.3 Acceleration on Default.............................................................41
7.4 Waiver of Default...................................................................41
7.5 Enforcement by the Trustee..........................................................42
7.6 Debentureholders May Not Xxx........................................................43
7.7 Application of Moneys...............................................................44
7.8 Distributions of Moneys.............................................................44
7.9 Persons Dealing with Trustee........................................................45
7.10 Trustee Appointed Attorney..........................................................45
7.11 Remedies Cumulative.................................................................46
7.12 Judgment Against the Corporation....................................................46
ARTICLE 8. SATISFACTION AND DISCHARGE..........................................................46
8.1 Cancellation and Destruction........................................................46
8.2 Non-Presentation of Debentures......................................................46
8.3 Repayment of Unclaimed Moneys.......................................................47
8.4 Discharge...........................................................................47
ARTICLE 9. SUCCESSOR CORPORATIONS..............................................................48
9.1 Certain Requirements in Respect of Merger, etc......................................48
9.2 Vesting of Powers in Successor......................................................48
ARTICLE 10. MEETINGS OF DEBENTUREHOLDERS........................................................49
10.1 Right to Convene Meetings...........................................................49
10.2 Notice of Meeting...................................................................49
10.3 Chairman........................................................................... 49
10.4 Ouorum............................................................................. 50
10.5 Power to Adjourn................................................................... 50
10.6 Show of Hands...................................................................... 50
10.7 Poll............................................................................... 50
10.8 Voting............................................................................. 50
10.9 Regulations........................................................................ 51
10.10 Corporation and Trustee May Re Represented......................................... 51
10.11 Powers Exercisable by Extraordinary Resolution......................................52
10.12 Meaning of "Extraordinary Resolution".............................................. 54
10.13 Powers Cumulative.................................................................. 54
10.14 Minutes............................................................................ 54
10.15 Signed Instrument.................................................................. 55
10.16 Binding Resolutions................................................................ 55
10.17 Evidence of Rights of Debentureholders............................................. 55
ARTICLE 11. NOTICES.............................................................................56
11.1 Notice to the Corporation...........................................................56
11.2 Notice to Debentureholders..........................................................56
11.3 Notice to the Trustee...............................................................56
11.4 Mail Service Interruption...........................................................57
ARTICLE 12. CONCERNING THE TRUSTEE..............................................................57
12.1 Trust Indenture Legislation.........................................................57
12.2 No Conflict of Interest.............................................................57
12.3 Rights and Duties of Trustee........................................................58
12.4 Evidence, Experts and Advisers......................................................59
12.5 Certificate etc. of the Corporation as Evidence.....................................59
12.6 Trustee May Deal in Debentures......................................................59
12.7 Trustee Not Required to Give Security...............................................59
12.8 Trustee Not to be Appointed Receiver................................................60
12.9 Protection of Trustee...............................................................60
12.10 Investment of Trust Moneys..........................................................61
12.11 Action by Trustee to Protect Interests..............................................61
12.12 Replacement of Trustee..............................................................61
12.13 Authority to Carry on Business......................................................62
12.14 Acceptance of Trusts................................................................63
ARTICLE 13. SUPPLEMENTAL INDENTURES.............................................................63
13.1 Supplemental Indentures.............................................................63
ARTICLE 14. EXECUTION...........................................................................64
14.1 Counterparts and Formal Date........................................................64
14.2 Language of Indenture...............................................................64
THIS TRUST INDENTURE made as of the 7th day January, 1997 BETWEEN:
MDC COMMUNICATIONS CORPORATION, a corporation incorporated
under the laws of Ontario
(hereinafter called the "Corporation")
OF THE FIRST PART
- and -
THE R-M TRUST COMPANY, a trust company incorporated under
the laws of Canada and having an office in the City of
Toronto in the Province of Ontario
(hereinafter called the "Trustee")
OF THE SECOND PART
WHEREAS the Corporation considers it necessary for its corporate
purposes to create and issue its Debentures in the manner provided herein; and
WHEREAS the Corporation is duly authorized to create and issue the
Debentures to be issued as provided herein; and
WHEREAS all necessary resolutions of the directors of the Corporation
have been duly passed and confirmed and other proceedings taken to make the
Debentures, when certified by the Trustee and issued as provided in this Trust
Indenture, valid, binding and legal obligations of the Corporation with the
benefits and subject to the terms of this Trust Indenture and to make this
Trust Indenture a valid and binding indenture in accordance with its terms;
and
WHEREAS the foregoing recitals are made as representations and
statements of fact by the Corporation and not by the Trustee;
NOW THEREFORE THIS INDENTURE WITNESSETH and it is hereby covenanted,
agreed and declared as follows:
ARTICLE 1.
INTERPRETATION
1.1 Definitions
In this Trust Indenture, unless there is something in the subject
matter or context inconsistent therewith:
"affiliates" and "subsidiaries" have the meanings attributed to those
terms in the Business Corporations Act (Ontario) from time to time;
"Business Day" means any day, other than Saturday, Sunday or any
statutory holiday in the City of Toronto;
"Certificate of the Corporation" means a certificate signed in the
name of the Corporation by either of the Chief Executive Officer or
any Vice President of the Corporation, and may consist of one or more
instruments so executed;
"Corporation" includes any successor corporation to or of the party
of the first part which shall have complied with the provisions of
Article Nine;
"Conversion Price" has the meaning attributed to such term in section
4.1;
"Counsel" means a barrister or solicitor or firm of barristers and
solicitors retained by the Trustee, who may be counsel to the
Corporation, or retained by the Corporation and acceptable to the
Trustee;
"Current Market Price" at any date means the weighted average trading
price per share for Subordinate Voting Shares for the 20 consecutive
trading days ending on the fifth trading day before such date on The
Toronto Stock Exchange, or, if the Subordinate Voting Shares are not
listed thereon on such stock exchange on which the shares are listed
as may be selected for such purpose by the Directors or, if the
Subordinate Voting Shares are not listed on any stock exchange, then
on the over-the-counter market; and for the purpose of this
definition, the weighted average price shall be determined by
dividing the aggregate sale price of all Subordinate Voting Shares
sold during such period of 20 consecutive trading days on such
exchange or market, as the case may be, by the total number of
Subordinate Voting Shares so sold;
"Date of Conversion" has the meaning attributed to such term in
section 4.2;
"Debentures" means the 7% Subordinated Unsecured Convertible
Debentures due January 8, 2007 issued hereunder;
"Debentureholders" or "Holders" means the Persons for the time being
entered in the registers hereinafter mentioned as holders of
Debentures;
2
"Debentureholders' Request" means an instrument signed in one or more
counterparts by the Holders of not less than 25% in principal amount
of the outstanding Debentures requesting the Trustee to take the
action or proceeding specified therein;
"Director" means a director of the Corporation for the time being and
"Directors" means the board of directors of the Corporation or,
whenever duly empowered, the executive committee (if any) of the
board of directors of the Corporation for the time being, and
reference to action by the Directors means action by the directors as
a board or action by the executive committee of the board as a
committee;
"Dividends Paid in the Ordinary Course" means dividends paid on the
Subordinate Voting Shares in any financial year of the Corporation,
whether in (1) cash, or (2) shares of the Corporation, (3) rights,
options or warrants to purchase any shares, property or other assets
of the Corporation (but excluding rights, options or warrants
referred to in subsection 4.3(2)(i) or (ii)), or (4) in property or
other assets of the Corporation, in each case to the extent that the
amount or value of such dividends in the aggregate does not exceed
the greater of:
(i) 150% of the aggregate amount or value of dividends
paid by the Corporation on the Subordinate Voting
Shares in its immediately preceding financial year;
or
(ii) 100% of the consolidated net income of the
Corporation (before extraordinary items but after
dividends payable on all shares ranking prior to or
on a parity with the Subordinate Voting Shares with
respect to the payment of dividends) for its
immediately preceding financial year, determined in
accordance with Generally Accepted Accounting
Principles;
and for the purpose of the foregoing where any dividend is paid, otherwise
than in cash, any securities, property or other assets so distributed by way
of dividend shall be valued at the fair market value of such securities,
property or other assets, as the case may be, as reasonably determined by the
Directors, which determination shall be conclusive;
"Event of Default" has the meaning attributed to such term in section
7.1;
"Extraordinary Resolution" has the meaning attributed to such term in
sections 10.12 and 10.15;
"Generally Accepted Accounting Principles" means generally accepted
accounting principles in Canada from time to time;
"Indenture Legislation" has the meaning attributed to such term in
section 12.1;
"Interest Payment Date" means any date on which interest on the
Debentures is payable pursuant to section 2.2;
3
"Maturity Date" means January 8, 2007;
"Person" means any individual, partnership, limited partnership,
joint venture, syndicate, sole proprietorship, company or corporation
with or without share capital, unincorporated association, trust,
trustee, executor, administrator or other legal personal
representative, government or governmental authority or entity,
however designated or constituted;
"Redemption Price" has the meaning attributed to such term in section
3.1;
"Regulation S" means Regulation S under the U.S. Securities Act;
"Rights Offering" and "Rights Period" have the meanings attributed to
such terms in section 4.3;
"Senior Indebtedness" means the principal of and the interest and
premium, if any, on:
(i) indebtedness of the Corporation (other than
indebtedness evidenced by the Debentures), whether
outstanding on the date of this Indenture or
thereafter created, incurred, assumed or
guaranteed, for moneys borrowed or raised by
whatever means (including, without limitation, by
means of acceptances, debt instruments, and finance
leases and any liability evidenced by bonds,
debentures, notes or similar instruments);
(ii) indebtedness of the Corporation, whether
outstanding on the date of this Indenture or
thereafter created, incurred, assumed or guaranteed
by the Corporation, in connection with the
acquisition by the Corporation or by others of any
assets or services;
(iii) any trade debts of the Corporation, whether
outstanding on the date of this Indenture or
thereafter created, incurred, assumed or guaranteed
by the Corporation; and
(iv) any amendments, renewals, extensions, modifications
or refundings of any indebtedness referred to in
(i), (ii) or (iii) of this definition;
unless in any case it is provided by the terms of the instrument creating or
evidencing such indebtedness or pursuant to which such indebtedness is
outstanding that such indebtedness does not rank prior in right of payment to
the Debentures but ranks pari passu with, or subordinate in right of payment
to, the Debentures;
"Subordinate Voting Share Reorganization" has the meaning attributed
to such term in subsection 4.3(2);
4
"Subordinate Voting Shares" means the Class A subordinate voting
shares in the capital of the Corporation, as such shares exist at the
close of business on the date of execution and delivery of this
Indenture; provided that, in the event of a subdivision, redivision,
reduction, combination or consolidation thereof, or successive such
subdivisions, redivisions, reductions, combinations or
consolidations, then, subject to adjustments, if any, having been
made in accordance with section 4.3, "Subordinate Voting Shares"
shall thereafter mean the shares resulting from such subdivision,
redivision, reduction, combination or consolidation;
"Successor Corporation" has the meaning attributed to such term in
section 9.1;
"this Indenture", "this Trust Indenture", "hereto", "hereby",
"hereunder", "hereof", "herein" and similar expressions refer to this
indenture and not to any particular Article, section, subsection,
paragraph, subsection, subdivision or other portion hereof, and
include any and every supplemental indenture; and "supplemental
indenture" and "indenture supplemental hereto" include any and every
instrument supplemental or ancillary hereto or in implement hereof;
"Time of Expiry" has the meaning attributed to such term in section
4.1;
"Trustee" means the party of the second part and its successors or
permitted assigns for the time being in the trusts hereby created;
"United States" means the United States of America, its territories
and possessions, any state of the United States, and the District of
Columbia;
"U.S. Person" means U.S. Person as that term is defined in Regulation
S under the U.S. Securities Act;
"U.S. Securities Act" means the United States Securities Act of 1933,
as amended;
"Withholding Tax" means withholding tax levied under Part XIII of the
Income Tax Act (Canada) and includes any similar tax hereafter levied
in addition to or in substitution therefor, and any penalties or
interests in respect thereof; and
"Written Order of the Corporation", "Written Request of the
Corporation" and "Written Direction of the Corporation" mean,
respectively, an order, a request or a direction signed in the name
of the Corporation by either the Chief Executive Officer or any Vice
President of the Corporation, and may consist of one or more
instruments so executed.
Words importing the singular include the plural and vice versa and
words importing the masculine gender include the feminine gender and vice
versa.
5
1.2 Meaning of "outstanding" for Certain Purposes
Every Debenture certified and delivered by the Trustee hereunder
shall be deemed to be outstanding until it shall be cancelled or delivered to
the Trustee for cancellation, or a new Debenture shall be issued in
substitution therefor under section 2.14, or moneys for the payment thereof
shall be set aside under Article Eight, provided that:
(a) where a new Debenture has been issued in substitution for a
Debenture which has been lost, stolen or destroyed, only one
of such Debentures shall be counted for the purpose of
determining the aggregate principal amount of Debentures
outstanding;
(b) Debentures which have been partially redeemed, purchased or
converted shall be deemed to be outstanding only to the
extent of the unredeemed, unpurchased or unconverted part of
the principal amount thereof;
(c) for the purpose of any provision of this Indenture entitling
Holders of outstanding Debentures to vote, sign consents,
requests or other instruments or take other action under
this Indenture, Debentures owned legally or equitably by the
Corporation or any subsidiary (as defined in the Business
Corporations Act (Ontario)) of the Corporation 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 Debentures of which the Trustee
has received actual notice that they are so owned
shall be so disregarded; and
(ii) Debentures so owned which have been pledged in good
faith other than to the Corporation or a subsidiary
(as defined in the Business Corporations Act
(Ontario)) of the Corporation shall not be so
disregarded if the pledges shall establish, to the
satisfaction of the Trustee, the pledgee's right to
vote such Debentures in his discretion free from
the control of the Corporation or the subsidiary
(as defined in the Business Corporations Act
(Ontario)) of the Corporation.
1.3 Interpretation not Affected by Heading, etc.
The division of this Indenture into Articles, sections, subsections
and paragraphs, 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 of this Indenture.
6
1.4 Statute References
Any reference in this Indenture to a statute shall be deemed to be a
reference to such statute as amended, re-enacted or replaced from time to
time.
1.5 References
Any reference in this Indenture to "Dollars", "dollars" or the "$"
sign shall be deemed to be a reference to lawful money of Canada.
1.6 Not a Business Day
In the event that any day on or before which any action is required
to be taken hereunder is not a Business Day, then such action shall be
required to be taken on or before the requisite time on the first Business Day
thereafter.
1.7 Invalidity of Provisions
Each of the provisions contained in this Indenture or the Debentures
is distinct and severable and a declaration of invalidity or unenforceability
of any such provision by a court of competent jurisdiction shall not affect
the validity or enforceability of any other provision hereof or thereof.
1.8 Governing Law
This Indenture and the Debentures 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.
ARTICLE 2.
THE DEBENTURES
2.1 Limitation on Issue and Designation
The aggregate principal amount of Debentures which may be issued and
certified hereunder shall consist of and be limited to $50,000,000 in lawful
money of Canada and such Debentures are hereby designated "7% Subordinated
Unsecured Convertible Debentures due January 8, 2007".
2.2 Terms of Debentures
The Debentures shall be dated as of January 7, 1997, regardless of
their actual date of issue, shall mature on the Maturity Date and shall bear
interest (subject to section 2.7) from January 7, 1997 at the rate of 7% per
annum (after as well as before maturity, default and judgment, with interest
on amounts in default at the same rate) payable in arrears in equal
semi-annual instalments on June 30 and December 31, the first such payment of
interest to be made on June 30, 1997 for the period from and including January
7, 1997 to but excluding June 30, 1997.
7
Subject to section 3.9, the principal amount of the Debentures and
interest thereon due on maturity or redemption will be made payable in lawful
money of Canada, against surrender thereof by the respective Holders thereof
at the principal office of the Trustee in Toronto.
2.3 Form of Debentures
(1) The Debentures shall be issued on January 7, 1997 only as fully
registered Debentures in denominations of $1,000 and integral multiples
thereof.
(2) The Debentures and the certificate of the Trustee endorsed
thereon shall be in the English language and shall be substantially in the
form set out in Schedule A to this Indenture with such appropriate additions,
deletions, substitutions and variations as the Trustee may approve, shall bear
such distinguishing letters and numbers as the Trustee may approve, such
approval of the Trustee to be conclusively evidenced by its certification of
the Debentures and, if applicable, shall bear the legend set forth in
paragraph (4) of this Section 2.3.
(3) The Debentures may be engraved, printed or lithographed, or
partly in one form and partly in another, as the Corporation may determine.
(4) Each Debenture originally issued to a person within the United
States, as well as certificates issued in exchange for or in substitution of
the foregoing securities, shall bear a legend to the following effect:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S.
SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES,
AGREES FOR THE BENEFIT OF THE CORPORATION THAT SUCH SECURITIES MAY BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION,
(B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF
REGULATION S UNDER THE U.S. SECURITIES ACT, OR (C) IN ACCORDANCE WITH
(1) RULE 144A UNDER THE U.S. SECURITIES ACT OR (2) RULE 144 UNDER THE
U.S. SECURITIES ACT, IF AVAILABLE. DELIVERY OF THIS CERTIFICATE MAY
NOT CONSTITUTE GOOD DELIVERY IN SETTLEMENT OF TRANSACTIONS ON STOCK
EXCHANGES IN CANADA. A NEW CERTIFICATE BEARING NO LEGEND MAY BE
OBTAINED FROM THE R-M TRUST COMPANY UPON DELIVERY OF THIS CERTIFICATE
AND A DULY EXECUTED DECLARATION, IN A FORM SATISFACTORY TO THE R-M
TRUST COMPANY AND THE CORPORATION, TO THE EFFECT THAT THE SALE OF THE
SECURITIES REPRESENTED HEREBY IS BEING MADE IN COMPLIANCE WITH RULE
904 OF REGULATION S UNDER THE U.S. SECURITIES ACT.";
8
2.4 Issue of Debentures
Debentures in the aggregate principal amount of $50,000,000 in lawful
money of Canada may forthwith and from time to time be executed by the
Corporation and delivered to the Trustee and shall be certified by the Trustee
and delivered to or to the order of the Corporation pursuant to a Written
Order of the Corporation, without the Trustee receiving any consideration
therefor.
2.5 Execution of Debentures
The Debentures shall be signed (either manually or by facsimile
signature) by the Chief Executive Officer and the Corporate Secretary of the
Corporation. A facsimile signature upon any of the Debentures shall for all
purposes of this Indenture be deemed to be the signature of the individual
whose signature it purports to be and to have been signed at the time such
facsimile signature is reproduced. Notwithstanding that any individual whose
signature (either manual or in facsimile) may appear on the Debentures is not,
at the date of this Indenture or at the date of the Debentures or at the date
of the certifying and delivery thereof, Chief Executive Officer or the
Corporate Secretary, as the case may be, of the Corporation, such Debentures
shall be valid and binding upon the Corporation and entitled to the benefits
of this Indenture.
2.6 Certification
No Debenture shall be issued or, if issued, shall be obligatory or
shall entitle the Holder thereof to the benefits of this Indenture until it
has been certified by manual signature by or on behalf of the Trustee
substantially in the form set out in Schedule A hereto or in some other form
approved by the Trustee, whose approval shall be conclusively evidenced by the
certification thereof. Such certificate on any Debenture shall be conclusive
evidence that such Debenture is duly issued and is a valid obligation of the
Corporation.
The certificate of the Trustee on any Debenture shall not be
construed as a representation or warranty by the Trustee as to the validity of
this Indenture or of the Debentures (except the due certification thereof) or
as to the performance by the Corporation of its obligations under this
Indenture and the Trustee shall in no respect be liable or answerable for the
use made of the Debentures or any of them or the proceeds thereof.
2.7 Concerning Interest
(1) Every Debenture, whether issued originally or in exchange for
other Debentures, shall bear interest from and including January 7, 1997 or
from and including the last Interest Payment Date to which interest shall have
been paid or made available for payment on the Debentures, whichever shall be
later.
(2) Interest on each Debenture shall cease to accrue from the
earliest of: (i) the Maturity Date; or (ii) if such Debenture is called for
redemption, the date fixed for redemption; or (iii) if such Debenture is
converted, the date stipulated in subsection
9
4.2(4), unless, in the case of (i) or (ii), as the case may be, upon due
presentation and surrender thereof for payment on or after the Maturity Date
or the date fixed for redemption, as the case may be, such payment is withheld
or refused.
(3) Wherever in this Indenture or the Debentures there is mention, in
any context, of the payment of interest, such mention shall be deemed to
include the payment of interest on amounts in default to the extent that, in
such context, such interest is, was or would be payable pursuant to section
2.2, and express mention of interest on amounts in default in any of the
provisions hereof shall not be construed as excluding such interest in those
provisions hereof where such express mention is not made.
2.8 Debentures to Rank Equally
The Debentures may be issued in such amounts, to such Persons, on
such terms not inconsistent with the provisions of this Indenture as the
Directors may determine. Each Debenture as soon as issued or negotiated shall,
subject to the terms hereof, be equally and rateably entitled to the benefits
hereof as if all the Debentures had been issued and negotiated simultaneously.
2.9 Registration of Debentures
(1) The Corporation shall cause to be kept by and at the principal
office of the Trustee in the City of Toronto a central register and in such
other place or places, by the Trustee or by such other registrar or
registrars, if any, as the Corporation with the approval of the Trustee may
designate, branch registers in which shall be entered the names and latest
known addresses of the Holders of Debentures and the other particulars, as
prescribed by law, of the Debentures held by them respectively and of all
transfers of Debentures. Such registration shall be noted on the Debentures by
the Trustee or other registrar. No transfer of a Debenture shall be effective
as against the Corporation unless made on one of the appropriate registers by
the Debentureholder or his executors or administrators or other legal
representatives or his or their attorney duly appointed by an instrument in
form and execution satisfactory to the Trustee and upon compliance with such
requirements as the Trustee or other registrar may prescribe, and unless such
transfer shall have been duly noted on such Debenture by the Trustee or other
registrar.
(2) The registers referred to in this section shall at all reasonable
times be open for inspection by the Corporation, the Trustee and any
Debentureholder.
(3) The registered Holder of a Debenture may at any time and from
time to time have such Debenture transferred at any of the places at which a
register is kept pursuant to the provisions of this section in accordance with
such reasonable regulations as the Trustee may prescribe. The Holder of a
Debenture may at any time and from time to time have the registration of such
Debenture transferred from the register in which the registration thereof
appears to another register maintained in another place authorized for that
purpose under the provisions of this Indenture upon payment of a reasonable
fee to be fixed by the Trustee.
10
(4) Neither the Corporation nor the Trustee nor any registrar shall
be required to transfer or exchange any Debentures on any Interest Payment
Date or during the ten Business Days immediately preceding any Interest
Payment Date.
(5) None of the Trustee, any registrar for any of the Debentures or
the Corporation shall 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 Debenture and may transfer any Debenture on the direction of the Holder
thereof, whether named as trustee or otherwise, as though that Person were the
beneficial owner thereof.
(6) Except in the case of the central register required to be kept at
the City of Toronto, the Corporation shall have power at any time to close any
branch register and in that event it shall transfer the records thereof to
another existing register or to a new register and thereafter such Debentures
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 in another place, notice of such change shall be
given to the Holders of the Debentures registered in the register so closed
and the particulars of such change shall be recorded in the central register
required to be kept in the City of Toronto.
(7) Every registrar shall, when requested to do so by the Corporation
or the Trustee, furnish the Corporation or the Trustee, as the case may be,
with a list of the names and addresses of the Holders of Debentures showing
the principal amounts and serial numbers of such Debentures held by each
Holder.
2.10 Payment of Principal and Interest in respect of Debentures
(1) As the interest on Debentures becomes due (except interest
payable on the Maturity Date or on redemption which may be paid upon
presentation of such Debentures for payment), the Corporation, at least three
days prior to each date on which interest on such Debentures becomes due,
shall forward or cause to be forwarded by first class mail, postage prepaid
(or in the event of mail service interruption by such other means as the
Corporation shall determine to be appropriate), to the Holder for the time
being at his address appearing on the appropriate register hereinbefore
mentioned a cheque for such interest (less any tax required by law to be
deducted) payable to the order of such Holder or Holders and negotiable at par
at any branch of the Canadian Imperial Bank of Commerce. The forwarding of
such cheque shall satisfy and discharge the liability for the interest on such
Debentures to the extent of the sum or sums represented thereby (as shall the
remittance to the appropriate governmental authority of the amount of any tax
deducted as aforesaid) unless such cheque is not paid on presentation. In the
event of the non-receipt of such cheque by the Holder or the loss or
destruction thereof, the Corporation, upon being furnished with evidence of
such non-receipt, loss or destruction and indemnity reasonably satisfactory to
it, shall issue or cause to be issued to such Holder a replacement cheque for
the amount of such cheque.
(2) Subject to section 3.9, where Debentures are registered in more
than one name, the principal and interest from time to time payable in respect
thereof
11
shall be paid by cheque payable to the order of all such Holders, unless the
Corporation has received written instructions from them to the contrary, and
the receipt of any one of such Holders therefor shall be a complete discharge
to the Trustee, any registrar of Debentures and the Corporation.
2.11 Ownership of Debentures
(1) The registered Holder for the time being of any Debenture shall
be deemed to be the absolute owner thereof for all purposes of this Indenture
and payment of or on account of the principal of, and interest on, such
Debenture shall be made only to or upon the order in writing of the Holder
thereof and such payment shall be a complete discharge to the Trustee, any
registrar of Debentures, the Corporation and any paying agent for the amounts
so paid.
(2) The Holder for the time being of any Debenture shall be entitled
to the principal and interest evidenced by such Debenture, free from all
equities or rights of set-off or counterclaim between the Corporation and the
original or any intermediate Holder thereof (except any equities of which the
Corporation is required to take notice by law or by order of a court of
competent jurisdiction) and all Persons may act accordingly and a transferee
of a Debenture shall, after the appropriate form of transfer is lodged with
the Trustee or other registrar of Debentures and upon compliance with all
other conditions in that behalf required by this Indenture or by any
conditions contained in such Debenture or by law, be entitled to be entered on
the appropriate register or on any one of the appropriate registers as the
owner of such Debenture free from all equities or rights of set-off or
counterclaim between the Corporation and the transferor or any previous Holder
thereof, save in respect of equities of which the Corporation is required to
take notice by law or by order of a court of competent jurisdiction.
2.12 Exchange of Debentures
(1) Debentures of any denomination may be exchanged for Debentures of
any other authorized denomination or denominations, any such exchange to be
for Debentures of an equivalent aggregate principal amount, except as set out
in paragraph (4) below, at the expense of the Debentureholders. Exchanges of
Debentures may be made at the principal offices of the Trustee in the city of
Toronto. Any Debentures tendered for exchange shall be surrendered to the
Trustee and shall be cancelled. The Corporation shall execute, and the Trustee
shall certify, all Debentures necessary to carry out such exchanges.
(2) Debentures issued in exchange for Debentures 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.
(3) Except as otherwise provided herein, upon any exchange of
Debentures of any denomination for Debentures of any other authorized
denominations and upon any transfer of Debentures, the Trustee or other
registrar of Debentures may
12
make a sufficient charge to reimburse it for any stamp tax, security transfer
tax or other governmental charge required to be paid, and in addition a
reasonable charge for its services for each Debenture exchanged or transferred,
and payment of such charges shall be made by the party requesting such exchange
or transfer as a condition precedent thereto.
(4) Notwithstanding the foregoing, no charge (other than for
insurance on any Debentures forwarded by mail) shall be made by the Trustee,
any other registrar of Debentures or the Corporation for any exchange,
registration or transfer of any Debenture applied for within a period of 45
days from the date hereof;
(5) Neither the Corporation, the Trustee nor any other registrar of
Debentures shall be required to exchange any Debentures on the day of any
selection by the Trustee of any Debentures to be redeemed or during the 15
preceding Business Days of such date.
2.13 Replacement of Debentures
If any of the Debentures shall become mutilated or be lost, stolen or
destroyed and in the absence of notice that such Debentures have been acquired
by a good faith purchaser within the meaning of the Business Corporations Act
(Ontario), the Corporation in its discretion may issue, and thereupon the
Trustee shall certify and deliver, a new Debenture upon surrender and
cancellation of the mutilated Debenture, or, in the case of a lost, stolen or
destroyed Debenture, in lieu of and in substitution for the same, and the
substituted Debenture shall be in a form approved by the Trustee and shall be
entitled to the benefits of this Indenture equally with all other Debentures
issued or to be issued hereunder. In case of loss, theft, destruction the
applicant for a new Debenture shall furnish to the Corporation and to the
Trustee such evidence of such loss, theft or destruction as shall be
satisfactory to them in their discretion and shall also furnish an indemnity
in amount and form satisfactory to them in their discretion. The applicant
shall pay all expenses incidental to the issuance of any such new Debenture.
2.14 Interim Debentures
Pending delivery to the Trustee of definitive Debentures, the
Corporation may execute in lieu thereof (but subject to the same provisions,
conditions and limitations as herein set forth), and the Trustee may certify,
interim printed, mimeographed or typewritten Debentures, in such form and in
such denominations as may be approved by the Trustee and either the Chief
Executive Officer or a Vice President of the Corporation (whose certification
or signature, either manual or in facsimile, as the case may be, on any such
interim Debentures shall be conclusive evidence of such approval) entitling
the Holders thereof to definitive Debentures in any authorized denominations
when the same are ready for delivery, without expense to such Holders, but the
total amount of interim Debentures so issued shall not exceed the aggregate
principal amount of Debentures authorized to be issued hereunder. Forthwith
after the issuance of any such interim Debentures the Corporation shall cause
to be prepared the appropriate definitive Debentures for delivery to the
Holders of such interim Debentures.
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Interim Debentures which have been duly issued shall, until exchanged
for definitive Debentures, entitle the Holders thereof to rank for all
purposes as Debentureholders and otherwise in respect of this Indenture to the
same extent and in the same manner as though such exchange had actually been
made. When exchanged for definitive Debentures such interim Debentures shall
forthwith be cancelled by the Trustee. Any interest paid upon interim
Debentures shall be noted thereon by the paying agent at the time of payment
unless paid by cheque to the Holder thereof.
2.15 Transfer of Legended Debentures
If a Debenture tendered for transfer bears the legend set forth in
Subsection 2.3(4), the Debenture issued to the transferee shall also bear such
legend, unless the Debenture is being transferred outside the United States in
compliance with the requirements of Rule 904 of Regulation S, in which case
such legend may be removed if the transferor delivers a declaration to the
Trustee to the following effect (or as the Corporation may prescribe from time
to time):
"The undersigned (a) acknowledges that the sale of the securities of
MDC Communications Corporation (the "Corporation") to which this
declaration relates is being made in reliance on Rule 904 of
Regulation S under the United States Securities Act of 1933, as
amended (the "U.S. Securities Act") and (b) certifies that (1) the
undersigned is not an affiliate of the Corporation as that term is
defined in the U.S. Securities Act, (2) the offer of such securities
was not made to a person in the United States and either (A) at the
time the buy order was originated, the buyer was outside the United
States, or the seller and any person acting on its behalf reasonably
believe that the buyer was outside the United States or (B) the
transaction was executed on or through the facilities of The Toronto
Stock Exchange, The Montreal Exchange, The Alberta Stock Exchange or
the Vancouver Stock Exchange and neither the seller nor any person
acting on its behalf knows that the transaction has been prearranged
with a buyer in the United States, (3) neither the seller nor any
affiliate of the seller nor any person acting on any of their behalf
has engaged or will engage in any directed selling efforts in the
United States in connection with the offer and sale of such
securities, (4) the sale is bona fide and not for the purpose of
"washing off" the resale restrictions imposed because the securities
are "restricted securities" (as such term is defined in Rule
144(a)(3) under the U.S. Securities Act), (5) the seller does not
intend to replace the securities sold in reliance on Rule 904 of the
U.S. Securities Act with fungible unrestricted securities and (6) the
contemplated sale is not a transaction, or part of a series of
transactions
14
which, although in technical compliance with Regulation S, is part of
a plan or scheme to evade the registration provisions of the U.S.
Securities Act. Terms used herein have the meanings given to them by
Regulation S."
ARTICLE 3.
REDEMPTION AND PURCHASE FOR CANCELLATION
OF DEBENTURES AND ISSUE OF SUBORDINATE VOTING SHARES
3.1 Redemption of Debentures
Subject to the provisions of section 3.2, the Debentures shall be
redeemable prior to maturity, in whole at any time or in part from time to
time, at the option of the Corporation (in the manner hereinafter provided and
in accordance with and subject to the provisions hereinafter set forth) at a
price equal to the principal amount of the Debentures so redeemed, together
with accrued and unpaid interest on such principal amount to but excluding the
date fixed for redemption (such price, including accrued and unpaid interest,
at which Debentures may be redeemed being hereinafter referred to as the
"Redemption Price").
3.2 Limitation on Redemption
The Debentures shall not be redeemable on or prior to December 31,
1999. After December 31, 1999, and on or prior to December 31, 2001, each
$1,000 principal amount of the Debentures will be redeemable prior to maturity
in whole at any time or in part from time to time at the option of the
Corporation on not more than 60 and not less than 30 days' prior notice at a
price equal to $1,000 plus accrued and unpaid interest, provided that the
Corporation shall have filed with the Trustee on the day that notice of
redemption of the Debenture is first given, pursuant to section 3.4, a
Certificate of the Corporation certifying that the Current Market Price of the
Subordinate Voting Shares on The Toronto Stock Exchange for the 20 consecutive
trading days ending five trading days preceding the date on which the notice
of redemption is given is not less than 125% of the Conversion Price. After
December 31, 2001, to and including the Maturity Date, each $1,000 principal
amount of the Debenture will be redeemable prior to maturity in whole or in
part from time to time at the option of the Corporation on not more than 60
and not less than 30 days' prior notice at a price equal to $1,000 plus
accrued and unpaid interest.
3.3 Partial Redemption of Debentures
If less than all the outstanding Debentures are to be redeemed, the
Corporation shall in each such case, at least 15 days before the date upon
which notice of redemption is to be given, notify the Trustee by Written
Direction of the Corporation of its intention to redeem Debentures and of the
aggregate principal amount of Debentures to be redeemed. The Debentures to be
redeemed shall be selected by lot by the Trustee or in such other manner as
the Trustee may consider equitable, provided that such selection shall be
proportionate (to the nearest $1,000). For this purpose, the Trustee may make,
15
and from time to time amend, regulations with regard to the manner in which
such Debentures may be so selected and regulations so made shall be valid and
binding upon all Holders of Debentures notwithstanding the fact that, as a
result thereof, one or more of such Debentures become subject to redemption in
part only.
Debentures in denominations in excess of $1,000 may be selected and
called for redemption in part only (such part being $1,000 or an integral
multiple thereof) and, unless the context otherwise requires, references to
Debentures in this Article Three be deemed to include any such part of the
principal amount of Debentures which shall have been so selected and called
for redemption. The Holder of any Debenture called for redemption in part
only, upon surrender of such Debenture for payment, shall be entitled to
receive, without expense to such Holder, a new Debenture for the unredeemed
part of the Debenture so surrendered, and the Corporation shall execute and
the Trustee shall certify and deliver, at the expense of the Corporation, such
new Debenture upon receipt from the paying agent of the Debenture so
surrendered.
3.4 Notice of Redemption
Notice of intention to redeem any Debentures shall be given by or on
behalf of the Corporation to the Holders of the Debentures which are to be
redeemed, not more than 60 days and not less than 30 days prior to the date
fixed for redemption, in the manner provided in section 11.2. The notice of
redemption shall, unless all the Debentures then outstanding are to be
redeemed, specify the distinguishing letters and numbers of the Debentures
which are to be redeemed and, if a Debenture is to be redeemed in part only,
shall specify that part of the principal amount thereof to be redeemed, and
shall specify the redemption date, the Redemption Price and places of payment
and shall state that all interest on the Debentures called for redemption
shall cease from and after such redemption date,
3.5 Debentures Due on Redemption Dates
Upon notice having been given as aforesaid, the Debentures so called
for redemption shall thereupon become due and payable at the Redemption Price
and on the redemption date specified in such notice, in the same manner and
with the same effect as if it were the Maturity Date specified in such
Debentures, notwithstanding anything contained therein or herein to the
contrary, and from and after such redemption date, if the moneys or
Subordinate Voting Shares necessary to redeem such Debentures shall have been
deposited as hereinafter provided and affidavits or other proof satisfactory
to the Trustee as to the mailing of such notices shall have been delivered to
it, such Debentures shall not be considered as outstanding hereunder and
interest upon such Debentures shall cease to accrue after such date.
If any question shall arise as to whether notice of redemption or
deposit of the redemption moneys or Subordinate Voting Shares has been given
or made as provided above, such question shall be decided by the Trustee whose
decision shall be final and binding upon all parties in interest.
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3.6 Deposit of Redemption Moneys
Subject to section 3.9, upon Debentures having been called for
redemption, the Corporation shall deposit with the Trustee, on or before the
redemption date fixed in the relevant notice of redemption, such sums as may
be sufficient to pay the Redemption Price of the Debentures to be redeemed,
together with the estimated charges and expenses to be incurred in connection
with such redemption. From the sums so deposited, the Trustee shall pay or
cause to be paid to the Holders of the Debentures called for redemption upon
surrender of such Debentures, the principal and interest to which they are
respectively entitled on redemption.
3.7 Failure to Surrender Debentures Called for Redemption
If the Holder of any Debentures called for redemption shall, within
30 days from the date fixed for redemption, fail to surrender any of such
Debentures or shall not within such time accept payment of the Redemption
Price payable in respect thereof or give such receipt therefor, if any, as the
Trustee may require, such Redemption Price shall be set aside in trust for
such Holder, in accordance with section 12.10, and such setting aside shall
for all purposes be deemed a payment to the Debentureholder of the sum so set
aside, and to that extent such Debentures shall thereafter not be considered
as outstanding hereunder and the Debentureholder shall have no right except to
receive payment out of the moneys so paid and deposited, upon surrender of his
Debentures at a principal paying agent appointed by the Corporation, of the
Redemption Price of such Debentures without interest thereon.
3.8 Surrender of Debentures for Cancellation
If the principal moneys due upon any Debenture shall become payable
by redemption or otherwise before the Maturity Date, the Person presenting
such Debenture for payment must surrender the same for cancellation, the
Corporation nevertheless paying or causing to be paid the interest accrued and
unpaid thereon (computed on a per diem basis if the date fixed for payment is
not an Interest Payment Date).
3.9 Payment in Subordinate Voting Shares on
Redemption of Debentures or Maturity Date
Subject to section 3.10 and applicable law (including approval of any
stock exchange on which the Subordinate Voting Shares are then listed), and
notwithstanding any other provision of this Indenture, the Corporation, at its
option, on not less than 30 and not more than 60 days' notice given in
accordance with subsection 3.11 (which notice, in the case of a redemption,
may be given contemporaneously with notice of such redemption pursuant to
section 3.4), may satisfy its obligation hereunder to pay the aggregate
principal amount payable to the Holders of Debentures on redemption or on the
Maturity Date by the issue to such holders of that number of Subordinate
Voting Shares determined by dividing such aggregate principal amount by 95% of
the Current Market Price of the Subordinate Voting Shares on the date that
notice of the Corporation's intention to pay in Subordinate Voting Shares on
the redemption date or the
17
Maturity Date, as the case may be, is first given. A copy of the notice
contemplated by this section 3.9 will be sent by the Corporation to the
Trustee concurrently with such notice being sent to Holders of Debentures, and
at the same time the Corporation will deliver a Written Direction of the
Corporation to the Trustee setting forth the Corporation's determination of
the number of Subordinate Voting Shares to be issued on the redemption date or
the Maturity Date, as the case may be.
The Corporation may not exercise this right if an Event of Default
hereunder has occurred and is continuing at the date of the notice referred to
in this section 3.9.
3.10 Issue of Subordinate Voting Shares Redemption of Debentures or
Maturity Date
(1) If the Corporation elects under section 3.9 to satisfy its
obligation to pay the principal amount of Debentures on the Maturity Date or
the redemption date, as the case may be, by the issue of Subordinate Voting
Shares and if otherwise permitted to do so by law, and subject to any
applicable regulatory approval (including approval of any stock exchange on
which the Subordinate Voting Shares are then listed), the Corporation will
issue that number of Subordinate Voting Shares determined under section 3.9,
and will deliver to the Trustee the following:
(a) a Certificate of the Corporation certifying that no Event of
Default hereunder has occurred and is continuing as at the
date of the notice referred to in section 3.9; and
(b) an opinion of Counsel that (i) all requirements imposed by
this Indenture or by law in connection with the proposed
issue of Subordinate Voting Shares have been complied with
including that no prospectus or similar document is required
to be filed or authorizations of regulatory authorities
required to be obtained under applicable legislation of the
Provinces of British Columbia, Ontario and Quebec (other
than as may have been previously filed or obtained) before
such Subordinate Voting Shares may properly and legally be
issued and thereafter freely traded through persons
registered if required under such applicable laws, (ii) the
Subordinate Voting Shares so issued have been validly issued
and will be outstanding as fully paid and non assessable
shares and (iii) the Subordinate Voting Shares so issued
have been conditionally approved for listing on The Toronto
Stock Exchange and The American Stock Exchange ("AMEX") (or
on such other principal exchange as the Subordinate Voting
Shares may then be listed), subject to compliance with the
usual requirements of such exchange.
(2) If the provisions of subsections 3.10(1)(a) and (b) are not
complied with, the principal amount of the Debentures payable on the Maturity
Date or on the
18
redemption date, as the case may be, will be payable in lawful money of Canada
as otherwise provided hereunder. If such provisions are complied with, the
issue by the Corporation of that number of Subordinate Voting Shares
determined under section 3.9 shall fully satisfy and discharge the obligation
of the Corporation to pay the principal amount of such Debentures on the
Maturity Date or on the redemption date, as the case may be.
3.11 General Requirement
(1) The notice to the Holders of Debentures to be given by the
Corporation pursuant to section 3.9 must:
(a) state that the Corporation has exercised its option to pay
the aggregate principal amount payable to the Holders of
Debentures on the date of redemption or the Maturity Date,
as the case may be, by the issue of Subordinate Voting
Shares to the Holders of Debentures;
(b) state that to receive a certificate for Subordinate Voting
Shares on the redemption date or the Maturity Date, as the
case may be, the Holders of Debentures must surrender their
Debentures to the Trustee at its principal office in
Toronto;
(c) advise each Holder of Debentures that the Subordinate Voting
Shares to be issued in respect of such Holder's Debenture
will be registered in the name of the Holder unless the
Trustee receives from such Holder, on or before the tenth
Business Day prior to the Maturity Date or the redemption
date, as the case may be, at its principal office in Toronto
written notice in form and execution satisfactory to the
Trustee directing the Corporation to register such
Subordinate Voting Shares in some other name or names and
stating the name or names (with addresses), accompanied by
payment to the Trustee of any transfer tax which may be
payable by reason thereof; and
(d) advise each Holder that such Holder may, on or after the
Maturity Date or the redemption date, as the case may be,
and on proof of identity satisfactory to the Trustee, take
personal delivery of the share certificates representing
that Holder's Subordinate Voting Shares so issued, at the
principal office of the Trustee in Toronto, if the Trustee
receives from such Holder at its principal offices, in
addition to any other notice or delivery required by this
subsection and on or before the tenth Business Day prior to
the Maturity Date or the redemption date, as the case may
be, written notice in form and execution satisfactory to the
Trustee, stating that such Holder wishes to take personal
delivery of the Subordinate Voting Shares
19
issued hereunder, and specifying the principal office of the
Trustee at which such delivery is to be made.
(2) On the Maturity Date or the redemption date, as the case may be,
the Corporation will:
(a) subject to subsections 3.11(1)(c) and (d), cause to be sent
by prepaid ordinary insured mail (or in the event of mail
service interruption by such other means as the Trustee and
the Corporation will determine to be appropriate), share
certificates for Subordinate Voting Shares issued pursuant
to section 3.10 to each Holder of Subordinate Voting Shares
in respect of which Debentures have been surrendered in
accordance with the requirements of the notice given
pursuant to subsection 3.11(1), at their addresses as shown
on the records of the Corporation; and
(b) make available for personal delivery, on proof of identity
satisfactory to the Trustee, to each Holder who has
delivered a notice to the Trustee in accordance with
subsection 3.11(1)(d) on or before the tenth Business Day
prior to the Maturity Date or the redemption date, as the
case may be, share certificates for Subordinate Voting
Shares issued pursuant to section 3.10 to such Holder in
respect of which Debentures have been surrendered in
accordance with the requirements of the notice given
pursuant to section 3.11(1).
(3) On or after the Maturity Date or the redemption date, as the case
may be, the Corporation will deliver share certificates representing the
Subordinate Voting Shares issued pursuant to section 3.10 to any other
registered holder thereof, upon presentation and surrender of the Debentures
in respect of which such shares were issued.
(4) Each share certificate delivered pursuant to this section 3.11
will be for that number of Subordinate Voting Shares that is the Holder's
proportionate share of the number of Subordinate Voting Shares determined in
accordance with section 3.9.
(5) Interest accrued and unpaid on the Debentures on the Maturity
Date or the redemption date, as the case may be, will be paid to the Holders
of Debentures in the manner contemplated in Article Two.
(6) If the Holder of any Debentures, in respect of which the
Corporation has elected pursuant to section 3.9 to satisfy its obligation to
pay the aggregate principal amount of such Debentures by the issue of
Subordinate Voting Shares, shall fail to surrender any of such Debentures or
shall not accept delivery of certificates representing the Subordinate Voting
Shares issuable to such Holder, such Debentures shall, after the redemption
date or the Maturity Date, as the case may be, not be considered as
outstanding hereunder, and the Debentureholder shall have no right in
20
respect thereof except to receive certificates representing Subordinate Voting
Shares upon surrender of such Debentures.
3.12 No Requirement to Issue Fractional Shares
The Corporation shall not be required to issue fractional Subordinate
Voting Shares upon the issue of Subordinate Voting Shares pursuant to section
3.10. If any fractional interest in a Subordinate Voting Share would, except
for the provisions of this section, be deliverable upon the issue of any
Subordinate Voting Shares pursuant to section 3.10, the Corporation shall, in
lieu of delivering any certificate representing such fractional interest,
satisfy such fractional interest by paying to the registered holder of such
shares an amount in lawful money of Canada equal (computed to the nearest
cent) to the appropriate fraction of the Current Market Price of the
Subordinate Voting Shares on the date that notice is given pursuant to section
3.9.
3.13 Purchase of Debentures for Cancellation
The Corporation may at any time at which the Corporation is not in
default hereunder purchase all or any of the Debentures in the market (which
shall include purchase from or through an investment dealer or a firm holding
membership on a recognized stock exchange) or by invitation for tenders or by
private contract; provided that the price at which any Debenture may be so
purchased: (i) on or prior to December 31, 2000, shall not exceed 105% of the
principal amount of such Debenture; and (ii) after December 31, 2000, shall
not exceed the principal amount of such Debenture, together, in each case,
with accrued and unpaid interest (to but not including the date of purchase)
and costs of purchase.
If, upon an invitation for tenders, more Debentures than the
Corporation is prepared to accept are tendered at the same Lowest price that
the Corporation is prepared to accept the Debentures to be purchased by the
Corporation shall be selected by the Trustee by lot, or in such other manner
as the Trustee may consider equitable, from the Debentures tendered by each
Debentureholder who tendered at such lowest price. For this purpose the
Trustee may make, and from time to time amend, regulations with respect to the
manner in which Debentures may be so selected and regulations so made shall be
valid and binding upon all Debentureholders, notwithstanding the fact that, as
a result thereof one or more of such Debentures become subject to purchase in
part only. The Holder of any Debenture of which a part only is purchased, upon
surrender of such Debenture for payment, shall be entitled to receive, without
expense to such Holder, one or more new Debentures for the unpurchased part so
surrendered and the Trustee shall certify and deliver such new Debenture or
Debentures upon receipt of the Debenture so surrendered.
3.14 Cancellation of Debentures
All Debentures redeemed and all Debentures purchased under this
Article Three shall forthwith be delivered to the Trustee and shall be
cancelled by it and no Debentures shall be issued in substitution therefor.
21
ARTICLE 4.
CONVERSION
4.1 Conversion Privilege
Subject to and upon compliance with the provisions of this Article
Four, the Holder of each Debenture shall have the right, at his option, at any
time prior to the close of business on the Business Day immediately preceding
the Maturity Date, or if such Debenture shall have been called for redemption
prior to such date, then up to, but not after, the close of business on the
last Business Day immediately preceding the date fixed for redemption, (such
time and date being referred to as the "Time of Expiry") to convert such
Debenture or any portion of the principal amount thereof which is $1,000 or an
integral multiple of $1,000 into fully paid and non-assessable Subordinate
Voting Shares at the Conversion Price then in effect.
The Conversion Price in effect on the date hereof is $20.30 for each
Subordinate Voting Share to be issued upon the conversion of the Debentures,
being a conversion rate of 49.261 Subordinate Voting Shares for each $1,000
principal amount of Debentures.
4.2 Manner Exercise of Right to Convert
(1) The Holder of a Debenture wishing to convert such Debenture in
whole or in part into Subordinate Voting Shares shall surrender such
Debenture, prior to the Time of Expiry, to the Trustee at its principal
offices in the city of Toronto, together with written notice in form and
substance satisfactory to the Trustee, in either case duly executed by the
Holder or his executors or administrators or other legal representatives or
his or their attorney duly appointed by an instrument in form and substance
satisfactory to the Trustee, exercising his right to convert such Debenture in
accordance with the provisions of this Article Four. Thereupon such
Debentureholder or, subject to payment of all applicable stamp taxes, security
transfer taxes or other governmental charges and compliance with all
reasonable requirements of the Trustee, his nominee or assignee shall be
entitled to be entered in the books of the Corporation as at the Date of
Conversion (as defined in subsection 4.2(2) below) (or such later date as is
specified in subsection 4.2(2)) as the holder of the number of Subordinate
Voting Shares into which such Debenture is convertible in accordance with the
provisions hereof and, as soon as practicable thereafter, the Corporation
shall deliver to such Debentureholder or, subject as aforesaid, his nominee or
assignee a certificate for such Subordinate Voting Shares and, if applicable,
a cheque for any amount payable under section 4.6.
(2) For the purposes hereof, a Debenture shall be deemed to be
surrendered for conversion on the date (the "Date of Conversion") on which it
is so surrendered in accordance with the provisions of this Article and, in
the case of a Debenture so surrendered by mail or other means of delivery, on
the date on which it is actually received by the Trustee at one of its offices
specified in subsection 4.2(1), provided that if a Debenture is surrendered
for conversion on a day on which the register of Subordinate Voting Shares is
closed, the Person entitled to receive Subordinate Voting
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Shares shall become the holder of record of such Subordinate Voting Shares as
at the date on which such register is next reopened and provided that if a
Debenture is surrendered for conversion on any Interest Payment Date or the
day of selection by the Trustee of any Debentures for redemption, or in either
case during the 15 preceding Business Days of such date, such Debenture shall
be deemed to be surrendered for conversion on the Business Day immediately
following such Interest Payment Date or date on which Debentures are selected
for redemption.
(3) Any part, being $1,000 or an integral multiple thereof, of a
Debenture of a denomination in excess of $1,000 may be converted as provided
herein and all references in this Indenture to conversion of Debentures shall
be deemed to include conversion of such part. The Holder of any Debenture of
which part only is converted shall, upon the exercise of his right of
conversion surrender such Debenture to the Trustee, and the Trustee shall
cancel the same and shall, without charge to the Holder, forthwith certify and
deliver to the Holder a new Debenture or Debentures in an aggregate principal
amount equal to the unconverted part of the principal amount of the Debenture
so surrendered.
(4) The Holder of a Debenture surrendered for conversion in
accordance with this section 4.2 shall be entitled to receive accrued and
unpaid interest in respect thereof only for the period up to the Interest
Payment Date, if any, which falls on the Date of Conversion or, if the Date of
Conversion is not an Interest Payment Date, for the period up to the Interest
Payment Date immediately preceding the Date of Conversion; and there shall be
no payment or adjustment by the Corporation on account of any interest accrued
or accruing on such Debenture from the date of the latest Interest Payment
Date. The Subordinate Voting Shares issued upon conversion shall rank only in
respect of dividends declared in favour of holders of record of Subordinate
Voting Shares on and after the Date of Conversion or such later date as such
Holder shall become the holder of record of such Shares pursuant to subsection
4.2(2), from which applicable date they will for all purposes be and be deemed
to be issued and outstanding as fully paid and non-assessable Subordinate
Voting Shares.
4.3 Adjustment of Conversion Price
(1) The Conversion Price will be subject to adjustment from time to
time in the events and in the manner provided as follows.
(2) If and whenever at any time after the date hereof and prior to
the Time of Expiry the Corporation:
(i) issues Subordinate Voting Shares or securities
exchangeable for or convertible into Subordinate
Voting Shares to all or substantially all the
holders of Subordinate Voting Shares as a stock
dividend or other distribution (other than an issue
of Subordinate Voting Shares to holders of
Subordinate Voting Shares pursuant to a right
granted to such holders to receive such Subordinate
Voting
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Shares in lieu of Dividends Paid in the
Ordinary Course and other than an issue of
Subordinate Voting Shares on account of the
exercise of options granted from time to time under
the Corporation's employee and director stock
option plan);
(ii) makes a distribution to all or substantially all of
the holders of Subordinate Voting Shares payable in
Subordinate Voting Shares or securities
exchangeable for or convertible into Subordinate
Voting Shares (other than an issue of Subordinate
Voting Shares to holders of Subordinate Voting
Shares pursuant to a right granted to such holders
to receive such Subordinate Voting Shares in lieu
of Dividends Paid in the Ordinary Course and other
than an issue of Subordinate Voting Shares on
account of the exercise of options granted from
time to time under the Corporation's employee and
director stock option plan);
(iii) subdivides its outstanding Subordinate Voting
Shares into a greater number of Subordinate Voting
Shares; or
(iv) consolidates its outstanding Subordinate Voting
Shares into a smaller number of Subordinate Voting
Shares,
(any of such events in subsections (i), (ii), (iii) and (iv) being
called a "Subordinate Voting Share Reorganization"), then the
Conversion Price then in effect will be adjusted effective
immediately after the effective date or record date for the happening
of a Subordinate Voting Share Reorganization, as the case may be, at
which the holders of Subordinate Voting Shares are determined for the
purpose of the Subordinate Voting Share Reorganization by multiplying
the Conversion Price in effect immediately prior to such effective
date or record date by a fraction, the numerator of which will be the
number of Subordinate Voting Shares outstanding on such effective
date or record date before giving effect to such Subordinate Voting
Share Reorganization and the denominator of which will be the number
of Subordinate Voting Shares outstanding immediately after giving
effect to such Subordinate Voting Share Reorganization (including, in
the case where securities exchangeable for or convertible into
Subordinate Voting Shares are distributed, the number of Subordinate
Voting Shares that would have been outstanding had all such
securities been exchanged for or converted into Subordinate Voting
Shares on such effective date or record date).
(3) If and whenever at any time after the date hereof and prior to
the Time of Expiry the Corporation fixes a record date for the issue of
rights, options or warrants to all or substantially all the holders of
Subordinate Voting Shares (not including rights, options or warrants issued
under the Corporation's employee and
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director stock option plan) under which such holders are entitled, during a
period expiring not more than 45 days after the date of such issue (the
"Rights Period"), to subscribe for or purchase Subordinate Voting Shares or
securities exchangeable for or convertible into Subordinate Voting Shares at a
price per share to the holder (or at an exchange or conversion price per share
during the Rights Period to the holder in the case of securities exchangeable
for or convertible into Subordinate Voting Shares) of less than 95% of the
Current Market Price for the Subordinate Voting Shares on such record date
(any of such events being called a "Rights Offering"), then the Conversion
Price will be adjusted effective immediately after the end of the Rights
Period so that it shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the end of the Rights Period
by a fraction:
(a) the numerator of which will be the aggregate of:
(i) the number of Subordinate Voting Shares outstanding
as of the record date for the Rights Offering, and
(ii) a number determined by dividing (A) either (i) the
product obtained by multiplying the number of
Subordinate Voting Shares issued or subscribed for
during the Rights Period upon the exercise of the
rights, warrants or options under the Rights
Offering by the price at which such Subordinate
Voting Shares are offered, or, as the case may be,
(ii) the product obtained by multiplying the
exchange or conversion price of such securities
exchangeable for or convertible into Subordinate
Voting Shares by the number of Subordinate Voting
Shares for or into which the securities so offered
pursuant to the Rights Offering could have been
exchanged or converted during the Rights Period, by
(B) the Current Market Price of the Subordinate
Voting Shares as of the record date for the Rights
Offering, and
(b) the denominator of which will be the number of Subordinate
Voting Shares outstanding on such record date plus the total
number of Subordinate Voting Shares which would be
outstanding if all the exchangeable or convertible
securities were exchanged for or converted into Subordinate
Voting Shares during the Rights Period, after giving effect
to the Rights Offering and including the number of
Subordinate Voting Shares actually issued or subscribed for
during the Rights Period upon exercise of the rights,
warrants or options under the Rights Offering.
Any Debentureholder who has exercised the right to convert to Subordinate
Voting Shares in accordance with this Article Four during the period beginning
immediately after the record date for a Rights Offering and ending on the last
day of the Rights Period for the Rights Offering will, in addition to the
Subordinate Voting Shares to which that
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holder would otherwise be entitled upon such conversion, be entitled to that
number of additional Subordinate Voting Shares equal to the result obtained
when the difference, if any, between the Conversion Price in effect
immediately prior to the end of such Rights Offering and the Conversion Price
as adjusted for such Rights Offering pursuant to this subsection is multiplied
by the number of Subordinate Voting Shares received upon the conversion of the
Debentures held by such Holder during such period, and the resulting product
is divided by the Conversion Price as adjusted for such Rights Offering
pursuant to this subsection; provided that the provisions of section 4.6 will
be applicable to any fractional interest in a Subordinate Voting Share to
which such Holder might otherwise be entitled under the foregoing provisions
of this subsection. Such additional Subordinate Voting Shares will be deemed
to have been issued to-the Debentureholder immediately following the end of
the Rights Period and a certificate for such additional Subordinate Voting
Shares will be delivered to such Holder within 15 Business Days following the
end of the Rights Period. To the extent that any such rights, options or
warrants are not so exercised on or before the expiry thereof, the Conversion
Price will be readjusted to the Conversion Price which would then be in effect
based on the number of Subordinate Voting Shares (or the securities
convertible into or exchangeable for Subordinate Voting Shares) actually
delivered on the exercise of such rights, options or warrants.
(4) If and whenever at any time after the date hereof and prior to
the Time of Expiry, the Corporation fixes a record date for the issue or the
distribution to all or substantially all the holders of Subordinate Voting
Shares of (i) securities of the Corporation, including rights, options or
warrants to acquire securities of the Corporation or any of its property or
assets and including evidences of indebtedness or (ii) any property or other
assets, including evidences of indebtedness, and if such issuance or
distribution does not constitute a Dividend Paid in the Ordinary Course, a
Subordinate Voting Share Reorganization or a Rights Offering (any of such
non-excluded events being called a "Special Distribution"), the Conversion
Price will be adjusted effective immediately after such record date so that it
shall equal the price determined by multiplying the Conversion Price in effect
on such record date by a fraction:
(a) the numerator of which will be:
(A) the product obtained by multiplying the number of
Subordinate Voting Shares outstanding on such
record date by the Current Market Price of the
Subordinate Voting Shares on such record date; less
(B) the fair market value, as determined by action by
the Directors (whose determination will be
conclusive), to the holders of Subordinate Voting
Shares of such securities or property or other
assets so issued or distributed in the Special
Distribution; and
(b) the denominator of which will be the product obtained by
multiplying the number of Subordinate Voting Shares
outstanding
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on such record date by the Current Market Price
of the Subordinate Voting Shares on such record date.
To the extent that any Special Distribution is not so made, the Conversion
Price will be readjusted effective immediately to the Conversion Price which
would then be in effect based upon such securities or property or other assets
as actually distributed.
(5) If and whenever at any time after the date hereof and prior to
the Maturity Date, there is a reclassification of the Subordinate Voting
Shares at any time outstanding or change of the Subordinate Voting Shares into
other shares or into other securities or other capital reorganization (other
than a Subordinate Voting Share Reorganization), or a consolidation,
amalgamation or merger of the Corporation with or into any other corporation
or other entity (other than a consolidation, amalgamation or merger which does
not result in any reclassification of the outstanding Subordinate Voting
Shares or a change of the Subordinate Voting Shares into other shares), or a
transfer of the undertaking or assets of the Corporation as an entirety or
substantially as an entirety to another corporation or other entity in which
the holders of Subordinate Voting Shares are entitled to receive shares, other
securities or other property (any of such events being called a "Capital
Reorganization"), any Holder of Debentures who exercises the right to convert
Debentures into Subordinate Voting Shares pursuant to Debentures then held
after the effective date of such Capital Reorganization will be entitled to
receive, and will accept for the same aggregate consideration in lieu of the
number of Subordinate Voting Shares to which such Holder was previously
entitled upon such conversion, the aggregate number of shares, other
securities or other property which such holder would have been entitled to
receive as a result of such Capital Reorganization if, on the effective date
thereof, the holder had been the registered holder of the number of
Subordinate Voting Shares to which such holder was previously entitled upon
conversion. The Corporation will take all steps necessary to ensure that, on a
Capital Reorganization, the Holders of Debentures will receive the aggregate
number of shares, other securities or other property to which they are
entitled as a result of the Capital Reorganization. Appropriate adjustments
will be made as a result of any such Capital Reorganization in the application
of the provisions set forth in this Article Four with respect to the rights
and interests thereafter of holders of Debentures to the end that the
provisions set forth in this Article Four will thereafter correspondingly be
made applicable as nearly as may reasonably be in relation to any shares,
other securities or other property thereafter deliverable upon the conversion
of any Debenture. Any such adjustment will be made by and set forth in an
indenture supplemental hereto approved by action of the Directors and entered
into pursuant to the provisions of Article Thirteen and will for all purposes
be conclusively deemed to be an appropriate adjustment.
(6) If the purchase price provided for in any rights, options or
warrants (the "Rights Offering Price") referred to in subsections 4.3(3) or
(4) is decreased, the Conversion Price will forthwith be changed so as to
decrease the Conversion Price to the Conversion Price that would have been
obtained if the adjustment to the Conversion Price made under subsection
4.3(3) or (4), as the case may be, with respect to such rights, options or
warrants had been made on the basis of the Rights Offering Price as so
decreased, provided that the terms of this subsection will not apply to any
decrease in the
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Rights Offering Price resulting from terms in any such rights, options or
warrants designed to prevent dilution except to the extent that the resulting
decrease in the Conversion Price under this subsection would be greater than
the decrease, if any, in the Conversion Price to be made under the terms of
this section by virtue of the occurrence of the event giving rise to such
decrease in the Rights Offering Price.
(7) In any case in which this section 4.3 shall require that an
adjustment shall become effective intermediately after a record date for an
event referred to herein, the Corporation may defer, until the occurrence of
such event, issuing to the Holder of any Debenture converted after such record
date and before the occurrence of such event the additional Subordinate Voting
Shares issuable upon such conversion by reason of the adjustment required by
such event; provided, however, that the Corporation shall deliver to such
Holder an appropriate instrument evidencing such Holder's right to receive
such additional Subordinate Voting Shares upon the occurrence of such event
and the right to receive any distributions made on such additional Subordinate
Voting Shares declared in favour of holders of record of Subordinate Voting
Shares on and after the Date of Conversion or such later date on which such
Holder would, but for the provisions of this subsection (a), have become the
holder of record of such additional Subordinate Voting Shares pursuant to
subsection 4.2(2).
4.4 Other Adjustment of Conversion Price
If the Corporation shall take any action affecting the Subordinate
Voting Shares, other than an action described in section 4.3, which in the
opinion of the Directors would have a material adverse effect upon the rights
of Debentureholders, the Conversion Price shall be adjusted in such manner and
at such time as the Directors determine to be equitable in the circumstances.
Any such action taken by the Corporation shall be subject to applicable
regulatory approval. Failure of the Directors to take any such action shall be
conclusive evidence that the Directors have determined that it is equitable to
make no adjustment in the circumstances.
4.5 Rules Regarding Calculation of Adjustment of Conversion Price
For the purposes of section 4.3:
(1) The adjustments provided for in section 4.3 are cumulative and
will be computed to the nearest one-tenth of one cent and will be made
successively whenever an event referred to therein occurs, subject to the
following subsections of this section.
(2) No adjustment in the Conversion Price will be required unless
such adjustment would result in a change of at least 1% in the prevailing
Conversion Price; provided, however, that any adjustments which, except for
the provisions of this subsection would otherwise have been required to be
made, will be carried forward and taken into account in any subsequent
adjustment.
(3) If at any time a dispute arises with respect to adjustments
provided for in section 4.3, such dispute will be conclusively determined by
the Corporation's
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auditors, or if they are unable or unwilling to act, by such other firm of
independent chartered accountants as may be selected by action of the
Directors and any such determination, subject to the approval of The Toronto
Stock Exchange, will be binding upon the Corporation, the Trustee, the
Debentureholders and shareholders of the Corporation; such auditors or
accountants will be given access to all necessary records of the Corporation.
If any such determination is made, the Corporation will deliver a Certificate
of the Corporation to the Trustee describing such determination.
(4) If the Corporation sets a record date to determine the holders of
Subordinate Voting Shares for the purpose of entitling them to receive any
dividend or distribution or sets a record date to take any other action and
thereafter and before the distribution to such shareholders of any such
dividend or distribution or the taking of any other action, legally abandons
its plan to pay or deliver such dividend or distribution or take such other
action, then no adjustment in the Conversion Price shall be made.
(5) In the absence of a resolution of the Directors fixing a record
date for a Special Distribution or Rights Offering, the Corporation will be
deemed to have fixed as the record date therefor the date on which the Special
Distribution or Rights Offering is effected.
4.6 No Requirement to Issue Fractional Shares
The Corporation shall not be required to issue fractional Subordinate
Voting Shares upon the conversion of Debentures. If more than one Debenture
shall be surrendered for conversion at one time by the same Holder, the number
of whole Subordinate Voting Shares issuable upon conversion thereof shall be
computed on the basis of the aggregate principal amount of the Debentures to
be converted. If any fractional interest in a Subordinate Voting Share would,
except for the provisions of this section, be deliverable upon the conversion
of any principal amount of Debentures, the Corporation may, in lieu of
delivering any certificate of such fractional interest, satisfy such
fractional interest by paying to the Holder of such surrendered Debentures an
amount in lawful money of Canada equal to the Current Market Price of the
Subordinate Voting Shares on the Business Day preceding the Date of
Conversion.
4.7 Corporation to Reserve Shares
The Corporation covenants that it will at all times reserve and keep
available out of its authorized Subordinate Voting Shares (if the number
thereof is or becomes limited) solely for the purpose of issue upon conversion
of Debentures as provided herein, and conditionally allot to Debentureholders
who may exercise their conversion rights hereunder, such number of Subordinate
Voting Shares as shall then be issuable upon the conversion of all outstanding
Debentures. The Corporation covenants with the Trustee that all Subordinate
Voting Shares which shall be so issuable shall be duly and validly issued as
fully paid and non-assessable and shall be listed and posted for trading on
each stock exchange on which the Subordinate Voting Shares are then listed.
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4.8 Corporation to Qualify Shares
If at any time any registration or filing pursuant to any securities
laws of Canada or any province thereof is required to ensure that any
Subordinate Voting Shares issuable upon the conversion of the Debentures are
issued in compliance with all such laws or to ensure that any such Subordinate
Voting Shares, once issued, are not subject to any restriction as to the
resale thereof, the Corporation covenants that it will take all such action as
may be necessary to make or obtain such registration or filing, as the case
may be.
4.9 Taxes and Charges on Conversion
The Corporation will from time to time promptly pay or make provision
satisfactory to the Trustee for the payment of all taxes and charges which may
be imposed by the laws of Canada or any province thereof (except income tax or
security transfer tax, if any) which shall be payable with respect to the
issuance or delivery of Subordinate Voting Shares to the Holders of Debentures
upon the exercise of their right of conversion pursuant to the terms of the
Debentures and of this Indenture.
4.10 Cancellation of Converted Debentures
All Debentures converted in whole or in part shall be forthwith
delivered to and cancelled by the Trustee and, subject to subsection 4.2(3),
no Debentures shall be issued in substitution therefor.
4.11 Certificate as to Adjustment
The Corporation shall, immediately after the occurrence of any and
each event which requires an adjustment or readjustment as provided in section
4.3, deliver a Certificate of the Corporation to the Trustee specifying the
nature of the event requiring the same and the amount of the adjustment or
readjustment necessitated thereby and setting forth in reasonable detail the
method of calculation and the facts upon which such calculation is based. Such
Certificate of the Corporation and the amount of the adjustment specified
therein shall, subject to the provisions of subsection 4.3(6), be conclusive
and binding on all parties in interest. Except in respect of any subdivision,
redivision, reduction, combination or consolidation of the Subordinate Voting
Shares, the Corporation shall forthwith give notice to the Debentureholders
specifying the event requiring such adjustment or readjustment and the amount
thereof, including the resulting Conversion Price; provided that if the
Corporation has given notice under section 4.11 covering all the relevant
facts in respect of such event, no such notice need be given under this
section 4.11.
4.12 Notice of Special Matters
The Corporation covenants that, so long as any Debentures remain
outstanding, it will give notice to the Trustee and to the Debentureholders of
its intention to fix a record date for any event referred to in subsections
4.3(2), (3) or (4) (other than the subdivision, redivision, reduction,
combination or consolidation of Subordinate
30
Voting Shares) or a cash dividend (other than a Dividend Paid in the Ordinary
Course) which may give rise to an adjustment in the Conversion Price, and such
notice shall specify the particulars of such event and the record date and the
effective date for such event; provided that the Corporation shall only be
required to specify in such notice such particulars of such event as shall
have been fixed and determined on the date on which such notice is given. Such
notice shall be given not less than 14 days in each case prior to the
applicable record date.
4.13 Notice of Expiry of Conversion Right
The Corporation covenants that, so long as any Debentures remain
outstanding, it will give notice to the Trustee and the Debentureholders in
the manner provided in Article Eleven, not less than 21 days prior to the Time
of Expiry, of the expiry of the right of the Holders of the Debentures to
convert their Debentures.
4.14 Revival of Right to Convert
If the Corporation shall fail to redeem any Debenture which has been
called for redemption upon due surrender of such Debenture, any right to
convert such Debenture as provided in this Article Four shall revive and
continue as if such Debenture had not been called for redemption.
4.15 Protection of Trustee
The Trustee (i) shall not at any time be under any duty or
responsibility to any Debentureholder to determine whether any facts exist
which may require any adjustment in the Conversion Price, or with respect to
the nature or extent of any such adjustment when made, or with respect to the
method employed in making the same; (ii) shall not be accountable with respect
to the validity or value (or the kind or amount) of any Subordinate Voting
Shares or of any shares or other securities or other property which may at any
time be issued or delivered upon the conversion of any Debenture; and (iii)
shall not be responsible for any failure of the Corporation to make any cash
payment or to issue, transfer or deliver Subordinate Voting Shares or share
certificates upon the surrender of any Debenture for the purpose of
conversion, or to comply with any of the covenants contained in this Article
Four.
4.16 U.S. Legend
Certificates representing Subordinate Voting Shares delivered upon
conversion of Debentures bearing the legend set forth in Subsection 2.3(4)
shall also bear such legend.
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ARTICLE 5.
SUBORDINATION OF DEBENTURES
5.1 Agreement to Subordinate
The Corporation covenants and agrees, and each Holder of a Debenture,
by his acceptance thereof, likewise agrees, that the payment of the principal
of and interest on the Debentures is hereby expressly subordinated, to the
extent and in the manner hereinafter set forth, in right of payment to the
prior payment in full of all Senior Indebtedness.
5.2 Distribution on Insolvency or Winding-up
In the event of any insolvency or bankruptcy proceedings, or any
receivership, liquidation, reorganization or other similar proceedings
relative to the Corporation, or to its property or assets, or in the event of
any proceedings for voluntary liquidation, dissolution or other winding-up of
the Corporation, whether or not involving insolvency or bankruptcy, or any
marshalling of the assets and liabilities of the Corporation, then the holders
of Senior Indebtedness shall be entitled to receive payment in full of all the
Senior Indebtedness before the Trustee shall be entitled to receive any
payment or distribution of any kind or character, whether in cash, property or
securities, which may be payable or deliverable in any such event in respect
of the Debentures.
Upon any payment or distribution of assets of the Corporation
referred to in this Article Five, the Trustee and the Debentureholders shall
be entitled to call for and rely and act upon a certificate, addressed to the
Trustee or to the Debentureholders, of the Person making any such payment; or
distribution for the purpose of ascertaining the Persons entitled to
participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Corporation, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article Five.
5.3 Subrogation of Debentures
Subject to the payment in full of all Senior Indebtedness, the
Debentureholders shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments and distributions of assets of the
Corporation in respect of and on account of Senior Indebtedness, to the extent
of the application thereto of moneys or other assets which would have been
received by the Debentureholders but for the provisions of this Article Five,
until the principal of and interest on the Debentures shall be paid in full.
No payment or distribution of assets of the Corporation to the
Debentureholders which would be payable or distributable to the holders of
Senior Indebtedness pursuant to this Article shall, as between the
Corporation, its creditors (other than the holders of Senior Indebtedness) and
the Debentureholders, be deemed to be a payment by the Corporation to or on
account of the Debentureholders, it being understood that the provisions of
this Article Five are, and are intended, solely for the purpose of defining
the relative rights of the Debentureholders, on the one hand, and the
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holders of the Senior Indebtedness, on the other hand. Nothing contained in
this Article Five or elsewhere in this Indenture or in the Debentures is
intended to or shall impair, as between the Corporation and its creditors
(other than the holders of Senior Indebtedness and the Debentureholders), the
obligation of the Corporation, which is unconditional and absolute, to pay to
the Debentureholders the principal of and interest on the Debentures as and
when the same shall become due and payable in accordance with their terms, or
to affect the relative rights of the Debentureholders and creditors of the
Corporation other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee or the holder of any Debenture
from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this
Article Five, of the holders of Senior Indebtedness upon the exercise of any
such remedy.
5.4 No Payment to Debentureholders if Senior Indebtedness in Default
(1) The Corporation shall not make any payment, and the Trustee shall
not be entitled to demand, institute proceedings for the collection of, or
receive any payment or benefit (including without limitation by set-off,
combination of accounts or otherwise in any manner whatsoever) on account of
the Debentures (i) in a manner inconsistent with the terms (as they exist on
the date hereof) of the Debentures, or (ii) at any time when an event of
default, as defined in any Senior Indebtedness or any instrument evidencing
the same, has occurred and is continuing and notice of such event of default
has been given by or on behalf of the holders of Senior Indebtedness to the
Corporation and the Trustee.
(2) The fact that any payment which is required to be made pursuant
to this Indenture or the Debentures is prohibited by this section 5.4 shall
not prevent the failure to make such payment from being an Event of Default
hereunder.
5.5 Payment of Debentures Permitted
(1) For greater certainty, this Article Five shall not be construed
so as to prevent the Trustee from receiving and retaining any payments on
account of the Debentures which are made (i) in a manner that is consistent
with the terms of this Indenture or the Debentures and (ii) at any time when
no event of default, as defined in any Senior Indebtedness or the instrument
creating the same has occurred and is continuing in respect of which notice
has been given by or on behalf of the holders of Senior Indebtedness to the
Corporation and the Trustee.
(2) Until written notice shall be given to the Trustee by or on
behalf of any holder of any Senior Indebtedness of the occurrence of any
default with respect to such Senior Indebtedness or of the existence of any
other facts which would have the result that any payment with respect to the
Debentures would be in contravention of the provisions of this Article Five,
the Trustee shall be entitled to assume that no such default has occurred, or
that no such facts exist; and nothing in this Indenture shall prevent the
Trustee from applying any moneys received by it pursuant to this Indenture
prior to the receipt by it of such written notice, to the purposes for which
the same were received,
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notwithstanding the occurrence or continuance of a default with respect to, or
the existence of such facts with respect to, such Senior Indebtedness.
5.6 Subordination Not to be Impaired
(1) The subordination provided for in this Article Five shall remain
in full force and effect until the entire amount of the Senior Indebtedness
has been paid and satisfied in full without regard to, and such subordination
shall not be released, discharged, limited or in any way affected or impaired
by:
(a) any lack of validity or enforceability of or any limitation
of liability under any agreement, document or instrument now
or hereafter given in connection with the Senior
Indebtedness (including without limitation any security and
guarantees, and for greater certainty including this
agreement) and such agreements, documents and instruments
are hereinafter collectively referred to as the "Credit
Documents" and individually as a "Credit Document" ;
(b) any irregularity, defect, informality, lack of power or due
authorization relating to any Credit Document;
(c) any amendment, modification, addition or supplement to any
Credit Document;
(d) any extension, renewal, indulgence, compromise, or any other
action or inaction, relating to any Credit Document or any
person or property;
(e) any taking or abstention from taking of any security for, or
any guarantee of, any of the obligations and liabilities of
any person arising under any Credit Document whether or not
such security or guarantee is given in connection with a
Credit Document;
(f) any release, loss, exchange, amendment, modification,
addition or supplement to or of any Credit Document or any
collateral thereunder (with or without consideration);
(g) any default under, or any lack of due execution, validity or
enforceability of, or any irregularity or other defect in,
or any failure to perfect, register or file notice of, any
Credit Document;
(h) any waiver of or consent to a departure from any requirement
or condition precedent contained in any Credit Document;
(i) any exercise or non-exercise, negligent or otherwise, of any
right, remedy, power or privilege in respect of any Credit
Document;
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(j) any change in the parties to, or in the interest of any
party in, any Credit Document, including without limitation
any change resulting from an assignment of the interest of a
party under any Credit Document;
(k) any method or sequence of application (or subsequent change
thereof) at any time or from time to time used by any holder
of Senior Indebtedness or the Trustee to apply any proceeds
received from any source to the Senior Indebtedness;
(l) any sale, lease, transfer or other disposition by the
Corporation or the Trustee or any other person of any
property;
(m) any amalgamation, consolidation or merger of the Corporation
or the Trustee or any other person with or into any person;
(n) any manner of dealing by any holder of Senior Indebtedness
with the Corporation or the Trustee or any other person;
(o) any bankruptcy, insolvency, reorganization, arrangement or
similar proceedings involving or affecting the Corporation
or the Trustee or any other person;
(p) any other circumstances of any nature whatsoever which might
otherwise constitute a legal or equitable discharge of or
defence against the obligations of the Corporation or the
Trustee hereunder (except satisfaction in full of the
obligations of the Corporation and the Trustee hereunder);
or
(q) any other circumstances (except satisfaction in full of the
obligations of the Corporation and the Trustee hereunder);
in each case whether or not the Corporation, the Trustee, any holder of Senior
Indebtedness or any other person shall have notice or knowledge of any of the
foregoing and whether or not any of the holders of Senior Indebtedness, the
Corporation or the Trustee shall have consented thereto.
(2) With respect to the subordination contemplated by this Article
Five, the Trustee, and by his acceptance of Debentures, each of the
Debentureholders, absolutely and unconditionally waives:
(a) notice of any of the matters referred to in subsection
5.6(1);
(b) all notices which may be required by statute, rule of law or
otherwise to preserve any rights of any holder of Senior
Indebtedness other than notice of an event of default as
provided for in section 5.4;
35
(c) any right to require the exercise by any holder of Senior
Indebtedness of any right, remedy, power or privilege in
connection with any Credit Document (including without
limitation any right to require any holder of Senior
Indebtedness to take or exhaust any recourse against the
Corporation or any other person or under the Credit
Documents); and
(d) any requirement of diligence or care on the part of any
holder of Senior Indebtedness, or the Trustee.
The subordination provided for in this Article Five shall be
continuing and shall continue irrespective of any one or more demands which
may be made hereunder by any holder of Senior Indebtedness, and irrespective
of any statute of limitations otherwise applicable. If at any time a payment
on account of the Senior Indebtedness is rescinded or avoided upon the
insolvency, bankruptcy or reorganization of the Corporation or any other
person or for whatever reason, the subordination provided for in this Article
Five shall be continuing or be reinstated, as applicable, (irrespective of any
statute of limitations otherwise applicable) and shall cover and include each
such rescinded or avoided payment, all as though such payment had not been
made.
5.7 Authorization of Debentureholder to Trustee to Effect Subordination
Each Holder of a Debenture, by his acceptance thereof, authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effect the subordination provided for in this Article Five and
appoints the Trustee his attorney-in-fact for any and all such purposes.
5.8 Trustee Not Fiduciary for Holders of Senior Indebtedness
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if
the Trustee shall in good faith mistakenly pay over or distribute to Holders
of Debentures or to the Corporation or to any other person cash, property or
securities to which any holders of Senior Indebtedness shall be entitled by
virtue of this Article 5 or otherwise. The Trustee shall not be charged with
knowledge of the existence of Senior Indebtedness or of any facts that would
prohibit any payment hereunder unless the Trustee shall have received notice
to that effect. With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants or
obligations as are specifically set forth in this Article 5 and no implied
covenants or obligations with respect to holders of Senior Indebtedness shall
be read into this Indenture against the Trustee.
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ARTICLE 6.
COVENANTS OF THE CORPORATION
6.1 General Covenant
The Corporation covenants with the Trustee for the benefit of the
Trustee and the Debentureholders as follows:
(a) the Corporation will duly and punctually pay or cause to be
paid to every Debentureholder the principal of and interest
accrued on the Debentures of which he is the Holder
(including, in the case of default, interest on the amount
in default) on the dates, at the places, in the money or
Subordinate Voting Shares (as the case may be), and in the
manner mentioned herein and in the Debentures;
(b) except as herein otherwise expressly provided, the
Corporation will at all times maintain its corporate
existence and at all reasonable times it will furnish or
cause to be furnished to the Trustee or its duly authorized
agent or attorney such information relating to its business
as the Trustee may reasonably require and such information
shall at all reasonable times be open for inspection by the
Trustee or such agent or attorney;
(c) the Corporation will furnish to the Trustee a copy of all
financial statements, whether annual or interim, of the
Corporation and the report, if any, of the Corporation's
auditors thereon and of all annual and other periodic
reports of the Corporation furnished to its shareholders at
the same time as they are furnished to such shareholders;
and
(d) the Corporation will duly and punctually perform and carry
out all of the acts or things to be done by it as provided
in this Indenture; and
(e) the Corporation will do or cause to be done all things
necessary to ensure that so long as any Debenture is
outstanding:
(i) the Corporation maintains its status as a reporting
issuer, under the laws of the provinces of Ontario,
British Columbia and Quebec, and that it is not in
default of any requirements of the securities
legislation of any such province; and
(ii) all the Debentures, and all the Subordinate Voting
Shares issued in the manner mentioned herein and in
the Debentures, are listed or will be listed at the
time of issue on The Toronto Stock Exchange or on
another nationally
37
recognized stock exchange in Canada and all the
Subordinate Voting Shares issued in the manner
mentioned herein and in the Debentures, are listed
or will be listed at the time of issue on the AMEX.
6.2 Not to Extend Time for Payment of Interest or Principal
The Corporation covenants that, in order to prevent any accumulation
after maturity of unpaid interest or of unpaid Debentures, the Corporation
will not directly or indirectly extend or assent to the extension of time for
payment of any interest upon any Debentures or of any principal payable in
respect of any Debentures and that it will not directly or indirectly be or
become a party to or approve any such arrangement by purchasing or funding any
interest on the Debentures or any principal thereof or in any other manner and
that the Corporation will deliver to the Trustee all Debentures when paid as
evidence of such payment.
If the time for the payment of any interest or principal shall be so
extended, whether or not such extension is by or with the consent of the
Corporation, notwithstanding anything herein or in the Debentures contained,
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 the Debentures then outstanding and of
all matured interest on such Debentures the payment of which has not been so
extended.
6.3 To Provide Annual Certificate of Compliance
The Corporation covenants that, on or before December 15, 1997 and on
or before December 15 in each subsequent year and at any other time if
requested by the Trustee, the Corporation will furnish to the Trustee a
Certificate of the Corporation stating that the Corporation has complied with
all covenants, conditions and other requirements contained in this Indenture,
non-compliance with which would, with the giving of notice or the lapse of
time or both, constitute an Event of Default hereunder 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 the
action, if any, the Corporation proposes to take with respect thereto.
6.4 To Give Notice of Event of Default
The Corporation will promptly notify the Trustee of the occurrence of
any Event of Default or of any event which, with the giving of notice, the
lapse of time or both, would constitute an Event of Default.
6.5 To Pay Trustee's Remuneration
The Corporation covenants that it will pay to the Trustee reasonable
remuneration for its services as Trustee and will pay all costs, charges and
expenses properly incurred by the Trustee in connection with the trusts
hereof, on demand by the Trustee, and also (in addition to any right of
indemnity given to the Trustee hereunder or
38
otherwise by law) will at all times keep indemnified the Trustee against all
liabilities, losses, damages, actions, proceedings, costs, claims, expenses
and demands in respect of any matter or thing done or omitted by the Trustee
(other than through negligence of the Trustee) in any way relating to this
Indenture, which indemnity shall survive resignation or removal of the Trustee
and the discharge of this Indenture. The said remuneration shall continue to
be payable until the trusts hereof be finally wound up and whether or not the
trusts of this Indenture shall be in the course of administration by or under
the direction of the court.
Any amount due under this section 6.5 and unpaid 30 days after demand
for such payment shall bear interest from the expiration of such 30 day period
at a rate per annum equal to the prime rate designated from time to time by
Canadian Imperial Bank of Commerce as its prime rate for commercial loans in
Canadian funds at Toronto. After default all amounts so payable and the
interest thereon shall be payable out of any funds coming into possession of
the Trustee in priority to any payment of the principal of and interest on the
Debentures.
6.6 Trustee may Perform Covenants
If the Corporation shall fail to perform any of its covenants
contained herein, the Trustee may in its discretion, but (subject to section
7.2) need not, notify the Debentureholders of such failure or may itself
perform any of such covenants capable of being performed by it and, if any
such covenant requires the payment of money, it may make such payment with its
own funds, or with money borrowed by it for such purpose, but shall be under
no obligation to do so; and all sums so paid shall be payable by the
Corporation in accordance with the provisions of section 6.4. No such
performance by the Trustee of any covenant contained herein or payment by the
Corporation of any sums advanced or borrowed by the Trustee pursuant to the
foregoing provisions shall be deemed to relieve the Corporation from any
default hereunder.
ARTICLE 7.
DEFAULT AND ENFORCEMENT
7.1 Events of Default
Each of the following events is hereinafter sometimes referred to as
an "Event of Default" :
(a) if the Corporation makes default in payment of the principal
of any Debenture when the same becomes due under any
provision hereof or of such Debenture;
(b) if the Corporation makes default in payment of any interest
due on any Debenture and such default shall have continued
for a period of five Business Days;
(c) if the Corporation makes default in observing or performing
any other covenant or condition of this Indenture on its
part to be
39
observed or performed and if such default continues for a
period of 30 Business Days after notice in writing has been
given to the Corporation by the Trustee specifying such
default and requiring the Corporation to rectify the same,
unless the Trustee (having regard to the subject matter of
the default) shall have agreed to a longer period and, in
such event, for the period agreed to by the Trustee;
(d) if a decree or order of a court having jurisdiction in the
premises is entered adjudging the Corporation a bankrupt or
insolvent under the Bankruptcy and Insolvency Act (Canada)
or any other bankruptcy, insolvency or analogous laws, or
issuing sequestration or process of execution against, or
against any substantial part of, the property of, the
Corporation, or appointing a receiver of the Corporation or
any substantial part of its property, or ordering the
winding-up or liquidation of its affairs, and any such
decree or order continues unstayed and in effect for, a
period of 60 Business Days; or
(e) if a resolution is passed for the winding-up or liquidation
of the Corporation except in the course of carrying out or
pursuant to a transaction in respect of which the conditions
of section 9.1 are duly observed and performed or if the
Corporation institutes proceedings to be adjudicated a
bankrupt or insolvent, or consents to the institution of
bankruptcy or insolvency proceedings against it under the
Bankruptcy and Insolvency Act (Canada) or any other
bankruptcy, insolvency or analogous laws, or consents to the
filing of any such petition or to the appointment of a
receiver of the Corporation or any substantial part of its
property, or makes a general assignment for the benefit of
creditors, or admits in writing its inability to pay its
debts generally as they become due or takes corporate action
in furtherance of any of the aforesaid purposes.
7.2 Notice of Events of Default
If an Event of Default shall occur and is continuing the Trustee
shall, within 15 days after it becomes aware of the occurrence of such Event
of Default, give notice thereof to the Debentureholders, provided that,
notwithstanding the foregoing, the Trustee shall not be required to give such
notice if the Trustee in good faith shall have decided that the withholding of
such notice is in the best interests of the Debentureholders and shall have so
advised the Corporation in writing.
Where notice of the occurrence of an Event of Default has been given
and the Event of Default is thereafter cured, notice that the Event of Default
is no longer continuing shall be given by the Trustee to the Debentureholders
within 15 days after the Trustee becomes aware that the Event of Default has
been cured.
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7.3 Acceleration on Default
If any Event of Default has occurred and is continuing, the Trustee
may in its discretion, and shall upon receipt of a Debentureholders' Request
(but subject to sufficient funds and/or indemnity having been provided in
accordance with section 12.3(2)), subject to section 7.4, by notice in writing
to the Corporation declare the principal of and interest on the Debentures
then outstanding and any other moneys payable hereunder to be due and payable
and the same shall forthwith become immediately due and payable to the
Trustee, notwithstanding anything contained therein or herein to the contrary,
and the Corporation shall pay forthwith to the Trustee for the benefit of the
Debentureholders the principal of and accrued and unpaid interest (including
interest on amounts in default) on such Debentures and all other moneys
payable hereunder, together with subsequent interest thereon at the rate borne
by the Debentures from the date of such declaration until payment is received
by the Trustee. Such payment when made shall be deemed to have been made in
discharge of the Corporation's obligations hereunder and any moneys so
received by the Trustee shall be applied as provided in section 7.7.
7.4 Waiver of Default
If an Event of Default shall have occurred:
(a) the Holders of more than 50% of the principal amount of the
Debentures then outstanding shall have the power (in
addition to the powers exercisable by Extraordinary
Resolution as hereinafter provided) by instrument signed by
such Holders to instruct the Trustee to waive any Event of
Default hereunder and/or to cancel any declaration made by
the Trustee pursuant to section 7.3 and the Trustee shall
thereupon waive the Event of Default and/or cancel such
declaration upon such terms and conditions as such
Debentureholders shall prescribe; and
(b) the Trustee, so long as it has not become bound to institute
any proceedings hereunder, shall have the power to waive any
Event of Default hereunder 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 the Trustee
may consider advisable;
provided that no delay or omission of the Trustee or of the Debentureholders
to exercise any right or power accruing upon any Event of Default shall impair
any such right or power or shall be construed to be a waiver of any such Event
of Default or acquiescence therein and provided further that no act or
omission either of the Trustee or of the Debentureholders shall extend to or
be taken in any manner whatsoever to affect any subsequent Event of Default
hereunder or the rights resulting therefrom.
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7.5 Enforcement by the Trustee
If an Event of Default shall have occurred, but subject to section
7.4 and to the provisions of any Extraordinary Resolution that may be passed
by the Debentureholders as hereinafter provided:
(a) the Trustee (either in its own name or as trustee of an
express trust, or as attorney in fact for the Holders of the
Debentures, or in any one or more of such capacities) may in
its discretion proceed to enforce the rights of the Trustee
and of the Debentureholders by any action, suit, remedy or
proceeding authorized or permitted by this Indenture or by
law or equity; and may file such proof of debt, amendment of
proof of debt, claim, petition or other papers or documents
as may be necessary or advisable in order to have the claims
of the Trustee and of the Debentureholders filed in any
bankruptcy, insolvency, winding-up or other judicial
proceedings relating to the Corporation or its creditors or
relating to or affecting its property;
(b) the Trustee is hereby irrevocably appointed (and the
successive Holders of Debentures by taking and holding the
same shall be conclusively deemed to have so appointed the
Trustee) the true and lawful attorney-in-fact of the
respective Holders of Debentures with authority to make and
file in respect of names of the Holders of Debentures or on
behalf of the Holders of Debentures as a class, subject to
deduction from any such claims of the amounts of any claims
filed by any of the Holders of the Debentures themselves,
any proof of debt, amendment of proof of debt, claim,
petition or other papers or documents in any such
proceedings and to receive payment of any sums becoming
distributable on account thereof, and to execute any such
other papers and documents and to do and perform any and all
such acts and things for and on behalf of such Holders of
Debentures, as may be necessary or advisable in the opinion
of the Trustee, in order to hold the respective claims of
the Trustee and of the Holders of the Debentures against the
Corporation or its property allowed in any such proceeding,
and to receive payment of or on account of such claims;
provided, however, that nothing contained in this Indenture
shall be deemed to give to the Trustee, unless so authorized
by Extraordinary Resolution, any right to accept or consent
to any plan of reorganization or otherwise by action of any
character in such proceeding to waive or change in any way
any right of any Debentureholder;
(c) no such remedy for the enforcement of the rights of the
Trustee or the Debentureholders shall be exclusive of or
dependent on any
42
other such remedy but any one or more of such remedies may
from time to time be exercised independently or in
combination;
(d) all rights of action hereunder may be enforced by the
Trustee without the possession of any of the Debentures or
the production thereof on the trial or other proceedings
relating thereto; and
(e) upon receipt of a Debentureholders' Request, the Trustee
shall exercise or take such one or more of such remedies as
the Debentureholders' Request may direct, provided that if
any such Debentureholders' Request directs the Trustee to
take proceedings out of court the Trustee may in its
discretion take judicial proceedings in lieu thereof.
7.6 Debentureholders May Not Xxx
No Holder of any Debenture shall have the right to o institute any
action, suit or proceeding or to exercise any other remedy authorized or
permitted by this Indenture or by law or by equity for the purpose of
enforcing payment of principal or interest owing on any Debenture or for the
execution of any trust or power hereunder, unless:
(a) such Holder shall previously have given to the Trustee
written notice of the occurrence of an Event of Default;
(b) the Debentureholders, by Extraordinary Resolution, shall
have made a request to the Trustee to take action hereunder
or the Debentureholders' Request referred to in subsection
7.5(e) shall have been delivered to the Trustee, and the
Trustee shall have been offered a 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;
(c) the Debentureholders or any of them shall have furnished to
the Trustee, when requested by the Trustee, sufficient funds
and an indemnity in accordance with subsection 12.3(2); and
(d) the Trustee shall have failed to act within a reasonable
time thereafter.
In such event but not otherwise any Debentureholder, acting on behalf
of himself and all other Debentureholders, shall be entitled to take
proceedings in any court of competent jurisdiction such as the Trustee might
have taken under section 7.5, but in no event shall any Debentureholder or
combination of Debentureholders have any right to take any other remedy or
proceedings out of court; it being understood and intended that no one or more
Holders of Debentures shall have any right in any manner whatsoever to enforce
any right hereunder or under any Debenture except subject to the conditions
and in the manner herein provided, and that all powers and trusts shall be
exercised and all
43
proceedings at law shall be instituted, had and maintained by the Trustee,
except only as herein provided, and in any event for the equal benefit of all
Holders of outstanding Debentures.
7.7 Application of Moneys
Except as otherwise provided herein, any moneys arising from any
enforcement hereof, whether by the Trustee or any Holder of a Debenture, shall
be held by the Trustee and applied by it, together with any moneys then or
thereafter in the hands of the Trustee available for the purpose, as follows:
(a) first, in payment or reimbursement to the Trustee of the
amounts contemplated by section 6.5 including without
limitation 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) second, (but subject to section 6.2) in or towards payment
of the principal of all of the Debentures then outstanding
and thereafter in or towards payment of the accrued and
unpaid interest and interest on overdue interest on such
Debentures (or if the Debentureholders, by Extraordinary
Resolution passed at a meeting of Debentureholders, shall
have directed payments to be made in accordance with any
other order of priority, or without priority as between
principal and interest, then such moneys shall be applied in
accordance with such direction); and
(c) third, the surplus (if any) of such moneys shall be paid to
the Corporation or as it may direct;
provided, however, that no payments shall be made pursuant to clause (b) above
in respect of the principal or interest on any Debenture held, directly or
indirectly, by or for the benefit of the Corporation or any of its
subsidiaries or affiliates (other than any Debenture pledged for value and in
good faith to a Person other than the Corporation or any such subsidiary or
affiliate, but only to the extent of such Person's interest therein) except
subject to the prior payment in full of the principal of and interest on all
Debentures which are not so held.
7.8 Distributions of Moneys
Payments to Holders of Debentures pursuant to subsection 7.7 (b)
shall be made as follows:
(a) at least 21 days' notice of every such payment shall be
given in the manner provided in Article Eleven specifying
the date and time when and the place or places where such
payments are to be made
44
and the amount of the payment and the application thereof as
between principal and interest;
(b) payment of any Debenture shall be made upon presentation
thereof at any one of the places specified in such notice
and any such Debenture thereby paid in full shall be
surrendered, otherwise a notation 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 receipt by it of such indemnity as it
shall consider sufficient;
(c) from and after the date of payment specified in the notice,
interest shall accrue only on the amount owing on each
Debenture after giving credit for the amount of the payment
specified in such notice unless the Debenture in respect of
which such amount is owing is duly presented on or after the
date so specified and payment of such amount is not made;
and
(d) the Trustee shall not be required to make any partial or
interim payment to Debentureholders unless the moneys in its
hands, after reserving therefrom such amount as the Trustee
may think necessary to provide for the payments mentioned in
subsection 7.7(a), exceed 5% of the aggregate principal
amount of the outstanding Debentures, but it may retain the
moneys so received by it and deal with the same as provided
in section 12.10 until the money or investments representing
the same, with the income derived therefrom, together with
any other moneys for the time being under its control, shall
be sufficient for such purpose or until it shall consider it
advisable to apply the same in the manner hereinbefore set
forth. For certainty, the foregoing shall, however, not
apply to a final payment or distribution hereunder.
7.9 Persons Dealing with Trustee
No Person dealing with the Trustee or any of its agents shall be
concerned to enquire whether an Event of Default has occurred, or whether the
powers which the Trustee is purporting to exercise have become exercisable, or
whether any moneys remain due under this Indenture or on the Debentures, or to
see to the application of any moneys paid to the Trustee; and in the absence
of fraud on the part of such Person, such dealing shall be deemed to be within
the powers hereby conferred and to be valid and effective accordingly.
7.10 Trustee Appointed Attorney
The Corporation irrevocably appoints the Trustee to be the attorney
of the Corporation in the name and on behalf of the Corporation to execute any
instruments and do any things which the Corporation ought to execute and do,
and has not executed or
45
done, under the covenants and provisions contained in this Indenture and
generally to use the name of the Corporation in the exercise of all or any of
the powers hereby conferred on the Trustee with full powers of substitution
and revocation.
7.11 Remedies Cumulative
No remedy herein conferred upon or reserved to the Trustee or the
Holders of Debentures 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 or hereafter existing by law or by
statute.
7.12 Judgment Against the Corporation
In the case of any judicial or other proceedings to obtain judgment
for the principal of or interest on the Debentures, judgment may be rendered
against the Corporation in favour of the Debentureholders or in favour of the
Trustee, as trustee for the Debentureholders, for any amount which may remain
due in respect of the Debentures and the interest thereon and any other moneys
owing hereunder.
ARTICLE 8.
SATISFACTION AND DISCHARGE
8.1 Cancellation and Destruction
All matured Debentures shall forthwith after payment thereof be
delivered to the Trustee and cancelled by it. Subject to applicable law, all
Debentures which are cancelled or required to be cancelled under this or any
other provision of this Indenture shall be destroyed by the Trustee and, if
required in advance by the Corporation, the Trustee shall furnish to it a
destruction certificate setting out the designating numbers and denominations
of the Debentures so destroyed.
8.2 Non-Presentation of Debentures
If the Holder of any Debenture shall fail to present the same for
payment on the date on which the principal thereof and/or the interest thereon
or represented thereby becomes payable either at maturity or on redemption or
otherwise or shall not accept payment on account thereof and give such receipt
therefor (if any) as the Trustee may require:
(a) the Corporation shall be entitled to pay to the Trustee and
direct it to set aside; or
(b) in respect of moneys in the hands of the Trustee which may
or should be applied to the payment of the Debentures, the
Corporation shall be entitled to direct the Trustee to set
aside; or
(c) if the redemption was pursuant to notice given by the
Trustee, the Trustee may itself set aside;
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the principal moneys and/or the interest, as the case may be, in trust to be
paid to the Holder of such Debenture upon due presentation and surrender
thereof in accordance with the provisions of this Indenture; and thereupon the
principal moneys and/or the interest payable on or represented by each
Debenture in respect whereof such moneys have been set aside shall be deemed
to have been paid and thereafter such Debentures shall not be considered as
outstanding hereunder and the Holders thereof shall thereafter have no right
in respect thereof except that of receiving payment of the moneys so set aside
by the Trustee (without interest thereon) upon due presentation and surrender
thereof, subject always to the provisions of section 8.3. Any moneys so set
aside may, and, if remaining unclaimed for 60 days shall, be invested by the
Trustee in accordance with section 12.10.
8.3 Repayment of Unclaimed Moneys
Any moneys set aside under section 8.2 and not claimed by and paid to
Holders of Debentures within six years after the date of such setting aside
shall, subject to applicable law, be repaid to the Corporation by the Trustee
on demand, and thereupon the Trustee shall be released from all further
liability with respect to such moneys and thereafter the Holders of the
Debentures in respect of which such moneys were so repaid to the Corporation
shall have no rights in respect thereof except to obtain payment of such
moneys without interest thereon from the Corporation up to such time as the
right to proceed against the Corporation for recovery of such moneys has
become statute barred under the laws of the Province of Ontario.
8.4 Discharge
Upon proof being given to the reasonable satisfaction of the Trustee
that all the Debentures and interest (including interest on amounts in
default) thereon have been paid or satisfied or that, all the outstanding
Debentures having matured or having been duly called for redemption or the
Trustee having been given irrevocable instructions by the Corporation to give
within 90 days' notice of redemption of all the outstanding Debentures, such
payment or redemption has been duly 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 thereon
and the remuneration of and any other amounts accrued or owing by the
Corporation to the Trustee, or upon provision satisfactory to the Trustee
being made therefor, the Trustee shall, at the request and at the expense of
the Corporation, execute and deliver to the Corporation such deeds or other
instruments as shall be necessary to evidence the satisfaction and discharge
of this Indenture and to release the Corporation from its covenants contained
herein except those relating to the indemnification of the Trustee.
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ARTICLE 9.
SUCCESSOR CORPORATIONS
9.1 Certain Requirements in Respect of Merger, etc.
The Corporation shall not enter into any transaction, whether by way
of amalgamation (except a vertical short-form amalgamation with one or more of
its wholly-owned subsidiaries pursuant to the Business Corporations Act
(Ontario)), merger, reconstruction, reorganization, consolidation, transfer,
sale, lease or otherwise, whereby all or substantially all of its undertaking,
property and assets would become the property of any other Person or, in the
case of any such amalgamation, of the continuing corporation resulting
therefrom, but may do so if:
(a) such other Person or continuing corporation is a corporation
(the "Successor Corporation") incorporated under the laws of
Canada or any province thereof.
(b) the Successor Corporation shall execute, prior to or
contemporaneously with the completion of such transaction,
such indenture supplemental hereto and other instruments (if
any) as in the opinion of Counsel are necessary or advisable
to evidence the assumption by the Successor Corporation of
the liability for the due and punctual payment of all the
Debentures and the interest thereon and all other moneys
payable hereunder and the covenant of such Successor
Corporation to pay the same and its agreement to observe and
perform all the covenants and obligations of the Corporation
under this Indenture;
(c) such transaction shall, to the satisfaction of the Trustee
and in the opinion of Counsel, be upon such terms as
substantially to preserve and not to impair any of the
rights or powers of the Trustee or of the Debentureholders
hereunder; and
(d) no condition or event shall exist in respect of the
Corporation or the Successor Corporation, either at the time
of such transaction or immediately thereafter after giving
full effect thereto, which constitutes or would, after the
giving of notice or the lapse of time or both, constitute an
Event of Default hereunder;
provided, however, that the requirements of this section 9.1 shall not apply
to, need not be complied with in respect of, and shall not prevent, any sale,
lease or exchange of all or substantially all the property of the Corporation
in the ordinary course of its business.
9.2 Vesting of Powers in Successor
Whenever the conditions of section 9.1 have been duly observed and
performed, the Trustee shall execute and deliver the supplemental indenture
provided for in Article Thirteen and thereupon:
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(a) the Successor Corporation shall possess and from time to
time may exercise each and every right and power of the
Corporation under this Indenture in the name of the
Corporation 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 Corporation may be done
and performed with like force and effect by the like
directors or officers of such Successor Corporation; and
(b) the Corporation shall be released and discharged from
liability under this Indenture and the Trustee may execute
any documents which it may be advised are necessary or
advisable for effecting or evidencing such release and
discharge.
ARTICLE 10.
MEETINGS OF DEBENTUREHOLDERS
10.1 Right to Convene Meetings
The Trustee may at any time and from time to time and shall, on
receipt of a written request of the Corporation or a Debentureholders' Request
and receiving sufficient funds and upon being indemnified to its reasonable
satisfaction by the Corporation or by the Debentureholders signing such
Debentureholders' Request against the costs which may be incurred in
connection with the calling and holding of such meeting, convene a meeting of
the Debentureholders. If the Trustee fails within 30 days after receipt of
such written request or Debentureholders' Request and such funding and
indemnity to give notice convening a meeting, the Corporation or such
Debentureholders, as the case may be, may convene such meeting. Every such
meeting shall be held in the city of Toronto or at such other place as may be
approved or determined by the Trustee.
10.2 Notice of Meeting
At least 21 days' notice of any meeting shall be given to the
Debentureholders and a copy thereof shall be sent by mail to the Trustee
unless the meeting has been called by it and to the Corporation 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, but it shall not be necessary
for any such notice to set out the terms of any resolution to be proposed at
the meeting or any of the provisions of this Article.
10.3 Chairman
An individual, who need not be a Debentureholder, nominated in
writing by the Trustee shall be chairman of the meeting and if no individual
is so nominated or if the individual so nominated is unable or unwilling to
act or if the individual so nominated is not present within 15 minutes from
the time fixed for the holding of the meeting, the Debentureholders present in
person or by proxy shall choose an individual present to be chairman.
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10.4 Ouorum
At any meeting of the Debentureholders other than a meeting convened
for the purpose of considering a resolution proposed to be passed as an
Extraordinary Resolution, as to which the provisions of section 10.12 shall be
applicable, a quorum shall consist of Debentureholders present in person or by
proxy and representing at least 15% in principal amount of the outstanding
Debentures. If a quorum of the Debentureholders shall not be present within 30
minutes from the time fixed for holding any such meeting, the meeting, if
convened by the Debentureholders or pursuant to a Debentureholder's Request,
shall be dissolved; but in any other case the meeting shall be adjourned to
the same day in the next week (unless such day is not a Business Day, in which
case it shall be adjourned to the next following Business Day) at the same
time and place. At the adjourned meeting the Debentureholders 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
represent 15% of the principal amount of the outstanding Debentures. No
business shall be transacted at any meeting unless the required quorum is
present at the commencement of the meeting.
10.5 Power to Adjourn
The chairman of any meeting at which a quorum of the Debentureholders
is present may, with the consent of the Holders of a majority in principal
amount of the Debentures 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.
10.6 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 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.
10.7 Poll
On every Extraordinary Resolution, and on any other question
submitted to a meeting, when demanded by the chairman or by one or more
Debentureholders and/or proxies for Debentureholders holding at least 5% of
the principal amount of the Debentures represented thereat, a poll shall be
taken in such manner as the chairman shall direct. Questions other than
Extraordinary Resolutions shall, if a poll is taken, be decided by the votes
of the holders of a majority in principal amount of the Debentures represented
at the meeting and voted on the poll.
10.8 Voting
On a show of hands every Person who is present and entitled to vote,
whether as a Debentureholder or as proxy, shall have one vote. On a poll each
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Debentureholder present in person or represented by a duly appointed proxy
shall be entitled to one vote in respect of each $1,000 principal amount of
Debentures of which he shall then be the Holder. A proxy need not be a
Debentureholder. In the case of joint registered Holders of a Debenture, any
one of them present in person or by proxy at the meeting may vote in the
absence of the other or others; but in case more than one of them are present
in person or by proxy, they shall vote together in respect of the Debentures
of which they are joint registered Holders.
10.9 Regulations
The Trustee or the Corporation, 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 providing for:
(a) voting by proxy and the form of the instrument appointing a
proxy (which shall be in writing) and the manner in which
the same shall be executed and for the production of the
authority of any Person signing on behalf of a
Debentureholder;
(b) the deposit of instruments appointing proxies at such place
as the Trustee, the Corporation or the Debentureholders
convening a particular meeting, as the case may be, may in
the notice convening the meeting direct and the time, if
any, before the holding of the meeting or any adjournment
thereof by which the same shall be deposited; and
(c) the deposit of instruments appointing proxies at some
approved place or places other than the place at which a
particular meeting is to be held and enabling particulars of
instruments appointing proxies to be mailed, cabled,
telegraphed, telecopied or sent by telex before the meeting
to the Corporation 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 of the Holders of any Debentures, or as entitled to vote or be present
at the meeting in respect thereof, shall be Debentureholders and persons whom
Debentureholders have duly appointed as their proxies.
10.10 Corporation and Trustee May Re Represented
The Corporation and the Trustee, by their respective officers,
directors and employees, and the legal advisers of the Corporation and the
Trustee may attend any meeting of the Debentureholders, but shall have no vote
as such.
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10.11 Powers Exercisable by Extraordinary Resolution
In addition to the powers conferred upon them by any other provisions
of this Indenture or by law, a meeting of the Debentureholders shall have the
following powers exercisable from time to time by Extraordinary Resolution:
(a) power to approve any change whatsoever in any of the
provisions of this Indenture or the Debentures and any
modification, abrogation, alteration, compromise or
arrangement of the rights of the Debentureholders and/or the
Trustee against the Corporation or against its undertaking,
property and assets or any part thereof, whether such rights
arise under this Indenture or the Debentures or otherwise;
(b) power to approve any scheme for the reconstruction or
reorganization of the Corporation or for the consolidation,
amalgamation or merger of the Corporation with any other
corporation or for the selling or leasing of the
undertaking, property and assets of the Corporation or any
part thereof, provided that no such approval shall be
necessary in respect of any such transaction if the
provisions of Article Nine shall have been complied with;
(c) power to direct or authorize the Trustee to exercise any
power, right, remedy or authority given to it by this
Indenture or the Debentures in any manner specified in such
Extraordinary Resolution or to refrain from exercising any
such power, right, remedy or authority, subject to receipt
by the Trustee of reasonable funding and indemnity;
(d) power to waive and direct the Trustee to waive any default
or Event of Default hereunder and/or cancel any declaration
made by the Trustee pursuant to section 7.3 either
unconditionally or upon any conditions specified in such
Extraordinary Resolution;
(e) power to restrain any Debentureholder from taking or
instituting any suit, action or proceeding for the purpose
of enforcing payment of the principal or interest of any
Debenture, or for the execution of any trust or power
hereunder;
(f) power to direct any Debentureholder who, as such, has
brought any action, suit or proceeding to stay or
discontinue or otherwise deal with the same in the manner
directed by such Extraordinary Resolution upon payment, if
the taking of such action, suit or proceeding shall have
been permitted by section 7.6, of the costs, charges and
expenses reasonably and properly incurred by such
Debentureholder in connection therewith;
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(g) power to appoint a committee to consult with the Trustee
(and to remove any committee so appointed) 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 Debentureholders may exercise by
Extraordinary Resolution under this section 10.11; the
Extraordinary Resolution making such appointment may provide
for payment of the expenses and disbursements of and
compensation to such committee and the Trustee; such
committee shall consist of such number of individuals (who
need not be Debentureholders) as shall be prescribed in the
Extraordinary Resolution appointing it; 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 resolution signed in one or
more counterparts 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 Debentureholders;
(h) power to agree to any compromise or arrangement with any
creditor or creditors or any class or classes of creditors,
whether secured or otherwise, and with holders of any shares
or other securities of the Corporation;
(i) power to authorize the distribution in specie of any shares,
bonds, debentures or other securities or obligations and/or
cash or other consideration received or the use or
disposition of the whole or any part of such shares, bonds,
debentures or other securities or obligations and/or cash or
other consideration in such manner and for such purpose as
may be considered advisable and specified in such
Extraordinary Resolution;
(j) power to approve the exchange of the Debentures for or the
conversion thereof into shares, bonds, debentures or other
securities or obligations of the Corporation or of any
corporation formed or to be formed;
(k) power to remove the Trustee from office and to appoint a new
Trustee or Trustees; and
(l) power to amend, alter or repeal any Extraordinary Resolution
previously passed or approved by the Debentureholders or by
any committee appointed pursuant to subsection 10.11(g).
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10.12 Meaning of "Extraordinary Resolution"
(1) The expression "Extraordinary Resolution" when used in this
Indenture means, subject as hereinafter provided in this Article Ten, a
resolution proposed to be passed as an Extraordinary Resolution at a meeting
of Debentureholders duly convened for the purpose and held in accordance with
the provisions of this Article Ten at which the Holders of more than 25% of
the principal amount of the Debentures then outstanding are present in person
or by proxy and passed by the favourable votes of the holders of not less than
66-2/3% of the principal amount of Debentures represented at the meeting and
voted on a poll upon such resolution.
(2) If at any such meeting the holders of more than 25% of the
principal amount of the Debentures then outstanding are not present in person
or by proxy within 30 minutes after the time appointed for the meeting, then
the meeting, if convened by the Debentureholders or pursuant to a
Debentureholder's Request, shall be dissolved; but in any other case it shall
be 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 Article Eleven. Such notice shall state that at the
adjourned meeting the Debentureholders 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 the Debentureholders present in person or by proxy shall
form a quorum and may transact the business for which the meeting was
originally convened and a resolution proposed at such adjourned meeting and
passed in accordance with subsection 10.12(1) shall be an Extraordinary
Resolution within the meaning of this Indenture, notwithstanding that the
holders of more than 25% of the principal amount of the Debentures then
outstanding are not present in person or by proxy at such adjourned meeting.
(3) 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.
10.13 Powers Cumulative
It is hereby declared and agreed that any one or more of the powers
and/or any combination of the powers in this Indenture stated to be
exercisable by the Debentureholders 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 Debentureholders to exercise the same or any other
such power or powers or combination of powers thereafter from time to time.
10.14 Minutes
Minutes of all resolutions and proceedings at every meeting of
Debentureholders shall be made and duly entered in books to be provided for
that purpose by the Trustee at the expense of the Corporation, and any such
minutes, if signed
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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
Debentureholders, 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 or proceedings had
thereat, to have been duly passed and had.
10.15 Signed Instrument
Any action which may be taken and any power which may be exercised by
the Debentureholders at a meeting held as hereinbefore in this Article
provided may also be taken and exercised by the Holders of not less than
66-2/3% of the principal amount of the outstanding Debentures by a signed
instrument and the expression "Extraordinary Resolution" when used in this
Indenture shall include an instrument so signed. Notice of any Extraordinary
Resolution passed in accordance with this section 10.15 shall be given by the
Trustee to the Holders of Debentures affected thereby within 30 days of the
date on which such Extraordinary Resolution was passed.
10.16 Binding Resolutions
Every resolution and every Extraordinary Resolution passed in
accordance with the provisions of this Article Ten at a meeting of
Debentureholders shall be binding upon all the Debentureholders, whether
present at or absent from such meeting, and every instrument signed by
Debentureholders in accordance with section 10.15 shall be binding upon all
the Debentureholders, whether signatories thereto or not, and each and every
Debentureholder and the Trustee (subject to the provisions for its funding and
indemnity herein contained) shall be bound to give effect to every such
resolution, Extraordinary Resolution and instrument.
10.17 Evidence of Rights of Debentureholders
Any request, direction, notice, consent or other instrument which
this Indenture may require or permit to be signed or executed by the
Debentureholders may be in any number of concurrent instruments of similar
tenor and may be signed or executed by such Debentureholders in person or by
attorney appointed in writing. Proof of the execution of any such request,
direction, notice, consent or other instrument or of a writing appointing any
such attorney shall be sufficient for any purpose of this Indenture if made in
the following manner, namely, the fact and date of the execution by any Person
of such request, direction, notice, consent or other instrument or writing may
be proved by the certificate of any notary public, or other officer authorized
to take acknowledgements of deeds to be recorded at the place where such
certificate is made, that the Person signing such request, direction, notice,
consent or other instrument or writing acknowledged to him the execution
thereof, or by an affidavit of a witness of such execution or in any other
manner which the Trustee may consider adequate.
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The Trustee may, nevertheless, in its discretion require further
proof in cases where it considers further proof necessary or desirable or may
accept such other proof as it shall consider proper.
ARTICLE 11.
NOTICES
11.1 Notice to the Corporation
Any notice to the Corporation under the provisions of this Indenture
shall be valid and effective if delivered personally to, or, subject to
section 11.4, if given by registered mail, postage prepaid, addressed to, the
Corporation at 00 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx, X0X 0X0, Attention: Chief
Operating Officer and shall be deemed to have been given on the date of
delivery or on the third Business Day after such letter has been mailed, as
the case may be. The Corporation may from time to time notify the Trustee of a
change in address which thereafter, until changed by further notice, shall be
the address of the Corporation for all purposes of this Indenture.
11.2 Notice to Debentureholders
Except as otherwise expressly provided herein, all notices to be
given hereunder with respect to the Debentures shall be valid and effective if
such notice is delivered personally or, subject to section 11.4, sent by first
class mail, postage prepaid, addressed to such Holders at their post office
addresses appearing in any of the registers hereinbefore mentioned. Any notice
so delivered or sent by mail shall be deemed to have been given on the day
upon which it is delivered or mailed, as the case may be. Any accidental
error, omission or failure in giving or in delivering or mailing any such
notice or the non-receipt of any such notice by any Debentureholder or Holders
shall not invalidate or otherwise prejudicially affect any action or
proceeding founded thereon. All notices may be given to whichever one of the
Holders (if more than one) is named first in the appropriate register
hereinbefore mentioned, and any notice so given shall be sufficient notice to
all Holders of and any other Persons (if any) interested in such Debentures.
11.3 Notice to the Trustee
Any notice to the Trustee under the provisions of this Indenture
shall be valid and effective if delivered personally to, or, subject to
section 11.4, if given by registered mail, postage prepaid, addressed to, the
Trustee at The R-M Trust Company, 000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxx,
Xxxxxxx, X0X 0X0, Attention: Manager, Corporate Trust, and shall be deemed to
have been given on the date of delivery or on the third Business Day after
such letter has been mailed, as the case may be. The Trustee may from time to
time notify the Corporation of a change in address which thereafter until
changed by further notice, shall be the address of the Trustee for all
purposes of this Indenture.
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11.4 Mail Service Interruption
If the Trustee determines that mail service is or is threatened to be
interrupted at the time when the Trustee is required or elects to give any
notice to the Debentureholders hereunder, the Trustee shall, notwithstanding
the provisions hereof, give such notice at the Corporation's expense by means
of publication in The Globe and Mail, national edition, or any other English
language daily newspaper or newspapers of general circulation in Canada and in
a French language daily newspaper of general circulation in the Province of
Quebec, once in each of two successive weeks, and any notice so published
shall be deemed to have been given on the latest date on which the publication
takes place.
If by reason of any actual or threatened interruption of mail service
due to strike, lock-out or otherwise, any notice to be given to the Trustee or
to the Corporation would be unlikely to reach its destination in a timely
manner, such notice shall be valid and effective only if delivered personally
in accordance with sections 11.1 or 11.3, as the case may be.
ARTICLE 12.
CONCERNING THE TRUSTEE
12.1 Trust Indenture Legislation
(1) In this Article Twelve, the term "Indenture Legislation" means
the provisions, if any, of the Canada Business Corporations Act, the Business
Corporations Act (Ontario), and any other statute of Canada or a province
thereof, and of the regulations under any such statute, relating to trust
indentures and 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 Corporation.
(2) If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with a mandatory requirement of Indenture Legislation,
such mandatory requirement shall prevail.
(3) At all times in relation to this Indenture and any action to be
taken hereunder, the Corporation and the Trustee each shall observe and comply
with Indenture Legislation and the Corporation, the Trustee and each
Debentureholder shall be entitled to the benefits of Indenture Legislation.
12.2 No Conflict of Interest
The Trustee represents to the Corporation that at the date of the
execution and delivery of this Indenture there exists no material conflict of
interest in the role of the Trustee as a fiduciary hereunder. If at any time a
material conflict of interest exists in the Trustee's role as a fiduciary
hereunder the Trustee shall, within 90 days after it becomes aware that such a
material conflict of interest exists, either eliminate the same or else resign
from the trusts hereunder by giving notice in writing to the Corporation at
least 21
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days prior to such resignation and shall thereupon be discharged from
all further duties and liabilities hereunder. If such a material conflict
exists at the time of the execution and delivery of this Indenture, the
validity and enforceability of this Indenture and the Debentures issued
hereunder shall not be affected in any manner whatsoever by reason only that
such material conflict exists.
12.3 Rights and Duties of Trustee
(1) In the exercise of the rights and duties prescribed or conferred
by the terms of this Indenture, the Trustee shall act honestly and in good
faith with a view to the best interests of the Debentureholders as a whole and
exercise that degree of care, diligence and skill that a reasonably prudent
trustee would exercise in comparable circumstances.
(2) Subject only to subsection 12.3(1), the obligation of the Trustee
to commence or continue any act, action or proceeding for the purpose of
enforcing any rights of the Trustee or the Debentureholders hereunder shall be
conditional upon the Debentureholders furnishing, when required by notice in
writing by the Trustee, 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 and 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.
(3) The Trustee may, before commencing or at any time during the
continuance of any such act, action or proceeding, require the
Debentureholders at whose instance it is acting to deposit with the Trustee
the Debentures held by them, for which Debentures the Trustee shall issue
receipts.
(4) 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 Indenture Legislation, this section 12.3 and
section 12.4.
(5) The Trustee shall not be bound to give notice or to do or take
any act, action or proceeding by virtue of the powers conferred on it hereby
unless and until it shall have been required so to do under the terms hereof;
nor shall the Trustee be required to take notice of any default hereunder,
unless and until notified in writing of such default, which notice shall
distinctly specify the default desired to be brought to the attention of the
Trustee and in the absence of any such notice, the Trustee may for all
purposes of this indenture conclusively assume that no default has been made
in the observance or performance of any of the representations, warranties,
covenants, agreements or conditions contained herein. Any such notice shall in
no way limit any discretion herein given the Trustee to determine whether or
not the Trustee shall take action with respect to any default.
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12.4 Evidence, Experts and Advisers
(1) In addition to the reports, certificates, opinions, statutory
declarations and other evidence required by this Indenture, the Corporation
shall furnish to the Trustee such additional evidence of compliance with any
provisions hereof, and in such form, as may be prescribed by Indenture
Legislation or as the Trustee may reasonably require by written notice to the
Corporation.
(2) In the exercise of its rights, duties and obligations, the
Trustee may, if it is acting in good faith, act and rely as to the truth of
the statements and the accuracy of the opinions expressed therein, upon
statutory declarations, opinions, reports, certificates or other evidence
referred to in subsection 12.4(1) provided that the Trustee examines the same
and determines that such evidence complies with the applicable requirements of
this Indenture and of Indenture Legislation.
(3) The Trustee may employ or retain such Counsel, auditors,
accountants, agents, appraisers, brokers or other experts or advisers, whose
qualifications give authority to any advice, opinion or report made by them as
it may reasonably require for the purpose of determining and discharging its
duties hereunder, shall not be responsible for any misconduct on the part of
any of them, and the Trustee may act and rely on the advice, opinion or report
of any such expert or advisor and shall not be responsible for any loss
occasioned by so acting and relying, unless such action was taken in bad faith
or such action constitutes gross negligence or wilful misconduct. The Trustee
may pay reasonable remuneration for all services performed for it in the
discharge of the trusts hereof by such Counsel, auditors, accountants, agents,
appraisers, brokers or other experts or advisors, such remuneration to be
repaid to the Trustee by the Corporation in accordance with Section 6.5.
12.5 Certificate etc. of the Corporation as Evidence
Except as otherwise specifically provided or prescribed by this
Indenture, whenever in the administration of the provisions of this Indenture,
the Trustee shall deem necessary or desirable that the matter be approved or
established prior to taking or admitting any action hereunder, the Trustee, if
acting in good faith, may rely and act upon a Certificate, Written Order,
Written Request, or Written Direction of the Corporation.
12.6 Trustee May Deal in Debentures
The Trustee and its affiliates may buy, sell, lend upon and deal in
the Debentures or other securities of the Corporation, either with the
Corporation or otherwise, and generally contract and enter into financial
transactions with the Corporation or otherwise, without being liable to
account for any profits made thereby.
12.7 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 this Indenture.
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12.8 Trustee Not to be Appointed Receiver
The Trustee and any person related to the Trustee shall not be
appointed a receiver or receiver and manager or liquidator of all or any part
of the assets or undertaking of the Corporation
12.9 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 and its directors, officers and employees will
at all times be indemnified and saved harmless by the
Corporation from and against all claims, demands, losses,
actions, causes of action, costs, charges, expenses, damages
and liabilities whatsoever arising in connection with this
Indenture, including, without limitation, those arising out
of or related to actions taken or omitted to be taken by the
Trustee contemplated hereby, legal fees and disbursements on
a solicitor and client basis, and costs and expenses
incurred in connection with the enforcement of this
indemnity, which the Trustee may suffer or incur, whether at
law or in equity, in any way caused by or arising, directly
or indirectly, in respect of any act, deed, matter or thing
whatsoever made, done, acquiesced in or omitted in or about
or in relation to the execution of its duties as Trustee and
including any deed, matter or thing in relation to the
registration, perfection, release or discharge of security.
The foregoing provisions of this subsection do not apply to
the extent that in any circumstances there has been a
failure by the Trustee or its employees or agents to act
honestly and in good faith or where the Trustee or its
employees or agents have acted negligently or in wilful
disregard of the Trustee's obligations hereunder. It is
understood and agreed that this indemnification shall
survive the termination or discharge of this indenture or
the resignation or removal of the Trustee;
(b) the Trustee shall not be liable for or by reason of any
statements of fact or recitals in this Indenture or in the
Debentures (except the representation contained in section
12.2 and in the certificate of the Trustee on the
Debentures) or required to verify the same, but all such
statements or recitals are and shall be deemed to be made by
the Corporation;
(c) 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;
60
(d) the Trustee shall not be bound to give notice to any Person
of the execution hereof; and
(e) 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 Corporation of any of the
covenants herein contained or of any acts of the agents of
the Corporation.
12.10 Investment of Trust Moneys
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
or which may be on deposit with the Trustee or which may be in the hands of
the Trustee, may be invested and reinvested in the name or under the control
of the Trustee in any debt securities in which trustees are, under the laws of
the Province of Ontario, authorized to invest (including debt securities of an
affiliate of the Trustee including without limitation Mellon Bank Canada),
provided that such debt securities are expressed to mature within one year
after their purchase by the Trustee, and unless and until the Trustee shall
have declared the principal of and interest on the Debentures to be due and
payable, the Trustee shall so invest such moneys at the direction of the
Corporation. Pending such investment such moneys may be deposited by the
Trustee in any chartered bank in Canada (including any affiliate of the
Trustee) or with its own deposit department. The Trustee shall allow interest
at the current rate for similar deposits on moneys remaining on deposit with
it and, provided that the Corporation is not in default hereunder, shall
credit the Corporation with interest received on moneys deposited with other
depositories and on all moneys invested as provided in this section 12.10.
Unless and until the Trustee shall have declared the principal of and
interest on the Debentures to be due and payable, the Trustee shall pay over
to the Corporation all interest received by the Trustee in respect of any
investments or deposits made pursuant to the provisions of this section 12.10.
The Trustee shall be accountable only for reasonable diligence in the
investment of moneys under this section 12.10 and the Trustee shall not be
liable for any loss or losses realized on such investments, gross negligence
and wilful acts or defaults only excepted.
12.11 Action by Trustee to Protect Interests
The Trustee shall have the power to institute and maintain all and
any such actions, suits or proceedings as it may consider necessary or
expedient to preserve, protect or enforce its interests and the interests of
the holders of the Debentures.
12.12 Replacement of Trustee
The Trustee may resign from the trusts hereunder and thereupon be
discharged from all further duties and liabilities hereunder by giving to the
Corporation 60 days' notice in writing or such shorter notice as the
Corporation may accept as
61
sufficient; provided that the Trustee may resign immediately by giving written
notice to the Corporation in the event that Debentureholders pass a resolution
in accordance with the provisions of Article 10 which has a material adverse
effect on the rights of the Trustee under this Indenture. The Debentureholders
by Extraordinary Resolution shall have power at any time to remove the Trustee
and to appoint a new trustee hereunder. In the event of the Trustee resigning
or being removed as aforesaid or being dissolved, becoming bankrupt, going
into liquidation or otherwise becoming incapable of acting hereunder, the
Corporation shall forthwith appoint a new trustee hereunder unless a new
trustee has already been appointed by the Debentureholders; failing such
appointment by the Corporation, the retiring trustee hereunder (at the expense
of the Corporation) or any Debentureholder may apply to a judge of the Ontario
Court of Justice (General Division), on such notice as such judge may direct,
for the appointment of a new trustee hereunder; but any trustee so appointed
by the Corporation or by the Court shall be subject to removal as aforesaid by
the Debentureholders. Any new trustee hereunder appointed under any provision
of this section 12.12 shall be a corporation authorized and qualified to carry
on the business of a trust company in the Province of Ontario and every other
jurisdiction where such authorization or qualification is necessary to enable
it to act as a trustee hereunder, shall certify that it will not have any
material conflict of interest upon becoming trustee hereunder, and shall
accept the trust herein declared and provided for. On any new 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.
Any corporation into which the Trustee may be merged or with which it
may be consolidated or amalgamated, or any corporation 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 necessity of
the execution of any instrument or any further act. Nevertheless, upon the
written request of the Successor Trustee or of the Corporation, the Trustee
ceasing to act shall execute and deliver an instrument assigning and
transferring to such Successor Trustee, upon the trust herein expressed, all
the rights, powers and trusts of the Trustee so ceasing to act, and shall duly
assign, transfer and deliver all property and money held by such Trustee to
the Successor Trustee so appointed in its place. Should any deed, conveyance
or instrument in writing from the Corporation be required by any new trustee
for more fully and certainly vesting in and confirming to it such estates,
properties, rights powers and trusts, then any and all such deeds, conveyances
and instruments in writing shall on request of such new Trustee, be made,
executed, acknowledged and delivered by the Corporation.
12.13 Authority to Carry on Business
The Trustee represents to the Corporation that at the date of
execution and delivery by it of this Indenture, it is authorized to carry on
the business of a trust company in the Province of Ontario but if,
notwithstanding the provisions of this section, it ceases to be so authorized
to carry on business, the validity and enforceability of this Indenture and
the Debentures issued hereunder shall not be affected in any manner whatsoever
by reason only of such event but the Trustee shall, within 90 days after
ceasing to be authorized to carry on the business of a trust company in the
Province of
62
Ontario, either become so authorized or resign in the manner and with the
effect specified in section 12.12.
12.14 Acceptance of Trusts
The Trustee accepts the trusts in this Indenture declared and
provided for and agrees to perform the same upon the terms and conditions
herein set forth and in trust for the various Persons who shall from time to
time be Debentureholders, subject to the terms and conditions herein set
forth.
ARTICLE 13.
SUPPLEMENTAL INDENTURES
13.1 Supplemental Indentures
From time to time the Trustee and, when authorized by a resolution of
the Directors and with the prior approval of The Toronto Stock Exchange, the
Corporation may and they shall, when required by this Indenture, execute,
acknowledge and deliver, by their proper officers, deeds or indentures
supplemental hereto, which thereafter shall form part hereof, for any one or
more of the following purposes:
(a) adding to the provisions hereof such additional covenants of
the Corporation, enforcement provisions and other provisions
for the protection of the Holders of the Debentures and/or
providing for events of default in addition to those herein
specified;
(b) making such provisions not inconsistent with this Indenture
as may be necessary or desirable with respect to matters or
questions arising hereunder, including the making of any
modifications in the form of the Debentures which do not
affect the substance thereof and which, in the opinion of
Counsel to the Trustee, it may be expedient to make,
provided that the Trustee shall be of the opinion that such
provisions and modifications will not be materially
prejudicial to the interests of the Debentureholders;
(c) evidencing the succession, or successive successions, of
other corporations to the Corporation and the covenants of
and obligations assumed by any such successor in accordance
with the provisions of this Indenture;
(d) giving effect to any Extraordinary Resolution passed as
provided in Article Ten;
(e) making any modification of any of the provisions of this
Indenture or the Debentures which is of a formal, minor or
technical nature;
(f) making any additions to, deletions from or alterations of
the provisions of this Indenture (including any of the terms
63
and conditions of the Debentures) which, in the opinion of
Counsel to the Trustee, are not materially prejudicial to
the interests of the Debentureholders and which are
necessary or advisable in order to incorporate, reflect or
comply with Indenture Legislation;
(g) adding to or altering the provisions hereof in respect of
the transfer of Debentures, including provision for the
exchange of Debentures of different denominations, and
making any modification in the form of the Debentures which
does not affect the substance thereof and which, in the
opinion of the Trustee, is not materially prejudicial to the
interests of the Debentureholders;
(h) correcting or rectifying any ambiguities, defective
provisions, errors or omissions herein, provided that, in
the opinion of Counsel to the Trustee, the rights of the
Trustee and the Debentureholders are in no way materially
prejudiced thereby;
(i) any other purpose not inconsistent with the terms of this
Indenture provided that, in the opinion of Counsel to the
Trustee, the rights of the Trustee and of the
Debentureholders are in no way materially prejudiced
thereby; and
(j) provided that the Trustee may in its uncontrolled discretion
decline to enter into such supplemental indenture which in
its opinion may not afford adequate protection of the
Trustee when the same shall become operative.
ARTICLE 14.
EXECUTION
14.1 Counterparts and Formal Date
This Indenture may be executed in several counterparts, each of which
when so executed shall be deemed to be an original, and such counterparts
together shall constitute one and the same instrument and notwithstanding
their date of execution shall be deemed to bear date as of the 7th day of
January, 1997.
14.2 Language of Indenture
The parties hereby acknowledge that they have expressly required this
Indenture and all notices, statements of account and other documents required
or permitted to be given or entered into pursuant hereto to be drawn up in the
English language only. Les parties reconnaissent avoir expressement demandees
que la presente convention ainsi que tout avis, tout etat de compte et tout
autre document a etre ou pouvant etre donne ou conclu en vertu des
dispositions des presentes, soient rediges en langue anglaise seulement.
64
IN WITNESS WHEREOF the parties hereto have executed this Indenture
under their respective corporate seals and the hands of their proper officers
duly authorized in that behalf.
MDC COMMUNICATIONS CORPORATION
By: /s/ W. Xxxxxx Xxxxxx
----------------------------------
Name: W. Xxxxxx Xxxxxx
Title: Senior Executive Vice-
President and Chief Operating
Officer
THE R-M TRUST COMPANY
By: /s/ Xxxxxxx Petryla
----------------------------------
Name: Xxxxxxx Petryla
Title: Account Manager
(corporate seal)
By: /s/ Xxxxx Xxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxx
Title: Authorized Signatory
65
SCHEDULE A
To the foregoing indenture made as of January 7, 1997 between MDC
Communications Corporation and The R-M Trust Company, as Trustee.
The attached is the form of fully registered 7% Subordinated Unsecured
Convertible Debenture due January 8, 2007.
GRAPHICS HAVE NOT BEEN INSERTED (SEE MASTER)
THIS SUPPLEMENTAL INDENTURE made as of the 14th day of February,
1997.
BETWEEN:
MDC COMMUNICATIONS CORPORATION, a corporation incorporated
under the laws of Ontario,
(hereinafter called the "Corporation"),
OF THE FIRST PART,
- and -
THE R-M TRUST COMPANY, a trust company incorporated under
the laws of Canada and having an office in the City of
Toronto in the Province of Ontario,
(hereinafter called the "Trustee"),
OF THE SECOND PART.
WHEREAS each of the Corporation and the Trustee entered into a trust
indenture dated as of January 7, 1997 providing for the issue of $50,000,000
aggregate principal amount 7% Subordinated Unsecured Convertible Debentures
due January 8, 2007 (the "Indenture");
AND WHEREAS Article 13 of the Indenture provides that from time to
time the Trustee and when authorized by a resolution of the directors and with
the prior approval of The Toronto Stock Exchange, the Corporation may execute,
acknowledge and deliver indentures supplemental thereto;
AND WHEREAS clause (e) of section 13.1 provides that such a
supplemental indenture may be entered into in order to make any modification
to any of the provisions of the Indenture or the Debentures which is of a
formal, minor or technical nature;
AND WHEREAS clause (h) of section 13.1 provides that a supplemental
indenture may be entered into in order to correct or rectify any ambiguities,
defect provisions, errors or omissions in the Indenture provided that in the
opinion of Counsel to the Trustee, the rights of the Trustee and the
Debentureholders are in no way materially prejudiced thereby;
AND WHEREAS clause (i) of section 13.1 provides that a supplemental
indenture may be entered into for any other purpose not inconsistent with the
terms of the Indenture provided that in the opinion of Counsel to the Trustee
the rights of the trustee and the Debentureholders are in no way materially
prejudiced thereby;
AND WHEREAS the Corporation has deemed it to be in the best interests
of the Corporation and the Debentureholders to correct an error contained in
section 3.9 of the Indenture in the manner set forth herein and has determined
that the rights of the Trustee and the Debentureholders would be in no way
materially prejudiced thereby;
NOW THEREFORE for good and valuable consideration (the receipt and
sufficiency whereof be hereby acknowledged by each of the parties hereto) the
parties hereto hereby agree as follows:
Article 1.0 - Definitions
1.1 All capitalized terms not otherwise defined herein shall have the
respective meanings ascribed thereto in the Indenture.
Article 2.0 - Amendment to Section 3.9 of the Indenture
2.1 Section 3.9 of the Indenture, be and it is hereby deleted in its entirety
and placed and amended in its entirety by the following:
"3.9 Payment in Subordinate Voting Shares
on Redemption of Debentures or Maturity Date
Subject to section 3.10 and applicable law (including
approval of any stock exchange on which the Subordinate Voting Shares
are then listed), and notwithstanding any other provision of this
Indenture, the Corporation, at its option, on not less than 30 and
not more than 60 days' notice given in accordance with subsection
3.11 (which notice, in the case of a redemption, may be given
contemporaneously with notice of such redemption pursuant to section
3.4), may satisfy its obligation hereunder to pay the aggregate
principal amount payable to the Holders of Debentures on redemption
or on the Maturity Date by the issue to such holder of that number of
Subordinate Voting Shares determined by dividing such aggregate
principal amount by 95% of the Current Market Price of the
Subordinate Voting Shares either:
(a) in the case of a payment on redemption:
(i) as of the date that notice of the Corporation's
intention to pay in Subordinate Voting Shares on
the redemption date is first given; or
(ii) as of the redemption date,
or
(b) in the case of a payment on the Maturity Date:
(i) as of the date that notice of the Corporation's
intention to pay in Subordinate Voting Shares on
the Maturity Date is first given; or
(ii) as of the Maturity Date,
whichever yields a greater number of Subordinate Voting
Shares.
A copy of the notice contemplated by this section 3.9 will
be sent by the Corporation to the Trustee concurrently with
such notice being sent to Holders of Debentures. Not less
than two days prior to the redemption date or Maturity Date,
as the case may be, the Corporation will deliver a Written
Direction of the Corporation to the Trustee setting forth
the Corporation's determination of the number of Subordinate
Voting Shares to be issued on the redemption date or the
Maturity Date, as the case may be.
The Corporation may not exercise this right if an Event of
Default hereunder has occurred and is continuing at the date
of the notice referred to in this section 3.9."
2.2 Section 3.12 of the Indenture, be and it is hereby deleted in its entirety
and replaced and amended in its entirety by the following:
"3.12 No Requirement to Issue Fractional Shares
The Corporation shall not be required to issue fractional
Subordinate Voting Shares upon the issue of Subordinate Voting Shares
pursuant to section 3.10. If any fractional interest in a Subordinate
Voting Share would, except for the provisions of this section, be
deliverable upon the issue of any Subordinate Voting Shares pursuant
to section 3.10, the Corporation shall, in lieu of delivering any
certificate representing such fractional interest, satisfy such
fractional interest by paying to the registered holder of such shares
an amount in lawful money of Canada equal (computed to the nearest
cent) to the appropriate fraction of the applicable Current Market
Price of the Subordinate Voting Shares determined pursuant to section
3.9."
Article 3.0 - Balance of Indenture Unamended
3.1 Except as expressly set forth herein, the Indenture shall remain in full,
force and effect, unamended, as of the date hereof.
Article 4.0 - Counterparts and Formal Date
4.1 This Indenture may be executed in several counterparts, each of which when
so executed shall be deemed to be an original, and such counterparts together
shall constitute one and the same instrument and notwithstanding their date of
execution shall be deemed to bear the date as of February 14, 1997.
IN WITNESS WHEREOF the parties hereby have executed this Supplemental
Indenture under their respective corporate seals and the hands of their proper
officers duly authorized in that behalf.
MDC COMMUNICATIONS CORPORATION
By:
------------------------------
Name:
Title:
THE R-M TRUST COMPANY
By:
------------------------------c/s
Name:
Title:
By:
-------------------------------
Name:
Title:
Article 4.0 - Counterparts and Formal Date
4.1 This Indenture may be executed in several counterparts, each of which when
so executed shall be deemed to be an original, and such counterparts together
shall constitute one and the same instrument and notwithstanding their date of
execution shall be deemed to bear the date as of February 14, 1997.
IN WITNESS WHEREOF the parties hereby have executed this Supplemental
Indenture under their respective corporate seals and the hands of their proper
officers duly authorized in that behalf.
MDC COMMUNICATIONS CORPORATION
By:
----------------------------------
Name:
Title:
THE R-M TRUST COMPANY
By: /s/ Xxxxxxx Petryla
-------------------------------c/s
Name: Xxxxxxx Petryla
Title: Account Manager
By: /s/ Jedford X. Xxxxx
--------------------------------
Name: Jedford X. Xxxxx
Title: Senior Solicitor
