CONVERTIBLE DEBENTURE INDENTURE DATED AS OF THE 26TH DAY OF MAY, 2010 AMONG PARAMOUNT ENERGY TRUST AND PARAMOUNT ENERGY OPERATING CORP. AND COMPUTERSHARE TRUST COMPANY OF CANADA PROVIDING FOR THE ISSUE OF DEBENTURES
DATED
AS OF THE 26TH DAY OF
MAY, 2010
AMONG
PARAMOUNT
ENERGY TRUST
AND
PARAMOUNT
ENERGY OPERATING CORP.
AND
COMPUTERSHARE
TRUST COMPANY OF CANADA
PROVIDING
FOR THE ISSUE OF DEBENTURES
TABLE
OF CONTENTS
|
Page
|
||
|
ARTICLE 1
INTERPRETATION
|
1
|
|
|
1.1
|
Definitions
|
1
|
|
1.2
|
Meaning
of "Outstanding"
|
7
|
|
1.3
|
Interpretation
|
7
|
|
1.4
|
Headings,
Etc
|
8
|
|
1.5
|
Time
of Essence
|
8
|
|
1.6
|
Monetary
References
|
8
|
|
1.7
|
Invalidity,
Etc.
|
8
|
|
1.8
|
Language
|
8
|
|
1.9
|
Successors
and Assigns
|
8
|
|
1.10
|
Severability
|
9
|
|
1.11
|
Entire
Agreement
|
9
|
|
1.12
|
Benefits
of Indenture
|
9
|
|
1.13
|
Applicable
Law and Attornment
|
9
|
|
1.14
|
Currency
of Payment
|
9
|
|
1.15
|
Non-Business
Days
|
9
|
|
1.16
|
Accounting
Terms
|
9
|
|
1.17
|
Calculations
|
9
|
|
1.18
|
Schedules
|
10
|
|
ARTICLE 2
THE DEBENTURES
|
10
|
|
|
2.1
|
Limit
of Debentures
|
10
|
|
2.2
|
Terms
of Debentures of any Series
|
10
|
|
2.3
|
Form
of Debentures
|
11
|
|
2.4
|
Form
and Terms of Initial Debentures
|
12
|
|
2.5
|
Certification
and Delivery of Additional Debentures
|
16
|
|
2.6
|
Issue
of Global Debentures
|
17
|
|
2.7
|
Execution
of Debentures
|
18
|
|
2.8
|
Certification
|
18
|
|
2.9
|
Interim
Debentures or Certificates
|
18
|
|
2.10
|
Mutilation,
Loss, Theft or Destruction
|
19
|
|
2.11
|
Concerning
Interest
|
19
|
|
2.12
|
Debentures
to Rank Pari Passu
|
19
|
|
2.13
|
Payments
of Amounts Due on Maturity
|
19
|
|
2.14
|
U.S.
Legend on the Debentures
|
20
|
|
2.15
|
Payment
of Interest
|
20
|
|
2.16
|
Limitation
on Non-Resident Ownership
|
21
|
|
ARTICLE 3
REGISTRATION, TRANSFER, EXCHANGE AND OWNERSHIP
|
22
|
|
|
3.1
|
Fully
Registered Debentures
|
22
|
|
3.2
|
Global
Debentures
|
22
|
|
3.3
|
Transferee
Entitled to Registration
|
23
|
|
3.4
|
No
Notice of Trusts
|
24
|
|
3.5
|
Registers
Open for Inspection
|
24
|
|
3.6
|
Exchanges
of Debentures
|
24
|
|
3.7
|
Closing
of Registers
|
24
|
|
3.8
|
Charges
for Registration, Transfer and Exchange
|
25
|
|
3.9
|
Ownership
of Debentures
|
25
|
|
ARTICLE 4
REDEMPTION AND PURCHASE OF DEBENTURES
|
26
|
|
|
4.1
|
Applicability
of Article
|
26
|
|
4.2
|
Partial
Redemption
|
26
|
|
4.3
|
Notice
of Redemption
|
26
|
|
4.4
|
Debentures
Due on Redemption Dates
|
27
|
|
4.5
|
Deposit
of Redemption Monies or Trust Units
|
27
|
|
4.6
|
Right
to Repay Redemption Price in Trust Units
|
27
|
|
4.7
|
Failure
to Surrender Debentures Called for Redemption
|
29
|
|
4.8
|
Cancellation
of Debentures Redeemed
|
30
|
|
4.9
|
Purchase
of Debentures by the Trust
|
30
|
|
4.10
|
Right
to Repay Principal Amount and Accrued Interest in Trust
Units
|
30
|
|
ARTICLE 5
SUBORDINATION OF DEBENTURES
|
33
|
|
|
5.1
|
Applicability
of Article
|
33
|
|
5.2
|
Order
of Payment
|
33
|
|
5.3
|
Subrogation
to Rights of Holders of Senior Indebtedness
|
34
|
|
5.4
|
Obligation
to Pay Not Impaired
|
34
|
|
5.5
|
No
Payment if Senior Indebtedness in Default
|
35
|
|
5.6
|
Payment
on Debentures Permitted
|
35
|
|
5.7
|
Confirmation
of Subordination
|
35
|
|
5.8
|
Knowledge
of Trustee
|
36
|
|
5.9
|
Trustee
May Hold Senior Indebtedness
|
36
|
|
5.10
|
Rights
of Holders of Senior Indebtedness Not Impaired
|
36
|
|
5.11
|
Altering
the Senior Indebtedness
|
36
|
|
5.12
|
Additional
Indebtedness
|
36
|
|
5.13
|
Right
of Debentureholder to Receive Trust Units Not Impaired
|
36
|
|
5.14
|
Invalidated
Payments
|
36
|
|
5.15
|
Contesting
Security
|
37
|
|
ARTICLE 6
CONVERSION OF DEBENTURES
|
37
|
|
|
6.1
|
Applicability
of Article
|
37
|
|
6.2
|
Notice
of Expiry of Conversion Privilege
|
37
|
|
6.3
|
Revival
of Right to Convert
|
37
|
|
6.4
|
Manner
of Exercise of Right to Convert
|
37
|
|
6.5
|
Adjustment
of Conversion Price
|
38
|
|
6.6
|
No
Requirement to Issue Fractional Trust Units
|
42
|
|
6.7
|
Trust
to Reserve Trust Units
|
42
|
|
6.8
|
Cancellation
of Converted Debentures
|
42
|
|
6.9
|
Certificate
as to Adjustment
|
42
|
|
6.10
|
Notice
of Special Matters
|
43
|
|
6.11
|
Protection
of Trustee
|
43
|
|
6.12
|
U.S.
Legend on Trust Units
|
43
|
|
6.13
|
Payment
of Cash in Lieu of Trust Units
|
44
|
|
ARTICLE 7
COVENANTS OF THE TRUST
|
44
|
|
|
7.1
|
To
Pay Principal and Interest
|
44
|
|
7.2
|
To
Pay Trustee's Remuneration
|
44
|
|
7.3
|
To
Give Notice of Default
|
44
|
|
7.4
|
Preservation
of Existence, etc.
|
44
|
|
7.5
|
Keeping
of Books
|
44
|
|
7.6
|
Annual
Certificate of Compliance
|
45
|
|
7.7
|
Limitation
on Additional Debentures
|
45
|
|
7.8
|
Performance
of Covenants by Trustee
|
45
|
|
7.9
|
SEC
Notice
|
45
|
|
7.10
|
No
Distribution on Trust Units if Event of Default
|
45
|
|
7.11
|
Maintain
Listing
|
45
|
|
ARTICLE 8
DEFAULT
|
45
|
|
|
8.1
|
Events
of Default
|
45
|
|
8.2
|
Notice
of Events of Default
|
47
|
|
8.3
|
Waiver
of Default
|
47
|
|
8.4
|
Enforcement
by the Trustee
|
47
|
|
8.5
|
No
Suits by Debentureholders
|
48
|
|
8.6
|
Application
of Monies by Trustee
|
49
|
|
8.7
|
Notice
of Payment by Trustee
|
49
|
|
8.8
|
Trustee
May Demand Production of Debentures
|
49
|
|
8.9
|
Remedies
Cumulative
|
50
|
|
8.10
|
Judgment
Against the Trust
|
50
|
|
8.11
|
Immunity
of Directors, Officers and Others
|
50
|
|
ARTICLE 9
SATISFACTION AND DISCHARGE
|
50
|
|
|
9.1
|
Cancellation
and Destruction
|
50
|
|
9.2
|
Non-Presentation
of Debentures
|
50
|
|
9.3
|
Repayment
of Unclaimed Monies or Trust Units
|
51
|
|
9.4
|
Discharge
|
51
|
|
9.5
|
Satisfaction
|
51
|
|
9.6
|
Continuance
of Rights, Duties and Obligations
|
52
|
|
ARTICLE 10
TRUST UNIT INTEREST PAYMENT ELECTION
|
52
|
|
|
10.1
|
Trust
Unit Interest Payment Election
|
52
|
|
ARTICLE 11
SUCCESSORS
|
54
|
|
|
11.1
|
Trust
may Consolidate, Etc., Only on Certain Terms
|
54
|
|
11.2
|
Successor
Substituted
|
55
|
|
ARTICLE 12
COMPULSORY ACQUISITION
|
55
|
|
|
12.1
|
Definitions
|
55
|
|
12.2
|
Offer
for Debentures
|
56
|
|
12.3
|
Offeror's
Notice to Dissenting Debentureholders
|
56
|
|
12.4
|
Delivery
of Debenture Certificates
|
56
|
|
12.5
|
Payment
of Consideration to Trustee
|
56
|
|
12.6
|
Consideration
to be held in Trust
|
56
|
|
12.7
|
Completion
of Transfer of Debentures to Offeror
|
57
|
|
12.8
|
Communication
of Offer to Trust
|
57
|
|
ARTICLE 13
MEETINGS OF DEBENTUREHOLDERS
|
57
|
|
|
13.1
|
Right
to Convene Meeting
|
57
|
|
13.2
|
Notice
of Meetings
|
57
|
|
13.3
|
Chairman
|
59
|
|
13.4
|
Quorum
|
59
|
|
13.5
|
Power
to Adjourn
|
59
|
|
13.6
|
Show
of Hands
|
59
|
|
13.7
|
Poll
|
59
|
|
13.8
|
Voting
|
59
|
|
13.9
|
Proxies
|
60
|
|
13.10
|
Persons
Entitled to Attend Meetings
|
60
|
|
13.11
|
Powers
Exercisable by Extraordinary Resolution
|
60
|
|
13.12
|
Meaning
of "Extraordinary Resolution"
|
62
|
|
13.13
|
Powers
Cumulative
|
62
|
|
13.14
|
Minutes
|
63
|
|
13.15
|
Instruments
in Writing
|
63
|
|
13.16
|
Binding
Effect of Resolutions
|
63
|
|
13.17
|
Evidence
of Rights of Debentureholders
|
63
|
|
13.18
|
Concerning
Serial Meetings
|
63
|
|
ARTICLE 14
NOTICES
|
64
|
|
|
14.1
|
Notice
to Trust
|
64
|
|
14.2
|
Notice
to Debentureholders
|
64
|
|
14.3
|
Notice
to Trustee
|
64
|
|
14.4
|
Mail
Service Interruption
|
64
|
|
ARTICLE 15
CONCERNING THE TRUSTEE
|
65
|
|
|
15.1
|
No
Conflict of Interest
|
65
|
|
15.2
|
Replacement
of Trustee
|
65
|
|
15.3
|
Duties
of Trustee
|
65
|
|
15.4
|
Reliance
Upon Declarations, Opinions, etc.
|
65
|
|
15.5
|
Evidence
and Authority to Trustee, Opinions, etc.
|
66
|
|
15.6
|
Officers'
Certificates Evidence
|
67
|
|
15.7
|
Experts,
Advisers and Agents
|
67
|
|
15.8
|
Trustee
May Deal in Debentures
|
67
|
|
15.9
|
Investment
of Monies Held by Trustee
|
67
|
|
15.10
|
Trustee
Not Ordinarily Bound
|
68
|
|
15.11
|
Trustee
Not Required to Give Security
|
68
|
|
15.12
|
Trustee
Not Bound to Act on Trust's Request
|
68
|
|
15.13
|
Conditions
Precedent to Trustee's Obligations to Act Hereunder
|
68
|
|
15.14
|
Authority
to Carry on Business
|
68
|
|
15.15
|
Compensation
and Indemnity
|
69
|
|
15.16
|
Acceptance
of Trust
|
69
|
|
15.17
|
Third
Party Interests
|
69
|
|
15.18
|
Anti-Money
Laundering
|
69
|
|
15.19
|
Privacy
Laws
|
70
|
|
15.20
|
Force
Majeure
|
70
|
|
ARTICLE 16
SUPPLEMENTAL INDENTURES
|
70
|
|
|
16.1
|
Supplemental
Indentures
|
70
|
|
ARTICLE 17
EXECUTION AND FORMAL DATE
|
71
|
|
|
17.1
|
Execution
|
71
|
|
17.2
|
Contracts
of the Trust
|
71
|
|
17.3
|
Formal
Date
|
72
|
Schedule
"A" - Form of Initial Debenture
Schedule
"B" - Form of Redemption Notice
Schedule
"C" - Form of Maturity Notice
Schedule
"D" - Form of Notice of Conversion
Schedule
"E" - Seller's Certificate for Removal of Legend
THIS
INDENTURE made as of the 26th day of
May, 2010.
AMONG:
PARAMOUNT ENERGY TRUST, an
open ended trust governed under the laws of the Province of Alberta and having
its head office in the City of Calgary, in the Province of Alberta (hereinafter
called "PET" or the
"Trust")
AND
PARAMOUNT ENERGY OPERATING
CORP., a Trust existing under the laws of the Province of Alberta and
having its head office in the City of Calgary, in the Province of Alberta
(hereinafter called "PEOC" or the "Corporation")
AND
COMPUTERSHARE TRUST COMPANY OF
CANADA, a trust company organized under the laws of Canada having an
office in the City of Calgary, in the Province of Alberta (hereinafter called
the "Trustee")
WITNESSETH
THAT:
WHEREAS
the Trust wishes to create and issue the Debentures in the manner and subject to
the terms and conditions of this Indenture;
AND
WHEREAS the Trust, under the laws relating thereto, is duly authorized to create
and issue the Debentures to be issued as herein provided;
AND
WHEREAS PEOC is duly authorized to sign instruments on behalf of the
Trust;
AND
WHEREAS, when certified by the Trustee and issued as in this Indenture provided,
all necessary steps in relation to the Trust have been duly enacted, passed
and/or confirmed and other proceedings taken and conditions complied with to
make the creation and issue of the Debentures proposed to be issued hereunder
legal, valid and binding on the Trust in accordance with the laws relating to
the Trust;
AND
WHEREAS the foregoing recitals are made as representations and statements of
fact by the Trust and not by the Trustee;
NOW
THEREFORE THIS INDENTURE WITNESSES that in consideration of the respective
covenants and agreements contained herein and for other good and valuable
consideration (the receipt and sufficiency of which are acknowledged), the
Trust, the Corporation and the Trustee covenant and agree, for the benefit of
each other and for the equal and rateable benefit of the holders, as
follows:
ARTICLE 1
INTERPRETATION
INTERPRETATION
|
1.1
|
Definitions
|
In this
Indenture and in the Debentures, unless there is something in the subject matter
or context inconsistent therewith, the expressions following shall have the
following meanings, namely:
|
(a)
|
"this Indenture", "this Convertible Debenture
Indenture", "hereto", "herein", "hereby", "hereunder", "hereof" and similar
expressions refer to this Indenture and not to any particular Article,
Section, subsection, clause, subdivision or other portion hereof and
include any and every instrument supplemental or ancillary
hereto;
|
|
(b)
|
"Additional Debentures"
means Debentures of any one or more series, other than the first series of
Debentures, being the Initial Debentures, issued under this
Indenture;
|
|
(c)
|
"Applicable Securities
Legislation" means applicable securities laws (including rules,
regulations, policies and instruments) in each of the applicable Provinces
of Canada;
|
|
(d)
|
"Beneficial Holder" means
any person who holds a beneficial interest in a Global Debenture as shown
on the books of the Depository or a Depository Participant as determined
in accordance with MI 62-104;
|
|
(e)
|
"Board of Directors"
means the board of directors of the Corporation or any committee
thereof;
|
|
(f)
|
"Business Day" means any
day other than a Saturday, Sunday or any other day that the Trustee in
Calgary, Alberta is not generally open for
business;
|
|
(g)
|
"Change of Control" means
(i) the acquisition by any Person, or group of Persons acting jointly
or in concert (within the meaning of MI 62-104), of voting control or
direction of an aggregate of more than 50% of the outstanding Trust Units,
or (ii) the sale of all or substantially all of the assets of the
Trust, but shall not include a sale, merger, reorganization, arrangement,
combination or other similar transaction if the previous holders of Trust
Units hold at least 50% of the voting control or direction in such merged,
reorganized, arranged, combined or other continuing entity immediately
following completion of such transaction (and in the case of a sale of all
or substantially all of the assets, in the entity which has acquired such
assets) provided that for greater certainty a Corporate Conversion shall
not constitute a Change of Control;
|
|
(h)
|
"Change of Control
Notice" has the meaning ascribed thereto in Section
2.4(j)(i);
|
|
(i)
|
"Change of Control Purchase
Date" has the meaning ascribed thereto in Section
2.4(j)(i);
|
|
(j)
|
"Change of Control Purchase
Offer" has the meaning ascribed thereto in Section
2.4(j)(i);
|
|
(k)
|
"Continuing Corporation"
means the corporation resulting from a Corporate
Conversion;
|
|
(l)
|
"Conversion Price" means
the dollar amount for which each Trust Unit may be issued from time to
time upon the conversion of Debentures or any series of Debentures which
are by their terms convertible in accordance with the provisions of
Article 6;
|
|
(m)
|
"Corporate Conversion"
means a conversion to a Continuing Corporation provided the Continuing
Corporation assumes the Trust's obligations with respect to the Debentures
and the Other Debentures;
|
|
(n)
|
"Counsel" means a
barrister or solicitor or firm of barristers or solicitors retained or
employed by the Trustee or retained or employed by the Trust and
acceptable to the Trustee;
|
|
(o)
|
"Current Market Price"
means, generally, the VWAP for the 20 consecutive trading days ending on
the fifth trading day preceding the applicable
date;
|
|
(p)
|
"Date of Conversion" has
the meaning ascribed thereto in Section
6.4(b);
|
|
(q)
|
"Debenture Liabilities"
has the meaning ascribed thereto in Section
5.1;
|
|
(r)
|
"Debentureholders" or
"holders" means
the Persons for the time being entered in the register for Debentures as
registered holders of Debentures or any transferees of such Persons by
endorsement or delivery;
|
2
|
(s)
|
"Debentures" means the
debentures, notes or other evidence of indebtedness of the Trust issued
and certified hereunder, or deemed to be issued and certified hereunder,
including, without limitation, the Initial Debentures, and for the time
being outstanding, whether in definitive or interim
form;
|
|
(t)
|
"Depository" means, with
respect to the Debentures of any series issuable or issued in the form of
one or more Global Debentures, the person designated as depository by the
Trust pursuant to Section 3.2(a) until a successor depository shall
have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Depository" shall mean
each person who is then a depository hereunder, and if at any time there
is more than one such person, "Depository" as used with
respect to the Debentures of any series shall mean each depository with
respect to the Global Debentures of such
series;
|
|
(u)
|
"Depository Participant"
means a broker, dealer, bank, other financial institution or other person
for whom, from time to time, a Depository effects book entry for a Global
Debenture deposited with the
Depository;
|
|
(v)
|
"especially affected
series" has the meaning ascribed thereto in Section
13.2(b)(i);
|
|
(w)
|
"Event of Default" has the meaning
ascribed thereto in Section 8.1;
|
|
(x)
|
"Extraordinary
Resolution" has the meaning ascribed thereto in Section
13.12;
|
|
(y)
|
"Freely Tradeable" means
any trust units or shares, as the case may be, which: (i) are issuable
without the necessity of filing a prospectus or any other similar offering
document (other than such prospectus or similar offering document that has
already been filed) under Applicable Securities Legislation; and (ii) can
be traded by the holder thereof without any restriction under Applicable
Securities Legislation, such as hold periods, except in the case of a
distribution by a control person;
|
|
(z)
|
"Fully Registered
Debentures" means Debentures registered as to both principal and
interest;
|
|
(aa)
|
"generally accepted accounting
principles" or "GAAP" means generally
accepted accounting principles from time to time approved by the Canadian
Institute of Chartered Accountants (including as further described in
Section 1.16);
|
|
(bb)
|
"Global Debenture" means
a Debenture that is issued to and registered in the name of the
Depository, or its nominee, pursuant to Section 2.6 for purposes of being
held by or on behalf of the Depository as custodian for participants in
the Depository's book-entry only registration
system;
|
|
(cc)
|
"Government Obligations"
means securities issued or guaranteed by the Government of Canada or any
province thereof;
|
|
(dd)
|
"Guarantees" means any
guarantee, undertaking to assume, endorse, contingently agree to purchase,
or to provide funds for the payment of, or otherwise become liable in
respect of, any indebtedness, liability or obligation of any
Person;
|
|
(ee)
|
"Initial Debentures"
means the Debentures designated as "7.00% Convertible Unsecured Junior
Subordinated Debentures" and described in Section
2.4;
|
|
(ff)
|
"Interest Account" has
the meaning ascribed thereto in Section
10.1(h);
|
|
(gg)
|
"Interest Obligation"
means the obligation of the Trust to pay interest on the Debentures, as
and when the same becomes due;
|
|
(hh)
|
"Interest Payment Date"
means a date specified in a Debenture as the date on which interest on
such Debenture shall become due and
payable;
|
3
|
(ii)
|
"Legended Debentures"
means Debentures bearing the legend provided for in Section
2.14;
|
|
(jj)
|
"Maturity Account" means
an account or accounts required to be established by the Trust (and which
shall be maintained by and subject to the control of the Trustee) for each
series of Debentures issued pursuant to and in accordance with this
Indenture;
|
|
(kk)
|
"Maturity Date" means the
date specified for maturity of any
Debentures;
|
|
(ll)
|
"Maturity Notice" has the
meaning ascribed thereto in Section
2.4(g);
|
|
(mm)
|
"MI 62-104" means
Multilateral Instrument 62-104 – Take-Over Bids and Issuer
Bids;
|
|
(nn)
|
"Offer Price" has the
meaning ascribed thereto in Section
2.4(j)(i);
|
|
(oo)
|
"Offeror's Notice" has
the meaning ascribed thereto in Section
12.3;
|
|
(pp)
|
"Offering" means the
public offering by short form prospectus dated May 17, 2010 of $60,000,000
in aggregate principal amount of Initial
Debentures;
|
|
(qq)
|
"Officers' Certificate"
means a certificate of the Trust signed by any one authorized officer or
directors of PEOC, on behalf of the Trust, in his or her capacity as an
officer or director of PEOC, as the case may be, and not in his or her
personal capacity;
|
|
(rr)
|
"Other Debentures" means
collectively, the (i) 6.25% convertible unsecured subordinated
debentures due June 30, 2010, (ii) 6.50% convertible unsecured
subordinated debentures due June 30, 2012 and (iii) 7.25% convertible
unsecured subordinated debentures due January 31,
2015;
|
|
(ss)
|
"Periodic Offering" means
an offering of Debentures of a series from time to time, the specific
terms of which Debentures, including, without limitation, the rate or
rates of interest, if any, thereon, the stated maturity or maturities
thereof and the redemption provisions, if any, with respect thereto, are
to be determined by the Trust upon the issuance of such Debentures from
time to time;
|
|
(tt)
|
"Person" includes an
individual, corporation, company, partnership, joint venture, association,
trust, trustee, unincorporated organization or government or any agency or
political subdivision thereof (and for the purposes of the definition of
"Change of Control", in addition to the foregoing, "Person" shall include
any syndicate or group that would be deemed to be a "Person" under MI
62-104);
|
|
(uu)
|
"PEOC" means Paramount
Energy Operating Corp. and includes any successor to or of PEOC which
shall have complied with the provisions of
Article 11;
|
|
(vv)
|
"PET" or the "Trust" means Paramount
Energy Trust and includes any successor to or of PET which shall have
complied with the provisions of
Article 11;
|
|
(ww)
|
"PET Auditors" or "Auditors of the Trust"
means an independent firm of chartered accountants duly appointed as
auditors of the Trust;
|
|
(xx)
|
"Privacy Laws" has the
meaning ascribed thereto in Section
15.19;
|
|
(yy)
|
"Redemption Date" has the
meaning ascribed thereto in Section
4.3;
|
|
(zz)
|
"Redemption Notice" has
the meaning ascribed thereto in Section
4.3;
|
|
(aaa)
|
"Redemption Price" means,
in respect of a Debenture, the amount, including accrued and unpaid
interest up to, but excluding, the Redemption Date fixed for such
Debenture, payable on the Redemption Date, which amount, except as
specifically provided herein, may be payable by the issuance of Freely
Tradeable Trust Units as provided for in Section
4.6;
|
4
|
(bbb)
|
"Regulation S" means
Regulation S adopted by the United States Securities and Exchange
Commission under the 1933 Act;
|
|
(ccc)
|
"representing party" has
the meaning ascribed thereto in Section
15.7;
|
|
(ddd)
|
"Senior Creditor" means a
holder or holders of Senior Indebtedness and includes any representative
or representatives, agent or agents or trustee or trustees of any such
holder or holders;
|
|
(eee)
|
"Senior Indebtedness"
means all obligations, liabilities and indebtedness of the Trust and its
Subsidiaries which would, in accordance with GAAP, be classified upon a
consolidated balance sheet of the Trust as liabilities of the Trust and
its Subsidiaries and, whether or not so classified, shall include (without
duplication): (a) indebtedness of the Trust and its Subsidiaries for
borrowed money; (b) obligations of the Trust and its Subsidiaries
evidenced by bonds, debentures, notes or other similar instruments
including the Other Debentures; (c) obligations of the Trust and its
Subsidiaries arising pursuant or in relation to bankers' acceptances,
letters of credit and letters of guarantee (including payment and
reimbursement obligations in respect thereof) or indemnities issued in
connection therewith; (d) obligations of the Trust and its Subsidiaries
under any swap, hedging or other similar contracts or arrangements; (e)
obligations of the Trust and its Subsidiaries under Guarantees,
indemnities, assurances, legally binding comfort letters or other
contingent obligations relating to the Senior Indebtedness or other
obligations of any other person which would otherwise constitute Senior
Indebtedness within the meaning of this definition; (f) all indebtedness
of the Trust or its Subsidiaries representing the deferred purchase price
of any property including, without limitation, purchase money mortgages;
(g) accounts payable to trade creditors; (h) all renewals, extensions and
refinancing of any of the foregoing; and (i) all costs and expenses
incurred by or on behalf of the holder of any Senior Indebtedness in
enforcing payment or collection of any such Senior Indebtedness, including
enforcing any security interest securing the same. "Senior Indebtedness"
shall not include any indebtedness that would otherwise be Senior
Indebtedness if it is expressly stated to be subordinate to or rank pari passu with the
Debentures;
|
|
(fff)
|
"Senior Security" means
all mortgages, liens, pledges, charges (whether fixed or floating),
security interests or other encumbrances of any kind, contingent or
absolute, held by or on behalf of any Senior Creditor and in any manner
securing any Senior Indebtedness;
|
|
(ggg)
|
"Serial Meeting" has the
meaning ascribed thereto in Section
13.2(b)(i);
|
|
(hhh)
|
"Subsidiary" has the
meaning ascribed thereto in the Securities Act
(Alberta);
|
|
(iii)
|
"Time of Expiry" means
the time of expiry of certain rights with respect to the conversion of
Debentures under Article 6 which is to be set forth separately in the form
and terms for each series of Debentures which by their terms are to be
convertible;
|
|
(jjj)
|
"Total Offer Price" has
the meaning ascribed thereto in Section
2.4(j)(i);
|
|
(kkk)
|
"trading day" means, with
respect to the Toronto Stock Exchange or other market for securities, any
day on which such exchange or market is open for trading or
quotation;
|
|
(lll)
|
"Trust Units" means Trust
Units in the capital of the Trust, as such Trust Units are constituted on
the date of execution and delivery of this Indenture; provided that in the
event of a change or a subdivision, redivision, reduction, combination or
consolidation thereof, any reclassification, capital reorganization,
consolidation, amalgamation, arrangement, merger, sale or conveyance or
liquidation, dissolution or winding-up, or such successive changes,
subdivisions, redivisions, reductions, combinations or consolidations,
reclassifications, capital reorganizations, consolidations, amalgamations,
arrangements, mergers, sales or conveyances or liquidations, dissolutions
or windings-up, then, subject to adjustments, if any, having been made in
accordance with the provisions of Section 6.5, "Trust Units" shall mean
the units or other securities or property resulting from such change,
subdivision, redivision, reduction, combination or consolidation,
reclassification, capital reorganization, consolidation, amalgamation,
arrangement, merger, sale or conveyance or liquidation, dissolution or
winding-up;
|
5
|
(mmm)
|
"Trust Unit Bid Request"
means a request for bids to purchase Trust Units (to be issued by the
Trust on the Trust Unit Delivery Date) made by the Trustee in accordance
with the Trust Unit Interest Payment Election Notice and which shall make
the acceptance of any bid conditional upon the acceptance of sufficient
bids to result in aggregate proceeds from such issue and sale of Trust
Units which, together with the cash payments by the Trust in lieu of
fractional Trust Units, if any, equal the Interest
Obligation;
|
|
(nnn)
|
"Trust Unit Delivery
Date" means a date, not more than 90 days and not less than one
Business Day prior to the applicable Interest Payment Date, upon which
Trust Units are issued by the Trust and delivered to the Trustee for sale
pursuant to Trust Unit Purchase
Agreements;
|
|
(ooo)
|
"Trust Unit Interest Payment
Election" means an election to satisfy an Interest Obligation on
the applicable Interest Payment Date in the manner described in the Trust
Unit Interest Payment Election
Notice;
|
|
(ppp)
|
"Trust Unit Interest Payment
Election Amount" means the sum of the amount of the aggregate
proceeds resulting from the sale of Trust Units on the Trust Unit Delivery
Date pursuant to acceptable bids obtained pursuant to the Trust Unit Bid
Requests, together with any amount paid by the Trust in respect of
fractional Trust Units pursuant to Section 10.1(g), that is equal to the
aggregate amount of the Interest Obligation in respect of which the Trust
Unit Interest Payment Election Notice was
delivered;
|
|
(qqq)
|
"Trust Unit Interest Payment
Election Notice" means a written notice made by the Trust to the
Trustee specifying:
|
|
(i)
|
the
Interest Obligation to which the election
relates;
|
|
(ii)
|
the
Trust Unit Interest Payment Election
Amount;
|
|
(iii)
|
the
investment banks, brokers or dealers through which the Trustee shall seek
bids to purchase the Trust Units and the conditions of such bids, which
may include the minimum number of Trust Units, minimum price per Trust
Unit, timing for closing for bids and such other matters as the Trust may
specify; and
|
|
(iv)
|
that
the Trustee shall accept through the investment banks, brokers or dealers
selected by the Trust only those bids which comply with such
notice;
|
|
(rrr)
|
"Trust Unit Proceeds
Investment" has the meaning attributed thereto in Section
10.1(h);
|
|
(sss)
|
"Trust Unit Purchase
Agreement" means an agreement in customary form among the Trust,
the Trustee and the Persons making acceptable bids pursuant to a Trust
Unit Bid Request, which complies with all applicable laws, including the
Applicable Securities Legislation and the rules and regulations of any
stock exchange on which the Debentures or Trust Units are then
listed;
|
|
(ttt)
|
"Trust Unit Redemption
Right" has the meaning attributed thereto in Section
4.6(a);
|
|
(uuu)
|
"Trust Unit Repayment
Right" has the meaning attributed thereto in Section
4.10(a);
|
|
(vvv)
|
"Trustee" means
Computershare Trust Company of Canada, or its successor or successors for
the time being as trustee
hereunder;
|
|
(www)
|
"Unclaimed Funds Return
Date" has the meaning ascribed thereto in
Section 2.4(j)(vii);
|
6
|
(xxx)
|
"United States" means the
United States of America, its territories and possessions, any state of
the United States and the District of
Columbia;
|
|
(yyy)
|
"U.S. Legend" has the
meaning ascribed thereto in Section
2.14(a);
|
|
(zzz)
|
"VWAP" means the volume
weighted average trading price of the Trust Units for the applicable
period on the Toronto Stock Exchange (or if the Trust Units are no longer
traded on the Toronto Stock Exchange, on such other exchange as the Trust
Units are then traded) or if not such prices are available for such
applicable period, "VWAP" shall be the fair value per Trust Unit as
reasonably determined by the Board of
Directors;
|
|
(aaaa)
|
"Written Direction of the
Trust" means an instrument in writing signed by any one officer or
director of the Corporation;
|
|
(bbbb)
|
"1933 Act" means the
United States Securities Act of 1933, as amended;
and
|
|
(cccc)
|
"90% Redemption Right"
has the meaning ascribed thereto in Section
2.4(j)(ii).
|
|
1.2
|
Meaning
of "Outstanding"
|
Every
Debenture certified and delivered by the Trustee hereunder shall be deemed to be
outstanding until it is cancelled, converted or redeemed or delivered to the
Trustee for cancellation, conversion or redemption or monies and/or Trust Units,
as the case may be, or the payment thereof shall have been set aside under
Section 9.2, provided that:
|
(a)
|
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;
|
|
(b)
|
when
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; and
|
|
(c)
|
for
the purposes of any provision of this Indenture entitling holders of
outstanding Debentures to vote, sign consents, requisitions or other
instruments or take any other action under this Indenture, or to
constitute a quorum of any meeting of Debentureholders, Debentures owned
directly or indirectly, legally or equitably, by the Trust shall be
disregarded except that:
|
|
(i)
|
for
the purpose of determining whether the Trustee shall be protected in
relying on any such vote, consent, requisition or other instrument or
action, or on the holders of Debentures present or represented at any
meeting of Debentureholders, only the Debentures which the Trustee knows
are so owned shall be so disregarded;
and
|
|
(ii)
|
Debentures
so owned which have been pledged in good faith other than to the Trust
shall not be so disregarded if the pledgee shall establish to the
satisfaction of the Trustee the pledgee's right to vote such Debentures,
sign consents, requisitions or other instruments or take such other
actions in his discretion free from the control of the Trust or a
Subsidiary of the Trust.
|
|
1.3
|
Interpretation
|
In this
Indenture:
|
(a)
|
words
importing the singular number or masculine gender shall include the plural
number or the feminine or neuter genders, and vice
versa;
|
7
|
(b)
|
all
references to Articles and Schedules refer, unless otherwise specified, to
articles of and schedules to this
Indenture;
|
|
(c)
|
all
references to Sections refer, unless otherwise specified, to Sections,
subsections or clauses of this
Indenture;
|
|
(d)
|
words
and terms denoting inclusiveness (such as "include" or "includes" or "including"), whether or
not so stated, are not limited by and do not imply limitation of their
context or the words or phrases which precede or succeed
them;
|
|
(e)
|
reference
to any agreement or other instrument in writing means such agreement or
other instrument in writing as amended, modified, replaced or supplemented
from time to time;
|
|
(f)
|
unless
otherwise indicated, reference to a statute shall be deemed to be a
reference to such statute as amended, re-enacted or replaced from time to
time; and
|
|
(g)
|
unless
otherwise indicated, time periods within which a payment is to be made or
any other action is to be taken hereunder shall be calculated by including
the day on which the period commences and excluding the day on which the
period ends.
|
|
1.4
|
Headings,
Etc
|
The
division of this Indenture into Articles and Sections, 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 or of
the Debentures.
|
1.5
|
Time
of Essence
|
Time
shall be of the essence of this Indenture.
|
1.6
|
Monetary
References
|
Whenever
any amounts of money are referred to herein, such amounts shall be deemed to be
in lawful money of Canada unless otherwise expressed.
|
1.7
|
Invalidity,
Etc.
|
Any
provision hereof which is prohibited or unenforceable shall be ineffective only
to the extent of such prohibition or unenforceability, without invalidating the
remaining provisions hereof.
|
1.8
|
Language
|
Each of
the parties hereto hereby acknowledges that it has consented to and requested
that this Indenture and all documents relating thereto, including, without
limiting the generality of the foregoing, the form of Debenture attached hereto
as Schedule A, be drawn
up in the English language only.
|
1.9
|
Successors
and Assigns
|
All
covenants and agreements of the Trust in this Indenture and the Debentures shall
bind its successors and assigns, whether so expressed or not. All covenants and
agreements of the Trustee in this Indenture shall bind its
successors.
8
|
1.10
|
Severability
|
In case
any provision in this Indenture or in the Debentures shall be invalid, illegal
or unenforceable, such provision shall be deemed to be severed herefrom or
therefrom and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected, prejudiced or impaired
thereby.
|
1.11
|
Entire
Agreement
|
This
Indenture and all supplemental indentures and Schedules hereto and thereto, and
the Debentures issued hereunder and thereunder, together constitute the entire
agreement between the parties hereto with respect to the indebtedness created
hereunder and thereunder and under the Debentures and supersedes as of the date
hereof all prior memoranda, agreements, negotiations, discussions and term
sheets, whether oral or written, with respect to the indebtedness created
hereunder or thereunder and under the Debentures.
|
1.12
|
Benefits
of Indenture
|
Nothing
in this Indenture or in the Debentures, express or implied, shall give to any
Person, other than the parties hereto and their successors hereunder, any paying
agent, the holders of Debentures, the Senior Creditors (to the extent provided
in Article 5 only), and (to the extent provided in Section 8.11) the
holders of Trust Units, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
|
1.13
|
Applicable
Law and Attornment
|
This
Indenture, any supplemental indenture and the Debentures shall be governed by
and interpreted in accordance with the laws of the Province of Alberta and the
federal laws of Canada applicable therein and shall be treated in all respects
as Alberta contracts. With respect to any suit, action or proceedings relating
to this Indenture, any supplemental indenture or any Debenture, the Trust, the
Trustee and each holder irrevocably submit and attorn to the non-exclusive
jurisdiction of the courts of the Province of Alberta.
|
1.14
|
Currency
of Payment
|
Unless
otherwise indicated in a supplemental indenture with respect to any particular
series of Debentures, all payments to be made under this Indenture or a
supplemental indenture shall be made in Canadian dollars.
|
1.15
|
Non-Business
Days
|
Whenever
any payment to be made hereunder shall be due, any period of time would begin or
end, any calculation is to be made or any other action is to be taken on, or as
of, or from a period ending on, a day other than a Business Day, such payment
shall be made, such period of time shall begin or end, such calculation shall be
made and such other action shall be taken, as the case may be, unless otherwise
specifically provided herein, on or as of the next succeeding Business Day
without any additional interest, cost or charge to the Trust.
|
1.16
|
Accounting
Terms
|
Except as
hereinafter provided or as otherwise indicated in this Indenture, all
calculations required or permitted to be made hereunder pursuant to the terms of
this Indenture shall be made in accordance with GAAP. For greater certainty,
GAAP shall include any accounting standards, including International Financial
Reporting Standards, that may from time to time be approved for general
application by the Canadian Institute of Chartered Accountants.
|
1.17
|
Calculations
|
The Trust
shall be responsible for making all calculations called for hereunder including,
without limitation, calculations of Current Market Price. The Trust
shall make such calculations in good faith and, absent manifest error, the
Trust's calculations shall be final and binding on holders and the
Trustee. The Trust will provide a schedule of its calculations to the
Trustee and the Trustee shall be entitled to rely conclusively on the accuracy
of such calculations without independent verification.
9
|
1.18
|
Schedules
|
The
following Schedules are incorporated into and form part of this
Indenture:
Schedule
"A" – Form of Initial Debenture
Schedule
"B" – Form of Redemption Notice
Schedule
"C" – Form of Maturity Notice
Schedule
"D" – Form of Notice of Conversion
Schedule
"E" – Seller's Certificate for Removal of Legend
In the
event of any inconsistency between the provisions of any Section of this
Indenture and the provisions of the Schedules which form a part hereof, the
provisions of this Indenture shall prevail to the extent of the
inconsistency.
ARTICLE 2
THE DEBENTURES
THE DEBENTURES
|
2.1
|
Limit
of Debentures
|
Subject
to the limitation in respect of the Initial Debentures set out in Section
2.4(a), the aggregate principal amount of Debentures authorized to be issued
under this Indenture is unlimited, but Debentures may be issued only upon and
subject to the conditions and limitations herein set forth.
|
2.2
|
Terms
of Debentures of any Series
|
The
Debentures may be issued in one or more series. There shall be established
herein or in or pursuant to one or more indentures supplemental hereto, prior to
the initial issuance of Debentures of any particular series:
|
(a)
|
the
designation of the Debentures of the series (which need not include the
term "Debentures"), which shall distinguish the Debentures of the series
from the Debentures of all other
series;
|
|
(b)
|
any
limit upon the aggregate principal amount of the Debentures of the series
that may be certified and delivered under this Indenture (except for
Debentures certified and delivered upon registration of, transfer of,
amendment of, or in exchange for, or in lieu of, other Debentures of the
series pursuant to Sections 2.9, 2.10, 3.2, 3.3, 3.6, Article 4 and
Article 6);
|
|
(c)
|
the
date or dates on which the principal of the Debentures of the series is
payable;
|
|
(d)
|
the
rate or rates at which the Debentures of the series shall bear interest,
if any, the date or dates from which such interest shall accrue, on which
such interest shall be payable and on which record date, if any, shall be
taken for the determination of holders to whom such interest shall be
payable and/or the method or methods by which such rate or rates or date
or dates shall be determined;
|
|
(e)
|
the
place or places where the principal of and any interest on Debentures of
the series shall be payable or where any Debentures of the series may be
surrendered for registration of transfer or
exchange;
|
|
(f)
|
the
right, if any, of the Trust to redeem Debentures of the series, in whole
or in part, at its option and the period or periods within which, the
price or prices at which and any terms and conditions upon which,
Debentures of the series may be so
redeemed;
|
10
|
(g)
|
the
obligation, if any, of the Trust to redeem, purchase or repay Debentures
of the series pursuant to any mandatory redemption, sinking fund or
analogous provisions or at the option of a holder thereof and the price or
prices at which, the period or periods within which, the date or dates on
which, and any terms and conditions upon which, Debentures of the series
shall be redeemed, purchased or repaid, in whole or in part, pursuant to
such obligations;
|
|
(h)
|
if
other than denominations of $1,000 and any integral multiple thereof, the
denominations in which Debentures of the series shall be
issuable;
|
|
(i)
|
subject
to the provisions of this Indenture, any trustee, Depositories,
authenticating or paying agents, transfer agents or registrars or any
other agents with respect to the Debentures of the
series;
|
|
(j)
|
any
other events of default or covenants with respect to the Debentures of the
series;
|
|
(k)
|
whether
and under what circumstances the Debentures of the series will be
convertible into or exchangeable for securities of any
Person;
|
|
(l)
|
the
form and terms of the Debentures of the
series;
|
|
(m)
|
if
applicable, that the Debentures of the series shall be issuable in whole
or in part as one or more Global Debentures and, in such case, the
Depository or Depositories for such Global Debentures in whose name the
Global Debentures will be registered, and any circumstances other than or
in addition to those set forth in Section 2.9 or 3.2 or those applicable
with respect to any specific series of Debentures, as the case may be, in
which any such Global Debenture may be exchanged for Fully Registered
Debentures, or transferred to and registered in the name of a person other
than the Depository for such Global Debentures or a nominee
thereof;
|
|
(n)
|
if
other than Canadian currency, the currency in which the Debentures of the
series are issuable; and
|
|
(o)
|
any
other terms of the Debentures of the series (which terms shall not be
inconsistent with the provisions of this
Indenture).
|
All
Debentures of any one series shall be substantially identical, except as may
otherwise be established herein or by or pursuant to a resolution of the Board
of Directors, Officers' Certificate or in an indenture supplemental hereto. All
Debentures of any one series need not be issued at the same time and may be
issued from time to time, including pursuant to a Periodic Offering, consistent
with the terms of this Indenture, if so provided herein, by or pursuant to such
resolution of the Board of Directors, Officers' Certificate or in an indenture
supplemental hereto.
|
2.3
|
Form
of Debentures
|
Except in
respect of the Initial Debentures, the form of which is provided for herein, the
Debentures of each series shall be substantially in such form or forms (not
inconsistent with this Indenture) as shall be established herein or by or
pursuant to one or more resolutions of the Board of Directors (or to the extent
established pursuant to, rather than set forth in, a resolution of the Board of
Directors, in an Officers' Certificate detailing such establishment) or in one
or more indentures supplemental hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have imprinted or otherwise reproduced
thereon such legend or legends or endorsements, not inconsistent with the
provisions of this Indenture, as may be required to comply with any law or with
any rules or regulations pursuant thereto or with any rules or regulations of
any securities exchange or securities regulatory authority or to conform to
general usage, all as may be determined by the directors or officers of the PEOC
executing such Debentures on behalf of the Trust, as conclusively evidenced by
their execution of such Debentures.
11
|
2.4
|
Form
and Terms of Initial Debentures
|
|
(a)
|
The
first series of Debentures (the "Initial Debentures")
authorized for issue immediately is limited to an aggregate principal
amount of $60,000,000 and shall be designated as "7.00% Convertible
Unsecured Junior Subordinated
Debentures".
|
|
(b)
|
The
Initial Debentures shall be dated as of the date of the closing of the
Offering (or such other date as the Trust may request) and shall mature
December 31, 2015 (the "Maturity Date" for the
Initial Debentures).
|
|
(c)
|
The
Initial Debentures shall bear interest from the date of the Initial
Debentures at the rate of 7.00% per annum (based on a year of 365 days),
payable in equal (with the exception of the first interest payment which
will include interest from and including the date of closing of the
Offering as
set forth below) semi-annual payments in arrears on June 30 and
December 31 in each year, the first such payment to fall due on
December 31, 2010 and the last such payment (representing interest payable
from the last Interest Payment Date to, but excluding, the Maturity Date
of the Initial Debentures) to fall due on December 31, 2015, payable after
as well as before maturity and after as well as before default, with
interest on amounts in default at the same rate, compounded semi-annually.
For certainty, the first interest payment will include interest accrued
from and including the date of closing of the Offering to, but excluding
December 31, 2010, which will be equal to $42.00 for each $1,000
principal amount of Initial Debentures. The record dates for the payment
of interest on the Initial Debentures will be June 15 and
December 15 in each year (or the first Business Day prior to such
date if not a Business Day).
|
|
(d)
|
The
Initial Debentures will be redeemable in accordance with the terms of
Article 4, provided that the Initial Debentures will not be redeemable
before December 31, 2013, except in the event of the satisfaction of
certain conditions after a Change of Control has occurred as outlined
herein. On and after December 31, 2013 and prior to December 31,
2014, provided that the Current Market Price at the time of the Redemption
Notice is at least 125% of the Conversion Price, the Initial Debentures
may be redeemed at the option of the Trust in whole or in part from time
to time on notice as provided for in Section 4.3 for the Redemption
Price. On and after December 31, 2014 and prior to the Maturity
Date, the Initial Debentures may be redeemed at the option of the Trust in
whole or in part from time to time on notice as provided for in
Section 4.3 for the Redemption Price. The Redemption
Notice for the Initial Debentures shall be substantially in the form of
Schedule
B. In connection with the redemption of the Initial
Debentures, the Trust may, at its option and subject to the provisions of
Section 4.6 and subject to regulatory approval, elect to satisfy its
obligation to pay all or a portion of the aggregate Redemption Price
of the Initial Debentures to be redeemed by issuing and delivering to the
holders of such Initial Debentures, such number of Freely Tradeable Trust
Units as is obtained by dividing the aggregate Redemption Price by
95% of the
Current Market Price in effect on the Redemption Date. If the Trust elects
to exercise such option, it shall so specify and provide details in the
Redemption Notice.
|
|
(e)
|
The
Initial Debentures will be subordinated to the Senior Indebtedness of the
Trust in accordance with the provisions of Article 5. In
accordance with Section 2.12, the Initial Debentures will rank pari passu with each
other series of Debentures issued under this Indenture or under indentures
supplemental to this Indenture (regardless of their actual date or terms
of issue) and, except as prescribed by law, with all other existing and
future unsecured indebtedness of the Trust other than Senior
Indebtedness.
|
|
(f)
|
Upon
and subject to the provisions and conditions of Article 6 and Section
3.7, the holder of each Initial Debenture shall have the right at such
holder's option, prior to the close of business on the earlier of (i) the
Business Day immediately preceding the Maturity Date of the Initial
Debentures; or (ii) if the Initial Debentures are called for redemption,
on the Business Day immediately preceding the date specified by the Trust
for redemption of the Initial Debentures, by notice to the holders of
Initial Debentures in accordance with Sections 2.4(d) and 4.3 (the earlier
of which will be the "Time of Expiry" for the
purposes of Article 6 in respect of the Initial Debentures), to
convert any part, being $1,000 or an integral multiple thereof, of the
principal amount of a Debenture into Trust Units at the Conversion Price
in effect on the Date of Conversion. To the extent a redemption
is a redemption in part only of the Initial Debentures, such right to
convert, if not exercised prior to the applicable Time of Expiry, shall
survive as to any Initial Debentures not redeemed or converted and be
applicable to the next succeeding Time of
Expiry.
|
12
The
Conversion Price in effect on the date hereof for each Trust Unit to be issued
upon the conversion of Initial Debentures shall be equal to $7.00 such that
142.8571 Trust Units shall be issued for each $1,000 principal amount of Initial
Debentures so converted. Except as provided herein, no adjustment in
the number of Trust Units to be issued upon conversion will be made for
dividends or distributions on Trust Units issuable upon conversion, the record
date for the payment of which precedes the date upon which the holder becomes a
holder of Trust Units in accordance with Article 6, or for interest accrued
on Initial Debentures surrendered for conversion. The Conversion
Price applicable to and the Trust Units, securities or other property receivable
on the conversion of the Initial Debentures is subject to adjustment pursuant to
the provisions of Section 6.5.
Holders
converting their Initial Debentures will receive, in addition to the applicable
number of Trust Units, accrued and unpaid interest (less any taxes required to
be deducted) in respect of the Initial Debentures surrendered for conversion up
to but excluding the Date of Conversion from, and including, the most recent
Interest Payment Date in accordance with Section 6.4(e). For clarity, payment of
such interest, whether in cash or by delivery of Freely Tradeable Trust Units
pursuant to the exercise of the Trust Unit Interest Payment Election, may, at
the option of the Trust, be paid on the next regularly scheduled Interest
Payment Date following the Date of Conversion.
Holders
of Initial Debentures surrendered for conversion during the period from the
close of business on any regular record date for the payment of interest on the
Initial Debentures to the opening of business on the next succeeding Interest
Payment Date will receive the semi-annual interest payable on such Initial
Debentures on the corresponding Interest Payment Date notwithstanding the
conversion. In the event that a holder of Debentures exercises their
conversion right following a Redemption Notice by the Trust and during the
period from the close of business on any regular record date for the payment of
interest on the Initial Debentures to the opening of business on the next
succeeding Interest Payment Date, such holder will be entitled to receive
accrued and unpaid interest, in addition to the applicable number of Trust Units
to be received on conversion, for the period from the last Interest Payment Date
to (but excluding) the date of conversion.
Notwithstanding
any other provisions of this Indenture, if a Debenture is surrendered for
conversion on an Interest Payment Date or during the five preceding Business
Days, the person or persons entitled to receive Trust Units in respect of the
Debenture so surrendered for conversion shall not become the holder or holders
of record of such Trust Units until the Business Day following such Interest
Payment Date.
A
Debenture which has been tendered for purchase by its holder pursuant to a
Change of Control Purchase Offer pursuant to the provisions of Section 2.4(j)
may be surrendered for conversion only if such notice is withdrawn in accordance
with this Indenture.
|
(g)
|
On
maturity of the Initial Debentures, the Trust may, at its option and
subject to the provisions of Section 4.10, as applicable, and subject
to regulatory approval, elect to satisfy its obligation to pay all or a
portion of the aggregate principal amount of the Initial Debentures due on
maturity, together with all accrued but unpaid interest thereon, by
issuing and delivering to such holders of Initial Debentures Freely
Tradeable Trust Units pursuant to the provisions of Section 4.10. If
the Trust elects to exercise such option, it shall provide details in the
maturity notice (the "Maturity Notice") to the
holders of the Initial Debentures not more than 60 days and not less than
40 days before the Maturity Date in substantially the form of Schedule C and provide
the necessary details.
|
|
(h)
|
The
Initial Debentures shall be issued in denominations of $1,000 and integral
multiples of $1,000. Each Initial Debenture and the certificate of the
Trustee endorsed thereon shall be issued in substantially the form set out
in Schedule A,
with such insertions, omissions, substitutions or other variations as
shall be required or permitted by this Indenture, and may have imprinted
or otherwise reproduced thereon such legend or legends or endorsements,
not inconsistent with the provisions of this Indenture, as may be required
to comply with any law or with any rules or regulations pursuant thereto
or with any rules or regulations of any securities exchange or securities
regulatory authority or to conform with general usage, all as may be
determined by the directors or officers of the Corporation executing such
Initial Debenture in accordance with Section 2.7 hereof, as conclusively
evidenced by their execution of an Initial Debenture. Each Initial
Debenture shall additionally bear such distinguishing letters and numbers
as the Trustee shall approve. Notwithstanding the foregoing, an Initial
Debenture may be in such other form or forms as may, from time to time,
be, approved by a resolution of the Board of Directors, or as specified in
an Officers' Certificate. The Initial Debentures may be engraved,
lithographed, printed, mimeographed or typewritten or partly in one form
and partly in another.
|
13
Except in
respect of Initial Debentures that are required to bear a U.S. Legend as set
forth in Section 2.14, which shall be issued in the form of definitive
certificates, the Initial Debentures shall be issued as a Global Debenture and
the Global Debenture will be registered in the name of the Depository which, as
of the date hereof, shall be CDS Clearing and Depository Services Inc. (or any
nominee of the Depository). No beneficial holder will receive definitive
certificates representing their interest in Debentures except as provided in
this Section 2.4(h) and Section 3.2. A Global Debenture may be exchanged for
Debentures in registered form that are not Global Debentures, or transferred to
and registered in the name of a person other than the Depository for such Global
Debentures or a nominee thereof, as provided in Section 3.2.
|
(i)
|
Upon
and subject to the provisions of Article 10, the Trust may elect,
from time to time, to satisfy its Interest Obligation on the Initial
Debentures on any Interest Payment Date (including, for greater certainty,
following conversion or upon maturity or redemption) by delivering Trust
Units to the Trustee pursuant to the Trust Unit Interest Payment
Election.
|
|
(j)
|
Within
30 days following the occurrence of a Change of Control, and subject to
the provisions and conditions of this Section 2.4(j), the Trust shall be
obligated to offer to purchase all of the Initial Debentures then
outstanding. The terms and conditions of such obligation are set forth
below:
|
|
(i)
|
Within
30 days following the occurrence of a Change of Control, the Trust shall
deliver to the Trustee, and the Trustee shall promptly deliver to the
holders of the Initial Debentures, a notice stating that there has been a
Change of Control and specifying the date on which such Change of Control
occurred and the circumstances or events giving rise to such Change of
Control (a "Change of
Control Notice") together with an offer in writing (the "Change of Control Purchase
Offer") to purchase, on the Change of Control Purchase Date (as
defined below), all (or any portion actually tendered to such offer) of
the Initial Debentures then outstanding from the holders thereof made in
accordance with the requirements of Applicable Securities Legislation at a
price per Initial Debenture equal to 101% of the principal amount thereof
(the "Offer
Price") plus accrued and unpaid interest on such Initial Debentures
up to, but excluding, the Change of Control Purchase
Date (collectively, the "Total Offer Price"). If
such Change of Control Purchase Date is after a record date for the
payment of interest on the Initial Debentures but on or prior to an
Interest Payment Date, then the interest payable on such date will be paid
to the holder of record of the Debentures on the relevant record
date. The "Change of Control Purchase
Date" shall be the date that is 30 days after the date that the
Change of Control Notice and Change of Control Purchase Offer are
delivered or mailed to holders of Initial
Debentures.
|
|
(ii)
|
If
90% or more in aggregate principal amount of Initial Debentures
outstanding on the date the Trust provides the Change of Control Notice
and the Change of Control Purchase Offer to holders of the Initial
Debentures have been tendered for purchase pursuant to the Change of
Control Purchase Offer on the expiration thereof, the Trust has the right
upon written notice provided to the Trustee within 10 days following the
expiration of the Change of Control Purchase Offer, to redeem all the
Initial Debentures remaining outstanding on the expiration of the Change
of Control Purchase Offer at the Total Offer Price as at the Change of
Control Purchase Date (the "90% Redemption
Right").
|
|
(iii)
|
Upon
receipt of notice that the Trust has exercised or is exercising the 90%
Redemption Right and is acquiring the remaining Initial Debentures, the
Trustee shall promptly provide written notice to each Debentureholder that
did not previously accept the Offer
that:
|
|
(A)
|
the
Trust has exercised the 90% Redemption Right and is purchasing all
outstanding Initial Debentures effective on the expiry of the Change of
Control Purchase Offer at the Total Offer Price, and shall include a
calculation of the amount payable to such holder as payment of the Total
Offer Price as at the Change of Control Purchase
Date;
|
14
|
(B)
|
each
such holder must transfer their Initial Debentures to the Trustee on the
same terms as those holders that accepted the Change of Control Purchase
Offer and must send their respective Initial Debentures, duly endorsed for
transfer, to the Trustee within 10 days after the sending of such notice;
and
|
|
(C)
|
the
rights of such holder under the terms of the Initial Debentures and this
Indenture cease effect as of the date of expiry of the Change of Control
Purchase Offer provided the Trust has, on or before the time of notifying
the Trustee of the exercise of the 90% Redemption Right, paid the Total
Offer Price to, or to the order of, the Trustee and thereafter the Initial
Debentures shall not be considered to be outstanding and the holder shall
not have any right except to receive such holder's Total Offer Price upon
surrender and delivery of such holder's Initial Debentures in accordance
with the Indenture.
|
|
(iv)
|
The
Trust shall, on or before 11:00 a.m., Calgary Time, on the Business Day
immediately prior to the Change of Control Purchase Date, deposit with the
Trustee or any paying agent to the order of the Trustee, such sums of
money as may be sufficient to pay the Total Offer Price of the Initial
Debentures to be purchased or redeemed by the Trust on the Change of
Control Purchase Date (less any tax required by law to be deducted in
respect of accrued and unpaid interest), provided the Trust may elect to
satisfy this requirement by providing the Trustee with a certified cheque
or wire transfer for such amounts required under this Section 2.4(j)(iv)
post-dated to the date of expiry of the Change of Control Purchase Offer.
The Trust shall also deposit with the Trustee a sum of money sufficient to
pay any charges or expenses which may be incurred by the Trustee in
connection with such purchase. Every such deposit shall be irrevocable,
except as provided herein. From the sums so deposited, the Trustee shall
pay or cause to be paid to the holders of such Initial Debentures, the
Total Offer Price to which they are entitled (less any tax required by law
to be deducted in respect of accrued and unpaid interest) on the Trust's
purchase.
|
|
(v)
|
In
the event that one or more of such Initial Debentures being purchased in
accordance with this Section 2.4(j) becomes subject to purchase in part
only, upon surrender of such Initial Debentures for payment of the Total
Offer Price, the Trust shall execute and the Trustee shall certify and
deliver without charge to the holder thereof or upon the holder's order,
one or more new Initial Debentures for the portion of the principal amount
of the Initial Debentures not
purchased.
|
|
(vi)
|
Initial
Debentures for which holders have accepted the Change of Control Purchase
Offer and Initial Debentures which the Trust has elected to redeem in
accordance with this Section 2.4(j) shall become due and payable at the
Total Offer Price in cash on the Change of Control Purchase Date, in the
same manner and with the same effect as if it were the date of maturity
specified in such Initial Debentures, anything therein or herein to the
contrary notwithstanding, and from and after the Change of Control
Purchase Date, if the money necessary to purchase or redeem the Initial
Debentures shall have been deposited as provided in this Section 2.4(j)
and affidavits or other proofs satisfactory to the Trustee as to the
publication and/or mailing of such notices shall have been lodged with it,
interest on the Initial Debentures shall cease. If any question shall
arise as to whether any notice has been given as above provided and such
deposit made, such question shall be decided by the Trustee whose decision
shall be final and binding upon all parties in
interest.
|
|
(vii)
|
In
case the holder of any Initial Debenture to be purchased or redeemed in
accordance with this Section 2.4(j) shall fail on or before the Change of
Control Purchase Date so to surrender such holder's Initial Debenture or
shall not within such time accept payment of the monies payable, or give
such receipt therefor, if any, as the Trustee may require, such monies may
be set aside in trust, without interest, either in the deposit department
of the Trustee or in a chartered bank, and such setting aside shall for
all purposes be deemed a payment to the Debentureholder of the sum so set
aside and the Debentureholder shall have no other right except to receive
payment of the monies so paid and deposited, upon surrender and delivery
up of such holder's Initial Debenture. In the event that any money
required to be deposited hereunder with the Trustee or any depository or
paying agent on account of principal or interest, if any, on Initial
Debentures issued hereunder shall remain so deposited for a period of six
years from the Change of Control Purchase Date, then such monies, or
certificates representing Trust Units, together with any accumulated
interest thereon, or any distributions paid thereon, shall at the end of
such period be paid over or delivered over by the Trustee, or such
depository or paying agent, to the Trust and the Trustee shall not be
responsible to Debentureholders for any amounts owing to them.
Notwithstanding the foregoing, the Trustee will pay any remaining funds
deposited hereunder on the date that is six years after the Change of
Control Purchase Date (the "Unclaimed Funds Return
Date") to the Trust upon receipt from the Trust of an unconditional
letter of credit from a Canadian chartered bank in an amount equal to or
in excess of the amount of the remaining funds. If the remaining funds are
paid to the Trust prior to the Unclaimed Funds Return Date, the Trust
shall reimburse the Trustee for any amounts required to be paid by the
Trustee to a holder of a Debenture pursuant to the Change of Control
Purchase Offer after the date of such payment of the remaining funds to
the Trust but prior to the Unclaimed Funds Return
Date.
|
|
(viii)
|
Subject
to the provisions above related to Initial Debentures purchased in part,
all Initial Debentures redeemed and paid under this Section 2.4(j) shall
forthwith be delivered to the Trustee and cancelled and no Initial
Debentures shall be issued in substitution
therefor.
|
15
|
(k)
|
The
Trustee shall be provided with the documents and instruments referred to
in Sections 2.5(b), (c) and (d) with respect to the Initial Debentures
prior to the issuance of the Initial
Debentures.
|
|
2.5
|
Certification
and Delivery of Additional
Debentures
|
The Trust
may from time to time request the Trustee to certify and deliver Additional
Debentures of any series by delivering to the Trustee the documents referred to
below in this Section 2.5 whereupon the Trustee
shall certify such Debentures and cause the same to be delivered in accordance
with the Written Direction of the Trust referred to below or pursuant to such
procedures acceptable to the Trustee as may be specified from time to time by a
Written Direction of the Trust. The maturity date, issue date, interest rate (if
any) and any other terms of the Debentures of such series shall be set forth in
or determined by or pursuant to such Written Direction of the Trust and
procedures. In certifying such Debentures, the Trustee shall be entitled to
receive and shall be fully protected in relying upon, unless and until such
documents have been superseded or revoked:
|
(a)
|
an
Officers' Certificate and/or executed supplemental indenture by or
pursuant to which the form and terms of such Additional Debentures were
established;
|
|
(b)
|
a
Written Direction of the Trust requesting certification and delivery of
such Additional Debentures and setting forth delivery instructions,
provided that, with respect to Debentures of a series subject to a
Periodic Offering:
|
|
(i)
|
such
Written Direction of the Trust may be delivered by the Trust to the
Trustee prior to the delivery to the Trustee of such Additional Debentures
of such series for certification and
delivery;
|
|
(ii)
|
the
Trustee shall certify and deliver Additional Debentures of such series for
original issue from time to time, in an aggregate principal amount not
exceeding the aggregate principal amount, if any, established for such
series, pursuant to a Written Direction of the Trust or pursuant to
procedures acceptable to the Trustee as may be specified from time to time
by a Written Direction of the
Trust;
|
|
(iii)
|
the
maturity date or dates, issue date or dates, interest rate or rates (if
any) and any other terms of Additional Debentures of such series shall be
determined by an executed supplemental indenture or by Written Direction
of the Trust or pursuant to such procedures;
and
|
16
|
(iv)
|
if
provided for in such procedures, such Written Direction of the Trust may
authorize certification and delivery pursuant to oral or electronic
instructions from the Trust which oral or electronic instructions shall be
promptly confirmed in writing;
|
|
(c)
|
an
opinion of Counsel, in form and substance satisfactory to the Trustee,
acting reasonably, to the effect that all requirements imposed by this
Indenture and by law in connection with the proposed issue of Additional
Debentures have been complied with, subject to the delivery of certain
documents or instruments specified in such opinion;
and
|
|
(d)
|
an
Officers' Certificate (which Officers' Certificate shall be in such form
that satisfies all applicable laws) certifying that the Trust is not in
default under this Indenture, that the terms and conditions for the
certification and delivery of Additional Debentures (including those set
forth in Section 15.5), have been complied with subject to the delivery of
any documents or instruments specified in such Officers' Certificate and
that no Event of Default exists or will exist upon such certification and
delivery.
|
|
2.6
|
Issue
of Global Debentures
|
|
(a)
|
The
Trust may specify that the Debentures of a series are to be issued in
whole or in part as one or more Global Debentures registered in the name
of a Depository, or its nominee, designated by the Trust in the Written
Direction of the Trust delivered to the Trustee at the time of issue of
such Debentures, and in such event the Trust shall execute and the Trustee
shall certify and deliver one or more Global Debentures that
shall:
|
|
(i)
|
represent
an aggregate amount equal to the principal amount of the outstanding
Debentures of such series to be represented by one or more Global
Debentures;
|
|
(ii)
|
be
delivered by the Trustee to such Depository or pursuant to such
Depository's instructions; and
|
|
(iii)
|
bear
a legend substantially to the following
effect:
|
"This
Debenture is a Global Debenture within the meaning of the Indenture herein
referred to and is registered in the name of a Depository or a nominee thereof.
This Debenture may not be transferred to or exchanged for Debentures registered
in the name of any person other than the Depository or a nominee thereof and no
such transfer may be registered except in the limited circumstances described in
the Indenture. Every Debenture authenticated and delivered upon registration of,
transfer of, or in exchange for, or in lieu of, this Debenture shall be a Global
Debenture subject to the foregoing, except in such limited circumstances
described in the Indenture.
Unless
this certificate is presented by an authorized representative of CDS Clearing
and Depository Services Inc. ("CDS") to Paramount Energy Trust (the "Issuer"),
its successor or its agent for registration of transfer, exchange or payment,
and any certificate issued in respect thereof is registered in the name of CDS
& Co., or in such other name as is requested by an authorized representative
of CDS (and any payment is made to CDS & Co. or to such other entity as is
requested by an authorized representative of CDS), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered holder hereof, CDS & Co., has a property interest in the
securities represented by this certificate herein and it is a violation of its
rights for another person to hold, transfer or deal with this certificate.
"
17
|
(b)
|
Each
Depository designated for a Global Debenture must, at the time of its
designation and at all times while it serves as such Depository, be a
clearing agency registered or designated under the securities legislation
of the jurisdiction where the Depository has its principal
offices.
|
|
2.7
|
Execution
of Debentures
|
All
Debentures shall be signed (either manually or by facsimile signature) by any
one authorized director or officer of PEOC, on behalf of the Trust holding
office at the time of signing. A facsimile signature upon a Debenture shall for
all purposes of this Indenture be deemed to be the signature of the person whose
signature it purports to be. Notwithstanding that any person whose signature,
either manual or in facsimile, appears on a Debenture as a director or officer
may no longer hold such office at the date of the Debenture or at the date of
the certification and delivery thereof, such Debenture shall be valid and
binding upon the Trust and entitled to the benefits of this
Indenture.
|
2.8
|
Certification
|
No
Debenture shall be issued or, if issued, shall be obligatory or shall entitle
the holder to the benefits of this Indenture, until it has been manually
certified by or on behalf of the Trustee substantially in the form set out in
this Indenture, in the relevant supplemental indenture, or in some other form
approved by the Trustee. Such certification on any Debenture shall be conclusive
evidence that such Debenture is duly issued, is a valid obligation of the Trust
and the holder is entitled to the benefits hereof.
The
certificate of the Trustee signed on the Debentures, or interim Debentures
hereinafter mentioned, shall not be construed as a representation or warranty by
the Trustee as to the validity of this Indenture or of the Debentures or interim
Debentures or as to the issuance of the Debentures or interim Debentures and the
Trustee shall in no respect be liable or answerable for the use made of the
Debentures or interim Debentures or any of them or the proceeds
thereof. The certificate of the Trustee on the Debentures or interim
Debentures shall, however, be a representation and warranty by the Trustee that
the Debentures or interim Debentures have been duly certified by or on behalf of
the Trustee pursuant to the provisions of this Indenture.
|
2.9
|
Interim
Debentures or Certificates
|
Pending
the delivery of definitive Debentures of any series to the Trustee, the Trust
may issue and the Trustee certify in lieu thereof interim Debentures in such
forms and in such denominations and signed in such manner as provided herein,
entitling the holders thereof to definitive Debentures of the series when the
same are ready for delivery; or the Trust may execute and the Trustee certify a
temporary Debenture for the whole principal amount of Debentures of the series
then authorized to be issued hereunder and deliver the same to the Trustee and
thereupon the Trustee may issue its own interim certificates in such form and in
such amounts, not exceeding in the aggregate the principal amount of the
temporary Debenture so delivered to it, as PEOC, on behalf of the Trust and the
Trustee may approve entitling the holders thereof to definitive Debentures of
the series when the same are ready for delivery; and, when so issued and
certified, such interim or temporary Debentures or interim certificates shall,
for all purposes but without duplication, rank in respect of this Indenture
equally with Debentures duly issued hereunder and, pending the exchange thereof
for definitive Debentures, the holders of the interim or temporary Debentures or
interim certificates shall be deemed without duplication to be Debentureholders
and entitled to the benefit of this Indenture to the same extent and in the same
manner as though the said exchange had actually been made. Forthwith after the
Trust shall have delivered the definitive Debentures to the Trustee, the Trustee
shall cancel such temporary Debentures, if any, and shall call in for exchange
all interim Debentures or certificates that shall have been issued and forthwith
after such exchange shall cancel the same. No charge shall be made by the Trust
or the Trustee to the holders of such interim or temporary Debentures or interim
certificates for the exchange thereof. All interest paid upon interim or
temporary Debentures or interim certificates shall be noted thereon as a
condition precedent to such payment unless paid by cheque to the registered
holders thereof.
18
|
2.10
|
Mutilation,
Loss, Theft or Destruction
|
In case
any of the Debentures issued hereunder shall become mutilated or be lost, stolen
or destroyed, the Trust, 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 and rank equally in accordance with its terms
with all other Debentures issued or to be issued hereunder. In case of loss,
theft or destruction the applicant for a substituted Debenture shall furnish to
the Trust and to the Trustee such evidence of the loss, theft or destruction of
the Debenture as shall be satisfactory to them in their discretion and shall
also furnish an indemnity and surety bond satisfactory to them in their
discretion. The applicant shall pay all reasonable expenses incidental to the
issuance of any substituted Debenture.
|
2.11
|
Concerning
Interest
|
|
(a)
|
All
Debentures issued hereunder, whether originally or upon exchange or in
substitution for previously issued Debentures which are interest bearing,
shall bear interest (i) from and including their issue date, or
(ii) from and including the last Interest Payment Date to which
interest shall have been paid or made available for payment on the
outstanding Debentures of that series, whichever shall be the later, or,
in respect of Debentures subject to a Periodic Offering, from and
including their issue date or from and including the last Interest Payment
Date to which interest shall have been paid or made available for payment
on such Debentures, in all cases, to and excluding the next Interest
Payment Date.
|
|
(b)
|
Unless
otherwise specifically provided in the terms of the Debentures of any
series, interest shall be computed on the basis of a year of 365
days. With respect to any series of Debentures, whenever
interest is computed on the basis of a year (the "deemed year") which
contains fewer days than the actual number of days in the calendar year of
calculation, such rate of interest shall be expressed as a yearly rate for
purposes of the Interest
Act (Canada) by multiplying such rate of interest by the actual
number of days in the calendar year of calculation and dividing it by the
number of days in the deemed year.
|
|
2.12
|
Debentures
to Rank Pari Passu
|
The
Debentures will be direct unsecured obligations of the Trust. Each Debenture
issued hereunder shall rank pari passu with one another,
without discrimination, preference or priority. The payment of the
principal of and interest on the Debentures is expressly subordinated to the
prior payment in full of Senior Indebtedness, as provided in
Article 5.
|
2.13
|
Payments
of Amounts Due on Maturity
|
Except as
may otherwise be provided herein or in any supplemental indenture in respect of
any series of Debentures and subject to Section 4.10, payments of amounts due
upon maturity of the Debentures will be made in the following manner. The Trust
will establish and maintain with the Trustee a Maturity Account for each series
of Debentures. Each such Maturity Account shall be maintained by and be subject
to the control of the Trustee for the purposes of this Indenture. On or before
11:00 a.m. (Calgary time) on the Business Day immediately prior to each Maturity
Date for Debentures outstanding from time to time under this Indenture, the
Trust will deliver to the Trustee a certified cheque or wire transfer for
deposit in the applicable Maturity Account in an amount sufficient to pay the
cash amount payable in respect of such Debentures (including the principal
amount together with any accrued and unpaid interest thereon less any tax
required by law to be deducted), provided the Trust may elect to satisfy this
requirement by providing the Trustee with a certified cheque for such amounts
required under this Section 2.13 post-dated to the applicable Maturity Date. The
Trustee, on behalf of the Trust, will pay to each holder entitled to receive
payment the principal amount of and accrued and unpaid interest on the
Debenture, upon surrender of the Debenture at any branch of the Trustee
designated for such purpose from time to time by the Trust and the Trustee. The
delivery of such funds to the Trustee for deposit to the applicable Maturity
Account will satisfy and discharge the liability of the Trust for the Debentures
to which the delivery of funds relates to the extent of the amount delivered
(plus the amount of any tax deducted as aforesaid) and such Debentures will
thereafter to that extent not be considered as outstanding under this Indenture
and such holder will have no other right in regard thereto other than to receive
out of the money so delivered or made available the amount to which it is
entitled.
19
|
2.14
|
U.S.
Legend on the Debentures
|
|
(a)
|
The
Debentures have not been and will not be registered under the 1933 Act.
Certificates representing Debentures offered and sold in reliance on an
exemption from the registration requirements of the 1933 Act provided by
(i) Rule 144A thereunder or (ii) Section 4(2) of the 1933 Act (including,
without limitation, pursuant to Regulation D thereunder), as well as all
certificates representing securities issued in exchange for or in
substitution of such Debentures, shall bear the following legend (the
"U.S.
Legend"):
|
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR
THE BENEFIT OF PARAMOUNT ENERGY TRUST THAT SUCH SECURITIES MAY BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO PARAMOUNT ENERGY TRUST, (B) OUTSIDE
THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (C) PURSUANT TO THE EXEMPTIONS FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 OR RULE 144A THEREUNDER, IF AVAILABLE, OR
(D) PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION, IN EACH CASE AFTER
PROVIDING A LEGAL OPINION OF COUNSEL OF RECOGNIZED STANDING SATISFACTORY TO
PARAMOUNT ENERGY TRUST OR OTHER EVIDENCE SATISFACTORY TO PARAMOUNT ENERGY TRUST
TO SUCH EFFECT. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY"
IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA.
|
(b)
|
Notwithstanding
Section 2.14(a), provided that the Debentures are being sold in compliance
with the requirements of Rule 904 of Regulation S, and provided that the
Trust is a "foreign issuer" within the meaning of Regulation S at the time
of sale, the U.S. Legend may be removed by providing a declaration to the
Trustee substantially as set forth in Schedule E hereto (or as
the Trust may prescribe from time to time); together with any other
evidence reasonably requested by the Trust or Trustee, which evidence may
include an opinion of counsel of recognized standing, in form and
substance reasonably satisfactory to the Trust or the Trustee, to the
effect that the U.S. Legend is no longer required pursuant to the
requirements of the 1933 Act; and provided, further, that if the
Securities are being sold pursuant to Rule 144 under the 1933 Act, the
U.S. Legend may be removed by delivery to the Trustee of an opinion of
counsel, of recognized standing reasonably satisfactory to the Trust, that
the U.S. Legend is no longer required under the 1933 Act or applicable
state securities laws. Provided that the Trustee obtains confirmation from
the Trust that such counsel is satisfactory to it, the Trustee shall be
entitled to rely on such opinion of counsel without further
inquiry.
|
|
(c)
|
Prior
to the issuance of the Debentures, the Trust shall notify the Trustee, in
writing, concerning which Debentures are to be issued in definitive form
and bear the U.S. Legend. The Trustee will thereafter maintain a list of
all registered holders from time to time of Legended
Debentures.
|
|
2.15
|
Payment
of Interest
|
The
following provisions shall apply to Debentures, except as otherwise provided in
Section 2.4(c) or specified in a resolution of the directors of PEOC, on behalf
of the Board of Directors, an Officers' Certificate or a supplemental indenture
relating to a particular series of Additional Debentures:
|
(a)
|
As
interest becomes due on each Debenture (except, on conversion or on
redemption, when interest may at the option of the Trust be paid upon
surrender of such Debenture) the Trust, either directly or through the
Trustee or any agent of the Trustee, shall send or forward by prepaid
ordinary mail, electronic transfer of funds or such other means as may be
agreed to by the Trustee, payment of such interest (less any tax required
to be withheld therefrom) to the order of the registered holder of such
Debenture appearing on the registers maintained by the Trustee at the
close of business on the fifth Business Day prior to the applicable
Interest Payment Date and addressed to the holder at the holder's last
address appearing on the register, unless such holder otherwise directs.
If payment is made by cheque, such cheque shall be forwarded at least
three days prior to each date on which interest becomes due and if payment
is made by other means (such as electronic transfer of funds, provided the
Trustee must receive confirmation of receipt of funds prior to being able
to wire funds to holders), such payment shall be made in a manner whereby
the holder receives credit for such payment on the date such interest on
such Debenture becomes due. The mailing of such cheque or the making of
such payment by other means shall, to the extent of the sum represented
thereby, plus the amount of any tax withheld as aforesaid, satisfy and
discharge all liability for interest on such Debenture, unless in the case
of payment by cheque, such cheque is not paid at par on presentation. In
the event of non-receipt of any cheque for or other payment of interest by
the person to whom it is so sent as aforesaid, the Trust will issue to
such person a replacement cheque or other payment for a like amount upon
being furnished with such evidence of non-receipt as it shall reasonably
require and upon being indemnified to its satisfaction. Notwithstanding
the foregoing, if the Trust is prevented by circumstances beyond its
control (including, without limitation, any interruption in mail service)
from making payment of any interest due on each Debenture in the manner
provided above, the Trust may make payment of such interest or make such
interest available for payment in any other manner acceptable to the
Trustee with the same effect as though payment had been made in the manner
provided above.
|
20
|
(b)
|
Notwithstanding
Section 2.15(a), if a series of Debentures or any portion thereof is
represented by a Global Debenture, than all payments of interest on the
Global Debenture shall be made by electronic funds transfer made payable
to the Depository or its nominee on the day interest is payable for
subsequent payment to Beneficial Holders of the applicable Global
Debenture, unless the Trust and the Depository otherwise agree. None of
the Trust, the Trustee or any agent of the Trustee for any Debenture
issued as a Global Debenture will be liable or responsible to any person
for any aspect of the records related to or payments made on account of
beneficial interests in any Global Debenture or for maintaining,
reviewing, or supervising any records relating to such beneficial
interests.
|
|
2.16
|
Limitation
on Non-Resident Ownership
|
At no
time may non-residents of Canada be the beneficial owners of a majority of the
Trust Units on a fully diluted basis, whether by way of conversion of Debentures
to Trust Units, repayment of Debentures by issuance of Trust Units, or
otherwise, and PEOC has informed the Trustee and the transfer agent and
registrar of the Trust Units of this restriction. The Trustee may,
upon receipt of written direction of the Trust, require declarations as to the
jurisdictions in which beneficial owners of Debentures are
resident. If the Trust becomes aware as a result of requiring such
declarations as to beneficial ownership, that the beneficial owners of 49% or
more of the Trust Units then outstanding, on a fully diluted basis, are, or may
be, non-residents or that such a situation is imminent, it shall make a public
announcement thereof and shall notify the Trustee in writing and the Trustee
shall not accept a subscription for Debentures from or issue or register a
transfer of Debentures to a person unless the person provides a declaration that
the person is not a non-resident. If, notwithstanding the foregoing,
the Trust determines that a majority of the Trust Units, on a fully diluted
basis, are held by non-residents, the Trust shall send a notice to non-resident
holders of Debentures or Trust Units, chosen in inverse order to the order of
acquisition or registration of the Debentures and Trust Units or in such manner
as the Trust may consider equitable and practicable, requiring them to sell
their Debentures or Trust Units or a portion thereof within a specified period
of not less than 60 days. If the Debentureholders or Unitholders
receiving such notice have not sold the specified number of Debentures or Trust
Units or provided the Trust with satisfactory evidence that they are not
non-residents within such period, the Trust may on behalf of such
Debentureholder or Unitholder sell such Debentures or Trust Units, as the case
may be, and, in the interim, shall suspend the rights attached to such
Debentures or Trust Units, as the case may be, and their rights shall be limited
to receiving the net proceeds of sale upon surrender of the certificates
representing such Debentures or Trust Units.
21
ARTICLE 3
REGISTRATION,
TRANSFER, EXCHANGE AND OWNERSHIP
|
3.1
|
Fully
Registered Debentures
|
|
(a)
|
With
respect to each series of Debentures issuable as Fully Registered
Debentures, the Trust shall cause to be kept by and
at the principal office of the Trustee in Xxxxxxx, Xxxxxxx xxx Xxxxxxx,
Xxxxxxx and by the Trustee or such other registrar as the Trust, with the
approval of the Trustee, may appoint at such other place or places, if
any, as may be specified in the Debentures of such series or as the Trust
may designate with the approval of the Trustee, a register in which shall
be entered the names and addresses of the holders of Fully Registered
Debentures and particulars of the Debentures held by them respectively and
of all transfers of Fully Registered Debentures. Such registration shall
be noted on the Debentures by the Trustee or other registrar unless a new
Debenture shall be issued upon such
transfer.
|
|
(b)
|
No
transfer of a Fully Registered Debenture shall be valid unless made on
such register referred to in Section 3.1(a) by the registered holder or
such holder's executors, administrators or other legal representatives or
an attorney duly appointed by an instrument in writing in form and
executed in a manner satisfactory to the Trustee or other registrar upon
surrender of the Debentures together with a duly executed form of transfer
acceptable to the Trustee and upon compliance with such other reasonable
requirements as the Trustee or other registrar may prescribe, or unless
the name of the transferee shall have been noted on the Debenture by the
Trustee or other registrar.
|
|
3.2
|
Global
Debentures
|
|
(a)
|
With
respect to each series of Debentures issuable in whole or in part as one
or more Global Debentures, the Trust shall cause to be kept by and at the
principal offices of the Trustee in Xxxxxxx, Xxxxxxx xxx Xxxxxxx, Xxxxxxx
and by the Trustee or such other registrar as the Trust, with the approval
of the Trustee, may appoint at such other place or places, if any, as the
Trust may designate with the approval of the Trustee, a register in which
shall be entered the name and address of the holder of each such Global
Debenture (being the Depository, or its nominee, for such Global
Debenture) as holder thereof and particulars of the Global Debenture held
by it, and of all transfers thereof. If any Debentures of such
series are at any time not Global Debentures, the provisions of Section
3.1 shall govern with respect to registrations and transfers of such
Debentures.
|
|
(b)
|
Notwithstanding
any other provision of this Indenture, a Global Debenture may not be
transferred by the registered holder thereof and accordingly, no
definitive certificates shall be issued to Beneficial Holders except in
the following circumstances or as otherwise specified in a resolution of
the trustee, a resolution of the Board of Directors, Officers' Certificate
or supplemental indenture relating to a particular series of Additional
Debentures:
|
|
(i)
|
Global
Debentures may be transferred by a Depository to a nominee of such
Depository or by a nominee of a Depository to such Depository or to
another nominee of such Depository or by a Depository or its nominee to a
successor Depository or its
nominee;
|
|
(ii)
|
Global
Debentures may be transferred at any time after the Depository for such
Global Debentures (i) has notified the Trustee, or the Trust has notified
the Trustee, that it is unwilling or unable to continue as Depository for
such Global Debentures, or (ii) ceases to be eligible to be a Depository
under Section 2.6(b), provided that at the time of such transfer the Trust
has not appointed a successor Depository for such Global
Debentures;
|
|
(iii)
|
Global
Debentures may be transferred at any time after the Trust has determined,
in its sole discretion, to terminate the book-entry only registration
system in respect of such Global Debentures and has communicated such
determination to the Trustee in
writing;
|
22
|
(iv)
|
Global
Debentures may be transferred at any time after the Trustee has determined
that an Event of Default has occurred and is continuing with respect to
the Debentures of the series issued as a Global Debenture, provided that
Beneficial Holders representing, in the aggregate, not less than 25% of the aggregate
principal amount of the Debentures of such series advise the Depository in
writing, through the Depository Participants, that the continuation of the
book-entry only registration system for such series of Debentures is no
longer in their best interest and also provided that at the time of such
transfer the Trustee has not waived the Event of Default pursuant to
Section 8.3;
|
|
(v)
|
Global
Debentures may be transferred if required by applicable
law;
|
|
(vi)
|
Global
Debentures may be transferred if the book-entry only registration system
ceases to exist; or
|
|
(vii)
|
Global
Debentures may be transferred at any time if the Debentures represented by
such Global Debentures are required to bear a U.S. Legend or are otherwise
subject to transfer restrictions under the 1933
Act.
|
|
(c)
|
With
respect to the Global Debentures, unless and until definitive certificates
have been issued to Beneficial Holders pursuant to Subsection
3.2(b):
|
|
(i)
|
the
Trust and the Trustee may deal with the Depository for all purposes
(including paying interest on the Debentures) as the sole holder of such
series of Debentures and the authorized representative of the Beneficial
Holders;
|
|
(ii)
|
the
rights of the Beneficial Holders shall be exercised only through the
Depository and shall be limited to those established by law and agreements
between such Beneficial Holders and the Depository or the Depository
Participants;
|
|
(iii)
|
the
Depository will make book-entry transfers among the Depository
Participants; and
|
|
(iv)
|
whenever
this Indenture requires or permits actions to be taken based upon
instruction or directions of Debentureholders evidencing a specified
percentage of the outstanding Debentures, the Depository shall be deemed
to be counted in that percentage only to the extent that it has received
instructions to such effect from the Beneficial Holders or the Depository
Participant, and has delivered such instructions to the
Trustee.
|
|
(d)
|
Whenever
a notice or other communication is required to be provided to
Debentureholders, unless and until definitive certificate(s) have been
issued to Beneficial Holders pursuant to this Section 3.2, the Trustee
shall provide all such notices and communications to the Depository and
the Depository shall deliver such notices and communications to such
Beneficial Holders in accordance with Applicable Securities Legislation.
Upon the termination of the book-entry only registration system on the
occurrence of one of the conditions specified in Section 3.2(b) with
respect to a series of Debentures issued hereunder, the Trustee shall
notify all applicable Depositary Participants and Beneficial Holders,
through the Depository, of the availability of definitive Debenture
certificates. Upon surrender by the Depository of the certificate(s)
representing the Global Debentures and receipt of new registration
instructions from the Depository, the Trustee shall deliver the definitive
Debenture certificates for such Debentures to the holders thereof in
accordance with the new registration instructions and thereafter, the
registration and transfer of such Debentures will be governed by Section
3.1 and the remaining Sections of this
Article 3.
|
|
3.3
|
Transferee
Entitled to Registration
|
The
transferee of a Debenture shall be entitled, after the appropriate form of
transfer is lodged with the Trustee or other registrar and upon compliance with
all other conditions in that behalf required by this Indenture or by law, to be
entered on the register as the owner of such Debenture free from all equities or
rights of set-off or counterclaim between the Trust and the transferor or any
previous holder of such Debenture, save in respect of equities of which the
Trust is required to take notice by statute or by order of a court of competent
jurisdiction.
23
|
3.4
|
No
Notice of Trusts
|
Neither
the Trust nor the Trustee nor any registrar shall be bound to take notice of or
see to the execution of any trust (other than that created by this Indenture)
whether express, implied or constructive, in respect of any Debenture, and may
transfer the same on the direction of the person registered as the holder
thereof, whether named as trustee or otherwise, as though that person were the
beneficial owner thereof.
|
3.5
|
Registers
Open for Inspection
|
The
registers referred to in Sections 3.1 and 3.2 shall at all reasonable times be
open for inspection by the Trust, the Trustee or any Debentureholder. Every
registrar, including the Trustee, shall from time to time when requested so to
do by the Trust or by the Trustee, in writing, furnish the Trust or the Trustee,
as the case may be, with a list of names and addresses of holders of registered
Debentures entered on the register kept by them and showing the principal amount
and serial numbers of the Debentures held by each such holder, provided the
Trustee shall be entitled to charge a reasonable fee to provide such a
list.
|
3.6
|
Exchanges
of Debentures
|
|
(a)
|
Subject
to Section 3.7, Debentures in any authorized form or denomination, other
than Global Debentures, may be exchanged for Debentures in any other
authorized form or denomination, of the same series and date of maturity,
bearing the same interest rate and of the same aggregate principal amount
as the Debentures so exchanged.
|
|
(b)
|
In
respect of exchanges of Debentures permitted by Section 3.6(a), Debentures
of any series may be exchanged only at the principal offices of the
Trustee in the cities of Calgary, Alberta and Toronto, Ontario or at such
other place or places, if any, as may be specified in the Debentures of
such series and at such other place or places as may from time to time be
designated by the Trust with the approval of the Trustee. Any Debentures
tendered for exchange shall be surrendered to the Trustee. The Trust shall
execute and the Trustee shall certify all Debentures necessary to carry
out exchanges as aforesaid. All Debentures surrendered for exchange shall
be cancelled.
|
|
(c)
|
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.
|
|
3.7
|
Closing
of Registers
|
|
(a)
|
Neither
the Trust nor the Trustee nor any registrar shall be required
to:
|
|
(i)
|
make
transfers or exchanges or convert any of Fully Registered Debentures on
any Interest Payment Date for such Debentures or during the five preceding
Business Days;
|
|
(ii)
|
make
transfers or exchanges of, or convert any Debentures on the day of any
selection by the Trustee of Debentures to be redeemed or during the five
preceding Business Days; or
|
|
(iii)
|
make
exchanges of any Debentures which will have been selected or called for
redemption unless upon due presentation thereof for redemption such
Debentures shall not be redeemed.
|
|
(b)
|
Subject
to any restriction herein provided, the Trust with the approval of the
Trustee may at any time close any register for any series of Debentures,
other than those kept at the principal offices of the Trustee in Xxxxxxx,
Xxxxxxx xxx Xxxxxxx, Xxxxxxx, and transfer the registration of any
Debentures registered thereon to another register (which may be an
existing register) and thereafter such Debentures shall be deemed to be
registered on such other register. Notice of such transfer shall be given
to the holders of such Debentures.
|
24
|
3.8
|
Charges
for Registration, Transfer and
Exchange
|
For each
Debenture exchanged, registered, transferred or discharged from registration,
the Trustee or other registrar, except as otherwise herein provided, may make a
reasonable charge for its services and in addition may charge a reasonable sum
for each new Debenture issued (such amounts to be agreed upon from time to time
by the Trustee and the Trust), and payment of such charges and reimbursement of
the Trustee or other registrar for any stamp taxes or governmental or other
charges required to be paid shall be made by the party requesting such exchange,
registration, transfer or discharge from registration as a condition precedent
thereto. Notwithstanding the foregoing provisions, no charge shall be made to a
Debentureholder hereunder:
|
(a)
|
for
any exchange, registration, transfer or discharge from registration of any
Debenture applied for within a period of two months from the date of the
first delivery of Debentures of that series or, with respect to Debentures
subject to a Periodic Offering, within a period of two months from the
date of delivery of any such
Debenture;
|
|
(b)
|
for
any exchange of any interim or temporary Debenture or interim certificate
that has been issued under Section 2.9 for a definitive
Debenture;
|
|
(c)
|
for
any exchange of a Global Debenture as contemplated in Section 3.2;
or
|
|
(d)
|
for
any exchange of any Debenture resulting from a partial redemption under
Section 4.2.
|
|
3.9
|
Ownership
of Debentures
|
|
(a)
|
Unless
otherwise required by law, the person in whose name any registered
Debenture is registered shall for all the purposes of this Indenture be
and be deemed to be the owner thereof and payment of or on account of the
principal of and premium, if any, on such Debenture and interest thereon
shall be made to such registered
holder.
|
|
(b)
|
The
registered holder for the time being of any registered Debenture shall be
entitled to the principal and interest evidenced by such instrument free
from all equities or rights of set-off or counterclaim between the Trust
and the original or any intermediate holder thereof and all persons may
act accordingly and the receipt of any such registered holder for any such
principal and interest shall be a good discharge to the Trustee, any
registrar and to the Trust for the same and none shall be bound to inquire
into the title of any such registered
holder.
|
|
(c)
|
Where
Debentures are registered in more than one name, the principal and
interest from time to time payable in respect thereof may be paid to the
order of all such holders, failing written instructions from them to the
contrary, and the receipt of any one of such holders therefor shall be a
valid discharge, to the Trustee, any registrar and to the
Trust.
|
|
(d)
|
In
the case of the death of one or more joint holders of any Debenture the
principal and interest from time to time payable thereon may be paid to
the order of the survivor or survivors of such registered holders and the
receipt of any such survivor or survivors therefor shall be a valid
discharge to the Trustee and any registrar and to the
Trust.
|
25
ARTICLE 4
REDEMPTION
AND PURCHASE OF DEBENTURES
|
4.1
|
Applicability
of Article
|
Subject
to regulatory approval, Section 2.4(d) and Article 5, the Trust shall have
the right at its option to redeem, either in whole at any time or in part from
time to time before maturity, either by payment of money, by issuance of Freely
Tradeable Trust Units as provided in Section 4.6 or any combination thereof, any
Debentures issued hereunder of any series which by their terms are made so
redeemable (subject, however, to any applicable restriction on the redemption of
Debentures of such series) and on such date or dates and in accordance with such
other provisions as shall have been determined at the time of issue of such
Debentures and as shall have been expressed in this Indenture, in the
Debentures, in an Officers' Certificate, or in a supplemental indenture
authorizing or providing for the issue thereof, or in the case of Additional
Debentures issued pursuant to a Periodic Offering, in the Written Direction of
the Trust requesting the certification and delivery thereof.
Subject
to regulatory approval and Article 5, the Trust shall also have the right
at its option to repay, either in whole or in part, on maturity, either by
payment of money in accordance with Section 2.13, by issuance of Freely
Tradeable Trust Units as provided in Section 4.10 or any combination thereof,
any Debentures issued hereunder of any series which by their terms are made so
repayable on maturity (subject however, to any applicable restriction on the
repayment of the principal amount of the Debentures of such series) on such date
or dates and in accordance with such other provisions as shall have been
determined at the time of issue of such Debenture and shall have been expressed
in this Indenture, in the Debentures, in an Officers' Certificate, or in a
supplemental indenture authorizing or providing for the issue thereof, or in the
case of Additional Debentures issued pursuant to a Periodic Offering, in the
Written Direction of the Trust requesting the certification and delivery
thereof.
|
4.2
|
Partial
Redemption
|
If less
than all the Debentures of any series for the time being outstanding are at any
time to be redeemed, or if a portion of the Debentures being redeemed are being
redeemed for cash and a portion of such Debentures are being redeemed by the
payment of Freely Tradeable Trust Units pursuant to Section 4.6, the Debentures
to be so redeemed shall be selected by the Trustee on a pro rata basis to the
nearest multiple of $1,000 in accordance with the principal amount of the
Debentures registered in the name of each holder or in such other manner as the
Trustee deems equitable, subject to the approval of the Toronto Stock Exchange
or such other exchange on which the Debentures are then listed, as may be
required from time to time. Unless otherwise specifically provided in the terms
of any series of Debentures, no Debenture shall be redeemed in part unless the
principal amount redeemed is $1,000 or a multiple thereof. For this purpose, the
Trustee may make, and from time to time vary, regulations with respect to the
manner in which such Debentures may be drawn for redemption and regulations so
made shall be valid and binding upon all holders of such Debentures
notwithstanding that as a result thereof one or more of such Debentures may
become subject to redemption in part only. In the event that one or more of such
Debentures becomes subject to redemption in part only, upon surrender of any
such Debentures for payment of the Redemption Price, together with interest
accrued to but excluding the Redemption Date, the Trust shall execute and the
Trustee shall certify and deliver without charge to the holder thereof or upon
the holder's order one or more new Debentures for the unredeemed part of the
principal amount of the Debenture or Debentures so surrendered or, with respect
to a Global Debenture, the Depository shall make notations on the Global
Debenture of the principal amount thereof so redeemed. Unless the context
otherwise requires, the terms "Debenture" or "Debentures" as used in this
Article 4 shall be deemed to mean or include any part of the principal
amount of any Debenture which in accordance with the foregoing provisions has
become subject to redemption.
|
4.3
|
Notice
of Redemption
|
Notice of
redemption (the "Redemption
Notice") of any series of Debentures shall be given to the holders of the
Debentures so to be redeemed not more than 60 days nor less than 30 days (40
days if the Trust exercises the Trust Unit Redemption Right) prior to the date
fixed for redemption (the "Redemption Date") in the
manner provided in Section 14.2. Every such notice shall
specify the aggregate principal amount of Debentures called for redemption, the
Redemption Date, the Redemption Price and the places of payment and shall state
that interest upon the principal amount of Debentures called for redemption
shall cease to be payable from and after the Redemption Date. In addition,
unless all the outstanding Debentures are to be redeemed, the Redemption Notice
shall specify:
26
|
(a)
|
the
distinguishing letters and numbers of the registered Debentures which are
to be redeemed (or of such thereof as are registered in the name of such
Debentureholder);
|
|
(b)
|
in
the case of a published notice, the distinguishing letters and numbers of
the Debentures which are to be redeemed or, if such Debentures are
selected by terminal digit or other similar system, such particulars as
may be sufficient to identify the Debentures so
selected;
|
|
(c)
|
in
the case of a Global Debenture, that the redemption will take place in
such manner as may be agreed upon by the Depository, the Trustee and the
Trust; and
|
|
(d)
|
in
all cases, the principal amounts of such Debentures or, if any such
Debenture is to be redeemed in part only, the principal amount of such
part.
|
In the
event that all Debentures to be redeemed are registered Debentures, publication
shall not be required.
|
4.4
|
Debentures
Due on Redemption Dates
|
Notice
having been given as aforesaid, all the Debentures so called for redemption
shall thereupon be and become due and payable at the Redemption Price on the
Redemption Date specified in such notice, in the same manner and with the same
effect as if it were the date of maturity specified in such Debentures, anything
therein or herein to the contrary notwithstanding, and from and after such
Redemption Date, if the monies necessary to redeem, or the Trust Units to be
issued to redeem, such Debentures shall have been deposited as provided in
Section 4.5 and
affidavits or other proof satisfactory to the Trustee as to the publication
and/or mailing of such notices shall have been lodged with it, interest upon the
Debentures shall cease. If any question shall arise as to whether any notice has
been given as above provided and such deposit made, such question shall be
decided by the Trustee whose decision shall be final and binding upon all
parties in interest.
|
4.5
|
Deposit
of Redemption Monies or Trust Units
|
Redemption
of Debentures shall be provided for by the Trust depositing with the Trustee or
any paying agent to the order of the Trustee, on or before 11:00 a.m. (Calgary
time) on the Business Day immediately prior to the Redemption Date specified in
such notice, such sums of money, or certificates representing such Trust Units,
or both as the case may be, as may be sufficient to pay the Redemption Price of
the Debentures so called for redemption, provided the Trust may elect to satisfy
this requirement by providing the Trustee with a certified cheque or
wire transfer for such amounts required under this Section 4.5 post-dated to the
Redemption Date. The Trust shall also deposit with the Trustee a sum of money
sufficient to pay any charges or expenses which may be incurred by the Trustee
in connection with such redemption. Every such deposit shall be irrevocable.
From the sums so deposited, or certificates so deposited, or both, the Trustee
shall pay or cause to be paid, or issue or cause to be issued, to the holders of
such Debentures so called for redemption, upon surrender of such Debentures, the
principal and interest (if any) to which they are entitled on
redemption.
|
4.6
|
Right
to Repay Redemption Price in Trust
Units
|
|
(a)
|
Subject
to the receipt of any required regulatory approvals, the provisions
governing any series of Debentures and the other provisions of this
Section 4.6, the Trust may, at its option, in exchange for or in lieu of
paying the Redemption Price in money, elect to satisfy its obligation to
pay all or any portion of the Redemption Price by issuing and delivering
to holders on the Redemption Date that number of Freely Tradeable Trust
Units obtained by dividing the Redemption Price (or applicable portion
thereof to be satisfied by the issuance and delivery of Freely Tradeable
Trust Units) by 95% of the Current
Market Price of the Trust Units on the Redemption Date (the "Trust Unit Redemption
Right").
|
27
|
(b)
|
The
Trust shall exercise the Trust Unit Redemption Right by so specifying in
the Redemption Notice and shall also specify the aggregate principal
amount of Debentures in respect of which it is exercising the Trust Unit
Redemption Right in such notice.
|
|
(c)
|
The
Trust's right to exercise the Trust Unit Redemption Right shall be
conditional upon the following conditions being met on the Business Day
preceding the Redemption Date:
|
|
(i)
|
the
issuance of the Trust Units on the exercise of the Trust Unit Redemption
Right shall be made in accordance with Applicable Securities Legislation
and such Trust Units shall be issued as Freely Tradeable Trust
Units;
|
|
(ii)
|
such
additional Freely Tradeable Trust Units shall be listed on the Toronto
Stock Exchange or a national securities exchange or quoted in an
inter-dealer quotation system of any registered national securities
association;
|
|
(iii)
|
the
Trust shall be a reporting issuer in good standing under Applicable
Securities Legislation in all jurisdictions in which the Trust is a
reporting issuer on the date of the
Indenture;
|
|
(iv)
|
no
Event of Default shall have occurred and be
continuing;
|
|
(v)
|
the
Trustee shall have received an Officers' Certificate stating that
conditions (i), (ii), (iii) and (iv) above have been satisfied and setting
forth the number of Trust Units to be delivered for each $1,000 principal
amount of Debentures and the Current Market Price of the Trust Units on
the Redemption Date; and
|
|
(vi)
|
the
Trustee shall have received an opinion of Counsel to the effect that such
Trust Units have been duly authorized and, when issued and delivered
pursuant to the terms of this Indenture in payment of the Redemption
Price, will be validly issued as fully paid and non-assessable, that
conditions (i) and (ii) above have been satisfied and that, relying
exclusively on certificates of good standing issued by the relevant
securities authorities, condition (iii) above is satisfied, except that
the opinion in respect of condition (iii) need not be expressed with
respect to those provinces where certificates are not
issued.
|
If the
foregoing conditions are not satisfied prior to the close of business on the
Business Day preceding the Redemption Date, the Trust shall pay the Redemption
Price in cash in accordance with Section 4.5 unless the Debentureholder waives
the conditions which are not satisfied.
|
(d)
|
In
the event that the Trust duly exercises its Trust Unit Redemption Right,
upon presentation and surrender of the Debentures for payment on the
Redemption Date, at any place where a register is maintained pursuant to
Article 3 or any other place specified in the Redemption Notice, the
Trust shall on or before 11:00 a.m. (Calgary time) on the Business Day
immediately prior to the Redemption Date make the delivery to the Trustee
for delivery to and on account of the holders, of certificates
representing the Freely Tradeable Trust Units to which such holders are
entitled.
|
|
(e)
|
No
fractional Freely Tradeable Trust Units shall be delivered upon the
exercise of the Trust Unit Redemption Right but, in lieu thereof, the
Trust shall pay to the Trustee for the account of the holders, at the time
contemplated in Section 4.6(d), the cash equivalent thereof determined on
the basis of the Current Market Price of the Trust Units on the Redemption
Date (less any tax required to be deducted, if
any).
|
|
(f)
|
A
holder shall be treated as the unitholder of record of the Freely
Tradeable Trust Units issued on due exercise by the Trust of its Trust
Unit Redemption Right effective immediately after the close of business on
the Redemption Date, and shall be entitled to all substitutions therefor,
all income earned thereon or accretions thereto and all dividends or
distributions (including distributions and dividends in kind) thereon and
arising thereafter, and in the event that the Trustee receives the same,
it shall hold the same in trust for the benefit of such
holder.
|
28
|
(g)
|
The
Trust shall at all times reserve and keep available out of its authorized
Trust Units (if the number thereof is or becomes limited), solely for the
purpose of issue and delivery upon the exercise of the Trust's Trust Unit
Redemption Right as provided herein, and shall issue to Debentureholders
to whom Freely Tradeable Trust Units will be issued pursuant to exercise
of the Trust Unit Redemption Right, such number of Freely Tradeable Trust
Units as shall be issuable in such event. All Freely Tradeable Trust Units
which shall be so issuable shall be duly and validly issued as fully paid
and non-assessable.
|
|
(h)
|
The
Trust shall comply with all Applicable Securities Legislation regulating
the issue and delivery of Freely Tradeable Trust Units upon exercise of
the Trust Unit Redemption Right and shall cause to be listed and posted
for trading such Trust Units on each stock exchange on which the Trust
Units are then listed.
|
|
(i)
|
The
Trust shall 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,
withholding tax or security transfer tax, if any) which shall be payable
with respect to the issuance or delivery of Freely Tradeable Trust Units
to holders upon exercise of the Trust Unit Redemption Right pursuant to
the terms of the Debentures and of this
Indenture.
|
|
(j)
|
If
the Trust elects to satisfy its obligation to pay all or any portion of
the Redemption Price by issuing Freely Tradeable Trust Units in accordance
with this Section 4.6 and if the Redemption Price (or any portion thereof)
to which a holder is entitled is subject to withholding taxes and the
amount of the cash payment of the Redemption Price, if any, is
insufficient to satisfy such withholding taxes, the Trustee, on the
Written Direction of the Trust but for the account of the holder, shall
sell, through the investment banks, brokers or dealers selected by the
Trust, out of the Freely Tradeable Trust Units issued by the Trust for
this purpose, such number of Freely Tradeable Trust Units that together
with the cash payment of the Redemption Price, if any, is sufficient to
yield net proceeds (after payment of all costs) to cover the amount of
taxes required to be withheld, and shall remit same on behalf of the Trust
to the proper tax authorities within the period of time prescribed for
this purpose under applicable laws.
|
|
(k)
|
Each
certificate representing Freely Tradeable Trust Units issued in payment of
the Redemption Price of Debentures bearing the U.S. Legend, as well as all
certificates issued in exchange for or in substitution of the foregoing
securities, shall bear the U.S. Legend; provided that if the Freely
Tradeable Trust Units are being sold in compliance with the requirements
of Rule 904 of Regulation S, and provided that the Trust is a "foreign
issuer" within the meaning of Regulation S at the time of sale, the U.S.
Legend may be removed by providing a declaration to the Trustee, as
registrar and transfer agent for the Trust Units, substantially as set
forth in Schedule E
hereto (or as the Trust or the Trustee may prescribe from time to
time), together with any other evidence reasonably requested by the Trust
or Trustee, which evidence may include an opinion of counsel of recognized
standing, in form and substance reasonably satisfactory to the Trust or
the Trustee, to the effect that the U.S. Legend is no longer required
pursuant to the requirements of the 1933 Act; and provided further that,
if any such securities are being sold within the United States in
accordance with Rule 144 under the 1933 Act, the U.S. Legend may be
removed by delivery to the Trustee, as registrar and transfer agent for
the Trust Units, of an opinion of counsel, of recognized standing, or
other evidence reasonably satisfactory to the Trust, that the U.S. Legend
is no longer required under applicable requirements of the 1933 Act or
applicable state securities laws. Provided that the Trustee obtains
confirmation from the Trust that such counsel is satisfactory to it, it
shall be entitled to rely on such opinion of counsel without further
inquiry.
|
|
4.7
|
Failure
to Surrender Debentures Called for
Redemption
|
In case
the holder of any Debenture so called for redemption shall fail on or before the
Redemption Date so to surrender such holder's Debenture, or shall not within
such time accept payment of the redemption monies payable, or take delivery of
certificates representing such Trust Units issuable in respect thereof, or give
such receipt therefor, if any, as the Trustee may require, such redemption
monies may be set aside in trust, or such certificates may be held in trust
without interest, either in the deposit department of the Trustee or in a
chartered bank, and such setting aside shall for all purposes be deemed a
payment to the Debentureholder of the sum or Trust Units so set aside and, to
that extent, the Debenture shall thereafter not be considered as outstanding
hereunder and the Debentureholder shall have no other right except to receive
payment out of the monies so paid and deposited, or take delivery of the
certificates so deposited, or both, upon surrender and delivery up of such
holder's Debenture of the Redemption Price, as the case may be, of such
Debenture. In the event that any money, or certificates representing Trust
Units, required to be deposited hereunder with the Trustee or any depository or
paying agent on account of principal and interest, if any, on Debentures issued
hereunder shall remain so deposited for a period of six years from the
Redemption Date, then such monies or certificates representing Trust Units,
together with any accumulated interest thereon or any distribution paid thereon,
shall at the end of such period be paid over or delivered over by the Trustee or
such depository or paying agent to the Trust on its demand, and thereupon the
Trustee shall not be responsible to Debentureholders for any amounts owing to
them and subject to applicable law, thereafter the holder of a Debenture in
respect of which such money was so repaid to the Trust shall have no rights in
respect thereof except to obtain payment of the money or certificates due from
the Trust, subject to any limitation period provided by the laws of Alberta.
Notwithstanding the foregoing, the Trustee will pay any remaining funds prior to
the expiry of six years after the Redemption Date to the Trust upon receipt from
the Trust, of an unconditional letter of credit from a Canadian chartered bank
in an amount equal to or in excess of the amount of the remaining funds. If the
remaining funds are paid to the Trust prior to the expiry of six years after the
Redemption Date, the Trust shall reimburse the Trustee for any amounts required
to be paid by the Trustee to a holder of a Debenture pursuant to the redemption
after the date of such payment of the remaining funds to the Trust but prior to
six years after the redemption.
29
|
4.8
|
Cancellation
of Debentures Redeemed
|
Subject
to the provisions of Sections 4.2 and 4.9 as to Debentures redeemed or purchased
in part, all Debentures redeemed and paid under this Article 4 shall forthwith
be delivered to the Trustee and cancelled and no Debentures shall be issued in
substitution for those redeemed.
|
4.9
|
Purchase
of Debentures by the Trust
|
Unless
otherwise specifically provided with respect to a particular series of
Debentures, the Trust may, if it is not at the time in default hereunder, at any
time and from time to time, purchase Debentures in the open market (which shall
include purchases from or through an investment dealer or a firm holding
membership on a recognized stock exchange) or by tender or by contract, at any
price or by private agreement. All Debentures so purchased will be
delivered to the Trustee and shall be cancelled and no Debentures shall be
issued in substitution therefor.
If, upon
an invitation for tenders, more Debentures are tendered at the same lowest price
that the Trust is prepared to accept, the Debentures to be purchased by the
Trust shall be selected by the Trustee on a pro rata basis or in such
other manner consented to by the Toronto Stock Exchange or such other exchange
on which the Debentures are then listed which the Trustee considers appropriate,
from the Debentures tendered by each tendering 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 a
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 or, with respect to a Global Debenture, the Depository
shall make notations on the Global Debenture of the principal amount thereof so
purchased.
|
4.10
|
Right
to Repay Principal Amount and Accrued Interest in Trust
Units
|
|
(a)
|
Subject
to the receipt of any required regulatory approvals, the provisions
governing any series Debentures and the other provisions of this
Section 4.10, the Trust may, at its option, in exchange for or in
lieu of repaying the Debentures in money, elect to satisfy its obligation
to repay the principal amount of all or any portion of the principal
amount of the Debentures outstanding, together with all accrued and unpaid
interest thereon, by issuing and delivering to holders on the Maturity
Date of such Debentures that number of Freely Tradeable Trust Units
obtained by dividing the principal amount of the Debentures (or applicable
portion thereof to be satisfied by the issuance and delivery of Freely
Tradeable Trust Units) together with all accrued and unpaid interest
thereon by 95% of the then
Current Market Price of the Trust Units on the Maturity Date (the "Trust Unit Repayment
Right").
|
30
|
(b)
|
The
Trust shall exercise the Trust Unit Repayment Right by so specifying in
the Maturity Notice, which shall be delivered to the Trustee and the
holders of Debentures not more than 60 days and not less than 30 days
prior to the Maturity Date, and which shall also specify the aggregate
principal amount of Debentures in respect of which it is exercising the
Trust Unit Repayment Right on the Maturity
Date.
|
|
(c)
|
The
Trust's right to exercise the Trust Unit Repayment Right shall be
conditional upon the following conditions being met on the Business Day
preceding the Maturity Date:
|
|
(i)
|
the
issuance of the Trust Units on the exercise of the Trust Unit Repayment
Right shall be made in accordance with Applicable Securities Legislation
and such Trust Units shall be issued as Freely Tradeable Trust
Units;
|
|
(ii)
|
such
additional Freely Tradeable Trust Units shall be listed on the Toronto
Stock Exchange or a national securities exchange or quoted in an
inter-dealer quotation system of any registered national securities
association;
|
|
(iii)
|
the
Trust shall be a reporting issuer in good standing under Applicable
Securities Legislation in all jurisdictions in which the Trust is a
reporting issuer on the date of this
Indenture;
|
|
(iv)
|
no
Event of Default shall have occurred and be
continuing;
|
|
(v)
|
the
Trustee shall have received an Officers' Certificate stating that
conditions (i), (ii), (iii) and (iv) above have been satisfied and setting
forth the number of Trust Units to be delivered for each $1,000 principal
amount of Debentures and the Current Market Price of the Trust Units on
the Maturity Date; and
|
|
(vi)
|
the
Trustee shall have received an opinion of Counsel to the effect that such
Trust Units have been duly authorized and, when issued and delivered
pursuant to the terms of this Indenture in payment of the principal amount
of the Debentures outstanding, together with all accrued and unpaid
interest thereon, will be validly issued as fully paid and non-assessable,
that conditions (i) and (ii) above have been satisfied and that, relying
exclusively on certificates of good standing issued by the relevant
securities authorities, condition (iii) above is satisfied, except that
the opinion in respect of condition (iii) need not be expressed with
respect to those provinces where certificates are not
issued.
|
If the
foregoing conditions are not satisfied prior to the close of business on the
Business Day preceding the Maturity Date, the Trust shall pay the principal
amount of the Debentures outstanding, together with all accrued and unpaid
interest thereon, in cash in accordance with Section 2.13, unless the
Debentureholder waives the conditions which are not satisfied.
|
(d)
|
In
the event that the Trust duly exercises its Trust Unit Repayment Right,
upon presentation and surrender of the Debentures for payment on the
Maturity Date, at any place where a register is maintained pursuant to
Article 3 or any other place specified in the Maturity Notice, the
Trust shall on or before 11:00 a.m. (Calgary time) on the Business Day
immediately prior to the Maturity Date make the delivery to the Trustee
for delivery to and on account of the holders, of certificates
representing the Freely Tradeable Trust Units to which such holders are
entitled. The Trust shall also deposit with the Trustee a sum of money
sufficient to pay any charges or expenses which may be incurred by the
Trustee in connection with the Trust Unit Repayment Right. Every such
deposit shall be irrevocable. From the certificates so deposited in
addition to amounts payable by the Trustee pursuant to Section 2.13, the
Trustee shall pay or cause to be paid, to the holders of such Debentures,
upon surrender of such Debentures, the principal amount of to which they
are entitled on maturity and deliver to such holders the certificates to
which such holders are entitled. The delivery of such certificates to the
Trustee will satisfy and discharge the liability of the Trust for the
Debentures to which the delivery of certificates relates to the extent of
the amount delivered (plus the amount of any certificates sold to pay
applicable taxes in accordance with this Section 4.10) and such Debentures
will thereafter to that extent not be considered as outstanding under this
Indenture and such holder will have no other right in regard thereto other
than to receive out of the certificates so delivered, the certificate(s)
to which it is entitled.
|
31
|
(e)
|
No
fractional Freely Tradeable Trust Units shall be delivered upon the
exercise of the Trust Unit Repayment Right but, in lieu thereof, the Trust
shall pay to the Trustee for the account of the holders, at the time
contemplated in Section 4.10(d), the cash equivalent thereof determined on
the basis of the Current Market Price of the Trust Units on the Maturity
Date (less any tax required to be deducted, if
any).
|
|
(f)
|
A
holder shall be treated as the unitholder of record of the Freely
Tradeable Trust Units issued on due exercise by the Trust of its Trust
Unit Repayment Right effective immediately after the close of business on
the Maturity Date, and shall be entitled to all substitutions therefor,
all income earned thereon or accretions thereto and all dividends or
distributions (including distributions and dividends in kind) thereon and
arising thereafter, and in the event that the Trustee receives the same,
it shall hold the same in trust for the benefit of such
holder.
|
|
(g)
|
The
Trust shall at all times reserve and keep available out of its authorized
Trust Units (if the number thereof is or becomes limited), solely for the
purpose of issue and delivery upon the exercise of the Trust's Trust Unit
Repayment Right as provided herein, and shall issue to Debentureholders to
whom Freely Tradeable Trust Units will be issued pursuant to exercise of
the Trust Unit Repayment Right, such number of Freely Tradeable Trust
Units as shall be issuable in such event. All Freely Tradeable Trust Units
which shall be so issuable shall be duly and validly issued as fully paid
and non-assessable.
|
|
(h)
|
The
Trust shall comply with all Applicable Securities Legislation regulating
the issue and delivery of Freely Tradeable Trust Units upon exercise of
the Trust Unit Repayment Right and shall cause to be listed and posted for
trading such Freely Tradeable Trust Units on each stock exchange on which
the Trust Units are then listed.
|
|
(i)
|
The
Trust shall 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,
withholding tax or security transfer tax, if any) which shall be payable
with respect to the issuance or delivery of Freely Tradeable Trust Units
to holders upon exercise of the Trust Unit Repayment Right pursuant to the
terms of the Debentures and of this
Indenture.
|
|
(j)
|
If
the Trust elects to satisfy its obligation to pay all or any portion of
the principal amount of Debentures due on maturity together with all
accrued and unpaid interest thereon by issuing Freely Tradeable Trust
Units in accordance with this Section 4.10 and if the amount (or any
portion thereof) to which a holder is entitled is subject to withholding
taxes and the amount of the cash payment of the amount due on maturity, if
any, is insufficient to satisfy such withholding taxes, the Trustee, on
the Written Direction of the Trust but for the account of the holder,
shall sell, through the investment banks, brokers or dealers selected by
the Trust, out of the Freely Tradeable Trust Units issued by the Trust for
this purpose, such number of Freely Tradeable Trust Units that together
with the cash component of the amount due on maturity is sufficient to
yield net proceeds (after payment of all costs) to cover the amount of
taxes required to be withheld, and shall remit same on behalf of the Trust
to the proper tax authorities within the period of time prescribed for
this purpose under applicable laws.
|
|
(k)
|
Each
certificate representing Freely Tradeable Trust Units issued in payment of
the Debentures bearing the U.S. Legend, as well as all certificates issued
in exchange for or in substitution of the foregoing securities, shall bear
the U.S. Legend; provided that if the Freely Tradeable Trust Units are
being sold in compliance with the requirements of Rule 904 of Regulation
S, and provided that the Trust is a "foreign issuer" within the meaning of
Regulation S at the time of sale, the U.S. Legend may be removed by
providing a declaration to the Trustee, as registrar and transfer agent
for the Trust Units, substantially as set forth in Schedule E hereto (or as
the Trust or the Trustee may prescribe from time to time), together with
any other evidence reasonably requested by the Trust or Trustee, which
evidence may include an opinion of counsel of recognized standing, in form
and substance reasonably satisfactory to the Trust or the Trustee, to the
effect that the U.S. Legend is no longer required pursuant to the
requirements of the 1933 Act; and provided further that, if any such
securities are being sold within the United States in accordance with Rule
144 under the 1933 Act, the U.S. Legend may be removed by delivery to the
Trustee, as registrar and transfer agent for the Trust Units, of an
opinion of counsel, of recognized standing, or other evidence satisfactory
to the Trust, that the U.S. Legend is no longer required under applicable
requirements of the 1933 Act or applicable state securities laws. Provided
that the Trustee obtains confirmation from the Trust that such counsel is
satisfactory to it, it shall be entitled to rely on such opinion of
counsel without further inquiry.
|
32
|
(l)
|
When
the Trust determines the number of Trust Units issued pursuant to an
election in accordance with Section 4.6 or 4.10, the Trust will issue
a news release on a national newswire disclosing the number of Trust Units
issued.
|
ARTICLE 5
SUBORDINATION
OF DEBENTURES
|
5.1
|
Applicability
of Article
|
The
indebtedness, liabilities and obligations of the Trust hereunder (except as
provided in Section 15.15) or under the Debentures, whether on account of
principal, interest or otherwise, including any payment of cash in lieu of the
issuance of Trust Units pursuant to Section 6.13, but excluding the issuance of
Trust Units upon any conversion pursuant to Article 6, upon any redemption
pursuant to Article 4, or at maturity pursuant to Article 4
(collectively, the "Debenture
Liabilities"), shall be subordinated and postponed and subject in right
of payment, to the extent and in the manner hereinafter set forth in the
following Sections of this Article 5, to the full and final payment of all
Senior Indebtedness, and each holder of any such Debenture by his acceptance
thereof agrees to and shall be bound by the provisions of this
Article 5.
|
5.2
|
Order
of Payment
|
In the
event of any insolvency or bankruptcy proceedings, or any receivership, creditor
enforcement, realization, liquidation, reorganization or similar proceedings
relative to the Trust, or to its property or assets, whether voluntary or
involuntary, partial or complete, or in the event of any proceedings for
liquidation, dissolution or winding-up of the Trust, whether or not involving
insolvency or bankruptcy and whether voluntary or involuntary, partial or
complete, or any marshalling of the assets and liabilities of the
Trust:
|
(a)
|
all
Senior Indebtedness shall first be paid in full, or provision made for
such payment, before any payment is made on account of Debenture
Liabilities;
|
|
(b)
|
any
payment or distribution of assets of the Trust, whether in cash, property
or securities, to which the holders of the Debentures or the Trustee on
behalf of such holders would be entitled except for the provisions of this
Article 5, shall be paid or delivered by the trustee in bankruptcy,
receiver, assignee for the benefit of creditors, or other liquidating
agent making such payment or distribution, directly to the holders of
Senior Indebtedness or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing any of such Senior Indebtedness may have been issued, to the
extent necessary to pay all Senior Indebtedness in full after giving
effect to any concurrent payment or distribution, or provision therefor,
to the holders of such Senior Indebtedness;
and
|
|
(c)
|
the
Senior Creditors or a receiver or a receiver-manager of the Trust or of
all or part of its assets or any other enforcement agent may sell,
mortgage, or otherwise dispose of the Trust's assets in whole or in part,
free and clear of all Debenture Liabilities and without the approval of
the Debentureholders or the Trustee or any requirement to account to the
Trustee or the Debentureholders.
|
The
rights and priority of the Senior Indebtedness and the subordination pursuant
hereto shall not be affected by:
33
|
(i)
|
whether
or not the Senior Indebtedness is
secured;
|
|
(ii)
|
the
time, sequence or order of creating, granting, executing, delivering of,
or registering, perfecting or failing to register or perfect any security
notice, caveat, financing statement or other notice in respect of the
Senior Security;
|
|
(iii)
|
the
time or order of the attachment, perfection or crystallization of any
security constituted by the Senior
Security;
|
|
(iv)
|
the
taking of any collection, enforcement or realization proceedings pursuant
to the Senior Security;
|
|
(v)
|
the
date of obtaining of any judgment or order of any bankruptcy court or any
court administering bankruptcy, insolvency or similar proceedings as to
the entitlement of the Senior Creditors, or any of them or the
Debentureholders or any of them to any money or property of the
Trust;
|
|
(vi)
|
the
failure to exercise any power or remedy reserved to the Senior Creditors
under the Senior Security or to insist upon a strict compliance with any
terms thereof;
|
|
(vii)
|
whether
any Senior Security is now perfected, hereafter ceases to be perfected, is
avoidable by any trustee in bankruptcy or like official or is otherwise
set aside, invalidated or lapses;
|
|
(viii)
|
the
date of giving or failing to give notice to or making demand upon the
Trust; or
|
|
(ix)
|
any
other matter whatsoever.
|
|
5.3
|
Subrogation
to Rights of Holders of Senior
Indebtedness
|
Subject
to the prior payment in full of all Senior Indebtedness, the holders of the
Debentures shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of assets of the Trust to the
extent of the application thereto of such payments or other assets which would
have been received by the holders of the Debentures but for the provisions
hereof until the principal of and interest on the Debentures shall be paid in
full, and no such payments or distributions to the holders of the Debentures of
cash, property or securities, which otherwise would be payable or distributable
to the holders of the Senior Indebtedness, shall, as between the Trust, its
creditors other than the holders of Senior Indebtedness, and the holders of
Debentures, be deemed to be a payment by the Trust to the holders of the Senior
Indebtedness or on account of the Senior Indebtedness, it being understood that
the provisions of this Article 5 are and are intended solely for the purpose of
defining the relative rights of the holders of the Debentures, on the one hand,
and the holders of Senior Indebtedness, on the other hand.
The
Trustee, for itself and on behalf of each of the Debentureholders, hereby waives
any and all rights to require a Senior Creditor to pursue or exhaust any rights
or remedies with respect to the Trust or any property and assets subject to any
Senior Security or in any other manner to require the marshalling of property,
assets or security in connection with the exercise by the Senior Creditors of
any rights, remedies or recourses available to them.
|
5.4
|
Obligation
to Pay Not Impaired
|
Nothing
contained in this Article 5 or elsewhere in this Indenture or in the
Debentures is intended to or shall impair, as between the Trust, its creditors
other than the holders of Senior Indebtedness, and the holders of the
Debentures, the obligation of the Trust, which is absolute and unconditional, to
pay to the holders of the Debentures the principal of and interest on the
Debentures, as and when the same shall become due and payable in accordance with
their terms, or affect the relative rights of the holders of the Debentures and
creditors of the Trust 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 5 of the holders of Senior Indebtedness.
34
|
5.5
|
No
Payment if Senior Indebtedness in
Default
|
Upon the
maturity of any Senior Indebtedness by lapse of time, acceleration or otherwise,
or any other enforcement of any Senior Indebtedness, then, except as provided in
Section 5.8, all such Senior Indebtedness shall first be paid in full, or shall
first have been duly provided for, before any payment is made on account of the
Debenture Liabilities.
In case
of a circumstance constituting a default or event of default with respect to any
Senior Indebtedness permitting (whether at that time or upon notice, lapse of
time, or satisfaction of any other condition precedent) a Senior Creditor to
demand payment or accelerate the maturity thereof where the notice of such
default or event of default has been given by or on behalf of any of the holders
of any of the Senior Indebtedness to the Trust or the Trust otherwise has
knowledge thereof, unless and until such default or event of default shall have
been cured or waived or shall have ceased to exist, no payment (by purchase of
Debentures or otherwise) shall be made by the Trust with respect to the
Debenture Liabilities and neither the Trustee nor the holders of Debentures
shall be entitled to demand, institute proceedings for the collection of (which
shall, for certainty include proceedings related to an adjudication or
declaration as to the insolvency or bankruptcy of the Trust and other similar
creditor proceedings), 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 after the happening of such a default
or event of default (except as provided in Section 5.8), and unless and until such
default or event of default shall have been cured or waived or shall have ceased
to exist, such payments shall be held in trust for the benefit of, and, if and
when such Senior Indebtedness shall have become due and payable, shall be paid
over to, the holders of the Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any indenture under which
any instruments evidencing an amount of the Senior Indebtedness remaining unpaid
until all such Senior Indebtedness shall have been paid in full, after giving
effect to any concurrent payment or distribution to the holders of such Senior
Indebtedness.
The fact
that any payment hereunder is prohibited by this Section 5.5 shall not prevent
the failure to make such payment from being an Event of Default
hereunder.
|
5.6
|
Payment
on Debentures Permitted
|
Nothing
contained in this Article 5 or elsewhere in this Indenture, or in any of
the Debentures, shall affect the obligation of the Trust to make, or prevent the
Trust from making, at any time except as prohibited by Sections 5.2 or 5.5, any
payment of principal of or interest on the Debentures. The fact that
any such payment is prohibited by Sections 5.2 or 5.5 shall not prevent the
failure to make such payment from being an Event of Default hereunder. Nothing
contained in this Article 5 or elsewhere in this Indenture, or in any of
the Debentures, shall prevent the conversion of the Debentures or, except as
prohibited by Sections 5.2 or 5.5, the application by the Trustee of any monies
deposited with the Trustee hereunder for the purpose, to the payment of or on
account of the Debenture Liabilities.
|
5.7
|
Confirmation
of Subordination
|
Each
holder of Debentures 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 as provided in this Article 5 and appoints the Trustee
his attorney-in-fact for any and all such purposes. Upon request of the Trust,
and upon being furnished an Officers' Certificate stating that one or more named
persons are Senior Creditors and specifying the amount and nature of the Senior
Indebtedness of such Senior Creditor, the Trustee shall enter into a contractual
subordination agreement or agreements with the Trust and the person or persons
named in such Officers' Certificate providing that such person or persons are
entitled to all the rights and benefits of this Article 5 as a Senior
Creditor and for such other matters, including those in addition to the
provisions of this Article 5, such as an agreement not to amend the
provisions of this Article 5 and the definitions herein without the consent
of such Senior Creditor, as the Senior Creditor may reasonably request. Such
agreement shall be conclusive evidence that the indebtedness specified therein
is Senior Indebtedness, however, nothing herein shall impair the rights of any
Senior Creditor who has not entered into such an agreement.
35
|
5.8
|
Knowledge
of Trustee
|
Notwithstanding
the provisions of this Article 5 or any provision in this Indenture or in
the Debentures contained, the Trustee will not be charged with knowledge of any
Senior Indebtedness or of any default in the payment thereof, or of the
existence of any Event of Default or any other fact that would prohibit the
making of any payment of monies to or by the Trustee, or the taking of any other
action by the Trustee, unless and until the Trustee has received written notice
thereof from the Trust, any Debentureholder or any Senior Creditor.
|
5.9
|
Trustee
May Hold Senior Indebtedness
|
The
Trustee is entitled to all the rights set forth in this Article 5 with
respect to any Senior Indebtedness at the time held by it, to the same extent as
any other holder of Senior Indebtedness, and nothing in this Indenture deprives
the Trustee of any of its rights as such holder.
|
5.10
|
Rights
of Holders of Senior Indebtedness Not
Impaired
|
No right
of any present or future holder of any Senior Indebtedness to enforce the
subordination herein will at any time or in any way be prejudiced or impaired by
any act or failure to act on the part of the Trust or by any non-compliance by
the Trust with the terms, provisions and covenants of this Indenture, regardless
of any knowledge thereof which any such holder may have or be otherwise charged
with.
|
5.11
|
Altering
the Senior Indebtedness
|
The
holders of the Senior Indebtedness have the right to extend, renew, modify or
amend the terms of the Senior Indebtedness or any security therefor and to
release, sell or exchange such security and otherwise to deal freely with the
Trust, all without notice to or consent of the Debentureholders or the Trustee
and without affecting the liabilities and obligations of the parties to this
Indenture or the Debentureholders.
|
5.12
|
Additional
Indebtedness
|
Provided
that the Trust shall not issue additional convertible debentures ranking higher
in priority to the Debentures, this Indenture does not restrict the Trust from
incurring additional indebtedness for borrowed money or other obligations or
liabilities (including Senior Indebtedness) or mortgaging, pledging or charging
its properties to secure any indebtedness or obligations or
liabilities.
|
5.13
|
Right
of Debentureholder to Receive Trust Units Not
Impaired
|
The
subordination of the Debentures to the Senior Indebtedness and the provisions of
this Article 5 do not impair in any way the right of a Debentureholder to
receive Trust Units in respect of principal and interest upon any conversion
pursuant to Article 6, upon any redemption pursuant to Article 4 or at
maturity pursuant to Article 4.
|
5.14
|
Invalidated
Payments
|
In the
event that any of the Senior Indebtedness shall be paid in full and
subsequently, for whatever reason, such formerly paid or satisfied Senior
Indebtedness becomes unpaid or unsatisfied, the terms and conditions of this
Article 5 shall be reinstated and the provisions of this Article
shall again be operative until all Senior Indebtedness is repaid in full,
provided that such reinstatement shall not give the Senior Creditors any rights
or recourses against the Trustee or the Debentureholders for amounts paid to the
Debentureholders subsequent to such payment or satisfaction in full and prior to
such reinstatement.
36
|
5.15
|
Contesting
Security
|
The
Trustee, for itself and on behalf of the Debentureholders, agrees that it shall
not contest or bring into question the validity, perfection or enforceability of
any of the Senior Indebtedness, the Senior Security, or the relative priority of
the Senior Security.
ARTICLE 6
CONVERSION
OF DEBENTURES
|
6.1
|
Applicability
of Article
|
Any
Debentures issued hereunder of any series which by their terms are convertible
(subject, however, to any applicable restriction of the conversion of Debentures
of such series) will be convertible into Trust Units or other securities of the
Trust, at such conversion rate or rates, and on such date or dates and in
accordance with such other provisions as shall have been determined at the time
of issue of such Debentures and shall have been expressed in this Indenture, in
such Debentures, in an Officers' Certificate, or in a supplemental indenture
authorizing or providing for the issue thereof.
Such
right of conversion shall extend only to the maximum number of whole Trust Units
into which the aggregate principal amount of the Debenture or Debentures
surrendered for conversion at any one time by the holder thereof may be
converted. Fractional interests in Trust Units shall be adjusted for in the
manner provided in Section 6.6.
|
6.2
|
Notice
of Expiry of Conversion Privilege
|
Notice of
the expiry of the conversion privileges of the Debentures shall be given by or
on behalf of the Trust, not more than 60 days and not less than 30 days prior to
the date fixed for the Time of Expiry, in the manner provided in Section
14.2.
|
6.3
|
Revival
of Right to Convert
|
If the
redemption of any Debenture called for redemption by the Trust is not made or
the payment of the purchase price of any Debenture which has been tendered in
acceptance of an offer by the Trust to purchase Debentures for cancellation is
not made, in the case of a redemption upon due surrender of such Debenture or in
the case of a purchase on the date on which such purchase is required to be
made, as the case may be, then, provided the Time of Expiry has not passed, the
right to convert such Debentures shall revive and continue as if such Debenture
had not been called for redemption or tendered in acceptance of the Trust's
offer, respectively.
|
6.4
|
Manner
of Exercise of Right to Convert
|
|
(a)
|
The
holder of a Debenture desiring to convert such Debenture in whole or in
part into Trust Units shall surrender such Debenture to the Trustee at
either of its principal offices in the City of Calgary, Alberta or the
City of Toronto, Ontario together with the conversion notice attached
hereto as Schedule D
or any other written notice in a form 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 writing in form and executed in a
manner satisfactory to the Trustee, exercising his right to convert such
Debenture in accordance with the provisions of this Article; provided that
with respect to a Global Debenture, the obligation to surrender a
Debenture to the Trustee shall be satisfied if the Trustee makes notation
on the Global Debenture of the principal amount thereof so converted and
the Trustee is provided with all other documentation which it may request.
Thereupon such Debentureholder or, subject to payment of all applicable
stamp or security transfer taxes or other governmental charges and
compliance with all reasonable requirements of the Trustee, his nominee(s)
or assignee(s) shall be entitled to be entered in the books of the Trust
as at the Date of Conversion (or such later date as is specified in
Section 6.4(b)) as the holder of the number of Trust Units into which such
Debenture is convertible in accordance with the provisions of this Article
and, as soon as practicable thereafter, the Trust shall deliver to such
Debentureholder or, subject as aforesaid, his nominee(s) or assignee(s), a
certificate or certificates for such Trust Units and make or cause to be
made any payment of interest to which such holder is entitled in
accordance with Section 6.4(e)
hereof.
|
37
|
(b)
|
For
the purposes of this Article, a Debenture shall be deemed to be
surrendered for conversion on the date (herein called the "Date of Conversion") on
which it is so surrendered when the register of the Trustee is open and in
accordance with the provisions of this Article or, in the case of a Global
Debenture which the Trustee received notice of and all necessary
documentation in respect of the exercise of the conversion rights and, in
the case of a Debenture so surrendered by post or other means of
transmission, on the date on which it is received by the Trustee at one of
its offices specified in Section 6.4(a); provided that if a Debenture is
surrendered for conversion on a day on which the register of Trust Units
is closed, the person or persons entitled to receive Trust Units shall
become the holder or holders of record of such Trust Units as at the date
on which such registers are next
reopened.
|
|
(c)
|
Any
part, being $1,000 or an integral multiple thereof, of a Debenture in a
denomination in excess of $1,000 may be converted as provided in this
Article and all references in this Indenture to conversion of Debentures
shall be deemed to include conversion of such
parts.
|
|
(d)
|
The
holder of any Debenture of which only a part is converted shall, upon the
exercise of his right of conversion surrender such Debenture to the
Trustee in accordance with Section 6.4(a), and the Trustee shall cancel
the same and shall without charge 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 or, with respect to a Global Debenture, the Depository shall
make notations on the Global Debentures of the principal amount thereof so
converted.
|
|
(e)
|
The
holder of a Debenture surrendered for conversion in accordance with this
Section 6.4 shall be entitled (subject to any applicable restriction on
the right to receive interest on conversion of Debentures of any series)
to receive accrued and unpaid interest in respect thereof, in cash, up to
but excluding the Date of Conversion and the Trust Units issued upon such
conversion shall rank only in respect of distributions or dividends
declared in favour of unitholders of record on and after the Date of
Conversion or such later date as such holder shall become the holder of
record of such Trust Units pursuant to Section 6.4(b), from which
applicable date they will for all purposes be and be deemed to be issued
and outstanding as fully paid and non-assessable Trust
Units.
|
|
6.5
|
Adjustment
of Conversion Price
|
The
Conversion Price in effect at any date shall be subject to adjustment from time
to time as set forth below.
|
(a)
|
If
and whenever at any time prior to the Time of Expiry the Trust shall (i)
subdivide or redivide the outstanding Trust Units into a greater number of
units, (ii) reduce, combine or consolidate the outstanding Trust Units
into a smaller number of units, or (iii) issue Trust Units to the holders
of all or substantially all of the outstanding Trust Units by way of a
dividend or distribution (other than the issue of Trust Units to holders
of Trust Units who have elected to receive dividends or distributions in
the form of Trust Units in lieu of cash dividends or cash distributions
paid in the ordinary course on the Trust Units), the Conversion Price in
effect on the effective date of such subdivision, redivision, reduction,
combination or consolidation or on the record date for such issue of Trust
Units by way of a dividend or distribution, as the case may be, shall be
adjusted immediately after such effective date or such record date so that
it shall equal the price determined by multiplying the Conversion Price in
effect on such effective date or record date, as applicable, by a
fraction, of which the numerator shall be the total number of Trust Units
outstanding prior to such effective date or record as applicable date, and
of which the denominator shall be the total number of Trust Units
resulting from such subdivision, redivision, reduction, combination or
consolidation or issuance of Trust Units by way of a dividend or
distribution, as the case may be. Such adjustment shall be made
successively whenever any event referred to in this Section 6.5(a) shall
occur. Any such issue of Trust Units by way of a dividend or distribution
shall be deemed to have been made on the record date for the dividend or
distribution for the purpose of calculating the number of outstanding
Trust Units under subsections (b) and (d) of this Section
6.5.
|
38
|
(b)
|
If
and whenever at any time prior to the Time of Expiry the Trust shall fix a
record date for the issuance of options, rights or warrants to all or
substantially all the holders of its outstanding Trust Units entitling
them, for a period expiring not more than 45 days after such record date,
to subscribe for or purchase Trust Units (or securities convertible into
Trust Units) at a price per unit (or having a conversion or exchange price
per unit) less than 95% of the Current Market Price of a Trust Unit on
such record date, the Conversion Price shall be adjusted 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, of which the numerator shall be the total number of Trust Units
outstanding on such record date plus a number of Trust Units equal to the
number arrived at by dividing the aggregate price of the total number of
additional Trust Units offered for subscription or purchase (or the
aggregate conversion or exchange price of the convertible securities so
offered) by such Current Market Price per Trust Unit, and of which the
denominator shall be the total number of Trust Units outstanding on such
record date plus the total number of additional Trust Units offered for
subscription or purchase (or into which the convertible securities so
offered are convertible). Such adjustment shall be made successively
whenever such a record date is fixed. To the extent that any such options,
rights or warrants are not so issued or any such options, rights or
warrants are not exercised prior to the expiration thereof, the Conversion
Price shall be re-adjusted to the Conversion Price which would then be in
effect if such record date had not been fixed or to the Conversion Price
which would then be in effect based upon the number of Trust Units (or
securities convertible into Trust Units) actually issued upon the exercise
of such options, rights or warrants were included in such fraction, as the
case may be.
|
|
(c)
|
Subject
to the terms of this Indenture, if and whenever at any time prior to the
Time of Expiry the Trust shall fix a record date for the making of a
distribution to all or substantially all the holders of its outstanding
Trust Units of (i) units of any class other than Trust Units and other
than units distributed to holders of Trust Units who have elected to
receive dividends or distributions in the form of such units in lieu of
dividends or distributions paid in the ordinary course, (ii) rights,
options or warrants (excluding rights, options or warrants entitling the
holders thereof as at a specified date to subscribe for or purchase Trust
Units or securities convertible into Trust Units for a period of not more
than 45 days after such date), (iii) evidences of its indebtedness, or
(iv) assets (excluding dividends or distributions paid in the ordinary
course) then, in each such case, the Conversion Price shall be adjusted
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, of which the numerator shall be the total number of
Trust Units outstanding on such record date multiplied by the Current
Market Price per Trust Unit on such record date, less the fair market
value (as determined by the directors of PEOC, on behalf of the Trust,
with the approval of the Debenture Trustee, which determination shall be
conclusive) of such units, rights, options, warrants, evidences of
indebtedness or assets so distributed, and of which the denominator shall
be the total number of Trust Units outstanding on such record date
multiplied by such Current Market Price per Trust Unit. Such adjustment
shall be made successively whenever such a record date is fixed. To the
extent that such distribution is not so made, the Conversion Price shall
be readjusted to the Conversion Price which would then be in effect if
such record date had not been fixed or to the Conversion Price which would
then be in effect if only such units, rights, options, warrants, evidences
of indebtedness or assets actually distributed were included in such
fraction, as the case may be. In clause (iv) of this subsection (c) the
term "dividends or distributions paid in the ordinary course" shall
include the value of any securities or other property or assets
distributed in lieu of cash dividends or distributions paid in the
ordinary course at the option of
unitholders.
|
|
(d)
|
If
and whenever at any time prior to the Time of Expiry, there is a
reclassification of the Trust Units or a capital reorganization of the
Trust other than as described in Section 6.5(a) or a consolidation,
amalgamation, arrangement, binding securities exchange, merger of the
Trust with or into any other Person or other entity or acquisition of the
Trust or other combination pursuant to which the Trust Units are converted
into or acquired for cash, securities or other property; or a sale or
conveyance of the property and assets of the Trust as an entirety or
substantially as an entirety to any other Person (other than a direct or
indirect wholly-owned subsidiary of the Trust) or other entity or a
liquidation, dissolution or winding-up of the Trust, any holder of a
Debenture who has not exercised its right of conversion prior to the
effective date of such reclassification, capital reorganization,
consolidation, amalgamation, arrangement, merger, securities exchange,
acquisition, combination, sale or conveyance or liquidation, dissolution
or winding-up, upon the exercise of such right thereafter, shall be
entitled to receive and shall accept, in lieu of the number of Trust Units
then sought to be acquired by it, such amount of cash or the number of
shares or other securities or property of the Trust or of the Person or
other entity resulting from such merger, amalgamation, arrangement,
acquisition, combination or consolidation, or to which such sale or
conveyance may be made or which holders of Trust Units receive pursuant to
such liquidation, dissolution or winding-up, as the case may be, that such
holder of a Debenture would have been entitled to receive on such
reclassification, capital reorganization, consolidation, amalgamation,
arrangement, merger, securities exchange, acquisition, combination, sale
or conveyance or liquidation, dissolution or winding-up, if, on the record
date or the effective date thereof, as the case may be, the holder had
been the registered holder of the number of Trust Units sought to be
acquired by it and to which it was entitled to acquire upon the exercise
of the conversion right. If determined appropriate by the Board of
Directors, to give effect to or to evidence the provisions of this Section
6.5(d), the Trust, its successor, or such purchasing Person or other
entity, as the case may be, shall, prior to or contemporaneously with any
such reclassification, capital reorganization, consolidation,
amalgamation, arrangement, merger, securities exchange, acquisition,
combination, sale or conveyance or liquidation, dissolution or winding-up,
enter into an indenture which shall provide, to the extent possible, for
the application of the provisions set forth in this Indenture with respect
to the rights and interests thereafter of the holder of Debentures to the
end that the provisions set forth in this Indenture shall thereafter
correspondingly be made applicable, as nearly as may reasonably be, with
respect to any cash, shares or other securities or property to which a
holder of Debentures is entitled on the exercise of its acquisition rights
thereafter. Any indenture entered into between the Trust and the Trustee
pursuant to the provisions of this Section 6.5(d) shall be a supplemental
indenture entered into pursuant to the provisions of Article 16. Any
indenture entered into between the Trust, any successor to the Trust or
such purchasing Person or other entity and the Trustee shall provide for
adjustments which shall be as nearly equivalent as may be practicable to
the adjustments provided in this Section 6.5(d) and which shall apply to
successive reclassifications, capital reorganizations, amalgamations,
consolidations, mergers, securities exchanges, acquisitions, combinations,
sales or conveyances.
|
39
|
(e)
|
In
the event the Trust pays a dividend or makes a distribution to all or
substantially all the holders of Trust Units consisting of capital stock,
or similar equity interests in, a Subsidiary or other business unit of the
Trust (the "Spinoff
Securities"), the Conversion Price shall be adjusted, unless the
Trust makes an equivalent distribution to the holders of Debentures, so
that the same shall be equal to the rate determined by multiplying the
Conversion Price in effect on the record date fixed for the determination
of unitholders entitled to receive such distribution by a fraction, the
denominator of which shall be the sum of (i) the VWAP for the 20
consecutive trading day period (the "Spinoff Valuation
Period") commencing on and including the fifth trading day after
the date on which ex-dividend trading commences for such distribution on
the Toronto Stock Exchange, or such other national or regional exchange or
market on which the Trust Units are then listed or quoted and (ii) the
product of (A) the volume weighted average price (calculated in
substantially the same way as the Current Market Price is calculated for
the Trust Units) over the Spinoff Valuation Period of the Spinoff
Securities or, if no such prices are available, the fair market value of
the Spinoff Securities as reasonably determined by the Board of Directors
(which determination shall be conclusive and shall be evidenced by an
Officers' Certificate delivered to the Trustee) multiplied by (B) the
number of Spinoff Securities distributed in respect of one Trust Unit and
the numerator of which shall be the VWAP over the Spinoff Valuation
Period, such adjustment to become effective immediately preceding the
opening of business on the 25th trading day after the date on which
ex-dividend trading commences; provided, however, that the Trust may in
lieu of the foregoing adjustment elect to make adequate provision so that
each holder of Debentures shall have the right to receive upon conversion
thereof the amount of such Spinoff Securities that such holder of
Debentures would have received if such Debentures had been converted on
the record date with respect to such
distribution.
|
|
(f)
|
If
any issuer bid made by the Trust or any of its Subsidiaries for all or any
portion of Trust Units shall expire, then, if the issuer bid shall require
the payment to unitholders of consideration per Trust Unit having a fair
market value (determined as provided below) that exceeds the Current
Market Price per Trust Unit on the last date (the "Expiration Date")
tenders could have been made pursuant to such issuer bid (as it may be
amended) (the last time at which such tenders could have been made on the
Expiration Date is hereinafter sometimes called the "Expiration Time"), the
Conversion Price shall be adjusted so that the same shall equal the rate
determined by multiplying the Conversion Price in effect immediately
preceding the close of business on the Expiration Date by a fraction of
which (i) the denominator shall be the sum of (A) the fair market value of
the aggregate consideration (the fair market value as determined by the
Board of Directors, whose determination shall be conclusive evidence of
such fair market value and which shall be evidenced by an Officers'
Certificate delivered to the Trustee) payable to unitholders based on the
acceptance (up to any maximum specified in the terms of the issuer bid) of
all Trust Units validly tendered and not withdrawn as of the Expiration
Time (the Trust Units deemed so accepted, up to any such maximum, being
referred to as the "Purchased Trust Units")
and (B) the product of the number of Trust Units outstanding (less any
Purchased Trust Units) at the Expiration Time and the Current Market Price
per Trust Unit on the Expiration Date and (ii) the numerator of which
shall be the product of the number of Trust Units outstanding (including
Purchased Trust Units) at the Expiration Time multiplied by the Current
Market Price per Trust Unit on the Expiration Date, such adjustment to
become effective immediately preceding the opening of business on the day
following the Expiration Date. In the event that the Trust is
obligated to purchase Trust Units pursuant to any such issuer bid, but the
Trust is permanently prevented by applicable law from effecting any or all
such purchases or any or all such purchases are rescinded, the Conversion
Price shall again be adjusted to be the Conversion Price which would have
been in effect based upon the number of Trust Units actually purchased, if
any. If the application of this clause (f) of Section 6.5 to
any issuer bid would result in a decrease in the Conversion Price, no
adjustment shall be made for such issuer bid under this clause
(f).
|
40
For
purposes of this Section 6.5(f), the term "issuer bid" shall mean an issuer bid
under Applicable Securities Legislation (other than an issuer bid which is
exempt from the requirements of Part 2 of MI 62-104) or a take-over bid (other
than an take-over bid which is exempt from the requirements of Part 2 of MI
62-104) under Applicable Securities Legislation by a Subsidiary of the Trust for
the Trust Units and all references to "purchases" of Trust Units in issuer bids
(and all similar references) shall mean and include the purchase of Trust Units
in issuer bids and all references to "tendered Trust Units" (and all similar
references) shall mean and include Trust Units tendered in issuer
bids.
|
(g)
|
In
any case in which this Section 6.5 shall require
that an adjustment shall become effective immediately after a record date
for an event referred to herein, the Trust 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 Trust
Units issuable upon such conversion by reason of the adjustment required
by such event; provided, however, that the Trust shall deliver to such
holder an appropriate instrument evidencing such holder's right to receive
such additional Trust Units upon the occurrence of the event requiring
such adjustment and the right to receive any distributions made on such
additional Trust Units declared in favour of holders of record of Trust
Units on and after the Date of Conversion or such later date as such
holder would, but for the provisions of this Section 6.5(g), have become
the holder of record of such additional Trust Units pursuant to Section
6.4(b).
|
|
(h)
|
The
adjustments provided for in this Section 6.5 are cumulative and shall
apply to successive subdivisions, redivisions, reductions, combinations,
consolidations, distributions, issues or other events resulting in any
adjustment under the provisions of this Section, provided that,
notwithstanding any other provision of this Section, no adjustment of the
Conversion Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Conversion Price then in
effect; provided however, that any adjustments which by reason of this
Section 6.5(h) are not required to be made shall be carried forward and
taken into account in any subsequent
adjustment.
|
|
(i)
|
For
the purpose of calculating the number of Trust Units outstanding, Trust
Units owned by or for the benefit of the Trust shall not be
counted.
|
|
(j)
|
In
the event of any question arising with respect to the adjustments provided
in this Section 6.5, such question shall be conclusively determined by a
firm of nationally recognized chartered accountants appointed by the Trust
and acceptable to the Trustee (who may be the Auditors of the Trust); such
accountants shall have access to all necessary records of the Trust and
such determination shall be binding upon the Trust, the Trustee, and the
Debentureholders.
|
41
|
(k)
|
In
case the Trust shall take any action affecting the Trust Units other than
action described in this Section 6.5, which in the
opinion of the Board of Directors, would materially affect the rights of
Debentureholders, the Conversion Price shall be adjusted in such manner
and at such time, by action of the Board of Directors, subject to the
prior written consent of the Toronto Stock Exchange or such other exchange
on which the Debentures are then listed, as the Board of Directors, in
their sole discretion may determine to be equitable in the circumstances.
Failure of the directors to make such an adjustment shall be conclusive
evidence that they have determined that it is equitable to make no
adjustment in the circumstances.
|
|
(l)
|
Subject
to the prior written consent of the Toronto Stock Exchange or such other
exchange on which the Debentures are then listed, no adjustment in the
Conversion Price shall be made in respect of any event described in
Sections 6.5(a), 6.5(b), 6.5(c) 6.5(d) or 6.5(f) other than the events
described in 6.5(a)(i) or 6.5(a) (ii) if the holders of the Debentures are
entitled to participate in such event on the same terms mutatis mutandis as if
they had converted their Debentures prior to the effective date or record
date, as the case may be, of such
event.
|
|
(m)
|
Except
as stated above in this Section 6.5, no adjustment will be made in the
Conversion Price for any Debentures as a result of the issuance of Trust
Units at less than the Current Market Price for such Trust Units on the
date of issuance or the then applicable Conversion
Price.
|
|
6.6
|
No
Requirement to Issue Fractional Trust
Units
|
The Trust
shall not be required to issue fractional Trust Units upon the conversion of
Debentures pursuant to this Article. If more than one Debenture shall be
surrendered for conversion at one time by the same holder, the number of whole
Trust Units issuable upon conversion thereof shall be computed on the basis of
the aggregate principal amount of such Debentures to be converted. If any
fractional interest in a Trust Unit would, except for the provisions of this
Section, be deliverable upon the conversion of any principal amount of
Debentures, the Trust shall, in lieu of delivering any certificate representing
such fractional interest, make a cash payment to the holder of such Debenture of
an amount equal to the fractional interest which would have been issuable
multiplied by the Current Market Price.
|
6.7
|
Trust
to Reserve Trust Units
|
The Trust
covenants with the Trustee that it will at all times reserve and keep available
out of its authorized Trust Units (if the number thereof is or becomes limited),
solely for the purpose of issue upon conversion of Debentures as in this Article
provided, and conditionally allot to Debentureholders who may exercise their
conversion rights hereunder, such number of Trust Units as shall then be
issuable upon the conversion of all outstanding Debentures. The Trust covenants
with the Trustee that all Trust Units which shall be so issuable shall be duly
and validly issued as fully-paid and non-assessable.
|
6.8
|
Cancellation
of Converted Debentures
|
Subject
to the provisions of Section 6.4 as to Debentures converted in part, all
Debentures converted in whole or in part under the provisions of this Article
shall be forthwith delivered to and cancelled by the Trustee and no Debenture
shall be issued in substitution for those converted.
|
6.9
|
Certificate
as to Adjustment
|
The Trust
shall from time to time immediately after the occurrence of any event which
requires an adjustment or readjustment as provided in Section 6.5, deliver an
Officers' Certificate to the Trustee specifying the nature of the event
requiring the same and the amount of the adjustment necessitated thereby and
setting forth in reasonable detail the method of calculation and the facts upon
which such calculation is based, which certificate and the amount of the
adjustment specified therein shall be verified by an opinion of a firm of
nationally recognized chartered accountants appointed by the Trust and
acceptable to the Trustee (who may be the Auditors of the Trust) and shall be
conclusive and binding on all parties in interest. When so approved, the Trust
shall, except in respect of any subdivision, redivision, reduction, combination
or consolidation of the Trust Units, forthwith give notice to the
Debentureholders in the manner provided in Section 14.2 specifying the event
requiring such adjustment or readjustment and the results thereof, including the
resulting Conversion Price; provided that, if the Trust has given notice under
this Section 6.9 covering all the relevant facts in respect of such event and if
the Trustee approves, no such notice need be given under this Section
6.9.
42
|
6.10
|
Notice
of Special Matters
|
The Trust
covenants with the Trustee that so long as any Debenture remains outstanding, it
will give notice to the Trustee, and to the Debentureholders in the manner
provided in Section 14.2, of its intention to fix a record date for any event
referred to in Section 6.5(a) (other than the subdivision, redivision,
reduction, combination or consolidation of its Trust Units) which may give rise
to an adjustment in the Conversion Price, and, in each case, such notice shall
specify the particulars of such event and the record date and the effective date
for such event; provided that the Trust 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 fourteen (14) days in each case prior to such applicable record
date.
In
addition, the Trust covenants with the Trustee that so long as any Debenture
remains outstanding and other than in connection with a Corporation Conversion,
it will give notice to the Trustee, and to the Debentureholders in the manner
provided in Section 14.2, at least 30 days prior to the (i) effective date of
any transaction referred to in Section 6.5(d) stating the consideration into
which the Debentures will be convertible after the effective date of such
transaction, and (ii) Expiration Date of any transaction referred to in Section
6.5(f) stating the consideration paid per Trust Unit in such
transaction.
|
6.11
|
Protection
of Trustee
|
Subject
to Section 15.3, the Trustee:
|
(a)
|
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;
|
|
(b)
|
shall
not be accountable with respect to the validity or value (or the kind or
amount) of any Trust Units or of any shares or other securities or
property which may at any time be issued or delivered upon the conversion
of any Debenture; and
|
|
(c)
|
shall
not be responsible for any failure of the Trust to make any cash payment
or to issue, transfer or deliver Trust Units 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.
|
|
6.12
|
U.S.
Legend on Trust Units
|
|
(a)
|
No
Trust Units issuable pursuant to any Debentures have been or will be
registered under the 1933 Act. Each certificate representing Trust Units
issuable pursuant to this Article 6 upon conversion of Debentures
that bear a U.S. Legend ("Underlying Shares"), as
well as all certificates issued in exchange for or in substitution of the
foregoing securities, shall have imprinted or otherwise reproduced thereon
the U.S. Legend and such other legend or legends, including, without
limitation, a Canadian legend, not inconsistent with the provisions of the
Indenture, as may be required to comply with any law or with any rules or
regulations pursuant thereto or with any rules or regulations of any
securities exchange or securities regulatory authority or to conform with
general usage, all as may be determined by the Trust, as conclusively
evidenced by the issue of such
certificates.
|
|
(b)
|
If
any Underlying Shares are being sold in compliance with the requirements
of Rule 904 of Regulation S, and provided that the Trust is a "foreign
issuer" within the meaning of Regulation S at the time of sale, the U.S.
Legend may be removed by providing a declaration to the Trustee, as
registrar and transfer agent for the Trust Units, substantially as set
forth in Schedule
E hereto (or as the Trust may prescribe from time to time),
together with any other evidence reasonably requested by the Trust or
Trustee, which evidence may include an opinion of counsel of recognized
standing, in form and substance reasonably satisfactory to the Trust or
the Trustee, to the effect that the U.S. Legend is no longer required
pursuant to the requirements of the 1933 Act; and provided further that,
if any such securities are being sold within the United States in
accordance with Rule 144 under the 1933 Act, the U.S. Legend may be
removed by delivery to the Trustee, as registrar and transfer agent for
the Trust Units, of an opinion of counsel, of recognized standing or other
evidence reasonably satisfactory to the Trust, that the U.S. Legend is no
longer required under applicable requirements of the 1933 Act or
applicable state securities laws. Provided that the Trustee obtains
confirmation from the Trust that such counsel is satisfactory to it, it
shall be entitled to rely on such opinion of counsel without further
inquiry.
|
43
|
6.13
|
Payment
of Cash in Lieu of Trust Units
|
Upon
conversion, the Trust may offer and the converting Holder may agree to the
delivery of cash for all or a portion of the Debentures surrendered in lieu of
Trust Units.
ARTICLE 7
COVENANTS
OF THE TRUST
The Trust
hereby covenants and agrees with the Trustee for the benefit of the Trustee and
the Debentureholders, that so long as any Debentures remain
outstanding:
|
7.1
|
To
Pay Principal and Interest
|
The Trust
will duly and punctually pay or cause to be paid to every Debentureholder the
principal of and interest accrued on the Debentures of which it is the holder on
the dates, at the places and in the manner mentioned herein and in the
Debentures.
|
7.2
|
To
Pay Trustee's Remuneration
|
The Trust
will pay the Trustee reasonable remuneration for its services as Trustee
hereunder and will repay to the Trustee on demand all monies which shall have
been paid by the Trustee in connection with the execution of the trusts hereby
created and such monies including the Trustee's remuneration, shall be payable
out of any funds coming into the possession of the Trustee in priority to
payment of any principal of the Debentures or interest thereon. Such
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 a court of competent
jurisdiction.
|
7.3
|
To
Give Notice of Default
|
The Trust
shall notify the Trustee immediately upon obtaining knowledge of any Event of
Default hereunder.
|
7.4
|
Preservation
of Existence, etc.
|
Subject
to the express provisions hereof, the Trust will carry on and conduct its
activities, and cause its Subsidiaries to carry on and conduct their businesses,
in a business-like manner and in accordance with good business practices; and,
subject to the express provisions hereof, it will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence and
rights.
|
7.5
|
Keeping
of Books
|
The Trust
will keep or cause to be kept proper books of record and account, in which full
and correct entries shall be made of all financial transactions and the assets
and business of the Trust in accordance with GAAP.
44
|
7.6
|
Annual
Certificate of Compliance
|
The Trust
shall deliver to the Trustee, within 120 days after the end of each calendar
year, an Officers' Certificate as to the knowledge of such officers of PEOC who
executes the Officers' Certificate of the Trust's compliance with all conditions
and covenants in this Indenture certifying that after reasonable investigation
and inquiry, the Trust has complied with all covenants, conditions or other
requirements contained in this Indenture, the non-compliance with which could,
with the giving of notice, lapse of time or otherwise, constitute an Event of
Default hereunder, or if such is not the case, setting forth with reasonable
particulars the circumstances of any failure to comply and steps taken or
proposed to be taken to eliminate such circumstances and remedy such Event of
Default, as the case may be.
|
7.7
|
Limitation
on Additional Debentures
|
The Trust
shall not issue additional convertible debentures ranking higher in priority
than the Initial Debentures.
|
7.8
|
Performance
of Covenants by Trustee
|
If the
Trust shall fail to perform any of its covenants contained in this Indenture,
the Trustee may notify the Debentureholders of such failure on the part of the
Trust or may itself perform any of the covenants capable of being performed by
it, but shall be under no obligation to do so or to notify the Debentureholders.
All sums so expended or advanced by the Trustee shall be repayable as provided
in Section 7.2. No such performance, expenditure or advance by the Trustee shall
be deemed to relieve the Trust of any default hereunder.
|
7.9
|
SEC
Notice
|
The Trust
covenants that, in the event that any class of its securities shall become
registered pursuant to Section 12 of the U.S. Securities Exchange Act of 1934,
as amended, the Trust shall promptly deliver to the Trustee an Officers'
Certificate (in a form provided by the Trustee) certifying such status and other
information as the Trustee may reasonably require at such given
time.
|
7.10
|
No
Distribution on Trust Units if Event of
Default
|
The Trust
shall not declare or pay any distribution to the holders of its issued and
outstanding Trust Units after the occurrence of an Event of Default unless and
until such default shall have been cured or waived or shall have ceased to
exist.
|
7.11
|
Maintain
Listing
|
The Trust
will use reasonable commercial efforts to maintain the listing of the Trust
Units and the Debentures on the Toronto Stock Exchange, and to maintain the
Trust's status as a "reporting issuer" not in default of the requirements of the
Applicable Securities Legislation; provided that the foregoing covenant shall
not prevent or restrict the Trust from carrying out a transaction to which
Article 11 would apply (including the Corporate Conversion) if carried out
in compliance with Article 11 even if as a result of such transaction the
Trust ceases to be a "reporting issuer" in all or any of the provinces of Canada
or the Trust Units or Debentures cease to be listed on the Toronto Stock
Exchange or any other stock exchange.
ARTICLE 8
DEFAULT
|
8.1
|
Events
of Default
|
Each of
the following events constitutes, and is herein sometimes referred to as, an
"Event of
Default":
45
|
(a)
|
failure
for 30 days to pay interest on the Debentures when
due;
|
|
(b)
|
failure
to pay principal or premium when due on the Debentures whether at
maturity, upon redemption or a Change of Control, by declaration or
otherwise;
|
|
(c)
|
default
in the delivery, when due, of any Trust Units or other consideration,
including any make whole premium, payable on conversion with respect to
the Debentures, which default continues for 15
days;
|
|
(d)
|
default
in the observance or performance of any covenant or condition of the
Indenture by the Trust and the failure to cure (or obtain a waiver for)
such default for a period of 30 days after notice in writing has been
given by the Trustee or from holders of not less than 25% in aggregate
principal amount of the Debentures to the Trust specifying such default
and requiring the Trust to rectify such default or obtain a waiver for
same;
|
|
(e)
|
if
a decree or order of a Court having jurisdiction is entered adjudging the
Trust 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 Trust, or appointing a receiver
of, or of any substantial part of, the property of the Trust 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
days;
|
|
(f)
|
if
the Trust 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, or of any substantial part of, the property of the Trust 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;
|
|
(g)
|
if
a resolution is passed for the winding-up or liquidation of the Trust
except in the course of carrying out or pursuant to a transaction in
respect of which the conditions of Section 11.1 are duly observed and
performed; or
|
|
(h)
|
if,
after the date of this Indenture, any proceedings with respect to the
Trust are taken with respect to a compromise or arrangement, with respect
to creditors of the Trust generally, under the applicable legislation of
any jurisdiction;
|
then: (x)
in each and every such event listed above, the Trustee may, in its discretion,
and shall, upon receipt of a request in writing signed by the holders of not
less than 25% in principal amount of the Debentures then outstanding, subject to
the provisions of Section 8.3, by notice in writing to the Trust declare the
principal of and interest on all Debentures then outstanding and all other
monies outstanding hereunder to be due and payable and the same shall thereupon
forthwith become immediately due and payable to the Trustee, and (y) on the
occurrence of an Event of Default under Sections 8.1(e), (f) or (h), the
principal of and interest on all Debentures then outstanding hereunder and all
other monies outstanding hereunder, shall automatically without any declaration
or other act on the part of the Trustee or any Debentureholder become
immediately due and payable to the Trustee and, in either case, upon
such amounts becoming due and payable in either (x) or (y) above, the Trust
shall forthwith pay to the Trustee for the benefit of the Debentureholders such
principal, accrued and unpaid interest and interest on amounts in default on
such Debenture and all other monies outstanding hereunder, together with
subsequent interest at the rate borne by the Debentures on such principal,
interest and such other monies from the date of such declaration or event until
payment is received by the Trustee, such subsequent interest to be payable at
the times and places and in the manner mentioned in and according to the tenor
of the Debentures. Such payment when made shall be deemed to have been made in
discharge of the Trust's obligations hereunder and any monies so received by the
Trustee shall be applied in the manner provided in Section 8.6.
For
greater certainty, for the purposes of this Section 8.1, a series of Debentures
shall be in default in respect of an Event of Default if such Event of Default
relates to a default in the payment of principal or interest on the Debentures
of such series in which case references to Debentures in this Section 8.1 refer
to Debentures of that particular series.
46
For
purposes of this Article 8, where the Event of Default refers to an Event
of Default with respect to a particular series of Debentures as described in
this Section 8.1, then this Article 8 shall apply mutatis mutandis to the
Debentures of such series and references in this Article 8 to the
Debentures shall mean Debentures of the particular series and references to the
Debentureholders shall refer to the Debentureholders of the particular series,
as applicable.
|
8.2
|
Notice
of Events of Default
|
If an
Event of Default shall occur and be continuing the Trustee shall, within 30 days
after it receives written notice of the occurrence of such Event of Default,
give notice of such Event of Default to the Debentureholders in the manner
provided in Section 14.2, provided that notwithstanding the foregoing,
unless the Trustee shall have been requested to do so by the holders of at least
25% of the principal amount of the Debentures then outstanding, the Trustee
shall not be required to give such notice if the Trustee in good faith shall
have determined that the withholding of such notice is in the best interests of
the Debentureholders and shall have so advised the Trust in
writing.
|
8.3
|
Waiver
of Default
|
Upon the
happening of any Event of Default hereunder:
|
(a)
|
the
holders of the Debentures shall have the power (in addition to the powers
exercisable by Extraordinary Resolution as hereinafter provided) by
requisition in writing by the holders of more than 50% of the principal
amount of Debentures then outstanding, to instruct the Trustee to waive
any Event of Default and to cancel any declaration made by the Trustee
pursuant to Section 8.1 and the Trustee shall thereupon waive the Event of
Default and cancel such declaration, or either, upon such terms and
conditions as shall be prescribed in such requisition; provided that
notwithstanding the foregoing if the Event of Default has occurred by
reason of the non-observance or non-performance by the Trust of any
covenant applicable only to one or more series of Debentures, then the
holders of more than 50% of the principal amount of the outstanding
Debentures of that series shall be entitled to exercise the foregoing
power and the Trustee shall so act and it shall not be necessary to obtain
a waiver from the holders of any other series of Debentures;
and
|
|
(b)
|
the
Trustee, so long as it has not become bound to declare the principal and
interest on the Debentures then outstanding to be due and payable, or to
obtain or enforce payment of the same, shall have power to waive any Event
of Default if, in the Trustee's opinion, the same shall have been cured or
adequate satisfaction made therefor, and in such event to cancel any such
declaration theretofore made by the Trustee in the exercise of its
discretion, upon such terms and conditions as the Trustee may deem
advisable.
|
No such
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
or the rights resulting therefrom.
|
8.4
|
Enforcement
by the Trustee
|
Subject
to the provisions of Section 8.3 and to the provisions of any Extraordinary
Resolution that may be passed by the Debentureholders, if the Trust shall fail
to pay to the Trustee, forthwith after the same shall have been declared to be
due and payable under Section 8.1, the principal of and interest on all
Debentures then outstanding, together with any other amounts due hereunder, the
Trustee may in its discretion and shall upon receipt of a request in writing
signed by the holders of not less than 25% in principal amount of the Debentures
then outstanding and upon being funded and indemnified to its reasonable
satisfaction against all costs, expenses and liabilities to be incurred, proceed
in its name as trustee hereunder to obtain or enforce payment of such principal
of and interest on all the Debentures then outstanding together with any other
amounts due hereunder by such proceedings authorized by this Indenture or by law
or equity as the Trustee in such request shall have been directed to take, or if
such request contains no such direction, or if the Trustee shall act without
such request, then by such proceedings authorized by this Indenture or by suit
at law or in equity as the Trustee shall deem expedient.
47
The
Trustee shall be entitled and empowered, 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, to file such proof of debt, amendment of
proof of debt, claim, petition or other document as may be necessary or
advisable in order to have the claims of the Trustee and of the holders of the
Debentures allowed in any insolvency, bankruptcy, liquidation or other judicial
proceedings relative to the Trust or its creditors or relative to or affecting
its property. The Trustee is hereby irrevocably appointed (and the successive
respective holders of the 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 the Debentures with authority to
make and file in the respective names of the holders of the Debentures or on
behalf of the holders of the 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 document 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 the Debentures, as may be necessary or
advisable in the opinion of the Trustee, in order to have the respective claims
of the Trustee and of the holders of the Debentures against the Trust or its
property allowed in any such proceeding, and to receive payment of or on account
of such claims; provided, however, that subject to Section 8.3, 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.
The
Trustee shall also have the power at any time and from time to time to institute
and to maintain such suits and proceedings as it may be advised shall be
necessary or advisable to preserve and protect its interests and the interests
of the Debentureholders.
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. Any such suit or proceeding instituted by the
Trustee shall be brought in the name of the Trustee as trustee of an express
trust, and any recovery of judgment shall be for the rateable benefit of the
holders of the Debentures subject to the provisions of this Indenture. In any
proceeding brought by the Trustee (and also any proceeding in which a
declaratory judgment of a court may be sought as to the interpretation or
construction of any provision of this Indenture, to which the Trustee shall be a
party) the Trustee shall be held to represent all the holders of the Debentures,
and it shall not be necessary to make any holders of the Debentures parties to
any such proceeding.
|
8.5
|
No
Suits by Debentureholders
|
No holder
of any Debenture shall have any right to institute any action, suit or
proceeding at law or in equity for the purpose of enforcing payment of the
principal of or interest on the Debentures or for the execution of any trust or
power hereunder or for the appointment of a liquidator or receiver or for a
receiving order under the Bankruptcy and Insolvency Act
(Canada) or to have the Trust wound up or to file or prove a claim in any
liquidation or bankruptcy proceeding or for any other remedy hereunder, unless:
(a) such holder shall previously have given to the Trustee written notice of the
happening of an Event of Default hereunder; and (b) the Debentureholders by
Extraordinary Resolution or by written instrument signed by the holders of at
least 25% in principal amount of the Debentures then outstanding shall have made
a request to the Trustee and the Trustee shall have been afforded reasonable
opportunity either itself to proceed to exercise the powers hereinbefore granted
or to institute an action, suit or proceeding in its name for such purpose; and
(c) the Debentureholders or any of them shall have furnished to the Trustee,
when so requested by the Trustee, sufficient funds and security and indemnity
satisfactory to it against the costs, expenses and liabilities to be incurred
therein or thereby; and (d) the Trustee shall have failed to act within a
reasonable time after such notification, request and offer of indemnity and such
notification, request and offer of indemnity are hereby declared in every such
case, at the option of the Trustee, to be conditions precedent to any such
proceeding or for any other remedy hereunder by or on behalf of the holder of
any Debentures.
48
|
8.6
|
Application
of Monies by Trustee
|
|
(a)
|
Except
as herein otherwise expressly provided, any monies received by the Trustee
from the Trust pursuant to the foregoing provisions of this
Article 8, or as a result of legal or other proceedings or from any
trustee in bankruptcy or liquidator of the Trust, shall be applied,
together with any other monies in the hands of the Trustee available for
such purpose, as follows:
|
|
(i)
|
first,
in payment or in reimbursement to the Trustee of its compensation, costs,
charges, expenses, borrowings, advances or other monies furnished or
provided by or at the instance of the Trustee in or about the execution of
its trusts under, or otherwise in relation to, this Indenture, with
interest thereon as herein
provided;
|
|
(ii)
|
second,
but subject as hereinafter in this Section 8.6 provided, in payment,
rateably and proportionately to the holders of Debentures, of the
principal of and accrued and unpaid interest and interest on amounts in
default on the Debentures which shall then be outstanding in the priority
of principal first and then accrued and unpaid interest and interest on
amounts in default unless otherwise directed by Extraordinary Resolution
and in that case in such order or priority as between principal and
interest as may be directed by such resolution;
and
|
|
(iii)
|
third,
in payment of the surplus, if any, of such monies to the Trust or its
assigns;
|
provided,
however, that no payment shall be made pursuant to clause (ii) above in respect
of the principal interest on any Debenture held, directly or indirectly, by or
for the benefit of the Trust or any Subsidiary (other than any Debenture pledged
for value and in good faith to a person other than the Trust or any Subsidiary
but only to the extent of such person's interest therein) except subject to the
prior payment in full of the principal and interest (if any) on all Debentures
which are not so held.
|
(b)
|
The
Trustee shall not be bound to apply or make any partial or interim payment
of any monies coming into its hands if the amount so received by it, after
reserving thereout such amount as the Trustee may think necessary to
provide for the payments mentioned in Section 8.6(a), is insufficient to
make a distribution of at least 2% of the aggregate principal amount of
the outstanding Debentures, but it may retain the money so received by it
and invest or deposit the same as provided in Section 15.9 until the money
or the investments representing the same, with the income derived
therefrom, together with any other monies for the time being under its
control shall be sufficient for the said purpose or until it shall
consider it advisable to apply the same in the manner hereinbefore set
forth. The foregoing shall, however, not apply to a final payment in
distribution hereunder.
|
|
8.7
|
Notice
of Payment by Trustee
|
Not less
than 15 days notice shall be given in the manner provided in Section 14.2 by the
Trustee to the Debentureholders of any payment to be made under this Article 8.
Such notice shall state the time when and place where such payment is to be made
and also the liability under this Indenture to which it is to be applied. After
the day so fixed, unless payment shall have been duly demanded and have been
refused, the Debentureholders will be entitled to interest only on the balance
(if any) of the principal monies and interest (if any) due to them,
respectively, on the Debentures, after deduction of the respective amounts
payable in respect thereof on the day so fixed.
|
8.8
|
Trustee
May Demand Production of Debentures
|
The
Trustee shall have the right to demand production of the Debentures in respect
of which any payment of principal, interest required by this Article 8 is
made and may cause to be endorsed on the same a memorandum of the amount so paid
and the date of payment, but the Trustee may, in its discretion, dispense with
such production and endorsement, upon such indemnity being given to it and to
the Trust as the Trustee shall deem sufficient.
49
|
8.9
|
Remedies
Cumulative
|
No remedy
herein conferred upon or reserved to the Trustee, or upon or to 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 existing or hereafter to exist by law or by
statute.
|
8.10
|
Judgment
Against the Trust
|
The Trust
covenants and agrees with the Trustee that, in case of any judicial or other
proceedings to enforce the rights of the Debentureholders, judgment may be
rendered against it 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 monies
owing hereunder.
|
8.11
|
Immunity
of Directors, Officers and Others
|
The
Debentureholders and the Trustee hereby waive and release any right, cause of
action or remedy now or hereafter existing in any jurisdiction against any past,
present or future officer, director or employee of the Corporation or holder of
Trust Units of the Trust or of any successor for the payment of the principal of
or interest on any of the Debentures or on any covenant, agreement,
representation or warranty by the Trust contained herein or in the
Debentures.
ARTICLE 9
SATISFACTION
AND DISCHARGE
|
9.1
|
Cancellation
and Destruction
|
All
Debentures shall forthwith after payment of all obligations thereunder be
delivered to the Trustee and cancelled by it. All Debentures cancelled or
required to be cancelled under this or any other provision of this Indenture
shall be destroyed by the Trustee and, if required by the Trust, the Trustee
shall furnish to it a destruction certificate setting out the designating
numbers of the Debentures so destroyed.
|
9.2
|
Non-Presentation
of Debentures
|
In case
the holder of any Debenture shall fail to present the same for payment on the
date on which the principal of or the interest thereon or represented thereby
becomes payable either at maturity or otherwise or shall not accept payment on
account thereof and give such receipt therefor, if any, as the Trustee may
require:
|
(a)
|
the
Trust shall be entitled to pay or deliver to the Trustee and direct it to
set aside; or
|
|
(b)
|
in
respect of monies or Trust Units in the hands of the Trustee which may or
should be applied to the payment of the Debentures, the Trust 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;
|
the
monies or Trust Units, as the case may be, in trust to be paid to the holder of
such Debenture upon due presentation or surrender thereof in accordance with the
provisions of this Indenture; and thereupon the principal of or the interest
payable on or represented by each Debenture in respect whereof such monies or
Trust Units, if applicable, have been set aside shall be deemed to have been
paid and the holder thereof shall thereafter have no right in respect thereof
except that of receiving delivery and payment of the monies or Trust Units, if
applicable, so set aside by the Trustee upon due presentation and surrender
thereof, subject always to the provisions of Section 9.3.
50
|
9.3
|
Repayment
of Unclaimed Monies or Trust Units
|
Subject
to applicable law, any monies or Trust Units, if applicable, set aside under
Section 9.2 and not claimed by and paid to holders of Debentures as provided in
Section 9.2 within six years after the date of such setting aside shall be
repaid and delivered to the Trust by the Trustee and thereupon the Trustee shall
be released from all further liability with respect to such monies or Trust
Units, if applicable, and thereafter the holders of the Debentures in respect of
which such monies or Trust Units, if applicable, were so repaid to the Trust
shall have no rights in respect thereof except to obtain payment and delivery of
the monies or Trust Units, if applicable, from the Trust subject to any
limitation provided by the laws of the Province of Alberta. Notwithstanding the
foregoing, the Trustee will pay any remaining funds prior to the expiry of six
years after the setting aside described in Section 9.2 to the Trust upon receipt
from the Trust, of an unconditional letter of credit from a Canadian chartered
bank in an amount equal to or in excess of the amount of the remaining funds. If
the remaining funds are paid to the Trust prior to the expiry of six years after
such setting aside, the Trust shall reimburse the Trustee for any amounts so set
aside which are required to be paid by the Trustee to a holder of a Debenture
after the date of such payment of the remaining funds to the Trust but prior to
six years after such setting aside.
|
9.4
|
Discharge
|
The
Trustee shall at the written request of the Trust release and discharge this
Indenture and execute and deliver such instruments as it shall be advised by
Counsel are requisite for that purpose and to release the Trust from its
covenants herein contained (other than the provisions relating to the
indemnification of the Trustee), upon proof being given to the reasonable
satisfaction of the Trustee that the principal of and interest (including
interest on amounts in default, if any), on all the Debentures and all other
monies payable hereunder have been paid or satisfied or that all the Debentures
having matured or having been duly called for redemption, payment of the
principal of and interest (including interest on amounts in default, if any) on
such Debentures and of all other monies payable hereunder has been duly and
effectually provided for in accordance with the provisions hereof.
|
9.5
|
Satisfaction
|
|
(a)
|
The
Trust shall be deemed to have fully paid, satisfied and discharged all of
the outstanding Debentures of any series and the Trustee, at the expense
of the Trust, shall execute and deliver proper instruments acknowledging
the full payment, satisfaction and discharge of such Debentures, when,
with respect to all of the outstanding Debentures or all of the
outstanding Debentures of any series, as
applicable:
|
|
(i)
|
the
Trust has deposited or caused to be deposited with the Trustee as trust
funds or property in trust for the purpose of making payment on such
Debentures, an amount in money or Trust Units, if applicable, sufficient
to pay, satisfy and discharge the entire amount of principal of, premium,
if any, and interest, if any, to maturity, or any repayment date or
Redemption Dates, or any Change of Control Purchase Date, or upon
conversion or otherwise as the case may be, of such
Debentures;
|
|
(ii)
|
the
Trust has deposited or caused to be deposited with the Trustee as trust
property in trust for the purpose of making payment on such
Debentures:
|
|
(A)
|
if
the Debentures are issued in Canadian dollars, such amount in Canadian
dollars of direct obligations of, or obligations the principal and
interest of which are guaranteed by, the Government of Canada or Trust
Units, if applicable; or
|
|
(B)
|
if
the Debentures are issued in a currency or currency unit other than
Canadian dollars, cash in the currency or currency unit in which the
Debentures are payable and/or such amount in such currency or currency
unit of direct obligations of, or obligations the principal and interest
of which are guaranteed by, the Government of Canada or the government
that issued the currency or currency unit in which the Debentures are
payable or Trust Units, if
applicable;
|
51
as will,
together with the income to accrue thereon and reinvestment thereof, be
sufficient to pay and discharge the entire amount of principal of and accrued
and unpaid interest to maturity or any repayment date or Redemption Date or any
Change of Control Purchase Date, as the case may be, of all such
Debentures;
so long
as in any such event:
|
(iii)
|
the
Trust has paid, caused to be paid or made provisions to the satisfaction
of the Trustee for the payment of all other sums payable or which may be
payable with respect to all of such Debentures (together with all
applicable expenses of the Trustee in connection with the payment of such
Debentures); and
|
|
(iv)
|
the
Trust has delivered to the Trustee an Officers' Certificate stating that
all conditions precedent herein provided relating to the payment,
satisfaction and discharge of all such Debentures have been complied
with.
|
Any
deposits with the Trustee referred to in this Section 9.5 shall be irrevocable,
subject to Section 9.6, and shall be made under the terms of an escrow and/or
trust agreement in form and substance satisfactory to the Trustee and which
provides for the due and punctual payment of the principal of and interest on
the Debentures being satisfied.
|
(b)
|
Upon
the satisfaction of the conditions set forth in this Section 9.5 with
respect to all the outstanding Debentures, or all the outstanding
Debentures of any series, as applicable, the terms and conditions of the
Debentures, including the terms and conditions with respect thereto set
forth in this Indenture (other than those contained in Articles 2, 4
and 6 and the provisions of Article 1 pertaining to Articles 2,
4 and 6) shall no longer be binding upon or applicable to the
Trust.
|
|
(c)
|
Any
funds or obligations deposited with the Trustee pursuant to this Section
9.5 shall be denominated in the currency or denomination of the Debentures
in respect of which such deposit is
made.
|
|
(d)
|
If
the Trustee is unable to apply any money or securities in accordance with
this Section 9.5 by reason of any legal proceeding or any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Trust's obligations under this
Indenture and the affected Debentures shall be revived and reinstated as
though no money or securities had been deposited pursuant to this Section
9.5 until such time as the Trustee is permitted to apply all such money or
securities in accordance with this Section 9.5, provided that if the Trust
has made any payment in respect of principal of or interest on Debentures
or, as applicable, other amounts because of the reinstatement of its
obligations, the Trust shall be subrogated to the rights of the holders of
such Debentures to receive such payment from the money or securities held
by the Trustee.
|
|
9.6
|
Continuance
of Rights, Duties and Obligations
|
Where
trust funds or trust property have been deposited pursuant to Section 9.5, the
holders of Debentures and the Trust shall continue to have and be subject to
their respective rights, duties and obligations under Articles 2, 4 and
6.
ARTICLE 10
TRUST
UNIT INTEREST PAYMENT ELECTION
|
10.1
|
Trust
Unit Interest Payment Election
|
|
(a)
|
Provided
that the Trust is not in default under this Indenture, there is no current
Event of Default under this Indenture and that all applicable regulatory
approvals have been obtained (including any required approval of any stock
exchange on which the Debentures or Trust Units are then listed), the
Trust shall have the right, from time to time (including following
conversion, at the time of redemption or at the time of maturity), to make
a Trust Unit Interest Payment Election in respect of any Interest
Obligation by delivering a Trust Unit Interest Payment Election Notice to
the Trustee no later than the earlier of (i) the date required by
applicable law or the rules of any stock exchange on which the Debentures
or Trust Units are then listed, and (ii) the day which is 15 Business Days
prior to the Interest Payment Date to which the Trust Unit Interest
Payment Election relates.
|
52
|
(b)
|
Upon
receipt of a Trust Unit Interest Payment Election Notice, the Trustee
shall, in accordance with this Article 10 and such Trust Unit Interest
Payment Election Notice, deliver Trust Unit Bid Requests to the investment
banks, brokers or dealers identified by the Trust, in its absolute
discretion, in the Trust Unit Interest Payment Election Notice. In
connection with the Trust Unit Interest Payment Election, the Trustee
shall: (i) accept delivery of the Trust Units from the Trust and process
the Trust Units in accordance with the Trust Unit Interest Payment
Election Notice; (ii) accept bids with respect to, and consummate sales
of, such Trust Units, each as the Trust shall direct in its absolute
discretion through the investment banks, brokers or dealers identified by
the Trust in the Trust Unit Interest Payment Election Notice; (iii) invest
the proceeds of such sales on the direction of the Trust in Government
Obligations which mature prior to an applicable Interest Payment Date;
(iv) use such proceeds to pay the Interest Obligation in respect of which
the Trust Unit Interest Payment Election was made; and (v) perform any
other action necessarily incidental thereto as directed by the Trust in
its absolute discretion. The Trust Unit Interest Payment Election Notice
shall direct the Trustee to solicit and accept only, and each Trust Unit
Bid Request shall provide that the acceptance of any bid is conditional on
the acceptance of, sufficient bids to result in aggregate proceeds from
such issue and sale of Trust Units which, together with the cash payments
by the Trust in lieu of fractional Trust Units, if any, equal the Interest
Obligation on the Trust Unit Delivery
Date.
|
|
(c)
|
The
Trust Unit Interest Payment Election Notice shall provide for, and all
bids shall be subject to, the right of the Trust, by delivering written
notice to the Trustee at any time prior to the consummation of such
delivery and sale of the Trust Units on the Trust Unit Delivery Date, to
withdraw the Trust Unit Interest Payment Election (which shall have the
effect of withdrawing each related Trust Unit Bid Request), whereupon the
Trust shall be obliged to pay in cash the Interest Obligation in respect
of which the Trust Unit Interest Payment Election Notice has been
delivered.
|
|
(d)
|
Any
sale of Trust Units pursuant to this Article 10 may be made to one or more
Persons whose bids are solicited, but all such sales with respect to a
particular Trust Unit Interest Payment Election shall take place
concurrently on the Trust Unit Delivery
Date.
|
|
(e)
|
The
amount received by a holder of a Debenture in respect of the Interest
Obligation or the entitlement thereto will not be affected by whether or
not the Trust elects to satisfy the Interest Obligation pursuant to a
Trust Unit Interest Payment
Election.
|
|
(f)
|
The
Trustee shall inform the Trust promptly following receipt of any bid or
bids for Trust Units solicited pursuant to the Trust Unit Bid Requests.
The Trustee shall accept such bid or bids as the Trust, in its absolute
discretion, shall direct by Written Direction of the Trust, provided that
the aggregate proceeds of all sales of Trust Units resulting from the
acceptance of such bids, together with the amount of any cash payment by
the Trust in lieu of any fractional Trust Units, on the Trust Unit
Delivery Date, must be equal to the related Trust Unit Interest Payment
Election Amount in connection with any bids so accepted, the Trust, the
Trustee (if required by the Trust in its absolute discretion) and the
applicable bidders shall, not later than the Trust Unit Delivery Date,
enter into Trust Unit Purchase Agreements and shall comply with all
Applicable Securities Legislation, including the securities rules and
regulations of any stock exchange on which the Debentures or Trust Units
are then listed. The Trust shall pay all fees and expenses in connection
with the Trust Unit Purchase Agreements including the fees and commissions
charged by the investment banks, brokers and dealers and the fees of the
Trustee.
|
|
(g)
|
Provided
that: (i) all conditions specified in each Trust Unit Purchase Agreement
to the closing of all sales thereunder have been satisfied, other than the
delivery of the Trust Units to be sold thereunder against payment of the
purchase price thereof; and (ii) the purchasers under each Trust Unit
Purchase Agreement shall be ready, willing and able to perform thereunder,
in each case on the Trust Unit Delivery Date, the Trust shall, on the
Trust Unit Delivery Date, deliver to the Trustee the Trust Units to be
sold on such date, an amount in cash equal to the value of any fractional
Trust Units and an Officers' Certificate to the effect that all conditions
precedent to such sales, including those set forth in this Indenture and
in each Trust Unit Purchase Agreement, have been satisfied. Upon such
deliveries, the Trustee shall consummate such sales on such Trust Unit
Delivery Date by the delivery of the Trust Units to such purchasers
against payment to the Trustee in immediately available funds of the
purchase price therefor in an aggregate amount equal to the Trust Unit
Interest Payment Election Amount (less any amount attributable to any
fractional Trust Units), whereupon the sole right of a holder of
Debentures to receive such holder's portion of the Trust Unit Interest
Payment Election Amount will be to receive same from the Trustee out of
the proceeds of such sales of Trust Units plus any amount received by the
Trustee from the Trust attributable to any fractional Trust Units in full
satisfaction of the Interest Obligation and the holder will have no
further recourse to the Trust in respect of the Interest
Obligation.
|
53
|
(h)
|
The
Trustee shall, on the Trust Unit Delivery Date, use the sale proceeds of
the Trust Units (together with any cash received from the Trust in lieu of
any fractional Trust Units) to purchase, on the direction of the Trust in
writing, Government Obligations which mature prior to the applicable
Interest Payment Date and which the Trustee is required to hold until
maturity (the "Trust Unit
Proceeds Investment") and shall, on such date, deposit the balance,
if any, of such sale proceeds in an account established by the Trust (and
which shall be maintained by and subject to the control of the Trustee)
(the "Interest
Account") for such Debentures. The Trustee shall hold such Trust
Unit Proceeds Investment (but not income earned thereon) under its
exclusive control in an irrevocable trust for the benefit of the holders
of the Debentures. At least one Business Day prior to the Interest Payment
Date, the Trustee shall deposit amounts from the proceeds of the Trust
Unit Proceeds Investment in the Interest Account to bring the balance of
the Interest Account to the Trust Unit Interest Payment Election Amount.
On the Interest Payment Date, the Trustee shall pay the funds held in the
Interest Account to the holders of record of the Debentures on the
Interest Payment Date (less any tax required to be deducted, if any) and,
provided that there is no Event of Default, shall remit amounts, if any,
in respect of income earned on the Trust Unit Proceeds Investment or
otherwise in excess of the Trust Unit Interest Payment Election Amount to
the Trust.
|
|
(i)
|
Neither
the making of a Trust Unit Payment Election nor the consummation of sales
of Trust Units on a Trust Unit Delivery Date shall (i) result in the
holders of the Debentures not being entitled to receive on the applicable
Interest Payment Date cash in an aggregate amount equal to the Interest
Obligation payable on such date or (ii) entitle such holders to receive
any Trust Units in satisfaction of such Interest
Obligation.
|
|
(j)
|
No
fractional Trust Units will be issued in satisfaction of interest but in
lieu thereof the Trust will satisfy such fractional interest by a cash
payment equal to the market price of such fractional interest (less any
tax required to be deducted, if
any).
|
ARTICLE 11
SUCCESSORS
|
11.1
|
Trust
may Consolidate, Etc., Only on Certain
Terms
|
Subject
to the provisions of Article 12, the Trust shall not enter into any transaction
or series of transactions whereby all or substantially all of its undertaking,
property or assets would become the direct or indirect property of any other
person (herein called a "Successor") whether by way of
reorganization, consolidation, amalgamation, arrangement, merger, transfer, sale
or otherwise, unless:
|
(a)
|
prior
to or contemporaneously with the consummation of such transaction the
Trust and the Successor shall have executed such instruments and done such
things as, in the opinion of Counsel, are necessary or advisable to
establish that upon the consummation of such
transaction:
|
|
(i)
|
the
Successor will have assumed all the covenants and obligations of the Trust
under this Indenture in respect of the
Debentures;
|
54
|
(ii)
|
the
Debentures will be valid and binding obligations of the Successor
entitling the holders thereof, as against the Successor, to all the rights
of Debentureholders under this Indenture;
and
|
|
(iii)
|
in
the case of an entity organized otherwise than under the laws of the
Province of Alberta, the Successor shall attorn to the jurisdiction of the
courts of the Province of Alberta;
|
|
(b)
|
such
transaction, in the opinion of Counsel, shall be on such terms as to
substantially preserve and not impair any of the rights and powers of the
Debenture Trustee or of the Debentureholders hereunder;
and
|
|
(c)
|
no
condition or event shall exist as to the Trust (at the time of such
transaction) or the Successor (immediately after such transaction) and
after giving full effect thereto or immediately after the Successor shall
become liable to pay the principal monies, premium, if any, interest and
other monies due or which may become due hereunder, which constitutes or
would constitute an Event of Default
hereunder.
|
|
11.2
|
Successor
Substituted
|
Upon any
consolidation of the Trust with, or amalgamation or merger of the Trust into,
any other Person or any sale, conveyance, transfer or lease of all or
substantially all of the properties and assets of the Trust and its
Subsidiaries, taken as a whole, in accordance with Section 11.1, the successor
Person formed by such consolidation or into which the Trust is amalgamated or
merged or to which such sale, conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Trust under this Indenture with the same effect as if such successor Person
had been named as the Trust herein, and thereafter, except in the case of a
lease, and except for obligations the predecessor Person may have under a
supplemental indenture entered into pursuant to Section 11.1(a), the predecessor
Person shall be relieved of all obligations and covenants under this Indenture
and the Debentures.
ARTICLE 12
COMPULSORY
ACQUISITION
|
12.1
|
Definitions
|
In this
Article:
|
(a)
|
"Affiliate" and "Associate" shall have
their respective meanings set forth in the Securities Act
(Alberta);
|
|
(b)
|
"Dissenting
Debentureholders" means a Debentureholder who does not accept an
Offer referred to in Section 12.2 and includes any assignee of the
Debenture of a Debentureholder to whom such an Offer is made, whether or
not such assignee is recognized under this
Indenture;
|
|
(c)
|
"Offer" means an offer to
acquire outstanding Debentures, which is a take-over bid or issuer bid for
Debentures within the meaning ascribed thereto in MI 62-104, where as
of the date of the offer to acquire, the Debentures that are subject to
the offer to acquire, together with the Offeror's Debentures, constitute
in the aggregate 20% or more of the outstanding principal amount of the
Debentures;
|
|
(d)
|
"offer to acquire"
includes an acceptance of an offer to
sell;
|
|
(e)
|
"Offeror" means a person,
or two or more persons acting jointly or in concert, who make an Offer to
acquire Debentures;
|
|
(f)
|
"Offeror's Debentures"
means Debentures beneficially owned, or over which control or direction is
exercised, on the date of an Offer by the Offeror, any Affiliate or
Associate of the Offeror or any person or company acting jointly or in
concert with the Offeror; and
|
|
(g)
|
"Offeror's Notice" means
the notice described in Section
12.3.
|
55
|
12.2
|
Offer
for Debentures
|
If an
Offer for all of the outstanding Debentures (other than Debentures held by or on
behalf of the Offeror or an Affiliate or Associate of the Offeror) is made
and:
|
(a)
|
within
the time provided in the Offer for its acceptance or within 120 days after
the date the Offer is made, whichever period is the shorter, the Offer is
accepted by Debentureholders representing at least 90% of the outstanding
principal amount of the Debentures, other than the Offeror's
Debentures;
|
|
(b)
|
the
Offeror is bound to take up and pay for, or has taken up and paid for the
Debentures of the Debentureholders who accepted the Offer;
and
|
|
(c)
|
the
Offeror complies with Sections 12.3 and
12.5;
|
the
Offeror is entitled to acquire, and the Dissenting Debentureholders are required
to sell to the Offeror, the Debentures held by the Dissenting Debentureholder
for the same consideration per Debenture payable or paid, as the case may be,
under the Offer.
|
12.3
|
Offeror's
Notice to Dissenting
Debentureholders
|
Where an
Offeror is entitled to acquire Debentures held by Dissenting Debentureholders
pursuant to Section 12.2 and the Offeror wishes to exercise such right, the
Offeror shall send by registered mail within 30 days after the date of
termination of the Offer a notice (the "Offeror's Notice") to each
Dissenting Debentureholder stating that:
|
(a)
|
Debentureholders
holding at least 90% of the principal amount of all outstanding
Debentures, other than Offeror's Debentures, have accepted the
Offer;
|
|
(b)
|
the
Offeror is bound to take up and pay for, or has taken up and paid for, the
Debentures of the Debentureholders who accepted the
Offer;
|
|
(c)
|
Dissenting
Debentureholders must transfer their respective Debentures to the Offeror
on the terms on which the Offeror acquired the Debentures of the
Debentureholders who accepted the Offer within 21 days after the date of
the sending of the Offeror's Notice;
and
|
|
(d)
|
Dissenting
Debentureholders must send their respective Debenture certificate(s) to
the Trustee within 21 days after the date of the sending of the Offeror's
Notice.
|
|
12.4
|
Delivery
of Debenture Certificates
|
A
Dissenting Debentureholder to whom an Offeror's Notice is sent pursuant to
Section 12.3 shall, within 21 days after the sending of the Offeror's Notice,
send his or her Debenture certificate(s) to the Trustee duly endorsed for
transfer.
|
12.5
|
Payment
of Consideration to Trustee
|
Within 21
days after the Offeror sends an Offeror's Notice pursuant to Section 12.3, the
Offeror shall pay or transfer to the Trustee, or to such other person as the
Trustee may direct, the cash or other consideration that is payable to
Dissenting Debentureholders pursuant to Section 12.2. The acquisition
by the Offeror of all Debentures held by all Dissenting Debentureholders shall
be effective as of the time of such payment or transfer.
|
12.6
|
Consideration
to be held in Trust
|
The
Trustee, or the person directed by the Trustee, shall hold in trust for the
Dissenting Debentureholders the cash or other consideration they or it receives
under Section 12.5. The Trustee, or such persons, shall deposit cash in a
separate account in a Canadian chartered bank, or other body corporate, any of
whose deposits are insured by the Canada Deposit Insurance Trust, and shall
place other consideration in the custody of a Canadian chartered bank or such
other body corporate.
56
|
12.7
|
Completion
of Transfer of Debentures to
Offeror
|
Within 30
days after the date of the sending of an Offeror's Notice pursuant to Section
12.3, the Trustee, if the Offeror has complied with Section 12.5,
shall:
|
(a)
|
do
all acts and things and execute and cause to be executed all instruments
as in the Trustee's opinion may be necessary or desirable to cause the
transfer of the Debentures of the Dissenting Debentureholders to the
Offeror;
|
|
(b)
|
send
to each Dissenting Debentureholder who has complied with Section 12.4 the
consideration to which such Dissenting Debentureholder is entitled under
this Article 12; and
|
|
(c)
|
send
to each Dissenting Debentureholder who has not complied with Section 12.4
a notice stating that:
|
|
(i)
|
his
or her Debentures have been transferred to the
Offeror;
|
|
(ii)
|
the
Trustee or some other person designated in such notice are holding in
trust the consideration for such Debentures;
and
|
|
(iii)
|
the
Trustee, or such other person, will send the consideration to such
Dissenting Debentureholder as soon as possible after receiving such
Dissenting Debentureholder's Debenture certificate(s) or such other
documents as the Trustee or such other person may require in lieu
thereof;
|
and the
Trustee is hereby appointed the agent and attorney of the Dissenting
Debentureholders for the purposes of giving effect to the foregoing
provisions.
|
12.8
|
Communication
of Offer to Trust
|
An
Offeror cannot make an Offer unless, concurrent with the communication of the
Offer to any Debentureholder, a copy of the Offer is provided to the
Trust.
ARTICLE 13
MEETINGS
OF DEBENTUREHOLDERS
|
13.1
|
Right
to Convene Meeting
|
The
Trustee or the Trust may at any time and from time to time, and the Trustee
shall, on receipt of a Written Direction of the Trust or a written request
signed by the holders of not less than 25% of the principal amount of the
Debentures then outstanding and upon receiving funding and being indemnified to
its reasonable satisfaction by the Trust or by the Debentureholders signing such
request against the costs which may be incurred in connection with the calling
and holding of such meeting, convene a meeting of the Debentureholders. In the
event of the Trustee failing, within 30 days after receipt of any such request
and such funding of indemnity, to give notice convening a meeting, the Trust or
such Debentureholders, as the case may be, may convene such meeting. Every such
meeting shall be held in the City of Calgary or at such other place as may be
approved or determined by the Trustee.
|
13.2
|
Notice
of Meetings
|
|
(a)
|
At
least 21 days notice of any meeting shall be given to the Debentureholders
in the manner provided in Section 14.2 and a copy of such notice shall be
sent by post to the Trustee, unless the meeting has been called by it.
Such notice shall state the time when and the place where the meeting is
to be held and shall state briefly the general nature of the business to
be transacted thereat and it shall not be necessary for any such notice to
set out the terms of any resolution to be proposed or any of the
provisions of this Article. The accidental omission to give notice of a
meeting to any holder of Debentures shall not invalidate any resolution
passed at any such meeting. A holder may waive notice of a meeting either
before or after the meeting.
|
57
|
(b)
|
If
the business to be transacted at any meeting by Extraordinary Resolution
or otherwise, or any action to be taken or power exercised by instrument
in writing under Section 13.15, especially affects the rights of holders
of Debentures of one or more series in a manner or to an extent differing
in any material way from that in or to which the rights of holders of
Debentures of any other series are affected (determined as provided in
Sections 13.2(c) and (d)), then:
|
|
(i)
|
a
reference to such fact, indicating each series of Debentures in the
opinion of the Trustee (or the Person calling the Meeting) so especially
affected (hereinafter referred to as the "especially affected
series") shall be made in the notice of such meeting, and in any
such case the meeting shall be and be deemed to be and is herein referred
to as a "Serial
Meeting"; and
|
|
(ii)
|
the
holders of Debentures of an especially affected series shall not be bound
by any action taken at a Serial Meeting or by instrument in writing under
Section 13.15 unless in addition to compliance with the other provisions
of this Article 13:
|
|
(A)
|
at
such Serial Meeting: (I) there are Debentureholders present in person or
by proxy and representing at least 25% in principal amount of the
Debentures then outstanding of such series, subject to the provisions of
this Article 13 as to quorum at adjourned meetings; and (II) the
resolution is passed by the affirmative vote of the holders of more than
50% (or in the case of an Extraordinary Resolution not less than
66 2/3%) of the principal amount of the Debentures of such series
then outstanding voted on the resolution;
or
|
|
(B)
|
in
the case of action taken or power exercised by instrument in writing under
Section 13.15, such instrument is signed in one or more counterparts by
the holders of not less than 66 2/3% in principal amount of the
Debentures of such series then
outstanding.
|
|
(c)
|
Subject
to Section 13.2(d), the determination as to whether any business to be
transacted at a meeting of Debentureholders, or any action to be taken or
power to be exercised by instrument in writing under Section 13.15,
especially affects the rights of the Debentureholders of one or more
series in a manner or to an extent differing in any material way from that
in or to which it affects the rights of Debentureholders of any other
series (and is therefore an especially affected series) shall be
determined by an opinion of Counsel, which shall be binding on all
Debentureholders, the Trustee and the Trust for all purposes
hereof.
|
|
(d)
|
A
proposal:
|
|
(i)
|
to
extend the maturity of Debentures of any particular series or to reduce
the principal amount thereof, the rate of interest or redemption premium
thereon or to impair any conversion right
thereof;
|
|
(ii)
|
to
modify or terminate any covenant or agreement which by its terms is
effective only so long as Debentures of a particular series are
outstanding; or
|
|
(iii)
|
to
reduce with respect to Debentureholders of any particular series any
percentage stated in this Section 13.2 or Sections 13.4, 13.12 and
13.15;
|
shall be
deemed to especially affect the rights of the Debentureholders of such series in
a manner differing in a material way from that in which it affects the rights of
holders of Debentures of any other series, whether or not a similar extension,
reduction, modification or termination is proposed with respect to Debentures of
any or all other series.
58
|
13.3
|
Chairman
|
Some
person, who need not be a Debentureholder, nominated in writing by the Trustee
shall be chairman of the meeting and if no person is so nominated, or if the
person so nominated is not present within 15 minutes from the time fixed for the
holding of the meeting, a majority of the Debentureholders present in person or
by proxy shall choose some person present to be chairman.
|
13.4
|
Quorum
|
Subject
to the provisions of Section 13.12, at any meeting of the Debentureholders a
quorum shall consist of Debentureholders present in person or by proxy and
representing at least 25% in principal amount of the outstanding Debentures and,
if the meeting is a Serial Meeting, at least 25% of the Debentures then
outstanding of each especially affected series. If a quorum of the
Debentureholders shall not be present within 30 minutes from the time fixed for
holding any meeting, the meeting, if summoned by the Debentureholders or
pursuant to a request of the Debentureholders, 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 thereafter) at the same time and place and no
notice shall be required to be given in respect of such adjourned meeting. At
the adjourned meeting, the Debentureholders present in person or by proxy shall,
subject to the provisions of Section 13.12, constitute a quorum and may transact
the business for which the meeting was originally convened notwithstanding that
they may not represent 25% of the principal amount of the outstanding Debentures
or of the Debentures then outstanding of each especially affected series. Any
business may be brought before or dealt with at an adjourned meeting which might
have been brought before or dealt with at the original meeting in accordance
with the notice calling the same. No business shall be transacted at any meeting
unless the required quorum be present at the commencement of
business.
|
13.5
|
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.
|
13.6
|
Show
of Hands
|
Every
question submitted to a meeting shall, subject to Section 13.7, be decided in
the first place by a majority of the votes given on a show of hands except that
votes on Extraordinary Resolutions shall be given in the manner hereinafter
provided. At any such meeting, unless a poll is duly demanded as herein
provided, a declaration by the chairman that a resolution has been carried or
carried unanimously or by a particular majority or lost or not carried by a
particular majority shall be conclusive evidence of the fact. The chairman of
any meeting shall be entitled, both on a show of hands and on a poll, to vote in
respect of the Debentures, if any, held by him.
|
13.7
|
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 or proxies for
Debentureholders, a poll shall be taken in such manner and either at once or
after an adjournment as the chairman shall direct. Questions other than
Extraordinary Resolutions shall, if a poll be taken, be decided by the votes of
the holders of a majority in principal amount of the Debentures and of each
especially affected series, if applicable, represented at the meeting and voted
on the poll.
|
13.8
|
Voting
|
On a show
of hands every person who is present and entitled to vote, whether as a
Debentureholder or as proxy for one or more Debentureholders or both, shall have
one vote. On a poll each Debentureholder present in person or represented by a
proxy duly appointed by an instrument in writing shall be entitled to one vote
in respect of each $1,000 principal amount of Debentures of which he shall then
be the holder. In the case of any Debenture denominated in a currency or
currency unit other than Canadian dollars, the principal amount thereof for
these purposes shall be computed in Canadian dollars on the basis of the
conversion of the principal amount thereof at the applicable spot buying rate of
exchange for such other currency or currency unit as reported by the Bank of
Canada at the close of business on the Business Day next preceding the meeting.
Any fractional amounts resulting from such conversion shall be rounded to the
nearest $100. A proxy need not be a Debentureholder. In the case of joint
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 be present in person or by proxy, they shall vote together in respect of
the Debentures of which they are joint holders.
59
|
13.9
|
Proxies
|
A
Debentureholder may be present and vote at any meeting of Debentureholders by an
authorized representative. The Trust (in case it convenes the meeting) or the
Trustee (in any other case) for the purpose of enabling the Debentureholders to
be present and vote at any meeting without producing their Debentures, and of
enabling them to be present and vote at any such meeting by proxy and of lodging
instruments appointing such proxies at some place other than the place where the
meeting is to be held, may from time to time make and vary such regulations as
it shall think fit providing for and governing any or all of the following
matters:
|
(a)
|
the
form of the instrument appointing a proxy, which shall be in writing, and
the manner in which the same shall be executed and 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 Trust or the Debentureholder convening the 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 must be deposited; and
|
|
(c)
|
the
deposit of instruments appointing proxies at some approved place or places
other than the place at which the meeting is to be held and enabling
particulars of such instruments appointing proxies to be mailed, faxed,
cabled, telegraphed, emailed, or sent by other electronic means before the
meeting to the Trust or to the Trustee at the place where the same is to
be held and for the voting of proxies so deposited as though the
instruments themselves were produced at the
meeting.
|
Any
regulations so made shall be binding and effective and the votes given in
accordance therewith shall be valid and shall be counted. Save as such
regulations may provide, the only persons who shall be recognized at any meeting
as the holders of any Debentures, or as entitled to vote or be present at the
meeting in respect thereof, shall be Debentureholders and persons whom
Debentureholders have by instrument in writing duly appointed as their
proxies.
|
13.10
|
Persons
Entitled to Attend Meetings
|
The Trust
and the Trustee, by their respective officers and directors, the Auditors of the
Trust and the legal advisors of the Trust, the Trustee or any Debentureholder
may attend any meeting of the Debentureholders, but shall have no vote as
such.
|
13.11
|
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, subject in the
case of the matters in paragraphs (a), (b), (c), (d) and (l) to receipt of the
prior approval of the Toronto Stock Exchange or such other exchange on which the
Debentures are then listed:
|
(a)
|
power
to authorize the Trustee to grant extensions of time for payment of any
principal or interest on the Debentures, whether or not the principal or
interest, the payment of which is extended, is at the time due or
overdue;
|
60
|
(b)
|
power
to sanction any modification, abrogation, alteration, compromise or
arrangement of the rights of the Debentureholders or the Trustee against
the Trust, or against its property, whether such rights arise under this
Indenture or the Debentures or
otherwise;
|
|
(c)
|
power
to assent to any modification of or change in or addition to or omission
from the provisions contained in this Indenture or any Debenture which
shall be agreed to by the Trust and to authorize the Trustee to concur in
and execute any indenture supplemental hereto embodying any modification,
change, addition or omission;
|
|
(d)
|
power
to sanction any scheme for the reconstruction, reorganization or
recapitalization of the Trust or for the consolidation, amalgamation,
arrangement, combination or merger of the Trust with any other Person or
for the sale, leasing, transfer or other disposition of all or
substantially all of the undertaking, property and assets of the Trust or
any part thereof, provided that no such sanction shall be necessary in
respect of any such transaction if the provisions of Section 11.1 shall
have been complied with;
|
|
(e)
|
power
to direct or authorize the Trustee to exercise any power, right, remedy or
authority given to it by this Indenture in any manner specified in any
such Extraordinary Resolution or to refrain from exercising any such
power, right, remedy or authority;
|
|
(f)
|
power
to waive, and direct the Trustee to waive, any default hereunder and/or
cancel any declaration made by the Trustee pursuant to Section 8.1 either
unconditionally or upon any condition specified in such Extraordinary
Resolution;
|
|
(g)
|
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 on the Debentures, or for the execution of any trust or power
hereunder;
|
|
(h)
|
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 upon
payment, if the taking of such suit, action or proceeding shall have been
permitted by Section 8.5, of the costs, charges and expenses reasonably
and properly incurred by such Debentureholder in connection
therewith;
|
|
(i)
|
power
to assent 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
Trust;
|
|
(j)
|
power
to appoint a committee with power and authority (subject to such
limitations, if any, as may be prescribed in the resolution) to exercise,
and to direct the Trustee to exercise, on behalf of the Debentureholders,
such of the powers of the Debentureholders as are exercisable by
Extraordinary Resolution or other resolution as shall be included in the
resolution appointing the committee. The resolution making such
appointment may provide for payment of the expenses and disbursements of
and compensation to such committee. Such committee shall consist of such
number of persons as shall be prescribed in the resolution appointing it
and the members need not be themselves Debentureholders. 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 and its procedure generally. Such regulations may provide that
the committee may act at a meeting at which a quorum is present or may act
by minutes signed by the number of members thereof necessary to constitute
a quorum. All acts of any such committee within the authority delegated to
it shall be binding upon all Debentureholders. Neither the committee nor
any member thereof shall be liable for any loss arising from or in
connection with any action taken or omitted to be taken by them in good
faith;
|
|
(k)
|
power
to remove the Trustee from office and to appoint a new Trustee or Trustees
provided that no such removal shall be effective unless and until a new
Trustee or Trustees shall have become bound by this
Indenture;
|
61
|
(l)
|
power
to sanction the exchange of the Debentures for or the conversion thereof
into shares, bonds, debentures or other securities or obligations of the
Trust or of any other Person formed or to be
formed;
|
|
(m)
|
power
to authorize the distribution in specie of any shares or securities
received pursuant to a transaction authorized under the provisions of
Section 13.11(l); and
|
|
(n)
|
power
to amend, alter or repeal any Extraordinary Resolution previously passed
or sanctioned by the Debentureholders or by any committee appointed
pursuant to Section 13.11(j).
|
Notwithstanding
the foregoing provisions of this Section 13.11 none of such provisions shall in
any manner allow or permit any amendment, modification, abrogation or addition
to the provisions of Article 5 which could reasonably be expected to
detrimentally affect the rights, remedies or recourse of the priority of the
Senior Creditors.
|
13.12
|
Meaning
of "Extraordinary Resolution"
|
|
(a)
|
The
expression "Extraordinary
Resolution" when used in this Indenture means, subject as
hereinafter in this Article provided, a resolution proposed to be passed
as an Extraordinary Resolution at a meeting of Debentureholders (including
an adjourned meeting) duly convened for the purpose and held in accordance
with the provisions of this Article at which the holders of not less than
25% of the principal amount of the Debentures then outstanding, and if the
meeting is a Serial Meeting, at which holders of not less than 25% of the
principal amount of the Debentures then outstanding of each especially
affected series, 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 the Debentures, and if the meeting is a Serial Meeting
by the affirmative vote of the holders of not less than 66 2/3% of
each especially affected series, in each case present or represented by
proxy at the meeting and voted upon on a poll on such
resolution.
|
|
(b)
|
If,
at any such meeting, the holders of not less than 25% of the principal
amount of the Debentures then outstanding and, if the meeting is a Serial
Meeting, 25% of the principal amount of the Debentures then outstanding of
each especially affected series, in each case are not present in person or
by proxy within 30 minutes after the time appointed for the meeting, then
the meeting, if convened by or on the requisition of Debentureholders,
shall be dissolved but in any other case it shall stand adjourned to such
date, being not less than 14 nor more than 60 days later, and to such
place and time as may be appointed by the chairman. Not less than 10 days
notice shall be given of the time and place of such adjourned meeting in
the manner provided in Section 14.2. Such notice shall state that at the
adjourned meeting the Debentureholders present in person or by proxy shall
form a quorum. 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 thereat by the affirmative vote of
holders of not less than 66 2/3% of the principal amount of the
Debentures and, if the meeting is a Serial Meeting, by the affirmative
vote of the holders of not less than 66 2/3% of the principal amount
of the Debentures of each especially affected series, in each case present
or represented by proxy at the meeting voted upon on a poll shall be an
Extraordinary Resolution within the meaning of this Indenture,
notwithstanding that the holders of not less than 25% in principal amount
of the Debentures then outstanding, and if the meeting is a Serial
Meeting, holders of not less than 25% of the principal amount of the
Debentures then outstanding of each especially affected series, are not
present in person or by proxy at such adjourned
meeting.
|
|
(c)
|
Votes
on an Extraordinary Resolution shall always be given on a poll and no
demand for a poll on an Extraordinary Resolution shall be
necessary.
|
|
13.13
|
Powers
Cumulative
|
Any one
or more 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 from time to
time shall not be deemed to exhaust the rights of the Debentureholders to
exercise the same or any other such power or powers thereafter from time to
time.
62
|
13.14
|
Minutes
|
Minutes
of all resolutions and proceedings at every meeting as aforesaid shall be made
and duly entered in books to be from time to time provided for that purpose by
the Trustee at the expense of the Trust, and any such minutes as aforesaid, if
signed by the chairman of the meeting at which such resolutions were passed or
proceedings had, or by the chairman of the next succeeding meeting of the
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 thereat
or proceedings taken thereat to have been duly passed and taken.
|
13.15
|
Instruments
in Writing
|
All
actions which may be taken and all powers that 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 66 2/3% of the principal
amount of all the outstanding Debentures and, if the meeting at which such
actions might be taken would be a Serial Meeting, by the holders of 66 2/3%
of the principal amount of the Debentures then outstanding of each especially
affected series, by an instrument in writing signed in one or more counterparts
and the expression "Extraordinary Resolution" when
used in this Indenture shall include an instrument so signed.
|
13.16
|
Binding
Effect of Resolutions
|
Every
resolution and every Extraordinary Resolution passed in accordance with the
provisions of this Article at a meeting of Debentureholders shall be binding
upon all the Debentureholders, whether present at or absent from such meeting,
and every instrument in writing signed by Debentureholders in accordance with
Section 13.15 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 indemnity herein contained) shall be bound to
give effect accordingly to every such resolution, Extraordinary Resolution and
instrument in writing.
|
13.17
|
Evidence
of Rights of Debentureholders
|
|
(a)
|
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 signed or executed by such
Debentureholders.
|
|
(b)
|
The
Trustee may, in its discretion, require proof of execution in cases where
it deems proof desirable and may accept such proof as it shall consider
proper.
|
|
13.18
|
Concerning
Serial Meetings
|
If in the
opinion of Counsel any business to be transacted at any meeting, or any action
to be taken or power to be exercised by instrument in writing under Section
13.15, does not adversely affect the rights of the holders of Debentures of one
or more series, the provisions of this Article 13 shall apply as if the
Debentures of such series were not outstanding and no notice of any such meeting
need be given to the holders of Debentures of such series. Without limiting the
generality of the foregoing, a proposal to modify or terminate any covenant or
agreement which is effective only so long as Debentures of a particular series
are outstanding shall be deemed not to adversely affect the rights of the
holders of Debentures of any other series.
63
ARTICLE 14
NOTICES
|
14.1
|
Notice
to Trust
|
Any
notice to the Trust under the provisions of this Indenture shall be valid and
effective if delivered to the Trust at: 3200, 605 – 5th Avenue
SW, Calgary, Alberta T2P 3H5, Attention: Vice-President, Finance and
Chief Financial Officer, and a copy delivered to Burnet, Xxxxxxxxx & Xxxxxx
LLP, 1400, 350 – 7th Avenue
S.W., Calgary, Alberta T2P 3N9, Attention: Xxx Xxxx, or if given by registered
letter, postage prepaid, to such offices and so addressed and if mailed, shall
be deemed to have been effectively given three days following the mailing
thereof. The Trust may from time to time notify the Trustee in writing of a
change of address which thereafter, until changed by like notice, shall be the
address of the Trust for all purposes of this Indenture.
|
14.2
|
Notice
to Debentureholders
|
All
notices to be given hereunder with respect to the Debentures shall be deemed to
be validly given to the holders thereof if sent by first class mail, postage
prepaid, by letter or circular addressed to such holders at their post office
addresses appearing in any of the registers hereinbefore mentioned and shall be
deemed to have been effectively given three days following the day of mailing.
Accidental error or omission in giving notice or accidental failure to mail
notice to any Debentureholder or the inability of the Trust to give or mail any
notice due to anything beyond the reasonable control of the Trust shall not
invalidate any action or proceeding founded thereon.
If any
notice given in accordance with the foregoing paragraph would be unlikely to
reach the Debentureholders to whom it is addressed in the ordinary course of
post by reason of an interruption in mail service, whether at the place of
dispatch or receipt or both, the Trust shall give such notice by publication at
least once in the cities of Calgary and Toronto (or in such of those cities as,
in the opinion of the Trustee, is sufficient in the particular circumstances),
each such publication to be made in a daily newspaper of general circulation in
the designated city.
Any
notice given to Debentureholders by publication shall be deemed to have been
given on the day on which publication shall have been effected at least once in
each of the newspapers in which publication was required.
All
notices with respect to any Debenture may be given to whichever one of the
holders thereof (if more than one) is named first in the registers hereinbefore
mentioned, and any notice so given shall be sufficient notice to all holders of
any persons interested in such Debenture.
|
14.3
|
Notice
to Trustee
|
Any
notice to the Trustee under the provisions of this Indenture shall be valid and
effective if delivered to the Trustee at its principal office in the City of
Calgary, at 600, 530 – 8th Avenue
S.W., Calgary, Alberta, T2P 3S8, Attention: Manager, Corporate Trust or if given
by registered letter, postage prepaid, to such office and so addressed and, if
mailed, shall be deemed to have been effectively given three days following the
mailing thereof.
|
14.4
|
Mail
Service Interruption
|
If by
reason of any interruption of mail service, actual or threatened, any notice to
be given to the Trustee would reasonably be unlikely to reach its destination by
the time notice by mail is deemed to have been given pursuant to Section 14.3,
such notice shall be valid and effective only if delivered at the appropriate
address in accordance with Section 14.3.
64
ARTICLE 15
CONCERNING
THE TRUSTEE
|
15.1
|
No
Conflict of Interest
|
The
Trustee represents to the Trust that at the date of execution and delivery by it
of this Indenture there exists no material conflict of interest in the role of
the Trustee as a fiduciary hereunder but if, notwithstanding the provisions of
this Section 15.1, such a material conflict of interest exists, or hereafter
arises, 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 of interest exists or arises but the Trustee shall,
within 30 days after ascertaining that it has a material conflict of interest,
either eliminate such material conflict of interest or resign in the manner and
with the effect specified in Section 15.2.
|
15.2
|
Replacement
of Trustee
|
The
Trustee may resign its trust and be discharged from all further duties and
liabilities hereunder by giving to the Trust 90 days notice in writing or such
shorter notice as the Trust may accept as sufficient. If at any time a material
conflict of interest exists in the Trustee's role as a fiduciary hereunder the
Trustee shall, within 30 days after ascertaining that such a material conflict
of interest exists, either eliminate such material conflict of interest or
resign in the manner and with the effect specified in this Section 15.2. The
validity and enforceability of this Indenture and of the Debentures issued
hereunder shall not be affected in any manner whatsoever by reason only that
such a material conflict of interest exists. In the event of the Trustee
resigning or being removed or being dissolved, becoming bankrupt, going into
liquidation or otherwise becoming incapable of acting hereunder, the Trust shall
forthwith appoint a new Trustee unless a new Trustee has already been appointed
by the Debentureholders. Failing such appointment by the Trust, the retiring
Trustee or any Debentureholder may apply to a Judge of the Court of Queen's
Bench of Alberta, on such notice as such Judge may direct at the Trust's
expense, for the appointment of a new Trustee but any new Trustee so appointed
by the Trust or by the Court shall be subject to removal as aforesaid by the
Debentureholders and the appointment of such new Trustee shall be effective only
upon such new Trustee becoming bound by this Indenture. Any new Trustee
appointed under any provision of this Section 15.2 shall be a Trust authorized
to carry on the business of a trust company in all of the Provinces of Canada.
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
company into which the Trustee may be merged or, with or to which it may be
consolidated, amalgamated or sold, or any company resulting from any merger,
consolidation, sale or amalgamation to which the Trustee shall be a party, shall
be the successor trustee under this Indenture without the execution of any
instrument or any further act. Nevertheless, upon the written request of the
successor Trustee or of the Trust, the Trustee ceasing to act shall execute and
deliver an instrument assigning and transferring to such successor Trustee, upon
the trusts 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 Trust 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 said new
Trustee, be made, executed, acknowledged and delivered by the
Trust.
|
15.3
|
Duties
of Trustee
|
In the
exercise of the rights, duties and obligations prescribed or conferred by the
terms of this Indenture, the Trustee shall act honestly and in good faith and
exercise that degree of care, diligence and skill that a reasonably prudent
trustee would exercise in comparable circumstances.
|
15.4
|
Reliance
Upon Declarations, Opinions, etc.
|
In the
exercise of its rights, duties and obligations hereunder the Trustee may, if
acting in good faith, rely, as to the truth of the statements and accuracy of
the opinions expressed therein, upon statutory declarations, opinions, reports
or certificates furnished pursuant to any covenant, condition or requirement of
this Indenture or required by the Trustee to be furnished to it in the exercise
of its rights and duties hereunder, if the Trustee examines such statutory
declarations, opinions, reports or certificates and determines that they comply
with Section 15.5, if applicable, and with any other applicable requirements of
this Indenture. The Trustee may nevertheless, in its discretion, require further
proof in cases where it deems further proof desirable. Without restricting the
foregoing, the Trustee may rely on an opinion of Counsel satisfactory to the
Trustee notwithstanding that it is delivered by a solicitor or firm which acts
as solicitors for the Trust.
65
|
15.5
|
Evidence
and Authority to Trustee, Opinions,
etc.
|
The Trust
shall furnish to the Trustee evidence of compliance with the conditions
precedent provided for in this Indenture relating to any action or step required
or permitted to be taken by the Trust or the Trustee under this Indenture or as
a result of any obligation imposed under this Indenture, including without
limitation, the certification and delivery of Debentures hereunder, the
satisfaction and discharge of this Indenture and the taking of any other action
to be taken by the Trustee at the request of or on the application of the Trust,
forthwith if and when (a) such evidence is required by any other Section of this
Indenture to be furnished to the Trustee in accordance with the terms of this
Section 15.5, or (b) the Trustee, in the exercise of its rights and duties under
this Indenture, gives the Trust written notice requiring it to furnish such
evidence in relation to any particular action or obligation specified in such
notice.
Such
evidence shall consist of:
|
(a)
|
a
certificate made by any one officer or director of PEOC, on behalf of the
Trust, stating that any such condition precedent has been complied with in
accordance with the terms of this
Indenture;
|
|
(b)
|
in
the case of a condition precedent compliance with which is, by the terms
of this Indenture, made subject to review or examination by a solicitor,
an opinion of Counsel that such condition precedent has been complied with
in accordance with the terms of this Indenture;
and
|
|
(c)
|
in
the case of any such condition precedent compliance with which is subject
to review or examination by auditors or accountants, an opinion or report
of the Auditors of the Trust whom the Trustee for such purposes hereby
approves, that such condition precedent has been complied with in
accordance with the terms of this
Indenture.
|
Whenever
such evidence relates to a matter other than the certificates and delivery of
Debentures and the satisfaction and discharge of this Indenture, and except as
otherwise specifically provided herein, such evidence may consist of a report or
opinion of any solicitor, auditor, accountant, engineer or appraiser or any
other person whose qualifications give authority to a statement made by him,
provided that if such report or opinion is furnished by a trustee, officer or
employer of the Trust it shall be in the form of a statutory declaration. Such
evidence shall be, so far as appropriate, in accordance with the immediately
preceding paragraph of this Section.
Each
statutory declaration, certificate, opinion or report with respect to compliance
with a condition precedent provided for in the Indenture shall include (a) a
statement by the person giving the evidence that he has read and is familiar
with those provisions of this Indenture relating to the condition precedent in
question, (b) a brief statement of the nature and scope of the examination or
investigation upon which the statements or opinions contained in such evidence
are based, (c) a statement that, in the belief of the person giving such
evidence, he has made such examination or investigation as is necessary to
enable him to make the statements or give the opinions contained or expressed
therein, and (d) a statement whether in the opinion of such person the
conditions precedent in question have been complied with or
satisfied.
The Trust
shall furnish or cause to be furnished to the Trustee at any time if the Trustee
reasonably so requires, its certificate that the Trust has complied with all
covenants, conditions or other requirements contained in this Indenture, the
non-compliance with which would, with the giving of notice or the lapse of time,
or both, or otherwise, constitute an Event of Default, 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. The Trust shall,
whenever the Trustee so requires, furnish the Trustee with evidence by way of
statutory declaration, opinion, report or certificate as specified by the
Trustee as to any action or step required or permitted to be taken by the Trust
or as a result of any obligation imposed by this Indenture.
66
|
15.6
|
Officers'
Certificates 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 it
necessary or desirable that a matter be proved or established prior to taking or
omitting any action hereunder, the Trustee, if acting in good faith, may rely
upon an Officers' Certificate.
|
15.7
|
Experts,
Advisers and Agents
|
The
Trustee may:
|
(a)
|
employ
or retain and act and rely on the opinion or advice of or information
obtained from any solicitor, auditor, valuer, engineer, surveyor,
appraiser or other expert, whether obtained by the Trustee or by the
Trust, or otherwise, and shall not be liable for acting, or refusing to
act, in good faith on any such opinion or advice and may pay proper and
reasonable compensation for all such legal and other advice or assistance
as aforesaid; and
|
|
(b)
|
employ
such agents and other assistants as it may reasonably require for the
proper discharge of its duties hereunder, and may pay reasonable
remuneration for all services performed for it (and shall be entitled to
receive reasonable remuneration for all services performed by it) in the
discharge of the trusts hereof and compensation for all disbursements,
costs and expenses made or incurred by it in the discharge of its duties
hereunder and in the management of the trusts hereof and any solicitors
employed or consulted by the Trustee may, but need not be, solicitors for
the Trust.
|
|
15.8
|
Trustee
May Deal in Debentures
|
Subject
to Sections 15.1 and 15.3, the Trustee may, in its personal or other capacity,
buy, sell, lend upon and deal in the Debentures and generally contract and enter
into financial transactions with the Trust or otherwise, without being liable to
account for any profits made thereby.
|
15.9
|
Investment
of Monies Held by Trustee
|
Unless
otherwise provided in this Indenture, any monies 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
securities in which, under the laws of the Province of Alberta, trustees are
authorized to invest trust monies, provided that such securities are expressed
to mature within two years or such shorter period selected to facilitate any
payments expected to be made under this Indenture, 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 monies at the Written Direction of the Trust given in a reasonably
timely manner. Pending the investment of any monies as hereinbefore provided,
such monies may be deposited in the name of the Trustee in any chartered bank of
Canada or, with the consent of the Trust, in the deposit department of the
Trustee or any other loan or trust company authorized to accept deposits under
the laws of Canada or any Province thereof at the rate of interest, if any, then
current on similar deposits.
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 Trust all
interest received by the Trustee in respect of any investments or deposits made
pursuant to the provisions of this Section.
67
|
15.10
|
Trustee
Not Ordinarily Bound
|
Except as
provided in Section 8.2 and as otherwise specifically provided herein, the
Trustee shall not, subject to Section 15.3, be bound to give notice to any
person of the execution hereof, nor to do, observe or perform or see to the
observance or performance by the Trust of any of the obligations herein imposed
upon the Trust or of the covenants on the part of the Trust herein contained,
nor in any way to supervise or interfere with the conduct of the Trust's
business, unless the Trustee shall have been required to do so in writing by the
holders of not less than 25% of the aggregate principal amount of the Debentures
then outstanding or by any Extraordinary Resolution of the Debentureholders
passed in accordance with the provisions contained in Article 13, and then only
after it shall have been funded and indemnified to its satisfaction against all
actions, proceedings, claims and demands to which it may render itself liable
and all costs, charges, damages and expenses which it may incur by so
doing.
|
15.11
|
Trustee
Not Required to Give Security
|
The
Trustee shall not be required to give any bond or security in respect of the
execution of the trusts and powers of this Indenture or otherwise in respect of
the premises.
|
15.12
|
Trustee
Not Bound to Act on Trust's Request
|
Except as
in this Indenture otherwise specifically provided, the Trustee shall not be
bound to act in accordance with any direction or request of the Trust until a
duly authenticated copy of the instrument or resolution containing such
direction or request shall have been delivered to the Trustee, and the Trustee
shall be empowered to act upon any such copy purporting to be authenticated and
believed by the Trustee to be genuine.
|
15.13
|
Conditions
Precedent to Trustee's Obligations to Act
Hereunder
|
The
obligation of the Trustee to commence or continue any act, action or proceeding
for the purpose of enforcing the rights of the Trustee and of 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.
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.
|
15.14
|
Authority
to Carry on Business
|
The
Trustee represents to the Trust 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 each of the provinces of Canada but if, notwithstanding the provisions of
this Section 15.14, it ceases to be so authorized to carry on business, the
validity and enforceability of this Indenture and the securities 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 any of the provinces of Canada,
either become so authorized or resign in the manner and with the effect
specified in Section 15.2.
68
|
15.15
|
Compensation
and Indemnity
|
|
(a)
|
The
Trust shall pay to the Trustee from time to time compensation for its
services hereunder as agreed separately by the Trust and the Trustee, and
shall pay or reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
the administration or execution of its duties under this Indenture
(including the reasonable and documented compensation and disbursements of
its Counsel and all other advisers and assistants not regularly in its
employ), both before any default hereunder and thereafter until all duties
of the Trustee under this Indenture shall be finally and fully performed.
The Trustee's compensation shall not be limited by any law on compensation
of a trustee of an express trust.
|
|
(b)
|
The
Trust hereby indemnifies and saves harmless the Trustee and its directors,
officers and employees from and against any and all loss, damages,
charges, expenses, claims, demands, actions or liability whatsoever which
may be brought against the Trustee or which it may suffer or incur as a
result of or arising out of the performance of its duties and obligations
hereunder save only in the event of gross negligence, or the wilful
misconduct or bad faith of the Trustee. This indemnity will survive the
termination or discharge of this Indenture and the resignation or removal
of the Trustee. The Trustee shall notify the Trust promptly of any claim
for which it may seek indemnity. The Trust shall defend the claim and the
Trustee shall co-operate in the defence. The Trustee may have separate
Counsel and the Trust shall pay the reasonable fees and expenses of such
Counsel. The Trust need not pay for any settlement made without its
consent, which consent must not be unreasonably withheld. This indemnity
shall survive the resignation or removal of the Trustee or the discharge
of this Indenture.
|
|
(c)
|
The
Trust need not reimburse any expense or indemnify against any loss or
liability incurred by the Trustee through gross negligence or bad faith or
breach of the Trustee's duties
hereunder.
|
|
15.16
|
Acceptance
of Trust
|
The
Trustee hereby 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 to hold all rights, privileges and benefits conferred hereby and by law in
trust for the various persons who shall from time to time be Debentureholders,
subject to all the terms and conditions herein set forth.
|
15.17
|
Third
Party Interests
|
Each
party to this Indenture (in this paragraph referred to as a "representing party") hereby
represents to the Trustee that any account to be opened by, or interest to held
by, the Trustee in connection with this Indenture, for or to the credit of such
representing party, either (i) is not intended to be used by or on behalf of any
third party; or (ii) is intended to be used by or on behalf of a third party, in
which case such representing party hereby agrees to complete, execute and
deliver forthwith to the Trustee a declaration, in the Trustee's prescribed form
or in such other form as may be satisfactory to it, as to the particulars of
such third party.
|
15.18
|
Anti-Money
Laundering
|
The
Trustee shall retain the right not to act and shall not be liable for refusing
to act if, due to a lack of information or for any other reason whatsoever, the
Trustee, in its sole judgment, acting reasonably, determines that such act might
cause it to be in noncompliance with any applicable anti-money laundering or
anti-terrorist legislation, regulation or guideline. Further, should the
Trustee, in its sole judgment, acting reasonably, determine at any time that its
acting under this Indenture has resulted in its being in non-compliance with any
applicable anti-money laundering or anti-terrorist legislation, regulation or
guideline, then it shall have the right to resign on 10 days' prior written
notice sent to the Trust provided that (i) the Trustee's written notice shall
describe the circumstances of such non-compliance; and (ii) if such
circumstances are rectified to the Trustee's satisfaction within such 10-day
period, then such resignation shall not be effective.
|
15.19
|
Privacy
Laws
|
The
parties acknowledge that federal and/or provincial legislation that addresses
the protection of individuals' personal information (collectively, "Privacy Laws") applies to
certain obligations and activities under this Indenture. Notwithstanding any
other provision of this Indenture, neither party shall take or direct any action
that would contravene, or cause the other to contravene, applicable Privacy
Laws. The Trust shall, prior to transferring or causing to be transferred
personal information to the Trustee, obtain and retain required consents of the
relevant individuals to the collection, use and disclosure of their personal
information, or shall have determined that such consents either have previously
been given upon which the parties can rely or are not required under the Privacy
Laws. The Trustee shall use commercially reasonable efforts to ensure that its
services hereunder comply with Privacy Laws. Specifically, the Trustee agrees:
(a) to have a designated chief privacy officer; (b) to maintain policies and
procedures to protect personal information and to receive and respond to any
privacy complaint or inquiry; (c) to use personal information solely for the
purposes of providing its services under or ancillary to this Indenture and to
comply with applicable laws and not to use it for any other purpose except with
the consent of or direction from the Trust or the individual involved or
as permitted by Privacy Laws; (d) not to sell or otherwise improperly
disclose personal information to any third party; and (e) to employ
administrative, physical and technological safeguards to reasonably secure and
protect personal information against loss, theft, or unauthorized access, use or
modification.
69
|
15.20
|
Force
Majeure
|
The
Trustee shall not be personally liable to the other, or held in breach of this
Indenture, if prevented, hindered, or delayed in the performance or observance
of any provision contained herein by reason of act of God, riots, terrorism,
acts of war, epidemics, governmental action or judicial order, earthquakes, or
any other similar causes (including, but not limited to, mechanical, electronic
or communication interruptions, disruptions or failures). Performance
times under this Indenture shall be extended for a period of time equivalent to
the time lost because of any delay that is excusable under this
Section.
ARTICLE 16
SUPPLEMENTAL
INDENTURES
|
16.1
|
Supplemental
Indentures
|
Subject
to the approval of the Toronto Stock Exchange or such other exchange on which
the Debentures are then listed, as may be required, from time to time the
Trustee and, when authorized by a resolution of the Board of Directors, the
Trust, may, and they shall when required by this Indenture, execute, acknowledge
and deliver by the proper officers of the Corporation deeds or indentures
supplemental hereto which thereafter shall form part hereof, for any one or more
of the following purposes:
|
(a)
|
providing
for the issuance of Additional Debentures under this
Indenture;
|
|
(b)
|
adding
to the covenants of the Trust herein contained for the protection of the
Debentureholders, or of the Debentures of any series, or providing for
events of default, in addition to those herein
specified;
|
|
(c)
|
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 the
Trustee relying on an opinion of Counsel will not be prejudicial to the
interests of the Debentureholders;
|
|
(d)
|
evidencing
the succession, or successive successions, of others to the Trust and the
covenants of and obligations assumed by any such successor in accordance
with the provisions of this
Indenture;
|
|
(e)
|
giving
effect to any Extraordinary Resolution passed as provided in
Article 13; and
|
|
(f)
|
for
any other purpose not inconsistent with the terms of this
Indenture.
|
70
Unless
the supplemental indenture requires the consent or concurrence of
Debentureholders or the holders of a particular series of Debentures, as the
case may be, by Extraordinary Resolution, the consent or concurrence of
Debentureholders or the holders of a particular series of Debentures, as the
case may be, shall not be required in connection with the execution,
acknowledgement or delivery of a supplemental indenture. Subject to the approval
of the Toronto Stock Exchange or such other exchange on which the Debentures are
then listed, as may be required, the Trust and the Trustee may amend any of the
provisions of this Indenture related to matters of United States law or the
issuance of Debentures into the United States in order to ensure that such
issuances can be made in accordance with applicable law in the United States
without the consent or approval of the Debentureholders. Further, subject to the
approval of the Toronto Stock Exchange or such other exchange on which the
Debentures are then listed, as may be required, the Trust and the Trustee may
without the consent or concurrence of the Debentureholders or the holders of a
particular series of Debentures, as the case may be, by supplemental indenture
or otherwise, make any changes or corrections in this Indenture which it shall
have been advised by Counsel are required for the purpose of curing or
correcting any ambiguity or defective or inconsistent provisions or clerical
omissions or mistakes or manifest errors contained herein or in any indenture
supplemental hereto or any Written Direction of the Trust provided for the issue
of Debentures, providing that in the opinion of the Trustee (relying upon an
opinion of Counsel) the rights of the Debentureholders are in no way prejudiced
thereby.
ARTICLE 17
EXECUTION
AND FORMAL DATE
|
17.1
|
Execution
|
This
Indenture may be simultaneously 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.
|
17.2
|
Contracts
of the Trust
|
The
parties hereby acknowledge that in addition to entering into this Indenture on
its own behalf, PEOC is entering into this Indenture on behalf of the Trust and
the obligations of the Trust hereunder shall not be personally binding upon
PEOC, the trustee of the Trust or any of the registered or beneficial
unitholders of the Trust, or any annuitant under a plan of which a unitholder of
the Trust acts as trustee or carrier, and resort shall not be had to, nor shall
recourse or satisfaction be sought from, any of such persons or the private
property of any such persons. Any recourse against the Trust or any
of the aforementioned persons in any manner in respect of any indebtedness,
obligation or liability of the Trust arising hereunder or arising in connection
herewith or from the matters to which this Indenture relates, if any, including,
without limitation, claims based on negligence or otherwise tortious behaviour,
shall be limited to, and satisfied only out of, the Trust Fund, as defined in
the trust indenture by which the Trust is established made as of August 1, 2002,
as amended from time to time.
71
|
17.3
|
Formal
Date
|
For the
purpose of convenience this Indenture may be referred to as bearing the formal
date of May 26, 2010 irrespective of the actual date of execution
hereof.
IN
WITNESS whereof the parties hereto have executed these presents under their
respective corporate seals and the hands of their proper officers in that
behalf.
|
PARAMOUNT ENERGY TRUST,
by Paramount Energy Operating Corp. (as attorney-in-fact and agent of
Computershare Trust Company)
|
||||
|
By:
|
(signed)
"Xxxxxxx
Xxxxxxxxx"
|
|||
|
Xxxxxxx
Xxxxxxxxx
Vice
President, Finance and Chief Financial Officer
|
||||
|
PARAMOUNT
ENERGY OPERATING CORP.
|
||||
|
By:
|
(signed)
"Xxxxxxx
Xxxxxxxxx"
|
|||
|
Xxxxxxx
Xxxxxxxxx
Vice
President, Finance and Chief Financial Officer
|
||||
|
COMPUTERSHARE
TRUST COMPANY OF CANADA
|
||||
|
By:
|
(signed)
"Xxxxxx
Xxxxxx"
|
|||
|
By:
|
(signed)
"Xxxxx
Xxxxxxx"
|
|||
72
SCHEDULE
"A"
TO
THE CONVERTIBLE DEBENTURE INDENTURE AMONG
PARAMOUNT
ENERGY TRUST, PARAMOUNT ENERGY OPERATING CORP. AND
COMPUTERSHARE
TRUST COMPANY OF CANADA
FORM
OF DEBENTURE
FORM
OF GLOBAL DEBENTURE
This
Debenture is a Global Debenture within the meaning of the Indenture herein
referred to and is registered in the name of a Depository or a nominee thereof.
This Debenture may not be transferred to or exchanged for Debentures registered
in the name of any person other than the Depository or a nominee thereof and no
such transfer may be registered except in the limited circumstances described in
the Indenture. Every Debenture authenticated and delivered upon registration of,
transfer of, or in exchange for, or in lieu of, this Debenture shall be a Global
Debenture subject to the foregoing, except in such limited circumstances
described in the Indenture.
Unless
this certificate is presented by an authorized representative of CDS Clearing
and Depository Services Inc. ("CDS") to Paramount Energy Trust (the "Issuer")
its successor or its agent for registration of transfer, exchange or payment,
and any certificate issued in respect thereof is registered in the name of CDS
& Co., or in such other name as is requested by an authorized representative
of CDS (and any payment is made to CDS & Co. or to such other entity as is
requested by an authorized representative of CDS), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered holder hereof, CDS & Co., has a property interest in the
securities represented by this certificate herein and it is a violation of its
rights for another person to hold, transfer or deal with this
certificate.
CUSIP
000000XX0
XXXX
XX 000000XX00
| No. · |
$·
|
PARAMOUNT
ENERGY TRUST
(A
trust governed by the laws of Alberta)
7.00%
CONVERTIBLE UNSECURED JUNIOR SUBORDINATED DEBENTURE
DUE
DECEMBER 31, 2015
PARAMOUNT ENERGY TRUST (the
"Trust" or the "Issuer") for value received
hereby acknowledges itself indebted and, subject to the provisions of the
Convertible Debenture Indenture (the "Indenture") dated as of May
26, 2010 among the Trust, Paramount Energy Operating Corp. and Computershare
Trust Company of Canada (the "Trustee"), promises to pay to
the registered holder hereof on December 31, 2015 (the "Maturity Date") or on such
earlier date as the principal amount hereof may become due in accordance with
the provisions of the Indenture the principal sum of · Dollars ($·) in lawful money of Canada
on presentation and surrender of this Initial Debenture at the main branch of
the Trustee in Calgary, Alberta or in Toronto, Ontario in accordance with the
terms of the Indenture and, subject as hereinafter provided, to pay interest on
the principal amount hereof from the date hereof, or from the last Interest
Payment Date to which interest shall have been paid or made available for
payment hereon, whichever is later, at the rate of 7.00% per annum (based on a
year of 365 days), in like money, in arrears in equal (with the exception of the
first interest payment which will include interest from May 26, 2010 as set
forth below) semi-annual instalments (less any tax required by law to be
deducted) on June 30 and December 31 in each year commencing on December 31,
2010 and the last payment (representing interest payable from the last Interest
Payment Date to, but excluding, the Maturity Date) to fall due on the Maturity
Date and, should the Trust at any time make default in the payment of any
principal or interest, to pay interest on the amount in default at the same
rate, in like money and on the same dates. For certainty, the first interest
payment will include interest accrued from May 26, 2010 to, but excluding
December 31, 2010, which will be equal to $42.00 for each $1,000 principal
amount of the Initial Debentures.
Interest
hereon shall be payable by electronic transfer of funds to the registered holder
hereof and, subject to the provisions of the Indenture, the sending of such
electronic transfer of funds shall, to the extent of the sum represented thereby
(plus the amount of any tax withheld), satisfy and discharge all liability for
interest on this Initial Debenture.
A-1
This
Initial Debenture is one of the 7.00% Convertible Unsecured Junior Subordinated
Debentures (referred to herein as the "Initial Debentures") of the
Trust issued or issuable in one or more series under the provisions of the
Indenture. The Initial Debentures authorized for issue immediately are limited
to an aggregate principal amount of $60,000,000 in lawful money of
Canada. Reference is hereby expressly made to the Indenture for a
description of the terms and conditions upon which the Initial Debentures are or
are to be issued and held and the rights and remedies of the holders of the
Initial Debentures and of the Trust and of the Trustee, all to the same effect
as if the provisions of the Indenture were herein set forth to all of which
provisions the holder of this Initial Debenture by acceptance hereof
assents.
The
Initial Debentures are issuable only in denominations of $1,000 and integral
multiples thereof. Upon compliance with the provisions of the Indenture,
Debentures of any denomination may be exchanged for an equal aggregate principal
amount of Debentures in any other authorized denomination or
denominations.
Any part,
being $1,000 or an integral multiple thereof, of the principal of this Initial
Debenture, provided that the principal amount of this Initial Debenture is in a
denomination in excess of $1,000, is convertible, at the option of the holder
hereof, upon surrender of this Initial Debenture at the principal office of the
Trustee in Calgary, Alberta or in Xxxxxxx, Xxxxxxx, at any time prior to the
close of business on the earlier of (i) the Business Day immediately preceding
the Maturity Date of the Initial Debentures; or (ii) if the Initial Debentures
are called for redemption, on the business day immediately preceding the date
specified by the Trust for redemption of the Initial Debentures, into Trust
Units (without adjustment for interest accrued hereon or for dividends or
distributions on Trust Units issuable upon conversion) at a conversion price of
$7.00 (the "Conversion
Price") per Trust Unit, being a rate of 142.8571 Trust Units for each
$1,000 principal amount of Initial Debentures, all subject to the terms and
conditions and in the manner set forth in the Indenture. No Initial Debentures
may be converted during the five Business Days preceding and including June 30
and December 31 in each year, commencing December 31, 2010, as the registers of
the Trustee will be closed during such periods. The Indenture makes provision
for the adjustment of the Conversion Price in the events therein specified. No
fractional Trust Units will be issued on any conversion but in lieu thereof, the
Trust will satisfy such fractional interest by a cash payment equal to the
market price of such fractional interest determined in accordance with the
Indenture. Holders converting their Debentures will receive accrued
and unpaid interest thereon. If a Debenture is surrendered for conversion on an
Interest Payment Date or during the five preceding Business Days, the person or
persons entitled to receive Trust Units in respect of the Debentures so
surrendered for conversion shall not become the holder or holders of record of
such Trust Units until the Business Day following such Interest Payment
Date.
This
Initial Debenture may be redeemed at the option of the Trust on the terms and
conditions set out in the Indenture at the redemption price therein and herein
set out provided that this Initial Debenture is not redeemable before December
31, 2013, except in the event of the satisfaction of certain conditions after a
Change of Control has occurred. On and after December 31, 2013 and prior to
December 31, 2014, and provided that the Current Market Price of the Trust Units
of the Trust is at least 125% of the Conversion Price of the Initial Debentures,
the Initial Debentures are redeemable at the option of the Trust at a price
equal to $1,000 per Initial Debenture plus accrued and unpaid interest and
otherwise (the "Redemption
Price") on the terms and conditions described in the Indenture. On and
after December 31, 2014 and prior to the Maturity Date, the Initial Debentures
are redeemable at the option of the Trust at a price equal to $1,000 per Initial
Debenture plus accrued and unpaid interest and otherwise on the terms and
conditions described in the Indenture. The Trust may, on notice as provided in
the Indenture, at its option and subject to any applicable regulatory approval,
elect to satisfy its obligation to pay all or any portion of the applicable
Redemption Price by the issue of that number of Trust Units obtained by dividing
the applicable Redemption Price by 95% of the volume weighted average trading
price of the Trust Units on the Toronto Stock Exchange (or if the Trust Units
are no longer listed on the Toronto Stock Exchange, such other stock exchange on
which the Initial Debentures may be listed) for the 20 consecutive trading
days ending on the fifth trading day preceding the Redemption Date.
Upon the
occurrence of a Change of Control of the Trust, the Trust is required to make an
offer to purchase all of the Initial Debentures at a price equal to 101% of the
principal amount of such Initial Debentures plus accrued and unpaid interest up
to, but excluding, the date the Initial Debentures are so repurchased
(the "Change of Control
Purchase Offer"). If 90% or more of the principal amount of all
Debentures outstanding on the date the Trust provides notice of a Change of
Control to the Trustee have been tendered for purchase pursuant to the Change of
Control Purchase Offer, the Trust has the right to redeem all the remaining
outstanding Initial Debentures on the same date and at the same
price.
A-2
If an
offer is made for the Initial Debentures which is a take-over bid or issuer bid
for the Initial Debentures within the meaning of MI 62-104 and 90% or more
of the principal amount of all the Initial Debentures (other than Initial
Debentures held at the date of offer by or on behalf of the Offeror, associates
or affiliates of the Offeror or anyone acting jointly or in concert with the
Offeror) are taken up and paid for by the Offeror, the Offeror will be entitled
to acquire the Initial Debentures of those holders who did not accept the offer
on the same terms as the Offeror acquired Initial Debentures pursuant to the
Change of Control Purchase Offer.
The Trust
may, on notice as provided in the Indenture, at its option and subject to any
applicable regulatory approval, elect to satisfy the obligation to repay all or
any portion of the principal amount of this Initial Debenture due on the
Maturity Date, together with all accrued and unpaid interest thereon, by the
issue of that number of Freely Tradeable Trust Units obtained by dividing the
principal amount of this Initial Debenture (or that portion to be paid for in
Trust Units pursuant to the exercise by the Trust of the Trust Unit Repayment
Right), together with all accrued and unpaid interest thereon, by 95% of the volume
weighted average trading price of the Trust Units on the Toronto Stock Exchange
or other stock exchange on which the Debentures may be listed for the
20 consecutive trading days ending on the fifth trading day preceding the
Maturity Date.
The
indebtedness evidenced by this Initial Debenture, and by all other Initial
Debentures now or hereafter certified and delivered under the Indenture, is a
direct unsecured obligation of the Trust, and is subordinated in right of
payment, to the extent and in the manner provided in the Indenture, to the prior
payment in full of all Senior Indebtedness, whether outstanding at the date of
the Indenture or thereafter created, incurred, assumed or
guaranteed.
The
principal hereof may become or be declared due and payable before the stated
maturity in the events, in the manner, with the effect and at the times provided
in the Indenture.
The
Indenture contains provisions making binding upon all holders of Debentures
outstanding thereunder (or in certain circumstances specific series of
Debentures) resolutions passed at meetings of such holders held in accordance
with such provisions and instruments signed by the holders of a specified
majority of Debentures outstanding (or specific series), which resolutions or
instruments may have the effect of amending the terms of this Initial Debenture
or the Indenture.
The
Indenture contains provisions disclaiming any personal liability on the part of
holders of Trust Units and officers, directors and employees of the Trust in
respect of any obligation or claim arising out of the Indenture or this
Debenture.
This
Initial Debenture may only be transferred, upon compliance with the conditions
prescribed in the Indenture, in one of the registers to be kept at the principal
office of the Trustee in the City of Calgary or the City of Toronto and in such
other place or places and/or by such other registrars (if any) as the Trust with
the approval of the Trustee may designate. No transfer of this Initial Debenture
shall be valid unless made on the register by the registered holder hereof 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 or other registrar, and upon compliance with such reasonable
requirements as the Trustee and/or other registrar may prescribe and upon
surrender of this Initial Debenture for cancellation. Thereupon a new Initial
Debenture or Initial Debentures in the same aggregate principal amount shall be
issued to the transferee in exchange hereof.
This
Initial Debenture shall not become obligatory for any purpose until it shall
have been certified by the Trustee under the Indenture.
Capitalized
words or expressions used in this Initial Debenture shall, unless otherwise
defined herein, have the meaning ascribed thereto in the Indenture.
A-3
IN WITNESS WHEREOF PARAMOUNT ENERGY
TRUST has caused this Debenture to be signed by its authorized
representatives as of the 26th day of
May, 2010.
|
PARAMOUNT ENERGY TRUST,
by Paramount Energy Operating Corp. (as attorney-in-fact and agent of
Computershare Trust Company)
|
|||
|
By:
|
|||
A-4
(FORM
OF TRUSTEE'S CERTIFICATE)
This
Initial Debenture is one of the 7.00% Convertible Unsecured Junior Subordinated
Debentures due December 31, 2015 referred to in the Indenture within
mentioned.
COMPUTERSHARE
TRUST COMPANY OF CANADA
By:
_______________________________________
(Authorized Officer)
(FORM
OF REGISTRATION PANEL)
(No
writing hereon except by Trustee or other registrar)
|
Date
of Registration
|
In
Whose Name Registered
|
Signature
of Trustee or Registrar
|
||
A-5
FORM
OF ASSIGNMENT
FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
__________________________________, whose address and social insurance number,
if applicable, are set forth below, this Initial Debenture (or $______________
principal amount hereof*) of PARAMOUNT ENERGY TRUST standing in the name(s) of
the undersigned in the register maintained by the Trust with respect to such
Initial Debenture and does hereby irrevocably authorize and direct the Trustee
to transfer such Initial Debenture in such register, with full power of
substitution in the premises.
Dated:
____________________________________
Address
of Transferee:
_______________________________________________________________________________________
(Xxxxxx Xxxxxxx, Xxxx, Xxxxxxxx and
Postal Code)
Social
Insurance Number of Transferee, if applicable:
__________________________________________________________________________________-
*If less
than the full principal amount of the within Initial Debenture is to be
transferred, indicate in the space provided the principal amount (which must be
$1,000 or an integral multiple thereof, unless you hold an Initial Debenture in
a non-integral multiple of $1,000 by reason of your having exercised your right
to exchange upon the making of a Change of Control Purchase Offer, in which case
such Initial Debenture is transferable only in its entirety) to be
transferred.
|
1.
|
The
signature(s) to this assignment must correspond with the name(s) as
written upon the face of this Initial Debenture in every particular
without alteration or any change whatsoever. The signature(s) must be
guaranteed by a Canadian chartered bank or trust company or by a member of
an acceptable Medallion Guarantee Program. Notarized or witnessed
signatures are not acceptable as guaranteed signatures. The Guarantor must
affix a stamp bearing the actual words: "SIGNATURE
GUARANTEED".
|
|
2.
|
The
registered holder of this Initial Debenture is responsible for the payment
of any documentary, stamp or other transfer taxes that may be payable in
respect of the transfer of this
Debenture.
|
|
Signature
of Guarantor:
|
||
|
Authorized
Officer
|
Signature
of transferring registered holder
|
|
|
Name
of Institution
|
A-6
EXHIBIT
"1"
TO
CDS GLOBAL DEBENTURE
PARAMOUNT
ENERGY TRUST
7.00%
CONVERTIBLE UNSECURED JUNIOR SUBORDINATED DEBENTURES
DUE
DECEMBER 31, 2015
Initial
Principal Amount: $·
CUSIP
000000XX0
XXXX XX
000000XX00
Authorization: ________________________
ADJUSTMENTS
|
Date
|
Amount
of Increase
|
Amount
of Decrease
|
New
Principal Amount
|
Authorization
|
||||
A-7
FORM
OF U.S. CERTIFICATED DEBENTURE
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR
THE BENEFIT OF PARAMOUNT ENERGY TRUST THAT SUCH SECURITIES MAY BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO PARAMOUNT ENERGY TRUST, (B) OUTSIDE
THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (C) PURSUANT TO THE EXEMPTIONS FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 OR RULE 144A THEREUNDER, IF AVAILABLE, OR
(D) PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION, IN EACH CASE AFTER
PROVIDING A LEGAL OPINION OF COUNSEL OF RECOGNIZED STANDING SATISFACTORY TO
PARAMOUNT ENERGY TRUST OR OTHER EVIDENCE SATISFACTORY TO PARAMOUNT ENERGY TRUST
TO SUCH EFFECT. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY"
IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA.
CUSIP
000000XX0
XXXX
XX 000000XX00
| No. · |
$·
|
PARAMOUNT
ENERGY TRUST
(A
Trust incorporated under the laws of Alberta)
7.00%
CONVERTIBLE UNSECURED JUNIOR SUBORDINATED DEBENTURE
DUE
DECEMBER 31, 2015
PARAMOUNT ENERGY TRUST (the
"Trust" or the "Issuer") for value received
hereby acknowledges itself indebted and, subject to the provisions of the
Convertible Debenture Indenture (the "Indenture") dated as of May
26, 2010 among the Trust, Paramount Energy Operating Corp. and Computershare
Trust Company of Canada (the "Trustee"), promises to pay to
the registered holder hereof on December 31, 2015 (the "Maturity Date") or on such
earlier date as the principal amount hereof may become due in accordance with
the provisions of the Indenture the principal sum of · Dollars ($·) in lawful money of Canada
on presentation and surrender of this Initial Debenture at the main branch of
the Trustee in Calgary, Alberta or in Toronto, Ontario in accordance with the
terms of the Indenture and, subject as hereinafter provided, to pay interest on
the principal amount hereof from the date hereof, or from the last Interest
Payment Date to which interest shall have been paid or made available for
payment hereon, whichever is later, at the rate of 7.00% per annum (based on a
year of 365 days), in like money, in arrears in equal (with the exception of the
first interest payment which will include interest from May 26, 2010 as set
forth below) semi-annual instalments (less any tax required by law to be
deducted) on June 30 and December 31 in each year commencing on December 31,
2010 and the last payment (representing interest payable from the last Interest
Payment Date to, but excluding, the Maturity Date) to fall due on the Maturity
Date and, should the Trust at any time make default in the payment of any
principal or interest, to pay interest on the amount in default at the same
rate, in like money and on the same dates. For certainty, the first interest
payment will include interest accrued from May 26, 2010 to, but excluding
December 31, 2010, which will be equal to $42.00 for each $1,000 principal
amount of the Initial Debentures.
Interest
hereon shall be payable by electronic transfer of funds to the registered holder
hereof and, subject to the provisions of the Indenture, the sending of such
electronic transfer of funds shall, to the extent of the sum represented thereby
(plus the amount of any tax withheld), satisfy and discharge all liability for
interest on this Initial Debenture.
A-8
This
Initial Debenture is one of the 7.00% Convertible Unsecured Junior Subordinated
Debentures (referred to herein as the "Initial Debentures") of the
Trust issued or issuable in one or more series under the provisions of the
Indenture. The Initial Debentures authorized for issue immediately are limited
to an aggregate principal amount of $60,000,000 in lawful money of
Canada. Reference is hereby expressly made to the Indenture for a
description of the terms and conditions upon which the Initial Debentures are or
are to be issued and held and the rights and remedies of the holders of the
Initial Debentures and of the Trust and of the Trustee, all to the same effect
as if the provisions of the Indenture were herein set forth to all of which
provisions the holder of this Initial Debenture by acceptance hereof
assents.
The
Initial Debentures are issuable only in denominations of $1,000 and integral
multiples thereof. Upon compliance with the provisions of the Indenture,
Debentures of any denomination may be exchanged for an equal aggregate principal
amount of Debentures in any other authorized denomination or
denominations.
Any part,
being $1,000 or an integral multiple thereof, of the principal of this Initial
Debenture, provided that the principal amount of this Initial Debenture is in a
denomination in excess of $1,000, is convertible, at the option of the holder
hereof, upon surrender of this Initial Debenture at the principal office of the
Trustee in Calgary, Alberta or in Xxxxxxx, Xxxxxxx, at any time prior to the
close of business on the earlier of (i) the Business Day immediately preceding
the Maturity Date of the Initial Debentures; or (ii) if the Initial Debentures
are called for redemption, on the business day immediately preceding the date
specified by the Trust for redemption of the Initial Debentures, into Trust
Units (without adjustment for interest accrued hereon or for dividends or
distributions on Trust Units issuable upon conversion) at a conversion price of
$7.00 (the "Conversion
Price") per Trust Unit, being a rate of 142.8571 Trust Units for each
$1,000 principal amount of Initial Debentures, all subject to the terms and
conditions and in the manner set forth in the Indenture. No Initial Debentures
may be converted during the five Business Days preceding and including June 30
and December 31 in each year, commencing December 31, 2010, as the registers of
the Trustee will be closed during such periods. The Indenture makes provision
for the adjustment of the Conversion Price in the events therein specified. No
fractional Trust Units will be issued on any conversion but in lieu thereof, the
Trust will satisfy such fractional interest by a cash payment equal to the
market price of such fractional interest determined in accordance with the
Indenture. Holders converting their Debentures will receive accrued
and unpaid interest thereon. If a Debenture is surrendered for conversion on an
Interest Payment Date or during the five preceding Business Days, the person or
persons entitled to receive Trust Units in respect of the Debentures so
surrendered for conversion shall not become the holder or holders of record of
such Trust Units until the Business Day following such Interest Payment
Date.
This
Initial Debenture may be redeemed at the option of the Trust on the terms and
conditions set out in the Indenture at the redemption price therein and herein
set out provided that this Initial Debenture is not redeemable before December
31, 2013, except in the event of the satisfaction of certain conditions after a
Change of Control has occurred. On and after December 31, 2013 and prior to
December 31, 2014, and provided that the Current Market Price of the Trust Units
of the Trust is at least 125% of the Conversion Price of the Initial Debentures,
the Initial Debentures are redeemable at the option of the Trust at a price
equal to $1,000 per Initial Debenture plus accrued and unpaid interest and
otherwise (the "Redemption
Price") on the terms and conditions described in the Indenture. On and
after December 31, 2014 and prior to the Maturity Date, the Initial Debentures
are redeemable at the option of the Trust at a price equal to $1,000 per Initial
Debenture plus accrued and unpaid interest and otherwise on the terms and
conditions described in the Indenture. The Trust may, on notice as provided in
the Indenture, at its option and subject to any applicable regulatory approval,
elect to satisfy its obligation to pay all or any portion of the applicable
Redemption Price by the issue of that number of Trust Units obtained by dividing
the applicable Redemption Price by 95% of the volume weighted average trading
price of the Trust Units on the Toronto Stock Exchange (or if the Trust Units
are no longer listed on the Toronto Stock Exchange, such other stock exchange on
which the Initial Debentures may be listed) for the 20 consecutive trading
days ending on the fifth trading day preceding the Redemption Date.
Upon the
occurrence of a Change of Control of the Trust, the Trust is required to make an
offer to purchase all of the Initial Debentures at a price equal to 101% of the
principal amount of such Initial Debentures plus accrued and unpaid interest up
to, but excluding, the date the Initial Debentures are so repurchased
(the "Change of Control
Purchase Offer"). If 90% or more of the principal amount of all
Debentures outstanding on the date the Trust provides notice of a Change of
Control to the Trustee have been tendered for purchase pursuant to the Change of
Control Purchase Offer, the Trust has the right to redeem all the remaining
outstanding Initial Debentures on the same date and at the same
price.
A-9
If an
offer is made for the Initial Debentures which is a take-over bid or issuer bid
for the Initial Debentures within the meaning of MI 62-104 and 90% or more
of the principal amount of all the Initial Debentures (other than Initial
Debentures held at the date of offer by or on behalf of the Offeror, associates
or affiliates of the Offeror or anyone acting jointly or in concert with the
Offeror) are taken up and paid for by the Offeror, the Offeror will be entitled
to acquire the Initial Debentures of those holders who did not accept the offer
on the same terms as the Offeror acquired Initial Debentures pursuant to the
Change of Control Purchase Offer.
The Trust
may, on notice as provided in the Indenture, at its option and subject to any
applicable regulatory approval, elect to satisfy the obligation to repay all or
any portion of the principal amount of this Initial Debenture due on the
Maturity Date, together with all accrued and unpaid interest thereon, by the
issue of that number of Freely Tradeable Trust Units obtained by dividing the
principal amount of this Initial Debenture (or that portion to be paid for in
Trust Units pursuant to the exercise by the Trust of the Trust Unit Repayment
Right), together with all accrued and unpaid interest thereon, by 95% of the volume
weighted average trading price of the Trust Units on the Toronto Stock Exchange
or other stock exchange on which the Debentures may be listed for the
20 consecutive trading days ending on the fifth trading day preceding the
Maturity Date.
The
indebtedness evidenced by this Initial Debenture, and by all other Initial
Debentures now or hereafter certified and delivered under the Indenture, is a
direct unsecured obligation of the Trust, and is subordinated in right of
payment, to the extent and in the manner provided in the Indenture, to the prior
payment in full of all Senior Indebtedness, whether outstanding at the date of
the Indenture or thereafter created, incurred, assumed or
guaranteed.
The
principal hereof may become or be declared due and payable before the stated
maturity in the events, in the manner, with the effect and at the times provided
in the Indenture.
The
Indenture contains provisions making binding upon all holders of Debentures
outstanding thereunder (or in certain circumstances specific series of
Debentures) resolutions passed at meetings of such holders held in accordance
with such provisions and instruments signed by the holders of a specified
majority of Debentures outstanding (or specific series), which resolutions or
instruments may have the effect of amending the terms of this Initial Debenture
or the Indenture.
The
Indenture contains provisions disclaiming any personal liability on the part of
holders of Trust Units and officers, directors and employees of the Trust in
respect of any obligation or claim arising out of the Indenture or this
Debenture.
This
Initial Debenture may only be transferred, upon compliance with the conditions
prescribed in the Indenture, in one of the registers to be kept at the principal
office of the Trustee in the City of Calgary or the City of Toronto and in such
other place or places and/or by such other registrars (if any) as the Trust with
the approval of the Trustee may designate. No transfer of this Initial Debenture
shall be valid unless made on the register by the registered holder hereof 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 or other registrar, and upon compliance with such reasonable
requirements as the Trustee and/or other registrar may prescribe and upon
surrender of this Initial Debenture for cancellation. Thereupon a new Initial
Debenture or Initial Debentures in the same aggregate principal amount shall be
issued to the transferee in exchange hereof.
A-10
This
Initial Debenture shall not become obligatory for any purpose until it shall
have been certified by the Trustee under the Indenture.
IN WITNESS WHEREOF PARAMOUNT ENERGY
TRUST has caused this Debenture to be signed by its authorized
representatives as of the 26th day of
May, 2010.
|
PARAMOUNT ENERGY TRUST,
by Paramount Energy Operating Corp. (as attorney-in-fact and agent of
Computershare Trust Company)
|
||||
|
By:
|
||||
|
By:
|
||||
A-11
(FORM
OF TRUSTEE'S CERTIFICATE)
This
Initial Debenture is one of the 7.00% Convertible Unsecured Junior Subordinated
Debentures due December 31, 2015 referred to in the Indenture within
mentioned.
COMPUTERSHARE
TRUST COMPANY OF CANADA
By:
_____________________________________________________
(Authorized Officer)
(FORM
OF REGISTRATION PANEL)
(No
writing hereon except by Trustee or other registrar)
|
Date
of Registration
|
In
Whose Name Registered
|
Signature
of Trustee or Registrar
|
||
A-12
FORM
OF ASSIGNMENT
FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
__________________________________, whose address and social insurance number,
if applicable, are set forth below, this Initial Debenture (or $______________
principal amount hereof*) of PARAMOUNT ENERGY TRUST standing in the name(s) of
the undersigned in the register maintained by the Trust with respect to such
Initial Debenture and does hereby irrevocably authorize and direct the Trustee
to transfer such Initial Debenture in such register, with full power of
substitution in the premises.
Dated:
___________________________________________
Address
of Transferee:
_______________________________________________________
(Xxxxxx Xxxxxxx, Xxxx,
Xxxxxxxx and Postal Code)
Social
Insurance Number of Transferee, if applicable:
______________________________________________
*If less
than the full principal amount of the within Initial Debenture is to be
transferred, indicate in the space provided the principal amount (which must be
$1,000 or an integral multiple thereof, unless you hold an Initial Debenture in
a non-integral multiple of $1,000 by reason of your having exercised your right
to exchange upon the making of a Change of Control Purchase Offer, in which case
such Initial Debenture is transferable only in its entirety) to be
transferred.
|
1.
|
The
signature(s) to this assignment must correspond with the name(s) as
written upon the face of this Initial Debenture in every particular
without alteration or any change whatsoever. The signature(s) must be
guaranteed by a Canadian chartered bank or trust company or by a member of
an acceptable Medallion Guarantee Program. Notarized or witnessed
signatures are not acceptable as guaranteed signatures. The Guarantor must
affix a stamp bearing the actual words: "SIGNATURE
GUARANTEED".
|
|
2.
|
The
registered holder of this Initial Debenture is responsible for the payment
of any documentary, stamp or other transfer taxes that may be payable in
respect of the transfer of this
Debenture.
|
|
Signature
of Guarantor:
|
||
|
Authorized
Officer
|
Signature
of transferring registered holder
|
|
|
Name
of Institution
|
A-13
SCHEDULE
"B"
TO
THE CONVERTIBLE DEBENTURE INDENTURE AMONG
PARAMOUNT
ENERGY TRUST, PARAMOUNT ENERGY OPERATING CORP. AND
COMPUTERSHARE
TRUST COMPANY OF CANADA
FORM
OF REDEMPTION NOTICE
SCHEDULE
"B"
Form
of Redemption Notice
PARAMOUNT
ENERGY TRUST
7.00%
CONVERTIBLE UNSECURED JUNIOR SUBORDINATED DEBENTURES
REDEMPTION
NOTICE
|
To:
|
Holders
of 7.00% Convertible Unsecured Junior Subordinated Debentures (the "Debentures") of
Paramount Energy Trust (the "Trust")
|
|
Note:
|
All
capitalized terms used herein have the meaning ascribed thereto in the
Indenture mentioned below, unless otherwise
indicated.
|
Notice is
hereby given pursuant to Section 4.3 of the convertible debenture indenture
(the "Indenture") dated
as of May 26, 2010 among the Trust and Computershare Trust Company of Canada
(the "Trustee"), that
the aggregate principal amount of $· of the $· of Debentures outstanding
will be redeemed as of · (the "Redemption Date"), upon
payment of a redemption amount of $· for each $1,000 principal
amount of Debentures, being equal to the aggregate of (i) $· (the "Redemption Price"), and
(ii) all accrued and unpaid interest hereon to but excluding the Redemption
Date (collectively, the "Total
Redemption Price").
The Total
Redemption Price will be payable upon presentation and surrender of the
Debentures called for redemption at the following corporate trust
office:
Computershare Trust Company of
Canada
Xxxxx
000, 000 – 0xx Xxxxxx
XX
Xxxxxxx
Xxxxxxx X0X 0X0
The
interest upon the principal amount of Debentures called for redemption shall
cease to be payable from and after the Redemption Date, unless payment of the
Total Redemption Price shall not be made on presentation for surrender of such
Debentures at the above-mentioned corporate trust office on or after the
Redemption Date or prior to the setting aside of the Total Redemption Price
pursuant to the Indenture.
[Pursuant
to Section 4.6 of the Indenture, the Trust hereby irrevocably elects to
satisfy its obligation to pay $· of the Total Redemption
Price payable to holders of Debentures in accordance with this notice by issuing
and delivering to the holders that number of Freely Tradeable Trust Units
obtained by dividing the Total Redemption Price by 95% of the Current Market
Price of the Trust Units.]
[No
fractional Trust Units shall be delivered upon the exercise by the Trust of the
above-mentioned redemption right but, in lieu thereof, the Trust shall pay the
cash equivalent thereof determined on the basis of the Current Market Price of
Trust Units on the Redemption Date (less any tax required to be deducted, if
any).]
In this
connection, upon presentation and surrender of the Debentures for payment on the
Redemption Date, the Trust shall, on the Redemption Date, make the delivery to
the Trustee, at the above-mentioned corporate trust office, for delivery to and
on account of the holders, of certificates representing the Freely Tradeable
Trust Units to which holders are entitled together with the cash equivalent in
lieu of fractional Trust Units, and, if only a portion of the Debentures are to
be redeemed by issuing Freely Tradeable Trust Units, cash representing the
balance of the Total Redemption Price.
DATED:
PARAMOUNT ENERGY TRUST
by
Paramount
Energy Operating Corp.
(as
attorney-in-fact and agent of Computershare Trust Company)
(Authorized
Director or Officer of
Paramount
Energy Operating Corp.)
B-1
SCHEDULE
"C"
TO
THE CONVERTIBLE DEBENTURE INDENTURE AMONG
PARAMOUNT
ENERGY TRUST, PARAMOUNT ENERGY OPERATING CORP. AND
COMPUTERSHARE
TRUST COMPANY OF CANADA
FORM
OF MATURITY NOTICE
SCHEDULE
"C"
Form
of Maturity Notice
PARAMOUNT
ENERGY TRUST
7.00
% CONVERTIBLE UNSECURED JUNIOR SUBORDINATED DEBENTURES
MATURITY
NOTICE
|
To:
|
Holders
of 7.00% Convertible Unsecured Junior Subordinated Debentures (the "Debentures") of
Paramount Energy Trust (the "Trust")
|
|
Note:
|
All
capitalized terms used herein have the meaning ascribed thereto in the
Indenture mentioned below, unless otherwise
indicated.
|
Notice is
hereby given pursuant to Section 4.10(b) of the convertible debenture indenture
(the "Indenture") dated
as of May 26, 2010 among the Trust and Computershare Trust Company of Canada, as
trustee (the "Trustee"),
that the Debentures are due and payable as of December 31, 2015 (the "Maturity Date") and the Trust
elects to satisfy its obligation to repay to holders of Debentures the principal
amount of all of the Debentures outstanding on the Maturity Date, together with
all accrued and unpaid interest thereon, by issuing and delivering to the
holders that number of Freely Tradeable Trust Units equal to the number obtained
by dividing such principal amount of the Debentures and accrued and unpaid
interest thereon by 95% of the Current Market Price of Trust Units on the
Maturity Date.
No
fractional Trust Units shall be delivered on exercise by the Trust of the above
mentioned repayment right but, in lieu thereof, the Trust shall pay the cash
equivalent thereof determined on the basis of the Current Market Price of Trust
Units on the Maturity Date (less any tax required to be deducted, if
any).
In this
connection, upon presentation and surrender of the Debentures for payment on the
Maturity Date, the Trust shall, on the Maturity Date, make delivery to the
Trustee, at its principal trust office in Calgary, Alberta or in Xxxxxxx,
Xxxxxxx, for delivery to and on account of the holders, of certificates
representing the Freely Tradeable Trust Units to which holders are entitled
together with the cash equivalent in lieu of fractional Trust Units, and if only
a portion of the Debentures are to be repaid by issuing Freely Tradeable Trust
Units, cash representing the balance of the principal amount and interest due on
the Maturity Date.
DATED:
PARAMOUNT ENERGY TRUST
by
Paramount
Energy Operating Corp.
(as
attorney-in-fact and agent of
Computershare
Trust Company)
(Authorized
Director or Officer of
Paramount
Energy Operating Corp.)
C-1
SCHEDULE
"D"
TO
THE CONVERTIBLE DEBENTURE INDENTURE AMONG
PARAMOUNT
ENERGY TRUST, PARAMOUNT ENERGY OPERATING CORP. AND
COMPUTERSHARE
TRUST COMPANY OF CANADA
FORM
OF NOTICE OF CONVERSION
SCHEDULE
"D"
Form
of Notice of Conversion
CONVERSION
NOTICE
|
TO:
|
PARAMOUNT
ENERGY TRUST
|
|
Note:
|
All
capitalized terms used herein have the meaning ascribed thereto in the
Indenture mentioned below, unless otherwise
indicated.
|
The
undersigned registered holder of 7.00% Convertible Unsecured Junior Subordinated
Debentures irrevocably elects to convert such Debentures (or $· principal amount thereof*)
in accordance with the terms of the Indenture referred to in such Debentures and
tenders herewith the Debentures, and, if applicable, directs that the Trust
Units of Paramount Energy Trust issuable upon a conversion be issued and
delivered to the person indicated below. (If Trust Units are to be issued in the
name of a person other than the holder, all requisite transfer taxes must be
tendered by the undersigned).
|
Dated:
|
|||
|
(Signature
of Registered Holder)
|
|
*
|
If
less than the full principal amount of the Debentures, indicate in the
space provided the principal amount (which must be $1,000 or integral
multiples thereof).
|
|
NOTE:
|
If
Trust Units are to be issued in the name of a person other than the
holder, the signature must be guaranteed by a chartered bank, a trust
company or by a member of an acceptable Medallion Guarantee Program. The
Guarantor must affix a stamp bearing the actual words: "SIGNATURE
GUARANTEED".
|
(Print
name in which Trust Units are to be issued, delivered and
registered)
Name:
_________________________________________
____________________________________________
(Address)
_______________________________________________________
(City,
Province and Postal Code)
Name of
guarantor: _______________________________
Authorized
signature: _________________________________
D-1
SCHEDULE
"E"
TO
THE CONVERTIBLE DEBENTURE INDENTURE AMONG
PARAMOUNT
ENERGY TRUST, PARAMOUNT ENERGY OPERATING CORP. AND
COMPUTERSHARE
TRUST COMPANY OF CANADA
SELLER'S
CERTIFICATE FOR REMOVAL OF LEGEND
SCHEDULE
"E"
SELLER'S
CERTIFICATE FOR REMOVAL OF LEGEND
|
TO:
|
Computershare
Trust Company of Canada, as registrar, transfer agent for the Trust Units
and Trustee for the Debentures of Paramount Energy
Trust
|
This
Certificate relates to the offer and sale of 7.00% Convertible Unsecured Junior
Subordinated Debentures (the "Debentures") of Paramount
Energy Trust (the "Trust") made in reliance on
Rule 904 of Regulation S under the U.S. Securities Act of 1933, as amended (the
"Securities Act"). The undersigned certifies that:
|
1
|
check
the appropriate box:
|
|
|
¨
|
the
undersigned is not (i) a distributor (as that term is defined in Rule 902
of Regulation S under the Securities Act), (ii) an affiliate (as that term
is defined in Rule 144(a)(1) under the Securities Act) of the Trust, (iii)
an affiliate of a distributor, or (iv) acting on behalf of any of the
foregoing, or
|
|
|
¨
|
(A)
the undersigned is an affiliate (as that term is defined in Rule 144(a)(1)
under the Securities Act) of the Trust solely by virtue of being an
officer or director of the Trust, and no selling concession, fee or other
remuneration was paid in connection with the offer or sale of the
Debentures other than a usual and customary broker's commission that would
be received by a person executing such transaction as agent and (B) the
undersigned is neither (i) a distributor, (ii) an affiliate of a
distributor, nor (iii) acting on behalf of any of the
foregoing,
|
|
2
|
the
offer of such Debentures 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 undersigned and any person acting on its behalf
reasonably believed that the buyer was outside the United States, or (B)
the transaction was executed in, on or through the facilities of the
Toronto Stock Exchange or any other designated offshore securities market,
and neither the undersigned nor any person acting on its behalf knows that
the transaction has been pre-arranged with a buyer in the Xxxxxx
Xxxxxx,
|
|
0
|
neither
the undersigned nor any affiliate of the undersigned nor any person acting
on any of their behalf has engaged or will engage in any directed selling
efforts (as that term is defined in Regulation S under the Securities Act)
in the United States in connection with the offer and sale of the
Debentures,
|
|
4.
|
the
sale is not a transaction, or part of a series of transactions that,
although in technical compliance with Regulation S, is part of a plan or
scheme to evade the registration provisions of the Securities
Act,
|
|
5.
|
the
sale is bona fide and not for the purpose of "washing off" the resale
restrictions imposed because the Debentures are "restricted securities"
(as such term is defined in Rule 144(a)(3) under the Securities
Act),
|
|
6.
|
the
undersigned does not intend to replace the Debentures sold in reliance on
Rule 904 of Regulation S with fungible unrestricted securities,
and
|
|
7.
|
one
or more of the following is true: (i) the offer and sale of the Debentures
were made after the date that was 40 days after the closing of the private
placement pursuant to which the Debentures were initially issued; (ii) the
undersigned is not a dealer, as defined in Section 2(a)(12) of the U.S.
Securities Exchange Act of 1934, as amended, or a person receiving a
selling concession, fee or other remuneration in respect of the
Debentures; or (iii) the undersigned has complied with the requirements of
Rule 904(b)(1) of Regulation S under the U.S. Securities
Act.
|
Except as
set forth herein, terms used herein have the meanings given to them by
Regulation S under the Securities Act.
E-1
The
undersigned understands that this Certificate will be relied upon in determining
that (i) the sale is exempt from the registration requirements of the Securities
Act and (ii) upon the sale, the United States restrictive legend on each of the
unit certificates evidencing that portion of the Debentures sold in such sale
may be removed.
|
Dated:_____________________
|
||||
|
Name
of Seller
|
||||
|
By:
|
||||
|
·
|
||||
E-2
