DATED AS OF FEBRUARY 1, 1978
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BANK OF MONTREAL -- BANQUE DE MONTREAL
AND
THE ROYAL TRUST COMPANY -- COMPAGNIE TRUST ROYAL
TRUSTEE
TRUST INDENTURE
PROVIDING FOR THE ISSUE OF
DEBENTURES
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TABLE OF CONTENTS
Section Page
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Recitals ........................................................ 1
ARTICLE ONE
Interpretation
1.01 Definitions ..................................................... 2
1.02 Meaning of "outstanding" for Certain Purposes ................... 4
1.03 Interpretation not Affected by Headings, etc .................... 4
1.04 Applicable Law .................................................. 4
ARTICLE TWO
The Debentures
2.01 Limit of Issue .................................................. 5
2.02 Bank Debentures ................................................. 5
2.03 Subordination ................................................... 5
2.04 Form and Terms of Series 1 Debentures ........................... 6
2.05 Issue of Series 1 Debentures .................................... 7
2.06 Computation of Interest ......................................... 7
2.07 Creation and Issue of Additional Debentures ..................... 7
2.08 Debentures to Rank Pari Passu ................................... 8
2.09 Signing of Debentures ........................................... 9
2.10 Certification by Trustee ........................................ 9
2.11 Interim Debentures .............................................. 9
2.12 Issue in Substitution for Lost Debentures ....................... 10
ARTICLE THREE
Registration, Transfer, Exchange and Ownership of Debentures
3.01 Fully Registered Debentures ..................................... 11
3.02 Coupon Debentures ............................................... 11
3.03 Transferee Entitled to Registration ............................. 12
3.04 Exchange of Debentures .......................................... 13
3.05 Charges for Registration, Transfer and Exchange ................. 13
3.06 Register Open for Inspection .................................... 14
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3.07 Limitation on Obligation to Effect Transfers or Exchanges ....... 14
3.08 Ownership of Debentures and Coupons ............................. 14
ARTICLE FOUR
Redemption and Purchase of Debentures
4.01 General ......................................................... 15
4.02 Non-Redeemable .................................................. 15
4.03 Purchase of Debentures .......................................... 15
4.04 Cancellation of Retired Debentures .............................. 16
ARTICLE FIVE
Covenants of the Bank
5.01 General Covenants ............................................... 16
5.02 Trustee's Remuneration and Expenses ............................. 17
5.03 Not to Accumulate Interest ...................................... 17
5.04 Restriction on Senior Indebtedness .............................. 18
5.05 Annual Certificate of Compliance ................................ 18
ARTICLE SIX
Defaults and Enforcement
6.01 Events of Default ............................................... 18
6.02 Notice of Default by Trustee .................................... 20
6.03 Acceleration on Default ......................................... 20
6.04 Waiver of Default ............................................... 21
6.05 Proceedings by the Trustee ...................................... 22
6.06 Suits by Debentureholders ....................................... 23
6.07 Application of Moneys Received by Trustee ....................... 23
6.08 Distribution of Proceeds ........................................ 24
6.09 Immunity of Shareholders, etc ................................... 25
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ARTICLE SEVEN
Satisfaction and Discharge
7.01 Cancellation and Destruction .................................... 25
7.02 Non-Presentation of Debentures and Coupons ...................... 25
7.03 Repayment of Unclaimed Moneys to Bank ........................... 26
7.04 Release from Covenants .......................................... 26
ARTICLE EIGHT
Successor Banks
8.01 Certain Requirements in Respect of Merger, etc .................. 27
8.02 Vesting of Powers in Successor .................................. 28
ARTICLE NINE
Meetings of Debentureholders
9.01 Right to Convene Meeting ........................................ 29
9.02 Notice .......................................................... 29
9.03 Chairman ........................................................ 29
9.04 Quorum .......................................................... 29
9.05 Power to Adjourn ................................................ 30
9.06 Show of Hands ................................................... 30
9.07 Poll ............................................................ 30
9.08 Voting .......................................................... 30
9.09 Regulations ..................................................... 31
9.10 Bank and Trustee may be Represented ............................. 32
9.11 Powers Exercisable by Extraordinary Resolution .................. 32
9.12 Powers Cumulative ............................................... 34
9.13 Meaning of "Extraordinary Resolution" ........................... 34
9.14 Minutes ......................................................... 35
9.15 Instruments in Writing .......................................... 35
9.16 Binding Effect of Resolutions ................................... 35
9.17 Serial Meetings ................................................. 36
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ARTICLE TEN
Supplemental Indentures
10.01 Execution of Supplemental Indentures ............................ 37
ARTICLE ELEVEN
Concerning the Trustee
11.01 Trust Indenture Legislation ..................................... 39
11.02 Rights and Duties of Trustee .................................... 39
11.03 Evidence, Experts and Advisers .................................. 40
11.04 Documents, Moneys, etc., Held by Trustee ........................ 41
11.05 Action by Trustee to Protect Interests .......................... 42
11.06 Trustee not Required to Give Security ........................... 42
11.07 Protection of Trustee ........................................... 42
11.08 Replacement of Trustee .......................................... 42
11.09 Conflict of Interest ............................................ 43
11.10 Acceptance of Trust ............................................. 43
ARTICLE TWELVE
Notices
12.01 Notice to Debentureholders ...................................... 43
12.02 Notice to the Trustee ........................................... 44
12.03 Notice to the Bank .............................................. 44
ARTICLE THIRTEEN
Forms of Series 1 Debentures
13.01 Form of Coupon Debentures ....................................... 46
13.02 Form of Fully Registered Debentures ............................. 53
ARTICLE FOURTEEN
Execution
14.01 Counterparts and Formal Date .................................... 60
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THIS INDENTURE made as of February 1, 1978.
BETWEEN
BANK OF MONTREAL - BANQUE DE MONTREAL, a Canadian chartered bank
(hereinafter called the "Bank"),
OF THE FIRST PART,
-And-
THE ROYAL TRUST COMPANY - COMPAGNIE TRUST
ROYAL, a trust company incorporated under the laws of the Province of
Quebec (hereinafter called the "Trustee"),
OF THE SECOND PART.
WHEREAS under the provisions of the Bank Act, the Bank may borrow money by
the issue of bank debentures in accordance with the provisions of the Bank Act
relating to bank debentures; and
WHEREAS the Bank deems it desirable for its corporate purposes to create
and issue from time to time its Debentures to be constituted in the manner
hereinafter appearing; and
WHEREAS all things necessary have been done and performed to make the
Debentures when certified by the Trustee and issued as in this Trust Indenture
provided valid, binding and legal obligations of the Bank with the benefits and
subject to the terms of the Trust Indenture;
NOW THEREFORE THIS INDENTURE WITNESSETH and it is hereby agreed and
declared as follows:
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ARTICLE ONE
INTERPRETATION
SECTION 1.01 Definitions. In this Trust Indenture, unless there is
something in the subject matter or context inconsistent therewith:
"Bank" means the Party of the First Part and every successor bank which
shall have complied with the provisions of Article Eight;
"Bank Act" means the Bank Act of Canada, being Chapter B-1 of the Revised
Statutes of Canada, 1970, and any Act that may be substituted therefor, as from
time to time amended; and reference to a particular section of the Bank Act
includes reference to a section of similar effect in any such substituted or
amended Act;
"certificate of the Bank" means a written certificate signed in the name of
the Bank by its chairman or its president or a vice-president and its secretary
or another vice-president or an assistant secretary, and may consist of one or
more instruments so executed;
"certified resolution" means a copy of a resolution certified by the
secretary or an assistant secretary of the Bank to have been duly passed by the
directors and to be in full force and effect on the date of such certification;
"counsel" means a barrister or solicitor or firm of barristers and
solicitors retained by the Trustee or retained by the Bank and acceptable to the
Trustee;
"Debentureholders" or "holders" means as regards registered Debentures the
several persons for the time being entered in the registers hereinafter
mentioned as holders thereof and as regards unregistered Debentures the bearers
thereof for the time being;
"Debentures" means the Debentures of the Bank issued and certified
hereunder and for the time being outstanding; "coupon Debentures" means
Debentures which are issued with interest coupons attached; "coupons" means the
interest coupons attached or pertaining to coupon Debentures; "fully registered
Debentures" means Debentures without coupons which are registered as to
principal and interest as hereinafter provided; "registered Debentures"
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means and includes fully registered Debentures and coupon Debentures registered
as to principal only; and "unregistered Debentures" means Debentures which are
not so registered;
"Debentureholders' Request" means an instrument signed in one or more
counterparts by the holder or holders of not less than 10% in principal amount
of the Debentures, or in certain circumstances of any particular series,
outstanding for the time being, requesting the Trustee to take some action or
proceeding specified therein;
"director" means a director of the Bank for the time being, and reference
to action by the directors means action by the directors of the Bank as a board
or, whenever duly empowered, action by the executive committee of the board;
"event of default" has the meaning attributed to it in section 6.01;
"extraordinary resolution" has the meaning attributed to it in Article
Nine;
"person" means an individual, a corporation, a partnership, a trustee or an
unincorporated organization; and pronouns have a similarly extended meaning;
"Trust Indenture", "herein", "hereby", "hereof" and similar expressions
mean or refer to this indenture and any indenture, deed or instrument
supplemental or ancillary hereto; and the expressions "Article" and "section"
followed by a number mean and refer to the specified Article or section of this
indenture;
"Trustee" means the Party of the Second Part and its successors for the
time being in the trusts hereby created;
"written order of the Bank" means a written order signed in the name of the
Bank by its chairman or its president or a vice-president and its secretary or
another vice-president or an assistant secretary; and "written request of the
Bank" has a similar meaning; and
words importing the singular number include the plural and vice versa and
words importing gender include the masculine, feminine and neuter genders.
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SECTION 1.02. Meaning of "outstanding" for Certain Purposes. Every
Debenture certified and delivered by the Trustee hereunder shall be deemed to be
outstanding until it shall be cancelled or delivered to the Trustee for
cancellation or moneys for the payment thereof shall have been set aside under
section 7.02, provided that:
(1) Debentures which have been partially redeemed shall be deemed to be
outstanding only to the extent of the unredeemed part of the principal amount
thereof;
(2) where a new Debenture has been issued in substitution for a Debenture
which has been lost, stolen or destroyed, only one of them shall be counted for
the purpose of determining the aggregate principal amount of Debentures
outstanding; and
(3) for the purpose of any provision of this Trust Indenture entitling
holders of outstanding Debentures to vote, sign consents, requisitions or other
instruments or take any other action under this Trust Indenture, Debentures
owned legally or equitably by the Bank shall be disregarded except that:
(a) for the purpose of determining whether the Trustee shall be
protected in relying on any such vote, consent, requisition, instrument or
other action only the Debentures which the Trustee knows are so owned shall
be so disregarded; and
(b) Debentures so owned which have been pledged in good faith other
than to the Bank shall not be so disregarded if the pledgee shall establish
to the satisfaction of the Trustee the pledgee's right to vote such
Debentures in his discretion free from the control of the Bank.
SECTION 1.03. Interpretation not Affected by Headings, etc. The division of
this Trust 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 hereof.
SECTION 1.04. Applicable Law. This Trust Indenture and the Debentures and
coupons shall be construed in accordance with the laws of the Province of Quebec
and the laws of Canada applicable therein.
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ARTICLE TWO
ISSUE OF DEBENTURES
SECTION 2.01. Limit of Issue. Subject to the provisions of the Bank Act,
the aggregate principal amount of Debentures which may be authorized hereunder
is unlimited, but Debentures may be issued only upon and subject to the
conditions and limitations herein set forth. The Debentures may be issued in
several series as herein provided.
SECTION 2.02. Bank Debentures.
(1) The Debentures are bank debentures as that term is defined in the Bank
Act and accordingly:
(a) the Debentures of any series shall not be called for redemption by
the Bank before a date at least five years after the date of such
Debentures;
(b) the indebtedness evidenced by the Debentures of any series shall
not be paid by the Bank during the five years following the date of such
Debentures, or during such shorter period as may be permitted by section 77
of the Bank Act; and
(c) the Bank shall not issue Debentures dated more than sixty days
before the date of issue thereof, but this restriction does not apply to a
Debenture issued in exchange for or in replacement of one that has the same
stated maturity and that is not then being redeemed or paid.
(2) If and to the extent that any provision of this Trust Indenture or of
the Debentures conflicts with a mandatory requirement of the Bank Act, such
mandatory requirement shall prevail.
SECTION 2.03. Subordination.
(1) In the event of the insolvency or winding-up of the Bank, the
indebtedness evidenced by the Debentures is subordinate in right of payment to
the prior payment in full of the deposit liabilities of the Bank and all other
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liabilities of the Bank except those which by their terms rank in right of
payment equally with or subordinate to the Debentures.
(2) Each holder of Debentures or coupons by his acceptance thereof agrees
to and shall be bound by the subordination provided for in subsection (1) and
authorizes and directs the Trustee on his behalf to take such action, if any, as
may be necessary or appropriate further to assure the same and appoints the
Trustee his agent for such purpose.
SECTION 2.04. Form and Terms of Series 1 Debentures.
(1) The first series of Debentures authorized to be issued hereunder
(herein sometimes referred to as "Series 1 Debentures") shall consist of and be
limited to an aggregate principal amount of $50,000,000 in lawful money of
Canada and shall be designated "9% Debentures, Series 1".
(2) The Series 1 Debentures shall be dated as of March 1, 1978, shall bear
interest from that date (subject to section 2.06) at the rate of 9% per annum
(including, in case of default, interest on all amounts overdue at the same
rate) payable half-yearly on September 1 and March 1 in each year and shall
mature on March 1, 1984.
(3) The principal of the Series I Debentures and the interest thereon shall
be payable in lawful money of Canada at any branch in Canada of the Bank, at the
option of the respective holders of the Series 1 Debentures or of the coupons
representing such interest, as the case may be.
(4) The Series 1 Debentures shall be issuable as coupon Debentures
registrable as to principal only in the denominations of $1,000, $5,000, $25,000
and $100,000 and as fully registered Debentures in the denominations of $1,000
and multiples thereof; shall be substantially in one of the forms set out in
Article Thirteen hereof with such appropriate insertions, omissions,
substitutions and variations as the Trustee may approve; shall be in both the
English and French languages; and shall bear such distinguishing letters and
numbers as the Trustee shall approve.
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SECTION 2.05. Issue of Series 1 Debentures. The Series 1 Debentures, in
interim or definitive form, to the aggregate principal amount of $50,000,000,
may forthwith be executed by the Bank and certified by or on behalf of the
Trustee and delivered by it to or upon the written order of the Bank, without
the Trustee receiving any consideration therefor.
SECTION 2.06. Computation of Interest.
(1) Fully registered Debentures issued hereunder, whether originally or
upon exchange or in substitution for previously issued Debentures, shall bear
interest from their respective dates or from the last interest payment date to
which interest shall have been paid or made available for payment on the
outstanding Debentures of the same series and date of maturity, whichever shall
be the later.
(2) The coupons (if any) matured at the date of delivery by the Trustee of
any coupon Debenture shall be detached therefrom and cancelled before delivery,
unless such Debenture is being issued in exchange or in substitution for another
Debenture (whether in interim or definitive form) and such matured coupons
represent unpaid interest to which the holder of such exchanged or substituted
Debenture is entitled.
(3) Interest for any period of less than six months shall be computed on
the basis of a year of three hundred and sixty-five days, unless otherwise
provided in any supplemental indenture establishing the terms of any series of
additional Debentures.
SECTION 2.07. Creation and Issue of Additional Debentures.
(1) The directors may from time to time authorize the creation of one or
more subsequent series of Debentures hereunder. The Debentures of any such
subsequent series (herein sometimes referred to as "additional Debentures") may,
subject to the requirements of the Bank Act, be limited to such aggregate
principal amount, bear such date or dates, mature on such date or dates, bear
such rate or rates of interest, be redeemable at such prices, be entitled to the
benefit of such covenants, sinking or purchase fund provisions, conversion
rights, exchange rights and/or stock purchase rights, be payable in Canadian
currency at such place or places and in Canadian and/or such other currency or
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currencies and contain such other terms or provisions not inconsistent herewith
as the directors may determine.
(2) Before the issue of any Debentures of any such subsequent series the
Bank shall execute and deliver to the Trustee an indenture supplemental hereto
for the purpose of establishing the terms thereof and the forms and
denominations in which they may be issued, together with a certified resolution
authorizing the same, and the Trustee shall execute and deliver such
supplemental indenture pursuant to Article Eleven.
(3) Whenever any series of additional Debentures shall have been authorized
as aforesaid the same may be from time to time executed by the Bank and
delivered to the Trustee and, subject to subsection (4), shall be certified by
the Trustee and delivered by it to or to the order of the Bank upon receipt by
and deposit with the Trustee of the following:
(a) a certified resolution requesting certification and delivery of a
specified principal amount of Debentures of such subsequent series;
(b) a certificate of the Bank that it is not in default in the
performance of any of its covenants herein contained and that it has
complied with all the requirements of the Bank Act and of this Trust
Indenture in connection with the issue of the Debentures of which
certification is requested;
(c) a written order of the Bank for the certification and delivery of
such Debentures; and
(d) an opinion of counsel that all requirements imposed by this Trust
Indenture or by law in connection with the proposed issue of Debentures
have been complied with.
(4) No additional Debentures shall be certified or delivered hereunder if,
to the knowledge of the Trustee, an event of default shall have occurred and be
continuing.
SECTION 2.08. Debentures to Rank Pari Passu. All Debentures shall rank pari
passu without discrimination, preference or priority whatever may be
8
the actual date or terms of issue of the same respectively, save only as to
sinking or purchase fund provisions (if any) applicable to different series.
SECTION 2.09. Signing of Debentures. The Debentures shall be under the seal
of the Bank or a reproduction thereof (which shall be deemed to be the corporate
seal of the Bank) and shall be signed by the chairman, the deputy chairman, the
president or a vice-president and by the secretary or an assistant-secretary of
the Bank and the coupons shall be signed by any one of the said officers. The
signatures of such officers may be mechanically reproduced in facsimile and
Debentures and coupons bearing such facsimile signatures shall be binding upon
the Bank as if they had been manually signed by such officers. Notwithstanding
that any of the persons whose manual or facsimile signature appears on any
Debenture or coupon as one of such officers may no longer hold office at the
date of this Trust Indenture or at the date of such Debenture or coupon or at
the date of certification and delivery thereof, any Debenture or coupon signed
as aforesaid shall be valid and binding upon the Bank.
SECTION 2.10. Certification by Trustee.
(1) No Debenture shall be issued or, if issued, shall be obligatory or
entitle the holder to the benefit hereof until it has been certified by or on
behalf of the Trustee substantially in the form of the certificate set out in
Article Thirteen or in some other form approved by the Trustee and such
certification by the Trustee upon any Debenture shall be conclusive evidence as
against the Bank that the Debenture so certified has been duly issued hereunder
and is a valid obligation of the Bank and that the holder is entitled to the
benefit hereof.
(2) The certificate of the Trustee on Debentures issued hereunder shall not
be construed as a representation or warranty by the Trustee as to the validity
of this Trust Indenture or of the Debentures (except the due certification
thereof) and the Trustee shall in no respect be liable or answerable for the use
made of the Debentures or any of them or of the proceeds thereof.
SECTION 2.11. Interim Debentures. Pending the delivery of definitive
Debentures of any series to the Trustee, the Bank may issue and the Trustee
certify in lieu thereof interim Debentures, with or without coupons, in such
9
forms and in such denominations and signed in such manner as the Trustee and the
Bank may approve, entitling the holders thereof to definitive Debentures of the
said series when the same are ready for delivery. When so issued and certified,
such interim Debentures shall, for all purposes, be deemed to be Debentures and,
pending the exchange thereof for definitive Debentures, the holders of the said
interim Debentures shall be deemed to be Debentureholders and entitled to the
benefit of this Trust Indenture to the same extent and in the same manner as
though the said exchange had actually been made. Forthwith after the Bank shall
have executed and delivered the definitive Debentures to the Trustee, the
Trustee shall call in for exchange all interim Debentures that shall have been
issued and forthwith after such exchange shall cancel the same together with all
unmatured coupons (if any) pertaining thereto. No charge shall be made by the
Bank or the Trustee to the holders of such interim Debentures for such exchange
thereof. All interest paid upon interim Debentures without coupons shall be
noted thereon as a condition precedent to such payment unless paid by cheque to
the registered holders thereof.
SECTION 2.12. Issue in Substitution for Lost Debentures.
(1) In case any of the Debentures issued and certified hereunder or coupons
pertaining thereto shall become mutilated or be lost, destroyed or stolen, the
Bank in its discretion may issue and thereupon the Trustee shall certify and
deliver a new Debenture or coupon of like date and tenor as the one mutilated,
lost, destroyed or stolen in exchange for and in place of and upon cancellation
of such mutilated Debenture or coupon or in lieu of and in substitution for such
lost, destroyed or stolen Debenture or coupon and the new Debenture or coupon
shall be in a form approved by the Trustee and shall be entitled to the benefit
hereof and rank equally in accordance with its terms with all other Debentures
or coupons issued or to be issued hereunder.
(2) The applicant for the issue of a new Debenture or coupon pursuant to
this section shall bear the cost of the issue thereof and in case of loss,
destruction or theft shall, as a condition precedent to the issue thereof,
furnish to the Bank and to the Trustee such evidence of ownership and of the
loss, destruction or theft of the Debenture or coupon so lost, destroyed or
stolen as shall be satisfactory to the Bank and the Trustee in their discretion
and such applicant may also be required to furnish indemnity in amount and form
satisfactory to the Bank and the Trustee in their discretion, and shall pay the
reasonable charges of the Bank and the Trustee in connection therewith.
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ARTICLE THREE
REGISTRATION, TRANSFER, EXCHANGE AND
OWNERSHIP OF DEBENTURES
SECTION 3.01. Fully Registered Debentures.
(1) With respect to each series of Debentures issuable as fully registered
Debentures, unless otherwise provided in the supplemental indenture establishing
the terms thereof, the Bank shall cause to be kept by and at the principal
office of the Trustee in the City of Montreal or at such other place in Canada
as the Bank, with the approval of the Trustee, may determine a register in which
shall be entered the names and addresses of the holders of fully registered
Debentures of such series and particulars of the Debentures held by them
respectively. Unless otherwise provided as aforesaid, the Bank shall also, with
respect to each series of Debentures issuable as fully registered Debentures,
cause to be provided by and at such principal office of the Trustee facilities
for the exchange and transfer of fully registered Debentures, and by and at the
principal offices of the Trustee in each of the cities of Montreal, Toronto,
Halifax, Winnipeg, Calgary and Vancouver facilities for the registration,
exchange and transfer of fully registered Debentures. The Bank may from time to
time provide additional facilities for such registration, exchange and transfer
at other offices of the Trustee or at other agencies.
(2) No transfer of a fully registered Debenture shall be valid unless made
at one of such offices or other agencies by the registered holder or his
executors, administrators or other legal representatives or his or their
attorney duly appointed by an instrument in writing in form and execution
satisfactory to the Trustee and upon compliance with such reasonable
requirements as the Trustee may prescribe, nor unless the name of the transferee
shall have been noted on the Debenture by the Trustee or other agent.
SECTION 3.02. Coupon Debentures.
(1) Coupon Debentures issued hereunder shall be negotiable and title
thereto shall pass by delivery unless registered as to principal for the time
being as hereinafter provided. Notwithstanding registration of coupon Debentures
as to principal, the coupons when detached shall continue to be payable to
bearer and title thereto shall pass by delivery.
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(2) With respect to each series of Debentures issuable as coupon Debentures
registrable as to principal only, unless otherwise provided in the supplemental
indenture establishing the terms thereof, the Bank shall cause to be kept by and
at the principal office of the Trustee in the City of Montreal or at such other
place in Canada as the Bank, with the approval of the Trustee, may determine a
register in which holders of coupon Debentures of such series may register the
same as to principal only and in which shall be entered the names and addresses
of the holders of coupon Debentures of such series registered as to principal
and particulars of the coupon Debentures so registered held by them
respectively. Unless otherwise provided as aforesaid, the Bank shall also, with
respect to each series of Debentures issuable as coupon Debentures registrable
as to principal only, cause to be provided by and at such principal office of
the Trustee facilities for the exchange and transfer of such registered
Debentures, and by and at the principal offices of the Trustee in each of the
cities of Montreal, Toronto, Halifax, Winnipeg, Calgary and Vancouver facilities
for the registration, exchange and transfer of coupon Debentures registrable as
to principal only. The Bank may from time to time provide additional facilities
for such registration, exchange and transfer at other offices of the Trustee or
at other agencies. Such registration shall be noted on the Debentures by the
Trustee or other agent.
(3) After such registration of a coupon Debenture no transfer thereof shall
be valid unless made at one of such offices or other agencies by the registered
holder or his executors, administrators or other legal representatives or his or
their attorney duly appointed by an instrument in writing in form and execution
satisfactory to the Trustee or other agent upon compliance with such reasonable
requirements as the Trustee may prescribe, nor unless such transfer shall have
been noted on the Debenture by the Trustee or other agent; but any such
Debenture may be discharged from registry by being transferred to bearer, after
which it shall again be transferable by delivery, but may again from time to
time be registered and discharged from registry.
SECTION 3.03. Transferee Entitled to Registration. The transferee of a
registered Debenture shall, after the appropriate form of transfer is lodged
with the Trustee or other agent and upon compliance with all other conditions in
that behalf required by this Trust Indenture or by law, be entitled 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 Bank and his transferor or any
previous holder of such Debenture, save in respect of equities of which the Bank
is re-
12
quired to take notice by statute or by order of a court of competent
jurisdiction.
SECTION 3.04. Exchange of Debentures.
(1) Debentures in any authorized form or denomination may be exchanged upon
reasonable notice 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.
(2) Debentures of any series may be exchanged only at the principal office
of the Trustee in the City of Montreal 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 (if any) as may from time to time be designated by the Bank with the
approval of the Trustee. Any Debentures tendered for exchange shall be
surrendered to the Trustee together with all unmatured coupons (if any) and all
matured coupons in default (if any) pertaining thereto. The Bank shall execute
and the Trustee shall certify all Debentures necessary to carry out exchanges as
aforesaid. All Debentures and coupons surrendered for exchange shall be
cancelled.
SECTION 3.05. Charges for Registration, Transfer and Exchange.
(1) Unless otherwise provided in any supplemental indenture, for each
Debenture exchanged, registered, transferred or discharged from registration the
Trustee or other agent shall, if required by the Bank, make a charge not
exceeding $1 for its services and not exceeding $1 for each new Debenture issued
(if any); provided that no charge to a Debentureholder shall be made hereunder:
(a) for any exchange, registration, transfer or discharge from registration of
any Debenture applied for within the period of two months from and including the
date of such Debenture, or (b) for any exchange of any Debenture which has been
issued under section 2.11.
(2) Payment of any such charges and reimbursement of the Trustee or other
agent or the Bank for any transfer 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.
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SECTION 3.06. Register Open for Inspection. The register referred to in
this Trust Indenture shall be open for inspection during normal business hours
by the Bank, the Trustee or any Debentureholder.
SECTION 3.07. Limitation on Obligation to Effect Transfers or Exchanges.
Neither the Bank nor the Trustee nor any other agent shall be required (a) to
make transfers for exchanges of fully registered Debentures of any series on any
interest payment date for Debentures of that series or during the twenty-one
preceding days, or (b) to make exchanges of Debentures of any series on the day
of any selection by the Trustee of Debentures of that series to be redeemed or
during the fifteen preceding days.
SECTION 3.08. Ownership of Debentures and Coupons.
(1) The person in whose name any registered Debenture is registered shall
for all the purposes of this Trust 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, in the case of a fully registered Debenture, interest
thereon shall be made only to or upon the order in writing of such registered
holder.
(2) The Bank and the Trustee may deem and treat the bearer of any
unregistered Debenture and the bearer of any coupon, whether or not the
Debenture from which it has been detached shall be registered as to principal,
as the absolute owner of such Debenture or coupon, as the case may be, for all
purposes and neither the Bank nor the Trustee nor any other agent shall be
affected by any notice to the contrary.
(3) Neither the Bank nor the Trustee nor any other agent shall be bound to
take notice of or see to the execution of any trust, 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.
(4) The registered holder for the time being of any registered Debenture
and the bearer of any unregistered Debenture and the bearer of any coupon shall
be entitled to the principal, premium (if any) and/or interest evidenced by such
instruments respectively free from all equities or rights of set-off or counter
claim between the Bank and the original or any intermediate holder
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thereof and all persons may act accordingly and the receipt of any such
registered holder or bearer, as the case may be, for any such principal, premium
or interest shall be a good discharge to the Bank and the Trustee for the same
and neither the Bank nor the Trustee shall be bound to inquire into the title of
any such registered holder or bearer.
(5) Upon receipt of a certificate of any bank, trust company or other
depositary satisfactory to the Trustee stating that the unregistered Debentures
specified therein have been deposited by a named person with such bank, trust
company or other depositary and will remain so deposited until the expiry of the
period specified therein, the Bank and the Trustee may treat the person so named
as the owner, and such certificate as sufficient evidence of the ownership by
such person during such period, of such Debentures, for the purpose of any
Debentureholders' Request, requisition, direction, consent, instrument or other
document to be made, signed or given by the holder of the Debentures so
deposited. The Bank and the Trustee may treat the registered holder of, any
Debenture as the owner thereof without actual production of such Debenture for
the purpose of any Debentureholders' Request, requisition, direction, consent,
instrument or other document as aforesaid.
ARTICLE FOUR
REDEMPTION AND PURCHASE OF DEBENTURES
SECTION 4.01. General. The Bank shall have the right at its option to
redeem either in whole at any time or in part from time to time prior to
maturity Debentures issued hereunder of any series which by their terms are made
so redeemable (subject, however, to any applicable law restricting the
redemption of Debentures of such series) at such rates of premium, if any, and
subject to such conditions, if any, as shall have been determined at the time of
the issue of such Debentures and as shall be expressed in the supplemental
agreement authorizing or providing for the issue thereof.
SECTION 4.02. Non-Redeemable. The Series 1 Debentures are not redeemable
prior to maturity.
SECTION 4.03. Purchase of Debentures. The Bank shall have the right only
after March 1, 1983 to purchase Series 1 Debentures in the market or by private
contract.
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SECTION 4.04. Cancellation of Retired Debentures. All Series I Debentures
purchased by the Bank under the provisions of this Article, with the unmatured
coupons (if any) pertaining thereto, shall be forthwith delivered to and
cancelled by the Trustee and shall not be re-issued.
ARTICLE FIVE
COVENANTS OF THE BANK
SECTION 5.01. General Covenants. The Bank covenants with the Trustee that
so long as any Debentures remain outstanding:
(1) It will duly and punctually pay or cause to be paid to every holder of
Debentures issued hereunder the principal thereof, premium (if any) and interest
accrued thereon (including, in case of default, interest on all amounts overdue
at the rate specified therein) at the dates and places, in the currencies and in
the manner mentioned herein and in such Debentures and in the coupons, if any,
pertaining thereto. As interest becomes due on each fully registered Debenture
(except at maturity or on redemption, when interest may at the option of the
Bank be paid upon surrender of such Debenture for payment) the Bank, either
directly or through the Trustee, shall send by prepaid ordinary mail a cheque
for such interest (less any tax required to be withheld therefrom) payable to
the order of the then registered holder of such Debenture and addressed to
him at his last address appearing on the register, unless such holder otherwise
directs. In the case of joint holders the cheque shall be made payable to the
order of all such joint holders and addressed to them at the last address
appearing on the register, unless such joint holders otherwise direct. If more
than one address appears on the register in respect of such joint holding the
cheque shall be mailed to the first address so appearing. The mailing of such
cheque shall, to the extent of the sum represented thereby plus the amount of
any tax withheld as aforesaid, satisfy and discharge the liability for interest
on such Debenture, unless such cheque be not paid at par on presentation at one
of the places where such interest is, by the terms of such Debenture, made
payable. In the event of non-receipt of any cheque for interest by the person to
whom it is sent as aforesaid, the Bank will issue to such person a replacement
cheque for a like amount upon being furnished with such evidence of nonreceipt
as it shall reasonably require and upon being indemnified to its satisfaction.
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(2) Except as herein otherwise expressly provided, it will at all times
maintain its corporate existence and will itself carry on and conduct its
business in a proper, efficient and businesslike manner and in accordance with
good business practice.
(3) It will keep proper books of account in accordance with generally
accepted accounting practice and will, if and whenever it is so required in
writing by the Trustee, file with the Trustee a copy of each annual and other
periodic report of the Bank furnished to its shareholders after the date hereof.
SECTION 5.02. Trustee's Remuneration and Expenses. The Bank covenants that
it will pay to the Trustee from time to time reasonable remuneration for its
services hereunder and will pay or reimburse the Trustee upon its request for
all reasonable expenses, disbursements and advances incurred or made by the
Trustee in the administration or execution of the trusts hereby created
(including the reasonable compensation and the disbursements of its counsel and
all other advisers and assistants not regularly in its employ), both before any
default hereunder and thereafter until all duties of the Trustee under the
trusts hereof shall be finally and fully performed, except any such expense,
disbursement or advance as may arise from its negligence or wilful default. Any
amount due under this section and unpaid thirty days after request for such
payment shall bear interest at the rate of 10% per annum from the expiration of
such thirty days. After default all amounts so payable and the interest thereon
shall be payable out of any funds coming into the possession of the Trustee or
its successors in the trusts hereunder in priority to any payment of the
principal of or interest or premium on the Debentures.
SECTION 5.03. Not to Accumulate Interest. In order to prevent any
accumulation after maturity of coupons or interest the Bank covenants with the
Trustee that it will not, except with the approval of the Debentureholders
expressed by extraordinary resolution, directly or indirectly extend or assent
to the extension of time for payment of any coupons or interest payable
hereunder or be a party to or approve any such arrangement by purchasing or
funding any of said coupons or interest or in any other manner. In case the
time for payment of any such coupons or interest shall be so extended, whether
for a definite period or otherwise, such coupons or interest shall not be
entitled in case of default hereunder to the benefit of these presents except
subject to the prior payment in full of the principal of and premium (if any) on
all Debentures then outstanding and of all matured coupons and interest on such
Debentures, the
17
payment of which has not been so extended, and of all other moneys payable
hereunder.
SECTION 5.04. Restriction on Senior Indebtedness. The Bank hereby covenants
with the Trustee that so long as any Debentures remain outstanding the Bank will
not create, issue, incur or reclassify any indebtedness subordinate in right of
payment to the deposit liabilities of the Bank which, in the event of the
insolvency or winding-up of the Bank, would tank in right of payment in priority
to the Debentures.
SECTION 5.05. Annual Certificate of Compliance. Within ninety days after
the end of each fiscal year of the Bank, and at any other time if requested by
the Trustee, the Bank shall furnish the Trustee with a certificate of the Bank
stating that in the course of the performance by the signers of their duties as
officers of the Bank they would normally have knowledge of any default by the
Bank in the performance of its covenants under this Trust Indenture or of any
event of default under Article Six and certifying that the Bank has complied
with all covenants, conditions or other requirements contained in this Trust
Indenture nom-compliance with which would, with notification or with the 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.
In addition, on becoming aware at any time of any event of default of the
nature specified in subsections (f) and (g) of section 6.01, the Bank will
promptly notify the Trustee.
ARTICLE SIX
DEFAULTS AND ENFORCEMENT
SECTION 6.01. Events of Default. The following events are herein sometimes
referred to as "events of default" :-
(a) if the Bank makes default in payment of the principal of or
premium on any Debentures when the same becomes due under any provision
hereof or of the Debentures;
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(b) if the Bank wakes default in payment of any interest due on any
Debenture, and such default shall have continued for a period of thirty
days;
(c) if an order shall be made or an effective resolution be passed for
the winding-up or liquidation of the Bank, or if a liquidator of the Bank
be appointed, except in the course of carrying out or pursuant to a
transaction which is permitted by section 8.01;
(d) if the Bank shall become insolvent or bankrupt or if a curator,
receiver or receiver and manager of the Bank, or any other officer with
similar powers, be appointed;
(e) if the Bank shall neglect to carry out or observe any other
covenant or condition herein contained on its part to be observed or
performed and, after notice in writing has been given by the Trustee to the
Bank specifying such default and requiring the Bank to put an end to the
same, the Bank shall fail to make good such default within a period of
sixty days after receipt of such notice, unless the Trustee (having regard
to the subject matter of the neglect or non-observance) shall have agreed
to a longer period, and, in such event, within the period agreed to by the
Trustee;
(f) if an event of default, as defined in the trust agreement entered
into between the Bank and The Royal Trust Company, as trustee, dated as of
April 1, 1972 and agreements supplemental thereto, shall occur and be
continuing; and
(g) if an event or events of default, as defined in any one or more
indentures or instruments evidencing or under which the Bank has at the
time outstanding in the aggregate indebtedness for borrowed money in excess
of 5% of the aggregate principal amount of all outstanding indebtedness for
borrowed money of the Bank, shall happen and be continuing and (i) shall
consist of a failure to make any payment of principal at maturity or (ii)
shall have resulted in the acceleration of such indebtedness so that the
same shall be or become due and payable prior to the date on which the same
would otherwise have become due and payable; provided, however, that if
such event or events of default under such indentures or instruments shall
be remedied or cured by the Bank or waived by the holders
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of such indebtedness, then the event of default hereunder by reason thereof
shall be deemed likewise to have been thereupon remedied, cured or waived
without further action upon the part of either the Trustee or any of the
Debentureholders and any acceleration of maturity hereunder consequent
thereon shall be deemed rescinded and annulled unless any judgment or
decree for the payment of moneys due hereunder shall have theretofore been
obtained or entered; and provided further that, subject to the provisions
of section 6.05 and section 11.02, the Trustee shall not be charged with
knowledge of any such event of default unless written notice thereof shall
have been given to the Trustee by the Bank, by the holder or an agent of
the holder of any such indebtedness, by the trustee then acting under any
indenture or other instrument under which such event of default shall have
occurred, or by the holders of not less than 25% in the aggregate principal
amount of the Debentures at the time outstanding.
SECTION 6.02. Notice of Default by Trustee. If an event of default shall
occur and be continuing the Trustee shall, within thirty days after it becomes
aware of the occurrence of such event of default, give notice of such event of
default to the Debentureholders, provided that, notwithstanding the foregoing,
the Trustee shall not be required to give such notice if the Trustee in good
faith determines that the withholding of such notice is in the best interests of
the Debentureholders and gives notice of such determination to the Bank.
SECTION 6.03. Acceleration on Default.
(1) In case an event of default has occurred, the Trustee may in its
discretion and shall upon receipt of a Debentureholders' Request, subject to the
provisions of section 6.04, declare the principal and interest of all Debentures
then outstanding and other moneys payable hereunder to be due and payable and
the same shall forthwith become immediately due and payable to the Trustee on
demand, anything therein or herein to the contrary notwithstanding, and the Bank
shall on such demand forthwith pay to the Trustee for the benefit of the
Debentureholders the principal of and accrued and unpaid interest (including
interest on all amounts overdue) on the Debentures, the premium (if any)
provided for in subsection (2) and all other moneys payable hereunder, together
with subsequent interest thereon at the rates borne by the Debentures from the
date of the said declaration until payment is received by the Trustee, such
subsequent interest to be payable at the times and places and in the moneys
mentioned in and according to the tenor of the Debentures and coupons. Such
20
payment when made shall be deemed to have been made in discharge of the Bank's
obligations hereunder and any moneys so received by the Trustee shall be applied
as herein provided.
(2) Nothing in this section or in subsection (3) of section 6.05 shall
require the Bank to pay the principal of any Debenture at a time when such
payment would be contrary to the provisions of subsection (1) of section 2.02;
provided that nothing herein shall be deemed to prevent the Trustee or, subject
to section 6.06, the holder of any Debenture from proving claims in any
insolvency or winding-up proceedings for such amounts in respect of the
Debentures as they may be permitted to claim under the laws applicable to such
insolvency or winding-up proceedings or from receiving payment of any such
amounts.
SECTION 6.04. Waiver of Default. In case an event of default has occurred
otherwise than by default in payment of any principal moneys at maturity on any
Debenture:
(a) the holders of more than 50% in principal amount of the Debentures
then outstanding shall have power (in addition to and subject to the powers
exercisable by extraordinary resolution as hereinafter provided) by
instrument in writing to instruct the Trustee to waive the default and/or
to annul any declaration made by the Trustee pursuant to section 6.03 and
the Trustee shall thereupon waive the default and/or annul such declaration
upon such terms and conditions as such Debentureholders shall prescribe in
such instrument; and
(b) the Trustee, so long as it has not become bound to institute any
proceeding hereunder, shall have power to waive the default if, in the
Trustee's opinion, the same shall have been cured or adequate satisfaction
made therefor, and in such event to annul any such declaration theretofore
made by the Trustee in the exercise of its discretion, upon such terms and
conditions as to the Trustee may seem advisable;
provided that no act or omission either of the Trustee or of the
Debentureholders in the premises shall extend to or be taken in any manner
whatsoever to affect any subsequent default or the rights resulting therefrom.
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SECTION 6.05. Proceedings by the Trustee.
(1) Whenever an event of default has occurred, but subject to the
provisions of section 6.04 and to the provisions of any extraordinary
resolution:
(a) the Trustee, in the exercise of its discretion, may proceed to
enforce the rights of the Trustee and the Debentureholders by any action,
suit, remedy or proceeding authorized or permitted by law or by equity and
may file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee and of
the Debentureholders lodged in any winding-up or other proceedings relative
to the Bank; and
(b) upon receipt of a Debentureholders' Request the Trustee, subject
to section 11.02, shall exercise or take such one or more of the said
remedies as the Debentureholders' Request may direct or, if such
Debentureholders' Request contains no direction, as the Trustee may deem
expedient.
(2) No such remedy for the enforcement of the rights of the Trustee or of
the Debentureholders shall be exclusive of or dependent on any other such remedy
but any one or more of such remedies may from time to time be exercised
independently or in combination.
(3) Upon the exercising or taking by the Trustee of any such remedies,
whether or not a declaration and demand have been made pursuant to section 6.03,
the principal and interest of all Debentures then outstanding and the other
moneys payable under section 6.03 shall forthwith become due and payable to the
Trustee as though such a declaration and a demand therefor had actually been
made.
(4) All rights of action hereunder may be enforced by the Trustee without
the possession of any of the Debentures or coupons or the production thereof on
the trial or other proceedings relative thereto.
(5) No delay or omission of the Trustee or of the Debentureholders to
exercise any remedy referred to in subsection (1) of this section 6.05 shall
impair any such remedy or shall be construed to be a waiver of any default
hereunder or acquiescence therein.
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SECTION 6.06. Suits by Debentureholders. No holder of any Debenture or
coupon shall have the right to institute any action or proceeding or to exercise
any other remedy authorized by this Trust Indenture for the purpose of enforcing
any rights on behalf of the Debentureholders or for the execution of any trust
or power hereunder or for the appointment of a curator or liquidator or receiver
or to have the Bank wound up or to file or prove a claim in any liquidation or
insolvency proceedings, unless the Trustee shall have failed to act within a
reasonable time after the Debentureholders' Request referred to in section 6.05
has been delivered to the Trustee and any indemnity required by it under section
11.02 has been tendered to it; in such case, but not otherwise, any
Debentureholder acting on behalf of himself and all other Debentureholders shall
be entitled to take proceedings in any court of competent jurisdiction such as
the Trustee might have taken under section 6.05; it being understood and
intended that no one or more holders of Debentures or coupons shall have any
right in any manner whatsoever to affect, disturb or prejudice the rights hereby
created by his or their action or to enforce any right hereunder or under any
Debenture or coupon, except subject to the conditions and in the manner herein
provided, and that all powers and trusts hereunder shall be exercised and all
proceedings at law shall be instituted and maintained by the Trustee, except
only as herein provided, and in any event for the equal benefit of all holders
of all outstanding Debentures and coupons.
SECTION 6.07. Application of Moneys Received by Trustee.
(1) Except as otherwise herein provided, all moneys arising from any
enforcement hereof shall be held by the Trustee and by it applied, together with
any other moneys then or thereafter in the hands of the Trustee available for
the purpose, as follows:
(a) firstly, in payment or reimbursement to the Trustee of the
remuneration, expenses, disbursements and advances of the Trustee earned,
incurred or made in the administration or execution of the trusts hereunder
or otherwise in relation to this Trust Indenture with interest thereon as
herein provided; and
(b) secondly, but subject to the provisions of section 5.03, in or
towards payment of the principal of and premium (if any) and accrued and
unpaid interest (including interest on all amounts overdue) on the
Debentures and coupons which shall then be outstanding, in that order of
priority
23
unless otherwise directed by extraordinary resolution and in that case in
such order of priority as between principal, premium and interest as may be
directed by such extraordinary resolution.
The surplus (if any) of such moneys shall be paid to the Bank or its assigns.
(2) The holders of Debentures in respect of which no payments of principal
have been received by the Trustee by reason of the restrictions contained in
subsection (2) of section 6.03 shall not be entitled to participate in any
distribution under clause (b) of subsection (1) of this section 6.07 (except a
distribution on account of interest) until such restrictions shall cease to
apply to such Debentures; thereafter the holders of such Debentures shall be
entitled to participate in distributions under said clause (b) in priority to
the holders of Debentures which were not so restricted until the amounts
distributed to the holders of all Debentures are proportionate to the amounts
owing thereon.
SECTION 6.08. Distribution of Proceeds. Payment to holders of Debentures
and coupons pursuant to clause (b) of subsection (1) of section 6.07 shall be
made as follows:
(1) At least fifteen days' notice of every such payment shall be given in
the manner provided in Article Twelve specifying the time when and the place or
places where the Debentures and coupons are to be presented and the amount of
the payment and the application thereof as between principal, premium and
interest.
(2) Payment of any Debenture or coupon shall be made upon presentation
thereof at any one of the places specified in such notice and any such Debenture
or coupon thereby paid in full shall be surrendered, otherwise a memorandum of
such payment shall be endorsed thereon; but the Trustee may in its discretion
dispense with presentation and surrender or endorsement in any special case upon
such indemnity being given as it shall deem sufficient.
(3) From and after the date of payment specified in the notice interest
shall accrue only on the amount owing on each Debenture and coupon after giving
credit for the amount of the payment specified in such notice unless it be duly
presented on or after the date so specified and payment of such amount be not
made.
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(4) The Trustee shall not be required to make any interim payment to
Debentureholders unless the moneys in its hands, after reserving therefrom such
amount as the Trustee may think necessary to provide for the payments mentioned
in clause (a) of subsection (1) of section 6.07, exceed 5% of the principal
amount of the outstanding Debentures.
SECTION 6.08. Immunity of Shareholders, etc. 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
incorporator, shareholder, director or officer (as such) of the Bank or of any
successor company for the payment of the principal of or premium or interest on
any of the Debentures or on any covenant, agreement, representation or warranty
by the Bank herein or in the Debentures contained; provided that nothing in this
section shall prevent recourse to and the enforcement of liability of any
shareholder for uncalled capital or upon unsatisfied calls.
ARTICLE SEVEN
SATISFACTION AND DISCHARGE
SECTION 7.01. Cancellation and Destruction. All matured coupons and
Debentures shall forthwith after payment thereof be cancelled and delivered to
the Trustee. All Debentures and coupons cancelled or required to be cancelled
under this or any other provision of this Trust Indenture may be destroyed by or
under the direction of the Trustee by cremation or otherwise (in the presence of
a representative of the Bank if the Bank shall so require) and the Trustee shall
prepare and retain a certificate of such destruction and deliver a duplicate
thereof to the Bank.
SECTION 7.02. Non-Presentation of Debentures and Coupons. In case the
holder of any Debenture or coupon shall fail to present the same for payment on
the date on which the principal thereof, the premium (if any) thereon and/or the
interest thereon or represented thereby becomes payable either at maturity or on
redemption or otherwise:
(a) the Bank shall be entitled to pay to the Trustee and direct it to
set aside, or
25
(b) in respect of moneys in the hands of the Trustee which may or
should be applied to the payment or redemption of the Debentures, the Bank
shall be entitled to direct the Trustee to set aside,
the principal moneys and premium (if any) and/or the interest, as the case may
be, in trust to be paid to the holder of such Debenture or coupon upon due
presentation or surrender thereof in accordance with the provisions of this
Trust Indenture; and thereupon the principal moneys and premium (if any) and/or
the interest payable on or represented by each Debenture and each coupon in
respect whereof such moneys 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 payment of the moneys so set aside by the Trustee
(without interest on such moneys) upon due presentation and surrender thereof,
subject always to the provisions of section 7.03.
SECTION 7.03. Repayment of Unclaimed Moneys to Bank. Any moneys set aside
under section 7.02 in respect of any Debenture or coupon and not claimed by and
paid to the holder thereof, as provided in section 7.02, within six years after
the date of such setting aside shall be repaid to the Bank by the Trustee on
demand, and thereupon the Trustee shall be released from all further liability
with respect to such moneys, and thereafter such holder shall have no rights in
respect of such Debenture or coupon except to obtain payment of such moneys
(without interest thereon) from the Bank.
SECTION 7.04. Release from Covenants. Upon proof being given to the
reasonable satisfaction of the Trustee of compliance with the following
conditions:
(1) that the Bank has paid and discharged or provided for the payment and
discharge of the entire indebtedness on all Debentures outstanding hereunder in
any one or more of the following ways:
(a) by paying or causing to be paid the principal of and premium (if
any) and interest on Debentures outstanding hereunder as and when the same
became due and payable;
(b) by paying to the Trustee, or making provision satisfactory to the
Trustee for the payment of, moneys sufficient to pay principal and interest
26
to maturity on Debentures outstanding hereunder and maturing within ninety
days;
(c) by paying to the Trustee, or making provision satisfactory to the
Trustee for the payment of, moneys sufficient to redeem Debentures
outstanding hereunder together with (i) proof satisfactory to the Trustee
that notice of redemption of such Debentures within ninety days has been
duly given or waived or (ii) a written order of the Bank, expressed to be
irrevocable, authorizing the Trustee to give notice of such redemption for
and on behalf of the Bank; and/or
(d) by delivering to the Trustee, for cancellation by it, Debentures
outstanding hereunder with all unpaid coupons pertaining thereto;
(2) that all other moneys (if any) payable hereunder have been paid or
satisfied; and
(3) that all costs, charges and expenses properly incurred by the Trustee
in relation to these presents and all interest thereon and the remuneration of
the Trustee have been paid or provision satisfactory to the Trustee has been
made therefor;
the Trustee shall, upon the written request and at the expense of the Bank,
execute and deliver to the Bank such instruments as shall be requisite to
evidence the satisfaction of the obligations of the Bank under this Trust
Indenture and to release the Bank from its covenants herein contained except
those relating to the indemnification of the Trustee.
ARTICLE EIGHT
SUCCESSOR BANKS
SECTION 8.01. Certain Requirements in Respect of Merger, etc. The Bank
shall not enter into any transaction (whether by way of reconstruction,
reorganization, consolidation, amalgamation, merger, transfer, sale or
otherwise) whereby all or substantially all of its undertaking, property and
assets would become the property of any other person or, in the case of any such
amalgamation, of the continuing company resulting therefrom, unless, but may do
so if:
27
(1) the successor bank is an amalgamated bank resulting from the
amalgamation of the Bank with one or more other Canadian chartered banks under
an amalgamation agreement having the force of law under the Bank Act and by
virtue of which the successor bank is subject to all the duties, liabilities and
obligations of the Bank under this Trust Indenture and the Debentures; or
(2) the successor bank is a corporation lawfully entitled to acquire and
operate the undertaking and assets of the Bank and:
(a) the successor bank shall execute, prior to or contemporaneously
with the consummation of such transaction, an indenture supplemental hereto
and such other instruments (if any) as are satisfactory to the Trustee and
in the opinion of counsel are necessary or advisable to evidence the
assumption by the successor bank of liability for the due and punctual
payment of all the Debentures and the interest thereon and all other moneys
payable hereunder and the covenant of the successor bank to pay the same
and its agreement to observe and perform all the covenants and obligations
of the Bank under this Trust Indenture;
(b) such transaction shall to the satisfaction of the Trustee and in
the opinion of counsel be upon terms substantially preserving and not
materially impairing any of the rights and powers of the Trustee or of the
Debentureholders hereunder; and
(c) no condition or event shall exist in respect of the successor bank
at the time of such transaction and after giving full effect thereto which
constitutes or would constitute an event of default hereunder.
SECTION 8.02. Vesting of Powers in Successor. Whenever the conditions of
section 8.01 have been duly observed and performed, the Trustee shall execute
and deliver the said supplemental indenture pursuant to Article Ten and
thereupon the successor bank shall possess and from time to time may exercise
each and every right and power of the Bank under this Trust Indenture in the
name of the Bank or otherwise and any act or proceeding by any provision of this
Trust Indenture required to be done or performed by any directors and officers
of the Bank may be done and performed with like force and effect by the like
directors or officers of such successor bank.
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ARTICLE NINE
MEETINGS OF DEBENTUREHOLDERS
SECTION 9.01. Right to Convene Meeting. The Trustee may at any time and
from time to time and shall, on receipt of a written request of the Bank or a
Debentureholders' Request and upon being indemnified to its reasonable
satisfaction by the Bank or by the Debentureholders signing such
Debentureholders' Request against the costs which may be incurred in connection
with the calling and holding of such meeting, convene a meeting of the
Debentureholders. In the event of the Trustee failing within thirty days after
receipt of such request and indemnity to give notice convening such meeting, the
Bank or such Debentureholders, as the case may be, may convene such meeting.
Every such meeting shall be held in the city of Montreal or in the city of
Toronto or at such other place as may be approved or determined by the Trustee.
SECTION 9.02. Notice. At least thirty days' notice of any meeting shall be
given to the Debentureholders in the manner provided in Article Twelve and a
copy thereof shall be sent by mail to the Trustee unless the meeting has been
called by it and to the Bank 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.
SECTION 9.03. Chairman. Some individual 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 fifteen minutes from the time fixed for the holding of the
meeting, the Debentureholders present in person or by proxy shall choose some
person present to be chairman.
SECTION 9.04. Quorum. Subject to the provisions of section 9.13:
(a) 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;
(b) if a quorum of the Debentureholders shall not be present within
one half hour after the time fixed for holding any meeting, the meeting, if
29
convened by the Debentureholders or on a Debentureholders' Request, shall
be dissolved, but if otherwise convened the meeting shall stand adjourned
without notice to the same day in the next week (unless such day is a
non-business day in which case it shall stand adjourned to the next
following business day thereafter) at the same time and place, unless the
chairman shall appoint some other place, day and/or time of which not less
than seven days' notice shall be given in the manner provided in Article
Twelve; and
(c) at the adjourned meeting the Debentureholders present in person or
by proxy shall form a quorum and may transact the business for which the
meeting was originally convened notwithstanding that they may not represent
25% in principal amount of the outstanding Debentures.
SECTION 9.05. 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.
SECTION 9.06. Show of Hands. Every question submitted to a meeting shall be
decided 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 loss or not carried by a particular
majority shall be conclusive evidence of the fact.
SECTION 9.07. Poll. On every extraordinary resolution, and on any other
question submitted to a meeting when demanded after a vote by show of hands by
the chairman or by any Debentureholder, a poll shall be taken in such manner 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 more than 50% in
principal amount of the Debentures represented at the meeting and voted on the
poll.
SECTION 9.08. 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
absent Debentureholders or both, shall have one vote. On a poll each
30
Debentureholder present in person or represented by a proxy duly appointed by
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. A proxy
need not be a Debentureholder. In the case of joint registered holders of a
Debenture, any one of them present in person or by proxy at the meeting may vote
in the absence of the other or others; but in case more than one of them be
present in person or by proxy, they must vote together in respect of the
Debentures of which they are joint registered holders.
SECTION 9.09. Regulations. The Trustee or the Bank with the approval of the
Trustee may from time to time make and from time to time vary such regulations
as it shall from time to time think fit:
(a) for the issue of voting certificates
(i) by any bank, trust company or other depositary approved by
the Trustee certifying that specified unregistered Debentures have
been deposited with it by a named holder and will remain on deposit
until after the meeting, or
(ii) by any bank, trust company, insurance company, governmental
department or agency approved by the Trustee certifying that it is the
holder of specified unregistered Debentures and will continue to hold
the same until after the meeting;
which voting certificates shall entitle the holders named therein to be
present and vote at any such meeting and at any adjournment thereof to
appoint a proxy or proxies to represent them and vote for them at any such
meeting and at any adjournment thereof, in the same manner and with the
same effect as though the holders so named in such voting certificates were
the actual bearers of the Debentures specified therein;
(b) for the deposit of voting certificates and/or instruments
appointing proxies at such place as the Trustee, the Bank or the
Debentureholders convening the meeting, as the case may be, may in the
notice convening the meeting direct; and
(c) for the deposit of voting certificates and/or instruments
appointing proxies at some approved place or places other than the place at
which
31
the meeting is to be held and enabling particulars of such voting
certificates and/or instruments appointing proxies to be mailed, cabled or
otherwise transmitted before the meeting to the Bank 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 persons who produce unregistered Debentures
at the meeting and the holders of registered Debentures and persons whom holders
of registered Debentures have by instrument in writing duly appointed as their
proxies.
SECTION 9.10. Bank and Trustee may be Represented. The Bank and the
Trustee, by their respective officers and directors, and the legal advisers of
the Bank and the Trustee may attend any meeting of the Debentureholders, but
shall have no vote as such.
SECTION 9.11. Powers Exercisable by Extraordinary Resolution.
(1) In addition to all other powers conferred upon them by any other
provisions of this Trust Indenture or by law, a meeting of the Debentureholders
shall have the following powers exercisable from time to time by extraordinary
resolution:
(a) power to agree to any modification, abrogation, alteration,
compromise or arrangement of the rights of Debentureholders and/or the
Trustee against the Bank or against its undertaking, property and assets or
any part thereof whether such rights arise under this Trust Indenture or
the Debentures or otherwise;
(b) power to direct or authorize the Trustee to exercise any power,
right, remedy or authority given to it by this Trust Indenture or the
Debentures in any manner specified in such extraordinary resolution or to
refrain from exercising any such power, right, remedy or authority;
32
(c) power to waive and direct the Trustee to waive any default on the
part of the Bank in complying with any provision of this Trust Indenture or
the Debentures, and/or to annul and to direct the Trustee to annul any
declaration in respect of such default made by the Trustee pursuant to
section 6.03, either unconditionally or upon any conditions specified in
such extraordinary resolution;
(d) power to restrain any Debentureholder or the holder of any coupon
from taking, instituting or maintaining any suit, action or proceeding for
the payment of principal, interest or premium or for the execution of any
trust or power hereunder or for the appointment of a liquidator or receiver
or a trustee in bankruptcy or to have the Bank wound up or for any other
remedy hereunder;
(e) power to sanction the exchange of Debentures for or the conversion
of Debentures into shares, bonds, debentures, notes or any other securities
or obligations of the Bank or any other bank or corporation or proposed
bank or corporation;
(f) power to repeal, modify or amend any extraordinary resolution
previously passed by the Debentureholders; and
(g) power to assent to any modification of or change in or omission
from the provisions contained herein which shall be agreed to by the Bank
and to authorize the Trustee to concur in and execute any deed or
instrument supplemental hereto embodying such modification, change or
omission.
(2) A meeting of Debentureholders shall have the power, exercisable from
time to time by extraordinary resolution, to appoint and remove a committee to
consult with the Trustee and to delegate to such committee (subject to such
limitations, if any, as may be prescribed in such extraordinary resolution) all
or any of the powers which the Debentureholders could exercise by extraordinary
resolution under clauses (b), (c) and (d) of subsection (1) of this section
9.11. The extraordinary resolution making such appointment may provide for
payment of the expenses and disbursements of and compensation to such committee.
Such committee shall consist of such number of persons as shall be prescribed in
the extraordinary resolution appointing it, and the members need not be
themselves Debentureholders. Subject to the extraordinary resolution appointing
it, every such committee may elect its chairman and may
33
make regulations respecting its quorum, the calling of its meetings, the filling
of vacancies occurring in its number, the manner in which it may act and its
procedure generally and such regulations may provide that the committee may act
at a meeting at which a quorum is present or may act by minutes signed by a
majority of the members thereof or the number of members thereof necessary to
constitute a quorum, whichever is the greater. All acts of any such committee
within the authority delegated to it shall be binding upon all Debentureholders.
Neither such 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 in
good faith.
SECTION 9.12. Powers Cumulative. It is hereby declared and agreed that any
one or more of the powers and/or any combination of the powers in this Trust
Indenture stated to be exercisable by the Debentureholders by extraordinary
resolution or otherwise may be exercised from time to time and the exercise of
any one or more of such powers or any combination of powers from time to time
shall not be deemed to exhaust the right of the Debentureholders to exercise
such power or powers or combination of powers then or any power or powers or
combination of powers thereafter from time to time.
SECTION 9.13. Meaning of "Extraordinary Resolution".
(1) The expression "extraordinary resolution" when used in this Trust
Indenture means, subject as hereinafter in this section 9.13 and in sections
9.15 and 9.17 provided, a resolution proposed to be passed as an extraordinary
resolution at a meeting of Debentureholders duly convened for the purpose and
held in accordance with the provisions of this Article Nine at which the holders
of more than 50% in principal amount of the Debentures then outstanding are
present in person or by proxy and passed by the favourable votes of the holders
of not less than 66 2/3% of the principal amount of Debentures represented at
the meeting and voted on a poll upon such resolution.
(2) If at any such meeting the holders of more than 50% in principal amount
of the Debentures outstanding are not present in person or by proxy within one
half hour after the time appointed for the meeting, then the meeting, if
convened by Debentureholders or on a Debentureholder's Request, shall be
dissolved; but if otherwise convened the meeting shall stand adjourned to such
day, being not less than twenty-one nor more than sixty days later, and to such
place and time as may be appointed by the chairman. Not less than ten days
notice shall be given of the time and place of such adjourned meeting in the
34
manner provided in Article Twelve. Such notice shall state that at the adjourned
meeting the Debentureholders present in person or by proxy shall form a quorum
but it shall not be necessary to set forth the purposes for which the meeting
was originally called or any other particulars. At the adjourned meeting the
Debentureholders present in person or by proxy shall form a quorum and may
transact the business for which the meeting was originally convened and a
resolution proposed at such adjourned meeting and passed by the requisite vote
as provided in subsection (1) of this section 9.13 shall be an extraordinary
resolution within the meaning of this Trust Indenture, notwithstanding that the
holders of more than 50% in principal amount of the Debentures then outstanding
are not present in person or by proxy at such adjourned meeting.
(3) Votes on an extraordinary resolution shall always be given on a poll
and no demand for a poll on an extraordinary resolution shall be necessary.
SECTION 9.14. Minutes. Minutes of all resolutions and proceedings at every
such meeting as aforesaid shall be made and duly entered in books to be from
time to time provided for that purpose by the Trustee at the expense of the
Bank, 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 had, to have been duly passed and had.
SECTION 9.15. Instruments in Writing. All actions that may be taken and all
powers that may be exercised by the Debentureholders at a meeting held as
hereinbefore in this Article Nine provided may also be taken and exercised by
the holders of not less than 66 2/3% in principal amount of all the outstanding
Debentures by an instrument in writing signed in one or more counterparts and
the expression "extraordinary resolution" when used in this Trust Indenture
shall include an instrument so signed.
SECTION 9.16. Binding Effect of Resolutions. Subject to the provisions of
section 9.17, every resolution and every extraordinary resolution passed in
accordance with the provisions of this Article Nine 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
Debenture-
35
holders in accordance with section 9.15 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.
SECTION 9.17. Serial Meetings.
(1) If 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 9.15, especially affects the rights of the holders of Debentures of one
or more series or maturities in a manner or to an extent substantially differing
from that in or to which it affects the rights of the holders of Debentures of
any other series or maturity (as to which an opinion of counsel shall be binding
on all Debentureholders, the Trustee and the Bank for all purposes hereof) then:
(a) reference to such fact, indicating each series or maturity so
especially affected, shall be made in the notice of such meeting and the
meeting shall be and is herein called a "serial meeting"; and
(b) the holders of Debentures of a series or maturity so especially
affected shall not be bound by any action taken at a serial meeting or by
instruments in writing under section 9.15 unless in addition to compliance
with the other provisions of this Article:
(i) at such serial meeting:
(A) there are present in person or by proxy holders of at
least 25% (or for the purpose of passing an extraordinary
resolution more than 50%) in principal amount of the outstanding
Debentures of such series or maturity, subject to the provisions
of this Article as to adjourned meetings; and
(B) the resolution is passed by the favourable votes of the
holders of more than 50% (or in the case of an extraordinary
resolution not less than 66 2/3%) in principal amount of
Debentures of such series or maturity voted on the resolution; or
(ii) in the case of action taken or power exercised by instrument
in writing under section 9.15, such instrument is signed in one
36
or more counterparts by the holders of not less than 66 2/3% in
principal amount of the outstanding Debentures of such series or
maturity.
(2) 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 9.15, does not adversely affect the rights of the holders
of Debentures of one or more particular series or maturities, the provisions of
this Article Nine shall apply as if the Debentures of such series or maturity
were not outstanding and no notice of any such meeting need be given to the
holders of Debentures of such series or maturity. Without limiting the
generality of the foregoing, a proposal to modify or terminate any covenant or
agreement which by its terms is effective only so long as Debentures of a
particular series or maturity are outstanding shall be deemed not to adversely
affect the rights of the holders of Debentures of any other series or maturity.
(3) A proposal (i) to extend the maturity of Debentures of any particular
series or maturity or reduce the principal amount thereof or the rate of
interest or redemption premium thereon, (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 holders of
Debentures of any particular series any percentage stated in section 1.01,
6.04, 9.04, 9.07, 9.13 or 9.15 or in this section 9.17, shall be deemed to
especially affect the rights of the holders of Debentures of such series or
maturity, as the case may be, in a manner substantially differing from that in
which it affects the rights of holders of Debentures of any other series or
maturity, whether or not a similar extension, reduction, modification or
termination is proposed with respect to Debentures of any or all other series
and maturities.
ARTICLE TEN
SUPPLEMENTAL INDENTURES
SECTION 10.01. Execution of Supplemental Indentures. From time to time the
Bank (when authorized by a resolution of its directors) and the Trustee may,
subject to the provisions of these presents, and they shall, when so directed by
these presents, execute and deliver by their proper officers, indentures
37
or other instruments supplemental hereto, which thereafter shall form part
hereof, for any one or more or all of the following purposes:
(a) establishing the terms of any subsequent series of Debentures and
the forms and denominations in which they may be issued as provided in
Article Two;
(b) adding to the covenants of the Bank herein contained for the
protection of the holders of the Debentures, or of the Debentures of any
series, and providing for events of default in addition to those specified
in Article Six;
(c) evidencing the succession of successor banks to the Bank and the
covenants of and obligations assumed by such successor banks in accordance
with the provisions of Article Eight;
(d) giving effect to any extraordinary resolution passed as provided
in Article Nine;
(e) adding to or altering the provisions hereof in respect of the
registration and transfer of Debentures, making provision for the issue of
Debentures in forms or denominations other than those herein provided for
and for the exchange of Debentures of different forms and denominations,
and making any modifications in the forms of the Debentures and coupons
which in the opinion of the Trustee do not affect the substance thereof;
(f) making any additions to, deletions from or alterations of the
provisions of this Trust Indenture which the Bank may deem necessary or
advisable in order to facilitate the sale of the Debentures and which, in
the opinion of the Trustee, do not adversely affect in any substantial
respect the interests of the holders of the Debentures, or any series or
maturity thereof then outstanding, including without limiting the
generality of the foregoing such additions, deletions and alterations,
including provision for the appointment of an additional trustee or a
co-trustee in any jurisdiction, as would be required to comply with the
provisions relating to trust indentures contained in any corporations act,
securities act, trust indenture act or similar legislation in any
jurisdiction in which the Bank may desire to sell the Debentures;
38
(g) making any additions to, deletions from or alterations of the
provisions of this Trust Indenture which in the opinion of counsel may from
time to time be necessary or advisable to conform the same to applicable
legislation as that term is defined in subsection (1) of section 11.01;
and
(h) for any other purpose not inconsistent with the terms of this
Trust Indenture, including the correction or rectification of any
ambiguities, defective provisions, errors or omissions herein, provided
that in the opinion of the Trustee the rights of the Trustee or of the
Debentureholders are in no way prejudiced thereby.
ARTICLE ELEVEN
CONCERNING THE TRUSTEE
SECTION 11.01. Trust Indenture Legislation.
(1) In this Article the term "applicable legislation" means the provisions,
if any, of any statute of Canada or a province thereof, and of regulations under
any such statute, relating to trust indentures and to the rights, duties and
obligations of trustees under trust indentures and of corporations issuing debt
obligations under trust indentures, to the extent that such provisions are at
the time in force and applicable to this Trust Indenture.
(2) If and to the extent that any provision of this Trust Indenture limits,
qualifies or conflicts with a mandatory requirement of applicable legislation,
such mandatory requirement shall prevail.
(3) The Bank and the Trustee agree that each will at all times in relation
to this Trust Indenture and any action to be taken hereunder, observe and comply
with and be entitled to the benefits of applicable legislation.
SECTION 11.02. Rights and Duties of Trustee.
(1) In the exercise of the rights, duties and obligations prescribed or
conferred by the terms of this Trust Indenture, the Trustee shall exercise that
degree of care, diligence and skill that a reasonably prudent trustee would
exercise in comparable circumstances.
39
(2) Subject only to subsection (1) of this section 11.02, the obligation
of the Trustee to commence or continue any act, action or proceeding for the
purpose of enforcing any rights of the Trustee or the Debentureholders hereunder
shall be conditional upon the Debentureholders furnishing, when required by
notice in writing by the Trustee, sufficient funds to commence or continue such
act, action or proceeding and indemnity reasonably satisfactory to the Trustee
to protect and hold harmless the Trustee against the costs, charges and expenses
and liabilities to be incurred thereby and any loss and damage it may suffer by
reason thereof. None of the provisions contained in this Trust Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers unless indemnified as aforesaid.
(3) The Trustee may, before commencing or at any time during the
continuance of any such act, action or proceeding, require the Debentureholders
at whose instance it is acting to deposit with the Trustee the Debentures held
by them, for which Debentures the Trustee shall issue receipts.
(4) Every provision of this Trust Indenture that by its terms relieves the
Trustee of liability or entitles it to rely upon any evidence submitted to it,
is subject to the provisions of applicable legislation and of this section 11.02
and of section 11.03.
SECTION 11.03. Evidence, Experts and Advisers.
(1) In addition to the reports; certificates, opinions and other evidence
required by this Trust Indenture, the Bank shall furnish to the Trustee such
additional evidence of compliance with any provision hereof, and in such form,
as may be prescribed by applicable legislation or as the Trustee may reasonably
require by written notice to the Bank.
(2) In the exercise of its rights, duties and obligations, the Trustee may,
if it is acting in good faith, rely as to the truth of the statements and the
accuracy of the opinions expressed therein, upon statutory declarations,
opinions, reports, certificates or other evidence referred to in subsection (1)
of this section 11.03 provided that such evidence complies with applicable
legislation and that the Trustee examines the same in order to determine whether
such evidence indicates compliance with the applicable requirements of this
Trust Indenture.
40
(3) Whenever applicable legislation requires that evidence referred to in
subsection (1) of this section 11.03 be in the form of a statutory declaration,
the Trustee may accept such statutory declaration in lieu of a certificate of
the Bank required by any provision hereof. Any such statutory declaration may be
made by one or more of the chairman, the president, the secretary, the
comptroller, the chief accountant, or any vice president, assistant secretary
or director of the Bank.
(4) Proof of the execution of an instrument in writing, including a
Debentureholders' Request, by any Debentureholder may be made by the certificate
of a notary public, or other officer with similar powers, that the person
signing such instrument acknowledged to him the execution thereof, or by an
affidavit of a witness to such execution or in any other manner which the
Trustee may consider adequate.
(5) The Trustee may employ or retain such counsel, accountants, engineers,
appraisers or other experts or advisers as it may reasonably require for the
purpose of discharging its duties hereunder and shall not be responsible for any
misconduct on the part of any of them.
SECTION 11.04. Documents, Moneys, etc., Held by Trustee. Any securities,
documents of title or other instruments that may at any time be held by the
Trustee subject to the trusts hereof may be placed in the deposit vaults of the
Trustee or of the Bank or of any other Canadian chartered bank or deposited for
safekeeping with any such bank. Pending the application or withdrawal of any
moneys so held under any provision of this Trust Indenture, the Trustee, unless
it is herein otherwise expressly provided, may deposit the same in the name of
the Trustee in the Bank or in any other Canadian chartered bank at the rate of
interest (if any) then current on similar deposits or, if so directed by written
order of the Bank, shall (i) deposit such moneys in the deposit department of
the Trustee or any other loan or trust company authorized to accept deposits
under the laws of Canada or a province thereof, or (ii) invest such moneys in
securities issued or guaranteed by the Government of Canada or a province
thereof or in obligations, maturing not more than one year from the date of
investment, of the Bank or of any other Canadian chartered bank or loan or trust
company. Unless an event of default shall have occurred and be continuing, all
interest or other income received by the Trustee in respect of such deposits and
investments shall belong to the Bank.
41
SECTION 11.05. Action by Trustee to Protect Interests. The Trustee shall
have power to institute and to maintain such actions and proceedings as it may
consider necessary or expedient to preserve, protect or enforce its interests
and the interests of the Debentureholders.
SECTION 11.06. Trustee not Required to Give Security. The Trustee shall not
be required to give any bond or security in respect of the execution of the
trusts and powers of this Trust Indenture or otherwise in respect of the
premises.
SECTION 11.07. Protection of Trustee. By way of supplement to the
provisions of any law for the time being relating to trustees, it is expressly
declared and agreed as follows:
(1) The Trustee shall not be liable for or by any reason of any statements
of fact or recitals in this Trust Indenture or in the Debentures (except in the
certificate of the Trustee thereon) or required to verify the same, but all such
statements or recitals are and shall be deemed to be made by the Bank.
(2) Nothing herein contained shall impose any obligation on the Trustee to
see to or to require evidence of the registration or filing (or renewal thereof)
of this Trust Indenture or any instrument ancillary or supplemental hereto.
(3) The Trustee shall not be bound to give notice to any person or persons
of the execution hereof.
(4) The Trustee shall not incur any liability or responsibility whatever or
be in any way responsible for the consequence of any breach on the part of the
Bank of any of the covenants herein contained or of any acts of the agents or
servants of the Bank.
(5) The Trustee, in its personal or any other capacity, may buy, lend upon
and deal in shares in the capital of the Bank and in the Debentures and
generally may contract and enter into financial transactions with the Bank
without being liable to account for any profit made thereby.
SECTION 11.08. Replacement of Trustee. The Trustee may resign its trust and
be discharged from all further duties and liabilities hereunder by giving to the
Bank three months' notice in writing or such shorter notice as the
42
Bank may accept as sufficient. The Debentureholders by extraordinary
resolutions shall have power at any time to remove the Trustee and to appoint a
new Trustee. In the event of the Trustee resigning or being removed as aforesaid
or being dissolved, becoming bankrupt, going into liquidation or otherwise
becoming incapable of acting hereunder, the Bank shall forthwith appoint a new
Trustee unless a new Trustee has already been appointed by the Debentureholders;
but any new Trustee so appointed by the Bank shall be subject to removal as
aforesaid by the Debentureholders. Any new Trustee appointed under any provision
of this section 11.08 shall be a corporation authorized to carry on the
business of a trust company in 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 without any further assurance,
conveyance, act or deed; but there shall be immediately executed, at the expense
of the Bank, all such conveyances or other instruments as may, in the opinion of
counsel, be necessary or advisable for the purpose of assuring the same to the
new Trustee.
SECTION 11.09. Conflict of Interest. The Trustee represents that at the
time of the execution and delivery hereof no material conflict of interest
exists in the Trustee's role as a fiduciary hereunder and agrees that in the
event of a material conflict of interest arising hereafter it will, within
ninety days after ascertaining that it has such material conflict of interest,
either eliminate the same or resign its trust hereunder.
SECTION 11.10. Acceptance of Trust. The Trustee hereby accepts the trusts
in this Trust Indenture declared and provided for and agrees to perform the same
upon the terms and conditions herein set forth.
ARTICLE TWELVE
NOTICES
SECTION 12.01. Notice to Debentureholders. Unless herein otherwise
expressly provided, any notice to be given hereunder to Debentureholders shall
be deemed to be validly given:
43
(a) to the holders of registered Debentures if such notice is sent by
unregistered surface or air mail, postage prepaid, addressed to such
holders at their respective addresses appearing on the register maintained
under Article Three; and if in the case of joint holders of any Debentures
more than one address appears in the register in respect of such joint
holding, such notice shall be addressed only to the first address so
appearing; and
(b) to the holders of unregistered Debentures if such notice is
published once in each of the cities of Xxxxxxxx, Xxxxxxx, Xxxxxxx and
Vancouver, each such publication to be made in a daily newspaper in the
English or French language, or both languages, of general circulation in
the designated cities and approved by the Trustee; provided that in the
case of notice convening a meeting of Debentureholders, the Trustee may
require such additional publications of such notice, in the same or in
other cities or both, as it may deem necessary for the reasonable
protection of the Debentureholders.
Any notice so given by mail shall be deemed to have been given on the day of
mailing. Any notice so given by publication shall be deemed to have been given
when such notice shall have been published once in each of the cities in which
publication thereof was required under the foregoing provisions. In determining
under any provision hereof the date when notice of any meeting, redemption or
other event must be given, the date of giving the notice shall be included and
the date of the meeting, redemption or other event shall be excluded. Accidental
error or omission in giving notice or accidental failure to mail notice to any
Debentureholder shall not invalidate any action or proceeding founded thereon.
SECTION 12.02. Notice to the Trustee. Any notice to the Trustee under the
provisions of this Trust Indenture shall be valid and effective if delivered to
an officer of the Trustee or if sent by registered mail, postage prepaid,
addressed to the Trustee at its principal office in Montreal, Quebec. Notice by
mail shall be deemed to have been effectively given at the time when in the
ordinary course of mail the same should have reached its destination.
SECTION 12.03. Notice to the Bank. Any notice to the Bank under the
provisions of this Trust Indenture shall be valid and effective if delivered to
an officer of the Bank or if sent by registered mail, postage prepaid, addressed
to
44
the Bank at 000, xxx Xx-Xxxxxxx, Xxxxxxxx, Xxxxxx to the attention of the
secretary. Notice by mail shall be deemed to have been effectively given at the
time when in the ordinary course of mail the same should have reached its
destination. The Bank may from time to time notify the Trustee of a change in
address which thereafter, until changed by like notice, shall be the address of
the Bank for all purposes of this Trust Indenture.
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ARTICLE THIRTEEN
FORMS OF SERIES 1 DEBENTURES
SECTION 13.01. Form of Coupon Debenture. The form of the coupon Debenture
for the Series 1 Debentures, the Trustee's certificate and the interest coupon
pertaining thereto shall be substantially as follows in English and/or in
French:
(FORM OF COUPON DEBENTURE)
English Text
THIS IS NOT AN INSURED DEPOSIT AS DEFINED BY
THE CANADA DEPOSIT INSURANCE CORPORATION
$________________________ $______________________
No. _____________________ No. ___________________
The First Canadian Bank
BANK OF MONTREAL
(Incorporated under the laws of Canada)
9% DEBENTURE, SERIES 1
DUE MARCH 1, 1984
FOR VALUE RECEIVED, BANK OF MONTREAL (the "Bank") hereby promises to pay to
the bearer or, if registered, to the registered holder hereof
ON MARCH 1, 1984
the principal sum of
DOLLARS ($___________ )
in lawful money of Canada upon presentation and surrender of this Debenture at
any branch in Canada of the Bank at the holder's option and until payment
46
of the said principal sum to pay interest thereon from March 1, 1978 at the same
places in like money at the rate of nine per cent (9%) per annum, half yearly on
September 1 and March 1 in each year, on presentation and surrender of the
respective interest coupons attached hereto as they severally become due, with
overdue interest, if any, to bear interest at the same rate.
The Series 1 Debentures, of which this is one, are issued pursuant to a
trust indenture bearing formal date of February 1, 1978 (the "Trust Indenture")
between the Bank and The Royal Trust Company (the "Trustee") as Trustee for the
Debentureholders. The Series 1 Debentures rank equally and rateably with all
other debentures of the Bank from time to time issued and outstanding under the
Trust Indenture and the trust agreement dated as of April 1, 1972 and agreements
supplemental thereto. As provided in the Trust Indenture and in the Bank Act
(Canada), payment of all amounts owing hereunder is subordinated to the deposit
liabilities and all other liabilities of the Bank other than those ranking
equally with or subordinate to the Series 1 Debentures. Reference is made to
the Trust Indenture for a further statement of the rights of the holders of the
Series 1 Debentures, of the Bank and of the Trustee to the same effect as if the
provisions of the Trust Indenture were set forth herein in full.
The Series 1 Debentures are not redeemable prior to maturity. After March
1, 1983, the Bank may purchase Series 1. Debentures in the market or by private
contract.
The Trust Indenture provides, among other things, for: (a) the exchange of
this Debenture at the option of the holder for other Series 1 Debentures in
other authorized forms or denominations in equal aggregate principal amount; (b)
the acceleration of the maturity of this Debenture in the case of an event of
default (provided that this Debenture shall in no event be payable before March
1, 1983); and (c) the holding of meetings of Debentureholders and for making
binding on all Debentureholders certain decisions taken thereat.
This Debenture shall pass by delivery unless registered as to principal. It
may be registered as to principal only or discharged from registry at the
principal offices of the Trustee in any of the cities of Halifax, Montreal,
Toronto, Winnipeg, Calgary or Vancouver, or at such other places as may be
designated by the Bank with the approval of the Trustee, and when registered, it
may be transferred only by the registered holder hereof or his attorney duly
authorized
47
in writing. The coupons annexed hereto shall at all times be payable to bearer
and shall pass by delivery.
This Debenture shall not become obligatory for any purpose until it shall
have been certified by or on behalf of the Trustee.
IN WITNESS WHEREOF this Debenture has been duly executed and the corporate
seal of the Bank affixed hereon as of March 1, 1978.
BANK OF MONTREAL
By: And:
--------------------------------- -----------------------------------
Chairman Secretary
(FORM OF REGISTRATION PANEL)
English Text
NO WRITING HEREON EXCEPT BY THE REGISTRAR
Date of Registry In whose name Registered Signature of Registrar
---------------- ------------------------ ----------------------
48
(FORM OF TRUSTEE'S CERTIFICATE)
English Text
TRUSTEE'S CERTIFICATE
This Debenture is one of the Series 1 Debentures issued under the Trust
Indenture within mentioned.
THE ROYAL TRUST COMPANY
Trustee
By
-------------------------------------
Authorized Officer
(FORM OF COUPON - ATTACHED TO COUPON DEBENTURE)
English Text
The First Canadian Bank No: F
BANK OF MONTREAL will pay to the bearer on the 1st _______ 19___ the sum of
$_____ in lawful money of Canada, at any branch in Canada of the Bank of
Montreal, at the bearer's option, being one-half year's interest on its Series 1
Debenture No. _________ dated March 1, 1978.
Secretary
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(FORM OF COUPON DEBENTURE)
French Text
LA PRESENTE NE CONSTITUE PAS UN DEPOT ASSURE TEL QUE
DEFINI PAR LA SOCIETE D'ASSURANCE DEPOT DU CANADA
$___________________ $___________________
No._________________ No._________________
La Premiere Banque Canadienne
BANQUE DE MONTREAL
(Constituee en vertu des xxxx du Canada)
DEBENTURE 9%, SERIE 1
ECHEANT LE 1er MARS 1984
POUR VALEUR RECUE, BANQUE DE MONTREAL (la "Banque") promet par les
presentes de payer au porteur ou, en cas d'immatriculation, au detenteur inscrit
des presentes,
LE 1er MARS 1984
la somme nominale de
DOLLARS ($__________)
en monnaie legale du Canada sur presentation et remise de cette Debenture a
toute succursale au Canada de la Banque, au choix du detenteur, et de payer
l'interet sur cette somme a compter du 1er mars 1978 jusqu'a parfait paiement
d'icelle, en meme monnaie et aux memes endroits, au taux de neuf pour cent (9%)
l'an, semestriellement le 1er septembre et le ler mars de chaque annee, sur
presentation et remise des coupons d'interet correspondants annexes aux
presentes, a leur echeance respective, plus l'interet au meme taux sur tout
arrerage d'interet, s'il en est.
Les Debentures serie 1, dont la presente Debenture fait partie, sont emises
en vertu d'un acte de fiducie portant la date officielle du 1er fevrier 1978 (1'
"acte de fiducie") passe entre la Banque et la Compagnie Trust Royal (le
"fiduciaire") a titre de fiduciaire pour les detenteurs des Debentures. Les
Debentures serie 1 prennent rang pari passu avec toutes les autres debentures de
la Banque emises de temps a autre et en cours en vertu de l'acte de fiducie et
de la convention de fiducie datee du 1er avril 1972 et de ses conventions
supplementaires. Selon l'acte de fiducie et la Loi sur les banques (Canada), le
paiement de toute
50
somme due en vertu des presentes est subordonne au passif-depots et a tous les
autres elements du passif de la Banque, sauf ceux qui possedent rang egal ou
subordonne aux Debentures serie 1. II faut se referer a 1'acte de fiducie pour
un expose plus complet des droits des detenteurs des Debentures serie 1 et des
droits de la Banque et du fiduciaire, tout comme si les dispositions de 1'acte
de fiducie etaient reprises en entier aux presentes.
Les Debentures serie 1 ne sont pas rachetables avant echeance. Apres le 1er
mars 1983, la Banque pent acheter des Debentures serie 1 sur le marche ou de gre
a gre.
L'acte de fiducie prevoient, entre autres: (a) 1'echange de cette
Debenture, au gre du detenteur, contre d'autres Debentures serie 1 sous d'autres
formes ou coupures autorisees d'une valeur nominale globale equivalente, (b) la
decheance du terme de cette Debenture en cas de defaut (pourvu que cette
Debenture ne soit en aucun cas payable avant Ie ler mars 1983) et (c) la tenue
d'assemblees des detenteurs des Debentures et 1'assujettissement de tous les
detenteurs des Debentures a certaines decisions prises a ces assemblees.
Cette Debenture sera cessible par livraison a moins qu'elle ne soit
immatriculee quant au capital. Elie peut etre immatriculee quant au capital
seulement ou liberee de l'immatriculation a l'un on l'autre des bureaux
principaux du fiduciaire situes a Halifax, Montreal, Toronto, Winnipeg, Calgary
ou Vancouver, ou a tels autres endroits que la Banque pourra designer avec 1'
approbation du fiduciaire. Si cette Debenture est immatriculee, elle ne pourra
etre transferee que par son detenteur inscrit ou son fonde de pouvoir dument
autorise par ecrit. Les coupons ci-annexes seront payables au porteur en tout
temps et seront cessibles par livraison.
Cette Debenture ne prendra plein effet qu'apres avoir ete atteste par le
fiduciaire ou en son nom.
EN FOI DE QUOI, cette Debenture a ete dument signee et le sceau de la
Banque y a ete appose en date du ler mars 1978.
BANQUE DE MONTREAL
Par: Et:
-------------------------------- ------------------------------------
President du conseil Secretaire
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(FORM OF REGISTRATION PANEL)
French Text
CET ESPACE EST RESERVE AU REGISTRAIRE
Date Nom du Signature
d'immatriculation detenteur inscrit du registraire
----------------- ----------------- --------------
(FORM OF TRUSTEE'S CERTIFICATE)
French Text
ATTESTATION DU FIDUCIAIRE
Cette Debenture est une des Debentures serie 1 emises en vertu de l'acte de
fiducie ci-mentionne.
COMPAGNIE TRUST ROYAL
Fiduciaire
Par
------------------------------------
Officier autorise
52
(FORM OF COUPON - ATTACHED TO COUPON DEBENTURE)
French Text
La Premiere Banque Canadienne No.F
BANQUE DE MONTREAL paiera au porteur le ler 19__ la somme de $____________
en monnaie legale du Canada, a toute succursale au Canada de la Banque de
Montreal, au gre du porteur, representant l'interet semestriel sur sa Debenture
serie 1, No.______, datee du ler mars 1978.
----------------------------------------
Secretaire
SECTION 13.02. Form of Fully Registered Debenture. The form of the fully
registered Debenture for the Series 1 Debentures, the Trustee's certificate and
the transfer form thereon shall be substantially as follows in English and/or in
French:
(FORM OF FULLY REGISTERED DEBENTURE)
English Text
THIS IS NOT AN INSURED DEPOSIT AS DEFINED BY
THE CANADA DEPOSIT INSURANCE CORPORATION
$_____________________________ $_____________________________
No.___________________________ No.___________________________
The First Canadian Bank
BANK OF MONTREAL
(Incorporated under the laws of Canada)
9% DEBENTURE, SERIES 1
DUE MARCH 1, 1984
FOR VALUE RECEIVED, BANK OF MONTREAL (the "Bank") hereby promises to pay to
__________________________________________ or registered assigns
ON MARCH 1, 1984
the principal sum of _________________________________________________
DOLLARS ($____________ )
in lawful money of Canada at any branch in Canada of the Bank at the holder's
option and until payment of the said principal sum to pay interest
53
thereon from the date hereof, or from the last interest payment date to which
interest shall have been paid or made available for payment on the Series 1
Debentures, whichever is the later, at the same places in like money at the rate
of nine per cent (9%) per annum, half-yearly on September 1 and March 1 in each
year, with overdue interest, if any, to bear interest at the same rate.
As the interest matures, the Bank (except in case of payment at maturity,
in which case payment of interest may, at the option of the Bank, be made upon
surrender of this Debenture) shall forward to the registered address of the
holder hereof a cheque for such interest payable at any branch in Canada of the
Bank at the holder's option.
The Series 1 Debentures, of which this is one, are issued pursuant to a
trust indenture bearing formal date of February 1, 1978 (the "Trust Indenture")
between the Bank and The Royal Trust Company (the "Trustee") as Trustee for the
Debentureholders. The Series 1 Debentures rank equally and rateably with all
other debentures of the Bank from time to time issued and outstanding under the
Trust Indenture and the trust agreement dated as of April 1, 1972 and agreements
supplemental thereto. As provided in the Trust Indenture and in the Bank Act
(Canada), payment of all amounts owing hereunder is subordinated to the deposit
liabilities and all other liabilities of the Bank other than those ranking
equally with or subordinate to the Series 1 Debentures. Reference is made to
the Trust Indenture for a further statement of the rights of the holders of the
Series 1 Debentures, of the Bank and of the Trustee to the same effect as if the
provisions of the Trust Indenture were set forth herein in full.
The Series 1 Debentures are not redeemable prior to maturity. After March
1, 1983, the Bank may purchase Series 1 Debentures in the market or by private
contract.
The Trust Indenture provides, among other things, for: (a) the exchange of
this Debenture at the option of the holder for other Series 1 Debentures in
other authorized forms or denominations in equal aggregate principal amount;
(b) the acceleration of the maturity of this Debenture in the case of an event
of default (provided that this Debenture shall in no event be payable before
March 1, 1983); and (c) the holding of meetings of Debentureholders and for
making binding on all Debentureholders certain decisions taken thereat.
54
This Debenture shall be transferable at the principal offices of the
Trustee in any of the cities of Halifax, Montreal, Toronto, Winnipeg, Calgary or
Vancouver, or at such other places as may be designated by the Bank with the
approval of the Trustee, and it may be transferred only by the registered holder
hereof or his attorney duly authorized in writing.
This Debenture shall not become obligatory for any purpose until it shall
have been certified by or on behalf of the Trustee.
IN WITNESS WHEREOF this Debenture has been duly executed and the corporate
seal of the Bank affixed hereon as of March 1, 1978.
BANK OF MONTREAL
By: And:
--------------------------------- -----------------------------------
Chairman Secretary
(FORM OF TRANSFER)
English text
FOR VALUE RECEIVED, the undersigned hereby assign(s) and transfer(s) unto
________________________________________________________________ the within
Debenture, together with the principal thereof and all accrued interest thereon,
hereby irrevocably constituting and appointing
________________________________________________ attorney to transfer the said
Debenture on the registers maintained for that purpose with full power of
substitution in the premises.
Dated _______________ 19___
In the presence of
-------------------------------------
----------------------------------------
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ARTICLE FOURTEEN
EXECUTION
SECTION 14.01. Counterparts and Formal Date. This Trust Indenture may be
executed in several counterparts, each of which so executed shall be deemed to
be an original, and such counterparts together shall constitute one and the same
instrument and notwithstanding their date of execution shall be deemed to bear
date as of February 1, 1978.
IN WITNESS WHEREOF the parties hereto have declared that they have required
that these presents and all other documents related hereto be in the English
language and have executed these presents under their respective corporate seals
and the hands of their proper officers in that behalf.
BANK OF MONTREAL -- BANQUE DE MONTREAL
By (Signed) X. X. XXXXXX
-------------------------------------
Chairman and Chief Executive Officer
(Seal)
And (Signed) X. XXXXXX
------------------------------------
Assistant Secretary
THE ROYAL TRUST COMPANY -- COMPAGNIE TRUST ROYAL
By (Signed) XXXX X. XXXXXXX
-------------------------------------
Senior Executive Vice-President
(Seal)
And (Signed) G. A. XXXXXXXXXXXX
------------------------------------
Assistant Secretary
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