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Prepare a Trust Indenture to issue debentures to lenders or investors with this fully editable template. - The parties to the Trust Indenture are the corporation and a trustee appointed to act on behalf of the debenture holders. - The debentures are series registered bonds to be secured by certain assets and property of the corporation, including promissory notes obtained by the corporation. - All bonds issued are equally secured, rank pari passu and rateably without discrimination or preference. - Interest accruing on the bonds accrues monthly and will be paid monthly in arrears. - The deed provides for the issuance of supplemental indentures. - The template also includes a sample debenture certificate. This Trust Indenture to Issue Debentures is fully editable to fit your circumstances.
THIS TRUST DEED DATED the ___ day of ___________, ______. BETWEEN: CORPORATION, a body corporate incorporated under the laws of _________________ (hereinafter referred to as the "Company") OF THE FIRST PART - and - TRUSTEE, of ____________________, _________________ (hereinafter referred to as the "Trustee") OF THE SECOND PART WHEREAS: A. The Company is duly incorporated under the laws of _________________. B. The Company represents to the Trustee that all necessary resolutions have been passed by the directors of the Company and all other proceedings taken and conditions complied with to authorize the execution and delivery of this Indenture and the creation, execution and issue of the Debentures intended to be issued and certified hereunder and to make the same legal, valid and binding upon the Company. C. The foregoing recitals are made as representations and statements of facts by the Company and not by the Trustee. D. The Trustee has consented to act as Trustee on the terms herein stated. NOW THEREFORE THIS INDENTURE WITNESSES THAT in consideration of the premises and of the acceptance and consent by the Trustee as herein acknowledged and the sum of One Dollar ($1.00) now paid by the Trustee to the Company, the receipt and sufficiency whereof are hereby acknowledged by the Company, it is hereby covenanted, agreed and declared by and between the parties hereto as follows: ARTICLE 1 - INTERPRETATION 1.1 Definitions - In these presents unless there is something in the subject-matter or context inconsistent therewith: (a) "Applicable Law" means, in relation to any person, transaction or event, all applicable provisions (or mandatory applicable provisions, if so specified) of laws, statutes, rules or regulations, official directives and orders of all governmental bodies (whether administrative, legislative, executive or otherwise and, in the case of any central bank, fiscal or monetary authority, whether or not having the force of law) and judgments, orders and decrees of all courts, arbitrators, commissions or bodies exercising similar functions in actions or proceedings in which the person in question is a party or by which it is bound or having application to the transaction or event; (b) "Approved Securities" means the deposits and investments permitted under or in accordance with the provisions of Section 8.4; (c) "Bondholders", "holder", or "holders" means as regards the Bonds, the registered holders thereof from time to time; -2- (d) "Bondholders' Counsel" means any firm chosen for that purpose by the Bondholders; (e) "Bondholders' Request" or "Bondholders' Resolution" means an instrument signed in writing in one or more counterparts by the holder or holders of not less than 66 2/3% in principal amount of the Bonds outstanding from time to time directing the Trustee to take or approve, or refrain from taking or approving, some act, action or proceeding specified therein, which may be expressed to have retroactive effect and shall in any event be binding upon each Bondholder as if signed by all; (f) "Bonds" means the Bonds of the Company in substantially the form set forth in Schedule A with such appropriate insertions, omissions, substitutions and variations that may be approved or permitted under the terms of this Indenture or as the Trustee and the Company may approve, for the time being outstanding hereunder and entitled to the benefits of these presents; (g) "Event of Crystallization" means the occurrence of any (i) Event of Default of a type described in any of items (a), (b) or (c) of Section 7.1 if the Trustee has, in respect thereof determined or become bound to enforce the Security Interests hereby constituted, or (ii) any other Event of Default whether or not the Trustee has, in respect thereof, determined to become bound to enforce the Security Interests hereby constituted, in each case subject to the effects of a Rescission Notice in respect thereof under Section 7.3(b); (h) "Event of Default" has the meaning ascribed in Section 7.1; (i) "Extraordinary Resolution" has the meaning ascribed in Section 11.12; (j) "Mortgaged Property" or "Mortgaged Premises" means the assets, rights and things from time to time subject to (i) the floating charge or charges pursuant to Section 3.1 hereof; or (ii) the Security Interests constituted under any other instrument of assignment; (k) "Negotiable Instruments" means cash and all negotiable instruments including promissory notes, cheques, drafts and bills of exchange; (l) "other instrument of assignment" means an instrument by the Company in favour of the Trustee containing an assignment of general or specific application, and includes general assignments of book debts; (m) "Permitted Encumbrances" means as of any particular time in relation to the Company any of the following Security Interests: (i) Security Interests for taxes, assessments or governmental charges and other statutory Security Interests which (y) are not at the time due or delinquent or (z) are being contested at the time in good faith by the Company; (ii) Security Interests of any judgments rendered, or claims filed, against the Company which the Company shall be contesting in good faith if, and for so long as a stay of enforcement of such judgment or claim (if enforceable by seizure, sale or other remedy against any property), as the case may be, shall be in effect; (iii) Security Interests incidental to construction or operations which (y) have not at such time been filed pursuant to law and which relate to obligations not due or delinquent or (z) relate to obligations being contested at the time in good faith or by the Company; -3- (iv) Security Interests incurred or created in the ordinary course of business and in accordance with sound industry practice in respect of any of the Mortgaged Premises as security in favour of any other Person which is conducting the exploration, development or operation of the property to which such Security Interests relate for the Company's portion of the costs and expenses of such exploration, development or operation, which have not at such time been filed pursuant to law and which relate to obligations not due or delinquent; (v) Security Interests given by the Company to a public utility or any municipality or governmental or other authority when required by such public utility or municipality or other authority in connection with the operations of the Company; (vi) any Security Interest consented to by a Bondholders' Resolution; (vii) the Security Interests created hereby or otherwise in favour of the Trustee, the Bondholders or persons on their behalf; (viii) easements, rights-of-way, servitudes or other similar rights in land (including, without in any way limiting the generality of the foregoing, rights-of-way and servitudes for railways, sewers, drains, gas and oil pipelines, gas and water mains, electric light and power and telephone or telegraph or cable television conduits, poles, wires and cables) granted to or reserved or taken by other Persons which singly and in the aggregate do not materially detract from the value of the land concerned or materially impair its use in the operation of the business of the Borrower or any Subsidiary (as applicable); (ix) Purchase Money Mortgages securing Purchase Money Obligations provided the equivalent in ___________ Dollars of the principal amount outstanding (including any unpaid interest which has accrued) thereon does not exceed in the aggregate at any one time the equivalent of $_________________; (n) "person" means an individual, a partnership, a corporation, a trust, an unincorporated organization, a union, a government or any department or agency thereof and the heirs, executors, administrators or other legal representatives of an individual; (o) "Purchase Money Mortgage" means a Security Interest in favour of the party entitled to enforce a Purchase Money Obligation to secure such Purchase Money Obligation, provided that the property subject thereto is limited to the property in respect of which the Purchase Money Obligation was incurred including, in the case of real property, the fixed improvements and facilities constructed thereon and miscellaneous rights related thereto and no other property or assets; (p) "Purchase Money Obligation" means any indebtedness incurred by the Company as part of the purchase price of any property, (except shares of other companies or securities) provided that: (i) the principal amount of such indebtedness does not, at the time incurred, exceed 100% of the purchase price of the property; (ii) the principal amount of such indebtedness is incurred concurrently with such purchase; and (iii) immediately prior to entering into an agreement for the purchase of such property, the Company did not own or have any interest in or was entitled to own or have any interest in, such property; (q) "Receiver" has the meaning ascribed to it in Article 7 hereof; -4- (r) "Register" means the register of Bondholders to be maintained by the Trustee in accordance with Section 2.7 hereof; (s) "Security Interest" means any assignment, mortgage, charge, pledge, lien, hypothec, encumbrance conditional sale or title retention agreement or security interest whatsoever, howsoever created or arising, whether absolute or contingent, fixed or floating, legal or equitable, perfected or not, but does not include a right of set-off or a set-off; (t) "Tangibles" means at a time all of the Company's right, title, estate and interest, whether absolute or contingent, legal or beneficial, present or future, vested or not at such time, in and to any (or such as is stipulated) tangible property, apparatus, plants, equipment, machinery and facilities, fixed or non-fixed, real or personal, used or capable of use in the Company's business or operations; (u) "this Indenture", "this Trust Deed", "this Trust Indenture", "these presents", "herein", "hereof", "hereby", "hereunder", and similar expressions refer to this Indenture and include any other deed or writing in amendment hereof or supplemental or ancillary hereto and references herein to Sections or other subdivisions or Schedules followed by a number, letter or combination mean and refer to the stipulated Section or other subdivision hereof or Schedule hereto; (v) "Trustee" means the present trustee or other trustee for the time being hereof; (w) "Working Day" means any day of the week except Saturday, Sunday or any statutory or bank holiday in ______________, _________________. 1.2 Included Words - Words importing the singular number only shall include the plural and vice versa; words importing gender shall include the masculine, feminine and neuter; words importing persons shall include firms and corporations and vice versa; a reference to legislation or regulations includes restatements, consolidations or replacements thereof from time to time; and words denoting inclusiveness (such as "include" or "includes" or "including") or particularity (such as "in particular" or "such as") are, whether or not so stated, not limited by the context or by the words or phrases which precede or succeed them. 1.3 Divisions - The division of this Indenture into Articles and Sections and other subdivisions, the provision of an Index hereto and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Indenture. 1.4 Invalidity of Provisions - In case any of the provisions of this Indenture should be invalid, illegal or unenforceable in any respect, the validity, legality or enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. 1.5 Schedule - The Schedules to this Indenture, incorporated herein and made part hereof, is as follows: Schedule "A" - form of Bonds; Schedule “B” - Promissory Notes Any reference to such Schedule to this Indenture includes, unless the context otherwise requires, such Schedule as amended from time to time by one or more indentures supplemental hereto, whether or not so stated. -5- 1.6 Currency - All currency references contained herein are to lawful money of ______________ for the payment of public and private debts. ARTICLE 2 - THE BONDS 2.1 Bonds - The Bonds which may be issued by the Company hereunder shall be designated Series "__", ___ Year, _____% Registered Bonds. Bonds may, subject to the limitations herein, be issued from time to time upon the request of the Company to the Trustee; provided that no request by the Company to the Trustee shall be required in connection with a delivery of a Bond to a transferee as contemplated by Section 2.9 hereof; certification and delivery of a new Bond upon mutilation, loss or destruction contemplated by Section 2.11 hereof; or an exchange of Bonds contemplated by Section 2.12 hereof. 2.2 Aggregate Principal Amount and Denominations - The aggregate principal amount of Bonds which may be issued from time to time and outstanding at any time under this Indenture shall be limited to a total amount of $_______________. Bonds shall be issued in fully registered form in denominations of $___________ or integral multiples thereof authorized by the President of the Company (whose signature, either manual or facsimile, on any Bonds shall be conclusive evidence of such authorization) and shall be numbered or lettered in such manner as duly authorized officers of the Company, with the approval of the Trustee, may designate. 2.3 Form - The Bonds and the certificate of the Trustee to be endorsed on the Bonds shall respectively be substantially in the form set out in the Schedule A hereto with such appropriate insertions, omissions, substitutions and variations that may be approved or permitted under the terms of this Indenture or as the Trustee and the Company may approve in the manner provided herein for amendment to or modification of the form of the Bonds. 2.4 Execution - All Bonds issued hereunder and secured hereby shall be under the seal of the Company and shall be signed by the President of the Company, either manually or by facsimile signature. 2.5 Certification (a) No Bond shall be issued or if issued shall be obligatory until it has been certified by the Trustee and such certification shall be conclusive evidence that the Bond so certified has been duly issued hereunder and the holder thereof is entitled to the benefit of the security of and the trusts under this Indenture. (b) The certificate of the Trustee signed on any Bond shall not be construed as a representation or warranty by the Trustee as to the validity or security of this Indenture or any Bond. 2.6 Bonds Rank Pari Passu - All Bonds issued pursuant to this Indenture shall be equally secured, rank pari passu and rateably without discrimination or preference, whatever may be the actual dates, the terms of issue, or the principal amounts, of the same. 2.7 Register - The Company shall at all times, while any of the Bonds are outstanding, cause to be kept by the Trustee at its principal office in the City of ______________, _________________, a Register in which the holders of Bonds (including holders on original issuance and transferees) shall be entitled to have the same registered as to the principal and interest, such registration to be noted on the Bonds. The names and addresses of the holders of registered Bonds and particulars of the Bonds held by them respectively and of all transfers of registered Bonds shall be entered in the Register. The Register shall be open for inspection by the Trustee, the Company and any Bondholder at all reasonable times, and, at the request of any of them, the Trustee will provide certified copies of all entries made therein. -6- 2.8 Registered Owner Deemed Owner (a) The person in whose name a Bond is registered on the Register maintained pursuant to Section 2.07 shall be deemed to be the owner thereof for all purposes of this Indenture and payment of or on account of the principal of such Bond and of interest thereon shall be made only to or upon the order in writing of such registered holder thereof by prepaid registered mail to the address of such registered holder as shown in the Register, unless the Company is notified in writing by the Trustee to the contrary, and such payment shall be a good and sufficient discharge of the Company and the Trustee for the amount so paid. (b) In the event any Bond is registered in the name of a person other than the original or any intermediate holder thereof, any such registered holder from time to time of any Bond shall be entitled to the principal monies and interest evidenced by such instrument, free from all equities or rights of set-off or counterclaim between the Company and the original or any intermediate holder thereof, save in respect of equities or rights of which the Company or Trustee is required to take notice by Applicable Law and all such persons may and are entitled to act accordingly, and the receipt of any such registered holder for any such principal monies or interest shall be a good and sufficient discharge of the Company and the Trustee for the same. 2.9 Transfers (a) No transfer of a Bond shall be valid unless made on the application of 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 with effect satisfactory to the Trustee, and on compliance with such reasonable requirements as the Trustee may prescribe, and unless such transfer shall have been noted on such Bond by the Trustee. Transfers of Bonds shall only be operative and effective if noted in the Register by the Trustee. (b) The transferee of a registered Bond shall, after the appropriate form of transfer is lodged with the Trustee and upon compliance with all other conditions in that behalf required by this Indenture or by Applicable Law, be entitled to be entered on the Register as the owner of such Bond free from all equities or rights of set-off or counterclaim between the Company and his transferor or any previous holder of such Bond, save in respect of equities or rights of which the Company or Trustee is required to take notice by Applicable Law. (c) Neither the Company nor the Trustee shall be required to issue, transfer or exchange any Bonds for a period of 2 Working Days next preceding any date upon which interest is payable on such Bond. (d) No transfer of a Bond shall be valid unless the prior consent of the Company in writing is obtained for such transfer, which consent may be unreasonably withheld. 2.10 Joint Registered Owners - The aggregate principal amount and interest, or any part thereof, represented by a Bond held by joint registered holders may be paid to any such registered holder and the receipt therefor from any of them shall constitute a good and sufficient discharge of the Trustee and the Company. 2.11 Mutilation, Loss or Destruction (a) If any Bond is mutilated, lost or destroyed, the Company shall issue and thereupon the Trustee shall certify and deliver a new Bond of like date and tenor as the one mutilated, lost or destroyed, in exchange for, in place of and upon cancellation of the mutilated Bond or in lieu of and in substitution for the same if lost or destroyed and the substituted Bond shall be in a form -7- approved by the Trustee and the Company and shall be secured hereby equally with all other Bonds issued hereunder and without preference or priority one over another. (b) In case of loss or destruction, the applicant for a substituted Bond shall, as a condition precedent to the issue thereof, furnish to the Company and to the Trustee such evidence of ownership and of the loss or destruction of the Bond concerned as shall be satisfactory to the Company and the Trustee, in their discretion, and such applicant shall also furnish indemnity satisfactory to them. 2.12 Exchange of Bonds - Any Bond may be exchanged for one or more Bonds having an equivalent aggregate principal amount carrying the same rate of interest in any other authorized denomination or denominations (provided that the Bond shall be in the principal amount of $___________ or an integral multiple thereof) in the same or any other authorized form as the Bond exchanged; all Bonds so tendered for exchange shall be surrendered to the Trustee and cancelled. 2.13 Trustee's Charges - In every case of exchange of Bonds, of application for registration of Bonds, and of transfer of registered Bonds the Company shall pay the Trustee a reasonable fee for its services as a condition precedent thereto but the Company shall not be responsible to pay any stamp tax or governmental charge required to be paid, other than normal amounts. 2.14 Cancellation of Bond - All Bonds surrendered for payment or transfer shall, if surrendered to any person other than the Trustee, be delivered to the Trustee, and if not already cancelled shall be cancelled by it promptly upon payment or transfer. No Bonds shall be certified in lieu of or in exchange for any Bonds cancelled as provided in this Section 2.14 except as expressly permitted by this Indenture. All Bonds which shall have been delivered to and cancelled by the Trustee shall be destroyed by the Trustee and, if required by the Company, the Trustee shall furnish to it a destruction certificate setting forth the numbers and denominations of the Bonds so destroyed. ARTICLE 3 -SECURITY FOR BONDS 3.1 Security for Bonds - To secure the due payment of the principal of and interest, including interest on amounts in default, on the Bonds and all other monies from time to time owing on the security hereof and the due performance of the obligations of the Company herein contained the Company hereby charges, as and by way of a first floating charge and grants and creates a security interest to and in favour of the Trustee and its successors and assigns in the trusts hereof: all of the right, title and interest of the Company in and to the promissory notes obtained by the Company attached as Schedule “B” hereto; provided that such floating charge shall in no way hinder or prevent the Company, until an Event of Crystallization occurs (and subject to the effect of any Rescission Notice under Section 7.3(b)), from doing the matters or things or carrying out transactions referred to in Section 3.2 hereof with respect to assets referred to therein which are from time to time subject to such floating charge, but the Company, except in the ordinary cause of business, shall not, without the prior consent of the Bondholders evidenced by a Bondholders' Resolution: (i) make, give, grant, assign, create, assume or permit or suffer to exist any Security Interest (other than Permitted Encumbrances) on or in respect of the Mortgaged Premises or any part thereof other than as expressly permitted by Section 3.2; or (ii) sell, transfer, assign, exchange, lease, sub-lease, give, grant, convey or otherwise dispose of, for cash or other consideration any interest in any of the Mortgaged Property other than as expressly permitted by Section 3.2. 3.2 Possession Before Default - Until an Event of Crystallization occurs the Company, without the consent of the Bondholders evidenced by a Bondholders' Resolution, shall be entitled: (a) to retain full possession of the Mortgaged Premises (other than any Negotiable Instruments and Approved Securities held by the Trustee in accordance with the provisions of Section 3.9 hereof) in the ordinary course of business; -8- (b) to the extent not materially adverse to the interests of the Trustee, to create, amend or vary contracts in the ordinary course of business; (c) to create or suffer to exist Permitted Encumbrances but nothing herein shall permit or require the mortgages and charges hereof to be subordinate to such Permitted Encumbrances; (d) to sell, assign, transfer, abandon, surrender, exchange or otherwise dispose of, any fixtures, equipment, machinery, tools, implements, apparatus, facilities or appliances, or any part thereof, which may have become worn out, unserviceable, obsolete, unsuitable or unnecessary in the operation of any of the Mortgaged Premises, if at first or simultaneously therewith there shall have been or shall be substituted for the same other fixtures, equipment, machinery, tools, implements, apparatus, facilities or appliances not necessarily of the same character but at least of equal utility to the Company at the date of such substitution or replacement, which forthwith shall become subject to the Security Interests hereof, if and to the extent that such replacement or substitution is necessary or desirable in accordance with sound survey industry practice in _________________; (e) to abandon or dispose of any Tangibles if the abandonment of such property is desirable in accordance with sound ________________ industry practice in _________________; (f) to enter into and complete any disposition or other transaction consented to by a Bondholders' Resolution, subject to compliance with any conditions thereof; and the Trustee will, at the expense of the Company, execute and deliver from time to time acknowledgments, releases or discharges necessary to give effect to the transactions permitted by this Section 3.2. 3.3 Security Effective Notwithstanding Date of Issue - The Security Interests hereby created shall be effective and shall attach as of the date hereof whether the monies thereby secured or any part thereof shall become owing by the Company before or after or upon the date of the execution of this Indenture. 3.4 Registration - The Company shall, subject to contrary instructions as to registration approved by the Bondholders by Bondholders' Resolution: (a) register, file or record or cause to be registered, filed or recorded this Indenture and all instruments supplemental or ancillary hereto or security notices, caveats, registration statements, financing statements or other instruments related hereto or thereto at every office and place where the registration, filing or recording thereof may, in the opinion of Bondholders' Counsel be necessary or desirable to preserve and protect the Security Interests hereby created; (b) renew or cause to be renewed registrations, filings or recordings required under (a) from time to time as and when required or necessary or desirable to preserve and protect the Security Interests hereby created; and (c) if and when requested so to do by the Trustee, furnish to the Trustee evidence satisfactory to the Trustee (including, if requested, solicitors' opinions) to establish compliance with the provisions of this Section 3.4. 3.5 Reservation of Last Day of Leasehold Terms - It is hereby declared that the last day of any term (or any extended term, as the case may be) reserved by any lease, verbal or written, or any agreement therefor, now held or hereafter acquired by the Company of premises in any jurisdiction where mortgage by sub-demise may validly be given, and whether falling within the general or particular description of -9- the Mortgaged Premises, is hereby and shall be excepted out of the Security Interests created or to be created hereunder, and does not and shall not form part of the Mortgaged Premises, but the Company shall stand possessed of the reversion remaining in the Company of any leasehold premises for the time being demised as aforesaid upon trust to assign and dispose thereof as the Trustee or any purchaser of such leasehold premises shall direct. 3.6 Covenants as to Security/Further Assurances - The Company hereby covenants with the Trustee that: (a) it will at all times do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered all and singular all such further acts, deeds, mortgages, hypothecs, transfers, assignments and assurances in law (including obtaining consents, approvals or waivers from third parties under applicable documents or Applicable Law) as the Trustee may reasonably require for better assuring and charging unto the Trustee the Mortgaged Property in accordance with the meaning and the intent hereof, or which the Company may now be or hereafter become bound to charge in favour of the Trustee and for the better accomplishing and effectuating of this Indenture including, without limitation, the execution and delivery of indentures supplemental hereto to assure and confirm unto the Trustee any property or interest additional or otherwise herein subjected to or required herein to be subjected to the Security Interests hereby constituted. Upon execution of any supplemental indenture under this Section 3.6, this Indenture shall be modified in accordance therewith, and each such supplemental indenture shall form part of this Indenture for all purposes; and (b) upon the occurrence of an Event of Crystallization, the Trustee will from time to time execute and do all such assurances and things as the Trustee may reasonably require for facilitating, and cooperate with the Trustee in respect of, the realization of the Mortgaged Premises and exercising all the powers, authorities and discretions hereby conferred upon the Trustee and for confirming to any purchaser of the Mortgaged Premises, whether sold by the Trustee hereunder or by judicial proceedings, the title to the Mortgaged Premises so sold, and will give all notices and directions as the Trustee may consider expedient. 3.7 Defeasance - These presents are upon the express condition that if the Company shall: (a) well and truly pay to the Bondholders the principal of and interest on the Bonds and all other sums payable hereunder by the Company and secured hereby; (b) keep, perform and observe the covenants in the Bonds and in this Indenture agreed to be kept, performed and observed by or on behalf of the Company; and (c) deliver a request in writing to the Trustee that these presents cease and become null and void then these presents and the Security Interests, estate and rights hereby constituted or created shall cease and become null and void, and the Mortgaged Property hereunder shall revert to and revest in the Company. The Trustee shall, at the request and expense of the Company, made at any time after these presents become null and void as aforesaid, execute and deliver all such deeds, documents and assurances as are necessary or required to evidence or effect such reversion or revesting and reassignments of assignments contained herein or in any other instrument of assignment. ARTICLE 4 - PAYMENT OF INTEREST 4.1 Terms of Payment - Interest from the date of issue of each Bond on the principal amount thereof until paid, after as well as before default and judgment at the rate of ______% per annum compounded monthly shall be paid by the Company monthly in arrears to registered holders entitled to receipt thereof - 10 - at the close of business on the last day of each month in each year until the retirement of the Bonds in the manner provided for in the Bond or by deposit with the Trustee of the amount of interest payable in respect of each month on or before the last day thereof, with the first date of payment in respect of any Bond being the last day of __________________, ______, and should the Company at any time make default in the payment of any interest, interest shall be paid on the amount in default at the same rate and compounded monthly on the same days. 4.2 Trustee Not Liable - The Trustee shall not be liable for the payment of interest accrued as provided in the preceding paragraph in the event of any default by the Company in failing to make payment in the manner provided in Section 2.8 or deposit with the Trustee all of the monies required to be so deposited for the purpose of paying interest accrued under the Bonds. 4.3 Payment to Trustee Sufficient - Payment to the Trustee of any amount due hereunder shall fully discharge the Company, to the extent of such payment, of liability hereunder or to the Bondholder in respect of the amount due. 4.4 No Deemed Reinvestment - The theory of deemed reinvestment shall not apply to the calculation of interest or the payment of any amounts hereunder. ARTICLE 5 - PAYMENT 5.1 Payment on Demand - The principal of and all unpaid interest including, without limitation, interest on amounts in default, accrued on each of and all the Bonds outstanding hereunder, shall be paid by the Company to the Trustee on the ___ day of ___________, ______. ARTICLE 6 - CERTAIN COVENANTS OF THE COMPANY 6.1 Certain Covenants of the Company - In addition to any covenants contained elsewhere herein, the Company hereby represents and warrants to and covenants and agrees with the Trustee and its successors as follows: (a) to duly and punctually pay all principal of and interest on all Bonds forthwith upon demand by the Bondholder or the Trustee as provided in the Bonds or herein or on such earlier date as the same shall become due in accordance with the provisions hereof; (b) so long as any Bond remains outstanding and unpaid hereunder, or any monies remain due and payable hereunder it will pay to the Trustee all reasonable legal fees and disbursements, if any, incurred by the Trustee in connection herewith and will pay to the Trustee reasonable remuneration for services rendered by it pursuant hereto; (c) the Company (i) is and will continue to be a duly formed and validly existing corporation in good standing under the laws of the jurisdiction of its incorporation (ii) is and will continue to be duly qualified and licensed as a foreign or extra-provincial corporation in each jurisdiction where the nature of the properties owned by it or held by it under lease or license or the businesses conducted by it makes such qualification necessary or of advantage, or it maintains an office for the conduct of business except only certain jurisdictions outside ______________ where failure to be so qualified or licensed would not have a material adverse effect on its ability to hold its property or assets or otherwise, and (iii) has and will continue to have all necessary power and authority to own or hold its property and assets; to carry on its businesses as now conducted and as proposed to be conducted; and to execute, perform and deliver this Trust Deed and the Bonds; (d) no authorization, consent, approval or exemption from, or filing, registration, declaration or qualification with, or before, or giving notice to, any person, and in particular to any - 11 - governmental authority or regulatory body or any agency, department or division of any thereof, is required to be obtained, given or made for the due execution and delivery by the Company of this Trust Deed, or any documents provided for herein, or, except to comply with requirements hereof as to registration, filing or recordation, the performance of the terms hereof except such as have been duly and unconditionally obtained and are in full force and effect; (e) this Trust Deed and the Bonds constitute, or will at the time of delivery in each case constitute, the legal, valid and binding obligations of the Company enforceable against it, in accordance with the terms hereof or thereof, subject to (i) the effects of any laws regarding bankruptcy or insolvency or similar laws of general application affecting creditors' rights generally and (ii) equitable remedies being discretionary; 6.2 Trustee May Perform - If the Company should fail to perform any covenant on its part herein contained, the Trustee may itself perform such covenant and, if any such covenant requires the payment or expenditure of money, it may make such payment or expenditure with its own funds, or with money borrowed by or advanced to it for such purpose, but shall be under no obligation so to do; and all sums so expended or advanced shall be repayable by the Company in the manner provided herein, but no such performance or payment shall be deemed to relieve the Company from any obligation or Event of Default. ARTICLE 7 - EVENTS OF DEFAULT, REMEDIES, RIGHTS AND POWERS 7.1 Events of Default Defined - The following events are herein referred to as "Events of Default": (a) if a holder of a Bond advises the Trustee in writing that a demand for payment of principal, interest or other monies owing thereon was made and that payment has not been made by the Company within six (6) months of the date of such demand; (b) if any representation or warranty made by the Company herein or in Article 6 hereof is, or shall become untrue or misleading in any material respect; (c) if the Company makes default in the observance or performance of any covenant, agreement or condition herein on the part of the Company to be kept, observed and performed (other than as to the payment of principal, interest or other monies owing thereon) and such default shall remain unremedied for ten (10) Working Days after written notice from the Trustee of the same; provided, however, that if such default is capable of being remedied within a reasonable period of time after occurrence and the Company has within such 10 Working Day period following the giving of such notice, commenced action or actions appropriate to remedy the default and such remedial actions are thereafter continuously and diligently pursued and such default is remedied within a reasonable period of time after occurrence, then such default shall not become an Event of default and the default shall no longer be continuing; (d) if the Company shall (i) institute or commence or be subject to proceedings to be adjudicated a bankrupt or insolvent or enter liquidation, or consent to the filing of a bankruptcy or insolvency proceeding against it; or (ii) file, institute or commence or otherwise take any proceedings relating to reorganization, adjustment, arrangement, composition, compromise, stay of proceedings, or relief similar to any of the foregoing under any ___________ federal or provincial law regarding bankruptcy, insolvency, reorganization or relief of debtors other than any such proceeding in the ordinary course of business which is by its terms not applicable to the Trustee or Bondholders; or (iii) consent to the filing of any such proceeding; or (iv) consent to or be subject to the appointment of a receiver, receiver-manager, liquidator or trustee or assignee in bankruptcy, liquidation, reorganization or insolvency of the Company or of a substantial part of its Tangibles having a value in the aggregate in excess of $___________ (or equivalent); or (v) make an - 12 - assignment for the benefit of creditors; or (vi) admit in writing its inability to pay its debts generally as they become due; or (vii) voluntarily suspend transaction of its usual business; or (viii) generally not be paying its debts as they come due; or (ix) take any corporate or other action authorizing or in furtherance of any of the foregoing; or (x) deny any of its liabilities or obligations hereunder; (e) if (i) a court having jurisdiction in the premises shall have entered a judgment, decree or order which has not been reversed on appeal and is not stayed pending the outcome of appeals adjudging the Company a bankrupt or insolvent, or for the appointment of a receiver, liquidator, trustee or assignee in bankruptcy, or for liquidation, reorganization, insolvency, compromise, composition, arrangement or other plan of the Company or a substantial part of its property or a substantial part of the Mortgaged Premises, or for a stay of proceedings or the winding-up or liquidation of its affairs, or (ii) any proceeding is filed, instituted or commenced by any person seeking liquidation, reorganization or winding-up, adjustment, arrangement, compromise, composition, stay of proceedings or similar relief of or for the Company under any ___________ federal or provincial law regarding bankruptcy, insolvency, reorganization or relief of debtors, except in either such case (A) if the Company has filed an objection thereto in the appropriate court or office within 5 Working Days of entry thereof (and, in the case of (i) above, if and for so long as the effects thereof are stayed and, in the case of (ii) above, unless and until a judgment, decree or order is entered, in which case (i) shall, subject to these exceptions, apply) or filing, institution or commencement thereof, as applicable, and (B) for any transaction pursuant to and in accordance with the provisions of Section 10.1; (f) if any proceeding with respect to the Company is commenced under The Companies' Creditors' Arrangements Act or similar legislation or the Company shall seek or take any proceeding or be the subject of any proceeding relating to a compromise or arrangement with creditors or claimants (other than any such proceeding in the ordinary course of business which is by its terms not applicable to the Trustee or the Bondholders); (g) if judicial or extra-judicial enforcement proceedings (including receivership, whether pursuant to an instrument appointment with or without court confirmation or an order of a court, execution, distress, sequestration, extent or any other process) in respect of one or more judgments, orders or decrees in an amount in the aggregate in excess of $____________ (or equivalent) are commenced upon or become enforceable or are enforced against the Company or upon or against any of its property and, in the case of enforcement by or under a court order, such enforcement is not within 5 Business Days being disputed in good faith by the Company with adequate security in the full amount of the claim in respect of which such process having been issued posted in a court or with an escrow agent or the Trustee; or one or more judgments, orders or decrees in an amount in the aggregate in excess of $____________ (or equivalent) is or are entered against the Company and remains undischarged and unsatisfied for 5 Business Days except if (and for so long as) the same is or are stayed pending appeal; (h) if the Company is insolvent or commits or threatens to commit any act of bankruptcy or makes a bulk sale of its assets; (i) if the Company should have its charter revoked or rescinded or its existence in any way terminated except as permitted by Section 10.1; (j) if any instruments which constitute the security for the Bonds described in Section 3.1 hereof shall go in default. - 13 - 7.2 Acceleration of Maturity - If (i) any Event of Default occurs the Trustee shall be entitled to, and upon being requested by Bondholder's Request to do so, the Trustee shall, subject to the provisions of Section 7.3, give notice to the Company (an "Acceleration Notice") demanding payment by the Company of the principal amount of and accrued and unpaid interest on all Bonds then outstanding and other monies payable hereunder or (ii) any Event of Default of a type described in any of items (d) through (i) inclusive of Section 7.1 should occur, then whether or not the Trustee shall have been requested to give or shall have given an Acceleration Notice, all principal of and interest accrued and unpaid on the Bonds shall immediately become due and payable, each such case being herein called an "Event of Acceleration", then in either such case without need for any additional declaration, formality, notice or other communication all of which are hereby expressly waived by the Company, anything therein or herein to the contrary notwithstanding, and the Company shall on such demand forthwith pay to the Trustee for the benefit of the Bondholders the principal amount of, accrued and unpaid interest on, and interest on amounts in default under, such Bonds and all other moneys payable hereunder together with subsequent interest thereon at the rate borne by the Bonds from the date of the said demand until payment is received by the Trustee, such subsequent interest to be payable at the times and places and in the manner mentioned herein or in and according to the tenor of the Bonds, anything therein or herein to the contrary notwithstanding, without presentment, demand, protest or further notice of any kind all of which are hereby expressly waived by the Company. Such payment when made shall be deemed to have been made in discharge of the Company's obligations hereunder and any moneys so received by the Trustee shall be applied as herein provided. If the Company fails to comply with the demand of the Trustee contained in an Acceleration Notice as required by this Section, or to pay all amounts of principal of an accrued unpaid interest on the Bonds immediately upon the occurrence of any other Event of Acceleration, then in any such case the Trustee shall become bound to enforce the Security Interests hereby constituted subject to any provisions contained in the Acceleration Notice or other directions provided to the Trustee by the Bondholders' Request, and the Security Interest herein constituted shall become crystallized and fixed. Having become bound to enforce the Security Interests hereby constituted or any Security Interest constituted by any other instrument of assignment, the Trustee shall be entitled to take any one or more of the steps referred to in Section 7.5 and shall take such steps as instructed by Bondholders' Request, which instructions may be contained in the Bondholders' Request requiring the Trustee to issue an Acceleration Notice. 7.3 Waiver of Default (a) The Bondholders, by Bondholders' Request, shall have the power, to instruct the Trustee to waive any Event of Default, and the Trustee shall thereupon waive the Event of Default upon such terms and conditions as such holders shall prescribe; provided always that any waiver must be made expressly in writing in order to be effective and no act or omission either of the Trustee or of the Bondholders shall extend to or be taken in any manner whatsoever to affect any other Event of Default (whether similar or dissimilar to the Event of Default waived) or the rights resulting from such other Event of Default. (b) Upon delivery to the Trustee of a Bondholders' Resolution instructing the Trustee to do so, the Trustee shall issue and deliver to the Company a written notice (a "Rescission Notice") rescinding any Acceleration Notice. Upon such delivery, subject to any conditions contained in the Rescission Notice, (i) any steps or proceedings theretofore taken in furtherance of collection, enforcement or realization shall be suspended and discontinued, (ii) all appropriate steps shall be taken to restore the possession, control, operation and management of the Mortgaged Premises, including any proceeds of realization or proceeds collected by the Trustee or any Receiver, less any costs or expenses incurred in connection therewith, to the Company, (iii) the Company shall no longer be or be considered to be in default hereunder in respect of the Event of Default which gave rise to the rescinded Acceleration Notice and (iv) the Security Interests hereby constituted or constituted by any other instrument of assignment shall no longer be deemed to have become - 14 - enforceable by reason of the Event of Default which gave rise to the rescinded Acceleration Notice. 7.4 No Suits by Bondholders - No holder of any Bond shall in respect of the obligations of the Company hereunder have the right to institute any action or proceeding or to exercise any other remedy authorized by this Indenture for the purpose of enforcing payment or any other rights on behalf of the Bondholders, or realizing on security, or for the execution of any trust or power hereunder, for the appointment of a liquidator, receiver or receiver and manager, for a receiving order under the Bankruptcy and Insolvency Act (______________), to have the Company wound up or to file or prove a claim in any liquidation or bankruptcy proceedings under Applicable Law unless the Trustee shall have failed to act in accordance with and within a reasonable time after a Bondholders' Request referred to in Section 7.5 has been delivered to the Trustee and any indemnity required by it under Section 8.2 has been tendered to it and any Bonds required by it to be deposited with the Trustee under Section 8.2 have been so deposited; in case of such failure but not otherwise any Bondholder acting on behalf of himself and all other Bondholders shall be entitled to take such proceedings in any court of competent jurisdiction as the Trustee might have taken under Section 7.5, it being understood and intended that no one or more Bondholders 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 Bond, 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 outstanding Bonds. 7.5 Remedies of Trustee (a) Upon the occurrence of an Event of Crystallization, the Trustee by itself, its officers, its agents or attorneys, may and, in the case it has received a Bondholders' Request instructing it to do so, shall enter into and upon and take possession of all or any part of the Mortgaged Premises with full power to exclude the Company and thereafter shall have full power and authority (i) to carry on, manage and conduct the business operations of the Company respecting such part of the Mortgaged Premises and to borrow money in its own name or advance its own monies for the purpose of such business operations, the maintenance and preservation of such part of the Mortgaged Premises or any part thereof and the making of such replacements thereof and additions thereto as it shall deem desirable, the payment of taxes, wages and other charges ranking in priority to the Security Interests of this Indenture or those of any other instrument of assignment and current operating expenses incurred not more than 30 days prior to such taking of possession, and monies so borrowed or advanced shall be repaid by the Company on demand and until repaid shall (with interest thereon at the rate payable under this Indenture) be secured by the Security Interests hereby constituted in priority to sums otherwise secured hereby; and (ii) to receive, give notifications of and receipts for the revenues, incomes, issues and profits in respect of such part of the Mortgaged Premises and to pay therefrom the costs, charges and expenses of the Trustee in carrying on the said business operations or otherwise, and all taxes, assessments and other charges against such property ranking in priority to the Security Interests hereby constituted or by any other instrument of assignment or payment of which may be necessary to preserve such property, and to apply the remainder of the monies so received in the same manner as if the same arose from a sale or realization of such property; and (iii) exercise any or all rights and remedies of the Trustee under any other instrument of assignment. The Trustee (or such agents or attorneys) shall, on receipt of a Rescission Notice under Section 7.3 hereof, and subject to any conditions therein, return such business and property to the Company without prejudice to its rights hereunder with respect to the same Event of Default or any other or subsequent Event of Default and any balance of income received after payment in full of all amounts due to or properly payable to the Trustee hereunder in priority to sums otherwise secured hereby shall be returned to the Company. - 15 - (b) Upon the occurrence of an Event of Crystallization, the Trustee, either after entry as aforesaid or after other entries by itself or its agents, or without any entry, may and, in the case it has received a Bondholders' Request instructing it to do so, shall, with or without (x) advertisement or (y) notice to the Company, sell or dispose or lease the Mortgaged Premises either as a whole or in separate parcels (to the extent permitted by Applicable Law): (i) by private contract, or (ii) at public auction, or (iii) by public tender. It shall be lawful for the Trustee to make any such sale either for cash or upon credit and upon such reasonable conditions as to upset or reserve bid or price and terms of payment as it may deem reasonable in the circumstances; to rescind or vary any contract or sale that may have been entered into and re-sell with or under any of the powers conferred herein; to adjourn or postpone the closing of such sale from time to time; and to execute and deliver to the purchaser or purchasers of the said property or any part thereof good and sufficient deed or deeds for the same, the Trustee being hereby irrevocably constituted the attorney of the Company for the purpose of making such sale and executing such deeds, and any such sale made as aforesaid, shall be a perpetual bar at law and in equity against the Company, its successors and assigns and all other persons claiming the said property or any part or parcel thereof, by, from, through, or under the Company or its successors or assigns, and the proceeds of any such sale shall be distributed in the manner hereinafter provided. (c) Upon the occurrence of an Event of Crystallization, the Trustee may and, in the case it has received a Bondholders' Request instructing it to do so, shall, with or without entry or sale as aforesaid, in its discretion, proceed to protect and enforce its rights under this Indenture by sale under judgment order in any judicial proceeding or by foreclosure or a suit or suits in equity or at law or otherwise whether for the specific performance of any covenant or agreement contained in this Indenture or in aid of the execution of this Indenture or by the filing of such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claim of the Trustee lodged in any bankruptcy, winding-up or other judicial proceeding, or by the enforcement of any other legal or equitable remedy or means of realization as the Trustee shall deem most effective to protect and enforce any of the rights of the holders of Bonds or rights or duties of the Trustee. (d) Upon the occurrence of an Event of Crystallization, the Trustee may and, in the case it has received a Bondholders' Request instructing it to do so, shall appoint a receiver or a receiver and manager (herein called the "Receiver", which term also includes a receiver or receiver and manager appointed pursuant to subsection (e)), of the Mortgaged Premises or any part thereof and of the rents, issues, profits, revenues and income thereof and upon any such appointment by the Trustee the following provisions shall apply: (i) such appointment shall be made in writing upon notice to the Company given prior thereto of such length, if any, as the Trustee may deem reasonable in the circumstances, signed by the Trustee and such writing shall be conclusive evidence for all purposes of such appointment. The Trustee may from time to time in the same manner remove any Receiver so appointed and appoint another in his stead. In making any such appointment the Trustee shall be deemed to be acting as the attorney for the Company; (ii) any such appointment may be limited to any part or parts of the Mortgaged Premises or may extend to the whole thereof; - 16 - (iii) every such Receiver may, in the discretion of the Trustee, be vested or fixed with all or any of the powers, obligations and discretions of the Trustee and shall be fixed with all obligations hereunder stated to be applicable to a Receiver; (iv) the Trustee may from time to time fix the reasonable remuneration of every such Receiver and direct the payment thereof out of the Mortgaged Premises (in priority to the Trustee), the income therefrom or the proceeds thereof; (v) the Trustee may from time to time require any such Receiver to give security for the performance of his duties and may fix the nature and amount thereof, but shall not be bound to require such security; (vi) every such Receiver may, with the consent in writing of the Trustee, borrow money for the purpose of carrying on the business of the Company in respect of any part of the Mortgaged Premises or for the maintenance, protection or preservation of the Mortgaged Premises or any part thereof, and any Receiver may issue certificates (in this section called "Receiver's Certificates"), for such sums as will in the opinion of the Trustee be sufficient for obtaining upon the security of the Mortgaged Premises or any part thereof the amounts from time to time required, and such Receiver's Certificates may be payable either to order or bearer and may be payable at such time or times as the Trustee may consider expedient, and shall bear such interest as shall therein be declared and the Receiver may sell, pledge or otherwise dispose of the same in such manner as the Trustee may consider advisable and may pay such commission on the sale thereof as the Trustee may consider reasonable, and the amounts from time to time payable by virtue of such Receiver's Certificates shall at the option of the Trustee be entitled to the Security Interests hereby constituted in priority to the principal, interest and other amounts secured by this Indenture; (vii) every such Receiver shall, so far as concerns responsibility for his acts or omissions, be deemed the agent of the Company, and in no event the agent of the Trustee or any Bondholder and the Tru
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