Exhibit 4.2
MDC CORPORATION INC.
AND
CUSTOM DIRECT INCOME FUND
AND
CIBC MELLON TRUST COMPANY
TRUSTEE
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TRUST INDENTURE
PROVIDING FOR THE ISSUANCE OF ADJUSTABLE RATE
EXCHANGEABLE SECURITIES DUE DECEMBER 31, 2028
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December 8, 2003
[TORYS LLP Logo Graphic Omitted]
TABLE OF CONTENTS
Article 1
INTERPRETATION...........................................................................................2
1.1 Definitions......................................................................................2
1.2 Meaning of "outstanding" for Certain Purposes....................................................9
1.3 Interpretation Not Affected by Headings.........................................................10
1.4 Extended Meaning................................................................................10
1.5 Applicable Law..................................................................................10
1.6 Language........................................................................................10
1.7 Time of Essence.................................................................................10
1.8 Day Not a Business Day..........................................................................11
1.9 Meaning of Day..................................................................................11
1.10 References to Dollar Amounts....................................................................11
1.11 Currency Conversion and Indemnity...............................................................11
1.12 Severability....................................................................................12
Article 2
EXCHANGEABLE SECURITY FORMS.............................................................................12
2.1 Forms Generally.................................................................................12
Article 3
ISSUES OF EXCHANGEABLE SECURITIES.......................................................................12
3.1 Limit of Issue..................................................................................12
3.2 Designation, Terms and Form of Exchangeable Securities..........................................12
3.3 Issue of Exchangeable Securities................................................................14
3.4 Exchangeable Securities to Rank Pari Passu......................................................15
3.5 No Additional Exchangeable Securities...........................................................15
3.6 Exchangeable Securities Issuable in Global Form.................................................15
3.7 Global Security.................................................................................16
3.8 Signing of Exchangeable Securities..............................................................16
3.9 Certification by Trustee........................................................................17
3.10 Replacement of Exchangeable Securities..........................................................17
3.11 Computation of Interest.........................................................................18
3.12 Payment.........................................................................................19
3.13 Payment Agreements for Exchangeable Securities..................................................19
3.14 No Fractional Units.............................................................................19
Article 4
REGISTRATION, TRANSFER, EXCHANGE AND OWNERSHIP..........................................................20
4.1 Register........................................................................................20
4.2 Transferee Entitled to Registration.............................................................20
4.3 Charges for Transfer and Exchange...............................................................20
4.4 Registers Open for Inspection...................................................................21
4.5 Closing of Registers............................................................................21
4.6 Ownership of Exchangeable Securities............................................................21
4.7 Record of Payments..............................................................................22
4.8 Special Provisions Relating to Legended Exchangeable Securities.................................22
4.9 Certification by Non-U.S. Holders...............................................................23
4.10 Additional Conditions to Exchange of Certain Exchangeable Securities............................23
Article 5
RIGHT TO EXCHANGE EXCHANGEABLE SECURITIES...............................................................24
5.1 Exchange Right..................................................................................24
5.2 Basic Exchange Right............................................................................24
5.3 Exchange Date After Last Business Day of Month but On or Before Interest Payment Date...........25
5.4 Exchange Date Within 30 Days Preceding Maturity Date or Concurrently with or after Acceleration.25
5.5 Exercise of Exchange Right......................................................................25
5.6 Notice to MDC of Exercise of Exchange Right.....................................................26
5.7 Deposit of Cash or Units........................................................................26
5.8 Confirmation of Unit Ownership..................................................................26
5.9 Method of Delivery to Holders...................................................................27
5.10 Cancellation of Exchangeable Securities.........................................................27
5.11 Notice to Holders...............................................................................27
5.12 Fractional Units................................................................................27
Article 6
MDC'S RIGHT TO REDEEM AND PURCHASE......................................................................28
6.1 Redemption......................................................................................28
6.2 Redemption Notice...............................................................................28
6.3 Procedure for Redemption........................................................................29
6.4 Method of Delivery to Holders...................................................................30
6.5 No Fractional Units.............................................................................30
6.6 Purchase of Exchangeable Securities.............................................................30
6.7 Priority of Exchange Right Over Cash Redemption.................................................31
Article 7
ADJUSTMENTS.............................................................................................31
7.1 Adjustment upon Consolidation or Subdivision....................................................31
7.2 Adjustment upon Reorganization Event............................................................33
7.3 Other Actions...................................................................................34
7.4 Notice of Adjustments and Certain Other Events..................................................34
Article 8
SECURITY AND RELATED COVENANTS..........................................................................35
8.1 Pledge of Shares................................................................................35
8.2 Covenants Concerning the Pledged Eligible Securities, etc.......................................35
8.3 Further Security................................................................................36
8.4 Periodic Certification as to Market Value of Pledged Eligible Securities........................36
8.5 Delivery of Pledged Eligible Securities.........................................................37
8.6 Voting of Pledged Eligible Securities...........................................................37
8.7 Distributions on Pledged Eligible Securities....................................................37
8.8 Enforcement.....................................................................................37
8.9 Release of Pledged Eligible Securities..........................................................38
8.10 Further Assurances..............................................................................39
8.11 Release of Pledge of Shares.....................................................................39
Article 9
COVENANTS OF MDC AND OF THE FUND........................................................................39
9.1 General Covenants...............................................................................39
9.2 Not to Accumulate Interest......................................................................39
9.3 Certificates of Compliance......................................................................40
9.4 Trustee's Remuneration and Expenses.............................................................40
9.5 Performance of Covenants by Trustee.............................................................40
9.6 Qualification of Units..........................................................................41
9.7 Maintenance of Listing..........................................................................41
9.8 The Fund as a Reporting Issuer and Maintenance of Listing.......................................41
9.9 Provision of Documentation Relating to the Fund.................................................41
Article 10
DEFAULT AND ENFORCEMENT.................................................................................41
10.1 Events of Default...............................................................................41
10.2 Acceleration on Default.........................................................................43
10.3 Waiver of Default...............................................................................44
10.4 Proceedings by the Trustee......................................................................44
10.5 Suits by Holders................................................................................45
10.6 Application of Moneys Received by Trustee.......................................................45
10.7 Distribution of Proceeds........................................................................46
10.8 Immunity of Holders and Unitholders.............................................................46
10.9 Remedies Cumulative.............................................................................47
10.10 Judgment Against MDC............................................................................47
10.11 Indemnification.................................................................................47
10.12 No Fractional Units.............................................................................47
Article 11
SATISFACTION AND DISCHARGE..............................................................................47
11.1 Repayment of Unclaimed Moneys to MDC............................................................47
11.2 Release from Covenants..........................................................................48
Article 12
SUCCESSOR CORPORATIONS..................................................................................48
12.1 Certain Requirements in Respect of Merger, etc..................................................48
12.2 Vesting of Powers in Successor..................................................................50
12.3 Wholly-Owned Subsidiaries.......................................................................50
Article 13
MEETINGS OF BENEFICIAL HOLDERS..........................................................................50
13.1 Right to Convene Meeting........................................................................50
13.2 Notice..........................................................................................50
13.3 Chairman........................................................................................51
13.4 Quorum..........................................................................................51
13.5 Powers of Adjournment...........................................................................51
13.6 Show of Hands...................................................................................51
13.7 Poll............................................................................................52
13.8 Voting..........................................................................................52
13.9 MDC and Trustee May Be Represented..............................................................52
13.10 Powers Exercisable by Extraordinary Resolution..................................................52
13.11 Powers Not Exercisable by Extraordinary Resolution..............................................54
13.12 Meaning of "Extraordinary Resolution"...........................................................55
13.13 Powers Cumulative...............................................................................56
13.14 No Requirement to Obtain Consent................................................................56
13.15 Minutes.........................................................................................56
13.16 Instrument in Writing...........................................................................56
13.17 Binding Effect of Resolutions...................................................................57
13.18 Evidence of Rights of Holders...................................................................57
13.19 Voting and Dividends............................................................................57
Article 14
SUPPLEMENTAL INDENTURES.................................................................................58
14.1 Execution of Supplemental Indentures............................................................58
Article 15
CONCERNING THE TRUSTEE..................................................................................59
15.1 Rights and Duties of Trustee....................................................................59
15.2 Evidence........................................................................................60
15.3 Experts, Advisers and Agents....................................................................60
15.4 Documents, Moneys, etc. Held by Trustee.........................................................60
15.5 Action by Trustee to Protect Interests..........................................................61
15.6 Trustee Not Required to Give Security...........................................................61
15.7 Protection of Trustee...........................................................................61
15.8 Replacement of Trustee..........................................................................62
15.9 Conflict of Interest............................................................................64
15.10 Acceptance of Trust.............................................................................64
15.11 Trust Indenture Legislation.....................................................................64
15.12 Evidence and Authority to Trustee...............................................................64
15.13 Authority to Carry on Business..................................................................65
Article 16
NOTICES.................................................................................................66
16.1 Notice to Holders...............................................................................66
16.2 Notice to Trustee...............................................................................66
16.3 Notice to MDC...................................................................................66
16.4 Mail Service Interruption.......................................................................67
Article 17
SUBORDINATION...........................................................................................67
17.1 Agreement to Subordinate........................................................................67
17.2 Default on Senior Indebtedness..................................................................68
17.3 Liquidation; Dissolution; Bankruptcy............................................................68
17.4 Rights of Holders Reserved......................................................................70
17.5 No Fiduciary Duty to Holders of Senior Indebtedness.............................................70
17.6 Authorization of Holders to Trustee to Acknowledge or Effectuate Subordination..................70
17.7 Subrogation.....................................................................................70
17.8 Notice by MDC...................................................................................71
17.9 Rights of the Trustee; Holders of Senior Indebtedness...........................................72
17.10 Subordination May Not Be Impaired...............................................................72
17.11 Article Applicable to Paying Agents.............................................................73
Article 18
FORM OF EXCHANGEABLE SECURITIES.........................................................................73
18.1 English Form of Exchangeable Securities.........................................................73
18.2 U.S. Legend.....................................................................................83
18.3 French Form of Exchangeable Securities..........................................................83
Article 19
EXECUTION...............................................................................................83
19.1 Counterparts and Formal Date....................................................................83
THIS TRUST INDENTURE made as of December 8, 2003.
B E T W E E N:
MDC CORPORATION INC., a corporation incorporated
under the laws of Ontario
("MDC")
OF THE FIRST PART,
- and -
CUSTOM DIRECT INCOME FUND, a trust formed under the
laws of Ontario
(the "Fund")
OF THE SECOND PART,
- and -
CIBC MELLON TRUST COMPANY, a trust company existing
under the laws of Canada and duly authorized to carry
on a trust business in each province of Canada
(the "Trustee")
OF THE THIRD PART.
WHEREAS MDC wishes to create and issue Exchangeable Securities (as
hereinafter defined) to be constituted and issued in the manner hereinafter
appearing;
AND WHEREAS MDC, under its constating documents and the laws relating
thereto, is duly authorized to create and issue the Exchangeable Securities to
be issued as herein provided;
AND WHEREAS all things necessary have been done and performed to make
the Exchangeable Securities, when certified by the Trustee and issued as in this
Trust Indenture provided, legal, valid and binding obligations of MDC with the
benefits and subject to the terms of this Trust Indenture;
AND WHEREAS the foregoing recitals are made as representations and
statements of fact by MDC and not by the Trustee;
AND WHEREAS the Fund has agreed to become a party to this Trust
Indenture solely for the purpose of providing the covenants set out in Sections
9.6 and 9.8;
NOW THEREFORE THIS TRUST INDENTURE WITNESSES and it is hereby agreed
and declared as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions
In this Trust Indenture, unless there is something in the subject
matter or context inconsistent therewith or unless otherwise expressly provided:
"1933 Act" means the United States Securities Act of 1933, as amended
from time to time.
"2004 Audit" means the audit for the Fund for the year ended December
31, 2004.
"2004 Audit Date" means the date on which the Auditors' Report prepared
by the Fund's auditors and relating to the 2004 Audit is issued.
"Acceleration" means a declaration by the Trustee in accordance with
Section 10.2, either in its own discretion or upon receipt of a
Holders' Request, that the principal of and accrued but unpaid interest
on all Exchangeable Securities then outstanding and all other moneys
payable hereunder are immediately due and payable.
"Adjustable Rate" means for a month, the rate equal to the greater of:
(a) the percentage that the Unit Distribution in
respect of such month is of the principal amount
per Exchangeable Security; and
(b) 0.25%, being 3.00% per annum, calculated using the
nominal and not the effective rate method and
without allowance or deduction for deemed
re-investment.
"Adjustment Event" means any event which, in accordance with the
provisions of Article 7, would result in an adjustment to the Exchange
Rate.
"Affiliate" means any person directly or indirectly controlling,
controlled by or under direct or indirect common control with, MDC. A
person shall be deemed to control a body corporate if such person
possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such body corporate,
whether through the ownership of voting securities, by contract, or
otherwise.
"Authorized Investments" has the meaning set out in Subsection 15.4(2).
"Basic Exchange Right" has the meaning set out in Section 5.2.
"Beneficial Holder" means any person owning a beneficial interest in
any Exchangeable Security.
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"Business Day" means any day, other than a Saturday or Sunday, on which
banks and other financial institutions are open for business in
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇.
"Cash Redemption" has the meaning set out in Subsection 6.1(1).
"CDS" means The Canadian Depository for Securities Limited.
"CDS Participant" means a participant in the CDS book-entry only
system.
"Certificate of MDC", "Order of MDC" and "Request of MDC" mean,
respectively, a written certificate, order and request signed in the
name of MDC by any two of its Chairman, Chief Executive Officer,
President, any Vice-President, Treasurer, any Assistant Treasurer,
Secretary and any Assistant Secretary, and may consist of one or more
instruments so executed.
"Certified Resolution" means a copy of a resolution certified by an
officer of MDC to have been duly passed by the Directors and to be in
full force and effect on the date of such certification.
"Convertible Debentures" means the 7% subordinated unsecured
convertible debentures of MDC issued January 7, 1997 and due January 8,
2007.
"Counsel" means a barrister or solicitor or a firm of barristers and
solicitors (who may be counsel for MDC) retained by the Trustee or
retained by MDC and acceptable to the Trustee, acting reasonably.
"Current Market Price" means, as at any date (the "Date of
Determination"), a price per Unit equal to the weighted average trading
price for a Unit on the TSX for the 20 trading days ending 5 trading
days prior to the Date of Determination.
"Custom Direct" means Custom Direct, Inc., a corporation formed under
the laws of Delaware.
"Custom Direct Shares" means, collectively, (i) 3.903449098 Class B
shares in the capital of Custom Direct, representing 20% of the
outstanding common shares of Custom Direct; and (ii) 3.903449884 Series
B Preferred Shares in the capital of Custom Direct, representing 20% of
the outstanding preferred shares of Custom Direct.
"Custom Direct ULC" means Custom Direct ULC, an unlimited liability
corporation existing under the laws of Nova Scotia.
"Declaration of Trust" means the amended and restated declaration of
trust of the Fund dated May 14, 2003, as the same may be amended and
restated from time to time.
"Default Amount" means, with respect to an Exchangeable Security, an
amount equal to 101% of the principal amount of such Exchangeable
Security, plus accrued but unpaid interest on such Exchangeable
Security to but excluding the date of actual payment thereof.
-3-
"Director" means a director of MDC for the time being and "Directors"
means the board of directors of MDC or, whenever duly empowered, the
executive committee (if any) of the board of directors of MDC, for the
time being, and reference without more to action by the Directors means
action by the directors of MDC as a board or action by the executive
committee of the board as a committee.
"Distribution Target" means the Fund having made average monthly per
Unit cash Unit Distributions of at least $0.1125 for the period from
May 29, 2003 to December 31, 2003 or for any fiscal year subsequent to
2003.
"EBITDA" means earnings before interest, income taxes, depreciation and
amortization and non-recurring costs.
"EBITDA Target" means the Fund having earned audited EBITDA of
approximately US$22.2 million (based on 2002 EBITDA of US$20.1 million
adjusted to reflect the internalization of production related to the
termination of the contract with ▇▇▇▇▇▇▇ Company, the cost savings
associated with the extension of the base-stock agreement with ▇▇▇▇▇ +
▇▇▇▇▇▇▇▇▇, Limited Partnership (collectively, US$2.9 million) and
incremental public company costs (approximately US$0.8 million per
annum)) for the year ending December 31, 2003 or for any fiscal year
subsequent to 2003.
"Eligible Securities" means the Custom Direct Shares, Units,
Reorganization Property and Government Securities.
"Event of Default" has the meaning set out in Section 10.1.
"Exchange Date" has the meaning set out in Section 5.7.
"Exchange Default" means the failure by MDC to deliver the required
amount or number, as the case may be, of cash and/or Units in
accordance with Article 5 upon the exercise by any Holder of the
Exchange Right.
"Exchange Deposit Date" means, in respect of any Exchangeable Security,
the date upon which the certificate, if any, with respect to such
Exchangeable Security, together with a duly completed and executed
Exchange Notice or other form of written notice of exercise acceptable
to the Trustee, are deposited for exchange pursuant to Section 5.5.
"Exchange Event" means the occurrence in respect of any year of each of
the following conditions:
(a) the Fund meeting the EBITDA Target; and
(b) the Fund meeting the Distribution Target;
in each case provided that Custom Direct ULC is not then in default of
its interest obligations under the Note Indenture.
-4-
"Exchange Notice" means a written notice of a Holder's intention to
exchange Exchangeable Securities.
"Exchange Rate" means one Unit for each Exchangeable Security
exchanged, subject to adjustment from time to time in accordance with
Article 7.
"Exchange Right" means the right of a Holder to exchange Exchangeable
Securities in accordance with Article 5.
"Exchangeable Securities" means the adjustable rate exchangeable
securities of MDC issued and certified hereunder and for the time being
outstanding.
"Exercising Beneficial Holder" means a Beneficial Holder who exercises
the Exchange Right by causing a CDS Participant to deliver to CDS at
its principal office in Toronto, on behalf of the Beneficial Holder, an
Exchange Notice in accordance with Section 5.5.
"Extraordinary Resolution" has the meaning set out in Section 13.12.
"Fund" means Custom Direct Income Fund, an open-ended, limited purpose
trust formed under the laws of Ontario.
"Fund Cash Payment" means, at any date, a cash amount equal to the
greater of (i) the principal amount of the Exchangeable Security and
(ii) the Fund Unit Payment determined as at that date multiplied by the
Current Market Price per Unit at that date.
"Fund Unit Payment" means, at any date, the number of Units per
Exchangeable Security determined in accordance with the Exchange Rate
as at such date.
"Government Securities" means securities with a term not in excess of
90 days issued by or guaranteed by the Government of Canada or the
Government of the United States of America.
"Holder" means any person whose name is for the time being entered in
the registers hereinafter mentioned as a holder of Exchangeable
Securities.
"Holders' Request" means an instrument signed in one or more
counterparts by the holders of not less than 25% of the aggregate
principal amount of the Exchangeable Securities then outstanding
requesting the Trustee to take the action or proceeding specified
therein.
"indebtedness" means all indebtedness of MDC for borrowed money which
would, in accordance with generally accepted accounting principles in
Canada, be reflected as liabilities on an unconsolidated balance sheet
of MDC and shall, in any event, include, without limitation or
duplication:
(a) indebtedness of any partnership, joint venture or other entity
for which MDC is liable (to the extent liable);
-5-
(b) capital or financial leases which are required by generally
accepted accounting principles in Canada to be included as a
balance sheet item;
(c) amounts for which MDC may be liable at such time arising as a
result of the early termination of or default under interest rate
conversion agreements, currency conversion agreements, forward
contracts, hedging agreements, futures contracts and similar
agreements; and
(d) the retraction price of preferred shares which are retractable by
the holder within five years.
"Indenture Legislation" has the meaning set out in Subsection 15.11(1).
"Independent Investment Dealer" means a member of the Investment
Dealers Association of Canada which, in all the circumstances, can
reasonably be regarded as independent of MDC.
"Initial Pledged Shares" means the Custom Direct Shares owned by MDC
and delivered and pledged to the Trustee on the date hereof, subject to
adjustment in accordance with Subsection 8.2(3).
"Interest Payment Date" means the Business Day on or before the 15th
day of each calendar month, being the day on which the Fund currently
pays the monthly Unit Distribution to holders of Units in respect of
the preceding month, subject to the provisions of Section 13.14 hereof.
"Interest Record Date" means, with respect to any payment of interest
pursuant to Section 3.2 hereof, the last Business Day of the month
preceding the month in which such payment of interest is required to be
made.
"Market Value" means, as at any date, (i) in respect of Eligible
Securities, other than the Custom Direct Shares, Units and
Reorganization Property, 75% of the Canadian dollar face amount or, if
the face amount is not in Canadian dollars, 75% of the Canadian dollar
equivalent of such face amount as at such date, (ii) in the case of
Units, the aggregate Current Market Price of such Units, (iii) in
respect of Reorganization Property, the aggregate Transaction Value
thereof as at such date, and (iv) in the case of the Custom Direct
Shares, the aggregate Current Market Price of the number of Units into
which such Custom Direct Shares are exchangeable.
"Maturity Date" means December 31, 2028.
"Maturity Value" means, in respect of any Exchangeable Security, the
outstanding principal amount of such Exchangeable Security on the
Maturity Date.
"MDC" means MDC Corporation Inc. and every Successor Corporation which
shall have complied with the provisions of Article 12.
-6-
"Non-Book Entry Certification Event" means the occurrence of any of the
following events, in respect of CDS: (i) MDC determines that CDS is no
longer willing or able to discharge properly its responsibilities as
depository and MDC is unable to locate a qualified successor and
appoint such successor within 90 days; (ii) MDC at its option elects to
have the Exchangeable Securities authenticated and delivered in
certificated non-book entry, definitive registered form, or is required
by law to do so; or (iii) the book-entry system of CDS ceases to exist.
"Non-U.S. Holder" means any Holder that is not: (i) a citizen or
individual resident in the United States; (ii) a corporation or other
entity taxable as a corporation created or organized under the laws of
the United States or a political subdivision thereof; (iii) an estate,
the income of which is subject to U.S. federal income tax regardless of
the source; or (iv) a trust, if a court within the United States is
able to exercise primary supervision over the trust's administration
and one or more United States persons have the authority to control all
of its substantial decisions.
"Note Indenture" means a note indenture dated as of May 29, 2003
providing for the issue of an unlimited principal amount of unsecured,
subordinated 14.5% Promissory Notes of Custom Direct ULC due May 29,
2013, as the same may be amended from time to time.
"OBCA" has the meaning set out in Subsection 3.10(1).
"Officers' Certificate" of any person (other than a natural person)
means a written certificate signed in the name of such person by any
two of its Chairman, Chief Executive Officer, President, any
Vice-President, Treasurer, any Assistant Treasurer, Secretary and any
Assistant Secretary, and may consist of one or more certificates so
executed.
"Paying Agent" means any person (including MDC acting as Paying Agent)
authorized by MDC to pay the principal of or interest on any
Exchangeable Securities on behalf of MDC.
"person" means a natural person, corporation, body corporate,
partnership, joint venture or other unincorporated association, trust,
government or governmental authority and pronouns have a similar
extended meaning.
"Pledged Eligible Securities" means the Initial Pledged Shares and
thereafter all Eligible Securities as may be held from time to time by
the Trustee in accordance with the terms of Article 8.
"Redemption Date" means the date specified for delivery to the Trustee
by MDC of redemption proceeds in accordance with Article 6, which date
shall be 10 days following the Redemption Notice Date in the case of
the Unit Redemption or, in the case of the Cash Redemption, not more
than 60 days and not less than 30 days following the Redemption Notice
Date, all in accordance with Subsection 6.2(1).
"Redemption Notice" has the meaning set out in Subsection 6.2(1).
-7-
"Redemption Notice Date" means the date on which MDC delivers a
Redemption Notice to the Trustee in accordance with Section 6.2.
"Redemption Right" means the right of MDC to redeem Exchangeable
Securities in accordance with Article 6.
"Reorganization Event" has the meaning set out in Subsection 7.2(1).
"Reorganization Property" means any securities or other property which
may be received by MDC in exchange for, or in respect of, Custom Direct
Shares or Units in connection with a Reorganization Event.
"Secured Amount" has the meaning set out in Subsection 8.2(1).
"Senior Indebtedness" means, without duplication, with respect to MDC:
(i) the principal (including redemption payments), premium, if any,
interest and other payment obligations in respect of (A) indebtedness
of MDC, and (B) indebtedness evidenced by securities, debentures,
bonds, notes or other similar instruments issued by MDC, including any
such securities issued under any deed, indenture or other instrument to
which MDC is a party; (ii) all capital or financial lease obligations
of MDC; (iii) all obligations of MDC issued or assumed as the deferred
purchase price of property, all conditional sale obligations of MDC,
all hedging agreements and agreements of a nature similar thereto and
all agreements relating to any such agreements, and all obligations of
MDC under any title retention agreement (but excluding trade accounts
payable arising in the ordinary course of business); (iv) all
obligations of MDC for the reimbursement on any letter of credit,
banker's acceptance, security purchase facility or similar credit
transaction; (v) all obligations of the type referred to in clauses (i)
through (iv) above of other Persons for the payment of which MDC is
responsible or liable as obligor, guarantor, surety or otherwise; and
(vi) all obligations of the type referred to in clauses (i) through (v)
above of other Persons secured by any lien on any property or asset of
MDC (whether or not such obligation is assumed by MDC), in each case
whether outstanding at the date of this Indenture or thereafter
incurred, provided, however, that Senior Indebtedness shall not include
(W) trade accounts payable and purchase-money indebtedness classified
as accounts payable under Canadian generally accepted accounting
principles, (X) any such indebtedness that contains express terms, or
is issued under a deed, indenture or other instrument which contains
express terms, providing that it is subordinate to or ranks pari passu
in right of payment with the Exchangeable Securities, (Y) any
indebtedness between MDC and its Affiliates, and (Z) the Convertible
Debentures. Such Senior Indebtedness shall continue to be Senior
Indebtedness and be entitled to the benefits of the subordination
provisions of this Indenture irrespective of any amendment,
modification or waiver of any term of such Senior Indebtedness and
notwithstanding that no express written subordination agreement may
have been entered into between the holders of such Senior Indebtedness
and the Trustee or any of the Holders.
"Successor Corporation" has the meaning set out in Subsection
12.1(1)(a).
-8-
"Transaction Value" has the meaning set out in Subsection 7.2(1).
"Trust Indenture", "this Trust Indenture", "Indenture", "this
Indenture", "hereto", "herein", "hereby", "hereunder", "hereof" and
similar expressions refer to this Trust Indenture and not to any
particular Article, Section, Subsection, paragraph, subparagraph,
clause, subclause or other portion hereof, and include any and every
supplemental indenture; and "supplemental indenture" and "indenture
supplemental hereto" include any and every indenture, deed or
instrument supplemental or ancillary hereto or in implementation
hereof; and the expressions "Article", "Section", "Subsection",
"paragraph", "subparagraph", "clause" and "subclause" followed by a
number and/or a letter mean and refer to the specified Article,
Section, Subsection, paragraph, subparagraph, clause or subclause of
this Trust Indenture.
"Trustee" means CIBC Mellon Trust Company and any successors to CIBC
Mellon Trust Company for the time being in the trusts hereby created.
"Trustee Affiliate" has the meaning set out in Subsection 15.4(3).
"TSX" means the Toronto Stock Exchange.
"Unit Distribution" means the amount per Unit actually paid by the Fund
to holders of Units.
"Unit Redemption" has the meaning set out in Subsection6.1(1).
"Units" means trust units of the Fund authorized and issued in
accordance with the Declaration of Trust, as such Units may be
reclassified or changed from time to time as contemplated by Subsection
7.1(3), and includes Reorganization Property.
"U.S. Legend" has the meaning set out in Subsection 4.8(1).
"U.S. Person" has the meaning ascribed thereto in Regulation S
promulgated under the ▇▇▇▇ ▇▇▇.
1.2 Meaning of "outstanding" for Certain Purposes
Every Exchangeable Security certified and delivered by the Trustee
hereunder shall be deemed to be outstanding until it is cancelled or delivered
to the Trustee for cancellation or money and/or property for the payment thereof
has been set aside pursuant to the terms of this Trust Indenture; provided,
however, that:
(a) subject as provided in Subsection 1.2(b) hereof, a Exchangeable
Security does not cease to be outstanding because an Affiliate of
MDC is the Holder of the Exchangeable Security; and
(b) for the purpose of any provision of this Trust Indenture
entitling holders of Exchangeable Securities to vote, sign
consents, requests or other instruments or take any
other action under this Trust Indenture,
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Exchangeable Securities owned legally or equitably by MDC or
any Affiliate of MDC shall be disregarded except that:
(i) for the purpose of determining whether the Trustee shall be
protected in relying on any such vote, consent, request or
other instrument or other action, only the Exchangeable
Securities of which the Trustee has actual notice that they
are so owned shall be so disregarded; and
(ii) Exchangeable Securities so owned which have been pledged in
good faith other than to MDC or any Affiliate of MDC shall
not be so disregarded if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right to vote
such Exchangeable Securities in the pledgee's discretion
free from the control of MDC or any Affiliate of MDC.
1.3 Interpretation Not Affected by Headings
The division of this Trust Indenture into Articles, Sections and other
subdivisions, the provision of a table of contents and the insertion of headings
are for convenience of reference only and shall not affect the construction or
interpretation of this Trust Indenture.
1.4 Extended Meaning
Words importing the singular number only shall include the plural and
vice versa, and words importing the masculine gender shall include the feminine
and neuter genders and vice versa.
1.5 Applicable Law
This Trust Indenture and the Exchangeable Securities shall be governed
by and construed in accordance with the laws of the Province of Ontario and the
laws of Canada applicable therein.
1.6 Language
The parties hereto expressly request and require that this Trust
Indenture and all other documents related thereto be drawn up in English. Les
parties aux presentes conviennent et exigent que cette acte de fiducie et tous
les documents qui s'y rattachent soient rediges en anglais.
1.7 Time of Essence
Time shall be of the essence of this Trust Indenture.
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1.8 Day Not a Business Day
In the event that any day on which, or on or before which, any action
is required to be taken hereunder or under the Exchangeable Securities is not a
Business Day, then such action shall be required to be taken on or before the
required time on the next succeeding day that is a Business Day.
1.9 Meaning of Day
Unless otherwise expressly provided herein, any reference in this Trust
Indenture to anything to be calculated or recorded, on or before, by, as of or
after any date shall mean such thing is to be calculated or recorded, on or
before, by, as of or after 5:00 p.m. (Toronto time) on that date.
1.10 References to Dollar Amounts
All references in this Trust Indenture and in the Exchangeable
Securities to sums of money shall be, unless the contrary is expressly
indicated, to sums in lawful money of Canada. All references to US$ are to sums
in lawful money of the United States.
1.11 Currency Conversion and Indemnity
(1) If, in connection with any action or proceeding brought in connection
with this Trust Indenture or any judgment or order obtained as a result
thereof, it becomes necessary to convert any amount due hereunder in
the currency specified in this Trust Indenture (the "First Currency")
into currency of the United States of America ("U.S. Currency"), then
the conversion shall be made at the rate specified in Subsection
1.11(2) (the "Conversion Rate") on the first Business Day prior to the
day on which payment is received; provided that if the conversion is
not able to be made in such manner in the jurisdiction in which the
action or proceeding is brought, then the conversion shall be made at
the Conversion Rate on the date fixed by the court for such conversion.
It is further provided that if the Conversion Rate on the date of
payment is different from the Conversion Rate on such first Business
Day or on the date fixed for conversion by the court, as the case may
be, the party liable to make the payment (the "payor") shall pay such
additional amount (if any) in U.S. Currency as may be necessary to
ensure that the amount paid on such payment date is the aggregate
amount in U.S. Currency which, when converted at the Conversion Rate on
the date of payment, is the amount due in the First Currency, together
with all costs, charges and expenses of conversion. Any additional
amount owing by the payor to the party or parties entitled to payment
thereof pursuant to the provisions of this Section shall be due as a
separate debt and shall give rise to a separate cause of action and
shall not be affected by or merge into any judgment obtained for any
other amounts due under or in respect of this Trust Indenture.
(2) Where for the purposes of this Trust Indenture it is necessary to
convert on any particular day an amount expressed in lawful money
of Canada into lawful money of the United States of America,
such conversion, unless otherwise expressly
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provided herein, shall be effected at the noon rate of exchange for
such day as reported by the Bank of Canada for conversion of lawful
money of Canada into lawful money of the United States of America.
1.12 Severability
Each of the provisions in this Trust Indenture is distinct and
severable and a declaration of invalidity or unenforceability of any such
provision or part thereof by a court of competent jurisdiction shall not affect
the validity or enforceability of any of the other provisions hereof.
ARTICLE 2
EXCHANGEABLE SECURITY FORMS
2.1 Forms Generally
(1) The Exchangeable Securities and the Trustee's certificates of
authentication shall be in substantially the forms set forth in
Article 18 to this Trust Indenture, with such appropriate insertions,
omissions, substitutions and other variations as are required or
permitted by this Trust Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements
placed thereon as may be required to comply with the rules of the TSX
or as may, consistently herewith, be determined by the officers
executing such Exchangeable Securities, as evidenced by their
execution of the Exchangeable Securities.
(2) The definitive Exchangeable Securities shall be printed, lithographed
or engraved or produced by any combination of these or other methods,
or as otherwise conforms with the rules of any securities exchange on
which the Exchangeable Securities may be listed from time to time, as
determined by the officers of MDC executing such Exchangeable
Securities on behalf of MDC, with the Trustee's consent, as evidenced
by their execution of such Exchangeable Securities.
ARTICLE 3
ISSUES OF EXCHANGEABLE SECURITIES
3.1 Limit of Issue
The aggregate principal amount of Exchangeable Securities that may be
issued hereunder is limited to $34,155,196.25.
3.2 Designation, Terms and Form of Exchangeable Securities
The Exchangeable Securities authorized to be issued hereunder shall
(a) be designated as "Adjustable Rate Exchangeable Securities";
(b) be dated December 8, 2003 and bear interest from and
including December 1, 2003 (subject to Sections 3.11,
5.3, 5.4 and 6.1(2)) at a rate
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per calendar month equal to the Adjustable Rate for
such month (after as well as before the Maturity Date, subject
as herein provided, and after as well as before default and
judgment, with interest on amounts in default, including overdue
interest, at the same rate) and payable monthly (less all
applicable withholding taxes) to Holders of record as of the
last relevant Interest Record Date in arrears on each Interest
Payment Date with the first Interest Payment Date being January
15, 2004 (and at such other date or dates as interest may be
required to be paid hereunder on the Exchangeable Securities),
interest to accrue from day to day in accordance with subsection
3.11(3) from the first day of each month to the last day of each
month and payable in the amount calculated hereunder rounded to
the nearest cent;
(c) mature on the Maturity Date and be payable by MDC on such date
at the Maturity Value plus accrued but unpaid interest to but
excluding the date of payment (less all applicable withholding
taxes), if such Exchangeable Securities have not theretofore
been exchanged or redeemed, provided that, at the option of MDC,
MDC may on the Maturity Date satisfy payment of the Maturity
Value with respect to each Exchangeable Security in respect of
which an Exchange Deposit Date has not occurred by: (i) delivery
of Units with an aggregate value, based on the Current Market
Price at the Maturity Date, equal to the Maturity Value; or (ii)
payment of an amount in cash equal to the Maturity Value;
provided in either case that accrued but unpaid interest on the
Exchangeable Securities shall be paid in cash and that all
applicable withholding taxes shall be withheld;
(d) be issuable only in fully registered form without coupons and
only in denominations of $8.75 and any integral multiple thereof
and shall each have a principal amount of $8.75;
(e) be substantially in the form set out in Article 18 with such
appropriate insertions, deletions, substitutions and variations
as may be required or permitted by the terms of this Trust
Indenture or as may be required to comply with any law or the
rules of any securities exchange as may be determined by the
officers of MDC executing any Exchangeable Security;
(f) be evidenced by a book-entry certificate as provided in
Section 3.6(1) and, following a Non-Book Entry Certification
Event, (i) the Exchangeable Securities shall be issued in
fully registered certificated form without interest coupons;
and (ii) principal and interest on Exchangeable Securities
issued in certificated form will be payable (in the case of
interest in accordance with Section 3.12), the transfer of
such Exchangeable Securities will be registrable and such
Exchangeable Securities will be exchangeable for securities
bearing identical terms and provisions, at the office or agency
of the Trustee; provided, however, that payment of interest
may be made at the option of MDC by mailing a cheque five
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Business Days prior to the Interest Payment Date to the
Holder at such address as appears on the registers provided
in Section 4.1 and, at the option of MDC, principal and
interest may be paid by electronic funds transmission to an
account maintained by the payee located in Canada if
electronic funds transmission instructions which MDC deems
to be appropriate have been received from the Holder in
writing by the Trustee not less than 15 days prior to the
date of payment of such principal or interest; provided,
further, that in the case of payments of principal the
related Exchangeable Security, if any, is first surrendered
to the Paying Agent. Notwithstanding the foregoing, a Holder
will be entitled to receive interest payments, if any, on
any Interest Payment Date and principal on maturity by
electronic funds transmission to an account maintained by
the payee located in Canada if electronic funds transmission
instructions which MDC deems to be appropriate have been
received in writing by the Trustee not less than 15 days
prior to such Interest Payment Date or maturity, provided
that in the case of payments of principal the related
Exchangeable Security, if any, is first surrendered to the
Paying Agent. Any such electronic funds transmission
instructions received by the Trustee shall remain in effect
until revoked by such Holder;
(g) bear such distinguishing letters and numbers as the Trustee may
approve;
(h) in the circumstances described in Section 4.8, bear a legend
regarding the registration requirements of the 1933 Act in
substantially the form set out in Section 18.2;
(i) be exchangeable at the option of the Holder, the terms and
conditions under which such exchange may be completed being set
out in Article 5; and
(j) be redeemable at the option of MDC in accordance with Article 6.
3.3 Issue of Exchangeable Securities
Upon execution and delivery of this Trust Indenture, MDC shall
have the right to execute and deliver the Exchangeable Securities to the Trustee
for certification, and the Trustee shall thereupon certify and deliver those
Exchangeable Securities, upon receipt by the Trustee of:
(a) a Certified Resolution authorizing the issuance and delivery of
the Exchangeable Securities;
(b) a Certificate of MDC that it is not in default in the
performance of any of its covenants herein contained and that it
has complied with all other conditions of this Trust Indenture
in connection with the issue of Exchangeable Securities of which
certification and delivery is requested;
(c) an Order of MDC for the certification and delivery of such
Exchangeable Securities;
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(d) an opinion of Counsel in favour of the Trustee to the effect
that all legal requirements in connection with the issue of
the Exchangeable Securities have been complied with; and
(e) such reports and certificates, if any, as may be required by
any provision hereof or of Indenture Legislation in
connection with the issue, certification and delivery of the
Exchangeable Securities.
3.4 Exchangeable Securities to Rank Pari Passu
Each Exchangeable Security shall be a direct, unsecured obligation
of MDC that is, in part, subordinated to other indebtedness of MDC in
accordance with the provisions of Article 17 and shall rank pari passu with
each other Exchangeable Security without discrimination, preference or
priority whatever may be the actual date or terms of issue of the same.
3.5 No Additional Exchangeable Securities
MDC shall not have any right to authorize the creation of any
subsequent series of Exchangeable Securities hereunder.
3.6 Exchangeable Securities Issuable in Global Form
(1) An Exchangeable Security issued in global form (a "Global
Security") shall represent such of the Exchangeable Securities as
shall be specified therein and shall represent the aggregate
amount of Exchangeable Securities from time to time endorsed
thereon and the aggregate amount of Exchangeable Securities
represented thereby may from time to time be increased or
decreased to reflect exchanges. Such Global Security shall bear a
legend substantially to the following effect: "This Exchangeable
Security is a Global Security within the meaning of the Trust
Indenture hereinafter referred to and is registered in the name of
CDS & Co. as nominee of CDS. This Exchangeable Security is
exchangeable for Units registered in the name of a person other
than CDS or its nominee only in the limited circumstances
described in the Trust Indenture, and no transfer of this
Exchangeable Security (other than a transfer of this Exchangeable
Security as a whole by CDS to a nominee of CDS or by a nominee of
CDS to CDS or another nominee of CDS) may be registered except in
limited circumstances." Any endorsement on a Global Security to
reflect the amount, or any increase or decrease in the amount, of
Exchangeable Securities represented thereby shall be made by the
Trustee in such manner and upon instructions given in an Order of
MDC to be delivered to the Trustee. Subject to the provisions of
Section 3.8 and, if applicable, Section 3.9, the Trustee shall
deliver and redeliver any Global Security in the manner and upon
instructions given by the Person or Persons specified therein or
in the applicable Order of MDC. If an Order of MDC has been, or
simultaneously is, delivered, any instructions by MDC with respect
to endorsement or delivery or re-delivery of a Global Security
shall be in writing.
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(2) Notwithstanding the provisions of Sections 3.12 and 4.6, payment
of principal of, and interest on, any Global Security shall be
made to the Holder.
(3) Notwithstanding the provisions of Section 4.6 and except as
provided in the preceding paragraph, the Corporation, the Trustee
and any agent of the Corporation and the Trustee shall, and shall
be entitled to, treat the Holder of a Global Security as the
Holder for all purposes.
(4) Notwithstanding any other provision of this Trust Indenture, at
any time upon the occurrence of a Non-Book Entry Certification
Event, MDC shall have the option to terminate registration of the
Exchangeable Securities in global form, in which case certificates
representing the Exchangeable Securities in non-book entry,
definitive fully registered form shall be authenticated, issued
and delivered to each Holder or its nominee.
3.7 Global Security
(1) A Global Security may only be issued to CDS or a nominee of CDS
and may be transferred, in whole but not in part, only to another
nominee of CDS, or to a successor depository selected or approved
by MDC or to a nominee of such successor depository.
(2) If at any time a Non-Book Entry Certification Event occurs, the
Corporation will execute, and, subject to Article 3 of this
Indenture, the Trustee, upon receipt of an Order of MDC and in
accordance with Section 3.8, will authenticate and deliver the
Securities in certificated non-book entry, definitive registered
form without coupons, in authorized denominations, and in an
aggregate principal amount equal to the principal amount of the
Global Security in exchange for such Global Security. Upon the
exchange of the Global Security for such Securities in
certificated non-book entry, definitive registered form without
coupons, in authorized denominations, and in an aggregate
principal amount equal to the principal amount of the Global
Security, the Global Security shall be surrendered to and
cancelled by the Trustee. Such Securities in certificated non-book
entry, definitive registered form issued in exchange for the
Global Security shall be registered in such names and in such
authorized denominations as CDS, or a successor depository, as the
case may be, pursuant to instructions from the direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Securities to CDS, or a successor depository,
as the case may be, for delivery to the Persons in whose names
such Securities are so registered.
3.8 Signing of Exchangeable Securities
The Exchangeable Securities shall be under the corporate seal of
MDC or a reproduction thereof (which shall be deemed to be the corporate
seal of MDC) and shall be signed by any two of the Chairman, the President,
the Chief Executive Officer, any Vice-President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of MDC. The
signatures of such officers may be mechanically reproduced in facsimile and
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Exchangeable Securities bearing such facsimile signatures shall, subject to
Section 3.9, be binding upon MDC as if they had been manually signed by
such officers. Notwithstanding that any of the individuals whose manual or
facsimile signature appears on any Exchangeable Security as one of such
officers may no longer hold office at the date of this Trust Indenture or
at the date of such Exchangeable Security or at the date of certification
and delivery thereof, any Exchangeable Security signed as aforesaid shall,
subject to Section 3.9, be valid and binding upon MDC and entitled to the
benefit of this Trust Indenture.
3.9 Certification by Trustee
(1) No Exchangeable Security 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 18 or in some other
form approved by the Trustee, whose approval shall be conclusively
evidenced by the certification thereof by or on behalf of the
Trustee. Such certification by or on behalf of the Trustee upon
any Exchangeable Security shall be conclusive evidence as against
MDC that the Exchangeable Security so certified has been duly
issued hereunder and is a valid obligation of MDC and that the
Holder is entitled to the benefit hereof.
(2) The certificate by or on behalf of the Trustee on Exchangeable
Securities shall not be construed as a representation or warranty
by the Trustee as to the validity of this Trust Indenture or of
the Exchangeable Security (except the due certification thereof
and any other warranties imposed by law) and the Trustee shall in
no respect be liable or answerable for the use made of the
Exchangeable Securities or any of them or of the proceeds thereof.
The certificate by or on behalf of the Trustee on Exchangeable
Securities shall constitute a representation and warranty by the
Trustee that the said Exchangeable Securities have been duly
certified by or on behalf of the Trustee pursuant to the
provisions of this Trust Indenture.
3.10 Replacement of Exchangeable Securities
(1) If at any time a Non-Book Entry Certification Event occurs and any
Exchangeable Security shall become mutilated or be lost, destroyed
or stolen and in the absence of notice that such Exchangeable
Security has been acquired by a good faith purchaser (as defined
in the Business Corporations Act (Ontario) (the "OBCA"), subject
to Subsection 3.10(2), MDC in its discretion may issue, and
thereupon the Trustee shall certify and deliver, a new
Exchangeable Security of like date and tenor as the one mutilated,
lost, destroyed or stolen and in exchange for, and upon surrender
and cancellation of, such mutilated Exchangeable Security or in
lieu of and in substitution for such lost, destroyed or stolen
Exchangeable Security and the new Exchangeable Security shall be
substantially in the form set out in Article 18 as approved by the
Trustee whose approval shall be conclusively evidenced by the
certification thereof and shall be entitled to the benefit hereof
and rank equally in accordance with its terms with all other
Exchangeable Securities issued or to be issued hereunder.
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(2) The applicant for the issue of a new Exchangeable Security
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 MDC and to the Trustee
such evidence of ownership and of the loss, destruction or theft
of the Exchangeable Security so lost, destroyed or stolen as shall
be satisfactory to MDC and the Trustee in their discretion and
such applicant may also be required to furnish an indemnity and
surety bond in amount and form satisfactory to MDC and the Trustee
in their discretion, and shall pay the reasonable charges of MDC
and the Trustee or other registrar in connection therewith.
3.11 Computation of Interest
(1) Every Exchangeable Security, whether issued originally or upon
exchange or in substitution for previously issued Exchangeable
Securities, shall bear interest from and including December 1,
2003 or from and including the last Interest Payment Date on which
interest on the Exchangeable Security shall have been paid or made
available for payment on the outstanding Exchangeable Securities,
whichever shall be the later.
(2) Whenever in this Trust Indenture or the Exchangeable Securities
there is mention, in any context, of the payment of interest, such
mention shall be deemed to include mention of the payment of
interest on amounts in default to the extent that, in such
context, such interest is, was or would be payable pursuant to the
provisions of this Trust Indenture or the Exchangeable Securities
and express mention of interest on amounts in default in any
provision hereof or of the Exchangeable Securities shall not be
construed as excluding such interest in those provisions hereof or
of the Exchangeable Securities where such express mention is not
made.
(3) For purposes of calculating the amount of interest accrued on any
particular date and except as otherwise provided in Sections 5.3,
5.4, 6.1(2) or 10.2, the amount of interest accrued shall be equal
to the amount calculated by multiplying the amount of interest
which was paid on the immediately preceding Interest Payment Date
per Exchangeable Security (or, where the particular date is prior
to the first Interest Payment Date, the amount of the last Unit
Distribution made on or prior to that date) by a fraction, the
numerator of which is the number of days from and including the
first day of the month following the immediately preceding
Interest Record Date (or, where the particular date is prior to
the first Interest Payment Date, December 1, 2003) to but
excluding the particular date, and the denominator of which is the
number of days in the calendar month in which the particular date
falls, provided that if at any time the Fund publicly announces
that the amount of the Unit Distribution to be paid by the Fund
with respect to a month will be different than the Unit
Distribution for the preceding month, then the amount of interest
to accrue shall be adjusted immediately so that the interest paid
with respect to the month corresponds to the Unit Distribution
with respect to such month.
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3.12 Payment
As interest becomes due on each Exchangeable Security (except
interest payable at maturity or upon redemption or exchange which shall be
paid on the Exchange Date or Redemption Date, as applicable, of an
Exchangeable Security) MDC will send or cause to be sent, on or before each
Interest Payment Date, sufficient funds to pay such interest (less all
applicable withholding taxes) payable to the Holder of such Exchangeable
Security and at the option of MDC such payment may be paid by electronic
funds transmission to an account maintained by the payee located in Canada
if electronic funds transmission instructions which MDC deems to be
appropriate have been received from the Holder in writing by the Trustee
not less than 15 days prior to the Interest Payment Date, provided that MDC
is not otherwise directed in writing by the Holder to send payment to some
other person or some other address or, in the case of joint Holders,
payable to all of them and addressed to the joint Holder whose name appears
first in the register at such Holder's last address appearing on the
register unless otherwise directed in writing by all of them to send
payment to some other person or some other address. The forwarding of such
payment or electronic funds transmission will satisfy and discharge the
liability for interest on such Exchangeable Security to the extent of the
sum represented thereby (plus the amount of any tax withheld as aforesaid)
unless, in the case of payment by cheque, such cheque is not paid on
presentation. Notwithstanding the foregoing, in the event of the
non-receipt of any such cheque by the Holder of such Exchangeable Security
or the loss, theft or destruction thereof, MDC upon being furnished with
reasonable evidence of such non-receipt, loss, theft or destruction and
indemnity reasonably satisfactory to it will issue to such Holder a
replacement cheque for the amount of such cheque.
3.13 Payment Agreements for Exchangeable Securities
Notwithstanding anything contained in this Trust Indenture or any
Exchangeable Security to the contrary, MDC may, with the approval of the
Trustee, enter into an agreement with the Holder or with the person for
whom such Holder is acting as nominee providing for the payment or
delivery, without presentation or surrender of the Exchangeable Security or
notation of payment thereon, to such Holder of the principal of and
interest on such Exchangeable Security and all other money or property
payable or deliverable hereunder at a place, and by wire transfer of funds,
courier delivery of property or in such other manner, other than the places
and the manner, respectively, specified in this Trust Indenture and
approved by the Trustee and in such Exchangeable Security as the places and
the manner for such payment or delivery. MDC shall lodge a copy of any such
agreement with the Trustee at least 20 days prior to the next Interest
Payment Date of any Exchangeable Securities to which such agreement
relates. Any payment of the principal of and interest on any such
Exchangeable Security and other money payable or property deliverable
hereunder at such other place or in such other manner pursuant to such
agreement will, notwithstanding any other provision of this Trust Indenture
or the Exchangeable Securities, be valid and binding on MDC, the Trustee
and all Holders who are parties to such an agreement.
3.14 No Fractional Units
No fractional Units shall be delivered in connection with any
delivery of Units at the Maturity Date in accordance with Subsection
3.2(c), but in lieu of such fraction MDC shall
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pay the cash equivalent of such fraction (determined by multiplying the
relevant fraction of a Unit by the Current Market Price at the Maturity Date).
ARTICLE 4
REGISTRATION, TRANSFER, EXCHANGE AND OWNERSHIP
4.1 Register
(1) MDC shall cause to be kept by the Trustee, at the principal office
of the Trustee in Toronto and by the Trustee or such other
registrar as MDC may appoint at such other place or places (if
any) as MDC may designate from time to time with the approval of
the Trustee, registers in which shall be entered all particulars
required by law, including the names and addresses of the Holders
and particulars of the Exchangeable Securities held by them,
respectively, and of all transfers of such Exchangeable
Securities. Such registration shall be noted on the Exchangeable
Securities by the Trustee or other registrar.
(2) No transfer of an Exchangeable Security shall be valid unless made on
one of the registers herein provided for by the Holder or the
executor, administrator or other legal representative of, or an
attorney for, the Holder duly appointed by an instrument in writing in
form and execution satisfactory to the Trustee or other registrar upon
compliance with such reasonable requirements as the Trustee or other
registrar and MDC may prescribe, and unless the name of the transferee
shall have been noted on the Exchangeable Security by the Trustee or
other registrar.
4.2 Transferee Entitled to Registration
The transferee of an Exchangeable Security shall, after the
appropriate form of transfer is lodged with the Trustee or other registrar, and
upon compliance with all other conditions in that behalf required by this Trust
Indenture or by law, be entitled to be entered on the register as the owner of
such Exchangeable Security free from all equities or rights of set-off or
counterclaim between MDC and the transferor or any previous Holder of such
Exchangeable Security, save in respect of equities of which MDC and the
transferor or any previous transferor of such Exchangeable Security are
required to take notice by statute or by order of a court of competent
jurisdiction.
4.3 Charges for Transfer and Exchange
(1) For each Exchangeable Security registered or transferred, the
Trustee or other registrar shall, if required by MDC, and subject
to any limitation prescribed by law, make a reasonable charge;
provided that no charge to a Holder shall be made hereunder for
any registration or transfer of any Exchangeable Security
requested within the period of 60 days from and including the date
of this Trust Indenture.
(2) Payment of any such charges and reimbursement of the Trustee or
other registrar or MDC for any transfer taxes or other
governmental charges required to be paid
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shall be made by the party requesting such exchange, registration or
transfer as a condition precedent thereto.
4.4 Registers Open for Inspection
The registers hereinbefore referred to shall at all reasonable times
be open for inspection by MDC, the Trustee or any Holder. Every registrar
(including the Trustee) from time to time shall:
(a) at the written request of MDC or of the Trustee, furnish MDC or
the Trustee with a list of the names and addresses of the
Holders entered on the register kept by such registrar, showing
the principal amount of the Exchangeable Securities held by each
such Holder and the aggregate principal amount of such
Exchangeable Securities; and
(b) at the written request of any Holder, furnish such a list to
such Holder subject to fulfilment by such Holder of the
conditions prescribed by law in that respect;
in each case as soon as practicable following such request and, in any event,
not later than two Business Days thereafter.
4.5 Closing of Registers
(1) MDC, with the approval of the Trustee, may at any time close any
register of Exchangeable Securities, other than that kept at the
principal office of the Trustee in Toronto, and transfer the
registration of any Exchangeable Securities registered there to
another register and thereafter such Exchangeable Securities shall be
deemed to be registered on such other register. Notice of such
transfer shall be given to the Holders of such Exchangeable
Securities.
(2) Neither MDC nor the Trustee nor any other registrar shall be required
to make transfers pursuant to Section 4.2 of any Exchangeable
Securities on any Interest Payment Date, on the Maturity Date or
during the five Business Days preceding any such date, or on or during
the three Business Days preceding a Redemption Date, provided, for
greater certainty, that the foregoing shall not restrict the ability
of any Holder to exercise the Exchange Right at any time permitted
under the terms hereof.
4.6 Ownership of Exchangeable Securities
(1) Unless otherwise required by law, the person in whose name any
Exchangeable Security is registered shall for all purposes of this
Trust Indenture be and be deemed to be the owner thereof and payment
of or on account of the principal of such Exchangeable Security and
interest thereon and all other amounts payable or property deliverable
under this Trust Indenture or such Exchangeable Security in respect
thereof shall be made only to or upon the order in writing of such
Holder.
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(2) Neither MDC nor the Trustee nor any registrar shall be bound to take
notice of or see to the performance or observance of any duty owed to
a third person, whether under a trust, express, implied, resulting or
constructive, in respect of any Exchangeable Security or otherwise, by
the Holder or any person whom MDC or the Trustee treats, as permitted
or required by law, as the owner or the Holder of such Exchangeable
Security, and MDC or the Trustee, as the case may be, may transfer
such Exchangeable Security on the direction of the person so treated
or registered as the Holder thereof, whether named as trustee or
otherwise, as though that person were the beneficial owner thereof.
(3) The Holder for the time being of any Exchangeable Security shall be
entitled to the principal of and interest on the Exchangeable Security
and all other amounts payable or property deliverable under this Trust
Indenture or such Exchangeable Security, free from all equities or
rights of set-off or counterclaim between MDC and the original or any
intermediate Holder thereof save in respect of equities of which MDC
and the Holder are required to take notice by statute or by order of a
court of competent jurisdiction, and all persons may act accordingly
and the receipt of any such Holder for any such principal, interest or
other amounts payable or property deliverable shall be a good
discharge to MDC and the Trustee for the same and neither MDC nor the
Trustee shall be bound to inquire into the title of any such Holder
save as aforesaid.
(4) Subject to Section 13.18, MDC and the Trustee may treat the Holder of
any Exchangeable Security as the owner thereof without actual
production of such Exchangeable Security for the purpose of any
Holders' Request, requisition, direction, consent, instrument or other
document.
4.7 Record of Payments
The Trustee shall maintain accounts and records evidencing each
payment of principal, interest or other amounts and the delivery of any
property deliverable hereunder in respect of Exchangeable Securities, which
accounts and records shall constitute, in the absence of manifest error, prima
facie evidence thereof.
4.8 Special Provisions Relating to Legended Exchangeable Securities
(1) Any Exchangeable Security issued to a U.S. person, whether pursuant to
Section 3.10, or 4.2 hereof or otherwise, shall bear the legend set
forth in Section 18.2 hereof (the "U.S. Legend"); provided that the
Trustee may remove the U.S. Legend and register in the name of a
transferee a new Exchangeable Security without the U.S. Legend if the
transferor delivers to the Trustee an opinion of United States
counsel, of recognized standing reasonably satisfactory to MDC, that
such transfer is being made in reliance upon the exemption from
registration under the 1933 Act provided by Rule 144 thereunder and
the U.S. Legend is no longer required under applicable state
securities laws and provided further, that the U.S. Legend may also be
removed in the manner provided in Subsection 4.8(2) hereof.
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(2) Upon surrender for registration of transfer of any Exchangeable
Security bearing the U.S. Legend by a person who sold such
Exchangeable Security to a transferee on or through the facilities of
the TSX or otherwise in compliance with Rule 904 of Regulation S under
the 1933 Act, the Trustee shall certify, register and deliver in the
name of such transferee a new Exchangeable Security without the U.S.
Legend representing the principal amount of Exchangeable Securities so
transferred, provided that such transferor has delivered (by facsimile
transmission or otherwise) to the Trustee a duly executed declaration
to the effect of the following (or as MDC may prescribe from time to
time):
"The undersigned (A) represents that the sale of the Exchangeable
Securities, numbers , to which this declaration relates is being made
in reliance on Rule 904 of Regulation S under the United States
Securities Act of 1933, as amended (the "1933 Act") and (B) certifies
that (1) it is not an "affiliate" (as defined in Rule 405 under the
▇▇▇▇ ▇▇▇) of MDC Corporation Inc. or Custom Direct Income Fund, (2)
the offer of such Exchangeable Securities was not made to a person in
the United States and either (i) at the time the buy order was
originated, the buyer was outside the United States, or the seller and
any person acting on its behalf reasonably believe that the buyer was
outside the United States or (ii) the transaction was executed on or
through the facilities of the Toronto Stock Exchange and neither the
seller nor any person acting on its behalf knows that the transaction
has been prearranged with a buyer in the United States and (3) neither
the seller nor any person acting on its behalf engaged in any directed
selling efforts in connection with the offer and sale of such
Exchangeable Securities. Terms used herein have the meanings given to
them by Regulation S."
4.9 Certification by Non-U.S. Holders
Every Non-U.S. Holder of an Exchangeable Security shall be required to
provide to MDC or its agent (or any "qualified intermediary" through which such
Non-U.S. Holder holds its Exchangeable Security) an IRS Form W-8BEN (or a
suitable substitute form or successor form) certifying that such Holder is a
Non-U.S. Holder and indicating whether such Holder is entitled to a reduced
rate of U.S. withholding tax on dividends received from Custom Direct under an
applicable income tax treaty in effect between the United States and such
Holder's country of residence.
Failure to provide such IRS Form W-8BEN (or a suitable substitute form
or successor form) will not result in MDC withholding any amounts in respect of
U.S. withholding tax from any interest payments paid to Non-U.S. Holders or
affect MDC's indemnification obligations under Section 10.11 of this Trust
Indenture.
4.10 Additional Conditions to Exchange of Certain Exchangeable Securities
(1) Notwithstanding anything to the contrary contained in this Trust
Indenture, MDC will not deliver Units in satisfaction of any of its
obligations hereunder to any Holder that is within the United States
or is a United States person (within the meaning of Regulation S
under the 1933 Act), unless such Units are registered
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under the 1933 Act or unless there exists an applicable exemption from
the 1933 Act registration for such delivery, other than an exemption
that results in the delivery of "restricted securities" (within the
meaning of the 1933 Act). The Units have not been and will not be
registered under the 1933 Act. In the absence of such registration or
exemption, MDC shall satisfy its obligations to a Holder by delivering
the cash amount which it may elect to deliver in lieu of such delivery
of Units.
(2) Notwithstanding anything to the contrary in this Trust Indenture, MDC
will not deliver Units in satisfaction of any of its obligations
hereunder to any Holder that is within a province of Canada unless a
prospectus exemption is available or any requisite discretionary
rulings shall have been obtained from the securities regulatory
authority in such province, in each case to ensure that Holders
receive Units that may be resold in any of the provinces of Canada
immediately without the need for a prospectus or a prospectus
exemption under applicable Canadian securities law so long as the Fund
shall be a reporting issuer at the time of the trade, subject to
restrictions under applicable Canadian securities law governing sales
by persons holding sufficient Units to affect materially the control
of the Fund.
ARTICLE 5
RIGHT TO EXCHANGE EXCHANGEABLE SECURITIES
5.1 Exchange Right
(1) Subject as hereinafter provided, each Holder shall have the right,
exercisable at any time after the occurrence of the Exchange Event, to
and including the Maturity Date (unless the principal amount of such
Holder's Exchangeable Securities has not been paid or satisfied on or
before the Maturity Date, in which case such right shall continue
until the date on which such principal amount is paid or satisfied) to
exchange Exchangeable Securities of which such person is the Holder
for Units at the Exchange Rate.
(2) As soon as practicable after the occurrence of the Exchange Event, MDC
shall issue a press release through the facilities of Canada NewsWire
Ltd. advising Holders that they are entitled to exercise their
Exchange Right and shall notify the Trustee in writing of the
occurrence of such Exchange Event.
5.2 Basic Exchange Right
When the Exchange Right is exercised other than in the circumstances
described in Section 5.3 and Section 5.4, each Exchangeable Security will be
exchangeable at the Exchange Rate without payment of accrued but unpaid
interest from the last Interest Record Date, and such right is referred to
herein as the "Basic Exchange Right".
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5.3 Exchange Date After Last Business Day of Month but On or Before
Interest Payment Date
When an Exchange Date occurs after the last Business Day of a month
but on or before the relevant Interest Payment Date in respect of such month,
the Holder exercising its Exchange Right shall receive, in accordance with
Section 5.7, a number of Units per Exchangeable Security exchanged equal to the
Exchange Rate plus, on the relevant Interest Payment Date in respect of such
month, the interest accrued to the end of the month preceding the Exchange
Date.
5.4 Exchange Date Within 30 Days Preceding Maturity Date or Concurrently
with or after Acceleration
In addition to any accrued interest payable pursuant to Section 5.3,
if applicable, when an Exchange Date occurs on, or within the 30 days
preceding, the Maturity Date or concurrently with or after Acceleration, the
Holder exercising its Exchange Right shall receive, in accordance with Section
5.7, a number of Units per Exchangeable Security equal to the Exchange Rate
plus all accrued but unpaid interest to the date of actual payment thereof.
Such interest shall be payable in cash by MDC on or before the Exchange Date.
5.5 Exercise of Exchange Right
(1) Each Beneficial Holder wishing to exercise its Exchange Right with
respect to any or all of its Exchangeable Securities shall do so by
causing a CDS Participant to deliver to CDS at its principal office in
Toronto, on behalf of the Beneficial Holder, an Exchange Notice, the
form of such Exchange Notice to be as prescribed by the applicable CDS
Participant, provided that any expenses associated with the
preparation and delivery of any such Exchange Notice shall be for the
account of the Exercising Beneficial Holder.
(2) Upon delivery of an Exchange Notice to a CDS Participant in accordance
with Subsection 5.5(1), an Exercising Beneficial Holder shall be
deemed to have irrevocably surrendered its Exchangeable Securities for
exchange and to have appointed the relevant CDS Participant to act as
its exclusive settlement agent with respect to the exercise of its
Exchange Right and for the receipt of payment in connection with the
settlement of obligations arising from such exercise of its Exchange
Right.
(3) Any Exchange Notice which CDS determines to be incomplete, not in
proper form or not duly executed shall for all purposes be void and of
no effect, and the Exchange Right to which it relates shall be
considered for all purposes not to have been exercised thereby. In the
event of a determination that an Exchange Notice is incomplete, not in
proper form or not duly executed, CDS shall promptly notify the CDS
Participant which delivered the Exchange Notice. A failure by a CDS
Participant to exercise an Exchange Right or to give effect to the
settlement thereof in accordance with the Exercising Beneficial
Holder's instructions will not
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give rise to any obligations or liability on the part of MDC to the
CDS Participant or the Exercising Beneficial Holder.
5.6 Notice to MDC of Exercise of Exchange Right
The Trustee shall, as soon as practicable and in any event not later
than 2:00 p.m. (Toronto time) on the next Business Day following any date on
which an Exchange Notice has been received, deliver written notice to MDC of
the aggregate principal amount of Exchangeable Securities in respect of which
the Exchange Right was exercised on such date.
5.7 Deposit of Cash or Units
(1) MDC shall as soon as practicable following the Exchange Deposit Date,
and, in any event, not later than ten Business Days following the
Exchange Deposit Date (the "Exchange Date"), deliver to the Trustee a
confirmation by CDS that the Exercising Beneficial Holder has been
registered as a holder of that number of Units to which they are
entitled pursuant to the Exchange Right. MDC may, in lieu of
delivering such confirmation by CDS to the Trustee for this purpose,
direct the Trustee to apply some or all of the Pledged Eligible
Securities to the satisfaction of MDC's obligations hereunder.
(2) The amount of interest to which an Exercising Beneficial Holder is
entitled pursuant to Section 5.3 shall be paid on or before the
relevant Interest Payment Date in the same manner as set out in
Section 3.12.
(3) Notwithstanding any other provision of this Article 5, all payments to
a Holder of interest and all payments to a Holder of amounts or any
delivery to a Holder of property with respect to obligations of MDC to
a Holder in respect of such Holder's exercise of the Exchange Right
shall be subject to the deduction and withholding of all taxes
required by law to be deducted or withheld by MDC or the Trustee or
any other person.
5.8 Confirmation of Unit Ownership
(1) Subject to Sections 4.10 and 5.7, the Trustee shall, as soon as
practicable after the Exchange Date and, in any event, not more than
ten Business Days thereafter, deliver to each relevant Holder, for
each amount of Exchangeable Securities in respect of which an
Exercising Beneficial Holder has exercised its Exchange Right, a
confirmation of the number of Units making up the Fund Unit Payment.
(2) Upon the registration of an Exercising Beneficial Holder on the
register of the CDS Participant as the beneficial owner of Units
and delivery by CDS of confirmation of ownership of such Units,
the Exercising Beneficial Holder shall be deemed to have acquired
any Units evidenced by such registration effective immediately
after the close of business on the Exchange Date and to have
become entitled to all substitutions therefor, all income earned
thereon or accretions thereto and all distributions thereon the
record or effective dates for which occurred on or after the
Exchange Date and the Trustee shall hold the same in
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trust for the benefit of such Exercising Beneficial Holder and shall
deliver or pay the same, together with all income earned thereon or
accretions thereto, to such Exercising Beneficial Holder as soon as
practicable from time to time, provided that no interest shall accrue
on any such distributions notwithstanding a reasonable delay on the
part of the Trustee in delivering such interest.
5.9 Method of Delivery to Holders
Notwithstanding anything in this Trust Indenture to the contrary, any
confirmations, deliveries or payments to be made to a Holder in accordance with
Article 5 shall be delivered to the relevant Holder on the Exchange Date.
5.10 Cancellation of Exchangeable Securities
All Exchangeable Securities in respect of which the Exchange Right
shall have been exercised and the confirmations or deliveries contemplated by
Article 5 shall have been made shall be cancelled by the Trustee in accordance
with Article 11, the Trustee shall amend the register maintained by it pursuant
to Subsection 4.1(1) accordingly and the Global Security shall be amended
accordingly.
5.11 Notice to Holders
Not later than 30 days and not earlier than 60 days prior to the
Maturity Date, MDC shall give notice to the Holders advising Holders of the
Maturity Date and requesting Holders to indicate whether they intend to
exercise their respective Exchange Right prior to the Maturity Date and
stating (a) the manner in which the Exchange Right should be exercised, (b)
the addresses of the Trustee at which the Notice of Exchange may be
deposited, (c) the last day and time for exercising the Exchange Right, (d)
the consequences of failing to exercise the Exchange Right, and (e) such
other matters as MDC and the Trustee may deem appropriate. Not more than 30
days and not less than 15 days prior to the Maturity Date, MDC shall cause
to be published in the Report on Business section of a weekday national
edition of The Globe and Mail and in a French language newspaper of wide
circulation in Quebec, a notice setting out substantially the same
information as is set forth in the notice given by MDC to the Holders
pursuant hereto. The notice shall also be given to "intermediaries", as
such term is defined in National Instrument 54-101 of the Canadian
Securities Administrators at the same time that it is given to Holders.
5.12 Fractional Units
No fractional Units shall be delivered upon the exercise of the
Exchange Right in accordance with Article 5 but in lieu thereof MDC shall
pay to each relevant Holder, at the time contemplated in Subsection 5.8(1),
the cash equivalent thereof (determined by multiplying the relevant
fraction of a Unit by, in the case of exchanges pursuant to the Basic
Exchange Right or in the circumstances referred to in Section 5.3 and
Subsection 5.4, the Current Market Price at the Exchange Deposit Date.
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ARTICLE 6
MDC'S RIGHT TO REDEEM AND PURCHASE
6.1 Redemption
(1) MDC shall have a Redemption Right exercisable in whole at any time
in either of the following circumstances:
(a) Subsequent to the occurrence of the Exchange Event, each
Exchangeable Security will be redeemable by MDC for Units, at a
redemption price equal to the Fund Unit Payment calculated as at
the Redemption Notice Date (the "Unit Redemption"); or
(b) On and after the 2004 Audit Date, and provided no Exchange Event
has occurred, each Exchangeable Security will be redeemable by
MDC for cash, at a redemption price equal to the Fund Cash
Payment calculated as at the Redemption Notice Date (the "Cash
Redemption").
(2) No payment will be made in respect of accrued but unpaid interest on
any Exchangeable Security upon exercise by MDC of a Redemption Right,
provided that if a Redemption Date occurs after the last Business Day
of a month but on or before the relevant Interest Payment Date in
respect of such month, the Holder of the relevant Exchangeable
Security shall receive either (i) in the case of a Unit Redemption,
the Fund Unit Payment plus, on the relevant Interest Payment Date, the
interest payable to the end of the month preceding the Redemption
Date; or (ii) in the case of a Cash Redemption, on the relevant
Interest Payment Date, the Fund Cash Payment plus all accrued interest
up to the Redemption Date.
6.2 Redemption Notice
(1) MDC may exercise the Redemption Right in respect of any Exchangeable
Securities upon, in the case of the Unit Redemption, 10 days' notice,
or, in the case of the Cash Redemption, not more than 60 days' and not
less than 30 days' notice to the relevant Holders of the Exchangeable
Securities to be redeemed (either case being the "Redemption Notice")
by personal delivery or by facsimile transmission, a copy of such
Redemption Notice to be provided to the Trustee concurrently with its
provision to the relevant Holders. The Redemption Notice shall also be
given to "intermediaries" as such term is defined in National
Instrument 54-101 of the Canadian Securities Administrators as soon as
practicable.
(2) The Redemption Notice shall state substantially as follows:
(a) whether Holders are entitled to exercise their Exchange Right
prior to the Redemption Date;
(b) that MDC's Redemption Right has been exercised;
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(c) the record date for determining the Holders who shall receive
proceeds of redemption which shall be not more than three
Business Days before the Redemption Date;
(d) the total principal amount of Exchangeable Securities in respect
of which the Redemption Right is being exercised (which shall be
the total principal amount of Exchangeable Securities then
outstanding);
(e) whether the Redemption Price is to be satisfied by delivery of
the Fund Unit Payment or by payment of the Fund Cash Payment;
(f) the relevant Redemption Date;
(g) that, except as provided in Subsection 6.1(2), the Exchangeable
Securities cease to accrue interest as of the Redemption Date,
in the case of a Cash Redemption, and shall cease to accrue
interest as of the last day of the month preceding the
Redemption Date, in the case of a Unit Redemption;
(h) that upon presentation and surrender of the Exchangeable
Securities, if any, the Holders will obtain payment as specified
in Subsection 6.2(2)(e) in respect of Exchangeable Securities
for which such Holders have not theretofore exercised the
Exchange Right and that such payment will be delivered to the
Holder;
(i) that all applicable withholding taxes will be withheld from
payments made or property delivered in connection with the
redemption or any exchange and the manner in which such taxes
will be calculated; and
(j) any other matters MDC and the Trustee may deem appropriate.
6.3 Procedure for Redemption
(1) On or before the Redemption Date specified in a Redemption Notice, MDC
shall pay or cause to be paid to the Trustee funds sufficient to
permit the Trustee to make any payment to be made to Holders in cash
in respect of the Redemption Right, including payments in respect of
accrued but unpaid interest, and deliver to the Trustee a confirmation
by CDS that the Holder of the Exchangeable Securities being redeemed
has been registered as a holder of that number of Units to which they
are entitled pursuant to the Redemption Notice. MDC may, in lieu of
delivering such confirmation by CDS to the Trustee for this purpose,
direct the Trustee to apply some or all of the Pledged Eligible
Securities to the satisfaction of MDC's obligations hereunder. Such
direction by MDC shall be in writing and shall identify those Pledged
Eligible Securities to be applied.
(2) Subject to Section 4.10 and to receipt by the Trustee of the
Exchangeable Securities of the Holder, and provided no Exchange
Date with respect to such Exchangeable Securities has occurred on
or before the Redemption Date, the Trustee shall deliver to each
Holder, for each Exchangeable Security then
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outstanding, a cheque in respect of any cash payment to be made to
such Holder, including payment in respect of accrued but unpaid
interest, if any, in accordance with Section 6.1(2) and, in
respect of any part of the consideration to be delivered to
Holders in the form of Units, confirmation of ownership of Units.
All taxes shall be deducted or withheld as may be required by law.
At the option of MDC, any payment made pursuant to this subsection
6.3(2) may be paid by electronic funds transmission to an account
maintained by the payee located in Canada if electronic funds
transmission instructions which MDC deems to be appropriate have
been received from the Holder in writing by the Trustee not less
than 15 days prior to the date of such payment.
(3) Upon the registration of the Beneficial Holder in respect of whose
Exchangeable Securities the Redemption Right has been exercised on
the register of the CDS Participant as the beneficial owner of
Units and delivery by CDS of confirmation of ownership of such
Units, the relevant Beneficial Holder shall be deemed to have
acquired the Units evidenced by such registration effective
immediately after the close of business on the Redemption Date and
to have become entitled to all substitutions therefor, all income
earned thereon or accretions thereto and all dividends or
distributions thereon the record or effective dates for which
occurred on or after the Redemption Date and the Trustee shall
hold the same in trust for the benefit of the Beneficial Holder to
be paid over to the Beneficial Holder as soon as practicable,
provided that all applicable withholding taxes shall be withheld.
(4) All Exchangeable Securities in respect of which the Redemption
Right shall have been exercised and the deliveries contemplated by
Subsection 6.3(2) shall have been made, shall be acquired by MDC
and shall be cancelled by the Trustee in accordance with Article
11 and the Trustee shall amend the register maintained by it
pursuant to Subsection 4.1(1) accordingly.
6.4 Method of Delivery to Holders
Notwithstanding anything in this Trust Indenture to the contrary,
any confirmations, deliveries or payments to be made to a Holder in
accordance with Article 6 shall be delivered to the relevant Holder on the
Redemption Date.
6.5 No Fractional Units
No fractional Units shall be delivered in connection with any
delivery of Units at the Redemption Date in accordance with Section 6.3,
but in lieu thereof MDC shall pay the cash equivalent of such fraction
(determined by multiplying the relevant fraction of a Unit by the Current
Market Price at the Redemption Notice Date).
6.6 Purchase of Exchangeable Securities
(1) In addition to the Redemption Right, MDC shall have the right to
purchase up to an aggregate of 1,000,000 Exchangeable Securities
in the open market or by tender or by private contract at any
price.
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(2) If, upon an invitation for tenders, more Exchangeable Securities
than MDC is prepared to accept are tendered at the same lowest
price, the Exchangeable Securities to be purchased by MDC will be
selected by the Trustee pro rata from the Exchangeable Securities
tendered by each tendering Holder who tendered at such lowest
price. For this purpose, the Trustee may make, and from time to
time amend, regulations with respect to the manner in which
Exchangeable Securities may be so selected and regulations so made
shall be valid and binding upon all Holders and, notwithstanding
the fact that, as a result thereof, one or more of such
Exchangeable Securities become subject to purchase in part only.
If a Non-Book Entry Certification Event has occurred, the Holder
of any Exchangeable Security of which a part only is purchased,
upon surrender of such Exchangeable Security for payment, shall be
entitled to receive, without expense to such Holder, one or more
new Exchangeable Securities for the unpurchased part so
surrendered and the Trustee shall certify and send such new
Exchangeable Security or Exchangeable Securities upon receipt of
the Exchangeable Security so surrendered. Exchangeable Securities
so purchased shall be cancelled by the Trustee and the Trustee
shall confirm such action to MDC and such Exchangeable Securities
will not be reissued.
6.7 Priority of Exchange Right Over Cash Redemption
Notwithstanding anything in this Article 6 to the contrary, if MDC
has given a Redemption Notice relating to a Cash Redemption and if the
Exchange Event occurs before the Redemption Date, a Holder will be entitled
to exercise the Exchange Right in priority to MDC's Redemption Right by
giving an Exchange Notice as provided in Article 5. Where the Holders are
entitled to exercise their Exchange Right in priority to MDC's Redemption
Right, any Redemption Notice given by MDC shall include a statement of this
priority.
ARTICLE 7
ADJUSTMENTS
7.1 Adjustment upon Consolidation or Subdivision
(1) If the Fund shall, after the date hereof, (a) subdivide, split or
redivide the outstanding Units into a greater number of Units, or
(b) reduce, combine or consolidate the Units into a smaller number
of Units (either of such events in clauses (a) and (b) being
herein called a "Unit Reorganization"), then, in any such event,
the Exchange Rate shall be adjusted as of the effective date in
the case of either (a) or (b), so that the Holder of any
Exchangeable Securities shall thereafter be entitled to receive
the number of Units which such Holder would have owned or been
entitled to receive immediately following any Unit Reorganization
had such Exchangeable Securities been exchanged immediately prior
to the effective date, such adjustment to be made such that the
applicable rate will equal the rate determined by multiplying the
Exchange Rate in effect immediately prior to the effective date by
a fraction (the "Exchange Rate Reorganization Ratio"), the
numerator of which shall be the number of Units outstanding
immediately after giving effect to such Unit Reorganization and the
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denominator of which shall be the number of Units outstanding
immediately prior to the record date or the effective date, as the
case may be. Each such adjustment shall be made successively.
(2) If the Fund shall, after the date hereof, fix a record date for the
issue of options, rights or warrants to all or substantially all of
the holders of Units entitling them to subscribe for or purchase Units
or securities convertible or exchangeable into Units (other than
rights to purchase Units pursuant to a plan for the reinvestment of
distributions) at a price per Unit (or having a conversion or exchange
price per Unit) less than 95% of the Current Market Price on the
earlier of (a) the second trading day prior to such record date and
(b) the date on which the Fund publicly announces its intention to
make such issuance, then in each such case the Exchange Rate shall be
adjusted effective immediately after such record date so that it will
equal the rate determined by multiplying the Exchange Rate in effect
immediately prior to such record date by a fraction (the "Exchange
Rate Adjustment Ratio"), the numerator of which shall be the number of
Units outstanding immediately prior to such record date, plus such
number of additional Units offered for subscription or purchase
pursuant to such options, rights or warrants (or into which the
convertible or exchangeable securities so offered are convertible or
exchangeable) and the denominator of which shall be the number of
Units outstanding immediately prior to such record date, plus such
number of additional Units which the aggregate offering price of the
total number of Units so offered for subscription or purchase pursuant
to such options, rights or warrants (or the aggregate conversion or
exchange price of the convertible or exchangeable securities so
offered) would purchase at such Current Market Price, which shall be
determined by multiplying such total number of Units by the exercise
price of such options, rights or warrants (or of such convertible or
exchangeable securities) and dividing the product so obtained by such
Current Market Price. To the extent that such options, rights or
warrants are not exercised (or such convertible or exchangeable
securities are not converted or exchanged), the Exchange Rate shall be
readjusted to the rate, prices and amounts which would then be in
effect had such adjustments for the issuance of such options, rights
or warrants been made upon the basis of only the number of Units
actually delivered. Each such adjustment shall be made successively.
(3) If there is any reclassification of Units at any time outstanding
(including as a result of an amalgamation, arrangement, merger or
similar transaction), then each Holder of an Exchangeable Security
in respect of which the Exchange Right or the Redemption Right has
been exercised, or in respect of which payment is due on the
Maturity Date or the Default Amount has become payable on
Acceleration will be entitled to receive, and shall accept, in
lieu of the Units to which such Holder was theretofore entitled
upon such exercise, the kind of securities which such Holder would
have been entitled to receive immediately following such
reclassification or change had such Holder been the registered
holder of the Units to which such Holder was entitled immediately
prior to such reclassification or change. For the purpose of
determining the number of such reclassified or changed securities
to which each such Holder is entitled, and must accept, and the
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cash equivalent therefor by which MDC may satisfy its obligations
pursuant to the Exchange Right and the Redemption Right or upon
the Maturity Date or Acceleration following any such
reclassification or change, each reference to Units in the
definitions of Exchange Rate, Fund Unit Payment, and Current
Market Price shall be deemed to be a reference to securities of
the kind into which the Units have been reclassified or changed,
and all provisions of this Trust Indenture, including, without
limitation, the provisions of this Article 7, shall be interpreted
so that the consideration to be received by Holders upon exercise
of the Exchange Right or the Redemption Right or upon the Maturity
Date or Acceleration, whether in Units or by way of cash payment
based upon the Current Market Price of such Units, shall, to the
extent possible, be equal in value to the shares or cash the
Holder would have so received had the reclassification or change
not occurred.
(4) All adjustments to the Exchange Rate shall be calculated to the
nearest 1/10,000th of a Unit (or if there is not a nearest
1/10,000th of a Unit, to the next lower 1/10,000th of a Unit). No
adjustment in the Exchange Rate shall be required unless such
adjustment would require an increase or decrease of at least one
percent therein; provided, however, that any adjustments which by
reason of this Subsection are not required to be made shall be
carried forward and taken into account in any subsequent
adjustment.
7.2 Adjustment upon Reorganization Event
(1) In the event of (i) any amalgamation, arrangement, merger or
similar transaction of the Fund, or of a successor to the Fund,
which does not result in holders of Units receiving Units of the
Fund or a successor to the Fund, (ii) a transaction which results
in not less than 90% of the outstanding Units being owned by a
single person or group of persons acting jointly or in concert and
which does not result in holders of Units receiving Units of the
Fund or a successor to the Fund, (iii) any sale, lease or other
disposition involving all or substantially all of the assets of
the Fund, all or substantially all of the proceeds of which are
distributed to holders of Units, or (iv) any liquidation,
dissolution or winding-up of the Fund or any successor to the Fund
(any such event being herein referred to as a "Reorganization
Event"), the Exchange Rate will be adjusted to provide that each
Holder, upon exchange or redemption of Exchangeable Securities
pursuant to the Exchange Right or the Redemption Right, will
receive, with respect to each Exchangeable Security, cash in an
amount equal to the Fund Unit Payment multiplied by the
Transaction Value. For this purpose, "Transaction Value" means (x)
for any cash received in any such Reorganization Event, the amount
of cash received per Unit, (y) for any property other than cash or
securities received in any such Reorganization Event, an amount
equal to the market value of such property received per Unit as
determined by an Independent Investment Dealer retained by the
Directors for that purpose, and (z) for any securities received in
any such Reorganization Event, an amount equal to the market value
(determined in a manner consistent with the determination of
Current Market Price) of such securities received per Unit,
determined, in the case of each of clauses (y) and (z)
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as of the Exchange Deposit Date or the Redemption Notice Date, as
the case may be. Notwithstanding the foregoing, in lieu of
delivering cash as provided above, MDC may at its option deliver
an equivalent value of securities or other property received in
such Reorganization Event, determined in accordance with clause
(y) or (z) above, as applicable. If MDC elects to deliver
securities or other property, the Holders will be responsible for
the payment of any and all brokerage and other transaction costs
upon the sale of such securities or other property. The kind and
amount of securities into which the Exchangeable Securities shall
be so exchangeable at the election of MDC after a Reorganization
Event shall be subject to adjustment as described in Section 7.1
mutatis mutandis following the date of completion of such
Reorganization Event.
(2) The foregoing adjustments will be made successively whenever any
Reorganization Event may occur.
7.3 Other Actions
In the event that the Fund takes any action affecting or relating
to Units other than any action contemplated by Sections 7.1 and 7.2 which,
in the opinion of the Directors, would prejudicially affect the rights of
the Holders, the Exchange Rate shall be adjusted in such a manner, if any,
and at such time, by action of the Directors as they may in their sole
discretion determine to be fair and equitable in the circumstances to the
Holders, subject to the prior written consent of the TSX.
7.4 Notice of Adjustments and Certain Other Events
(1) Whenever the Exchange Rate is adjusted as herein provided, MDC
shall:
(a) forthwith as soon as practicable compute the new Exchange
Rate referred to in accordance with Sections 7.1, 7.2 or 7.3
hereof and prepare and deliver to the Trustee a Certificate
of MDC setting forth the adjusted Exchange Rate, the method
of calculation thereof in reasonable detail, and the facts
requiring such adjustment and upon which such adjustment is
based; and
(b) forthwith as soon as practicable after delivery of such
Certificate of MDC give notice to the Holders of the
outstanding Exchangeable Securities of the occurrence of
such event and a statement in reasonable detail setting
forth the method by which the adjustment to the Exchange
Rate was determined and setting forth the revised Exchange
Rate.
(2) If at any time while any of the Exchangeable Securities are
outstanding MDC receives notice that it has been publicly
announced by the Fund that any of the events which could result in
an adjustment pursuant to Sections 7.1, 7.2 or 7.3 has occurred,
or will occur, then MDC shall as soon as practicable deliver to
the Trustee and to Holders a notice stating (x) the record date,
if known by MDC, as of which the holders of Units to be entitled
to such dividend, issue or distribution are to be determined,
or (y) the date, if known by MDC, on which such
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subdivision, consolidation, reclassification or Reorganization
Event is expected to become effective.
(3) If a dispute shall at any time arise with respect to the adjustments
provided for in Sections 7.1, 7.2 or 7.3, such dispute shall be
conclusively determined by the Directors acting in good faith and any
such determination, subject to the prior written consent of the TSX,
shall be binding upon MDC, the Trustee and the Holders.
(4) The Trustee, acting reasonably, may act and rely on any adjustment
calculation provided by MDC pursuant to this Article 7. The Trustee
shall not at any time be under any duty or responsibility to any
Holder to determine whether facts exist which may require any
adjustment contemplated by this Article 7. The Trustee shall not at
any time be under any responsibility relating to the valid issuance or
value of any shares, Units or other securities which may at any time
be issued or delivered pursuant to this Article 7.
ARTICLE 8
SECURITY AND RELATED COVENANTS
8.1 Pledge of Shares
As security for MDC's obligations to deliver cash, Units or a
combination thereof upon the exercise of the Exchange Right, MDC hereby grants
to the Trustee for the benefit of the Holders a continuing security interest in
and by way of a charge and pledge of (i) the Initial Pledged Shares; (ii) any
replacements thereof, substitutions therefor or additions thereto; (iii) all
certificates and instruments evidencing or representing the Initial Pledged
Shares and/or such replacements and/or substitutions and/or additions; and (iv)
all proceeds of (i), (ii) and (iii) above; to have and to hold the same and,
subject to Sections 8.6 and 8.7, all rights thereby conferred unto the Trustee,
but in trust nevertheless for the benefit and security of Holders for the
purposes described above without preference or priority and for the uses and
purposes and with the powers and authorities and subject to the terms and
conditions set forth in this Trust Indenture. MDC and the Trustee acknowledge
that MDC delivered the Initial Pledged Shares to the Trustee concurrently with
the execution of this Trust Indenture.
8.2 Covenants Concerning the Pledged Eligible Securities, etc.
(1) MDC may not sell, transfer or otherwise dispose of all or any part
of the Pledged Eligible Securities, unless at the time of such sale,
transfer or other disposition (i) no Event of Default shall have
occurred and be continuing or would be occasioned thereby and (ii)
the Pledged Eligible Securities shall have a Market Value not less
than the aggregate Current Market Price of the number of Units into
which the then outstanding Exchangeable Securities are exchangeable
(the "Secured Amount"). If at any time thereafter, the Market Value
of the Pledged Eligible Securities shall be less than the Secured
Amount, MDC will pledge and shall deliver additional Eligible
Securities to the Trustee so that the Market Value of the Pledged
Eligible Securities as at the time of such pledge is not less than the
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Secured Amount. MDC shall provide the Trustee with an Officer's
Certificate of MDC and a certificate of an Independent Investment
Dealer selected by the Directors to the effect that the Market Value
of the Pledged Eligible Securities is not less than the Secured
Amount upon the pledge of additional Eligible Securities pursuant to
this Subsection 8.2(1).
(2) If at any time the Market Value of the Pledged Eligible Securities
exceeds the Secured Amount, and provided that no Event of Default
shall have occurred and be continuing or would be occasioned thereby,
MDC may require the Trustee to release Pledged Eligible Securities by
providing the Trustee with an Officers' Certificate of MDC and a
certificate of an Independent Investment Dealer selected by the
Directors for that purpose, both to the effect that the Market Value
of the remaining Pledged Eligible Securities would not be less than
the Secured Amount.
(3) If at any time an adjustment is required to be made to the Fund Unit
Payment in accordance with Article 7, and if, at such time, the
Pledged Eligible Securities are Units, then the same adjustment
shall be made, mutatis mutandis, to the number of Initial Pledged
Shares, and if such adjustment results in an increase in the number
of Initial Pledged Shares, MDC will forthwith as soon as practicable
deliver and pledge additional Eligible Securities to the Trustee so
that the Market Value of the Pledged Eligible Securities as at the
time of such pledge is not less than the Secured Amount as at the
time of such pledge.
(4) If a Reorganization Event results in the Pledged Eligible Securities
being exchanged for Reorganization Property, such Reorganization
Property shall constitute Pledged Eligible Securities.
8.3 Further Security
As further security for MDC's obligations to deliver cash, Units or
a combination thereof upon the exercise of the Exchange Right, MDC hereby
grants to the Trustee for the benefit of the Holders a continuing security
interest in and by way of a charge and pledge of (i) all Eligible Securities
delivered to the Trustee under Sections 8.1 and 8.2, (ii) any replacements
thereof, substitutions therefor or additions thereto, (iii) all certificates
and instruments evidencing or representing such Eligible Securities and/or
such replacements, and/or substitutions and/or additions, and (iv) all
proceeds of (i), (ii) and (iii) above, to have and to hold the same, and
subject to Sections 8.6 and 8.7, all rights thereby conferred unto the
Trustee but in trust nevertheless for the benefit and security of Holders for
the purposes described above without preference or priority and for the uses
and purposes and with the powers and authorities and subject to the terms and
conditions set forth in this Trust Indenture.
8.4 Periodic Certification as to Market Value of Pledged Eligible Securities
In the event that MDC substitutes Eligible Securities, MDC
will deliver an Officers' Certificate of MDC to the Trustee every 20
days until the Maturity Date and from time
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to time at the written request of the Trustee certifying that the
Market Value of the Pledged Eligible Securities is not less than the
Secured Amount.
8.5 Delivery of Pledged Eligible Securities
Certificates representing all Pledged Eligible Securities, including
those pledged as additional or replacement security pursuant to Sections 8.1
and 8.3 hereof, shall be endorsed in blank for transfer or accompanied by
stock powers of attorney satisfactory to the Trustee. The Pledged Eligible
Securities shall remain in the custody of the Trustee or its nominee in the
Province of Ontario.
8.6 Voting of Pledged Eligible Securities
MDC shall be entitled to exercise all voting rights from time
to time exercisable in respect of the Pledged Eligible Securities and give
consents, waivers and ratification in respect thereof and the Trustee shall take
such action, if any, at the expense of MDC, as is required to give effect to
MDC's decisions in this regard; provided, however, that no vote shall be cast or
consent, waiver or ratification given or action taken which MDC knows or has
reasonable grounds to believe would have the effect of imposing any restriction
on the transferability of any of the Pledged Eligible Securities. All such
rights of MDC to vote and give consents, waivers and ratifications shall cease
immediately upon the enforcement of the security in accordance with Section 8.8.
8.7 Distributions on Pledged Eligible Securities
MDC shall be entitled to receive all cash dividends or other
distributions made with respect to the Pledged Eligible Securities. All
such rights of MDC to dividends or other distributions on the Pledged
Eligible Securities shall cease immediately upon the enforcement of the
security in accordance with Section 8.8.
8.8 Enforcement
(1) The Trustee shall be entitled to enforce the security constituted
in Article 8 upon the occurrence of an Exchange Default.
(2) In connection with the enforcement of the security constituted in
this Article 8, the Trustee may:
(a) complete the blanks in any transfer in blank or power of
attorney in respect of any Pledged Eligible Securities with
such names and in such manner as the Trustee may determine
and seal and deliver the same after such blanks have been
filled in;
(b) realize upon the Pledged Eligible Securities, or any part
thereof, by taking steps to register the Pledged Eligible
Securities in the name of the Trustee (or its agent) if such
registration has not already occurred, to enable it to
enforce the security hereof;
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(c) exercise all rights of ownership of and all other rights
attaching to the Pledged Eligible Securities, or any part
thereof, as if the Trustee were the absolute owner thereof, all
in such manner and at such time or times as may seem to it
advisable, without notice to MDC except as required by law;
(d) sell the Pledged Eligible Securities, or any part thereof, by
public or private sale, upon such terms (including as to time
and method of payment and security or otherwise) as the Trustee
may prescribe; and
(e) exercise any other right or remedy available to the Trustee at
law or equity.
(3) The Trustee may exercise any of its rights and remedies
independently or in combination and at any time and from time to
time. The failure to exercise any particular right or remedy
shall not preclude the future exercise of that or any right or
remedy.
8.9 Release of Pledged Eligible Securities
(1) Upon receiving a written direction from MDC in accordance with Section
5.7 or Subsection 6.3(1) with respect to releasing Pledged Eligible
Securities to satisfy, in whole or in part, the obligations of MDC
pursuant to the exercise by Holders of the Exchange Right or by MDC of
the Redemption Right, the Trustee shall take such steps and execute
such documents and assignments as shall be necessary to release the
required number of Pledged Eligible Securities from the trust hereby
created, to release and discharge the security interest therein, and
to deliver such Pledged Eligible Securities to Holders in accordance
with the direction, provided that the direction shall contain
sufficient detail for these purposes.
(2) Upon receiving a written direction from MDC with respect to releasing
Pledged Eligible Securities to satisfy, in whole or in part, the
obligations of MDC upon the Maturity Date or upon Acceleration, and
provided that MDC shall have paid to the Trustee sufficient funds to
permit the Trustee to make any payment to be made to Holders in cash
on the Maturity Date in accordance with Subsection 3.2(c) or on
Acceleration in accordance with Subsection 10.2(1), as the case may
be, and in respect of any other amounts payable hereunder, and
provided that the Pledged Eligible Securities to which such direction
relates are sufficient to permit the Trustee to make any delivery to
be made to Holders in Units on the Maturity Date in accordance with
Subsection 3.2(c) or on Acceleration in accordance with Subsection
10.2(1), as the case may be, the Trustee shall take such steps and
execute such documents and assignments as shall be necessary to
release the required number of Pledged Eligible Securities from the
trust hereby created, to release and discharge the security interest
therein, and to deliver such Units to Holders in accordance with the
direction.
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8.10 Further Assurances
MDC shall from time to time take all such action and execute and
deliver all such deeds, instruments, agreements, financing statements or
registration forms as may in the opinion of Counsel be required to further
perfect or protect the security interests and charges created by this Article
8, and shall cause the registration, filing or recording of each such deed,
instrument, agreement, financing statement or registration form in each
jurisdiction in which, in the opinion of Counsel, such registration, filing or
recording may be necessary or of advantage in perfecting, maintaining or
protecting the security hereby created or intended to be created hereby. All
such further assurances shall be at MDC's expense.
8.11 Release of Pledge of Shares
MDC's pledge of the Initial Pledged Shares and any Pledged Eligible
Securities, if applicable, shall be released in its entirety upon payment of
the Fund Unit Payment in the case of a Unit Redemption or the Fund Cash Payment
in the case of a Cash Redemption, in accordance with Article 6 for the
outstanding Exchangeable Securities.
ARTICLE 9
COVENANTS OF MDC AND OF THE FUND
9.1 General Covenants
MDC covenants with the Trustee that so long as any Exchangeable
Securities remain outstanding:
(a) it will well, duly and punctually pay or cause to be paid to
every Holder of every Exchangeable Security, the principal
thereof, interest accrued thereon (including, in the case of
default, interest on the amount in default), at the dates and
places, in the currency and in the manner mentioned herein;
(b) it will at all times comply with all other provisions of this
Trust Indenture to be complied with by MDC; and
(c) it will keep proper books of account in accordance with
accounting practice generally accepted in Canada or other
relevant jurisdictions and will, if and whenever it is so
required in writing by the Trustee, file with the Trustee a copy
of each annual or other regular periodic report of MDC furnished
to its shareholders after the date hereof.
9.2 Not to Accumulate Interest
In order to prevent any accumulation after maturity of unpaid
interest, MDC covenants with the Trustee that it will not, directly or
indirectly, extend or assent to the extension of time for payment of any
interest payable on Exchangeable Securities or be a party to or approve any
such arrangement by funding interest or in any other manner. If the time
for payment of any of said interest shall be so extended, whether for
a definite period or otherwise,
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the Holders entitled to such interest shall not be entitled in case of
default hereunder to the benefit of this Trust Indenture except subject to
the prior payment in full of the principal of all Exchangeable Securities
and of all interest on such Exchangeable Securities, the payment of which
has not been so extended, and of all other moneys payable hereunder.
9.3 Certificates of Compliance
(1) Within 120 days after the end of each financial year of MDC (and in
any event within 12 months after the date hereof and thereafter within
12 months after the date of the latest such certificate) and at any
other time if requested by the Trustee, MDC shall furnish the Trustee
with a Certificate of MDC, certifying that after reasonable
investigation and inquiry MDC has complied with all covenants,
conditions or other requirements contained in this Trust Indenture,
the non-compliance of which would, with the giving of notice, lapse of
time or otherwise, constitute an Event of Default hereunder, or, if
such is not the case, setting forth with reasonable particulars the
circumstances of any failure to comply and steps taken or proposed to
be taken to eliminate such circumstances and remedy such Event of
Default, as the case may be.
(2) Within 45 days after the end of each financial quarter of MDC and
at any other time if requested by the Trustee, MDC shall furnish
the Trustee with a Certificate of MDC certifying that no material
adverse change in the business or affairs of MDC has occurred.
9.4 Trustee's Remuneration and Expenses
MDC 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 created hereby (including the
reasonable fees and disbursements of its Counsel and all other advisers and
assistants not regularly in its employ), both before any default hereunder
and thereafter until all duties of the Trustee under such trusts are
finally and fully performed, except any such expenses, disbursements or
advances as may arise from the negligence or wilful misconduct of the
Trustee. Any amount due under this Section and unpaid 30 days after request
for such payment will bear interest from the expiration of such 30 days at
a rate per annum equal to the rate then charged by the Trustee with respect
to commercial loans in Canadian currency made in Canada from time to time.
After default, all amounts so payable and the interest thereon shall be
payable out of any funds coming into the possession of the Trustee or its
successors in the trusts hereunder in priority to the payment of the
principal of and interest on the Exchangeable Securities.
9.5 Performance of Covenants by Trustee
If MDC fails to perform any of its covenants contained in this
Trust Indenture, the Trustee may itself perform any of such covenants
capable of being performed by it, but will be under no obligation to do so.
All sums expended or advanced by the Trustee for such purpose
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will be repayable as provided in Section 9.4. No such performance or
advance by the Trustee shall relieve MDC of any default hereunder.
9.6 Qualification of Units
The secondary offering of Units to be issued upon the exchange of
the Custom Direct Shares will be distributed by the Fund pursuant to
certain prospectus exemptions available in each of the provinces of Canada.
The Units have not been and will not be registered under the 1933 Act or
any state securities laws and, subject to certain exemptions, may not be
offered or sold in the United States or to, or for the account or benefit
of, U.S. Persons (as defined by Regulation S under the 1933 Act).
9.7 Maintenance of Listing
MDC will use its reasonable best efforts to ensure that all of the
outstanding Exchangeable Securities shall be listed and posted or admitted
for trading on the facilities of the TSX for as long as there are
sufficient amounts of Exchangeable Securities outstanding and numbers of
Holders thereof to satisfy the listing requirements of the TSX.
9.8 The Fund as a Reporting Issuer and Maintenance of Listing
The Fund covenants that, for as long as any Exchangeable
Securities are outstanding, it will use its reasonable best efforts to
maintain its status as a reporting issuer not in default under the
legislation administered by the Ontario Securities Commission or under any
similar provincial legislation of any of the other provinces of Canada or
any similar Canadian federal legislation hereinafter enacted and that it
will use its reasonable best efforts to ensure that all of the Units shall
remain listed and posted or admitted for trading on the facilities of the
TSX for so long as there are any Exchangeable Securities outstanding.
9.9 Provision of Documentation Relating to the Fund
MDC covenants that it will arrange for any continuous disclosure
documentation and other informational material provided by the Fund to
holders of Units to be mailed to Beneficial Holders as soon as practicable
after the Fund provides such documentation or other material to holders of
Units.
ARTICLE 10
DEFAULT AND ENFORCEMENT
10.1 Events of Default
(1) Each of the following events is herein sometimes referred to as an
"Event of Default":
(a) MDC fails to make payment of the principal of any
Exchangeable Security when the same becomes due under any
provision hereof or of such Exchangeable Security, and any
such default shall have continued for a period of 30 days
(an "Exchange Default");
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(b) MDC makes default in payment of any interest due on any
Exchangeable Security and any such default shall have
continued for a period of 5 days;
(c) an order shall be made or an effective resolution shall be
passed for the winding-up or liquidation of MDC, except in
the course of carrying out, or pursuant to, a transaction
which is permitted under Article 12;
(d) any proceeding shall be instituted against MDC or applying
to a substantial part of its property or assets seeking to
adjudicate it a bankrupt or insolvent, or seeking
liquidation, dissolution, winding-up, reorganization,
arrangement, adjustment, protection, relief or composition
of it or any substantial part of its property or debt under
any law relating to bankruptcy, insolvency or reorganization
or relief of debt (including, without limitation, any
application under the Companies' Creditors Arrangement Act
or, with respect to relief of debt, under the corporate law
applicable to MDC), or seeking an order for relief or the
appointment of a receiver, trustee or other similar official
for it or for any substantial part of its property or assets
and such proceeding shall have continued undismissed or
unstayed for 60 days, or a creditor or creditors of MDC or
any other interested party shall privately appoint a
receiver, trustee or similar official for any substantial
part of the property or assets of MDC, and, if MDC shall be
contesting such appointment in good faith, such appointment
shall continue for 60 days or any such action or proceeding
shall have been consented to or not expeditiously opposed by
MDC;
(e) any proceeding shall be instituted by MDC seeking to
adjudicate it a bankrupt or insolvent, or seeking
liquidation, dissolution, winding-up, adjustment,
protection, relief or composition of it or any of its
property or debt or making a proposal with respect to it
under any law relating to bankruptcy, insolvency or
reorganization or relief of debts (including, without
limitation, any application under the Companies' Creditors
Arrangement Act or, with respect to relief of debt, the
corporate law applicable to MDC) or seeking an order for
relief or the appointment of a receiver, trustee or other
similar official for it or for any of its property or
assets, or MDC shall take corporate action to authorize any
such proceeding;
(f) an encumbrancer shall legally take possession of the
property of MDC or any part thereof which is, in the opinion
of the Trustee, acting and relying on an opinion of Counsel,
a substantial and material part thereof or the Pledged
Eligible Securities or a distress or execution or any
similar process be levied or enforced against such property
and remains unsatisfied for such period as would permit such
property or such part thereof to be sold thereunder;
(g) MDC shall neglect to carry out or observe any other covenant
or condition herein on its part to be observed or performed
and, notice in writing
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having been given by the Trustee to MDC to put an end to the
same, MDC shall fail to make good such default within a
period of 60 days after the giving to it of such notice,
unless the Trustee (having regard to the subject matter of
such neglect or non-observance) shall have agreed to a
longer period and, in such event, within the period agreed
to by the Trustee; and
(h) a material adverse change in the business or affairs of MDC,
provided that the Trustee shall be under no duty or
obligation to make any enquiry as to whether or not there
has been such a material adverse change in the business or
affairs of MDC except in accordance with the provisions of
Section 9.3(2).
(2) For greater certainty, an Event of Default shall not arise under
Subsections 10.1(1)(d), (e) or (f) as a result of any proceeding,
possession, distress, execution or any similar process which is
instituted against or applies to the property, assets or debt of
any person in which MDC has an interest.
(3) Upon the occurrence of an Event of Default, MDC shall give notice
advising the Trustee and Holders of every Event of Default so
occurring and continuing at the time the notice is given and, if
applicable, that Holders have a right to exercise their Exchange
Right at any time prior to payment of the Default Amount.
10.2 Acceleration on Default
(1) In case an Event of Default shall have occurred and be continuing,
the Trustee may, in its discretion, and shall, upon receipt of a
Holders' Request, but subject to the provisions of Section 10.3,
declare, by written notice to MDC, the principal of and accrued
but unpaid interest on all Exchangeable Securities then
outstanding and all other moneys payable hereunder to be due and
payable and the same shall forthwith become immediately due and
payable, anything herein to the contrary notwithstanding, and MDC,
subject to the following sentence, shall forthwith pay to the
Trustee for the benefit of the Holders (other than Holders of
Exchangeable Securities in respect of which an Exchange Date has
occurred prior to the date of payment) the Default Amounts
relating to all such Exchangeable Securities and all other moneys
payable hereunder together with subsequent interest thereon until
payment is received by the Trustee. MDC shall be entitled to pay
the amounts owing to Holders pursuant to this Subsection 10.2(1)
either in cash or through the delivery of that number of Units
having an aggregate Current Market Price as at the date of payment
not less than the Default Amounts relating to the Exchangeable
Securities held by such Holders provided that MDC shall withhold
all applicable withholding taxes. If MDC elects to satisfy some of
its obligations pursuant to Subsection 10.2(1) with respect to any
Exchangeable Security through the payment of Units, MDC shall
deposit with the Trustee a number of Units sufficient to permit
the Trustee to deliver to Holders that number of Units which would
satisfy such obligations, determined in accordance with the
foregoing sentence. MDC may, in lieu of delivering Units to the
Trustee for this purpose, direct the Trustee to apply some or
all of the Pledged Eligible Securities to the
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satisfaction of such obligations, subject to Subsection 8.9(2),
provided that the relevant direction shall contain sufficient
detail for these purposes. Such payment, when made, shall be
deemed to have been made in discharge of MDC's obligations
hereunder and any moneys or property so received by the Trustee
shall be applied in the manner provided in Section 10.6. Where MDC
has elected to satisfy some of its obligations pursuant to this
Subsection 10.2(1) with respect to any Exchangeable Security
through the delivery of Units, the Trustee shall deliver to the
relevant Holder a confirmation relating to the requisite number of
Units against cancellation of the relevant Exchangeable
Securities.
(2) If an Event of Default occurs in respect of which the Trustee
intends to declare an Acceleration pursuant to Subsection 10.2(1),
the Trustee shall give Holders seven days prior notice of such
Acceleration, or such shorter period of notice as may be prudent
given the nature of such Event of Default.
10.3 Waiver of Default
In case any Event of Default hereunder has occurred, otherwise than an
Exchange Default, the Trustee, so long as it has not become bound to institute
any proceedings hereunder by virtue of a Holders' Request, shall have the 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
Holders in the premises shall extend to or be taken in any manner whatsoever to
affect any subsequent default or the rights resulting therefrom.
10.4 Proceedings by the Trustee
(1) Whenever any Event of Default hereunder has occurred and is
continuing, but subject to the provisions of Section 10.3 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 Holders 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 Holders lodged in any
bankruptcy, winding-up or other judicial proceeding relative to
MDC; and
(b) upon receipt of a Holders' Request, the Trustee, subject to
Section 15.1, shall exercise or take such one or more of the
said remedies as the Holders' Request may direct or, if such
Holders' 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 Holders shall be exclusive of or dependent on any other
such remedy but any one or more
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of such remedies may from time to time be exercised independently or
in combination.
(3) All rights of action hereunder may be enforced by the Trustee without
the possession of any of the Exchangeable Securities or the production
thereof on the trial or other proceedings relative thereto.
10.5 Suits by Holders
No Holder shall have the right to institute any action, suit or
proceeding or to exercise any other remedy authorized by this Trust Indenture
for the purpose of enforcing any rights on behalf of the Holders or for the
execution of any trust or power hereunder or for the appointment of a
custodian, sequestrator, liquidator, receiver or receiver and manager or any
officers with similar powers, or for a receiving order under any bankruptcy
legislation or to have MDC wound up or to file or prove a claim in any
liquidation or bankruptcy proceedings, unless a Holders' Request and the
funding and indemnity referred to in Section 15.1 have been tendered to the
Trustee and the Trustee shall have failed to act within a reasonable time
thereafter; in such case, but not otherwise, any Holder shall be entitled to
take proceedings in any court of competent jurisdiction such as the Trustee
might have taken under Section 10.4; it being understood and intended that no
one or more Holders shall have any right in any manner whatsoever to affect,
disturb or prejudice the rights hereby created by any such action, or to
enforce any right hereunder or under any Exchangeable Security, 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, had and maintained by the Trustee, except only as herein provided,
and in any event for the equal benefit of all holders of such outstanding
Exchangeable Securities.
10.6 Application of Moneys Received by Trustee
Except as herein otherwise provided, the moneys and/or property
arising from any enforcement hereof shall be held by the Trustee and applied by
it, together with any other moneys then or thereafter in the hands of the
Trustee available for the purpose, as follows:
(a) firstly, in payment or reimbursement to the Trustee of the
remuneration, expenses, disbursements and advances of the
Trustee earned, incurred or made in the administration or
execution of the trusts hereunder or otherwise in relation to
this Trust Indenture, with interest thereof as herein provided;
(b) secondly, rateably and proportionately to the Holders but
subject to Section 9.2, in or towards payment of the principal
of all of the Exchangeable Securities, and thereafter in or
towards payment of the accrued and unpaid interest and interest
on overdue interest (if any) which shall then be outstanding,
provided that in all cases all applicable withholding taxes
shall be withheld; and
(c) the surplus (if any) of such moneys shall be paid to MDC or its
assigns otherwise required by law.
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10.7 Distribution of Proceeds
Payments to holders of Exchangeable Securities pursuant to Subsection
10.6(b) shall be made as follows:
(a) at least 15 days' notice of every such payment shall be given in
the manner provided in Section 16.1 specifying the time when and
the place or places where the Exchangeable Securities are to be
presented, in the event that a Non-Book Entry Certification
Event has occurred (to the extent not theretofore presented in
accordance with the provisions of this Trust Indenture), and the
amount of the payment and the application thereof as between
principal and interest;
(b) subject to Section 3.12, payment of any Exchangeable Security
shall be made upon presentation thereof at any one of the places
specified for such payment in the notice referred to in
Subsection 10.7(a) and any such Exchangeable Security thereby
paid in full shall be surrendered, in the event that a Non-Book
Entry Certification Event has occurred, otherwise a memorandum
of such payment shall be endorsed on the face thereof; but the
Trustee may in its discretion dispense with presentation and
surrender or endorsement in any special case upon such indemnity
being given as it shall deem sufficient;
(c) from and after the date of payment specified in the notice
referred to in Subsection 10.7(a), interest shall accrue only on
the amount owing on each Exchangeable Security after giving
credit for the amount of the payment specified in such notice
unless such Exchangeable Security be duly presented, in the
event that a Non-Book Entry Certification Event has occurred, on
or after the date so specified and payment of such amount be not
made; and
(d) the Trustee shall not be required to make any partial payment to
Holders unless the moneys in its hands, after reserving
therefrom such amount as the Trustee may think necessary to
provide for the payments mentioned in Subsection 10.6(a), exceed
5% of the principal amount of Exchangeable Securities
outstanding but it may retain and invest or deposit such moneys
and deal with the same as provided in Section 15.4 until the
moneys or investments representing the same, with the income
derived therefrom, together with any other moneys for the time
being under its control, shall be sufficient for the said
purpose or until it shall consider it advisable to apply the
same in the manner hereinbefore set forth.
10.8 Immunity of Holders and Unitholders
The Holders shall have no, and the Trustee hereby waives and releases
any, right, cause of action or remedy now or hereafter existing in any
jurisdiction against any past, present and future incorporator, shareholder,
unitholder, Holder, director, officer or trustee (as such) of
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MDC, of the Fund or of any successor corporation or entity, as the case may be,
for the payment of the principal of or interest on any of the Exchangeable
Securities or for the performance of any covenant or agreement or for the
correctness of any representation or warranty by MDC or the Fund herein or in
the Exchangeable Securities contained.
10.9 Remedies Cumulative
No remedy herein conferred upon or reserved to the Trustee or upon or
to the Holders is intended to be exclusive of any other remedy, but each and
every such remedy shall be cumulative and shall be in addition to every other
remedy given hereunder or now existing or hereafter to exist by law or statute.
10.10 Judgment Against MDC
MDC covenants and agrees with the Trustee that, in case of any
judicial or other proceedings to obtain judgment for payment of the principal
of or interest on the Exchangeable Securities, judgment may be rendered against
it in favour of the Holders or in favour of the Trustee, as trustee for the
Holders, for the amount which may remain due in respect of the Exchangeable
Securities and the interest.
10.11 Indemnification
MDC agrees to indemnify and hold harmless on an after-tax basis any
Non-U.S. Holder for (i) the full amount of any United States withholding taxes
that may be payable with respect to any payments of interest on an Exchangeable
Security to the Non-U.S. Holder and (ii) any liability under U.S. and Canadian
tax laws (including penalties, interest, additions to tax and expenses) arising
from such withholding taxes or indemnity payments or with respect thereto,
including any income or other tax payable with respect to any payment made by
MDC pursuant to this Section 10.11. Payments under this indemnification shall
be made within 30 days after the date the Non-U.S. Holder makes written demand
therefor.
10.12 No Fractional Units
No fractional Units shall be delivered in connection with any delivery
of Units on an Event of Default in accordance with Subsection 10.2(1), but in
lieu of such fraction MDC shall pay the cash equivalent of such fraction
(determined by multiplying the relevant fraction of a Unit by 101% of the
Current Market Price at the time of the Event of Default).
ARTICLE 11
SATISFACTION AND DISCHARGE
11.1 Repayment of Unclaimed Moneys to MDC
Subject to the last sentence of this Section, any non-cash property
set aside or provided under Section 11.2 in respect of any Exchangeable
Security (and any property distributed thereon) and not claimed by and given
over to the Holder of such Exchangeable Security, as provided in such Section,
within six years after the relevant maturity date, shall be paid to MDC by the
Trustee on written demand, and thereupon the Trustee shall be released from all
further liability with respect to such property. Such property shall be sold by
MDC on behalf of such Holder in the open market, by tender or by private
contract on such date or dates and at such price or prices as MDC may consider
appropriate. Subject to the last sentence of this Section, any moneys set aside
or provided under Section 11.2 in respect of any Exchangeable Security and not
claimed by and paid to the Holder of such Exchangeable Security, as provided in
such Section, within six years after the Maturity Date, shall be paid to MDC by
the Trustee on demand, and thereupon the Trustee shall be released from
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all further liability with respect to such moneys. Thereafter such Holder shall
have no rights in respect of such Exchangeable Security except to obtain
payment of the cash proceeds of such sale and such moneys (without interest)
from MDC, subject to any applicable period of limitation provided by law and
provided that all applicable withholding taxes shall be withheld. The Trustee
shall from time to time deduct from such moneys prior to paying the same to MDC
or to any Holder (a) all the fees and disbursements of the Trustee paid by MDC
during the said six-year period and shall pay the same to MDC and (b) all taxes
payable with respect to any property distributed on such non-cash property and
any property distributed thereon.
11.2 Release from Covenants
Upon proof being given to the reasonable satisfaction of the Trustee
that:
(a) the principal of all Exchangeable Securities and interest
(including interest on amounts in default) thereon and other
moneys and property payable or deliverable hereunder have been
paid or satisfied or delivered, as the case may be; or
(b) all the outstanding Exchangeable Securities have matured, been
duly called for redemption or tendered for exchange or been
purchased and cancelled and payment of the principal of,
interest thereon and all other amounts payable hereunder have
been duly provided for in accordance with the provisions hereof,
and upon payment of 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, or upon provision satisfactory to the Trustee being
made therefor, the Trustee shall, at the request and at the expense of MDC,
execute and deliver to MDC and the Fund such deeds or other instruments as shall
be requisite to evidence the satisfaction and discharge of the security (if any)
created pursuant hereto and to release each of MDC and the Fund from its
covenants herein contained except those relating to the indemnification of the
Trustee. In such event the Trustee shall deliver up to MDC all Pledged Eligible
Securities and cash or other property arising from accretions thereto, if any,
remaining in its possession.
ARTICLE 12
SUCCESSOR CORPORATIONS
12.1 Certain Requirements in Respect of Merger, etc.
(1) MDC, without the consent or approval of the Holders or the
Trustee, shall not enter into any transaction (whether by way
of reconstruction, reorganization,
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consolidation, arrangement, amalgamation, merger, transfer, sale,
lease or otherwise) whereby all or substantially all of its
undertaking, property and assets would become the property of any
other person or, in the case of amalgamation, of the continuing
corporation resulting therefrom unless, but may do so without such
consent or approval, if:
(a) such other person or continuing corporation is a corporation
(herein called the "Successor Corporation") incorporated under
the laws of Canada or any province thereof or under the laws of
the United States;
(b) the Successor Corporation, by operation of law, becomes, without
more, bound by the terms and provisions of this Trust Indenture
and the Exchangeable Securities or, if not so bound, executes,
prior to or contemporaneously with the consummation of such
transaction, an indenture supplemental hereto and such other
instruments (if any) as are, in the opinion of the Trustee,
relying on the opinion of Counsel, necessary or advisable to
evidence the assumption by the Successor Corporation of
liability for the due and punctual payment of the Exchangeable
Securities and the interest thereon and all other moneys payable
and property deliverable hereunder and the covenant of such
Successor Corporation to pay and deliver or cause to be paid and
delivered the same and its agreement to observe and perform all
the covenants and obligations of MDC under this Trust Indenture;
(c) such transactions shall, to the satisfaction of the Trustee,
relying on the opinion of Counsel, be upon such terms as
substantially to preserve and not to impair in any material
respect any of the rights and powers of the Trustee or of
the Holders hereunder; and
(d) no condition or event shall exist in respect of the
Successor Corporation at the time of such transaction and
after giving full effect thereto which constitutes or would,
after notice or lapse of time or both, constitute an Event
of Default hereunder.
(2) For the purposes of Subsection 12.1(1), a transaction shall not be
regarded as a transaction whereby all or substantially all of
MDC's undertaking, property and assets would become the property
of another person if, prior to the completion of such transaction,
MDC provides to the Trustee an opinion, satisfactory to the
Trustee, of an Independent Investment Dealer selected by the
Directors for such purpose to the effect that, after the
completion of such transaction, and taking into account the
application or use of proceeds from such transaction or the
securities received by MDC as a result of such transaction, the
ability of MDC to honour its obligations under the Exchangeable
Securities would not be adversely affected from a financial point
of view in any significant respect.
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12.2 Vesting of Powers in Successor
Whenever the conditions of Subsection 12.1(1) have been duly
observed and performed, the Trustee, if required by Subsection 12.1(1),
shall execute and deliver the supplemental indenture provided for in
Article 14 and thereupon the Successor Corporation shall possess and from
time to time may exercise each and every right and power of MDC under this
Trust Indenture in the name of MDC or otherwise and any act or proceeding
by any provision of this Trust Indenture required to be done or performed
by the Directors or any officers of MDC may be done and performed with like
force and effect by the directors or officers of such Successor
Corporation.
12.3 Wholly-Owned Subsidiaries
Nothing herein shall be construed as preventing the amalgamation
or merger of any wholly-owned subsidiary of MDC with or into MDC or the
winding-up, liquidation or dissolution of any wholly-owned subsidiary of
MDC, provided that all of the assets of such subsidiary are transferred to
MDC or another wholly-owned subsidiary of MDC, or the transfer, sale, lease
or other disposition of any property and assets to a wholly-owned
subsidiary of MDC, and any such transactions are expressly permitted by
this Article 12. For greater certainty, nothing herein shall be construed
as preventing the planned amalgamation of MDC with MDC Partners Inc.
ARTICLE 13
MEETINGS OF BENEFICIAL HOLDERS
13.1 Right to Convene Meeting
The Trustee may at any time and from time to time and shall, on
receipt of a Request of MDC or a Holders' Request and upon being
indemnified and funded to its reasonable satisfaction by MDC or by the
Holders signing such Holders' Request, as the case may be, against the
costs which may be incurred in connection with the calling and holding of
such meeting, convene a meeting of the Beneficial Holders. In the event of
the Trustee failing within 30 days after receipt of such request, indemnity
and funding to give notice convening such meeting, MDC or such Holders, as
the case may be, may convene such meeting. Every such meeting shall be held
in the City of Toronto, Ontario or at such other place as may be approved
or determined by the Trustee.
13.2 Notice
At least 30 days' notice of any meeting shall be given to the
Beneficial Holders in accordance with the provisions of National Instrument
54-101 of the Canadian Securities Administrators and a copy thereof shall
be sent by post to the Trustee unless the meeting has been called by it and
to MDC 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 13.
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13.3 Chairman
Some individual, who need not be a Beneficial Holder, nominated in
writing by the Trustee, shall be chairman of the meeting and if no
individual is so nominated, or if the individual so nominated is not
present within 15 minutes from the time fixed for the holding of the
meeting, the Holders present in person or by proxy shall choose some
individual present to be chairman.
13.4 Quorum
Subject to the provisions of Section 13.12:
(a) at any meeting of Beneficial Holders, a quorum shall consist of
Beneficial Holders present in person or by proxy and
representing at least 25% in principal amount of the
outstanding Exchangeable Securities;
(b) if a quorum of the Beneficial Holders shall not be present
within 30 minutes from the time fixed for holding any meeting,
the meeting, if convened by the Beneficial Holders or on a
Holders' Request, shall be dissolved; but in any other case,
the meeting shall stand adjourned without notice to the same
day in the next week (unless such day is not a Business Day in
which case it shall stand adjourned to the next following
Business Day) thereafter at the same time and place, 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 Section 16.1; and
(c) at the adjourned meeting, the Beneficial Holders present in
person or by proxy shall constitute 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 Exchangeable Securities.
13.5 Powers of Adjournment
The chairman of any meeting at which a quorum of the Beneficial
Holders is present may with the consent of the holders of a majority in
principal amount of the Exchangeable Securities represented thereat adjourn
any such meeting and no notice of such adjournment need be given except such
notice, if any, as the meeting may prescribe.
13.6 Show of Hands
Every question submitted to a meeting shall be decided in the first
place by a majority of the votes given on a show of hands, except that votes
on Extraordinary Resolutions shall be given in the manner hereinafter
provided. At any such meeting, unless a poll is required or duly demanded as
herein provided, a declaration by the chairman that a resolution has been
carried or carried unanimously or by a particular majority or lost or not
carried by a particular majority shall be conclusive evidence of the fact.
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13.7 Poll
On every Extraordinary Resolution, and on any other question
submitted to a meeting when demanded after a vote by a show of hands by the
chairman or by one or more of the Beneficial Holders acting in person or by
proxy and holding or representing at least 5% of the outstanding Exchangeable
Securities, 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 a majority in principal amount of the
Exchangeable Securities represented at the meeting and voted on the poll.
13.8 Voting
On a show of hands, every person who is present and entitled to vote,
whether as a Beneficial Holder or as proxy for one or more absent Beneficial
Holders, or both, shall have one vote. On a poll, each Beneficial Holder
present in person or represented by a proxy duly appointed by instrument in
writing shall be entitled to one vote in respect of each Exchangeable Security
of which he shall then be the Beneficial Holder. A proxy need not be a
Beneficial Holder. In the case of joint Beneficial Holders of an Exchangeable
Security, any of them present in person or by proxy at the meeting may vote in
the absence of the other or others; but in case more than one of them be
present in person or by proxy, they shall vote together in respect of
Exchangeable Securities of which they are joint registered Holders.
13.9 MDC and Trustee May Be Represented
MDC and the Trustee, by their respective directors, officers and
employees and the legal advisers of MDC and the Trustee may attend any meeting
of the Beneficial Holders, but shall have no vote thereat as such.
13.10 Powers Exercisable by Extraordinary Resolution
In addition to all other powers conferred upon them by any other
provisions of this Trust Indenture or by law, but in all cases subject to
Section 13.11, a meeting of the Beneficial Holders shall have the following
powers, any one or combination of which may be exercised from time to time by
Extraordinary Resolution:
(a) power to agree to any modification, abrogation, alteration,
compromise or arrangement of the rights of the Holders or
Beneficial Holders and/or the Trustee against MDC or against
its undertaking, property and assets or any part thereof
(whether such rights arise under this Trust Indenture or the
Exchangeable Securities or otherwise) which shall have been
agreed to by MDC;
(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 Exchangeable Securities in any manner specified in such
Extraordinary Resolution or to refrain from exercising any such
power, right, remedy or authority and the power to remove the
Trustee and appoint a new trustee hereunder;
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(c) power to waive and direct the Trustee to waive any default
(other than a default in the payment of principal or interest
on the Exchangeable Securities, including, without limitation,
an Exchange Default) on the part of MDC in complying with any
provision of this Trust Indenture or the Exchangeable
Securities and/or to annul and to direct the Trustee to annul
any declaration made by the Trustee pursuant to Section 10.2,
either unconditionally or upon any conditions specified in such
Extraordinary Resolution;
(d) power, with the approval of MDC, to sanction the exchange of
Exchangeable Securities for or the conversion of Exchangeable
Securities into shares, bonds, notes or any other securities or
obligations of MDC or any other person;
(e) power to assent to any modification of, or change in, or
omission from, the provisions contained herein or in the
Exchangeable Securities or in any deed or instrument
supplemental hereto or thereto which shall be agreed to by MDC
and to authorize the Trustee to concur in and execute any deed
or instrument supplemental hereto embodying such modification,
change or omission;
(f) power to restrain any Holder or Beneficial Holder from taking,
instituting or maintaining any action, suit or proceeding for
the purpose of enforcing payment of principal or interest or
for the execution of any trust or power hereunder or for the
appointment of a custodian, sequestrator, liquidator, receiver,
receiver and manager or a trustee in bankruptcy or to have MDC
wound up or for any other remedy hereunder;
(g) power to direct any Holder or Beneficial Holder who, as such,
has brought any such suit, action or proceeding against MDC
hereunder to stay or otherwise discontinue or otherwise deal
with the same upon payment, if the taking of such suit, action
or proceeding shall have been permitted by Section 10.5, of the
costs, charges and expenses reasonably and properly incurred by
the Holder or Beneficial Holder in connection therewith;
(h) power to amend, alter or repeal any Extraordinary Resolution
previously passed or sanctioned by the Beneficial Holders;
(i) power to sanction any transaction (whether by way of
reconstruction, reorganization, arrangement, consolidation,
amalgamation, merger, transfer, sale, lease or otherwise)
whereby all or substantially all of the undertaking, property
and assets of MDC would become the property of any other
person, or in the case of an amalgamation, of the continuing
corporation resulting therefrom, provided that no such sanction
shall in any event be necessary in respect of any such
transaction if the provisions of Article 12 are complied with;
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(j) power to assent to any judgment, compromise or arrangement by
MDC with any creditor or creditors or classes of creditors or
with the holders of any shares or securities of MDC;
(k) power to authorize the Trustee, in the event of MDC making an
unauthorized assignment, or a custodian, sequestrator, trustee
or liquidator being appointed, under applicable bankruptcy or
insolvency legislation or legislation relating to winding-up,
for and on behalf of the Holders, and in addition to any claim
or debt proved or made for its own account as Trustee
hereunder, to file and prove a claim or debt against MDC and
its properties for an amount equivalent to the aggregate amount
which may be payable in respect of the Exchangeable Securities,
value security and vote such claim or debt at meetings of
creditors and to file any proposals and generally act for and
on behalf of the Holders in such proceedings as such
Extraordinary Resolution may provide; and
(l) power to appoint and remove a committee to consult with the
Trustee and to delegate to such committee (subject to such
limitations, if any, as may be prescribed in the Extraordinary
Resolution) all or any of the powers which the Beneficial
Holders could exercise by Extraordinary Resolution under the
foregoing paragraphs (b), (c), (f), (g), and (k) of this
Section 13.10; 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 themselves be Holders or Beneficial
Holders; subject to the Extraordinary Resolution appointing it,
every such committee may elect its chairman and may make
regulations respecting its quorum, the calling of its meetings,
the filling of vacancies occurring in its number, the manner in
which it may act and its procedure generally and such
regulations may provide that the committee may act 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, and all acts of any such committee within the
authority delegated to it shall be binding upon all Holders and
Beneficial Holders.
13.11 Powers Not Exercisable by Extraordinary Resolution
For greater certainty, no modification or abrogation of the
Trust Indenture, whether or not purported to be authorized by Extraordinary
Resolution may, without the consent of the Holder of each Exchangeable
Security affected thereby:
(a) modify the amount, currency or timing of payments of principal
of or interest on the Exchangeable Securities, the terms of the
Redemption Right, Exchange Rights or the security for the
obligation of MDC to deliver Units upon exercise of the
Exchange Right (other than, in the case
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of a change in the timing of payments of interest, if the change
is made in order to match the timing of payments of Unit
Distributions);
(b) reduce the stated percentage of principal amount of
Exchangeable Securities necessary to modify or amend the Trust
Indenture; or
(c) subordinate the indebtedness evidenced by the Exchangeable
Securities (to the extent such indebtedness is not already
subordinated) to any other indebtedness of MDC other than
Senior Indebtedness.
13.12 Meaning of "Extraordinary Resolution"
The expression "Extraordinary Resolution", when used in this Trust
Indenture, means, subject as hereinafter in this Section 13.12 and in Section
13.16 provided, a resolution proposed at a meeting of Beneficial Holders duly
convened for the purpose of passing an Extraordinary Resolution and held in
accordance with the provisions of this Article 13 at which the Beneficial
Holders of more than 50% of the principal amount of the outstanding
Exchangeable Securities 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 outstanding Exchangeable Securities represented at the meeting and
voted on a poll upon such resolution.
(1) If, at any such meeting called for the purpose of passing an
Extraordinary Resolution, the Beneficial Holders of more than 50% of
the principal amount of the outstanding Exchangeable Securities are
not present in person or by proxy within 30 minutes after the time
appointed for the meeting, then the meeting, if convened by
Beneficial Holders or on a Holders' Request, shall be dissolved, but
if otherwise convened, it shall stand adjourned to such date, being
not less than 14 nor more than 60 days later, and to such place and
time as may be appointed by the chairman. Not less than seven days'
prior notice shall be given of the time and place of such adjourned
meeting in the manner provided in Section 16.1. Such notice shall
specify the quorum for such adjourned meeting 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,
(a) if the Extraordinary Resolution purports to exercise any of the
powers conferred pursuant to paragraph (a), (c), (d), (i) or
(j) of Section 13.10 or purports to change the provisions of
this Section 13.12 or of Section 13.16 or purports to amend,
alter or repeal any Extraordinary Resolution previously passed
or sanctioned by the Beneficial Holders in exercise of the
powers referred to in this paragraph, a quorum for the
transaction of business shall consist of the Beneficial Holders
of at least 25% of the principal amount of the Exchangeable
Securities outstanding present in person or by proxy; and
(b) in any other case, a quorum for the transaction of business
shall consist of such number of Beneficial Holders as are
present in person or by proxy.
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(2) At any such adjourned meeting, any resolution passed by the requisite
votes as provided in Subsection 13.12(1) shall be an Extraordinary
Resolution within the meaning of this Trust Indenture notwithstanding
that Beneficial Holders of more than 50% of the principal amount of
the outstanding Exchangeable Securities are not present in person or
by proxy at such adjourned meeting.
(3) Votes on an Extraordinary Resolution shall always be taken by a poll
and no demand for a poll on an Extraordinary Resolution shall be
necessary.
13.13 Powers Cumulative
It is hereby declared and agreed that any one or more of the powers
or any combination of the powers in this Trust Indenture stated to be
exercisable by the Beneficial Holders 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 Beneficial Holders to exercise such power or powers
or combination of powers thereafter from time to time.
13.14 No Requirement to Obtain Consent
For greater certainty, in the event that the Fund changes the day on
which it provides payment of the monthly Unit Distribution to holders of
Units, MDC shall have the right, without any requirement to obtain the consent
of any Holder or Beneficial Holder, whether by Extraordinary Resolution or
otherwise, to modify the Interest Payment Date so that it falls on the same
day as such payment by the Fund of the monthly Unit Distribution.
13.15 Minutes
Minutes of all resolutions and proceedings at every meeting of the
Beneficial Holders 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 MDC and any
such minutes, 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 Beneficial Holders, 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.
13.16 Instrument in Writing
All actions which may be taken and all powers which may be
exercised by the Beneficial Holders at a meeting held as hereinbefore in
this Article 13 provided may also be taken and exercised by a resolution in
writing signed in one or more counterparts by the Beneficial Holders of not
less than 50% of the principal amount of all outstanding Exchangeable
Securities with respect to ordinary resolutions and by the Beneficial
Holders of not less than 66-2/3% of the principal amount of all outstanding
Exchangeable Securities with respect to an Extraordinary Resolution and the
expression "Extraordinary Resolution" when used in this Trust
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Indenture shall include a resolution so signed by the Holders of not less than
66-2/3% of the principal amount of all outstanding Exchangeable Securities.
13.17 Binding Effect of Resolutions
Subject as provided in any indenture, deed or instrument supplemental
or ancillary hereto, every resolution and every Extraordinary Resolution
passed in accordance with the provisions of this Article 13 at a meeting of
Beneficial Holders shall be binding upon all the Holders and Beneficial
Holders, whether present at or absent from such meeting, and every instrument
in writing signed by Holders in accordance with Section 13.16 shall be binding
upon all the Holders, whether signatories thereto or not, and each and every
Holder and Beneficial Holder and the Trustee (subject to the provisions for
its indemnity hereby contained) shall be bound to give effect accordingly to
every such resolution, Extraordinary Resolution and instrument in writing.
13.18 Evidence of Rights of Holders
(1) Any request, direction, notice, consent or other instrument which
this Trust Indenture may require or permit to be signed or executed
by the Holders or Beneficial Holders may be in any number of
concurrent instruments of similar tenor and may be signed or executed
by such Holders or Beneficial Holders in person or by attorney duly
appointed in writing. Proof of the execution of any such request,
direction, notice, consent or other instrument, or of a writing
appointing any such attorney or (subject to the provisions of this
Article 13 with regard to voting at meetings of Beneficial Holders)
of the holding by any person of Exchangeable Securities shall be
sufficient for any purpose of this Trust Indenture if the fact and
date of the execution by any person of such request, direction,
notice, consent or other instrument or writing is proved (a) by the
certificate of any notary public or other officer authorized to take
acknowledgement of deeds to be recorded at the place where such
certificate is made, that the person signing such request, direction,
notice, consent or other instrument or writing acknowledged to him
the execution thereof; or (b) by an affidavit of a witness of such
execution; or (c) in any other manner which the Trustee may consider
adequate.
(2) The Trustee may, nevertheless, in its discretion, require further
proof in cases where it deems further proof necessary or desirable or
may accept such other proof as it shall consider proper.
(3) The ownership of Exchangeable Securities shall be proved by the
registers as hereinbefore provided.
13.19 Voting and Dividends
Until such time as a Holder receives Units, either because the
Holder has exercised its Exchange Right or because MDC has exercised its
right to deliver Units upon redemption or at maturity, Holders will not
be entitled to any voting rights, dividends or other
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distributions with respect to Units or the Initial Pledged Shares, nor will
Holders be entitled to receive notice of or to attend meetings of the
holders of Units of the Fund.
ARTICLE 14
SUPPLEMENTAL INDENTURES
14.1 Execution of Supplemental Indentures
From time to time MDC (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 or other instruments
supplemental hereto, which thereafter shall form part hereof, for any one
or more of the following purposes:
(a) if and whenever required by any provision hereof,
mortgaging, hypothecating, pledging, assigning,
transferring, granting a security interest in, assuring and
confirming to or vesting in the Trustee or charging in
favour of the Trustee all or any portion of the undertaking,
property and assets then owned or thereafter acquired by
MDC, as, in the opinion of the Trustee, relying on the
opinion of Counsel, are necessary or advisable in the
premises, provided that such actions are not, in the opinion
of the Trustee, relying on the opinion of Counsel,
prejudicial to the interests of the Holders;
(b) evidencing the succession of Successor Corporations to MDC
and the covenants of and obligations assumed by each of such
Successor Corporations in accordance with the provisions of
Article 12 and the successor of any successor trustee in
accordance with the provisions of Article 15;
(c) giving effect to any Extraordinary Resolution passed as
provided in Article 13;
(d) making any modification in any form of Exchangeable Security
which, in the opinion of the Trustee, relying on the opinion
of Counsel, will not be prejudicial to the interests of the
Holders;
(e) making any additions to, deletions from or alterations of
the provisions of this Trust Indenture or the Exchangeable
Securities which, in the opinion of the Trustee, relying on
the opinion of Counsel, will not be prejudicial to the
interests of the Holders or are in the opinion of Counsel
necessary or advisable in order to incorporate, reflect or
comply with any legislation the provisions of which apply to
MDC, the Trustee or this Trust Indenture;
(f) correcting or rectifying any patent ambiguity, defective
provision, error or omission herein; and
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(g) for any other purposes not inconsistent with the provisions
of this Trust Indenture, provided that, in the opinion of
the Trustee, relying on the opinion of Counsel, the rights
of the Trustee and the Holders will not be prejudiced thereby.
ARTICLE 15
CONCERNING THE TRUSTEE
15.1 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 act
honestly and in good faith with a view to the best interests of the
Holders and exercise that degree of care, diligence and skill that a
reasonably prudent trustee would exercise in comparable circumstances.
(2) Subject only to Subsection 15.1(1) the obligation of the Trustee to
commence or continue any act, action or proceeding for the purpose of
enforcing any rights of the Trustee or the Holders hereunder shall be
conditional upon the Holders 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 except such as may
arise from its negligence or bad faith.
(3) 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.
(4) The Trustee shall not be bound to give any notice or do or take any
act, action or proceeding by virtue of the powers conferred on it
hereby unless and until it shall have been required so to do under the
terms hereof; nor shall the Trustee be required to take notice of any
default hereunder, unless and until notified in writing of such
default, which notice shall distinctly specify the default desired to
be brought to the attention of the Trustee and in the absence of any
such notice the Trustee may for all purposes of this Trust Indenture
conclusively assume that no default has been made in the observance or
performance of any of the representations, warranties, covenants,
agreement or conditions contained herein. Any such notice shall in no
way limit any discretion herein given to the Trustee or the duties of
the Trustee to determine whether or not the Trustee shall take action
with respect to any default.
(5) Notwithstanding anything in this Trust Indenture to the contrary, the
Trustee shall disperse moneys, shares or Units according to this Trust
Indenture only to the extent that such moneys, shares or Units have
been deposited with it.
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(6) At the request of the Trustee, any calculation required or provided
for by the terms of this Trust Indenture will be determined and set
out in writing by MDC and sent to the Trustee as soon as practicable.
15.2 Evidence
(1) Whenever it is provided in this Trust Indenture, with reference to any
application to the Trustee for the taking by it of any action
hereunder, that MDC shall deposit with the Trustee resolutions,
certificates, opinions, requests, orders or other documents, it is
intended that the truth, accuracy and good faith at the time of the
granting of such application of the facts and opinions stated in all
documents so deposited shall, in each and every such case, be
conditions precedent to the right of MDC to have such application
granted. The Trustee may act and rely, and shall be protected in
acting and relying, upon such documents deposited with it in purported
compliance with any such provision or for any other purpose hereof,
but may in its discretion require further evidence before acting or
relying thereon.
(2) The Trustee may act and rely, and shall be protected in acting and
relying, upon any resolution, certificate, statement, instrument,
opinion, calculation, report, notice, request, consent, order, letter,
telegram, telex, telecopy or other paper or document believed by it to
be genuine and to have been signed, sent or presented by or on behalf
of the proper party or parties.
15.3 Experts, Advisers and Agents
(1) The Trustee may employ, retain or appoint such Counsel, accountants,
appraisers or other experts or advisers and such agents including,
without limitation, with the consent of MDC, paying agents or agencies
as it may reasonably require for the purpose of determining and
discharging its duties hereunder, may pay reasonable remuneration for
all services so performed by any of them, and shall not be responsible
for any misconduct on the part of any of them.
(2) The Trustee may act and rely and shall be protected in acting and
relying in good faith on the opinion or advice of or information
obtained from any Counsel, accountant, appraiser or other expert or
adviser, whether retained, employed or appointed by MDC or by the
Trustee, in relation to any matter arising in the administration of
the trusts hereof.
15.4 Documents, Moneys, etc. Held by Trustee
(1) Subject to Section 8.5, 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 safekeeping or custody vaults of
the Trustee in Canada or of any Canadian chartered bank.
(2) Upon receipt of a written direction from MDC, any moneys held by
the Trustee shall be invested in its own name in Authorized
Investments in accordance with such direction. Any direction from
MDC to the Trustee shall be in writing and
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shall be provided to the Trustee no later than 9:00 a.m. on the
day on which the investment is to be made. Any such direction
received by the Trustee after 9:00 a.m. or received on a day which
is not a Business Day shall be deemed to have been given prior to
9:00 a.m. the next succeeding Business Day. For the purposes
hereof, "Authorized Investments" means short term interest bearing
or discount debt obligations issued or guaranteed by the
Government of Canada or a Province or a Canadian chartered bank
(which may include an Affiliate or related party of the Trustee),
provided that such obligation is rated at least R1 (middle) by
DBRS Inc. or an equivalent rating service.
(3) In addition to any written direction to invest cash in an Authorized
Investment, the Trustee may hold cash balances constituting part or
all of the funds and may, but need not, invest same in its deposit
department or the deposit department of one of its Affiliates; but
the Trustee and its Affiliates shall not be liable to account for
any profit to any parties to this Agreement or to any other person
or entity other than at a rate, if any, established from time to
time by the Trustee or one of its Trustee Affiliates. For the
purposes of this Subsection 15.4(3), "Trustee Affiliate" means
affiliated companies within the meaning of the OBCA; and includes
Canadian Imperial Bank of Commerce, CIBC Mellon Global Securities
Services Company and Mellon Bank, N.A. and each of their Affiliates
within the meaning of the OBCA.
(4) The Trustee shall not be held liable for any losses incurred in the
investment of any funds in Authorized Investments.
15.5 Action by Trustee to Protect Interests
The Trustee shall have power to institute and maintain such actions
and proceedings as it may consider necessary or expedient to preserve,
protect or enforce its interests and the interests of the Holders.
15.6 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.
15.7 Protection of Trustee
By way of supplement to the provisions of any law for the time being
relating to trustees, it is expressly declared and agreed as follows:
(a) the Trustee shall not be liable for or by reason of any
statements of fact or recitals in this Trust Indenture or in
the Exchangeable Securities (except the representations
contained in Sections 15.9 and 15.13 or deemed by the
provisions of Section 3.9 to have been made through the
certification of the Trustee on the Exchangeable Securities)
or required to verify the same, but all such statements or
recitals are and shall be deemed to be made by MDC;
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(b) nothing herein contained shall impose any obligation on the
Trustee to see to or to require evidence of the registration
or filing (or renewal thereof) of this Trust Indenture or any
instrument ancillary or supplemental hereto;
(c) the Trustee shall not be bound to give notice to any person of
the execution hereof;
(d) the Trustee shall not incur any liability or responsibility
whatever or be in any way responsible for the consequence of
any breach on the part of MDC of any of the covenants herein
contained or of any acts of the agents or servants of MDC
including, without limitation, any paying agent;
(e) the Trustee, in its personal capacity or any other capacity,
may buy, lend upon and deal in securities of MDC or any
Affiliate of MDC and generally may contract and enter into
financial transactions with MDC or any Affiliate of MDC
without being liable to account for any profit made thereby;
and
(f) the Trustee, its officers, directors, employees and agents
will at all times be indemnified and saved harmless by MDC
from and against all claims, demands, losses, actions, causes
of action, costs, charges, expenses, damages and liabilities
whatsoever arising in connection with this Trust Indenture,
including, without limitation, those arising out of or related
to actions taken or omitted to be taken by the Trustee
contemplated hereby, legal fees and disbursements on a
solicitor and client basis and costs and expenses incurred in
connection with the enforcement of this indemnity, which the
Trustee, its officers, directors, employees and agents may
suffer or incur, whether at law or in equity, in any way
caused by or arising, directly or indirectly, in respect of
any act, deed, matter or thing whatsoever made, done,
acquiesced in or omitted in or about or in relation to the
execution of its duties as Trustee and including any deed,
matter or thing in relation to the registration, perfection,
release or discharge of security. The foregoing provisions of
this Subsection 15.7(f) do not apply to the extent that in any
circumstances there has been a failure by the Trustee or its
employees or agents to act honestly and in good faith or to
discharge the Trustee's obligations under Subsection 15.1(1)
or where the Trustee or its employees or agents have acted
negligently or in wilful disregard of their obligations
hereunder, or have negligently or in wilful disregard of their
obligations hereunder, failed to act. This indemnification
shall survive the termination or discharge of this Trust
Indenture or the replacement or resignation of the Trustee.
15.8 Replacement of Trustee
(1) The Trustee may resign its trust and be discharged from all
further duties and liabilities hereunder by giving to MDC not less
than 90 days' notice in writing or such shorter notice as MDC
may accept as sufficient. The Holders by
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Extraordinary Resolution shall have power at any time to remove
the Trustee and to appoint a new Trustee. In the event of the
Trustee resigning or being removed as aforesaid or being
dissolved, becoming bankrupt, going into liquidation or otherwise
becoming incapable of acting hereunder, MDC shall forthwith
appoint a new Trustee unless a new Trustee has already been
appointed by the Holders; failing such appointment by MDC, the
retiring Trustee at the expense of MDC may apply to a Judge of the
Ontario Court of Justice on such notice as such Judge may direct,
for the appointment of a new Trustee; but any new Trustee so
appointed by MDC or by the Court shall be subject to removal as
aforesaid by the Holders. Any new Trustee appointed under any
provision of this Section 15.8 shall be a corporation authorized
to carry on the business of a trust company in the Province of
Ontario and, if required by the Indenture Legislation of any other
province, in such other province and shall certify that it will
not have any material conflict of interest upon becoming Trustee
hereunder. On any such appointment, the new Trustee shall be
vested with the same powers, rights, duties, security interest (if
any) in and encumbrances (if any) on the properties and assets of
MDC as may be applicable 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 MDC, all such conveyances or other instruments
(if any) as, in the opinion of Counsel, may be necessary or
advisable for the purpose of assuring the same to the new Trustee.
At the request of MDC or the new Trustee, the retiring Trustee,
upon payment of the amounts, if any, due to it pursuant to Section
9.4, shall duly assign, transfer and deliver to the new Trustee
all property and money held and all records kept by the retiring
Trustee hereunder or in connection herewith.
(2) Any corporation into which the Trustee may be merged or with which it
may be consolidated or amalgamated or any corporation resulting from
any merger, consolidation or amalgamation to which the Trustee shall
be a party, shall be the successor Trustee under this Trust Indenture
without the execution of any instrument or any further act, provided
that such corporation would be entitled to act as a new Trustee
hereunder in accordance with the provisions of Subsection 15.8(1).
Nevertheless, upon the written request of the successor Trustee or of
MDC, the Trustee ceasing to act shall, at the expense of MDC, execute
and deliver an instrument assigning and transferring to such
successor Trustee, upon the trusts herein expressed, all the rights,
powers and trusts of the Trustee so ceasing to act, and shall duly
assign, transfer and deliver all property and money held and all
records kept by such Trustee hereunder or in connection herewith to
the successor Trustee so appointed in its place. Should any deed,
conveyance or instrument in writing from MDC be required by any new
Trustee for more fully and certainly vesting in and confirming to it
such property, money, rights, powers and trusts, then any and all
such deeds, conveyances and instruments in writing shall on request
of such new Trustee, be made, executed, acknowledged and delivered by
MDC.
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15.9 Conflict of Interest
The Trustee represents to MDC that at the time of the execution and
delivery hereof no material conflict of interest exists in the Trustee's role
as a fiduciary hereunder and agrees that in the event of a material conflict
of interest arising hereafter, it will, within 90 days after ascertaining that
it has such material conflict of interest, either eliminate the same or resign
in the manner and with the effect specified in Section 15.8.
15.10 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.
15.11 Trust Indenture Legislation
(1) In this Trust Indenture, the term "Indenture Legislation" means the
provisions, if any, of the OBCA and any other statute of Canada or a
province thereof, and the respective regulations thereunder relating
to trust indentures and/or to the rights, duties and obligations of
trustees under trust indentures and of corporations issuing debt
obligations under trust indentures, to the extent that such
provisions are at the time in force and applicable to this Trust
Indenture.
(2) If and to the extent that any provision of this Trust Indenture
limits, qualifies or conflicts with a mandatory requirement of the
Indenture Legislation, such mandatory requirement shall prevail.
(3) MDC 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 the Indenture
Legislation.
15.12 Evidence and Authority to Trustee
(1) MDC shall furnish to the Trustee evidence of compliance with every
covenant, condition or other requirement relating to any action or
step required or permitted to be taken by MDC or the Trustee under
this Trust Indenture or as a result of any obligation imposed under
this Trust Indenture, including, without limitation, the
certification and delivery of Exchangeable Securities hereunder, the
release or release and substitution of property subject to a security
interest (if any) constituted by this Trust Indenture or the
satisfaction and discharge of this Trust Indenture, forthwith if and
when (a) such evidence is required by any other provision of this
Trust Indenture to be furnished to the Trustee, or (b) the Trustee,
in the exercise of its rights and duties under this Trust Indenture,
gives MDC written notice requiring it to furnish such evidence in
relation to any particular action, step or obligation specified in
such notice. Such evidence shall consist of the following evidence as
the Trustee may require:
(a) a certificate made by any one of the Chairman, the Chief
Executive Officer, the President, any Vice-President,
the Treasurer, any Assistant
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Treasurer, the Secretary or any Assistant Secretary of MDC
stating that any such covenant, condition or other requirement
has been complied with in accordance with the terms of this
Trust Indenture,
(b) in the case of any such covenant, condition or other
requirement, compliance with which is subject to the delivery
of an opinion of Counsel, an opinion of Counsel that any such
covenant, condition or other requirement has been complied with
in accordance with the terms of this Trust Indenture, or
(c) in the case of any such covenant, condition or other
requirement, compliance with which is subject to the review or
examination of auditors or accountants, an opinion or report of
such auditors or accountants as to the accuracy or reliability
of the statements required to be reviewed or examined and
stating whether or not the statements have been made in
accordance with the terms of this Trust Indenture, or any
combination of the foregoing.
Whenever such evidence relates to a matter other than the
certification and delivery of Exchangeable Securities, the release
and substitution of property subject to a security interest (if any)
constituted by this Trust Indenture or the satisfaction and discharge
of this Trust Indenture, and except as otherwise specifically
provided herein, such evidence may consist of or include a report or
opinion of any solicitor, auditor, accountant, valuer, engineer,
surveyor or appraiser or any other person whose qualifications give
authority to a statement made by him.
(2) Each certificate, opinion or report with respect to compliance with a
condition provided for in this Trust Indenture shall include a
statement by the person making or giving such certificate, opinion or
report (a) that he has read and is familiar with the covenant,
condition or other requirement, (b) stating the nature and scope of
the examination or investigation upon which the statements or opinions
contained in the certificate, opinion or report are based, (c) stating
that, in the belief of the person making the certificate or giving the
opinion or report, he has made such examination or investigation as is
necessary to enable him to express an opinion as to whether or not
such covenant, condition or other requirement has been complied with
or satisfied, and (d) whether or not in the opinion of such person
such covenant, condition or other requirement has been complied with
or satisfied.
15.13 Authority to Carry on Business
The Trustee represents to MDC that at the date of execution and
delivery by it of this Trust Indenture it is authorized to carry on the
business of a trust company in the Province of Ontario. If, notwithstanding
the provisions of this Section 15.13, the Trustee ceases to be so
authorized to carry on business, the validity and enforceability of this
Trust Indenture and the Exchangeable Securities issued hereunder shall
not be affected in any manner whatsoever by
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reason only of such event, but the Trustee shall, within 90 days after
ceasing to be authorized to carry on the business of a trust company in such
province, either become so authorized or resign in the manner and with the
effect specified in Section 15.8.
ARTICLE 16
NOTICES
16.1 Notice to Holders
Unless herein otherwise expressly provided, any notice to be given
hereunder to Holders shall be deemed to be validly given if such notice is
sent by unregistered surface or air mail, postage prepaid, addressed to
such Holders at their respective addresses appearing on the registers
mentioned in Article 4; and if, in the case of joint holders of any
Exchangeable Security, more than one address appears in the register in
respect to such joint holding, such notice shall be addressed only to the
first address so appearing. Any notice so given by mail shall be deemed to
have been given on the third Business Day following the date such notice is
mailed. In determining under any provision hereof the date when notice of
any meeting or other event must be given, the date of giving the notice
shall be included and the date of the meeting, or other event, shall be
excluded. Accidental error or omission in giving notice or accidental
failure to mail notice to any one or more Holders shall not invalidate any
action or proceeding founded thereon.
16.2 Notice to Trustee
Unless herein otherwise expressly provided, any notice to the
Trustee under any provision of this Trust Indenture, unless otherwise
specifically provided, shall be valid and effective if given by facsimile
transmission or 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 Toronto, Ontario, which at the date hereof is ▇▇▇ ▇▇▇ ▇▇▇▇▇▇,
▇.▇. ▇▇▇ ▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ M5H 4A6, Attention: Director,
Corporate Trust, Facsimile (▇▇▇) ▇▇▇-▇▇▇▇. The Trustee may from time to
time notify MDC of a change in address which thereafter, until changed by
like notice, shall be the address of the Trustee for all purposes of this
Trust Indenture. Notice by facsimile transmission shall be deemed to have
been effectively given when sent. Notice by delivery shall be deemed to
have been effectively given when delivered to an officer of the Trustee.
Notice by mail shall be deemed to have been effectively given at the time
when, in the ordinary course of post, the same should have reached its
destination.
16.3 Notice to MDC
Unless herein otherwise expressly provided, any notice to MDC under
any provision of this Trust Indenture shall be valid and effective if given
by facsimile transmission or if delivered to an officer of MDC or if sent by
registered mail, postage prepaid, addressed to MDC at ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Attention: Chief Financial Officer,
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇. MDC 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 MDC for all purposes of this Trust Indenture. Notice by
facsimile transmission shall be deemed to have been effectively given when
sent. Notice by delivery shall be deemed to have been effectively given
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when delivered to an officer of MDC. Notice by mail shall be deemed to have
been effectively given at the time when, in the ordinary course of post,
the same should have reached its destination.
16.4 Mail Service Interruption
(1) If by reason of any interruption of mail service, actual or
threatened, any notice to be given to the Trustee or to MDC would
reasonably be unlikely to reach its destination by the time notice
by mail would have been deemed to have been given pursuant to
Sections 16.2 or 16.3, such notice shall be valid and effective only
if delivered to an officer of the party to which it is addressed or,
if sent to such party, at the appropriate address in accordance with
Sections 16.2 or 16.3, as the case may be, by facsimile transmission
or other means of prepaid transmitted or recorded communication.
(2) If the Trustee determines that mail service is or is threatened to
be interrupted at the time when the Trustee is required or elects to
give any notice to the Holders hereunder, the Trustee shall,
notwithstanding the provisions hereof, give such notice by means of
publication in the Report on Business section of a weekday national
edition of The Globe and Mail and in a French language newspaper of
wide circulation in Quebec, once in each of two successive weeks,
and notice so published shall be deemed to have been given on the
latest date on which the first publication has taken place.
ARTICLE 17
SUBORDINATION
17.1 Agreement to Subordinate
(1) The Corporation covenants and agrees and each Holder of Exchangeable
Securities issued hereunder by such Holder's acceptance thereof
likewise covenants and agrees that all Exchangeable Securities shall
be issued subject to the provisions of this Article 17; and each
Holder of a Security, whether upon original issue or upon transfer
or assignment thereof, accepts and agrees to be bound by such
provisions.
(2) Subject to the right of the Trustee in the Pledged Eligible Securities
in connection with enforcement of the security constituted in Article
8 upon the occurrence of an Event of Default, the payment by MDC of
the principal of, and interest on, the Exchangeable Securities issued
hereunder shall, to the extent and in the manner hereinafter set
forth, be subordinated and junior in right of payment to the prior
payment in full of all Senior Indebtedness of MDC, whether outstanding
at the date of this Trust Indenture or thereafter incurred; provided
that, notwithstanding the foregoing and for greater certainty, the
Convertible Debentures do not constitute Senior Indebtedness and the
Exchangeable Securities shall rank in priority to the Convertible
Debentures in respect of the Pledged Eligible
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Securities and in all other respects shall rank pari passu with the
Convertible Debentures.
(3) No provision of this Article 17 shall prevent the occurrence of any
Default or Event of Default hereunder. Upon the occurrence of an Event
of Default, Holders shall have the right to receive in priority to
holders of Senior Indebtedness, the Pledged Eligible Securities in
accordance with the Exchange Right or the Pledged Eligible Securities
as a result of the enforcement by the Trustee of the security
constituted by Article 8. Nothing in this Article 17 shall prevent the
delivery of Units to Holders upon the exercise of an Exchange Right,
or upon redemption, maturity or Acceleration.
17.2 Default on Senior Indebtedness
(1) No payment of principal (including redemption payments) or interest on
the Exchangeable Securities may be made: (i) if any Senior
Indebtedness of MDC is not paid when due and any applicable grace
period with respect to a payment default on Senior Indebtedness has
ended and such default has not been cured or waived or ceased to
exist; or (ii) if the maturity of any Senior Indebtedness of MDC has
been accelerated because of a default and either the default has not
been rescinded or the Senior Indebtedness under which the default has
occurred has not been repaid in accordance with its terms.
(2) In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the
preceding paragraph of this Section 17.2, such payment shall be held
in trust for the benefit of, and shall be paid over or delivered to,
the holders of Senior Indebtedness or their respective
representatives, or to the trustee or trustees under any indenture
pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, as their respective interests may appear, as
calculated by MDC, to the extent necessary to pay such Senior
Indebtedness in full, in cash, after giving effect to any concurrent
payment or distribution to or for the benefit of the holders of such
Senior Indebtedness, before any payment or distribution is made to the
Holders or to the Trustee.
17.3 Liquidation; Dissolution; Bankruptcy
(1) Upon any distribution of assets of MDC of any kind or character,
whether in cash, property or securities, to creditors upon any
dissolution, winding-up, liquidation or reorganization of MDC, whether
voluntary or involuntary, or in bankruptcy, insolvency, receivership
or other proceedings, all principal, premium, if any, and interest due
on all Senior Indebtedness of MDC shall first be paid in full before
the Holders are entitled to receive or retain any payment; and upon
any such dissolution or winding-up or liquidation or reorganization,
any payment by MDC, or distribution of assets of MDC of any kind or
character, whether in cash, property or securities, which the Holders
or the Trustee would be entitled to receive from MDC, except for the
provisions of this Article 17, shall be paid by
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MDC or by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, or by the
Holders or by the Trustee under this Trust Indenture if received by
them or it, directly to the holders of Senior Indebtedness of MDC or
their respective representatives, or to the trustee or trustees under
any indenture pursuant to which any instruments evidencing such Senior
Indebtedness may have been issued, as their respective interests may
appear, as calculated by MDC, to the extent necessary to pay such
Senior Indebtedness in full, in cash, after giving effect to any
concurrent payment or distribution to or for the benefit of the
holders of such Senior Indebtedness, before any payment or
distribution is made to the Holders or to the Trustee.
(2) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of MDC of any kind or character, whether in
cash, property or securities, prohibited by the foregoing shall be
received by the Trustee before all Senior Indebtedness of MDC is paid
in full, or provision is made for such payment in money in accordance
with its terms, such payment or distribution shall be held in trust
for the benefit of and shall be paid over or delivered to the holders
of such Senior Indebtedness or their respective representatives, or to
the trustee or trustees under any indenture pursuant to which any
instruments evidencing such Senior Indebtedness may have been issued,
as their respective interests may appear, as calculated by MDC, to the
extent necessary to pay such Senior Indebtedness in full in cash,
after giving effect to any concurrent payment or distribution to or
for the benefit of the holders of such Senior Indebtedness, before any
payment or distribution is made to the Holders or to the Trustee.
(3) For purposes of this Article 17, the words "cash, property or
securities" shall not be deemed to include shares of MDC as
reorganized or readjusted, or securities of MDC or any other
corporation provided for by a plan of reorganization or readjustment,
the payment of which is subordinated at least to the extent provided
in this Article 17 with respect to the Exchangeable Securities to the
payment of all Senior Indebtedness of MDC, as the case may be, that
may at the time be outstanding; provided, however, that: (i) such
Senior Indebtedness is assumed by the new corporation, if any,
resulting from any such reorganization or readjustment; and (ii) the
rights of the holders of such Senior Indebtedness are not, without the
consent of such holders, altered by such reorganization or
readjustment. The amalgamation or consolidation of MDC with, or the
merger of MDC into, another corporation or the liquidation or
dissolution of MDC following the conveyance or transfer its properties
or assets substantially as an entirety, to another corporation upon
the terms and conditions provided for in Article 12 of this Trust
Indenture shall not be deemed a dissolution, winding-up, liquidation
or reorganization for the purposes of this Section 17.3 if such other
corporation shall, as a part of such amalgamation, consolidation,
merger, conveyance or transfer, comply with the conditions stated in
Article 12 of this Trust Indenture. Nothing in Section 17.2 or in this
Section 17.3 shall apply to claims of, or payments to, the Trustee
under or pursuant to Section 9.4 and 9.5 of this Trust Indenture.
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17.4 Rights of Holders Reserved
Nothing contained herein or in the Exchangeable Securities is intended
to or shall impair, as between MDC, its creditors other than the holders of
Senior Indebtedness, and the Holders, the obligation of MDC, which is absolute
and unconditional, to pay to the Holders the indebtedness represented thereby,
including the principal thereof and the interest thereon, as and when the same
shall become due and payable in accordance with the terms of this Trust
Indenture, or affect the relative rights of the Holders and creditors of MDC
other than the holders of Senior Indebtedness, nor shall anything herein or
therein prevent the Trustee or any Holder from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture,
subject to the rights, if any, under this Article 17 of the holders of Senior
Indebtedness in respect of assets of MDC received upon the exercise of any such
remedy.
17.5 No Fiduciary Duty to Holders of Senior Indebtedness
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if
it shall mistakenly pay over or deliver to the Holder or MDC or any other
person, money or assets to which any holders of Senior Indebtedness of MDC
shall be entitled by virtue of this Article 17 or otherwise.
17.6 Authorization of Holders to Trustee to Acknowledge or Effectuate
Subordination
Each Holder by its acceptance thereof authorizes and directs the
Trustee on its behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination as provided in this Article 17 and
approves and confirms any such action theretofore taken by the Trustee, and
each Holder appoints the Trustee its attorney-in-fact for any and all such
purposes. Upon the written direction of MDC, and upon being furnished with an
Officer's Certificate stating that one or more named persons are holders of
Senior Indebtedness and specifying the amount and nature of such Senior
Indebtedness, the Trustee, from time to time, and at the expense of MDC for and
on behalf of all present and future Holders, shall execute and deliver deeds of
subordination in favour of the person or persons and its or their successors or
assigns are entitled to all the rights and benefits of this Article 17 as the
holder or holders of Senior Indebtedness. An executed counterpart of each such
deed shall be delivered by the Trustee to MDC and another such counterpart
shall be retained by the Trustee. Nothing contained in this Section 17.6 shall
impair the rights of any holders of Senior Indebtedness in whose favour such
deed of subordination has not been so executed and delivered.
17.7 Subrogation
(1) Subject to the payment in full of all Senior Indebtedness of MDC then
outstanding, the rights of the Holders shall be subrogated to the
rights of the holders of such Senior Indebtedness to receive payments
or distributions of cash, property or securities of MDC, as the case
may be, applicable to such Senior Indebtedness until the principal of
and interest on the Exchangeable Securities shall be paid in full, and,
for the purposes of such subrogation, no payments or distributions to
the holders of such Senior Indebtedness of any cash, property or
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securities to which the Holders or the Trustee would be entitled
except for the provisions of this Article 17, and no payment over
pursuant to the provisions of this Article 17 to or for the benefit of
the holders of such Senior Indebtedness by Holders or the Trustee,
shall, as between MDC, its creditors other than holders of Senior
Indebtedness of MDC, and the Holders, be deemed to be a payment by MDC
to or on account of such Senior Indebtedness. It is understood that
the provisions of this Article 17 are and are intended solely for the
purposes of defining the relative rights of the Holders, on the one
hand, and the holders of such Senior Indebtedness on the other hand.
(2) Upon any payment or distribution of assets of MDC referred to in this
Article 17, the Trustee, subject to the provisions of Section 15.1 of
this Trust Indenture, and the Holders shall be entitled to conclusively
act and rely upon any order or decree made by any Court of competent
jurisdiction in which such dissolution, winding-up, liquidation or
reorganization proceedings are pending or a certificate of the
receiver, trustee in bankruptcy, liquidation trustee, agent or other
Person making such payment or distribution, delivered to the Trustee or
to the Holders, for the purposes of ascertaining the Persons entitled
to participate in such distribution, the holders of Senior Indebtedness
and other indebtedness of MDC, as the case may be, the amount thereof
or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article 17.
17.8 Notice by MDC
(1) The Corporation shall give prompt written notice to the Trustee of any
fact known to MDC that would prohibit the making of any payment of
moneys to or by the Trustee in respect of the Exchangeable Securities
pursuant to the provisions of this Article 17. Notwithstanding the
provisions of this Article 17 or any other provision of this Trust
Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts that would prohibit the making of any payment of
moneys to or by the Trustee in respect of the Exchangeable Securities
pursuant to the provisions of this Article 17, unless and until the
Trustee shall have received written notice thereof from MDC or a Holder
or holders of Senior Indebtedness or from any representative or trustee
therefor, and before the receipt of any such written notice, the
Trustee, subject to the provisions of Section 15.1 of this Trust
Indenture, shall be entitled in all respects to assume that no such
facts exist; provided, however, that if the Trustee shall not have
received the notice provided for in this Section 17.8 at least five
Business Days prior to the date upon which by the terms hereof any
money may become payable for any purpose (including, without
limitation, the payment of the principal of or interest on any
Exchangeable Security), then, notwithstanding anything herein contained
to the contrary, the Trustee shall have full power and authority to
receive such money and to apply the same to the purposes for which such
money was received, and shall not be affected by any notice to the
contrary that may be received by it within five Business Days prior to
such date.
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(2) The Trustee, subject to the provisions of Section 15.1 of this Trust
Indenture, shall be entitled to conclusively act and rely on the
delivery to it of a written notice by a Person representing himself to
be a holder of Senior Indebtedness of MDC (or a trustee or
representative on behalf of such holder), to establish that such notice
has been given by a holder of such Senior Indebtedness or a trustee or
representative on behalf of any such holder or holders. In the event
that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of such
Senior Indebtedness to participate in any payment or distribution
pursuant to this Article 17, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of such Senior Indebtedness held by such Person, the extent
to which such Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such Person
under this Article, and, if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
17.9 Rights of the Trustee; Holders of Senior Indebtedness
(1) The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article 17 in respect of any Senior
Indebtedness at any time held by it, to the same extent as any other
holder of Senior Indebtedness, and nothing in this Trust Indenture
shall deprive the Trustee of any of its rights as such holder.
(2) With respect to the holders of Senior Indebtedness of MDC, the Trustee
undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article 17, and no
implied covenants or obligations with respect to the holders of such
Senior Indebtedness shall be read into this Trust Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to
the holders of such Senior Indebtedness and, subject to the provisions
of Section 15.1 of this Trust Indenture, the Trustee shall not be
liable to any holder of such Senior Indebtedness if it shall pay over
or deliver to Holders, MDC or any other Person money or assets to which
any holder of such Senior Indebtedness shall be entitled by virtue of
this Article 17 or otherwise.
17.10 Subordination May Not Be Impaired
(1) No right of any present or future holder of any Senior Indebtedness of
MDC to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the
part of MDC, as the case may be, or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by MDC, as the
case may be, with the terms, provisions and covenants of this Trust
Indenture, regardless of any knowledge thereof that any such holder may
have or otherwise be charged with.
(2) Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness of MDC may, at any time and from
time to time, without
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the consent of or notice to the Trustee or the Holders, without
incurring responsibility to the Holders and without impairing or
releasing the subordination provided in this Article 17 or the
obligations hereunder of the Holders to the holders of such Senior
Indebtedness, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or
renew or alter, such Senior Indebtedness, or otherwise amend or
supplement in any manner such Senior Indebtedness or any instrument
evidencing the same or any agreement under which such Senior
Indebtedness is outstanding; (ii) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing such
Senior Indebtedness; (iii) release any Person liable in any manner for
the collection of such Senior Indebtedness; and (iv) exercise or
refrain from exercising, or waive any rights against MDC, as the case
may be, and any other Person.
(3) Each present and future holder of Senior Indebtedness shall be
entitled to the benefit of the provisions of this Article
notwithstanding that such holder is not a party to this Trust
Indenture.
17.11 Article Applicable to Paying Agents
In case at any time any Paying Agent other than the Trustee shall have
been appointed by MDC and be then acting hereunder, the term "Trustee" as used
in this Article 17 shall in such case (unless the context otherwise requires)
be construed as extending to and including such Paying Agent within its meaning
as fully for all intents and purposes as if such Paying Agent were named in
this Article 17 in addition to or in place of the Trustee; provided, however,
that this Section 17.11 shall not apply to MDC or any Affiliate of MDC if it or
such Affiliate acts as Paying Agent.
ARTICLE 18
FORM OF EXCHANGEABLE SECURITIES
18.1 English Form of Exchangeable Securities
The English language portion of the text of the Exchangeable
Securities, including the Trustee's certificate, the form of assignment, the
registration panel and the exchange form on the back of the Exchangeable
Security shall be substantially as follows:
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[Unless this certificate is presented by an authorized representative
of The Canadian Depository for Securities Limited ("CDS") to the Issuer or its
agent for registration of transfer, exchange or payment, and any Exchangeable
Security issued is registered in the name of CDS & Co. or such other name as
requested by an authorized representative of CDS and any payment hereon is made
to CDS & Co. (or as requested by an authorized representative of CDS), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL, since the registered owner hereof, CDS & Co., has an interest herein.
This Exchangeable Security is a Global Security within the meaning of
the Trust Indenture hereinafter referred to and is registered in the name of
CDS & Co. as nominee of CDS. This Exchangeable Security is exchangeable for
Units registered in the name of a person other than CDS or its nominee only in
the limited circumstances described in the Trust Indenture, and no transfer of
this Exchangeable Security (other than a transfer of this Exchangeable Security
as a whole by CDS to a nominee of CDS or by a nominee of CDS to CDS or another
nominee of CDS) may be registered except in limited circumstances.]*
____________________
* Insert in Global Securities only.
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IN CERTAIN CIRCUMSTANCES, HOLDERS MAY BE REQUIRED TO ACCEPT UNITS OF
CUSTOM DIRECT INCOME FUND HAVING LESS VALUE THAN THE PRINCIPAL AMOUNT HEREOF
PLUS ACCRUED BUT UNPAID INTEREST. AN INVESTMENT IN THE EXCHANGEABLE SECURITIES
IS SUBJECT TO THE RISK OF EQUITY DEPRECIATION IN THE VALUE OF UNITS OF CUSTOM
DIRECT INCOME FUND.
NO. MDC CORPORATION INC. $| |
(Incorporated under the laws of Ontario)
ADJUSTABLE RATE EXCHANGEABLE SECURITY
Due December 31, 2028
CUSIP 55267W 60 6
MDC CORPORATION INC. ("MDC") for value received hereby promises to
pay to the registered holder (the "Holder") hereof on December 31, 2028
(the "Maturity Date"), or on such earlier date as the principal amount
hereof may become due in accordance with the provisions of the Trust
Indenture hereinafter mentioned, the sum of DOLLARS ($ ) in lawful money of
Canada on presentation and surrender of this Exchangeable Security at the
principal office of CIBC Mellon Trust Company (the "Trustee") in Toronto or
at such other place or places, if any, as MDC, with the approval of the
Trustee, may designate, and to pay interest on the principal amount hereof
at a rate per month equal to the Adjustable Rate for such month (after as
well as before the Maturity Date, subject to the provisions of the Trust
Indenture, and after as well as before default and judgment, with interest
on amounts in default, including overdue interest, at the same rate) and
payable monthly (less all applicable withholding taxes) to Holders of
record as of the last relevant Interest Record Date in arrears on each
Interest Payment Date with the first Interest Payment Date being January
15, 2004 (and at such other date or dates as interest may be required to be
paid hereunder on the Exchangeable Securities), interest to accrue from day
to day from the first day of each month and payable in the amount
calculated hereunder rounded to the nearest cent, provided that if at any
time the Fund publicly announces that the amount of the Unit Distribution
paid by the Fund with respect to such month will be different than the Unit
Distribution for the preceding month, then the amount of interest to accrue
shall be adjusted immediately so that the interest paid in such month
corresponds to the Unit Distribution relating to such month. As interest
becomes due on each Exchangeable Security (except interest payable at
maturity or upon redemption or exchange which shall be paid on the Exchange
Date or Redemption Date, as applicable, of an Exchangeable Security) MDC
will send or cause to be sent on or before each Interest Payment Date,
sufficient funds to pay such interest (less all applicable withholding
taxes) payable to the Holder of such Exchangeable Security and at the
option of MDC such payment may be paid by electronic funds transmission to
an account maintained by the payee located in Canada if electronic funds
transmission instructions which MDC deems to be appropriate have been
received from the Holder in writing by the Trustee not less than 15 days
prior to the Interest Payment Date, provided that MDC is not otherwise
directed in writing by the Holder to send payment to some other person or
some other address or, in the case of joint Holders, payable to all of them
and addressed to the joint Holder whose name appears first in the register
at such Holder's last address appearing on the register unless otherwise
directed in writing by all of them to send payment to some other person or
some other address. The forwarding of such payment or electronic funds
transmission will satisfy and
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discharge the liability for interest on such Exchangeable Security to
the extent of the sum represented thereby (plus the amount of any tax withheld
as aforesaid) unless, in the case of payment by cheque, such cheque is not paid
on presentation.
This Exchangeable Security is one of the Adjustable Rate Exchangeable
Securities in an aggregate principal amount not exceeding $34,155,196.25
issued under a Trust Indenture (the "Trust Indenture") dated as of December 8,
2003 and made between MDC, Custom Direct Income Fund (the "Fund") and CIBC
Mellon Trust Company, as Trustee, to which Trust Indenture and all instruments
supplemental thereto reference is hereby made for a description of the rights
of the Holders, of MDC, of the Fund, and of the Trustee and of the terms and
conditions upon which the Exchangeable Securities are issued and held, all to
the same effect as if the provisions of the Trust Indenture and all
instruments supplemental thereto were herein set forth, to all of which
provisions the Holder, by acceptance hereof, assents.
The Exchangeable Securities are issuable as fully registered
Exchangeable Securities without coupons in denominations of $8.75 and integral
multiples thereof. The Exchangeable Securities of any authorized denomination
may be exchanged, as provided in the Trust Indenture, for trust units of the
Fund (the "Units") authorized and issued in accordance with the amended and
restated declaration of trust of the Fund dated May 14, 2003 (as the same may
be amended and restated from time to time) in an equal aggregate principal
amount in any other authorized denomination or denominations.
This Exchangeable Security and all other Exchangeable Securities
certified and issued under the Trust Indenture rank pari passu in accordance
to their tenor without discrimination, preference or priority. The
Exchangeable Securities are direct, unsecured obligations of MDC that are
subordinated to Senior Indebtedness. Payment of principal and interest owing
under the Exchangeable Securities is not secured by any mortgage, pledge,
hypothec or other charge. However, MDC has pledged shares of Custom Direct,
Inc., a corporation formed under the laws of Delaware, and/or other Eligible
Securities to secure its obligation to deliver Units upon the exercise of the
Holder's exchange right under the Exchangeable Securities.
MDC shall withhold all applicable withholding taxes from all payments
and deliveries under this Exchangeable Security, whether in respect of
principal, interest, amounts payable and property deliverable on redemption,
exchange or maturity, or otherwise.
At the option of MDC, on the Maturity Date, MDC may satisfy payment
of the outstanding principal amount of each Exchangeable Security in respect
of which an Exchange Deposit Date has not occurred by delivery of Units with a
value, based on the Current Market Price per Unit on the Maturity Date, equal
to the outstanding principal amount of such Exchangeable Security, or by
payment of an amount in cash equal to the outstanding principal amount of such
Exchangeable Security, provided in either case that accrued but unpaid
interest shall be paid in cash.
Each Exchangeable Security is exchangeable at the Holder's option for
Units at the Exchange Rate at any time after the occurrence of the Exchange
Event, to and including the Maturity Date (unless the principal amount of such
Holder's Exchangeable Securities has not
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been paid or satisfied on or before the Maturity Date, in which case
such right shall continue until the date on which such principal amount is
paid or satisfied).
At the option of MDC, at any time on and after the 2004 Audit Date
and provided no Exchange Event has occurred, MDC may redeem the Exchangeable
Securities in whole upon delivery by MDC to the Holder of an amount in cash
equal to the greater of (i) the principal amount of such Exchangeable
Securities to be redeemed, and (ii) for each Exchangeable Security to be
redeemed, the Current Market Price of a Unit. At the option of MDC, at any
time subsequent to the occurrence of an Exchange Event, MDC may redeem the
Exchangeable Securities in whole upon delivery by MDC to the Holder of one
Unit for each Exchangeable Security redeemed.
If MDC has given a Redemption Notice relating to a Cash Redemption
and if the Exchange Event occurs before the Redemption Date, a Holder will be
entitled to exercise the Exchange Right in priority to MDC's Redemption Right
by giving an Exchange Notice as provided in the Trust Indenture.
The exchange right and rights to redeem or purchase are all
exercisable subject to the terms and conditions and in the manner set forth in
the Trust Indenture. The Trust Indenture makes provision for the adjustment of
the bases for calculation of the Exchange Rate, the Fund Unit Payment and Fund
Cash Payment in the events therein specified.
Unless Units are registered under the U.S. Securities Act of 1933, as
amended, or unless there exists an applicable exemption from the U.S.
Securities Act of 1933, as amended, registration for such delivery, other than
an exemption that results in the delivery of "restricted securities", MDC will
not deliver Units upon exchange or redemption or at maturity to a Holder that
is within the United States or is a United States person (within the meaning
of Regulation S under the U.S. Securities Act of 1933, as amended), but will
pay such Holder in cash.
The principal hereof may become or be declared due before the
Maturity Date on the conditions, in the manner, with the effect and at the
time set forth in the Trust Indenture.
The Trust Indenture contains provisions for the holding of meetings
of Beneficial Holders and rendering resolutions passed at such meetings and
instruments in writing signed by the Beneficial Holders of a specified
majority of Exchangeable Securities outstanding binding upon all Beneficial
Holders, subject to the provisions of the Trust Indenture.
This Exchangeable Security may be transferred only upon compliance
with the conditions precedent in the Trust Indenture on one of the registers
to be kept at the principal office of the Trustee in Toronto and at such other
place or places, if any, and/or by such other registrar or registrars, if any,
as MDC with the approval of the Trustee may designate, by the Holder hereof or
such Holder's executors or administrators or other legal representatives or
such Holder's 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 and/or other registrar may prescribe,
and such transfer shall be duly noted hereon by the Trustee or other
registrar. No Holder or transferee may require any transfer to be made on an
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Interest Payment Date, on the Maturity Date, during the five Business Days
preceding any such date or on or during the three Business Days preceding a
Redemption Date.
All capitalized terms used in this Exchangeable Security that are
defined in the Trust Indenture shall have the meanings ascribed thereto in the
Trust Indenture. In the event of any inconsistency between this Exchangeable
Security and the Trust Indenture, the terms of the Trust Indenture shall
govern.
This Exchangeable Security shall not become obligatory for any
purpose until it shall have been certified by the Trustee for the time being
under the Trust Indenture.
IN WITNESS WHEREOF MDC CORPORATION INC. has caused this Exchangeable
Security to be signed by its President and Chief Executive Officer and by its
Senior Vice-President, Finance and Corporate Secretary.
Dated as of the | | day of | |, 20| |.
MDC CORPORATION INC.
By: ______________________________
[ ]
President and Chief Executive Officer
By: ______________________________
[ ]
Senior Vice-President, Finance and
Corporate Secretary
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(FORM OF TRUSTEE'S CERTIFICATE)
TRUSTEE'S CERTIFICATE
This Exchangeable Security is one of the Adjustable Rate
Exchangeable Securities referred to in the Trust Indenture within mentioned.
CIBC MELLON TRUST COMPANY,
Trustee
By: __________________________
Authorized Officer
(FORM OF ASSIGNMENT)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto,
_______________ whose address and social insurance number or Taxpayer
Identification Number, if applicable, are set forth below, this Exchangeable
Security (or $________ principal amount hereof*) of MDC CORPORATION INC.
standing in the name(s) of the undersigned in the register maintained by MDC
CORPORATION INC. with respect to such Exchangeable Security and does hereby
irrevocably constitute and appoint ________________________ Attorney to
transfer such Exchangeable Security in such register, with full power of
substitution in the premises.
Dated: _________________________ ______________________________
(Signature)
Address of Transferee: _______________________________________________________
(Street Address, City, Province and Postal Code)
Social Insurance Number
of Transferee, if applicable:_____________________
Taxpayer Identification Number
of Transferee, if applicable: ___________________
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Signature Guarantee:
____________________________________ ________________________________
Authorized Officer Name of Institution
*If less than the full principal amount of this Exchangeable Security
is to be transferred, indicate in the space provided the principal amount
(which must be $8.75 or an integral multiple thereof) to be transferred.
(a) The signature(s) to this assignment must correspond with the
name(s) as written upon the face of this Exchangeable Security
in every particular without alteration or any change
whatsoever. The signature(s) must be guaranteed by a Canadian
chartered bank or trust company, or by a medallion-signature
guarantee from a member of a recognized Medallion Signature
Guarantee Program. Notarized or witnessed signatures are not
acceptable as guaranteed signatures.
(b) The holder of this Exchangeable Security is responsible for the
payment of any documentary, stamp or other transfer taxes that
may be payable in respect of the transfer of this Exchangeable
Security.
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(FORM OF REGISTRATION PANEL)
(No writing hereon except by the Trustee or other registrar)
_______________________________________________________________________________
DATE OF IN WHOSE PLACE SIGNATURE OF
REGISTRATION NAME REGISTERED OF REGISTRY TRUSTEE OR OTHER
REGISTRAR
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(FORM OF EXCHANGE FORM)
TO: MDC CORPORATION INC.
AND TO: CIBC MELLON TRUST COMPANY
The undersigned holder of the within Exchangeable Security hereby
irrevocably elects to exchange said Exchangeable Security (or $ principal
amount hereof*) in accordance with the terms of the Trust Indenture referred
to in said Exchangeable Security and directs that the Units be delivered to
the person indicated below or, in the absence of instructions below, to the
holder of the Exchangeable Security.
Dated: ______________________________ _____________________________
(Signature)
___________________________________
Name of Person (Other than Registered Holder of the within Exchangeable
Security) in which Units are to be registered
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Address of such Person
(Street Address, City, Province and Postal Code)
Social Security Number of such Person: ______________________________________
Taxpayer Identification Number of such Person: ______________________________
Signature Guarantee:
___________________________________ _____________________________
Authorized Officer Name of Institution
If Units are to be delivered to a person other than the holder, the
signature of the holder must be guaranteed by a Canadian chartered bank or
trust company, by a U.S. commercial bank or trust company, or by a
medallion-signature guarantee from a member of a recognized Medallion
Signature Guarantee Program. Notarized or witnessed signatures are not
acceptable as guaranteed signatures.
The holder of this Exchangeable Security is responsible for the
payment of any documentary, stamp or other transfer taxes that may be payable
in respect of the delivery of Units and any accrued interest, if applicable.
*If less than the full principal amount of this Exchangeable Security
is to be exchanged, indicate in the space provided the principal amount (which
must be $8.75 or an integral multiple thereof) to be exchanged.
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18.2 U.S. Legend
The form of U.S. Legend shall be as follows:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE
HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF MDC
THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO
MDC, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S
UNDER THE SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, OR (D)
IN COMPLIANCE WITH CERTAIN OTHER PROCEDURES SATISFACTORY TO MDC AS SET FORTH
IN A LETTER TO MDC, AMONG OTHERS, EXECUTED BY OR ON BEHALF OF THE HOLDER
HEREOF. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY" IN
SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA. A NEW CERTIFICATE,
BEARING NO LEGEND, DELIVERY OF WHICH WILL CONSTITUTE "GOOD DELIVERY", MAY BE
OBTAINED FROM CIBC MELLON TRUST COMPANY UPON DELIVERY OF THIS CERTIFICATE AND
A DULY EXECUTED DECLARATION, IN A FORM SATISFACTORY TO CIBC MELLON TRUST
COMPANY AND MDC, TO THE EFFECT THAT THE SALE OF THE SECURITIES REPRESENTED
HEREBY IS BEING MADE IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT."
18.3 French Form of Exchangeable Securities
The French language portion of the text of the Exchangeable
Securities, including the Trustee's certificate, form of assignment, the
resignation panel and the exchange form on the back of the Exchangeable
Security shall be substantially as follows:
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[A moins que le present certificat ne soit presente par un
representant autorise de ▇▇ ▇▇▇▇▇▇ canadienne de depot de valeurs Limitee
(CCDV) a l'emetteur aux fins de l'inscription, du transfert, de l'echange ou
du paiement, et que tout titre echangeable emis ne soit inscrit au nom de CDS
& Co. ou a tout autre nom demande par un representant autorise de CDS et que
le paiement ne soit effectue a CDS & Co. (ou a la demande d'un representant
autorise de CCDV), TOUT TRANSFERT, GAGE OU AUTRE UTILISATION DU PRESENT TITRE
ECHANGEABLE, CONTRE VALEUR OU AUTREMENT, PAR UNE PERSONNE EST FAUTIF, etant
donne que le proprietaire inscrit des presentes, CDS & Co., detient une
participation dans les presentes.
Le present titre echangeable est un titre global au sens de l'acte de
fiducie ci-apres indique et est inscrit au nom CDS & Co., en tant que
▇▇▇▇▇-nom de CCDV. Le present titre echangeable peut etre echange contre des
parts inscrites au nom d'une personne autre que CCDV ou son ▇▇▇▇▇-nom
seulement dans les circonstances limitees decrites dans l'acte de fiducie, et
aucun transfert du present titre echangeable (sauf autre qu'un transfert de ce
titre echangeable dans son integralite par CCDV ou un de ses ▇▇▇▇▇-noms ou par
un tel ▇▇▇▇▇-nom a CCDV ou a un autre de ses ▇▇▇▇▇-noms) ne pourra etre
inscrit, sauf dans des circonstances limitees.]*
__________________
*Indiquer les titres globaux seulement.
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DANS CERTAINES CIRCONSTANCES, LES PORTEURS PEUVENT ETRE TENUS
D'ACCEPTER DES PARTS DE CUSTOM DIRECT INCOME FUND D'UNE VALEUR INFERIEURE AU
MONTANT EN CAPITAL DES PRESENTES, PLUS L'INTERET COURU ET IMPAYE. UN PLACEMENT
DANS LES TITRES ECHANGEABLES EST ASSUJETTI AU RISQUE DE LA DEVALUATION DES
CAPITAUX PROPRES FAISANT PARTIE DE LA VALEUR DES PARTS DE CUSTOM DIRECT INCOME
FUND.
No o $
MDC CORPORATION INC.
(constituee en vertu des ▇▇▇▇ de l'Ontario)
TITRES ECHANGEABLES A TAUX VARIABLE
echeant le 31 decembre 2028
CUSIP 55267W 60 6
Contre valeur recue, MDC CORPORATION INC. (MDC) promet par les
presentes de payer au porteur inscrit (le porteur) des presentes le 31 decembre
2028 (la date d'echeance) ou a toute autre date anterieure a laquelle le
montant en capital des presentes peut devenir exigible conformement aux
dispositions de l'acte de fiducie ci-apres indique, la somme de $ ( $ ), en
monnaie legale du Canada, sur presentation et remise du present titre
echangeable a l'etablissement principal de Compagnie Trust CIBC Mellon (le
fiduciaire) a Toronto ou a tout autre endroit, le cas echeant, que MDC peut
designer avec l'approbation du fiduciaire, et de payer l'interet sur le montant
en capital des presentes, au taux mensuel correspondant au taux variable pour
ce mois (tant apres qu'avant la date d'echeance, sous reserve des dispositions
de l'acte de fiducie, et tant apres qu'avant defaut et jugement, avec interet
sur les montants en defaut, y compris l'interet en souffrance, au meme taux) et
payable mensuellement (moins toutes les retenues d'impot applicables) aux
porteurs inscrits a la derniere date de reference pour l'interet s'averant
pertinent, a terme echu, a chaque date de paiement de l'interet, la premiere
date de paiement de l'interet etant le 15 janvier 2004 (et a toute autre date a
laquelle l'interet peut devoir etre paye en vertu des presentes sur les titres
echangeables), l'interet s'accumulant quotidiennement a compter du premier jour
de chaque mois et etant payable d'apres le montant calcule en vertu des
presentes, arrondi au cent le plus pres, a condition que si le Fonds annonce
publiquement a tout moment que le montant de la distribution sur les parts
payees par le Fonds pour ce mois sur la difference de la distribution sur les
parts pour le mois precedent, le montant de l'interet devant s'accumuler sera
alors rajuste immediatement, de sorte que l'interet paye pour ce mois
corresponde a la distribution sur les parts pour un tel mois. A mesure que
l'interet devient exigible sur chaque titre echangeable, (sauf dans le cas de
l'interet payable a l'echeance lors d'un rachat ou d'un echange qui sera paye a
la date d'echange ou a la date de rachat, selon le cas, d'un titre echangeable)
MDC enverra ou fera en sorte que soit envoye, le ou avant chaque date de
paiement d'interet, des fonds suffisants pour payer pour cet interet (moins le
montant de toute retenue d'impot applicable) payable au porteur de ce titre
echangeable a l'option de MDC peut decider d'effectuer ▇▇ ▇▇▇▇▇▇▇▇ par
transfert electronique de fonds dans un compte situe au Canada appartenant au
beneficiaire si des instructions a cet effet que MDC ▇▇▇▇ ▇▇▇▇ convenable aient
ete recues du porteur sous forme ecrite par le fiduciaire au moins 15 jours
avant la date de paiement d'interet, en autant que MDC n'ait pas
-85-
recu de directives differentes par ecrit du porteur lui indiquant de faire
parvenir le versement a une autre personne ou a une autre adresse ou dans le
cas de porteurs conjoints, payable a chacun d'eux et expedie a la derniere
adresse inscrite du porteur conjoint dont le nom parait en premier au registre,
a moins de directives differentes recues par ecrit de chaque porteur conjoint
indiquant d'envoyer le versement a une autre personne ou une autre adresse.
L'envoi de ▇▇ ▇▇▇▇▇▇▇▇ respectera et liberera la responsabilite quant a
l'interet sur ce titre echangeable dans la mesure de la somme qu'il represente
(plus le montant de tout impot deduit ou retenu tel qu'il est precite), a
moins, dans le cas de paiement par cheque, que ce cheque ne soit pas paye sur
presentation.
Le present titre echangeable fait partie des titres echangeables a
taux variable d'un montant en capital global n'excedant pas 34 155 196,25 $ qui
ont ete emis aux termes d'un acte de fiducie (l'acte de fiducie) intervenu en
date du 8 decembre 2003 entre MDC, Custom Direct Income Fund (le Fonds) et
Compagnie Trust CIBC Mellon, a titre de fiduciaire, et il est par les presentes
fait reference a cet acte de fiducie et a tous les actes lui etant
supplementaires pour une description des droits des porteurs de MDC, du Fonds
et du fiduciaire ainsi que des modalites auxquelles les titres echangeables
sont emises et detenues, le tout avec le meme effet que si les dispositions de
l'acte de fiducie et de tous les actes lui etant supplementaires etaient
indiques aux presentes, et le porteur consent a toutes ces dispositions, du
fait de son acceptation des presentes.
Les titres echangeables peuvent etre emis sous forme de titres
echangeables entierement nominatifs sans coupon, en coupures de 8,75 $ et en
multiples integraux de ce montant. Les titres echangeables de toute coupure
autorisee pourront etre echanges tel qu'il est prevu dans l'acte de fiducie,
contre des parts de fiducie du Fonds (les parts), autorisees et emises
conformement a la declaration de fiducie modifiee et refondue datee du 14 mai
2003 (telle qu'elle peut etre modifiee et refondue de temps a autre), d'apres
un montant en capital global de toute autre coupure autorisee.
Le present titre echangeable et tous les autres titres echangeables
certifies et emis aux termes de l'acte de fiducie se placent a egalite
conformement a leur teneur, sans discrimination, preference ni priorite. Les
titres echangeables constituent des obligations directes non garanties de MDC
qui sont subordonnees a la dette de premier rang. Le paiement du capital et de
l'interet dus aux termes des titres echangeables n'est garanti par aucune
hypotheque ni aucun gage ou autre charge. Cependant, MDC a ▇▇▇▇ ▇▇▇ actions de
Custom Direct, Inc., une societe par actions constituee en vertu des ▇▇▇▇ du
Delaware, et(ou) d'autres titres echangeables en garantie de son obligation de
remettre les parts lors de l'exercice du droit d'echange du porteur aux termes
des titres echangeables.
MDC deduira toutes les retenues d'impot applicables de tous les
paiements et remises aux termes du present titre echangeable, relativement au
capital, a l'interet, aux montants payables et aux biens devant etre livres
lors du rachat, de l'echange ou de l'echeance, ou autrement.
A la date d'echeance, MDC pourra, a son gre, respecter le paiement du
montant en capital en cours de chaque cours echangeable a l'egard duquel une
date de consignation aux fins d'echange n'a pas eu lieu en remettant les parts
d'une valeur, selon le cours du marche en vigueur par part a la date
d'echeance, egal au montant en capital en cours de ce titre echangeable,
-86-
ou en ▇▇▇▇▇▇ une somme au comptant egale au montant en capital en cours de ce
titre echangeable, a condition que, dans chaque cas, l'interet couru mais
impaye soit regle au comptant.
Chaque titre echangeable peut etre echange au gre du porteur contre
des parts au taux d'echange en tout temps apres le declenchement d'un cas
d'echange, jusqu'a la date d'echeance, inclusivement, a moins que le montant en
capital des titres echangeables de ▇▇ ▇▇▇▇▇▇▇ n'ait pas ete paye ou regle a la
date d'echeance ou auparavant, auquel cas ce droit se poursuivra jusqu'a la
date du reglement de ce montant en capital.
Au gre de MDC, en tout temps a compter de la date de verification de
2004 et a condition qu'aucun cas d'echange n'ait eu lieu, MDC pourra ▇▇▇▇▇▇▇▇
▇▇▇ titres echangeables en totalite lorsqu'elle remettra au porteur une somme
au comptant egale ou plus eleve de (i) le montant en capital devant faire
l'objet du rachat, et (ii) pour chaque titre echangeable ainsi rachete, le
cours du marche en vigueur d'une part. Au choix de MDC, en tout temps apres le
declenchement d'un cas d'echange, MDC pourra ▇▇▇▇▇▇▇▇ ▇▇▇ titres echangeables
en totalite en faisant livrer au porteur une part pour chaque titre echangeable
rachete.
Si MDC a donne un avis de rachat concernant un rachat au comptant et
si le cas d'echange a lieu avant la date de rachat, un porteur pourra exercer
le droit d'echange avant le droit de rachat de MDC en remettant un avis
d'echange tel qu'il est prevu dans l'acte de fiducie.
Le droit d'echange et les droits de rachat et d'achat peuvent tous
etre exerce sous reserve des modalites et de la maniere prevue dans l'acte de
fiducie. L'acte de fiducie prevoit le rajustement des modes de calcul du taux
d'echange, du paiement par part du Fonds et du paiement au comptant du Fonds
dans les circonstances y etant precisees.
Sauf si des parts sont inscrites en vertu de la loi des Etats-Unis
intitulee Securities Act of 1933, avec ses modifications, ou a moins qu'il
n'existe une dispense applicable des exigences d'inscription pour cette remise
de ladite loi avec ses modifications qu'une dispense entrainant la remise de
titres assujettis a des restrictions (selon l'expression correspondante) MDC ne
remettra aucune part lors de l'echange ou du rachat ou a l'echeance a un
porteur qui est aux Etats-Unis ou qui est une personne des Etats-Unis (au sens
de l'expression correspondante du Reglement S de la loi des Etats-Unis
intitulee Securities Act of 1933, avec ses modifications), mais versera une
somme au comptant a ▇▇ ▇▇▇▇▇▇▇.
Le montant en capital des presentes peut devenir ou etre declare
exigible avant la date d'echeance aux conditions, de la maniere, avec les
consequences et aux moments prevus dans l'acte de fiducie.
L'acte de fiducie contient des dispositions regissant la tenue des
assemblees des porteurs veritables et en vertu desquelles les resolutions
adoptees lors de ces assemblees et les actes ecrits et signes par les porteurs
d'une majorite specifiee des titres echangeables en circulation lient tous les
porteurs veritables, sous reserve des dispositions de l'acte de fiducie.
Le present titre echangeable ne pourra etre transfere qu'au moment
du respect des conditions prealables dans l'acte de fiducie, a l'un des
registres devant etre tenus a l'etablissement principal du fiduciaire a
Toronto et a tout autre endroit, le cas echeant, et(ou) par tout autre
agent charge de la tenue des registres, le cas echeant, que MDC peut
designer avec l'approbation du fiduciaire, par le porteur des presentes ou
par ses liquidateurs de succession ou administrateurs judiciaires ou autres
representants ▇▇▇▇▇▇ ou par son ou leur fondes de pouvoir dument nommes par
un acte dont la forme et la signature conviennent au fiduciaire, ainsi que
lors du respect des exigences raisonnables que le fiduciaire et(ou)
-87-
tout agent charge de la tenue des registres peut prescrire, et un tel transfert
soit dument note aux presentes par le fiduciaire ou cet autre agent charge de
la tenue des registres. Aucun porteur ni cessionnaire ne peut demander qu'un
transfert soit effectue a une date de paiement de l'interet, a la date
d'echeance, pendant les cinq jours ouvrables precedant toute pareille date ou a
une date de rachat ou ▇▇▇▇▇▇ ▇▇▇ trois jours ouvrables precedant une telle date
de rachat.
Certains termes et expressions utilisees dans le present titre
echangeable qui sont ▇▇▇▇▇▇▇ dans l'acte de fiducie ont les significations y
etant attribuees dans l'acte de fiducie. En cas d'incompatibilite entre le
titre echangeable et l'acte de fiducie, les modalites de l'acte de fiducie
auront preseance.
Le present titre echangeable ne deviendra obligatoire a
quelque fin que ce soit que lorsqu'il aura ete certifie par le fiduciaire alors
en fonction aux termes de l'acte de fiducie.
EN FOI DE QUOI MDC CORPORATION INC. a fait signer le present
titre echangeable par son president et chef de la direction et par son
secretaire de la societe.
Date le [o] decembre 20[o].
MDC CORPORATION INC.
Par ___________________________
[o]
President et chef de la direction
Par ___________________________
[o]
Premier vice-president, finances et
secretaire de la societe
-▇▇-
(▇▇▇▇▇▇ ▇▇ ▇'▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇)
ATTESTATION DU FIDUCIAIRE
Le present titre echangeable fait partie des titres echangeables a taux variable
indique dans l'acte de fiducie mentionne aux presentes.
COMPAGNIE TRUST CIBC MELLON,
Fiduciaire
Par ___________________________
Membre de la direction autorise
(MODELE DE CESSION)
CONTRE VALEUR RECUE, le soussigne vend, cede et transfere par les presentes a
__________________________, dont l'adresse et le numero d'assurance sociale ou
le numero d'identification de contribuable, s'il y a lieu, sont indiques
ci-dessous, le present titre echangeable (ou une tranche de _______________ $
de ce montant en capital*) de MDC CORPORATION INC. inscrit au nom du ou des
soussignes paraissant au registre tenu par MDC CORPORATION INC. a l'egard
de ces titres echangeables, et nomme irrevocablement par les presentes
____________________________________ son fonde de pouvoir pour transferer
ce titre echangeable dans un tel registre, avec pleins pouvoirs de
substitution aux presentes.
En date du __________________________ _____________________________
(signature)
Adresse du cessionnaire _______________________________________________________
(adresse municipale, ville, province et code postal)
En date du _________________________________
Numero d'assurance
sociale du
cessionnaire,
s'il y a lieu : ____________________________
Numero d'identification
de contribuable du
cessionnaire
s'il y a lieu : ____________________________
-▇▇-
▇▇▇▇ ▇▇ ▇▇ signature :
____________________________________ ____________________________
Membre de la direction autorise Nom de l'institution
*Si moins que le montant en capital integral du present titre echangeable peut
faire l'objet d'un transfert, indiquer dans l'espace prevu le montant en capital
(qui doit etre 8,75 $ ou un multiple integral de ce montant) devant etre
transferes.
A) LA OU LES SIGNATURES APPOSEES SUR LA PRESENTE CESSION DOIVENT
CORRESPONDRE EN TOUS POINTS AUX NOMS PARAISSANT AU RECTO DU
PRESENT TITRE ECHANGEABLE, SANS AJOUT NI CHANGEMENT QUEL QU'IL
SOIT. LA OU LES SIGNATURES DOIVENT ETRE AVALISEES PAR UNE BANQUE
A CHARTE OU UNE SOCIETE DE FIDUCIE AU CANADA, UNE BANQUE
COMMERCIALE OU UNE SOCIETE DE FIDUCIE AUX ETATS-UNIS, OU PAR UN
AVAL DE SIGNATURE MEDALLION D'UN PARTICIPANT D'UN PROGRAMME
RECONNU D'AVAL DES SIGNATURES MEDALLION. LES SIGNATURES
NOTARIEES OU AUTHENTIFIEES NE SONT PAS ACCEPTABLES EN TANT QUE
SIGNATURES AVALISEES.
B) LE PORTEUR DU PRESENT TITRE ECHANGEABLE EST RESPONSABLE DU
PAIEMENT DES TAXES SUR LES DOCUMENTS, DROITS DE TIMBRES OU
AUTRES TAXES DE TRANSFERT POUVANT ETRE PAYABLES A L'EGARD DU
TRANSFERT DU PRESENT TITRE ECHANGEABLE.
-90-
(MODELE DU TABLEAU D'INSCRIPTION)
(A l'usage exclusif du fiduciaire ou de tout autre agent
charge de la tenue des registres)
_______________________________________________________________________________
DATE NOM DU LIEU DE SIGNATURE DU
D'INSCRIPTION PORTEUR INSCRIT L'INSCRIPTION FIDUCIAIRE OU DE
TOUT AUTRE
AGENT CHARGE DE
LA TENUE DES
REGISTRES
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(MODELE DU FORMULAIRE D'ECHANGE)
A L'INTENTION DE MDC CORPORATION INC.
ET DE COMPAGNIE TRUST CIBC MELLON
Le porteur soussigne du present titre echangeable choisit irrevocablement par
les presentes d'echanger ce titre echangeable (ou une tranche de
________________ $ de son montant en capital*) conformement aux modalites de
l'acte de fiducie indique dans ce titre echangeable, et demande que des parts
soient remis a la personne dont le nom est indique ci-dessous ou, en l'absence
de directives fournies ci-dessous, au porteur du titre echangeable.
En date du __________________________ ________________________________
(signataire)
_____________________________
Nom de la personne (autre que le porteur inscrit du present titre echangeable)
a laquelle les parts doivent etre inscrites.
________________________________________
Adresse de cette personne
(Adresse municipale, ville province et code postal)
-91-
Numero d'assurance sociale de cette personne : ________________________________
Numero d'identification de contribuable de cette personne :____________________
Aval de la signature :
____________________________________ ______________________________
Membre de la direction autorise Nom de l'institution
Si des parts doivent etre remises a une personne autre que le porteur,
la signature du porteur doit etre avalisee par une banque a charte ou une
societe de fiducie au Canada, par une banque commerciale ou une societe de
fiducie aux Etats-Unis, ou un aval de signature Medallion d'un participant d'un
programme reconnu d'aval des signatures Medallion. Les signatures notariees ou
authentifiees par temoin ne sont pas acceptables en tant que signatures
avalisees.
Le porteur du present titre echangeable est responsable du paiement
des taxes sur les documents, droits de timbres ou des autres taxes de transfert
pouvant etre payables a l'egard de la remise des parts, d'une somme au comptant
ou de biens et de l'interet couru.
*Si moins que le montant en capital global du present titre
echangeable doit faire l'objet d'un echange, veuillez indiquer dans l'espace
prevu le montant en capital (qui doit etre 8,75 $ ou un multiple integral de
cette somme) devant etre echange.
ARTICLE 19
EXECUTION
19.1 Counterparts and Formal Date
This Trust Indenture may be executed in several counterparts and in
facsimile, 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
December 8, 2003.
-92-
IN WITNESS WHEREOF the parties hereto have executed this Trust
Indenture under their respective corporate seals and the hands of their
officers in that behalf.
MDC CORPORATION INC.
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
CUSTOM DIRECT INCOME FUND
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
CIBC MELLON TRUST COMPANY
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title: