CANADIAN PACIFIC FOREST PRODUCTS LIMITED
MONTREAL TRUST COMPANY
10.85% Debentures Due 2014
ARTICLE | Title | Page | ||||
ONE | Definitions and Other Provisions of General Application | 2 | ||||
TWO | Security Forms | 23 | ||||
THREE | The Securities | 41 | ||||
FOUR | Satisfaction and Discharge | 50 | ||||
FIVE | Remedies | 53 | ||||
SIX | The Trustee | 66 | ||||
SEVEN | Consolidation, Merger, Conveyance or Transfer | 76 | ||||
EIGHT | Supplemental Indentures | 78 | ||||
NINE | Meetings of Holders of Securities | 82 | ||||
TEN | Covenants | 87 | ||||
ELEVEN | Redemption and Purchase of Securities | 99 | ||||
TWELVE | Counterparts | 105 | ||||
Testimonium |
General Application
- 3 -
- 4 -
- 5 -
(i) | a Person, alone or with its Affiliates, Associates or Persons with whom such Person is acting jointly or in concert, becomes the Beneficial Owner of more than 30% of the total voting rights attaching to all outstanding Voting Shares of the Corporation or subsequently increases |
- 6 -
such Beneficial Ownership from 50% or less to a majority of the total voting rights attaching to all Voting Shares of the Corporation; provided that this clause (i) shall not apply to the acquisition of shares of the Parent Company; or | |||
(ii) | the individuals who are Continuing Directors shall cease for any reason to constitute at least two-thirds of the Board of Directors; or | ||
(iii) | the Corporation consolidates or amalgamates with or merges into another corporation or conveys, transfers or leases all or substantially all of its assets to any Person, or any corporation consolidates or amalgamates with or merges into the Corporation, in any such event pursuant to a transaction in which outstanding Voting Shares of the Corporation are changed into or exchanged for cash, securities or other property, provided that there shall be excluded from the application of this clause (iii) such transactions (a) between the Corporation and its Subsidiaries or between Subsidiaries, (b) involving solely the establishment of a public holding company for the Corporation, or (c) involving the exchange of the Corporation’s Voting Shares as consideration in the acquisition of another business or businesses (without change or exchange of the Corporation’s outstanding Voting Shares into or for cash, securities or other property); or | ||
(iv) | the Corporation or any Subsidiary of the Corporation purchases or otherwise |
- 7 -
acquires, directly or indirectly, Beneficial Ownership of Voting Shares of the Corporation if, after giving effect to such purchase or acquisition, the Corporation (together with its Subsidiaries) shall have acquired 30% or more of the Corporation’s Voting shares within any 12-month period calculated by reference to the Voting Shares outstanding at the beginning of such period; or | |||
(v) | on any date (a “Calculation Date”) the Corporation makes any distribution or distributions of cash, property or securities (excluding regular dividends and distributions of shares of the Corporation that are not Redeemable Shares) to holders of Voting Shares of the Corporation or purchases or otherwise acquires Beneficial Ownership of Voting Shares of the Corporation and the sum of the fair market value of such distribution or purchase, plus the fair market value of all other such distributions and purchases which have occurred during the preceding 12-month period, is at least 30% of the fair market value of the outstanding Voting Shares of the Corporation; this last percentage is calculated on each Calculation Date by dividing (x) the fair market value of the distributions and purchases which have occurred on such Calculation Date by (y) the fair market value of the Corporation’s outstanding Voting Shares immediately prior to such distributions or purchases, and adding to that percentage all of the percentages which have been similarly calculated on the dates of all such distributions and purchases during the preceding 12-month period. |
- 8 -
- 9 -
- 10 -
(i) | Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation; | ||
(ii) | Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Corporation) in trust or set aside and segregated in trust by the Corporation (if the Corporation shall act as a Paying Agent) for the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; and | ||
(iii) | Securities which have been paid pursuant to Section 306 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there |
- 11 -
shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Corporation; |
- 12 -
(a) | whose total assets or gross revenues (both calculated on a proportionate consolidation basis) represent not less than 15% of the consolidated total assets or, as the case may be, consolidated gross revenues of the Corporation and its |
- 13 -
Subsidiaries taken as a whole, all as calculated by reference to the then latest financial statements (consolidated or, as the case may be, unconsolidated, in accordance with generally accepted accounting principles) of such Subsidiary and the then latest consolidated audited financial statements of the Corporation and its Subsidiaries, after deducting from either of such amounts, as the case may be, the proportion thereof related to minority interests, if any, in the Subsidiary under consideration; or | |||
(b) | to which is transferred the whole or substantially the whole of the assets and undertaking of a Subsidiary which immediately prior to such transfer is a Principal Subsidiary; |
- 14 -
(a) | where the Securities were rated by a Rating Agency on the Rating Date as Investment Grade, the rating of the Securities by such Rating Agency is below Investment Grade; or |
- 15 -
(b) | where the Securities were rated by a Rating Agency on the Rating Date below Investment Grade, the rating of the Securities by such Rating Agency is at least one Full Rating Category below the rating of the Securities by such Rating Agency on the Rating Date. |
- 16 -
- 17 -
- 18 -
- 20 -
- 21 -
- 22 -
- 23 -
- 24 -
- 25 -
$ | No. |
- 26 -
- 27 -
- 28 -
- 29 -
- 30 -
- 31 -
Dated: | December 12, 1989 | CANADIAN PACIFIC FOREST | ||
PRODUCTS LIMITED | ||||
By | ||||
Chairman, President and Chief Executive Officer | ||||
Secretary |
MONTREAL TRUST COMPANY Trustee | ||||||
By | ||||||
Authorized Officer |
- 32 -
Partial purchase: | $ | |||
(multiple of $1,000 only) |
Witness | (Signature of Holder) |
No | $ |
- 33 -
- 34 -
- 35 -
- 36 -
- 37 -
- 38 -
CANADIEN PACIFIQUE LIMITEE | ||||||
Par | ||||||
Le Président du conseil, président et chef de la direction | ||||||
COMPAGNIE MONTREAL TRUST fiduciaire | ||||||
Par | ||||||
- 40 -
(multiple de 1 000 $ seulement)
DATE: | ||||||
- 41 -
- 42 -
Section 302. | Denominations. |
Section 303. | Execution, Authentication Delivery and Dating. |
- 44 -
Section 305. | Registration, Registration of Transfer and Exchange. |
- 45 -
- 46 -
- 47 -
Section 306. | Mutilated, Destroyed, Lost and Stolen Securities. |
- 48 -
- 49 -
Section 307. | Payment of Interest; Interest Rights Preserved. |
Section 308. | Persons Deemed Owners. |
Section 309. | Cancellation and Disposal of Securities. |
- 50 -
Section 310. | Authentication and Delivery of Original Issue. |
Section 401. | Satisfaction and Discharge of Indenture. |
- 51 -
- 52 -
- 53 -
- 54 -
- 55 -
- 56 -
- 57 -
Section 502. | Acceleration of Maturity; Rescission and Annulment. |
- 58 -
Section 503. | Collection of Indebtedness and Suits for Enforcement by Trustee. |
- 59 -
- 61 -
- 62 -
- 63 -
- 64 -
- 65 -
- 66 -
- 67 -
- 68 -
- 69 -
- 71 -
- 72 -
- 73 -
- 74 -
- 75 -
- 76 -
- 77 -
- 78 -
Section 802. | Supplemental Indentures With Consent of Securityholders. |
- 80 -
Section 803. | Execution of Supplemental Indentures. |
- 81 -
Section 804. | Effect of Supplemental Indentures. |
Section 805. | Reference in Securities to Supplemental Indentures. |
- 82 -
Section 901. | Purposes for Which Meetings May Be Called. |
Section 902. | Call, Notice and Place of Meetings. |
- 83 -
Section 903. | Persons Entitled to Vote at Meetings. |
Section 904. | Quorum; Action. |
- 84 -
- 85 -
Section 905. | Determination of Voting Rights; Conduct and Adjournment of Meetings. |
- 86 -
Section 906. | Counting Votes and Recording Action of Meetings. |
- 87 -
Section 1001. | Payment of Principal and Interest. Other Acts or Things. |
Section 1002. | Maintenance of Places of Registration. |
- 88 -
Section 1003. | Money for Security Payments to be Held in Trust. |
- 89 -
- 90 -
Section 1004. | Payment of Taxes and Other Claims. |
- 91 -
Section 1005. | Maintenance of Properties. |
Section 1006. | Negative Pledge. |
- 92 -
(i) | any Mortgage to secure any present or future indebtedness of or related to the affairs or activities of Ponderay Newsprint Company or of Gold River Newsprint Limited Partnership, being joint ventures in which the Corporation or a Subsidiary has an interest, or of their respective successors and assigns, to the extent that such Mortgage affects the property or interests in property in said joint ventures; | ||
(ii) | any Mortgage (except on fixed assets and on shares of a Subsidiary or Affiliate) given to banks or others to secure any Debt issued, assumed or guaranteed by the Corporation or a Subsidiary, which is payable on demand or which matures by its terms less than twelve months from the date of issuance, assumption or guarantee thereof; | ||
(iii) | any Mortgage to secure a Purchase Money Obligation; provided that (A) in the case of any construction or improvement of property, the Mortgage shall only apply to the property to be constructed or improved, to the real or immoveable property which is substantially unimproved for the purposes of the Corporation or a Subsidiary and on which the property so constructed or the improvement is located, and to any machinery or equipment installed at any time so as to constitute immoveable property or a fixture on the real property on which the property so constructed, or the improvement, is located and (B) in the case of any acquisition of property, the Mortgage shall only apply to the property to be |
- 93 -
acquired by the Corporation or a Subsidiary; | |||
(iv) | any Mortgage to secure indebtedness issued, assumed or guaranteed for the construction of townsites, employees’ housing, warehouses or office premises; | ||
(v) | any Mortgage on any non-producing resource property to secure any indebtedness issued, assumed or guaranteed for the development or improvement of non-producing resource property; | ||
(vi) | any Mortgage in favour of a Government in Canada or the United States of America; | ||
(vii) | any Mortgage in favour of the Corporation or any wholly-owned Subsidiary; | ||
(viii) | any Mortgage required to be given or granted by any Subsidiary pursuant to the terms of any trust deed or similar document entered into by such Subsidiary prior to the date it became a Subsidiary; | ||
(ix) | any renewal, replacement or extension (or successive renewals, replacements or extensions) of any Mortgage referred to in clauses (i) to (viii) inclusive above provided, however, that the principal amount of the indebtedness secured thereby shall not exceed the principal amount of the indebtedness so secured at the time of such renewal, replacement or extension; except that this proviso shall not apply to any indebtedness referred to in clause (i) or clause (ii) above nor to any indebtedness of or related to the affairs or activities of any joint |
- 94 -
venture, partnership or similar arrangement in which the Corporation or a Subsidiary has an interest but does not alone have the power to effect any such renewal, replacement or extension; and | |||
(x) | a Mortgage not excepted by clauses (i) through (ix) above, provided that after giving effect thereto the aggregate amount of Debt secured by such Mortgage and other Mortgages created under this clause (x) does not exceed 10% of the consolidated shareholders’ equity of the Corporation as at the end of the then last completed financial quarter of the Corporation. |
Section 1007. | Repayment Rights of Holders in Certain Events. |
- 95 -
- 96 -
- 97 -
- 98 -
Section 1008. | Waiver of Certain Covenants. |
- 100 -
- 101 -
- 102 -
- 103 -
- 104 -
- 105 -
PRODUITS FORESTIERS CANADIEN PACIFIQUE LIMITEE/ CANADIAN PACIFIC FOREST PRODUCTS LIMITED | ||
(signed) | ||
Paul E. Gagne | ||
(signed) | ||
Jacques Beauchamp | ||
COMPAGNIE MONTREAL TRUST - MONTREAL TRUST COMPANY | ||
(signed) | ||
Antonietta De Luca | ||
(signed) | ||
Guy O’Reilly |
(Unsecured)
To be dated December 12, 1989 | To mature November 30, 2014 |
Underwriters’ | Net Proceeds to | |||||||||||
Price to public (1) | fees | the Corporation (2) | ||||||||||
Per Unit | 100% | 0.95% | 99.05% | |||||||||
Total | $ | 125,000,000 | $ | 1,187,500 | $ | 123,812,500 |
(1) | Plus accrued interest, if any, from December 12, 1989 to the date of delivery. | |
(2) | Before deducting expenses of issue estimated at $200,000. |
Issue: | 10.85% Debenture Due 2014. | |
Amount: | $125 million. | |
Issue Price: | 100 plus accrued interest, if any. | |
Interest: | 10.85% per annum payable semi-annually on May 31 and November 30, commencing May 31, 1990. | |
Redemption: | Redeemable at any time at the higher of the Canada Yield Price and par. | |
Purchase for Cancellation: | Debentures may be purchased for cancellation at any time in the market or by tender or private contract at any price. | |
Purchase Funds: | Commencing January 1, 1997, the Corporation will make all reasonable efforts to purchase for cancellation during each calendar quarter (cumulative within the same calendar year) 1% of the aggregate principal amount of the Debentures, at prices below par. If the Corporation purchases such percentage of Debentures during each quarter, the average life of the Debentures would be approximately 18.5 years. | |
Rank: | The Debentures will be direct unsecured obligations of the Corporation. | |
Negative Pledge: | The Debentures will have the benefit of a negative pledge. | |
Put Right of Holders: | Upon the occurrence of both a Designated Event and a Rating Decline, each holder of Debentures may require the Corporation to purchase, on the Repayment Date, all or any portion of its Debentures at a price equal to the Put Price, unless a Rating Recovery has occurred. | |
Use of Proceeds: | The net proceeds to the Corporation from the sale of the Debentures will be used to reimburse long-term bank indebtedness primarily incurred to finance the Corporation’s capital expenditure program. | |
Interest and Asset Coverages: | Interest coverage on consolidated long-term debt, including this issue, for the 12 months ended September 30, 1989: 13.1 times. | |
Consolidated net tangible asset coverage of long-term debt, including this issue, as at September 30, 1989: | ||
— before deduction of deferred income taxes: 7.2 times; and | ||
— after deduction of deferred income taxes: 5.9 times. |
3
Page | ||||
Production Facilities | 2 | |||
Summary of the Offering | 3 | |||
Documents Incorporated by Reference | 4 | |||
Eligibility for Investment | 5 | |||
The Corporation | 6 | |||
Use of Proceeds | 6 | |||
Details of the Offering | 6 | |||
Plan of Distribution | 12 | |||
Material Changes in Loan Capital in 1989 | 12 | |||
Interest and Asset Coverages | 12 | |||
Transfer Agent and Registrar | 12 | |||
Purchaser’s Statutory Rights | 13 | |||
Certificates | 14 |
(1) | the Corporation’s Annual Information Form dated June 13, 1989, including the audited consolidated financial statements of the Corporation for the year ended December 31,1988 together with the auditors’ report thereon; | ||
(2) | The Corporation’s Management Proxy Circular dated February 17, 1989; and | ||
(3) | the Corporation’s first, second and third quarter reports to shareholders which include the unaudited consolidated financial statements for each of the periods ended March 31, June 30 and September 30, 1989, respectively. |
4
(a) | for insurance companies registered or licensed under the Canadian and British Insurance Companies Act (Canada) or the Foreign Insurance Companies Act (Canada); and | ||
(b) | for pension funds registered under the Pension Benefits Standards Act, 1985 (Canada) or An Act respecting supplemental pension plans (Quebec). |
5
6
(i) | any security on assets or interests in the assets in Ponderay Newsprint Company or Gold River Newsprint Limited Partnership, being joint ventures in which the Corporation or a subsidiary has an interest, to secure any present or future indebtedness of or related to such joint ventures; | ||
(ii) | any security (except on fixed assets and shares of a subsidiary or affiliate) given to banks or others to secure any indebtedness for borrowed money payable on demand or maturing within 12 months of the date that such indebtedness is incurred; | ||
(iii) | any purchase money mortgage (which will be defined in the Trust Indenture to include a mortgage on property purchased to secure all or part of the purchase price thereof or the cost of improvement thereof); | ||
(iv) | any security to secure indebtedness assumed or incurred for the construction of townsites, employees’ housing, warehouses and/or office premises; | ||
(v) | any security on any non-producing resource property to secure any indebtedness incurred for the development or improvement of non-producing resource property; | ||
(vi) | security in favour of a government in Canada or the United States; | ||
(vii) | any security in favour of the Corporation or any wholly-owned subsidiary; | ||
(viii) | any security required to be given or granted by any subsidiary pursuant to the terms of any trust deed or similar document entered into prior to the date it became a subsidiary; | ||
(ix) | any renewal, replacement or extension of any of the foregoing, provided that the principal amount of the indebtedness secured thereby is not increased except in the case of indebtedness referred to in (i) and (ii) above and any indebtedness of or related to joint ventures or partnerships in which the Corporation or a subsidiary has an interest but does not alone have the power to effect such renewal, replacement or extension; or | ||
(x) | any other security if, after giving effect thereto, the aggregate principal amount of indebtedness secured thereby and by other security created pursuant to this clause (x) would not be greater than 10% of consolidated shareholders’ equity of the Corporation. |
7
(i) | The Corporation shall promptly give written notice to the Trustee of the occurrence of any Designated Event and Rating Decline and the Trustee shall thereafter give to the Debentureholders a notice setting forth in reasonable detail the Designated Event, the Rating Decline, the repayment right of the Debentureholders, the right of the Corporation to give a notice of an increased interest rate, the termination of all such rights upon the occurrence of a Rating Recovery and the right of the Corporation to purchase untendered Debentures under certain circumstances; | ||
(ii) | If a Rating Recovery has occurred, the Corporation shall so notify the Trustee who shall promptly notify the Debentureholders of such occurrence and the consequences thereof; | ||
(iii) | If the Corporation has not increased the interest rate borne by the Debentures in accordance with the foregoing, the Trustee shall, on the 90th day following a Rating Decline Date, give notice to the Debentureholders of their right to require the Corporation to purchase their Debentures, which notice shall set forth the Put Price in effect on the date of such notice; and | ||
(iv) | To exercise the right to require the Corporation to purchase its Debentures, a Debentureholder shall deliver to the Trustee, not more than 30 days and not less than four business days prior to the Repayment Date, written notice of the holder’s exercise of such right, together with the Debentures with respect to which the right is being exercised, duly endorsed for transfer. |
8
(i) | a person (within the meaning of the Securities Act (Ontario) as enacted on the date of the Trust Indenture (the “Act”)), alone or with its affiliates, associates or persons with whom such person is acting jointly or in concert (all within the meaning of the Act), becomes the beneficial owner (within the meaning of the Act) of more than 30% of the total voting rights attaching to all classes of shares then outstanding of the Corporation having under all circumstances the right to elect directors (the “Voting Shares”) or subsequently increases such beneficial ownership from 50% or less to a majority of the Voting Shares of the Corporation; provided that this clause(i) shall not apply to the acquisition of shares of the Parent Company; or | ||
(ii) | the individuals who are Continuing Directors shall cease for any reason to constitute at least two-thirds of the Board of Directors of the Corporation; or | ||
(iii) | the Corporation consolidates or amalgamates with or merges into another corporation or conveys, transfers or leases all or substantially all of its assets to any person, or any corporation consolidates or amalgamates with or merges into the Corporation, in any such event pursuant to a transaction in which outstanding Voting Shares of the Corporation are changed into or exchanged for cash, securities or other property, provided that there shall be excluded from the application of this clause (iii) such transactions (a) between the Corporation and its subsidiaries or between subsidiaries, (b) involving solely the establishment of a public holding company for the Corporation, or (e) involving the exchange of the Corporation’s Voting Shares as consideration in the acquisition of another business or businesses (without change or exchange of the Corporation’s outstanding Voting Shares into or for cash, securities or other property); or | ||
(iv) | the Corporation or any subsidiary of the Corporation purchases or otherwise acquires, directy or indirectly, beneficial ownership of Voting Shares of the Corporation if, after giving effect to such purchase or acquisition, the Corporation (together with its subsidiaries) shall have acquired 30% or more of the Corporation’s Voting Shares within any 12-month period calculated by reference to the Voting Shares outstanding at the beginning of such period; or | ||
(v) | on any date (a “Calculation Date”) the Corporation makes any distribution or distributions of cash, property or securities (excluding regular dividends and distributions of non-redeemable and non-retractable shares of the Corporation) to holders of Voting Shares of the Corporation or purchases or otherwise acquires beneficial ownership of Voting Shares of the Corporation and the sum of the fair market value of such distribution or purchase, plus the fair market value of all other such distributions and purchases which have occurred during the preceding 12-month period, is at least 30% of the fair market value of the outstanding Voting Shares of the Corporation. This last percentage is calculated on each Calculation Date by dividing (x) the fair market value of the distributions and purchases which have occurred on such Calculation Date by (y) the fair market value of the Corporation’s outstanding Voting Shares immediately prior to such distributions or purchases, and adding to that percentage all of the percentages which have been similarly calculated on the dates of all such distributions and purchases during the preceding 12-month period. |
9
(a) | where the Debentures were rated by a Rating Agency on the Rating Date as Investment Grade, the rating of the Debenture by such Rating Agency is below Investment Grade; or | ||
(b) | where the Debentures were rated by a Rating Agency on the Rating Date below Investment Grade, the rating of the Debentures by such Rating Agency is at least one Full Rating Category below the rating of the Debentures by such Rating Agency on the Rating Date. |
10
11
Interest coverage on consolidated long-term debt of the Corporation | 13.1 times | |||
Consolidated net tangible asset coverage of long-term debt: | ||||
— before deduction of deferred income taxes | 7.2 times | |||
— after deduction of deferred income taxes | 5.9 times |
12
Cecil S. Flenniken | Paul E.Gagné | |
Chairman, President and | Executive Vice-President. | |
Chief Executive Officer | Finance, Accounting and Logistics, | |
(Chief Financial Officer) |
R. C. Meech | Michel Bélanger | |
Director | Director |
RBC Dominion Securities Inc. | Wood Gundy Inc. | |||||||
Per: | Per: | |||||||
T. T. Pepper | Conrad H. Harrington |
Burns Fry Limited | ScotiaMcleod inc. | Toronto Dominon Securities Inc. | ||||||||
Per: | Per: | Per: | ||||||||
G. A. Edwards | P. Matuszewski | Robert J. Keating |
14