EXHIBIT 7.1
AXCAN PHARMA INC.
and
U.S. BANK NATIONAL ASSOCIATION
as Trustee
------------------
INDENTURE
Dated as of March 5, 2003
------------------
$125,000,000 Principal Amount
(Includes Exercise of Over-allotment Option In Full)
4 1/4% CONVERTIBLE SUBORDINATED NOTES DUE 2008
CROSS-REFERENCE TABLE*
TIA Indenture
Section Section
------- -------
310(a)(1)................................................................................................... 7.10
(a)(2)................................................................................................. 7.10
(a)(3)................................................................................................. N.A.
(a)(4)................................................................................................. N.A.
(b)....................................................................................... 7.08; 7.10; 12.02
(c).................................................................................................... N.A.
311(a)...................................................................................................... 7.11
(b).................................................................................................... 7.11
(c).................................................................................................... N.A.
312(a)...................................................................................................... 2.05
(b).................................................................................................... 12.03
(c).................................................................................................... 12.03
313(a)...................................................................................................... 7.06
(b)(1)................................................................................................. N.A.
(b)(2)................................................................................................. 7.06
(c)............................................................................................. 7.06; 12.02
(d).................................................................................................... 7.06
314(a)...................................................................................................... 4.02
(b).................................................................................................... N.A.
(c)(1)................................................................................................. 12.04
(c)(2)................................................................................................. 12.04
(c)(3)................................................................................................. N.A.
(d).................................................................................................... N.A.
(e).................................................................................................... 12.05
(f).................................................................................................... N.A.
315(a).................................................................................................... 7.01(B)
(b)............................................................................................. 7.05; 12.02
(c).................................................................................................. 7.01(A)
(d).................................................................................................. 7.01(C)
(e).................................................................................................... 6.11
316(a)(last sentence)....................................................................................... 2.09
(a)(1)(A).............................................................................................. 6.05
(a)(1)(B).............................................................................................. 6.04
(a)(2)................................................................................................. N.A.
(b).................................................................................................... 6.07
317(a)(1)................................................................................................... 6.08
(a)(2)................................................................................................. 6.09
(b).................................................................................................... 2.04
318(a)...................................................................................................... 12.01
* N.A means Not Applicable.
Note: This Cross Reference Table shall not, for any purpose, be deemed to be
part of the
Indenture.
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TABLE OF CONTENTS
Article One
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 101. Definitions..........................................................................................1
"Additional Interest Amount"................................................................................1
"Affiliate".................................................................................................1
"Agent".....................................................................................................1
"Board of Directors"........................................................................................1
"Board Resolution"..........................................................................................1
"Capital Stock".............................................................................................1
"Change in Control Price"...................................................................................1
"Common Shares".............................................................................................2
"Company"...................................................................................................2
"Company Request"or "Company Order".........................................................................2
"Corporate Trust Office of the Trustee".....................................................................2
"Daily Market Price"........................................................................................2
"Default"...................................................................................................2
"Depositary"................................................................................................2
"Exchange Act"..............................................................................................2
"Holder"or "Security Holder"................................................................................2
"Indenture".................................................................................................2
"Initial Purchasers"........................................................................................2
"Interest"..................................................................................................3
"Issue Date"................................................................................................3
"Maturity Date".............................................................................................3
"Non-U.S. Person"...........................................................................................3
"Officer"...................................................................................................3
"Officers'Certificate"......................................................................................3
"Opinion of Counsel"........................................................................................3
"Over-Allotment Option".....................................................................................3
"Person"....................................................................................................3
"Purchase Agreement"........................................................................................3
"QIB".......................................................................................................3
"Redemption Price"..........................................................................................3
"Registration Rights Agreement".............................................................................3
"Regulation S"..............................................................................................3
"Regulation S Global Security"..............................................................................4
"Responsible Officer".......................................................................................4
"Restricted Security".......................................................................................4
"Rule 144A".................................................................................................4
"Rule 144A Global Security".................................................................................4
"Santions Regulations"......................................................................................4
"SEC".......................................................................................................4
"Securities"................................................................................................4
"Securities Act"............................................................................................4
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"Significant Subsidiary"....................................................................................4
"Senior Indebtedness".......................................................................................4
"Stated Maturity"...........................................................................................4
"Subsidiary"................................................................................................4
"Tax Act"...................................................................................................5
"TIA".......................................................................................................5
"Trustee"...................................................................................................5
SECTION 102. Other Definitions...................................................................................5
SECTION 103. Incorporated By Reference from Trust Indenture Act..................................................6
SECTION 104. Rules Of Construction...............................................................................6
Article Two
THE SECURITIES
SECTION 201. Form And Dating....................................................................................7
SECTION 202. Execution And Authentication.......................................................................8
SECTION 203. Registrar, Paying Agent And Conversion Agent.......................................................8
SECTION 204. Paying Agent To Hold Money In Trust................................................................9
SECTION 205. Security Holder Lists..............................................................................9
SECTION 206. Transfer And Exchange..............................................................................9
SECTION 207. Replacement Securities.............................................................................10
SECTION 208. Outstanding Securities.............................................................................10
SECTION 209. Securities Held By The Company Or An Affiliate.....................................................11
SECTION 210. Temporary Securities...............................................................................11
SECTION 211. Cancellation.......................................................................................11
SECTION 212. Defaulted Interest.................................................................................12
SECTION 213. Cusip Numbers......................................................................................12
SECTION 214. Deposit Of Moneys..................................................................................12
SECTION 215. Book-Entry Provisions For Global Securities........................................................12
SECTION 216. Special Transfer Provisions........................................................................14
SECTION 217. Restrictive Legends................................................................................16
SECTION 218. Computation of Interest............................................................................17
Article Three
REDEMPTION
SECTION 301. Right Of Redemption................................................................................17
SECTION 302. Notices To Trustee.................................................................................17
SECTION 303. Selection Of Securities To Be Redeemed.............................................................17
SECTION 304. Notice Of Redemption...............................................................................18
SECTION 305. Effect Of Notice Of Redemption.....................................................................19
SECTION 306. Deposit Of Redemption Price........................................................................19
SECTION 307. Securities Redeemed In Part........................................................................19
SECTION 308. Redemption For Tax Reasons.........................................................................20
SECTION 309. Purchase at the Option of Holders Upon a Change in Control.........................................21
SECTION 310. Conversion Arrangement On Call For Redemption......................................................25
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Article Four
COVENANTS
SECTION 401. Payment Of Securities..............................................................................26
SECTION 402. Maintenance Of Office Or Agency....................................................................26
SECTION 403. Reports............................................................................................26
SECTION 404. Compliance Certificate.............................................................................27
SECTION 405. Stay, Extension And Usury Laws.....................................................................27
SECTION 406. Corporate Existence................................................................................27
SECTION 407. Payment Of Additional Amounts......................................................................28
SECTION 408. Notice Of Default..................................................................................29
SECTION 409. Use Of Proceeds; Repayment.........................................................................29
SECTION 410. Further Instruments And Acts.......................................................................29
Article Five
SUCCESSORS
SECTION 501. When Company May Merge, Etc........................................................................29
SECTION 502. Successor Substituted..............................................................................30
Article Six
DEFAULTS AND REMEDIES
SECTION 601. Events Of Default..................................................................................30
SECTION 602. Acceleration.......................................................................................32
SECTION 603. Other Remedies.....................................................................................32
SECTION 604. Waiver Of Past Defaults............................................................................33
SECTION 605. Control By Majority................................................................................33
SECTION 606. Limitation On Suits................................................................................33
SECTION 607. Rights Of Holders To Receive Payment...............................................................33
SECTION 608. Collection Suit By Trustee.........................................................................34
SECTION 609. Trustee May File Proofs Of Claim...................................................................34
SECTION 610. Priorities.........................................................................................34
SECTION 611. Undertaking For Costs..............................................................................35
Article Seven
TRUSTEE
SECTION 701. Duties Of Trustee..................................................................................35
SECTION 702. Rights Of Trustee..................................................................................36
SECTION 703. Individual Rights Of Trustee.......................................................................37
SECTION 704. Trustee's Disclaimer...............................................................................37
SECTION 705. Notice Of Defaults.................................................................................37
SECTION 706. Reports By Trustee To Holders......................................................................38
SECTION 707. Compensation And Indemnity.........................................................................38
SECTION 708. Replacement Of Trustee.............................................................................38
SECTION 709. Successor Trustee By Merger, Etc...................................................................39
SECTION 710. Eligibility, Disqualification......................................................................39
SECTION 711. Preferential Collection Of Claims Against Company..................................................40
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Article Eight
DISCHARGE OF INDENTURE
SECTION 801. Termination Of The Obligations Of The Company......................................................40
SECTION 802. Application Of Trust Money.........................................................................41
SECTION 803. Repayment To Company...............................................................................41
SECTION 804. Reinstatement......................................................................................41
Article Nine
AMENDMENTS
SECTION 901. Without Consent Of Holders.........................................................................42
SECTION 902. With Consent Of Holders............................................................................42
SECTION 903. Compliance With Trust Indenture Act................................................................44
SECTION 904. Revocation And Effect Of Consents..................................................................44
SECTION 905. Notation On Or Exchange Of Securities..............................................................44
SECTION 906. Trustee Protected..................................................................................44
Article Ten
CONVERSION
SECTION 1001. Conversion Privilege, Restrictive Legends..........................................................45
SECTION 1002. Conversion Procedure...............................................................................45
SECTION 1003. Fractional Shares..................................................................................46
SECTION 1004. Taxes On Conversion................................................................................46
SECTION 1005. Company To Provide Shares..........................................................................46
SECTION 1006. Adjustment Of Conversion Rate......................................................................47
SECTION 1007. No Adjustment......................................................................................51
SECTION 1008. Other Adjustments..................................................................................52
SECTION 1009. Adjustments For Tax Purposes.......................................................................52
SECTION 1010. Notice Of Adjustment...............................................................................53
SECTION 1011. Notice Of Certain Transactions.....................................................................53
SECTION 1012. Effect Of Reclassifications, Consolidations, Amalgamations,
Statutory Arrangements, Mergers, Binding Share Exchanges Or Sales
On Conversion Privilege............................................................................53
SECTION 1013. Trustee's Disclaimer...............................................................................54
Article Eleven
SUBORDINATION
SECTION 1101. Agreement To Subordinate...........................................................................55
SECTION 1102. Certain Definitions................................................................................55
SECTION 1103. Liquidation; Dissolution; Bankruptcy...............................................................56
SECTION 1104. Company Not To Make Payments With Respect To Securities
In Certain Circumstances...........................................................................57
SECTION 1105. Acceleration Of Securities.........................................................................57
SECTION 1106. When Distribution Must Be Paid Over................................................................57
SECTION 1107. Notice By Company..................................................................................57
SECTION 1108. Subrogation........................................................................................57
SECTION 1109. Relative Rights....................................................................................58
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SECTION 1110. Subordination May Not Be Impaired By Company.......................................................58
SECTION 1111. Distribution Or Notice To Representative...........................................................58
SECTION 1112. Rights Of Trustee And Paying Agent.................................................................59
SECTION 1113. Officers'Certificate...............................................................................59
SECTION 1114. Not To Prevent Events Of Default...................................................................59
Article Twelve
MISCELLANEOUS
SECTION 1201. Trust Indenture Act Controls.......................................................................60
SECTION 1202. Notices............................................................................................60
SECTION 1203. Communication By Holders With Other Holders........................................................60
SECTION 1204. Certificate And Opinion As To Conditions Precedent.................................................61
SECTION 1205. Statements Required In Certificate Or Opinion......................................................61
SECTION 1206. Rules By Trustee And Agents........................................................................62
SECTION 1207. Legal Holidays.....................................................................................62
SECTION 1208. No Recourse Against Others.........................................................................62
SECTION 1209. Duplicate Originals................................................................................62
SECTION 1210. Governing Law......................................................................................62
SECTION 1211. No Adverse Interpretation Of Other Agreements......................................................62
SECTION 1212. Successors.........................................................................................63
SECTION 1213. Consent To Jurisdiction And Service Of Process.....................................................63
SECTION 1214. Conversion Of Currency.............................................................................64
SECTION 1215. Separability.......................................................................................65
SECTION 1216. Table Of Contents, Headings, Etc...................................................................65
EXHIBIT A Face of Security..............................................................................A-1
Trustee's Certificate of Authentication.......................................................A-2
Reverse of Security...........................................................................A-3
Form of Assignment...........................................................................A-13
Conversion Notice............................................................................A-16
Option of Holder to Elect Purchase Notice....................................................A-17
Notice of Election Upon Tax Redemption...................................................... A-18
Schedule A .....................................................................................Schedule ▇-▇
▇▇▇▇▇▇▇ ▇-▇ Form of Private Placement Legend............................................................B-1-1
EXHIBIT B-2 Form of Legend for Global Security..........................................................B-2-1
EXHIBIT D-1 Form of Certificate to Be Delivered in Connection with Transfers Pursuant to
Regulation S................................................................................D-1-1
EXHIBIT E Form of Notice of Transfer Pursuant to Registration Statement.................................E-1
EXHIBIT F Form of Opinion of Counsel in Connection with Registration Statement..........................F-1
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INDENTURE, dated as of March 5, 2003 between
AXCAN PHARMA
INC., a Canadian corporation (the "COMPANY"), and U.S. BANK NATIONAL
ASSOCIATION, as trustee (the "TRUSTEE").
Each party agrees as follows for the benefit of the other
parties and for the equal and ratable benefit of the Holders of the Company's 4
1/4% Convertible Subordinated Notes due 2008 (the "SECURITIES").
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 101. DEFINITIONS.
"ADDITIONAL INTEREST AMOUNT" has the meaning provided in the
Registration Rights Agreement.
"AFFILIATE" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For this purpose, "control" shall
mean the power to direct the management and policies of a Person, directly or
indirectly, through the ownership of securities, by contract or otherwise.
"AGENT" means any Registrar, Paying Agent, Conversion Agent or
co-registrar.
"BOARD OF DIRECTORS" means the Board of Directors of the
Company or any committee thereof authorized to act for it hereunder.
"BOARD RESOLUTION" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"CANADIAN SECURITIES LAWS" means the securities laws, rules,
regulations and written policy statements of any province or territory of
Canada, as the same may be amended from time to time.
"CAPITAL STOCK" means any and all shares, interests,
participations or other equivalents (however designated) of share capital or
capital stock, as the case may be, of the Person and all warrants or options to
acquire such share capital or capital stock, as the case may be.
"CHANGE IN CONTROL PRICE" means, with respect to a Security
duly tendered for purchase by the Company in accordance with Section 309, 100%
of the outstanding principal amount of such Security so tendered.
"CLEARSTREAM" means Clearstream Bank, S.A.
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"COMMON SHARES" means the common shares of the Company and
associated common share purchase rights, or such other capital stock into
which the Company's common shares are reclassified or changed.
"COMPANY" means the party named as such above until a
successor replaces it pursuant to the applicable provision hereof and thereafter
means the successor.
"COMPANY REQUEST" OR "COMPANY ORDER" means a written
request or order signed on behalf of the Company by any one of its Chairman of
the Board, its Chief Executive Officer, its President, its Chief Operating
Officer, its Chief Financial Officer, any Senior Vice President or any Vice
President and by any one of its Treasurer, Assistant Treasurer, Secretary or
Assistant Secretary, and delivered to the Trustee.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the
address of the Trustee specified in Section 1202 or such other address as the
Trustee may give notice of to the Holders and the Company.
"DAILY MARKET PRICE" means the price of a Common
Share on the relevant date, determined (a) on the basis of the last reported
sale price regular way of the Common Shares as reported on the Nasdaq National
Market (the "NNM"), or if the Common Shares are not then listed on the NNM, as
reported on such national securities exchange upon which the Common Shares are
listed, or (b) if there is no such reported sale on the day in question, on the
basis of the average of the closing bid and asked quotations regular way as so
reported, or (c) if the Common Shares are not listed on the NNM or on any
national securities exchange or automated quotation system, on the basis of the
average of the high bid and low asked quotations regular way on the day in
question in the over-the-counter market as reported by the National Association
of Securities Dealers Automated Quotation System, or if not so quoted, as
reported by National Quotation Bureau, Incorporated, or a similar organization.
"DEFAULT" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"DEPOSITARY" means The Depository Trust Company, its nominees
and successors.
"EUROCLEAR" means Euroclear Bank, S.A./N.V., as operator of
the Euroclear System.
"EXCHANGE ACT" means the U.S. Securities Exchange Act of 1934,
as amended.
"HOLDER" OR "SECURITY HOLDER" means a person in whose name a
Security is registered on the Registrar's books.
"
INDENTURE" means this Indenture as amended or supplemented
from time to time, including the provisions of the TIA that are deemed to be a
part hereof.
"INITIAL PURCHASERS" means UBS Warburg LLC, ▇.▇. ▇▇▇▇▇▇
Securities Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇▇ NBF Securities Inc.
2
"INTEREST" includes the Additional Interest Amount, unless the
context otherwise requires.
"ISSUE DATE"of any Security means the date on which the
Security was originally issued or deemed issued as set forth on the face of the
Security.
"MATURITY DATE" means the date on which the principal of such
Security or an installment of principal becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, notice of redemption, Change in Control Notice or otherwise.
"NON-U.S. PERSON" means a Person who is not a U.S. person (as
defined in Regulation S under the Securities Act).
"OFFICER" means the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Operating Officer, the Chief Financial
Officer, any Senior Vice President, any Vice President, the Treasurer, the
Secretary or the General Counsel of the Company.
"OFFICERS' CERTIFICATE" means a certificate signed by two
Officers or by an Officer and an Assistant Treasurer or an Assistant Secretary
of the Company.
"OPINION OF COUNSEL" means a written opinion from legal
counsel who may be an employee of or counsel for the Company, or other counsel
reasonably acceptable to the Trustee.
"OVER-ALLOTMENT OPTION" means the option granted to the
Initial Purchasers to purchase up to an additional $15,000,000 aggregate
principal amount of Securities pursuant to the Purchase Agreement.
"PERSON" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization or government or other agency or political
subdivision thereof.
"PURCHASE AGREEMENT" means the Purchase Agreement dated as of
February 27, 2003 between the Company and the Initial Purchasers.
"QIB" means a "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act.
"REDEMPTION PRICE" means, with respect to a Security to be
redeemed by the Company in accordance with Article III, the percentage of the
outstanding principal amount of such Security payable by the Company upon such
redemption.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement dated as of March 5, 2003 between the Company and the Initial
Purchasers.
"REGULATION S" means Regulation S promulgated under the
Securities Act.
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"REGULATION S GLOBAL SECURITY" means a permanent Global
Security in registered form representing the aggregate principal amount of
Securities sold in reliance on Regulation S.
"RESPONSIBLE OFFICER" shall mean, when used with respect to
the Trustee, any officer within the corporate trust department of the Trustee,
including any vice president, assistant vice president, assistant secretary,
assistant treasurer, trust officer or any other officer of the Trustee who
customarily performs functions similar to those performed by the Persons who at
the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of such person's knowledge of and familiarity with
the particular subject and who shall have direct responsibility for the
administration of this Indenture.
"RESTRICTED SECURITY" means a Security that constitutes a
"restricted security" within the meaning of Rule 144(a)(3) promulgated under the
Securities Act; provided, however, that the Trustee shall be entitled to request
and conclusively rely on an Opinion of Counsel with respect to whether any
Security constitutes a Restricted Security.
"RULE 144A" means Rule 144A promulgated under the Securities
Act.
"RULE 144A GLOBAL SECURITY" means a permanent Global Security
in registered form representing the aggregate principal amount of Securities
sold in reliance on Rule 144A.
"SANCTIONS REGULATIONS" mean the regulations of the United
States Treasury Department set forth under 31 CFR, Subtitle B, Chapter V, as
amended, or any enabling legislation or executive order relating thereto.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means the 4 1/4% Convertible Subordinated Notes
due 2008 issued by the Company pursuant to this Indenture, including pursuant to
the exercise of the Over-Allotment Option.
"SECURITIES ACT" means the U.S. Securities Act of 1933, as
amended.
"SIGNIFICANT SUBSIDIARY" with respect to any Person means any
subsidiary of such Person that constitutes a "significant subsidiary" within the
meaning of Rule 1-02 of Regulation S-X promulgated under the Securities Act.
"SENIOR INDEBTEDNESS" means all Indebtedness of the Company
outstanding at any time, except (1) the Securities, (2) Indebtedness that by its
terms provides that it shall be subordinate in right of payment to the
Securities or (3) Indebtedness that is not otherwise senior in right of payment
to the Securities. Senior Indebtedness does not include Indebtedness of the
Company to any of its Subsidiaries.
"STATED MATURITY" means April 15, 2008.
"SUBSIDIARY" means (i) a corporation a majority of whose
capital stock with voting power, under ordinary circumstances, to elect
directors is at the time, directly or indirectly, owned by the Company, by one
or more subsidiaries of the Company or by the Company and
4
one or more of its subsidiaries or (ii) any other Person (other than a
corporation) in which the Company, one or more its subsidiaries or the Company
and one or more its subsidiaries, directly or indirectly, at the date of
determination thereof, have at least majority ownership interest or the power to
elect or direct the election of a majority of the directors or other governing
body of such Person.
"TAX ACT" means the Income Tax Act (Canada) or a Canadian,
provincial or territorial income tax statute.
"TIA" means the U.S. Trust Indenture Act of 1939 as in effect
on the date of this Indenture, except as provided in Section 903.
"TRUSTEE" means the party named as such in this Indenture
until a successor replaces it in accordance with the provisions hereof and
thereafter means the successor.
SECTION 102. OTHER DEFINITIONS.
TERM DEFINED IN SECTION
"ADDITIONAL AMOUNTS" 407
"BANKRUPTCY LAW" 601
"BUSINESS DAY" 1207
"CANADIAN TAXES" 407
"CHANGE IN CONTROL" 309
"CHANGE IN CONTROL NOTICE" 309
"CHANGE IN CONTROL OFFER" 309
"CHANGE IN CONTROL PURCHASE DATE" 309
"COMBINED AMOUNT" 1006
"COMMENCEMENT DATE" 1006
"CONVERSION AGENT" 203
"CONVERSION DATE" 1002
"CONVERSION SHARES" 1006
"CURRENT MARKET PRICE" 1006
"CUSTODIAN" 601
"DEEMED INTEREST PERIOD" 218
"DETERMINATION DATE" 1006
"DISTRIBUTION DATE" 1006
"DISTRIBUTION DECLARATION DATE" 1006
"EVENT OF DEFAULT" 601
"EXCLUDED HOLDER" 407
"EXPIRATION TIME" 1006
"GLOBAL SECURITY" 201
"INDEBTEDNESS" 1102
"INELIGIBLE CONSIDERATION" 1012
"JUDGMENT CURRENCY" 1214
"LEGAL HOLIDAY" 1207
"NOTICE OF ELECTION" 308
5
"NNM" 101
"PARTICIPANTS" 215
"PAYING AGENT" 203
"PAYMENT BLOCKAGE" 1104
"PAYMENT BLOCKAGE NOTICE" 1104
"PHYSICAL SECURITIES" 201
"PRESCRIBED SECURITIES" 1012
"PRIVATE PLACEMENT LEGEND" 217
"PURCHASE DATE" 309
"PURCHASED SHARES" 1006
"RATE(S) OF EXCHANGE" 1214
"REGISTRAR" 203
"REPRESENTATIVE" 1102
"REQUIRED CURRENCY" 1214
"RESTRICTED PERIOD" 215
"RIGHTS" 1006
"RIGHTS PLAN" 1007
"TRIGGERING DISTRIBUTION" 1006
"U.S. GOVERNMENT OBLIGATIONS" 801
"VOTING SECURITIES" 309
SECTION 103. INCORPORATED BY REFERENCE FROM TRUST
INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the
following meanings:
"COMMISSION" means the SEC;
"INDENTURE SECURITIES" means the Securities;
"INDENTURE SECURITY HOLDER" means a Security Holder or a
Holder;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the
Trustee; and
"OBLIGOR" on the indenture securities means the Company or any
successor.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA and not otherwise defined herein have the meanings so assigned to them.
SECTION 104. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
6
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles in
the United States in effect on the date hereof;
(c) "or" is not exclusive;
(d) words in the singular include the plural and in the
plural include the singular;
(e) all references to "dollars" and "$" shall mean U.S.
dollars;
(f) provisions apply to successive events and transactions;
and
(g) "herein", "hereof", "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision.
ARTICLE TWO
THE SECURITIES
SECTION 201. FORM AND DATING.
The Securities and the Trustee's certificate of authentication
shall be substantially in the form set forth in EXHIBIT A, which is incorporated
in and forms a part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule or usage. Each
Security shall be dated the date of its authentication.
Securities offered and sold in reliance on Rule 144A or on
Regulation S under the Securities Act shall be issued initially in the form of
one or more Global Securities, substantially in the form set forth in EXHIBIT A
(the "GLOBAL SECURITY"), deposited with, or on behalf of, the Depositary or with
the Trustee, as custodian for the Depositary, and registered in the name of the
Depositary or the nominee thereof, duly executed by the Company and
authenticated by the Trustee as hereinafter provided and bearing the legends set
forth in EXHIBITS B-1 and B-2. The aggregate principal amount of the Global
Security may from time to time be increased or decreased by adjustments made on
the records of the Trustee, as custodian for the Depositary, as hereinafter
provided; provided, that in no event shall the aggregate principal amount of the
Global Security or Securities exceed $110,000,000 or $125,000,000 if the
Over-Allotment Option is exercised in full.
Securities issued in exchange for interests in a Global
Security pursuant to Section 215 may be issued in the form of permanent
certificated Securities in registered form in substantially the form set forth
in EXHIBIT A (the "PHYSICAL SECURITIES") and, if applicable, bearing any legends
required by Section 217.
All Securities offered and sold in reliance on Regulation S
shall remain in the form of a Global Security for 40 days after the Issue Date
for the Securities. Notwithstanding the foregoing, in the event that Physical
Securities are issued in respect of beneficial interests in a
7
Regulation S Global Security at any time prior to 40 days after the date of this
Indenture (other than in a transaction subject to Rule 144A) the Company shall,
as promptly as practicable, institute procedures, including appropriate
certifications reasonably designed to ensure that any transfer of such Physical
Securities prior to the end of such 40 day period is made only in accordance
with Regulation S, pursuant to a registration statement under the Securities Act
or pursuant to an exemption from registration under the Securities Act.
SECTION 202. EXECUTION AND AUTHENTICATION.
The Securities shall be executed on behalf of the Company by
one Officer by manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds
that office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the
manual signature of the Trustee. The signature shall be conclusive evidence that
the Security has been duly authenticated and delivered under this Indenture.
Upon a written order of the Company signed by one Officer of
the Company, the Trustee shall authenticate Securities for original issue in the
aggregate principal amount of up to $110,000,000 or $125,000,000 if the
Over-Allotment Option is exercised in full. The aggregate principal amount of
Securities outstanding at any time may not exceed $110,000,000, or $125,000,000
if the Over-Allotment Option is exercised in full, except as provided in Section
207.
Upon a written order of the Company signed by one Officer of
the Company, the Trustee shall authenticate Securities not bearing the Private
Placement Legend to be issued to the transferee when sold pursuant to an
effective registration statement under the Securities Act as set forth in
Section 216(D).
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such Agent. An
authenticating agent has the same rights as an Agent to deal with the Company
and its Affiliates.
The Securities shall be issuable only in registered book-entry
form without interest coupons and only in denominations of $1,000 principal
amount and any positive integral multiple thereof.
SECTION 203. REGISTRAR, PAYING AGENT AND CONVERSION
AGENT.
The Company shall maintain an office or agency in the Borough
of Manhattan, The City of
New York, where Securities may be presented for
registration of transfer or for exchange ("REGISTRAR"), an office or agency
where Securities may be presented for payment ("PAYING AGENT") and an office or
agency where Securities may be presented for conversion ("CONVERSION AGENT").
The Registrar shall keep a register of the Securities and of their
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transfer and exchange. The Company may appoint or change one or more
co-registrars, one or more additional paying agents and one or more additional
conversion agents without notice and may act in any such capacity on its own
behalf. The term "Registrar" includes any co-registrar; the term "Paying Agent"
includes any additional paying agent; and the term "Conversion Agent" includes
any additional conversion agent.
The Company shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall notify
the Trustee of the name and address of any Agent not a party to this Indenture.
If the Company fails to maintain a Registrar, Paying Agent or Conversion Agent,
the Trustee shall act as such.
The Company initially appoints the Trustee as Paying Agent,
Registrar and Conversion Agent.
SECTION 204. PAYING AGENT TO HOLD MONEY IN TRUST.
Each Paying Agent shall hold in trust for the benefit of the
Security Holders or the Trustee all moneys held by the Paying Agent for the
payment of the Securities, and shall notify the Trustee of any default by the
Company in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee.
The Company at any time may require a Paying Agent to pay all money held by it
to the Trustee. Upon payment over to the Trustee, the Paying Agent shall have no
further liability for the money. If the Company acts as Paying Agent, it shall
segregate and hold as a separate trust fund all money held by it as Paying
Agent.
SECTION 205. SECURITY HOLDER LISTS.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Security Holders. If the Trustee is not the Registrar, the Company
shall furnish to the Trustee on or before each interest payment date and at such
other times as the Trustee may request in writing a list, in such form and as of
such date as the Trustee may reasonably require, of the names and addresses of
Security Holders.
SECTION 206. TRANSFER AND EXCHANGE.
Subject to Sections 215 and 216 hereof, where Securities are
presented to the Registrar with a request to register their transfer or to
exchange them for an equal principal amount of Securities of other authorized
denominations, the Registrar shall register the transfer or make the exchange if
its requirements for such transaction are met. To permit registrations of
transfer and exchanges, the Trustee shall authenticate Securities at the
Registrar's request. The Company or the Trustee, as the case may be, shall not
be required (a) to issue, authenticate, register the transfer of or exchange any
Security during a period beginning at the opening of business 15 days before the
mailing of a notice of redemption of the Securities selected for redemption
under Section 304 and ending at the close of business on the day of such
mailing, (b) to register the transfer of or exchange any Security so selected
for redemption in whole or in part, except the unredeemed portion of Securities
being redeemed in part, or (c) register the transfer or exchange of any Security
in respect of which a Change in Control Notice has been given and not
9
withdrawn by the Holder thereof in accordance with the terms of this Indenture
(except, in the case of any Security to be purchased in part, the portion
thereof not to be purchased).
No service charge shall be made for any transfer, exchange or
conversion of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer, exchange or conversion of Securities, other than
exchanges pursuant to Sections 210, 307, 905 or 1002 not involving any transfer.
Notwithstanding any provision to the contrary herein, so long
as a Global Security remains outstanding and is held by or on behalf of the
Depositary, transfers of a Global Security shall be made only in accordance with
this Article II. Transfers of a Global Security shall be limited to transfers of
such Global Security in whole, to nominees of the Depositary or to a successor
of the Depositary or such successor's nominee.
Successive registrations and registrations of transfers and
exchanges as aforesaid may be made from time to time as desired, and each such
registration shall be noted on the register for the Securities.
Any Registrar appointed pursuant to Section 203 hereof shall
provide to the Trustee such information as the Trustee may reasonably require in
connection with the delivery by such Registrar of Securities upon transfer or
exchange of Securities.
No Registrar shall be required to make registrations of
transfer or exchange of Securities during any periods designated in the text of
the Securities or in this Indenture as periods during which such registration of
transfers and exchanges need not be made.
SECTION 207. REPLACEMENT SECURITIES.
If the Holder of a Security claims that the Security has been
mutilated, lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Security if the Trustee's requirements
are met and, in the case of a mutilated Security, such mutilated Security is
surrendered to the Trustee. In the case of lost, destroyed or wrongfully taken
Securities, if required by the Trustee, an indemnity bond must be provided by
the Holder that is sufficient in the judgment of the Trustee to protect the
Company, the Trustee or any Agent from any loss which any of them may suffer if
a Security is replaced. The Trustee may charge for its expenses in replacing a
Security.
In case any such mutilated, lost, destroyed or wrongfully
taken Security has become or is about to become due and payable, or is about to
be redeemed or purchased by the Company pursuant to Article III hereof, the
Company in its discretion may, instead of issuing a new Security, pay such
Security when due.
Every replacement Security is an additional obligation of the
Company only as provided in Section 208 and shall be entitled to all benefits of
this Indenture equally and proportionately with any and all other Securities
duly issued hereunder.
SECTION 208. OUTSTANDING SECURITIES.
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Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those converted, those cancelled by it,
those delivered to it for cancellation and those described in this Section 208
as not outstanding. Except to the extent provided in Section 209, a Security
does not cease to be outstanding because the Company or one of its Subsidiaries
or Affiliates holds the Security.
If a Security is replaced pursuant to Section 207, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it, or a
court holds, that the replaced Security is held by a protected purchaser, as
that term is defined in the
New York Uniform Commercial Code.
If the Paying Agent (other than the Company) holds on a
redemption date, Purchase Date or Maturity Date money sufficient to pay
Securities payable on that date, then on and after that date, such Securities
shall be deemed to be no longer outstanding and interest on them shall cease to
accrue, and such Security shall be deemed paid whether or not the Security is
delivered to the Paying Agent. Thereafter, all other rights of the Holders of
such Securities shall terminate with respect to such Securities, other than the
right to receive the Redemption Price, Change in Control Price or principal
amount, as applicable.
SECTION 209. SECURITIES HELD BY THE COMPANY OR AN
AFFILIATE.
In determining whether the Holders of the required aggregate
principal amount of Securities have concurred in any direction, waiver or
consent, Securities owned by the Company or any of its Subsidiaries or an
Affiliate shall be considered as though not outstanding, except that for the
purposes of determining whether a Responsible Officer of the Trustee shall be
protected in relying on any such direction, waiver or consent, only Securities
which the Trustee knows are so owned shall be so disregarded.
SECTION 210. TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, the
Company may prepare and execute and the Trustee shall authenticate and deliver
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and execute and the Trustee shall authenticate and deliver
definitive Securities in exchange for temporary Securities.
After the preparation of definitive Securities, the temporary
Securities shall be exchangeable for definitive Securities upon surrender of the
temporary Securities at the office or agency of the Company designated for such
purpose pursuant to Section 203, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Securities, the Company shall
prepare and execute and the Trustee shall authenticate and deliver in exchange
therefore a like aggregate principal amount of definitive Securities of
authorized denominations. Until so exchanged the temporary Securities shall in
all respects be entitled to the same benefits under this Indenture as definitive
Securities.
SECTION 211. CANCELLATION.
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The Company at any time may deliver Securities to the Trustee
for cancellation. The Registrar, Paying Agent and Conversion Agent shall forward
to the Trustee any Securities surrendered to them for transfer, exchange,
payment or conversion. The Trustee shall cancel all Securities surrendered for
transfer, exchange, payment, conversion or cancellation in accordance with its
customary procedures. The Company may not issue new Securities to replace
Securities that it has paid or delivered to the Trustee for cancellation or that
any Security Holder has converted pursuant to Article X.
SECTION 212. DEFAULTED INTEREST.
If and to the extent the Company defaults in a payment of
interest on the Securities, the Company shall pay the defaulted interest in any
lawful manner plus, to the extent not prohibited by applicable statute or case
law, interest payable on the defaulted interest at the rate provided in the
Securities. The Company may pay the defaulted interest to the persons who are
Security Holders on a subsequent special record date. The Company shall fix such
record date and payment date. At least 15 days before the record date, the
Company shall mail to Security Holders a notice that states the record date,
payment date and amount of interest to be paid.
SECTION 213. CUSIP NUMBERS.
The Company in issuing the Securities may use one or more
"CUSIP" numbers, and if so, the Trustee shall use the CUSIP numbers in notices
of redemption or exchange as a convenience to Holders; provided, however, that
no representation is hereby deemed to be made by the Trustee as to the
correctness or accuracy of the CUSIP numbers printed in the notice or on the
Securities, and that reliance may be placed only on the other identification
numbers printed on the Securities. The Company shall promptly notify the Trustee
of any change in the CUSIP numbers.
SECTION 214. DEPOSIT OF MONEYS.
Prior to 11:00 A.M.,
New York City time, on each interest
payment date, the Maturity Date, redemption date and Purchase Date, the Company
shall have deposited with the Paying Agent in immediately available funds money
sufficient to make cash payments, if any, due on such interest payment date,
Maturity Date, redemption date and Purchase Date, as the case may be, in a
timely manner which permits the Paying Agent to remit payment to the Holders on
such interest payment date, Maturity Date, redemption date and Purchase Date, as
the case may be.
SECTION 215. BOOK-ENTRY PROVISIONS FOR GLOBAL
SECURITIES.
(a) The Global Securities initially shall (i) be registered in
the name of the Depositary or the nominee of such Depositary, (ii) be delivered
to the Trustee as custodian for such Depositary and (iii) bear legends as set
forth in Section 217.
Members of, or participants in, the Depositary
("PARTICIPANTS") shall have no rights under this Indenture with respect to any
Global Security held on their behalf by the Depositary, or the Trustee as its
custodian, or under the Global Security, and the Depositary may
12
be treated by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner of the Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and Participants, the
operation of customary practices governing the exercise of the rights of a
Holder of any Security.
Investors in the Regulation S Global Security may hold their
interests in the Regulation S Global Security through Euroclear or Clearstream,
if they are participants in such systems, or indirectly through organizations
which are participants in such systems. After the expiration of the Restricted
Period (but not earlier), investors in the Regulation S Global Security may also
hold such interests through organizations other than Euroclear or Clearstream
that are participants in the Depositary's system. Euroclear and Clearstream will
hold interests in the Regulation S Global Security on behalf of their
participants through customers' securities accounts in their respective names on
the books of their respective depositories, which, in turn, will hold such
interests in the Regulation S Global Security in customer's securities accounts
in the depositories' names on the books of the Depositary. All interests in a
Global Security, including those held through Euroclear or Clearstream, may be
subject to the procedures and requirements of the Depositary. Those interests
held through Euroclear and Clearstream will be subject to the procedures and
requirements of such systems. As used herein, the term "RESTRICTED PERIOD" means
the period of 40 consecutive days beginning on and including the first day after
the later of (i) the day that UBS Warburg LLC advises the Company and the
Trustee in writing of the day on which the Securities are first offered to
persons other than distributors (as defined in Regulation S) and (ii) the
original Issue Date of the Securities.
(b) Transfers of Global Securities shall be limited to
transfers in whole, but not in part, to the Depositary, its successors or their
respective nominees. In addition, Physical Securities shall be transferred to
all beneficial owners in exchange for their beneficial interests in Global
Securities if (i) the Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for any Global Security and a successor
Depositary is not appointed by the Company within 90 days of such notice or (ii)
an Event of Default has occurred and is continuing and the Registrar has
received a written request from the Depositary to issue Physical Securities.
(c) In connection with the transfer of a Global Security in
its entirety to beneficial owners pursuant to Section 215(b), such Global
Security shall be deemed to be surrendered to the Trustee for cancellation, and
the Company shall execute, and the Trustee shall upon written instructions from
the Company authenticate and deliver, to each beneficial owner identified by the
Depositary in exchange for its beneficial interest in such Global Security, an
equal aggregate principal amount of Physical Securities of authorized
denominations.
(d) Any Physical Security constituting a Restricted Security
delivered in exchange for an interest in a Global Security pursuant to Section
215(b) shall, except as otherwise provided by Section 216, bear the Private
Placement Legend (as defined).
(e) The Holder of any Global Security may grant proxies and
otherwise authorize any Person, including Participants and Persons that may hold
interests through Participants, to take any action which a Holder is entitled to
take under this Indenture or the Securities.
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SECTION 216. SPECIAL TRANSFER PROVISIONS.
(a) TRANSFERS TO NON-U.S. PERSONS. The following
provisions shall apply with respect to the registration of any proposed transfer
of a Restricted Security to any Non-U.S. Person:
(i) the Registrar shall register the transfer of
any Restricted Security, whether or not such Security
bears the Private Placement Legend, if (x) the
requested transfer is after the second anniversary of
the Issue Date for the Securities; provided, however,
that neither the Company nor any of its Affiliates
has held any beneficial interest in such Security, or
portion thereof, at any time on or prior to the
second anniversary of the Issue Date for the
Securities or (y) the proposed transferor has
delivered to the Registrar certificates substantially
in the form of EXHIBIT D-1 hereto; and
(ii) if the proposed transferor is a
Participant seeking to transfer an interest in one
Global Security to a transferee who will hold such
interest in another Global Security, upon receipt by
the Registrar of (x) written instructions given in
accordance with the Depositary's and the Registrar's
procedures and (y) the appropriate certificates and
other documents, if any, required by clause (y) of
paragraph (i) above, the Registrar shall register the
transfer and reflect on its books and records the
date and (A) a decrease in the aggregate principal
amount of the Global Security through which the
transferor held such interest in an amount equal to
the aggregate principal amount of the Securities to
be transferred and (B) an increase in the aggregate
principal amount of the Global Security through which
the transferee proposes to hold such interest, in an
amount equal to the aggregate principal amount of the
Securities to be transferred.
(b) TRANSFERS TO QIBS. The following provisions shall
apply with respect to the registration of any proposed transfer of a Restricted
Security to a QIB:
(i) the Registrar shall register the
transfer of any Restricted Security, whether or not
such Security bears the Private Placement Legend, if
(x) the requested transfer is after the second
anniversary of the Issue Date for the Securities;
provided, however, that neither the Company nor any
of its Affiliates has held any beneficial interest in
such Security, or portion thereof, at any time on or
prior to the second anniversary of the Issue Date for
the Securities or (y) such transfer is being made by
a proposed transferor who has checked the box
provided for on the form of Security stating, or has
otherwise advised the Company and the Registrar in
writing, that the sale has been made in compliance
with the provisions
14
of Rule 144A to a transferee who has signed the
certification provided for on the form of Security
stating, or has otherwise advised the Company and the
Registrar in writing, that it is purchasing the
Security for its own account or an account with
respect to which it exercises sole investment
discretion and that it and any such account is a QIB
within the meaning of Rule 144A, and is aware that
the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such
information regarding the Company as it has requested
pursuant to Rule 144A or has determined not to
request such information and that it is aware that
the transferor is relying upon its foregoing
representations in order to claim the exemption from
registration provided by Rule 144A; and
(ii) if the proposed transferor is a
Participant seeking to transfer an interest in one
Global Security to a transferee who will hold such
interest in another Global Security, upon receipt by
the Registrar of (x) written instructions given in
accordance with the Depositary's and the Registrar's
procedures and (y) the appropriate certificates and
other documents, if any, required by clause (y) of
paragraph (i) above, the Registrar shall register the
transfer and reflect on its books and records the
date and (A) a decrease in the aggregate principal
amount of the Global Security through which the
transferor held such interest in an amount equal to
the aggregate principal amount of the Securities to
be transferred and (B) an increase in the aggregate
principal amount of the Global Security through which
the transferee proposes to hold such interest, in an
amount equal to the aggregate principal amount of the
Securities to be transferred.
(c) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL
SECURITIES. Notwithstanding any other provisions of this Indenture, a Global
Security may not be transferred except as a whole by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(d) PRIVATE PLACEMENT LEGEND. Upon the transfer, exchange
or replacement of Securities not bearing the Private Placement Legend, the
Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of Securities bearing the
Private Placement Legend, the Registrar shall deliver only Securities that bear
the Private Placement Legend unless (i) the requested transfer is after the
second anniversary of the Issue Date for the Securities (provided, however, that
neither the Company nor any of its Affiliates has held any beneficial interest
in such Security, or portion thereof, at any time prior to or on the second
anniversary of the Issue Date), (ii) there is delivered to the Trustee an
Opinion of Counsel reasonably satisfactory to the Company to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act or (iii)
such Security has been sold pursuant to an effective registration statement
under the Securities Act and the Holder selling such Securities has delivered to
the Registrar a notice in the form of EXHIBIT E hereto. Upon the
15
effectiveness of the Shelf Registration Statement (as defined in the
Registration Rights Agreement), the Company shall deliver to the Trustee a
notice of effectiveness, a Security or Securities, an authentication order in
accordance with Section 202 and an Opinion of Counsel in a form substantially
similar to EXHIBIT F hereto and, if required by the Depositary, the Company
shall deliver to the Depositary a letter of representations in a form reasonably
acceptable to the Depositary.
(e) GENERAL. By its acceptance of any Security bearing
the Private Placement Legend, each Holder of such a Security acknowledges the
restrictions on transfer of such Security set forth in this Indenture and in the
Private Placement Legend and agrees that it will transfer such Security only as
provided in this Indenture.
The Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 215 or this Section
216. The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of reasonable written notice to the Registrar.
(f) TRANSFERS OF SECURITIES HELD BY AFFILIATES. Any
certificate (i) evidencing a Security that has been transferred to an Affiliate
of the Company within two years after the Issue Date for the Securities, as
evidenced by a notation on the assignment form for such transfer or in the
representation letter delivered in respect thereof or (ii) evidencing a Security
that has been acquired from an Affiliate (other than by an Affiliate) in a
transaction or a chain of transactions not involving any public offering, shall,
until two years after the last date on which the Company or any Affiliate of the
Company was an owner of such Security, in each case, bear the Private Placement
Legend, unless otherwise agreed by the Company (with written notice thereof to
the Trustee).
SECTION 217. RESTRICTIVE LEGENDS.
Each Global Security and Physical Security that constitutes a
Restricted Security shall bear the legend (the "PRIVATE PLACEMENT LEGEND") as
set forth in EXHIBIT B-1 on the face thereof until after the second anniversary
of the later of (i) the Issue Date for the Securities, and (ii) the last date on
which the Company or any Affiliate of the Company was the owner of such Security
(or any predecessor security) (or such shorter period of time as permitted by
Rule 144(k) under the Securities Act or any successor provision thereunder) (or
such longer period of time as may be required under the Securities Act or
applicable state securities laws in the Opinion of Counsel for the Company,
unless otherwise agreed between the Company and the Holder thereof).
Each Global Security shall also bear the legend as set forth
in EXHIBIT B-2.
SECTION 218. COMPUTATION OF INTEREST.
Interest on the Securities shall be computed on the basis of a
360 day year composed of twelve 30-day months. Each rate of interest which is
calculated with reference to a period (the "DEEMED INTEREST PERIOD") that is
less than the actual number of days in the calendar year of calculation is, for
the purposes of the Interest Act (Canada), equivalent to a rate based on a
calendar year calculated by multiplying such number of days in the Deemed
Interest
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Period. The amount of interest payable for any period shorter than a full
quarterly period for which interest is computed, will be computed on the basis
of the actual number of days elapsed in the period.
ARTICLE THREE
REDEMPTION
SECTION 301. RIGHT OF REDEMPTION.
Redemption of the Securities, as permitted by any provision of
this Indenture, shall be made in accordance with paragraphs 7, 8 and 9 of the
Securities, and in accordance with this Article III. Except as provided in
Section 308 hereof, the Company will not have the right to redeem any Securities
prior to April 20, 2006. On or after April 20, 2006, the Company will have the
right to redeem in whole or in part the Securities at the Redemption Prices
specified in paragraph 7 therein under the caption "Redemption Price," in each
case including accrued and unpaid interest, if any, to, but excluding, the
redemption date.
SECTION 302. NOTICES TO TRUSTEE.
If the Company elects to redeem Securities pursuant to
paragraph 7 or 9 of the Securities, it shall notify the Trustee at least 15 days
prior to the mailing of the notice of redemption (unless a shorter notice period
shall be satisfactory to the Trustee) of the redemption date, the aggregate
principal amount of Securities to be redeemed and the Redemption Price.
SECTION 303. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all the Securities are to be redeemed, the
Trustee shall select the Securities to be redeemed on a pro rata basis, by lot
or in a method the Trustee deems fair and reasonable. The Trustee shall make the
selection from Securities outstanding not previously called for redemption. The
Trustee may select for redemption portions of the principal of Securities that
have denominations larger than $1,000 principal amount. Securities and portions
of them it selects shall be in amounts of $1,000 principal amount or positive
integral multiples of $1,000 principal amount. The Trustee shall promptly notify
the Company in writing of the Securities selected for redemption and the
principal amount thereof to be redeemed.
If any Security selected for partial redemption is converted
in part before termination of the conversion right with respect to the portion
of the Security so selected, the converted portion of such Security shall be
deemed, solely for the purposes of determining the aggregate principal amount of
the Securities to be redeemed by the Company, to be the portion selected for
redemption. Securities which have been converted during a selection of
Securities to be redeemed may be treated by the Trustee as outstanding for the
purpose of such selection.
The Registrar need not transfer or exchange any Securities
selected for redemption, except the unredeemed portion of the Securities
redeemed in part. Also, the Registrar need not transfer or exchange any
Securities for a period of 15 days before selecting Securities to be redeemed.
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SECTION 304. NOTICE OF REDEMPTION.
Subject to Section 308 of this Indenture, at least 30 Business
Days but not more than 60 Business Days before a redemption date, the Company
shall mail by first-class mail a notice of redemption to each Holder whose
Securities are to be redeemed.
The notice shall identify the Securities and the aggregate
principal amount thereof to be redeemed and shall state:
(i) the redemption date;
(ii) the Redemption Price plus the amount of
accrued and unpaid interest to be paid on the
Securities called for redemption;
(iii) the then current conversion rate and
conversion price;
(iv) the name and address of the Paying Agent
and Conversion Agent;
(v) the date on which the right to convert the
principal of the Securities called for redemption
will terminate and the place or places where such
Securities may be surrendered for conversion;
(vi) that Holders who want to convert Securities
must satisfy the requirements in Article X;
(vii) the paragraph of the Securities pursuant to
which the Securities are to be redeemed;
(viii) if such Securities are being redeemed
pursuant to paragraph 9 of the Securities, a
description of the procedures which a Holder must
follow if it chooses to exercise its right to not
have its Securities redeemed;
(ix) if such Securities are being redeemed
pursuant to paragraph 9 of the Securities, that
Holders will be entitled to withdraw their election
to not have Securities redeemed if the Company (if
acting as its own Paying Agent), or the Paying Agent
receives, not later than the close of business on the
Business Day immediately preceding the redemption
date, a letter or telegram, telex or facsimile
transmission (receipt of which is confirmed and
promptly followed by a letter) setting forth the name
of the Holder, and a statement that such Holder is
withdrawing its election to not have a specified
principal amount of Securities redeemed, the
certificate numbers of such Securities being
withdrawn, if applicable, and the principal amount,
if any, of the Securities that remain subject to the
Notice of Election;
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(x) that Securities called for redemption must
be surrendered to the Paying Agent to collect the
Redemption Price;
(xi) pursuant to Section 301 hereof, if fewer
than all the outstanding Securities are to be
redeemed, the identification and aggregate principal
amount of the particular Securities to be redeemed;
(xii) that unless the Company shall default in the
payment of the Redemption Price interest on
Securities called for redemption ceases to accrue on
and after the redemption date and that the Securities
will cease to be convertible after the close of
business on the Business Day immediately preceding
the redemption date; and
(xiii) the CUSIP number or numbers, as the case may
be, of the Securities.
The date on which the right to convert the principal of the
Securities called for redemption will terminate shall be at the close of
business on the Business Day immediately preceding the redemption date.
At the Company's request, upon reasonable prior notice, the
Trustee shall give the notice of redemption in the Company's name and at the
Company's expense; provided that the form and content of such notice shall be
prepared by the Company.
SECTION 305. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed, Securities called for
redemption become due and payable on the redemption date at the Redemption Price
plus accrued and unpaid interest to, but excluding, the date of redemption
except for Securities which are converted in accordance with the terms of this
Indenture or for which a Holder has elected not to have its Securities redeemed
pursuant to Section 308 hereof, and, on and after such date (unless the Company
shall default in the payment of the Redemption Price), such Securities shall
cease to bear interest. Upon surrender to the Paying Agent, such Securities
shall be paid at the Redemption Price plus accrued interest to, but excluding,
the redemption date, unless the redemption date is an interest payment date, in
which case the accrued interest will be paid in the ordinary course.
SECTION 306. DEPOSIT OF REDEMPTION PRICE.
Prior to 11:00 A.M. on the redemption date, the Company shall
deposit with the Paying Agent money in funds immediately available on the
redemption date sufficient to pay the Redemption Price of and accrued interest
on all Securities to be redeemed on that date. The Paying Agent shall return to
the Company, as soon as practicable, any money not required for that purpose.
SECTION 307. SECURITIES REDEEMED IN PART.
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Upon surrender of a Security that is redeemed in part, the
Company shall execute and the Trustee shall authenticate for the Holder a new
Security or Securities in an aggregate principal amount equal to the unredeemed
portion of the Security surrendered.
If any Security selected for partial redemption is converted
in part, the converted portion of such Security shall be deemed to be the
portion selected for redemption.
SECTION 308. REDEMPTION FOR TAX REASONS.
The Company may, at its option, redeem the Securities, in
whole but not in part, at a Redemption Price equal to 100% of the principal
amount thereof together with accrued and unpaid interest, if any, to, but
excluding the redemption date, if the Company has become or would become
obligated to pay to the Holders Additional Amounts (which are more than a DE
MINIMIS amount) as a result of any amendment or change occurring after February
27, 2003 in the laws or any regulations of Canada or any Canadian political
subdivision or taxing authority, or any change occurring after February 27, 2003
in the interpretation or application of any such laws or regulations by any
legislative body, court, governmental agency, taxing authority or regulatory
authority (including the enactment of any legislation and the publication of any
judicial decision or regulatory or administrative policies or practices);
provided the Company cannot avoid these obligations by taking reasonable
measures available to it and that it delivers to the Trustee an opinion of
Canadian legal counsel specializing in taxation and an Officers' Certificate
attesting to such change and obligation to pay Additional Amounts. The Company
will not and will not cause any Paying Agent or the Trustee to deduct from such
Redemption Price any amounts on account of, or in respect of, any Canadian
withholding taxes (except in respect of certain Excluded Holders). In such
event, the Company will give the Holders of the Securities not less than 30
Business Days' nor more than 60 Business Days' notice of this redemption, except
that (i) the Company will not give notice of redemption earlier than 60 Business
Days prior to the earliest date on or from which it would be obligated to pay
any such Additional Amounts, and (ii) at the time the Company gives the notice,
the circumstances creating its obligation to pay such Additional Amounts remain
in effect.
Upon receiving such notice of redemption, no later than the
close of business on the Business Day prior to the redemption date, each Holder
who does not wish to have the Company redeem its Securities can elect to convert
its Securities pursuant to Article X or to not have its Securities redeemed,
provided that no Additional Amounts will be payable by the Company on any
payment of interest or principal with respect to its Securities after such
redemption date. All future payments will be subject to the deduction or
withholding of any Canadian Taxes required to be deducted or withheld.
Where no election is made, the Holder will have its Securities
redeemed without any further action. The Holder must deliver to the Company (if
it is acting as its own Paying Agent), or to a Paying Agent designated by the
Company for such purpose in the notice of redemption the written notice of
election (the "NOTICE OF ELECTION") on the back of the Securities, or any other
form of written notice substantially similar to the Notice of Election, in each
case, duly completed and signed, so as to be received by the Paying Agent no
later than the close of business on the Business Day prior to the redemption
date.
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A Holder may withdraw any Notice of Election by delivering to
the Paying Agent a written notice of withdrawal prior to the close of business
on the Business Day prior to the redemption date.
SECTION 309. PURCHASE AT THE OPTION OF HOLDERS UPON
A CHANGE IN CONTROL.
Upon any Change in Control (as defined below) with respect to
the Company, each Holder of Securities shall have the right, subject to the
rights of the holders of Senior Indebtedness under Article XI of this Indenture,
to require the Company to purchase all of such Holder's Securities, or a portion
thereof which is $1,000 in principal amount or any positive integral multiple
thereof, pursuant to an offer to purchase such Securities required to be made by
the Company (the "CHANGE IN CONTROL OFFER"), on the date (the "CHANGE IN CONTROL
PURCHASE DATE") that is 30 Business Days after the date of the Change in Control
Notice (as defined below) at the Change in Control Price, plus accrued and
unpaid interest, if any, to, but excluding, the Purchase Date.
Within 30 Business Days after the occurrence of a Change in
Control of the Company, the Company shall mail to all Holders of record of the
Securities at their addresses shown in the Registrar's register, and to
beneficial owners of the Securities as required by applicable law, a notice (the
"CHANGE IN CONTROL NOTICE") of the occurrence of such Change in Control and
making the Change in Control Offer arising as a result thereof. The Company
shall deliver a copy of the Change in Control Notice to the Trustee and shall
cause a copy to be published at the expense of the Company in the
New York Times
or the Wall Street Journal or another newspaper of national circulation. To
accept the Change in Control Offer, a Holder of Securities must deliver on or
before the close of business on the third Business Day immediately preceding the
Purchase Date written notice to the Company (or an agent designated by the
Company for such purpose) and the Trustee of the Holder's acceptance of the
Change in Control Offer together with the Securities with respect to which the
acceptance is being made, duly endorsed for transfer.
Each Change in Control Notice shall state:
(i) that a Change in Control has occurred and a
Change in Control Offer is being made pursuant to the Covenant
described in Section 309 of this Indenture entitled "Purchase
at the Option of Holders upon a Change in Control" and that
all Securities timely tendered will be purchased;
(ii) the events causing the Change in Control;
(iii) the date of such Change in Control;
(iv) the Purchase Date;
(v) the date by which the Holder must accept the
Change in Control Offer and by which the Securities to be
purchased by the Company thereunder must be tendered;
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(vi) the Change in Control Price, plus the amount
of accrued interest to be paid on the Securities to be
purchased;
(vii) the name and address of the Paying Agent and
the Conversion Agent;
(viii) a description of the procedures that Holders
must follow in order to tender their Securities (or portions
thereof) for payment, and the procedures that Holders must
follow in order to withdraw an election to tender Securities
(or portions thereof) for payment;
(ix) that Holders will be entitled to withdraw
their election if the Company (if acting as its own Paying
Agent), or the Paying Agent receives, not later than the close
of business on the Business Day immediately preceding the
Purchase Date, or such longer period as may be required by
law, a letter or telegram, telex or facsimile transmission
(receipt of which is confirmed and promptly followed by a
letter) setting forth the name of the Holder, the principal
amount of Securities the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have
such Securities purchased, the certificate numbers of such
Securities being withdrawn, if applicable, and the principal
amount, if any, of the Securities that remain subject to a
Change in Control Notice;
(x) that Securities with respect to which an
Option of Holder to Elect Purchase Notice (as used below) is
given by the Holder may be converted, if otherwise
convertible, only if the Option of Holder to Elect Purchase
Notice has been withdrawn in accordance with the terms hereof;
(xi) the then existing conversion rate, and any
adjustment to the conversion rate that will result from the
Change in Control;
(xii) the place or places where such Securities
may be surrendered for conversion; and
(xiii) the CUSIP number or numbers, as the case may
be, of the Securities.
In order to tender Securities (or portions thereof) pursuant
to a Change in Control Offer, a Holder shall deliver to the Company (if it is
acting as its own Paying Agent), or to a Paying Agent designated by the Company
for such purpose in the Change in Control Notice within the period set forth in
the second paragraph of this Section 309, (i) the Option of Holder To Elect
Purchase Notice on the back of the Securities, or any other form of written
notice substantially similar to the Option of Holder To Elect Purchase Notice,
in each case, duly completed and signed, with appropriate signature guarantee,
and (ii) such Securities that the Holder wishes to tender for purchase by the
Company pursuant to the Change in Control Offer, duly endorsed for transfer to
the Company and the Holder of such Securities shall be entitled to receive from
the Company (if it is acting as its own Paying Agent), or such Paying Agent a
nontransferable receipt of deposit evidencing such deposit.
22
In the event Securities are tendered by a Holder pursuant to a
Change in Control Offer in accordance with the terms hereof, the Company shall
pay or cause to be paid the applicable Change in Control Price plus accrued and
unpaid interest with respect to the Securities which are so tendered by the
Holder on the Purchase Date.
Prior to 11:00 A.M. on the Purchase Date, the Company shall
deposit with the Trustee or with a Paying Agent (or, if the Company is acting as
its own Paying Agent, segregate and hold in trust in accordance with Section
204) an amount of money (to be available on the Purchase Date) sufficient to pay
the Change in Control Price plus accrued and unpaid interest of all of the
Securities which are to be purchased on that date.
Both the Change in Control Notice and the Option of Holder to
Elect Purchase Notice having been duly given as specified in this Section 309,
the Securities so to be purchased shall, on the Purchase Date, become due and
payable at the Change in Control Price applicable thereto plus accrued and
unpaid interest and from and after such date (unless there shall be a default in
the payment of the Change in Control Price) such Securities shall cease to bear
interest and shall cease to be convertible. Upon surrender of any such Security
for purchase in accordance with said notice, such Security shall be paid by the
Company at the Change in Control Price plus accrued and unpaid interest.
If any Security shall not be paid upon surrender thereof for
purchase, the principal shall, until paid, bear interest from the Purchase Date
at the rate borne by such Security on the principal amount of such Security and
shall continue to be convertible.
Any Security which is to be submitted for purchase only in
part shall be delivered pursuant to this Section 309 (with, if the Company or
the Trustee so requires, due endorsement by, or a written instrument of transfer
in form satisfactory to the Company and the Trustee duly executed by the Holder
thereof or its attorney duly authorized in writing), and the Company shall
prepare and execute, and the Trustee shall authenticate and make available for
delivery to the Holder of such Security without service charge, a new Security
or Securities, of any authorized denomination as requested by such Holder, of
the same tenor and in aggregate principal amount equal to the portion of such
Security not submitted for purchase.
Notwithstanding anything herein to the contrary, (i) if the
offer that is required to be made to Holders to purchase their Securities upon
the occurrence of a Change in Control is determined to constitute a "tender
offer" under the Exchange Act or an "issuer bid" under applicable Canadian
Securities Laws (which terms, as used herein, include any successor provision
thereto); the Company, to the extent applicable, will comply with all applicable
tender offer rules under the Exchange Act, including Rules 13e-4 and 14e-1, any
Canadian Securities Laws and file Schedule TO or any other schedules required
under the Exchange Act rules or Canadian Securities Laws which may then be
applicable; and (ii) the Company may not purchase Securities of Holders pursuant
to a Change in Control Offer upon a Change in Control if there has occurred and
is continuing an Event of Default with respect to the Securities, other than a
Default in the payment of the Change in Control Price with respect to the
Securities.
As used in this Section 309 of the Indenture and in the
Securities:
23
A "CHANGE IN CONTROL" of the Company shall be deemed to have
occurred at such time as:
(i) any "person" or "group" (as such terms are
used for purposes of Sections 13(d) and 14(d) of the Exchange
Act), is or becomes the "beneficial owner" (as such term is
used in Rule 13d-3 under the Exchange Act), directly or
indirectly, of 50% or more of the voting power of the
Company's Common Shares or other Capital Stock into which its
Common Shares are reclassified or changed (collectively, the
"VOTING SECURITIES"); or
(ii) any person who, together with any joint
actors (as such terms are used in Title IV of the Quebec
Securities Act), acquires or increases its ownership of or the
power to exercise control or direction over 50% or more of a
class of the Company's Voting Securities; or
(iii) there shall be consummated any
consolidation, merger, amalgamation, statutory arrangement
(involving a business combination) or similar transaction of
the Company in which it is not the continuing or surviving
corporation or pursuant to which the Common Shares would be
converted into cash, securities or other property, in each
case, other than a consolidation, merger, amalgamation,
statutory arrangement (involving a business combination) or
similar transaction of the Company in which the holders of the
Voting Securities immediately prior to such transaction have,
directly or indirectly, at least a majority of the voting
shares of the continuing or surviving corporation immediately
after such transaction; or
(iv) at any time the following persons cease
for any reason to constitute a majority of the Board of
Directors:
(1) individuals who on the Issue Date of the
convertible Securities constituted the Board
of Directors; and
(2) any new directors whose election by
the Board of Directors or whose nomination
for election by the Company's shareholders
was approved by at least a majority of the
directors then still in office who were
either directors on the Issue Date of the
Securities or whose election or nomination
for election was previously so approved; or
(v) the sale, lease or transfer of all or
substantially all of the consolidated assets of the Company to
any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act).
However, a Change in Control will not be deemed to have
occurred if either:
(X) the last sale price of the Company's Common Shares
for any five trading days during the ten trading days
immediately preceding the Change in
24
Control is at least equal to 105% of the conversion
price in effect on such trading day; or
(Y) in the case of a consolidation, merger, amalgamation,
statutory arrangement (involving a business
combination) or similar transaction, all of the
consideration (excluding cash payments for fractional
shares and cash payments pursuant to dissenters'
appraisal rights, if applicable) in the transaction
constituting the Change in Control consists of common
stock traded on a U.S. national securities exchange
or quoted on the NNM (or which will be so traded or
quoted when issued or exchanged in connection with
such Change in Control) and as a result of such
transaction or transactions the Securities become
convertible solely into such common stock.
SECTION 310. CONVERSION ARRANGEMENT ON CALL FOR
REDEMPTION.
In connection with any redemption of Securities, the Company
may arrange, in lieu of redemption, for the purchase and conversion of any
Securities called for redemption by an agreement with one or more investment
bankers or other purchasers to purchase all or a portion of such Securities by
paying to the Trustee in trust for the Holders whose Securities are to be so
purchased, on or before the close of business on the redemption date, an amount
that, together with any amounts deposited with the Trustee by the Company for
redemption of such Securities, is not less than the Redemption Price, together
with interest, if any, accrued to the redemption date, of such Securities.
Notwithstanding anything to the contrary contained in this Article III, the
obligation of the Company to pay the Redemption Price of such Securities,
including all accrued interest, if any, shall be deemed to be satisfied and
discharged to the extent such amount is so paid by such purchasers, but no such
agreement shall relieve the Company of its obligation to pay such Redemption
Price and such accrued interest, if any. If such an agreement is entered into,
any Securities not duly surrendered for conversion by the Holders thereof may,
at the option of the Company, be deemed, to the fullest extent permitted by law,
acquired by such purchasers from such Holders and (notwithstanding anything to
the contrary contained in Article X) surrendered by such purchasers for
conversion, all as of immediately prior to the close of business on the
redemption date, subject to payment of the above amount as aforesaid. The
Trustee shall hold and pay to the Holders whose Securities are selected for
redemption any such amount paid to it for purchase and conversion in the same
manner as it would moneys deposited with it by the Company for the redemption of
Securities. Without the Trustee's prior written consent, no arrangement between
the Company and such purchasers for the purchase and conversion of any
Securities shall increase or otherwise affect any of the powers, duties, rights,
immunities, responsibilities or obligations of the Trustee as set forth in this
Indenture, and the Company agrees to indemnify the Trustee from, and hold it
harmless against, any and all loss, liability or expense arising out of or in
connection with any such arrangement for the purchase and conversion of any
Securities between the Company and such purchasers, including the costs and
expenses (including counsel fees and expenses) incurred by the Trustee in the
defense of any claim or liability arising out of or in connection with the
exercise or performance of any of its powers, duties, responsibilities or
obligations under this Indenture except to the extent arising from its bad
faith, willful misconduct or negligence.
25
ARTICLE FOUR
COVENANTS
SECTION 401. PAYMENT OF SECURITIES.
The Company shall promptly pay all amounts due with respect to
the Securities on the dates and in the manner provided in the Securities or
pursuant to this Indenture. All such amounts shall be considered paid on the
date due if the Paying Agent holds (or, if the Company is acting as Paying
Agent, if the Company has segregated and holds in trust in accordance with
Section 204) on that date money sufficient to pay the amount then due with
respect to the Securities.
The Company shall promptly pay defaulted interest (including,
to the extent permitted by applicable law, interest payable on the defaulted
interest) at the rate borne by the Securities.
SECTION 402. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in the Borough of Manhattan, The
City of
New York, an office or agency (which may be an office of the Trustee or
an Affiliate of the Trustee or Registrar) where Securities may be surrendered
for registration of transfer or exchange or conversion and where notices and
demands to or upon the Company in respect of the Securities and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Company may also from time to time designate one or more
other offices or agencies where the Securities may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in the Borough of Manhattan, The City of
New York for such purposes. The Company
will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of
the Trustee as an agency of the Company in accordance with Section 203.
SECTION 403. REPORTS.
(a) The Company will promptly provide to the Trustee and
shall, upon request, provide to any Holder or beneficial owner of Securities or
prospective purchaser of Securities that so requests, the information required
to be delivered pursuant to Rule 144A(d)(4) until such time as the Securities
and the underlying Common Shares have been registered by the Company for resale
under the Securities Act pursuant to the Registration Rights Agreement. In
26
addition, the Company will furnish such Rule 144A(d)(4) information if, at any
time while the Securities or the Common Shares are issuable upon conversion of
the Securities are restricted securities within the meaning of the Securities
Act, the Company is not subject to the informational requirements of the
Exchange Act.
(b) The Company will comply with the provisions of TIA
Section 314(a).
(c) The Company will promptly provide to the Trustee copies of
its annual report to shareholders, containing audited financial statements, and
any other financial reports which the Company furnishes to its shareholders.
(d) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on the Officers' Certificate).
SECTION 404. COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee within 120 days after
the end of each fiscal year (beginning with the fiscal year ending on September
30, 2003) of the Company and otherwise upon the demand of the Trustee an
Officers' Certificate stating whether or not the signers know of any Default or
Event of Default by the Company in performing any of its obligations under this
Indenture or the Securities. If they do know of any such Default or Event of
Default, the certificate shall describe the Default or Event of Default and its
status.
SECTION 405. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (in each case,
to the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not, by resort to any such
law, hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law has been enacted.
SECTION 406. CORPORATE EXISTENCE.
Subject to Article V, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence and the corporate existence of each of its Subsidiaries in accordance
with the respective organizational documents of each Subsidiary and the rights
(charter and statutory), licenses and franchises of the Company and its
Subsidiaries; provided, however, that the Company shall not be required to
preserve any such right, license or franchise, or the corporate existence of any
Subsidiary, if in the judgment of the Board of Directors (i) such preservation
or existence is not material to the conduct of business of the Company and (ii)
the loss of such right, license or franchise or the dissolution of such
Subsidiary does not have a material adverse impact on the Holders.
27
SECTION 407. PAYMENT OF ADDITIONAL AMOUNTS.
All payments made by or on behalf of the Company under or with
respect to the Securities will be made free and clear of and without withholding
or deduction for, or on account of, any present or future tax, duty, levy,
impost, assessment or other governmental charge imposed or levied by or on
behalf of the Government of Canada or of any province or territory thereof or by
any authority or agency therein or thereof having power to tax, including
without limitation any taxes imposed under Part XIII of the Tax Act (hereinafter
"CANADIAN TAXES"), unless the Company is required to withhold or deduct any
amounts for, or on account of, Canadian Taxes pursuant to any applicable law or
by virtue of the interpretation or administration thereof. If the Company is so
required to withhold or deduct any amount for or on account of Canadian Taxes
from any payment made under or with respect to the Securities, the Company will
pay as additional interest such additional amounts ("Additional Amounts") as may
be necessary so that the net amount received by each Holder (including
Additional Amounts) after such withholding or deduction (including any
withholding or deduction required to be made in respect of Additional Amounts)
will not be less than the amount the Holder would have received if such Canadian
Taxes had not been withheld or deducted (a similar payment will also be made to
Holders of Securities (other than Excluded Holders (as defined herein)) that are
exempt from withholding but are required to pay tax directly on amounts
otherwise subject to withholding, provided that no Additional Amounts will be
payable with respect to a payment made to a Holder in respect of a beneficial
owner of Securities (an "EXCLUDED HOLDER") (i) with which the Company does not
deal at arm's length (within the meaning of the Tax Act) at the time of making
such payment, (ii) which is subject to such Canadian Taxes by reason of its
failure to comply with any certification, identification, information,
documentation or other reporting requirement if compliance is required by law,
regulation, administrative practice or an applicable treaty as a precondition to
exemption from, or a reduction in the rate of deduction or withholding of, such
Canadian Taxes, (iii) which has executed a Notice of Election and has not
withdrawn such Notice of Election or (iv) which is subject to such Canadian
Taxes by reason of any connection between such beneficial owner and Canada or
any province or territory thereof other than the mere holding of Securities or
the receipt of payments thereunder. The Company will also (i) make such
withholding or deduction and (ii) remit the full amount deducted or withheld to
the relevant tax or receiving authority in accordance with and in the time
required by applicable law. The Company will furnish to the Trustee, within 30
days after the date the payment of any Canadian Taxes are due pursuant to
applicable law, certified copies of tax receipts evidencing such payment by the
Company. The Company will indemnify and hold harmless each Holder (other than
all Excluded Holders) for the amount of (i) any Canadian Taxes not withheld or
deducted by the Company and levied or imposed on and paid by such Holder or
beneficial owner as a result of payments made under or with respect to the
Securities, (ii) any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto, and (iii) any Canadian Taxes imposed
with respect to any payment made under clauses (i) or (ii) above. Holders shall
be required to complete and file any applicable forms with, or provide
certification to, the relevant tax authorities as requested by the Company.
At least 30 days prior to each date on which any payment under
or with respect to the Securities is due and payable, if the Company is aware
that it will be obligated to pay Additional Amounts with respect to such
payment, the Company will deliver to the Trustee an Officers' Certificate
stating the fact that such Additional Amounts will be payable, the amounts
28
so payable and will set forth such other information necessary to enable the
Trustee to pay such Additional Amounts to Holders on the payment date.
Whenever in this Indenture there is mentioned, in any context,
the payment of principal and interest or any other amount payable under or with
respect to any Security, such mention shall be deemed to include mention of the
payment of Additional Amounts provided for in this Section to the extent that,
in such context, Additional Amounts are, were or would be payable in respect
thereof.
SECTION 408. NOTICE OF DEFAULT.
In the event that any Default or Event of Default shall occur,
the Company will give prompt written notice of such Default or Event of Default
to the Trustee.
SECTION 409. USE OF PROCEEDS; REPAYMENT.
The Company will not, and will cause each of its Subsidiaries
not to, designate or direct the use of the proceeds of the sale and issuance of
the Securities specifically to fund any activities or business with any entity
or individual with respect to which U.S. persons are prohibited from doing
business under the Sanctions Regulations.
The Company will not, directly or indirectly, repay the
Securities or any portion thereof from any proceeds and funds sourced from
activities, operations or sales with entities or individuals with respect to
which U.S. persons are prohibited from doing business under the Sanctions
Regulations.
SECTION 410. FURTHER INSTRUMENTS AND ACTS.
Upon request of the Trustee, the Company will execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purposes of this
Indenture.
ARTICLE FIVE
SUCCESSORS
SECTION 501. WHEN COMPANY MAY MERGE, ETC.
The Company shall not consolidate with, amalgamate or merge
with or into, enter into a binding share exchange or sell, convey, transfer or
lease all or substantially all of its properties and assets to, another Person
(including in any such case under a statutory arrangement) unless such other
Person is a corporation organized under the laws of the United States, any State
thereof, the District of Columbia, the laws of Canada or any province or
territory thereof; such Person assumes by supplemental indenture all the
obligations of the Company, under the Securities and this Indenture; and
immediately after giving effect to the transaction, no Default or Event of
Default shall exist; provided, however, for purposes of the foregoing, the sale,
conveyance, transfer or lease (in a single transaction or a series of
29
transactions) of the properties or assets of one or more Subsidiaries (other
than to the Company or another wholly-owned Subsidiary) which, if such
properties or assets were directly owned by the Company, would constitute all or
substantially all of its properties and assets on a consolidated basis, shall be
deemed to be a sale, conveyance, transfer or lease of all or substantially all
of the Company's properties and assets.
The Company shall deliver to the Trustee prior to the
consummation of the proposed transaction an Officers' Certificate to the
foregoing effect and an Opinion of Counsel, which may rely upon such Officers'
Certificate as to the absence of Defaults and Events of Default, stating that
the proposed transaction and such supplemental indenture will, upon consummation
of the proposed transaction, comply with this Indenture.
SECTION 502. SUCCESSOR SUBSTITUTED.
Upon any consolidation or merger or transfer or lease of all
or substantially all of the assets of the Company in accordance with Section
501, the successor person formed by such consolidation or into which the Company
is merged or to which such transfer or lease is made shall succeed to, and,
except in the case of a lease, be substituted for, and may exercise every right
and power of, and shall assume every duty and obligation of, the Company under
this Indenture with the same effect as if such successor had been named as the
Company herein. When the successor assumes all obligations of the Company
hereunder, except in the case of a lease, all obligations of the predecessor
shall terminate.
ARTICLE SIX
DEFAULTS AND REMEDIES
SECTION 601. EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" occurs if:
(i) the Company defaults in the payment of the
principal or Change in Control Price or Redemption Price of
any Security when the same becomes due and payable, whether on
the Maturity Date, upon redemption, on the Purchase Date or
otherwise, whether or not such payment shall be prohibited by
the provisions of Article XI hereof;
(ii) the Company defaults in the payment of
accrued and unpaid interest, Additional Interest Amount or
Additional Amounts on any Security when the same becomes due
and payable and the default continues for a period of 30 days,
whether or not such payment shall be prohibited by the
provisions of Article XI hereof;
(iii) the Company fails to comply with any of its
other agreements in the Securities or this Indenture and the
default continues for 30 days after receipt of the notice
specified below;
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(iv) the Company or any of its Significant
Subsidiaries defaults in the payment at the final maturity
thereof, after the expiration of any applicable grace period,
of principal of, or premium, if any, on indebtedness for money
borrowed in the aggregate principal amount then outstanding of
$10,000,000 or more, or the acceleration of indebtedness for
money borrowed in such aggregate principal amount so that it
becomes due and payable prior to the date on which it would
otherwise become due and payable and such acceleration is not
rescinded or such default is not cured within 15 Business Days
after receipt of notice to the Company in accordance with this
Indenture;
(v) the Company or any of its Significant
Subsidiaries pursuant to or within the meaning of any
Bankruptcy Law:
(A) commences a voluntary case or proceeding,
(B) consents to the entry of an order for relief
against it in an involuntary case or proceeding or the
commencement of any case against it,
(C) consents to the appointment of a Custodian of it
or for all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors or files a proposal or other scheme of arrangement
involving the rescheduling or composition of its indebtedness;
(E) files a petition in bankruptcy or answer or
consent seeking reorganization or relief; or
(F) consents to the filing of such petition or the
appointment of or taking possession by a Custodian;
(vi) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that:
(A) is for relief against the Company or any of its
Significant Subsidiaries in an involuntary case or
proceeding, or adjudicates the Company or any
Significant Subsidiary insolvent or bankrupt,
(B) appoints a Custodian of the Company or any of its
Significant Subsidiaries for all or substantially all
of the property of the Company or any such
Significant Subsidiary, as the case may be, or
(C) orders the winding up or liquidation of the
Company or any of its Significant Subsidiaries, and
the order or decree remains unstayed and in effect
for 90 consecutive days; or
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(vii) the Company fails to make a Change in Control
Offer pursuant to the covenant described in Section 309 of
this Indenture entitled "Purchase at the Option of Holders
upon a Change in Control".
The term "BANKRUPTCY LAW" means Title 11, U.S. Code, the
Canadian Bankruptcy and Insolvency Act, the Companies, Creditors Arrangement Act
(Canada), or any similar U.S. or Canadian federal, state, provincial or foreign
law for the relief of debtors. The term "CUSTODIAN" means any receiver, trustee,
assignee, liquidator or similar official under any Bankruptcy Law.
A default under clause (iii) is not an Event of Default until
the Trustee or the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding notify the Company and the Trustee of the default
and the default is not cured within 30 days after receipt of the notice. The
notice must specify the default, demand that it be remedied and state that the
notice is a "NOTICE OF DEFAULT". If the Holders of 25% in aggregate principal
amount of the outstanding Securities request the Trustee to give such notice on
their behalf, the Trustee shall do so. When a default is cured, it ceases.
SECTION 602. ACCELERATION.
If an Event of Default (other than an Event of Default
specified in Section 601(v) or (vi) with respect to the Company) as to which the
Trustee has received notice pursuant to the provisions of this Indenture occurs
and is continuing, the Trustee by notice to the Company or the Holders of at
least 25% in principal amount of the Securities then outstanding by notice to
the Company and the Trustee may declare the Securities to be due and payable.
Upon such declaration such principal and interest shall be due and payable
immediately. If an Event of Default specified in Section 601(v) or (vi) with
respect to the Company occurs, the principal of and accrued interest on all the
Securities shall IPSO FACTO become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Security Holder.
The Holders of a majority in aggregate principal amount of the Securities then
outstanding by written notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any order or decree and
if all existing Events of Default have been cured or waived except nonpayment of
principal or interest that has become due solely because of the acceleration and
if all amounts due to the Trustee under Section 707 have been paid.
SECTION 603. OTHER REMEDIES.
Notwithstanding any other provision of this Indenture, if an
Event of Default occurs and is continuing, the Trustee may pursue any available
remedy by proceeding at law or in equity to collect the payment of amounts due
with respect to the Securities or to enforce the performance of any provision of
the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Security Holder in exercising any
right or remedy accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default. All
remedies are cumulative.
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SECTION 604. WAIVER OF PAST DEFAULTS.
Subject to Sections 607 and 902, the Holders of a majority in
aggregate principal amount of the Securities then outstanding by notice to the
Trustee may waive any past Default or Event of Default and its consequences.
When a Default or an Event of Default is waived, it is cured and ceases for
every purpose of this Indenture.
SECTION 605. CONTROL BY MAJORITY.
The Holders of a majority in aggregate principal amount of the
Securities then outstanding may direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture, is unduly prejudicial to
the rights of other Security Holders or would involve the Trustee in personal
liability; provided that the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction.
SECTION 606. LIMITATION ON SUITS.
Except as provided in Section 607, a Security Holder may
pursue a remedy with respect to this Indenture or the Securities only if:
(i) the Holder gives to the Trustee written
notice of a continuing Event of Default;
(ii) the Holders of at least 25% in aggregate
principal amount of the Securities then outstanding make a
written request to the Trustee to pursue the remedy;
(iii) such Holder or Holders offer and, if
requested, provide to the Trustee indemnity satisfactory to
the Trustee against any loss, liability or expense;
(iv) the Trustee does not comply with the request
within 60 days after receipt of the request and the offer of
indemnity; and
(v) during such 60-day period, the Holders of a
majority in aggregate principal amount of the Securities then
outstanding do not give the Trustee a direction inconsistent
with the request.
A Security Holder may not use this Indenture to prejudice the
rights of another Security Holder or to obtain a preference or priority over
another Security Holder.
SECTION 607. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the
right of any Holder to receive payment of all amounts due with respect to the
Securities, on or after the respective due
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dates expressed in the Securities, or to bring suit for the enforcement of any
such payment on or after such respective dates, shall not be impaired or
affected without the consent of the Holder.
Notwithstanding any other provision of this Indenture, the
right of any Holder to bring suit for the enforcement of the right to convert
the Security shall not be impaired or affected without the consent of the
Holder.
SECTION 608. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 601(i) or (ii)
occurs and is continuing, the Trustee may recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount due with
respect to the Securities, including any unpaid and accrued interest.
SECTION 609. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee 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, any predecessor Trustee and the Security Holders allowed in any
judicial proceedings relative to the Company or its creditors or properties.
The Trustee may collect and receive any moneys or other
property payable or deliverable on any such claims and to distribute the same,
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any judicial proceeding is hereby authorized by each Holder
to make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 707.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
SECTION 610. PRIORITIES.
If the Trustee collects any money pursuant to this Article VI,
it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 707;
Second: to holders of Senior Indebtedness to the extent
required by Article XI;
Third: to Security Holders for all amounts due and unpaid on
the Securities, without preference or priority of any kind, according to the
amounts due and payable on the Securities; and
Fourth: the balance, if any, to the Company.
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The Trustee, upon prior written notice to the Company, may fix
a record date and payment date for any payment by it to Security Holders
pursuant to this Section 610. At least 15 days before such record date, the
Trustee shall mail to each Security Holder and the Company a notice that states
the record date, the payment date and the amount to be paid.
SECTION 611. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing by
any party litigant in the suit other than the Trustee of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 611 does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 607 or a suit by Holders of more
than 10% in aggregate principal amount of the outstanding Securities.
ARTICLE SEVEN
TRUSTEE
SECTION 701. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee need perform only those duties
that are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith, willful
misconduct or negligence on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the
case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished to
the Trustee, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the
requirements of this Indenture (but need not confirm or
investigate the accuracy of mathematical calculations or other
facts stated therein).
(c) The Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
35
(i) the Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer,
unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(ii) the Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section
605.
(d) Every provision of this Indenture that in any way relates to
the Trustee is subject to the provisions of this Section 701.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 702. RIGHTS OF TRUSTEE.
(a) Subject to Section 701, the Trustee may conclusively rely on
any document believed by it to be genuine and to have been signed or presented
by the proper person. The Trustee need not investigate any fact or matter stated
in the document; if, however, the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled during normal business hours to
examine the relevant books, records and premises of the Company, personally or
by agent or attorney upon reasonable prior notice.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate and/or an Opinion of Counsel. The Trustee shall
not be liable for any action it takes or omits to take in good faith in reliance
on such Officers' Certificate or Opinion of Counsel.
(c) Any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors shall be sufficiently evidenced by a Board
Resolution.
(d) The Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon.
(e) The Trustee may act through agents or attorneys and shall not
be responsible for the misconduct or negligence of any agent or attorney
appointed with due care.
(f) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
discretion, rights or powers conferred upon it by this Indenture.
(g) Except with respect to Section 601, the Trustee shall have no
duty to inquire as to the performance of the Company with respect to the
covenants contained in Article IV. In addition, the Trustee shall not be deemed
to have knowledge of an Event of Default except (i) any Default or Event of
Default occurring pursuant to Sections 601(i) and 601(ii) or (ii) any Default or
Event of Default of which a Responsible Officer of the Trustee shall have
36
received written notification or obtained actual knowledge. Delivery of reports,
information and documents to the Trustee under Article IV (other than Sections
404 and 407) is for informational purposes only and the Trustee's receipt of the
foregoing shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
(h) The Trustee shall be under no obligation to exercise any of
the rights or powers vested by this Indenture at the request or direction of any
of the Holders pursuant to this Indenture unless such Holders shall have offered
to the Trustee security or indemnity reasonably satisfactory to the Trustee
against the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction.
(i) The rights, privileges, protections, immunities and benefits
given to the Trustee, including without limitation, its right to be indemnified,
are extended to, and shall be enforceable by, the Trustee in each of its
capacities hereunder, and each agent, custodian and other Person employed to act
hereunder.
(j) The Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
SECTION 703. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal with the Company or
any of its Affiliates with the same rights it would have if it were not Trustee.
Any Agent may do the same with like rights. The Trustee, however, must comply
with Sections 710 and 711.
SECTION 704. TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities; it shall not be accountable for
the Company's use of the proceeds from the Securities; and it shall not be
responsible for any statement in the Securities other than its certificate of
authentication.
SECTION 705. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing as
to which the Trustee has received notice pursuant to the provisions of this
Indenture, the Trustee shall mail to each Security Holder a notice of the
Default or Event of Default within 30 days after it occurs unless such Default
or Event of Default has been cured or waived. Except in the case of a Default or
Event of Default in payment of any amounts due with respect to any Security, the
Trustee may withhold the notice if and so long as it in good faith determines
that withholding the notice is in the interests of Security Holders.
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SECTION 706. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each May 15 beginning with May 15, 2003,
the Trustee shall mail to each Security Holder if required by TIA Section 313(a)
a brief report dated as of such May 15 that complies with TIA Section 313(c). In
such event, the Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Security
Holders shall be mailed to the Company and filed by the Trustee with the SEC and
each stock exchange, if any, on which the Securities are listed. The Company
shall promptly notify the Trustee when the Securities are listed on any stock
exchange.
SECTION 707. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such
compensation for its services as shall be agreed upon in writing. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee upon request for all
reasonable out-of-pocket expenses incurred by it. Such expenses shall include
the reasonable compensation and out-of-pocket expenses of the Trustee's agents
and counsel.
The Company shall indemnify the Trustee against any and all
loss, liability, damage, claim or expense (including the reasonable fees and
expenses of counsel and taxes other than those based upon the income of the
Trustee) incurred by it in connection with the acceptance or administration of
this trust and the performance of its duties hereunder, including the reasonable
costs and expenses of defending itself against any claim (whether asserted by
the Company, any Holder or any other Person) or liability in connection with the
exercise or performance of any of its powers and duties hereunder. The Company
need not pay for any settlement made without its consent. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnification.
The Company need not reimburse any expense or indemnify against any loss or
liability incurred by the Trustee through the Trustee's negligence, bad faith or
willful misconduct.
To secure the Company's payment obligations in this Section
707, the Trustee shall have a lien prior to the Securities on all money or
property held or collected by the Trustee, except that held in trust to pay
amounts due on particular Securities.
The indemnity obligations of the Company with respect to the
Trustee provided for in this Section 707 shall survive any resignation or
removal of the Trustee.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 601(v) or (vi) occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 708. REPLACEMENT OF TRUSTEE.
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A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 708.
The Trustee may resign by so notifying the Company in writing
30 Business Days prior to such resignation. The Holders of a majority in
aggregate principal amount of the Securities then outstanding may remove the
Trustee by so notifying the Trustee and the Company in writing and may appoint a
successor Trustee with the Company's consent. The Company may remove the Trustee
if:
(i) the Trustee fails to comply with Section
710;
(ii) the Trustee is adjudged a bankrupt or an
insolvent;
(iii) a receiver or other public officer takes
charge of the Trustee or its property; or
(iv) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee.
If a successor Trustee does not take office within 30 days
after the retiring Trustee resigns or is removed, the retiring Trustee (at the
Company's expense), the Company or the Holders of at least 10% in aggregate
principal amount of the outstanding Securities may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 710, any Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Security Holders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 707.
SECTION 709. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee, if such successor corporation is otherwise eligible
hereunder.
SECTION 710. ELIGIBILITY, DISQUALIFICATION.
39
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has a combined capital and surplus of at
least $100 million as set forth in its most recent published annual report of
condition. The Trustee shall comply with TIA Section 310(b).
SECTION 711. PREFERENTIAL COLLECTION OF CLAIMS
AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding
any creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated.
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 801. TERMINATION OF THE OBLIGATIONS OF THE
COMPANY.
The Company may terminate all of its obligations under this
Indenture if all Securities previously authenticated and delivered (other than
mutilated, destroyed, lost or stolen Securities which have been replaced or paid
as provided in Section 207) have been delivered to the Trustee for cancellation
or if:
(i) the Securities mature within one year or all
of them are to be called for redemption within one year under
arrangements satisfactory to the Trustee for giving the notice
of redemption;
(ii) the Company irrevocably deposits, or
arranges for the irrevocable deposit pursuant to Section 310
of this Indenture, in trust with the Trustee money or U.S.
Government Obligations sufficient to pay the principal or
Redemption Price of and any unpaid and accrued interest on the
Securities to maturity or redemption, as the case may be.
Immediately after making the deposit, the Company shall give
notice of such event to the Security Holders;
(iii) the Company has paid or caused to be paid
all sums then payable by the Company to the Trustee hereunder
as of the date of such deposit; and
(iv) the Company has delivered to the Trustee an
Opinion of Counsel and an Officers' Certificate stating that
all conditions precedent provided for herein relating to the
satisfaction and discharge of this Indenture have been
complied with. The Company may make the deposit only during
the one-year period and only if Article XI permits it.
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However, the Company's obligations in Sections 202, 203, 204,
205, 206, 207, 208, 215, 216, 217, 401, 402, 407, 409, 707 and 708, Article VIII
and Article X shall survive until the Securities are no longer outstanding.
Thereafter the obligations of the Company in Sections 707 and 803 shall survive.
After a deposit pursuant to this Section 801, the Trustee upon
request shall acknowledge in writing the discharge of the obligations of the
Company under the Securities and this Indenture, except for those surviving
obligations specified above.
In order to have money available on a payment date to pay the
principal or Redemption Price of and any unpaid and accrued interest on the
Securities, the U.S. Government Obligations shall be payable as to principal and
any unpaid and accrued interest on or before such payment date in such amounts
as will provide the necessary money.
"U.S. GOVERNMENT OBLIGATIONS" means direct non-callable
obligations of, or non-callable obligations guaranteed by, the United States of
America for the payment of which the full faith and credit of the United States
of America is pledged.
SECTION 802. APPLICATION OF TRUST MONEY.
The Trustee shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to Section 801. It shall apply the
deposited money and the money from U.S. Government Obligations through the
Paying Agent and in accordance with this Indenture to the payment of the
principal or Redemption Price of and any unpaid and accrued interest on the
Securities. Money and securities so held in trust are not subject to the
subordination provisions of Article XI.
SECTION 803. REPAYMENT TO COMPANY.
The Trustee and the Paying Agent shall promptly notify the
Company of, and pay to the Company upon the request of the Company, any excess
money or securities held by them at any time. The Trustee and the Paying Agent
shall pay to the Company upon the written request of the Company any money held
by them for the payment of the principal or Redemption Price of and any unpaid
and accrued interest that remains unclaimed for two years; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may, at the expense and request of the Company, cause to be published
once in a newspaper of general circulation in the City of
New York or cause to
be mailed to each Holder, notice stating that such money remains and that, after
a date specified therein, which shall not be less than 30 days from the date of
such publication or mailing, any unclaimed balance of such money then remaining
will be repaid to the Company. After payment to the Company, Security Holders
entitled to the money must look to the Company for payment as general creditors
unless an applicable abandoned property law designates another person and all
liability of the Trustee and the Paying Agent shall cease.
SECTION 804. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money or
U.S. Government Obligations in accordance with Sections 801 and 802 by reason of
any legal proceeding or by
41
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the
obligations of the Company under this Indenture and the Securities shall be
revived and reinstated as though no deposit had occurred pursuant to Sections
801 and 802 until such time as the Trustee or Paying Agent is permitted to apply
all such money or U.S. Government Obligations in accordance with Sections 801
and 802; provided, however, that if the Company has made any payment of amounts
due with respect to any Securities because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money or U.S. Government
Obligations held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS
SECTION 901. WITHOUT CONSENT OF HOLDERS.
The Company, with the consent of the Trustee, may amend or
supplement this Indenture or the Securities without notice to or the consent of
any Security Holder:
(i) to cure any ambiguity, inconsistency or
other defect in this Indenture;
(ii) to comply with Sections 501 and 1012;
(iii) to make any changes or modifications to this
Indenture necessary in connection with the registration of the
Securities under the Securities Act and the qualification of
the Indenture under the TIA;
(iv) to secure the obligations of the Company in
respect of the Securities; or
(v) to add to the covenants of the Company
described in this Indenture for the benefit of Security
Holders or to surrender any right or power conferred upon the
Company.
Notwithstanding the foregoing, no supplemental indenture
pursuant to clause (i), (iii), (iv) and (v) of this Section 901 may be entered
into without the consent of the holders of a majority in principal amount of the
Securities if such supplemental indenture would materially and adversely affect
the interests of the Holders of the Securities.
SECTION 902. WITH CONSENT OF HOLDERS.
The Company, with the consent of the Trustee, may amend or
supplement this Indenture or the Securities with the written consent of the
Holders of at least a majority in aggregate principal amount of the outstanding
Securities. Subject to Section 607, the Holders of a majority in aggregate
principal amount of the outstanding Securities may (a) waive compliance by the
Company with any restrictive provision of this Indenture or the Securities, (b)
waive any
42
past Default under this Indenture and its consequences, except a Default in the
payment of the principal amount, accrued and unpaid interest, if any, Redemption
Price or Change in Control Price or obligation to deliver Common Shares upon
conversion with respect to any Security or in respect of any provision which
under this Indenture cannot be modified or amended without the consent of the
Holder of each outstanding Security. However, without the consent of each
Security Holder affected, an amendment, supplement or waiver, including a waiver
pursuant to Section 604, may not:
(i) reduce the amount of Securities whose
Holders must consent to an amendment, supplement or waiver or
modify the provisions of this Indenture relating to such
amendments, supplements or waivers;
(ii) reduce the rate of or change the time for
payment of interest (including Additional Interest Amount and
Additional Amounts, if any) on any Security;
(iii) reduce the principal, Redemption Price or
Change in Control Price of any Security;
(iv) change the Stated Maturity of any Security;
(v) make any Security payable in money or
securities other than as stated in such Security;
(vi) modify the provisions of Article XI in a
manner adverse to the Holders of the Securities;
(vii) waive a default in the payment of any amount
due with respect to any Security;
(viii) make any change to the right to convert, or
receive payment with respect to, any Security or the right to
institute suit for the enforcement of any payment with respect
to, or conversion of, any Security; or
(ix) make any change that adversely affects the
right to require the Company to purchase any of the Securities
upon a Change in Control.
An amendment under this Section 902 may not make any change
that adversely affects the rights under Article XI of any holder of Senior
Indebtedness unless the holders of such Senior Indebtedness pursuant to its
terms consent to the change.
Promptly after an amendment under Section 901 or this Section
902 becomes effective, the Company shall mail to Security Holders a notice
briefly describing the amendment. Any failure of the Company to mail such notice
shall not in any way impair or affect the validity of such amendment, supplement
or waiver.
43
It shall not be necessary for the consent of the Holders under
this Section 902 to approve the particular form of any proposed amendment or
supplement, but it shall be sufficient if such consent approves the substance
thereof.
SECTION 903. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment, waiver or supplement to this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION 904. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security. However, any such Holder or subsequent Holder may revoke
the consent as to its Security or portion of a Security if the Trustee receives
the notice of revocation before the date the amendment, supplement or waiver
becomes effective. An amendment, supplement or waiver becomes effective in
accordance with its terms and thereafter binds every Security Holder.
After an amendment, supplement or waiver becomes effective
with respect to the Securities, it shall bind every Security Holder unless it
makes a change described in Section 902. In that case, the amendment, supplement
or waiver shall bind each Holder of a Security who has consented to it and,
provided that notice of such amendment, supplement or waiver is reflected on a
Security that evidences the same debt as the consenting Holder's Security, every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security.
SECTION 905. NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security as
directed and prepared by the Company about the changed terms and return it to
the Holder. Alternatively, if the Company so determines, the Company in exchange
for the Security shall issue and the Trustee shall authenticate a new Security
that reflects the changed terms.
SECTION 906. TRUSTEE PROTECTED.
The Trustee need not sign any amendment, supplement or waiver
authorized pursuant to this Article IX that adversely affects the Trustee's
rights, duties, liabilities or immunities. The Trustee shall be entitled to
receive and conclusively rely upon an Opinion of Counsel and an Officers'
Certificate that any supplemental indenture, amendment or waiver is permitted or
authorized pursuant to the Indenture.
ARTICLE TEN
CONVERSION
44
SECTION 1001. CONVERSION PRIVILEGE, RESTRICTIVE
LEGENDS.
A Holder of a Security may convert such Security into Common
Shares at any time during the periods stated in paragraph 11 of the Securities.
The initial conversion rate is stated in paragraph 11 of the Securities. The
conversion rate is subject to adjustment in accordance with Sections 1006
through 1012. A Holder may convert a portion of the principal of such Security
if the portion is $1,000 principal amount or a positive integral multiple of
$1,000 principal amount. Provisions of this Indenture that apply to conversion
of all of a Security also apply to conversion of a portion of it.
Any Common Shares issued upon conversion of a Security shall
bear the Private Placement Legend until after the second anniversary of the
later of the Issue Date for the Securities and the last date on which the
Company or any Affiliate of the Company was the owner of such shares or the
Security (or any predecessor security) from which such shares were converted (or
such shorter period of time as permitted by Rule 144(k) under the Securities Act
or any successor provision thereunder) (or such longer period of time as may be
required under the Securities Act or applicable state securities laws in the
Opinion of Counsel for the Company, unless otherwise agreed by the Company and
the Holder thereof).
SECTION 1002. CONVERSION PROCEDURE.
To convert a Security, a Holder must satisfy the requirements
in paragraph 11 of the Securities. The date on which the Holder satisfies all
those requirements is the "CONVERSION DATE". As soon as practicable following
the Conversion Date, the Company shall deliver to the Holder through the
Conversion Agent a certificate for the number of full Common Shares issuable
upon the conversion and a check in lieu of any fractional share. The person in
whose name the certificate is registered shall be treated as a shareholder of
record on and after the Conversion Date.
Except as described below and in the Registration Rights
Agreement with respect to the Additional Interest Amount (as defined therein),
no payment or adjustment will be made for accrued interest on a converted
Security or for dividends on any Common Shares issued on or prior to conversion.
If any Holder surrenders a Security for conversion after the close of business
on the record date for the payment of an installment of interest and prior to
the opening of business on the next interest payment date, then, notwithstanding
such conversion, the interest payable on such interest payment date shall be
paid to the Holder of such Security on such record date; provided, however, that
such Security, when surrendered for conversion, must be accompanied by payment
to the Trustee on behalf of the Company of an amount equal to the interest
payable on such interest payment date on the portion so converted; provided,
further, however, that such payment to the Trustee described in the immediately
preceding proviso shall not be required in connection with any conversion of a
Security called for redemption pursuant to Sections 304 or 308 hereof on a
redemption date that is after a record date for the payment of interest and on
or before the day that is one Business Day following the corresponding interest
payment date.
45
If a Holder converts more than one Security at the same time,
the number of full shares issuable upon the conversion shall be based on the
total principal amount of the Securities converted.
Upon surrender of a Security that is converted in part the
Trustee shall authenticate for the Holder a new Security equal in principal
amount to the unconverted portion of the Security surrendered.
If the last day on which a Security may be converted is a
Legal Holiday in a place where a Conversion Agent is located, the Security may
be surrendered to that Conversion Agent on the next succeeding day that is not a
Legal Holiday.
SECTION 1003. FRACTIONAL SHARES.
The Company will not issue fractional Common Shares upon
conversion of Securities. Instead, the Company will deliver a check in an amount
equal to the value of such fraction computed on the basis of the last sale price
of the Common Shares as reported on the NNM (or if not listed for trading
thereon, then on the principal securities exchange or on the principal automated
quotation system on which the Common Shares are listed or admitted to trading)
at the close of business on the Business Day immediately preceding the date of
conversion or if no such sale takes place on such day, the last sale price for
such day shall be the average of the closing bid and asked prices regular way on
the NNM (or if not listed for trading thereon, on the principal U.S. securities
exchange or on the principal U.S. automated quotation system on which the Common
Shares are listed or admitted to trading or if not listed for trading in the
U.S. then on the principal Canadian securities exchange on which the Common
Shares are listed for trading, converted into U.S. dollars at the Rate of
Exchange) for such day. If on the date of conversion, the Common Shares are not
quoted by any such organization, the fair value of such Common Shares on such
day, as reasonably determined in good faith by the Board of Directors shall be
used.
SECTION 1004. TAXES ON CONVERSION.
If a Holder converts its Security, the Company shall pay any
documentary, stamp or similar issue or transfer tax due on the issue of Common
Shares upon the conversion. However, the Holder shall pay any such tax which is
due because the shares are issued in a name other than the Holder's name.
SECTION 1005. COMPANY TO PROVIDE SHARES.
The Company shall allot out of its authorized but unissued
Common Shares enough Common Shares to permit the conversion of all of the
Securities.
All Common Shares which may be issued upon conversion of the
Securities shall be validly issued, fully paid and non-assessable.
The Company will endeavor to comply with all securities laws
regulating the offer and delivery of Common Shares upon conversion of Securities
and will endeavor to list
46
such shares on each securities exchange or automated quotation system on which
the Common Shares are listed.
SECTION 1006. ADJUSTMENT OF CONVERSION RATE.
The conversion rate shall be subject to adjustment from time
to time as follows:
(a) In case the Company shall (1) pay a dividend in Common
Shares to all holders of Common Shares, (2) make a distribution of Common Shares
to all holders of Common Shares, (3) subdivide the outstanding Common Shares
into a greater number of Common Shares or (4) combine the outstanding Common
Shares into a smaller number of Common Shares, the conversion rate in effect
immediately prior to such action shall be adjusted so that the Holder of any
Security thereafter surrendered for conversion shall be entitled to receive the
number of Common Shares which it would have owned immediately following such
action had such Securities been converted immediately prior thereto. Any
adjustment made pursuant to this Section 1006(a) shall become effective
immediately after the record date in the case of a dividend or distribution and
shall become effective immediately after the effective date in the case of a
subdivision or combination.
(b) In case the Company shall issue rights or warrants to all
or substantially all holders of Common Shares, entitling them (for a period
commencing no earlier than the record date for the determination of Holders of
Common Shares entitled to receive such rights or warrants) to subscribe for or
purchase Common Shares (or securities convertible into Common Shares), at a
price per share less than the then Current Market Price (as determined pursuant
to Section 1006(g) below) of Common Shares on such record date, except for
rights under the Rights Plan described in Section 1007, the conversion rate
shall be increased by multiplying the conversion rate in effect immediately
prior to such record date by a fraction of which the numerator shall be the
number of Common Shares outstanding on such record date, plus the number of
Common Shares so offered for subscription or purchase, and the denominator of
which shall be the number of Common Shares outstanding at the close of business
on such record date plus the number of Common Shares which the aggregate of the
offering price of the total number of Common Shares so offered for subscription
or purchase would purchase at such Current Market Price. Such adjustments shall
become effective immediately after such record date.
(c) In case the Company shall distribute to all or
substantially all holders of Common Shares Capital Stock of the Company other
than Common Shares, evidences of indebtedness or other assets (other than cash
dividends out of current or retained earnings), or shall distribute to all or
substantially all holders of Common Shares rights or warrants to subscribe for
securities (other than those referred to in Sections 1006(b) or 1007), then in
each such case the conversion rate shall be increased by multiplying the
conversion rate in effect immediately prior to the close of business on the
record date for the determination of shareholders entitled to such distribution
by a fraction of which the numerator shall be the Current Market Price of Common
Shares (determined as provided in Section 1006(g) below), on such date and the
denominator shall be such Current Market Price less the fair market value (as
determined in good faith by the Board of Directors whose determination shall be
conclusive and described in a Board Resolution) on such date of the portion of
the evidences of indebtedness,
47
shares of Capital Stock, cash and other assets to be distributed or of such
subscription rights or warrants applicable to one Common Share, such increase to
become effective immediately prior to the opening of business on the day
following such record date. Notwithstanding the foregoing, in the event that the
Company shall distribute rights or warrants (other than those referred to in
Section 1006(b) above) ("RIGHTS") pro rata to holders of Common Shares, the
Company may, in lieu of making any adjustment pursuant to this Section 1006(c),
make proper provision so that each Holder of a Security who converts such
Security (or any portion thereof) after the record date for such distribution
and prior to the expiration or redemption of the Rights shall be entitled to
receive upon such conversion, in addition to the Common Shares issuable upon
such conversion (the "CONVERSION SHARES"), a number of Rights to be determined
as follows: (i) if such conversion occurs on or prior to the date for the
distribution to the holders of Rights of separate certificates evidencing such
Rights (the "DISTRIBUTION DATE"), the same number of Rights to which a holder of
a number of Common Shares equal to the number of Conversion Shares is entitled
at the time of such conversion in accordance with the terms and provisions of
and applicable to the Rights; and (ii) if such conversion occurs after the
Distribution Date, the same number of Rights to which a holder of the number of
Common Shares into which the principal amount of the Security so converted was
convertible immediately prior to the Distribution Date would have been entitled
on the Distribution Date in accordance with the terms and provisions of and
applicable to the Rights.
(d) In case the Company shall, by dividend or otherwise, at
any time make a distribution (the "TRIGGERING DISTRIBUTION," and the amount of
the Triggering Distribution, together with the sum of (w) and (x) below, the
"COMBINED AMOUNT") to all or substantially all holders of its Common Shares of
cash (including any distributions of cash out of current or retained earnings of
the Company, but excluding any cash that is distributed as part of a
distribution requiring a conversion rate adjustment pursuant to Section 1006(c)
above or Section 1006(e) below) in an aggregate amount that, together with the
sum of (w) the aggregate amount of any cash and the fair market value (as
determined in good faith by the Board of Directors, whose determination shall be
conclusive thereof and described in a Board Resolution), as of the expiration of
the issuer bid, tender offer or exchange offer referred to below, of any other
consideration payable in respect of any issuer bid, tender offer or exchange
offer by the Company or a Subsidiary of the Company for all or any portion of
the Common Shares consummated within the 12 months preceding the date of payment
of the Triggering Distribution and in respect of which no conversion rate
adjustment has been made pursuant to this Section 1006, and (x) the aggregate
amount of all other cash distributions to all or substantially all holders of
Common Shares made within the 12 months preceding the date of payment of the
Triggering Distribution and in respect of which no conversion rate adjustment
has been made pursuant to this Section 1006, exceeds 10% of the product of the
Current Market Price per share (as determined in accordance with Section
1006(g)) of the Common Shares on the close of business,
New York City time, on
the Business Day (the "DISTRIBUTION DECLARATION DATE") immediately preceding the
day on which the Triggering Distribution is declared by the Company and the
number of Common Shares outstanding on the Distribution Declaration Date
(excluding shares held in the treasury of the Company), the conversion rate
shall be adjusted by multiplying the conversion rate in effect immediately prior
to the effectiveness of the conversion rate adjustment contemplated by this
Section 1006(d) by a fraction (y) the numerator of which shall be such Current
Market Price per Common Share and (z) the denominator of which shall be (I) such
Current Market Price per Common Share less (II) the number obtained by dividing
the
48
Combined Amount by such number of Common Shares outstanding. Such adjustment
shall become effective immediately prior to the opening of business on the day
following the Distribution Declaration Date.
(e) In case an issuer bid, tender offer or exchange offer made
by the Company or any of its Subsidiaries for all or any portion of the Common
Shares shall expire and such issuer bid, tender offer or exchange offer (as
amended upon the expiration thereof) shall require the payment to shareholders
(based on the acceptance (up to any maximum specified in the terms of the issuer
bid, tender offer or exchange offer) of Purchased Shares (as defined below)) of
an aggregate consideration having a fair market value (as determined in good
faith by the Board of Directors, whose determination shall be conclusive and set
forth in a Board Resolution) that combined together with:
(1) the aggregate of the cash plus the fair
market value (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and set
forth in a Board Resolution), as of the expiration of such
issuer bid, tender offer or exchange offer, of consideration
payable in respect of any other issuer bids, tender offers or
exchange offers, by the Company or any of its Subsidiaries for
all or any portion of the Common Shares expiring within the 12
months preceding the expiration of such issuer bid, tender
offer or exchange offer and in respect of which no adjustment
pursuant to this Section 1006 has been made, and
(2) the aggregate amount of any distributions to
all or substantially all holders of the Company's Common
Shares made exclusively in cash within the 12 months preceding
the expiration of such issuer bid, tender offer or exchange
offer and in respect of which no adjustment pursuant to
Section 1006 has been made, exceeds 10% of the product of the
Current Market Price per share (as determined in accordance
with Section 1006(g)) as of the last time (the "EXPIRATION
TIME") tenders or exchanges could have been made pursuant to
such issuer bid, tender offer or exchange offer (as it may be
amended) times the number of Common Shares outstanding
(including any tendered shares or exchanged shares) at the
Expiration Time, then, and in each such case, immediately
prior to the opening of business on the day after the date of
the Expiration Time, the conversion rate shall be adjusted by
multiplying the conversion rate in effect immediately prior to
the close of business on the date of the Expiration Time by a
fraction:
(i) the numerator of which shall be the sum
of (x) the fair market value (determined as
aforesaid) of the aggregate consideration
payable to shareholders based on the
acceptance (up to any maximum specified in
the terms of issuer bid, the tender offer or
exchange offer) of all shares validly
tendered or exchanged and not withdrawn as
of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being
referred to as the "PURCHASED SHARES") and
(y) the product of the number of Common
Shares outstanding (less any Purchased
Shares) at the
49
Expiration Time and the Current Market Price
per share of the Common Shares as of the
Expiration Time; and
(ii) the denominator of which shall be the
number of Common Shares outstanding
(including any tendered or exchanged shares)
at the Expiration Time multiplied by the
Current Market Price per share (as
determined in accordance with Section
1006(g)) of the Common Shares as of the
Expiration Time. Such adjustment (if any)
shall become effective immediately prior to
the opening of business on the day following
the Expiration Time. In the event that the
Company is obligated to purchase shares
pursuant to any such issuer bid, tender
offer or exchange offer, but the Company is
permanently prevented by applicable law from
effecting any such purchases or all such
purchases are rescinded, the conversion rate
shall again be adjusted to be the conversion
rate which would then be in effect if such
issuer bid, tender offer or exchange offer
had not been made. If the application of
this Section 1006(e) to any issuer bid,
tender offer or exchange offer would result
in a decrease in the conversion rate, no
adjustment shall be made for such issuer
bid, tender offer or exchange offer under
this Section 1006(e).
(f) In addition to the foregoing adjustments in subsections
(a), (b), (c), (d) and (e) above, the Company, from time to time and to the
extent permitted by law, may increase the conversion rate by any amount for at
least 20 days or such longer period as may be required by law, if the Board of
Directors of the Company has made a determination, which determination shall be
conclusive, that such increase would be in the best interests of the Company.
The Company shall give notice to the Trustee and cause notice of such increase
to be mailed to each Holder of Securities at such Holder's address as the same
appears on the registry books of the Registrar, at least 15 days prior to the
date on which such increase commences. Such conversion rate increase shall be
irrevocable during such period.
(g) For the purpose of any computation under subsections (b),
(c), (d) and (e) above of this Section 1006, the "CURRENT MARKET PRICE" per
Common Share on the date fixed for determination of the shareholders entitled to
receive the issuance or distribution requiring such computation (the
"DETERMINATION DATE") shall be deemed to be the average of the Daily Market
Prices for the ten consecutive trading days immediately preceding the
Determination Date; provided, however, that (i) if the "ex" date for any event
(other than the issuance or distribution requiring such computation) that
requires an adjustment to the conversion rate pursuant to subsection (b), (c),
(d) or (e) above occurs on or after the tenth trading day prior to the
Determination Date and prior to the "ex" date for the issuance or distribution
requiring such computation, the Daily Market Price for each trading day prior to
the "ex" date for such other event shall be adjusted by multiplying such Daily
Market Price by the reciprocal of the fraction by which the conversion rate is
so required to be adjusted as a result of such other event, (ii) if the "ex"
date for any event (other than the issuance or distribution requiring such
computation) that requires an adjustment to the conversion rate pursuant to
subsection (b), (c), (d) or (e) above occurs on or after the "ex" date for the
issuance or distribution requiring such computation and on or prior to the
Determination Date, the Daily
50
Market Price for each Business Day on and after the "ex" date for such other
event shall be adjusted by multiplying such Daily Market Price by the same
fraction by which the conversion rate is so required to be adjusted as a result
of such other event, and (iii) if the "ex" date for the issuance or distribution
requiring such computation is on or prior to the Determination Date, after
taking into account any adjustment required pursuant to clause (i) or (ii) of
this proviso, the Daily Market Price for each trading day on and after the "ex"
date shall be adjusted by adding thereto the amount of any cash and the fair
market value (as determined in good faith by the Board of Directors in a manner
consistent with any determination of such value for the purposes of this Section
1006, whose determination shall be conclusive and described in a Resolution of
the Board of Directors) of the evidences of indebtedness, shares of Capital
Stock or other securities or assets being distributed (in the distribution
requiring such computation) applicable to one Common Share as of the close of
business on the day before such "ex" date. For the purpose of any computation
under Section 1006(e), the Current Market Price per Common Share at the
Expiration Time for the issuer bid, tender offer or exchange offer requiring
such computation shall be deemed to be the average of the Daily Market Price for
the ten consecutive trading days commencing on the Business Day immediately
following the expiration time of such issuer bid, tender offer or exchange offer
(the "COMMENCEMENT DATE"); provided, however, that if the "ex" date for any
event (other than the issuer bid, tender offer or exchange offer requiring such
computation) that requires an adjustment to the conversion rate pursuant to
subsection (b), (c), (d) or (e) above occurs on or after the expiration time for
the issuer bid, tender offer or exchange offer requiring such computation and
prior to the day in question, the Daily Market Price for each trading day on or
after to the "ex" date for such other event shall be adjusted by multiplying
such Daily Market Price by the same fraction by which the conversion rate is so
required to be adjusted as a result of such other event. For purposes of this
subsection, the term "ex" date, (i) when used with respect to any issuance or
distribution, means the first date on which the Common Shares trades regular way
on the relevant exchange or in the relevant market from which the Daily Market
Price was obtained without the right to receive such issuance or distribution,
(ii) when used with respect to any subdivision or combination of Common Shares,
means the first date on which the Common Shares trades regular way on such
exchange or in such market after the time at which such subdivision or
combination becomes effective, and (iii) when used with respect to any issuer
bid, tender offer or exchange offer means the first date on which the Common
Shares trades regular way on such exchange or in such market after the
expiration time of such issuer bid, tender offer or exchange offer (as it may be
amended or extended).
SECTION 1007. NO ADJUSTMENT.
(a) The Company's shareholder protection rights plan (the
"RIGHTS PLAN") provides that each of the Common Shares, including those issued
pursuant to the terms of the Securities, issued at any time prior to the
distribution of separate certificates representing the Company's share purchase
rights, will be entitled to receive such rights. However, there shall not be any
adjustment to the conversion rate as a result of:
(i) the issuance of the rights to purchase
Common Shares pursuant to the Rights Plan or any successor
agreement;
51
(ii) the distribution of any entitlement to
receive the share purchase rights;
(iii) the exercise or redemption of such rights
in accordance with the Rights Plan; or
(iv) the termination or invalidation of the share
purchase rights or similar rights; or
(v) the existence of rights to purchase Common
Shares pursuant to a Company plan for reinvestment of
dividends and interest.
(b) No adjustment in the conversion rate shall be required
until cumulative adjustments amount to 1% or more of the conversion rate as last
adjusted; provided, however, that any adjustments which by reason of this
Section 1007(b) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Article X
shall be made to the nearest cent or to the nearest one-hundredth of a share, as
the case may be.
(c) If any rights, options or warrants issued by the Company
as described in Section 1006 are only exercisable upon the occurrence of certain
triggering events, then the conversion rate will not be adjusted as provided in
Section 1006 until the earliest of such triggering event occurs. Upon the
expiration or termination of any rights, options or warrants without the
exercise of such rights, options or warrants, the conversion rate then in effect
shall be adjusted immediately to the conversion rate which would have been in
effect at the time of such expiration or termination had such rights, options or
warrants, to the extent outstanding immediately prior to such expiration or
termination, never been issued.
(d) No adjustment need be made for a transaction referred to
in this Article X if Security Holders are to participate in the transaction
without conversion on a basis and with notice that the Board of Directors
determines to be fair and appropriate in light of the basis and notice on which
holders of Common Shares participate in the transaction.
SECTION 1008. OTHER ADJUSTMENTS.
In the event that, as a result of an adjustment made pursuant
to Section 1006 hereof, the Holder of any Security thereafter surrendered for
conversion shall become entitled to receive any shares of Capital Stock other
than Common Shares, thereafter the conversion rate of such other shares so
receivable upon conversion of any Security shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to Common Shares contained in this Article X.
SECTION 1009. ADJUSTMENTS FOR TAX PURPOSES.
The Company may make such increases in the conversion rate, in
addition to those required by Section 1006 hereof, as it determines to be
advisable in order that any share dividend, subdivision of shares, distribution
or rights to purchase shares or securities or
52
distribution of securities convertible into or exchangeable for shares made by
the Company or to its shareholders will not be taxable to the recipients
thereof.
SECTION 1010. NOTICE OF ADJUSTMENT.
Whenever the conversion rate is adjusted, the Company shall
promptly mail to Holders at the addresses appearing on the Registrar's books a
notice of the adjustment and file with the Trustee an Officers' Certificate
briefly stating the facts requiring the adjustment and the manner of computing
it. The certificate shall be conclusive evidence of the correctness of such
adjustment.
SECTION 1011. NOTICE OF CERTAIN TRANSACTIONS.
In the event that:
(1) the Company takes any action which would require an adjustment
in the conversion rate;
(2) the Company takes any action that would require a supplemental
indenture pursuant to Section 1012; or
(3) there is a dissolution or liquidation of the Company;
a Holder of a Security may wish to convert, subject to paragraph 11 of the
Securities, such Security into Common Shares prior to the record date for or the
effective date of the transaction so that he may receive the rights, warrants,
securities or assets which a holder of Common Shares on that date may receive.
Therefore, the Company shall mail to Holders at the addresses appearing on the
Registrar's books and the Trustee a notice stating the proposed record or
effective date, as the case may be, of any transaction referred to in clause
(1), (2) or (3) of this Section 1011. The Company shall mail such notice at
least 15 days before such date; however, failure to mail such notice or any
defect therein shall not affect the validity of any transaction referred to in
clause (1), (2) or (3) of this Section 1011.
SECTION 1012. EFFECT OF RECLASSIFICATIONS,
CONSOLIDATIONS, AMALGAMATIONS, STATUTORY ARRANGEMENTS, MERGERS, BINDING SHARE
EXCHANGES OR SALES ON CONVERSION PRIVILEGE.
If any of the following shall occur, namely: (i) any
reclassification or change in the Common Shares issuable upon conversion of
Securities, (ii) any consolidation, amalgamation, statutory arrangement, merger,
binding share exchange or other combination to which the Company is a party
other than a merger in which the Company is the continuing corporation and which
does not result in any reclassification of, or change (other than a change in
name) in, the Common Shares, or (iii) any sale or conveyance of all or
substantially all of the consolidated property or business of the Company as an
entirety, then the Company or such successor or purchasing corporation, as the
case may be, shall, as a condition precedent to such reclassification, change,
consolidation, amalgamation, statutory arrangement, merger, binding share
exchange or other combination, sale or conveyance, execute and deliver to the
Trustee a supplemental indenture in form reasonably satisfactory to the Trustee
providing that the Holder
53
of each Security then outstanding shall have the right to convert such Security
into the kind and amount of shares of stock and other securities and property
(including cash) receivable upon such reclassification, change, consolidation,
amalgamation, statutory arrangement, merger, binding share exchange or other
combination, sale or conveyance by a holder of the number of Common Shares,
deliverable upon conversion of such Security immediately prior to such
reclassification, change, consolidation, amalgamation, statutory arrangement,
merger, binding share exchange or other combination, sale or conveyance. Such
supplemental indenture shall provide for adjustments of the conversion rate
which shall be as nearly equivalent as may be practicable to the adjustments of
the conversion rate provided for in this Article X. The foregoing, however,
shall not in any way affect the right a Holder of a Security may otherwise have,
pursuant to clause (ii) of the last sentence of Section 1006(c) hereof, to
receive Rights upon conversion of a Security. If, in the case of any
consolidation, amalgamation, statutory arrangement, merger, binding share
exchange or other combination, sale or conveyance, the stock or other securities
and property (including cash) receivable thereupon by a holder of Common Shares
includes shares of stock or other securities and property of a corporation other
than the successor or purchasing corporation, as the case may be, in such
consolidation, merger, binding share exchange, sale or conveyance, then such
supplemental indenture shall also be executed by such other corporation and
shall contain such additional provisions to protect the interests of the Holders
of the Securities as the Board of Directors shall reasonably consider necessary
by reason of the foregoing. The provision of this Section 1012 shall similarly
apply to successive consolidations, mergers, binding share exchanges, sales or
conveyances.
If, however, prior to the date that is five years from the
Issue Date, Holders of Securities would otherwise be entitled to receive, upon
conversion of the Securities, any property (including cash) or securities of a
company ("INELIGIBLE CONSIDERATION") that would not constitute "PRESCRIBED
SECURITIES" for the purpose of clause 212(1)(b)(vii)(E) of the Tax Act, such
Holders shall not be entitled to receive such Ineligible Consideration but the
Company or the successor or acquiror, as the case may be, shall have the right
(at the sole option of the Company or the successor or acquiror, as the case may
be) to deliver either such Ineligible Consideration or Prescribed Securities
with a market value comparable to such Ineligible Consideration (as determined
in good faith by the Board of Directors, whose determination shall be conclusive
and set forth in a Board Resolution). The Company will give notice to Holders of
the Securities at least 30 days prior to the effective date of such transaction
in writing and by release to a business newswire stating the consideration into
which the Securities will be convertible after the effective date of such
transaction. After such notice, the Company or the successor or acquiror, as the
case may be, may not change the consideration to be delivered upon conversion of
the Securities except in accordance with any other provision of this Indenture.
In the event the Company shall execute a supplemental
indenture pursuant to this Section 1012, the Company shall promptly file with
the Trustee an Officers' Certificate briefly stating the reasons therefor, the
kind or amount of shares of stock or securities or property (including cash)
receivable by Holders of the Securities upon the conversion of their Securities
after any such reclassification, change, consolidation, merger, binding share
exchange, sale or conveyance and any adjustment to be made with respect thereto.
SECTION 1013. TRUSTEE'S DISCLAIMER.
54
The Trustee has no duty to determine when an adjustment under
this Article X should be made, how it should be made or what such adjustment
should be, but may accept as conclusive evidence of the correctness of any such
adjustment, and shall be protected in relying upon the Officers' Certificate
with respect thereto which the Company is obligated to file with the Trustee
pursuant to Section 1010 hereof. The Trustee makes no representation as to the
validity or value of any securities or assets issued upon conversion of
Securities, and the Trustee shall not be responsible for the failure by the
Company to comply with any provisions of this Article X. The Trustee shall not
be under any responsibility to determine the correctness of any provisions
contained in any supplemental indenture executed pursuant to Section 1012, but
may accept as conclusive evidence of the correctness thereof, and shall be
protected in relying upon, the Officers' Certificate with respect thereto which
the Company is obligated to file with the Trustee pursuant to Section 1012
hereof.
ARTICLE ELEVEN
SUBORDINATION
SECTION 1101. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Security Holder by accepting a
Security agrees, that the payment of all amounts due with respect to the
Securities is subordinated in right of payment, to the extent and in the manner
provided in this Article XI, to the prior payment in full of all Senior
Indebtedness and that the subordination is for the benefit of the holders of
Senior Indebtedness.
Money and securities held in trust pursuant to Article VIII
are not subject to the subordination provisions of this Article XI.
SECTION 1102. CERTAIN DEFINITIONS.
"INDEBTEDNESS" means, with respect to any Person, the
principal of, and premium, if any, and interest on (a) all indebtedness of such
Person for borrowed money (including all indebtedness evidenced by Securities,
bonds, debentures or other securities sold by such Person for money), (b) all
obligations incurred by such Person in the acquisition (whether by way of
purchase, merger, amalgamation, statutory arrangement, consolidation or
otherwise and whether by such Person or another Person) of any business, real
property or other assets (except inventory and related items acquired in the
ordinary course of the conduct of the acquiror's usual business), (c) guarantees
by such Person of indebtedness described in clause (a) or (b) of another Person,
(d) all renewals, extensions, refundings, deferrals, restructurings, amendments
and modifications of any such indebtedness, obligation or guarantee, (e) all
reimbursement obligations of such Person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of such
Person, (f) all capital lease obligations of such Person and (g) all net
obligations of such Person under interest rate swap, currency exchange or
similar agreements of such Person.
55
"REPRESENTATIVE" means the indenture trustee or other trustee,
agent or representative for an issue of Senior Indebtedness.
SECTION 1103. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any payment or distribution of assets to creditors of the
Company in a liquidation, winding up or dissolution of the Company, or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property:
(a) holders of Senior Indebtedness shall be entitled to
receive payment in full of the principal of and interest (including interest
accruing after the commencement of any such proceeding) to the date of payment
on the Senior Indebtedness before Security Holders shall be entitled to receive
any payment from the Company of amounts due with respect to the Securities
(other than cash payments due upon conversion of Securities in lieu of
fractional shares); and
(b) until the Senior Indebtedness is paid in full, any
distribution to which Security Holders would be entitled from the Company but
for this Article XI shall be made to holders of Senior Indebtedness, as their
interests may appear, except the Security Holders may receive (i) securities
that are subordinated to Senior Indebtedness to at least the same extent as the
Securities and (ii) payments made pursuant to Sections 801 and 802.
SECTION 1104. COMPANY NOT TO MAKE PAYMENTS WITH
RESPECT TO SECURITIES IN CERTAIN CIRCUMSTANCES.
No payment of amounts due may be made by the Company, directly
or indirectly, with respect to the Securities (including any Change in Control
Price to be paid in connection with a Change in Control Offer, but excluding
cash payments due upon conversion in lieu of fractional shares) or to acquire
any of the Securities at any time if a default in payment of the principal of or
premium, if any, or interest on Senior Indebtedness exists beyond any applicable
grace period, unless and until such default shall have been cured or waived or
shall have ceased to exist. During the continuance of any default with respect
to any Senior Indebtedness pursuant to which any Senior Indebtedness has been
issued (other than default in payment of the principal of or premium, if any, or
interest on any Senior Indebtedness), permitting the holders thereof to
accelerate the maturity thereof, no payment may be made by the Company, directly
or indirectly, after receipt of a Payment Blockage Notice as defined below, of
any amount due with respect to the Securities (a "PAYMENT BLOCKAGE") until the
earlier of (i) the date on which such default has been cured or waived, (ii) 180
days following receipt of written notice (a "PAYMENT BLOCKAGE NOTICE") to the
Company from any holder or holders thereof or its Representative or
Representatives or the trustee or trustees under any indenture under which any
instrument evidencing any such Senior Indebtedness may have been issued, that
such a default has occurred and is continuing, (iii) the date on which such
Senior Indebtedness is discharged or paid in full or (iv) the date of which the
imposition of such Payment Blockage shall have been terminated by written notice
to such trustee or the Company from such trustee or other representative
initiating such Payment Blockage. Notwithstanding the foregoing, no new Payment
Blockage Notice shall be given until a period of at least 365 consecutive days
shall have elapsed since the beginning of the prior Payment Blockage period. No
default (other than a default in payment) that existed or was continuing on the
date of delivery of any Payment
56
Blockage Notice shall be the basis for any subsequent Payment Blockage Notice,
unless such default has been cured or waived for a period of not less than 90
consecutive days. However, if the maturity of such Senior Indebtedness is
accelerated, no payment may be made by the Company on the Securities until such
Senior Indebtedness that has matured has been paid or such acceleration has been
cured or waived.
Regardless of anything to the contrary herein, nothing shall
prevent (a) any payment by the Trustee to the Security Holders of amounts
deposited with it pursuant to Article VIII or (b) any payment by the Trustee or
the Paying Agent as permitted by Section 1112. Nothing contained in this Article
XI will limit the right of the Trustee or the Security Holders to take any
action to accelerate the maturity of the Securities pursuant to Section 602 or
to pursue any rights or remedies hereunder.
SECTION 1105. ACCELERATION OF SECURITIES.
If payment of the Securities is accelerated because of an
Event of Default, the Company shall promptly notify holders of Senior
Indebtedness of the acceleration.
SECTION 1106. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Company shall make any payment to the
Trustee with respect to the Securities at a time when such payment is prohibited
by Section 1103 or 1104, such payment shall be held by the Trustee, in trust for
the benefit of, and shall be paid forthwith over and delivered to, the holders
of Senior Indebtedness (pro rata as to each of such holders on the basis of the
respective amounts of Senior Indebtedness held by them) or their Representative
or the trustee under the indenture or other agreement (if any) pursuant to which
Senior Indebtedness may have been issued, as their respective interests may
appear, for application to the payment of all Senior Indebtedness remaining
unpaid to the extent necessary to pay all Senior Indebtedness in full in
accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
If a distribution is made to Security Holders, that because of
this Article XI should not have been made to them, the Security Holders who
receive the distribution shall hold it in trust for holders of Senior
Indebtedness and pay it over to them as their interests may appear.
SECTION 1107. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying
Agent in writing of any facts known to the Company that would cause a payment of
any amount due with respect to the Securities to violate this Article XI, but
failure to give such notice shall not affect the subordination of the Securities
to the Senior Indebtedness provided in this Article XI.
SECTION 1108. SUBROGATION.
After all Senior Indebtedness is paid in full and until the
Securities are paid in full, Security Holders shall be subrogated (equally and
ratably with all other Indebtedness of the Company ranking pari passu with the
Securities) to the rights of holders of Senior Indebtedness
57
to receive distributions applicable to Senior Indebtedness to the extent that
distributions otherwise payable to the Security Holders have been applied to the
payment of Senior Indebtedness. A distribution made under this Article XI to
holders of Senior Indebtedness which otherwise would have been made to Security
Holders is not, as between the Company and Security Holders, a payment by the
Company on Senior Indebtedness.
SECTION 1109. RELATIVE RIGHTS.
This Article XI defines the relative rights of Security
Holders and holders of Senior Indebtedness. Nothing in this Indenture shall:
(i) impair, as between the Company, on the one
hand, and Security Holders, on the other hand, the obligation
of the Company, which is absolute and unconditional, to pay
all amounts due with respect to the Securities in accordance
with their terms;
(ii) affect the relative rights of Security
Holders and creditors of the Company other than holders of
Senior Indebtedness; or
(iii) prevent the Trustee or any Security Holder
from exercising its available remedies upon a Default or Event
of Default, subject to the rights of holders of Senior
Indebtedness to receive distributions otherwise payable to
Security Holders.
Upon any distribution of assets of the Company referred to in
this Article XI, the Trustee, subject to the provisions of Sections 701 and 702,
and the Holders of the Securities shall be entitled to rely upon any order or
decree by any court of competent jurisdiction in which such dissolution, winding
up, liquidation or reorganization proceedings are pending, or a certificate of
the liquidating trustee or agent or other person making any distribution to the
Trustee or the Holders of the Securities, for the purpose of ascertaining the
persons entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article XI. Nothing contained in this Article
XI or elsewhere in this Indenture or in any Security is intended to or shall
affect the obligation of the Company to make, or prevent the Company from
making, at any time except during the pendency of any dissolution, winding up,
liquidation or reorganization proceeding, and except during the continuance of
any default specified in Section 1104 (not cured or waived), payments at any
time of all amounts due with respect to the Securities.
SECTION 1110. SUBORDINATION MAY NOT BE IMPAIRED BY
COMPANY.
No right of any holder of Senior Indebtedness to enforce the
subordination of the indebtedness evidenced by the Securities shall be impaired
by any act or failure to act by the Company or by the failure of the Company to
comply with this Indenture.
SECTION 1111. DISTRIBUTION OR NOTICE TO
REPRESENTATIVE.
58
Whenever a distribution is to be made or a notice given to
holders of Senior Indebtedness, the distribution may be made and the notice
given to their Representatives.
SECTION 1112. RIGHTS OF TRUSTEE AND PAYING AGENT.
The Trustee or Paying Agent may continue to make payments on
the Securities until it receives written notice of facts that would cause a
payment of amounts due with respect to the Securities to violate this Article
XI. Only the Company or a Representative or a holder of an issue of Senior
Indebtedness that has no Representative may give the notice.
The Trustee shall be entitled to conclusively rely on the
delivery to it of a written notice by a person representing himself to be a
holder of Senior Indebtedness (or a Representative on behalf of such holder) to
establish that such notice has been given by a holder of Senior Indebtedness or
a Representative on behalf of any such holder. In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any person who is a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to this Article XI, the Trustee may request
such person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of 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 XI, 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 or until such time as the Trustee shall be otherwise satisfied as to the
right of such person to receive such payment.
The Trustee in its individual or any other capacity may hold
Senior Indebtedness with the same rights it would have if it were not Trustee.
Any Agent may do the same with like rights.
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 holder if
it shall mistakenly pay over or distribute to Security Holders or the Company or
any other person money or assets to which any holders of Senior Indebtedness
shall be entitled by virtue of this Article XI or otherwise.
SECTION 1113. OFFICERS' CERTIFICATE.
If there occurs an event referred to in Section 1103 or 1104,
the Company shall promptly give to the Trustee an Officers' Certificate (on
which the Trustee may conclusively rely) identifying all holders of Senior
Indebtedness or their Representatives and the principal amount of Senior
Indebtedness then outstanding held by each such holder and stating the reasons
why such Officers' Certificate is being delivered to the Trustee.
SECTION 1114. NOT TO PREVENT EVENTS OF DEFAULT.
The failure to make any payment due with respect to the
Securities by reason of any provision of this Article XI shall not be construed
as preventing the occurrence of an Event of Default under Section 601.
59
ARTICLE TWELVE
MISCELLANEOUS
SECTION 1201. TRUST INDENTURE ACT CONTROLS.
The Trustee and the Company agree to comply with all
provisions of the TIA applicable to or binding upon it in connection with this
Indenture and any action to be taken hereunder. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision of
the TIA shall control.
SECTION 1202. NOTICES.
Any notice or communication by the Company or the Trustee to
one or both of the others is duly given if in writing and delivered in person,
mailed by first-class mail or by express delivery to the other parties'
addresses stated in this Section 1202. The Company or the Trustee by notice to
the others may designate additional or different addresses for subsequent
notices or communications.
Any notice or communication to a Security Holder is duly given
(unless otherwise expressly provided herein) if in writing and mailed by first
class mail to each Security Holder affected by the event at the address shown on
the register kept by the Registrar. Failure to mail a notice or communication to
a Security Holder or any defect in it shall not affect its sufficiency with
respect to other Security Holders.
If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Security
Holders, it shall mail a copy to the Trustee and each Agent at the same time.
All notices or communications shall be in writing.
The Company's address is:
Axcan Pharma Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇ ▇▇-▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
The Trustee's address is:
U.S. Bank National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Corporate Trust Department
SECTION 1203. COMMUNICATION BY HOLDERS WITH OTHER
HOLDERS.
Security Holders may communicate pursuant to TIA Section
312(b) with other Security Holders with respect to their rights under this
Indenture or the Securities. The Company, the Trustee, the Registrar and anyone
else shall have the protection of TIA Section 312(c).
SECTION 1204. CERTIFICATE AND OPINION AS TO
CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee
to take any action under this Indenture, the Company shall furnish to the
Trustee:
(i) an Officers' Certificate stating that, in
the opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed action
have been complied with; and
(ii) an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent have
been complied with.
Each signer of an Officers' Certificate or an Opinion of
Counsel may (if so stated) rely, effectively, upon an Opinion of Counsel as to
legal matters and an Officers' Certificate as to factual matters if such signer
reasonably and in good faith believes in the accuracy of the document relied
upon.
SECTION 1205. STATEMENTS REQUIRED IN CERTIFICATE OR
OPINION.
Each Officers' Certificate or Opinion of Counsel with respect
to compliance with a condition or covenant provided for in this Indenture shall
include:
(i) a statement that the person making such
certificate or opinion has read such covenant or condition and
the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope
of the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are
based;
(iii) a statement that, in the opinion of such
person, he or she has made such examination or investigation
as is necessary to enable him or her to express an informed
opinion as to whether or not such covenant or condition has
been complied with; and
61
(iv) a statement as to whether or not, in the
opinion of such person, such condition or covenant has been
complied with.
SECTION 1206. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a
meeting of Security Holders. The Registrar, Paying Agent or Conversion Agent may
make reasonable rules and set reasonable requirements for their respective
functions.
SECTION 1207. LEGAL HOLIDAYS.
A "LEGAL HOLIDAY" is a Saturday, a Sunday or a day on which
banking institutions are not required to be open in The City of
New York, in the
State of
New York, in the City of Montreal, Canada or in the city in which the
Trustee administers its corporate trust business. If a payment date is a Legal
Holiday at a place of payment, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue on that
payment for the intervening period.
A "BUSINESS DAY" is a day other than a Legal Holiday.
SECTION 1208. NO RECOURSE AGAINST OTHERS.
No past, present or future director, officer, employee,
incorporator or shareholder of the Company, as such, shall have any liability
for any obligations of the Company under the Securities or this Indenture or for
any claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Securities.
SECTION 1209. DUPLICATE ORIGINALS.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement. Delivery of an executed counterpart by facsimile shall be
effective as delivery of a manually executed counterpart thereof.
SECTION 1210. GOVERNING LAW.
This Indenture and any claim, counterclaim or dispute of any
kind or nature whatsoever arising out of or in any way relating to this
Indenture, directly or indirectly, shall be governed by, and construed in
accordance with, the laws of the State of New York applicable to agreements and
instruments entered into and wholly-performed within the State of New York.
SECTION 1211. NO ADVERSE INTERPRETATION OF OTHER
AGREEMENTS.
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or any of its Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
62
SECTION 1212. SUCCESSORS.
All agreements of the Company in this Indenture and the
Securities shall bind their respective successors. All agreements of the Trustee
in this Indenture shall bind its successors.
SECTION 1213. CONSENT TO JURISDICTION AND SERVICE OF
PROCESS.
The Company irrevocably submits to the nonexclusive
jurisdiction of any New York State or Federal court sitting in The City of New
York over any suit, action or proceeding arising out of or relating to this
Indenture or any Security. The Company irrevocably waives, to the fullest extent
permitted by law, any objection which it may have to the laying of the venue of
any such suit, action or proceeding brought in such a court and any claim that
any such suit, action or proceeding brought in such a court has been brought in
any inconvenient forum. The Company agrees that final judgment in any such suit,
action or proceeding brought in such a court shall be conclusive and binding
upon the Company and may be enforced in the courts of Canada (or any other
courts to the jurisdiction of which the Company is subject) by a suit upon such
judgment, provided that service of process is effected upon the Company in the
manner specified in the following paragraph or as otherwise permitted by law;
PROVIDED, HOWEVER, that the Company does not waive, and the foregoing provisions
of this sentence shall not constitute or be deemed to constitute a waiver of,
(i) any right to appeal any such judgment, to seek any stay or otherwise to seek
reconsideration or review of any such judgment or (ii) any stay of execution or
levy pending an appeal from, or a suit, action or proceeding for reconsideration
or review of, any such judgment.
As long as any of the Securities remain outstanding, the
Company will at all times have an authorized agent in the Borough of Manhattan,
The City of New York upon whom process may be served in any legal action or
proceeding arising out of or relating to the Indenture or any Security. Service
of process upon such agent and written notice of such service mailed or
delivered to the Company shall to the extent permitted by law be deemed in every
respect effective service of process upon the Company in any such legal action
or proceeding. The Company hereby appoints CT Corporation System as its agent
for such purpose, and covenants and agrees that service of process in any such
legal action or proceeding may be made upon it at the office of such agent at
▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (or at such other address in the
Borough of Manhattan, The City of New York, as the Company may designate by
written notice to the Trustee).
The Company hereby consents to process being served in any
suit, action or proceeding of the nature referred to in the preceding paragraphs
by service upon such agent together with the mailing of a copy thereof by
registered or certified mail, postage prepaid, return receipt requested, to the
address of the Company set forth in the first paragraph of this instrument or to
any other address of which the Company shall have given written notice to the
Trustee. The Company irrevocably waives, to the fullest extent permitted by law,
all claim of error by reason of any such service (but does not waive any right
to assert lack of subject matter jurisdiction) and agrees that such service (i)
shall be deemed in every respect effective service of process upon the Company
in any such suit, action or proceeding and (ii) shall, to the fullest
63
extent permitted by law, be taken and held to be valid personal service upon and
personal delivery to the Company.
Nothing in this Section shall affect the right of the Trustee
or any Holder to serve process in any manner permitted by law or limit the right
of the Trustee to bring proceedings against the Company in the courts of any
jurisdiction or jurisdictions.
SECTION 1214. CONVERSION OF CURRENCY.
(a) The Company covenants and agrees that the following
provisions shall apply to conversion of currency in the case of the Securities
and this Indenture:
(i) If for the purposes of obtaining judgment
in, or enforcing the judgment of, any court in any country, it
becomes necessary to convert into any other currency (the
"JUDGMENT CURRENCY") an amount due or contingently due under
the Securities and this Indenture (the "REQUIRED CURRENCY"),
then the conversion shall be made at the rate of exchange
prevailing on the Business Day before the day on which a final
judgment which is not appealable or is not appealed is given
or the order of enforcement is made, as the case may be
(unless a court shall otherwise determine).
(ii) If there is a change in the rate of exchange
prevailing between the Business Day before the day on
which the judgment referred to in (i) above is given
or an order of enforcement is made, as the case may
be (or such other date as a court shall determine),
and the date of receipt of the amount due, the
Company shall pay such additional (or, as the case
may be, such lesser) amount, if any, as may be
necessary so that the amount paid in the Judgment
Currency when converted at the rate of exchange
prevailing on the date of receipt will produce the
amount in the Required Currency originally due.
(b) In the event of the winding-up of the Company at any time
while any amount or damages owing under the Securities and this Indenture, or
any judgment or order rendered in respect thereof, shall remain outstanding, the
Company shall indemnify and hold the Holders of Securities and the Trustee
harmless against any deficiency arising or resulting from any variation in rates
of exchange between (1) the date as of which the equivalent of the amount in the
Required Currency (other than under this Section 1214(b)) is calculated for the
purposes of such winding-up and (2) the final date for the filing of proofs of
claim in such winding-up. For the purpose of this Section 1214(b) the final date
for the filing of proofs of claim in the winding-up of the Company shall be the
date fixed by the liquidator or otherwise in accordance with the relevant
provisions of applicable law as being the latest practicable date as at which
liabilities of the Company may be ascertained for such winding-up prior to
payment by the liquidator or otherwise in respect thereto.
(c) The obligations contained in Sections 1214(a)(ii) and (b)
of this Section shall constitute separate and independent obligations of the
Company from its other obligations
64
under the Securities and this Indenture, shall give rise to separate and
independent causes of action against the Company, shall apply irrespective of
any waiver or extension granted by any Holder or Trustee from time to time and
shall continue in full force and effect notwithstanding any judgment or order or
the filing of any proof of claim in the winding-up of the Company for a
liquidated sum in respect of amounts due hereunder (other than under Section
1214(b) above) or under any such judgment or order. Any such deficiency as
aforesaid shall be deemed to constitute a loss suffered by the Holders or the
Trustee, as the case may be, and no proof or evidence of any actual loss shall
be required by the Company or the applicable liquidator. In the case of
Subsection (b) above, the amount of such deficiency shall not be deemed to be
reduced by any variation in rates of exchange occurring between the said final
date and the date of any liquidating distribution.
(d) The term "RATE(S) OF EXCHANGE" shall mean the Bank of
Canada noon rate for purchases on the relevant date of the Required Currency
with the Judgment Currency, as reported by Telerate on screen 3194 (or such
other means of reporting the Bank of Canada noon rate as may be agreed upon by
each of the parties to this Indenture) and includes any premiums and costs of
exchange payable.
SECTION 1215. SEPARABILITY.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby and a Holder shall have no claim therefor against any party
hereto.
SECTION 1216. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
65
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the date first above written.
AXCAN PHARMA INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President, Finance
U.S. BANK NATIONAL ASSOCIATION, as Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
Title: Vice President
66
EXHIBIT A
[Face of Security]
[INSERT PRIVATE PLACEMENT LEGEND AND GLOBAL SECURITY LEGEND AS REQUIRED]
AXCAN PHARMA INC.
4 1/4% CONVERTIBLE SUBORDINATED NOTE DUE 2008
[Certificate No. _______] CUSIP NO. ____________
ISIN NO. ____________
AXCAN PHARMA INC., a corporation incorporated under the Canada Business
Corporations Act (herein called the "COMPANY"), for value received, hereby
promises to pay to Cede & Co. or registered assigns, the principal sum
of UNITED STATES DOLLARS ($ ) on April 15, 2008, and to pay interest
thereon, as provided on the reverse hereof, until the principal and any
unpaid and accrued interest is paid or duly provided for. The right to
payment of the principal and all other amounts due with respect hereto is
subordinated to the rights of Senior Indebtedness as set forth in the
Indenture referred to on the reverse side hereof.
Interest Payment Dates: April 15 and October 15, with the
first payment to be made on October 15, 2003.
Record Dates: April 1 and October 1.
The provisions on the back of this certificate are
incorporated as if set forth on the face hereof.
IN WITNESS WHEREOF,
AXCAN PHARMA INC. has caused this
instrument to be duly signed.
AXCAN PHARMA INC.
By: ______________________________
Name:
Title:
Dated: ______________
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned Indenture.
U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE
By: ______________________
Authorized Signatory
Dated: ____________
A-2
[REVERSE OF SECURITY]
AXCAN PHARMA INC.
4 1/4% CONVERTIBLE SUBORDINATED NOTE DUE 2008
(1) INTEREST.
AXCAN PHARMA INC., a corporation incorporated under the Canada
Business Corporations Act (the "COMPANY"), promises to pay interest on the
principal amount of this Security at the rate PER ANNUM shown above. The Company
will pay interest semi-annually on April 15 and October 15 of each year, with
the first payment to be made on October 15, 2003. Interest on the Securities
will accrue on the principal amount from the most recent date to which interest
has been paid or provided for or, if no interest has been paid, from March 5,
2003. Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
(2) MATURITY. The Securities will mature on April 15, 2008.
(3) METHOD OF PAYMENT. The Company will pay interest on the Securities (except
defaulted interest) to the persons who are registered Holders of Securities at
the close of business on the record date set forth on the face of this Security
next preceding the applicable interest payment date. Holders must surrender
Securities to a Paying Agent to collect the principal, Redemption Price or
Change in Control Price of the Securities. The Company will pay all amounts due
with respect to the Securities in money of the United States that at the time of
payment is legal tender for payment of public and private debts. If this
Security is in global form, the Company will pay interest on the Securities by
wire transfer of immediately available funds to the account specified by the
Holder. With respect to securities held other than in global form, the Company
will make payments by wire transfer of immediately available funds to the
account specified by the Holders thereof or, if no such account is specified
with respect to a Holder, by mailing a check to the Holder's registered address.
(4) PAYING AGENT, REGISTRAR, CONVERSION AGENT. Initially, U.S. Bank National
Association (the "TRUSTEE") will act as Paying Agent, Registrar and Conversion
Agent. The Company may change any Paying Agent, Registrar or Conversion Agent
without notice to the Holders. The Company may act in any such capacity.
(5) INDENTURE. The Company issued the Securities under an Indenture dated as of
March 5, 2003 (the "INDENTURE") between the Company and the Trustee. The terms
of the Securities include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939 (the "ACT") as in
effect on the date of the Indenture. The Securities are subject to all such
terms, and Security Holders are referred to the Indenture and the Act for a
statement of such terms. The Securities are general unsecured subordinated
obligations of the Company limited to $110,000,000 aggregate principal amount
($125,000,000 if the Over-Allotment Option is exercised in full), except as
otherwise provided in the Indenture (except for Securities issued in
substitution for destroyed, mutilated, lost or stolen Securities). Terms used
herein which are defined in the Indenture have the meanings assigned to them in
the Indenture.
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(6) ADDITIONAL AMOUNTS. The Company will pay to the Holders such Additional
Amounts as may become payable under Section 407 of the Indenture.
(7) OPTIONAL REDEMPTION. No sinking fund is provided for the Securities. Except
as provided in paragraph 9, the Securities will be redeemable prior to maturity
at the option of the Company, in whole or in part, at any time on or after April
20, 2006, at the following Redemption Prices (expressed as percentages of the
principal amount thereof), if redeemed during the periods commencing on the
dates set forth below, in each case together with accrued and unpaid interest
to, but excluding, the redemption date:
-------------------------------------------------------
Redemption
Date Price
-------------------------------------------------------
April 20, 2006 to April 14, 2007 101.70%
April 15, 2007 to April 14, 2008 100.85%
-------------------------------------------------------
(8) NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30 days
but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at its registered address. Securities in denominations
larger than $1,000 principal amount may be redeemed in part but only in positive
integral multiples of $1,000 principal amount. On and after the redemption date
interest ceases to accrue on Securities or portions of them called for
redemption.
(9) REDEMPTION FOR TAX REASONS. The Company may, at its option, redeem the
Securities, in whole but not in part, at a Redemption Price equal to 100% of the
principal amount thereof together with accrued and unpaid interest, if any, to,
but excluding the redemption date if the Company has become or would become
obligated to pay to the Holders any Additional Amounts (which are more than a DE
MINIMIS amount) as a result of any amendment or change occurring after February
27, 2003 in the laws or any regulations of Canada or any Canadian political
subdivision or taxing authority, or any change occurring after February 27, 2003
in the interpretation or application of any such laws or regulations by any
legislative body, court, governmental agency, taxing authority or regulatory
authority (including the enactment of any legislation and the publication of any
judicial decision or regulatory or administrative policies or practices);
provided the Company cannot avoid these obligations by taking reasonable
measures available to it and that it delivers to the Trustee an opinion of
Canadian legal counsel specializing in taxation and an Officers' Certificate
attesting to such change and obligation to pay Additional Amounts. The Company
will not and will not cause any Paying Agent or the Trustee to deduct or
withhold from such Redemption Price any amounts on account of, or in respect of,
any Canadian withholding taxes (except in respect of certain Excluded Holders).
In such event, the Company will give the Holders of the Securities not less than
30 Business Days' nor more than 60 Business Days' notice of this redemption,
except that (i) the Company will not give notice of redemption earlier than 60
Business Days prior to the earliest date on or from which it would be obligated
to pay any such Additional Amounts, and (ii) at the time the Company gives the
notice, the circumstances creating its obligation to pay such Additional Amounts
remain in effect.
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Upon receiving such notice of redemption, no later than the
close of business on the Business Day prior to the redemption date, each Holder
who does not wish to have the Company redeem its Securities can elect to convert
its Securities or not have its Securities redeemed, provided that no Additional
Amounts will be payable by the Company on any payment of interest or principal
with respect to its Securities after such redemption date. All future payments
will be subject to the deduction or withholding of any Canadian Taxes required
to be deducted or withheld.
Where no election is made, the Holder will have its Securities
redeemed without any further action. The holder must deliver to the Company (if
it is acting as its own Paying Agent), or to a Paying Agent designated by the
Company for such purpose in the notice of redemption a written Notice of
Election so as to be received by the Paying Agent no later than the close of
business on the Business Day prior to the redemption date.
A Holder may withdraw any Notice of Election by delivering to
the Paying Agent a written notice of withdrawal prior to the close of business
on the Business Day prior to the redemption date.
(10) PURCHASE AT THE OPTION OF HOLDERS. In the event of a Change in Control with
respect to the Company, then each Holder of the Securities shall have the right,
subject to the rights of the holders of Senior Indebtedness under Article XI of
the Indenture, to require the Company to purchase such Holder's Securities
including any portion thereof which is $1,000 in principal amount or any
positive integral multiple thereof, pursuant to an offer to purchase such
Securities required to be made by the Company (the "CHANGE IN CONTROL OFFER"),
on a day (the "CHANGE IN CONTROL PURCHASE DATE") that is 30 Business Days after
the date of the Change in Control Notice, unless otherwise required by
applicable law, at a price equal to 100% of the outstanding principal amount of
such Security, plus accrued and unpaid interest to, but excluding, the Purchase
Date.
Within 30 Business Days after the occurrence of the Change in
Control, the Company is obligated to give notice of the occurrence of such
Change in Control and make the Change in Control Offer to each Holder. Such
notice shall include, among other things, the date by which Holder must notify
the Company of such Holder's intention to accept the Change in Control Offer and
of the procedure which such Holder must follow to tender Securities for purchase
by the Company under such offer. To accept the Change in Control Offer, a Holder
of Securities must deliver on or before the close of business on the third
Business Day immediately preceding the Purchase Date written notice to the
Company (or an agent designated by the Company for such purpose) and the Trustee
of the Holder's acceptance of the change in Control Offer together with the
Securities with respect to which the acceptance is being made, duly endorsed for
transfer in accordance with the provisions of the Indenture.
A "CHANGE IN CONTROL" of the Company shall be deemed to have
occurred at such time as:
(i) any "person" or "group" (as such terms are
used for purposes of Sections 13(d) and 14(d) of the Exchange
Act), is or becomes the "beneficial owner" (as such term is
used in Rule 13d-3 under the
A-5
Exchange Act), directly or indirectly, of 50% or more of the
voting power of the Company's Common Shares or other capital
stock into which our Common Shares are reclassified or changed
(collectively, the "VOTING SECURITIES"; or
(ii) any person who, together with any joint
actors (as such terms are used in Title IV of the Quebec
Securities Act), acquires or increases its ownership or power
to exercise control or direction over 50% or more of a class
of the Company's Voting Securities; or
(iii) there shall be consummated any
consolidation, merger, amalgamation, statutory arrangement
(involving a business combination) or similar transaction of
the Company in which it is not the continuing or surviving
corporation or pursuant to which the Common Shares would be
converted into cash, securities or other property, in each
case, other than a consolidation, merger, amalgamation,
statutory arrangement (involving a business combination) or
similar transaction of the Company in which the holders of the
Voting Securities immediately prior to such transaction have,
directly or indirectly, at least a majority of the voting
shares of the continuing or surviving corporation immediately
after such transaction; or
(iv) at any time the following persons cease for
any reason to constitute a majority the Company's Board of
Directors:
(1) individuals who on the Issue Date of the
convertible Securities constituted the Board of Directors and
(2) any new directors whose election by the
Board of Directors or whose nomination for election by the
Company's shareholders was approved by at least a majority of
the directors then still in office who were either directors
on the Issue Date of the Securities or whose election or
nomination for election was previously so approved; or
(v) the sale, lease or transfer of all or
substantially all of the consolidated assets of the Company to
any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act).
However, a Change in Control will not be deemed to have
occurred if either:
(X) the last sale price of the Company's Common Shares for any
five trading days during the ten trading days immediately
preceding the Change in Control is at least equal to 105% of
the then effective conversion price on the date of such
trading day; or
(Y) in the case of a consolidation, merger, amalgamation,
statutory arrangement (involving a business combination) or
similar transaction, all of the consideration (excluding cash
payments for fractional shares and cash payments pursuant to
dissenters' appraisal rights, if applicable) in the
transaction constituting the
A-6
Change in Control consists of common stock traded on a U.S.
national securities exchange or quoted on the NNM (or which
will be so traded or quoted when issued or exchanged in
connection with such Change in Control) and as a result of
such transaction or transactions the Securities become
convertible solely into such common stock.
(11) CONVERSION. A Holder of Securities may convert a Security into Common
Shares of the Company as follows:
A. A Holder of Securities may surrender Securities for conversion during
any conversion period, if the Daily Market Price of the Common Shares for
at least 20 consecutive trading days in the 30 consecutive trading-day
period ending on the first day of the conversion period was more than 110%
of the conversion value in effect on that thirtieth trading day. A
"conversion period" will be the period from and including the thirtieth
trading day in a fiscal quarter to, but not including the thirtieth trading
day in the immediately following fiscal quarter.
B. A Holder of Securities may surrender Securities for conversion during
the five business-day period following any 10 consecutive trading-day
period in which the daily average of the "trading prices" for the
Securities for that 10 trading-day period was less than 95% of the average
"conversion value" for the Securities during that period. As used in this
paragraph B, the "conversion value" is equal to the product of the Daily
Market Price for the Common Shares on a given day multiplied by the then
current conversion rate, which is the number of Common Shares into which
each $1,000 aggregate principal amount of Security is then convertible. As
used in this paragraph B, the "trading price" of the Securities on any date
of determination means the average of the secondary market bid quotations
per Security obtained by the Company or the Calculation Agent for
$1,000,000 principal amount of Securities at approximately 3:30 P.M., New
York City time, on such determination date from three independent
nationally recognized securities dealers the Company selects, provided that
if at least three such bids cannot reasonably be obtained by the Company or
the Calculation Agent, but two such bids are obtained, then the average of
the two bids shall be used, and if only one such bid can reasonably be
obtained by the Company or the Calculation Agent, this one bid shall be
used. If either the Company or the Calculation Agent cannot reasonably
obtain at least one bid for $1,000,000 principal amount of Securities from
a nationally recognized securities dealer, then the trading price of the
Securities will equal (i) the then-applicable conversion rate of the
Securities multiplied by (ii) the Daily Market Price of the Common Shares
on such determination date. "Calculation Agent" means UBS Warburg LLC or
any other securities dealer selected by the Company.
C. A Holder of Securities may surrender Securities for conversion if the
Company has called the Securities for redemption at any time before the
close of business on the Business Day immediately preceding the date fixed
for such redemption. If a Holder already has delivered a Change in Control
Notice with respect to a Security, the Holder may not surrender that
Security for conversion until the Holder has withdrawn the Change in
Control Notice in accordance with the Indenture.
A-7
D. A Holder of Securities may surrender Securities for conversion if (i)
the Company distributes rights or warrants to all holders of Common Shares
entitling them (for a period commencing no earlier than the record date for
the determination of holders of Common Shares entitled to receive such
rights or warrants) to subscribe for or purchase Common Shares (or
securities convertible into Common Shares), at a price per share less than
the then Current Market Price of Common Shares on such record date, except
for rights under the Rights Plan (ii) the Company elects to distribute to
all holders of Common Shares cash or other assets, debt securities or
rights or warrants to subscribe for securities (other than those referred
to in clause (i) above), which distribution has a per share value exceeding
10% of the Daily Market Price of the Common Shares on the trading day
preceding the declaration date of such distribution, or (iii) a Change in
Control has occurred other than pursuant to a transaction described in
paragraph E below; provided that the Company shall mail to Holders of
Securities a notice of such distribution or Change in Control at least 20
days prior to the ex-dividend date for the distribution or within 30 days
of the occurrence of the Change in Control, as the case may be. Once such
notice to Holders of Securities has been provided, Holders may convert
their Securities any time until either (x) the earlier of close of business
on the Business Day immediately prior to the ex-dividend date and the
Company's announcement that the distribution will not take place, in the
case of a distribution, or (y) within 30 days of the Change in Control
notice, in the case of a Change in Control. In the case of a distribution,
no adjustment to the ability of a Holder of Securities to convert will be
made if the holder participates or will participate in the distribution
without conversion.
E. If the Company is party to a consolidation, amalgamation, statutory
arrangement, merger, binding share exchange or other combination or
transfer of all or substantially all of the Company's assets pursuant to
which the Common Shares will be converted into or the right to receive
cash, securities or other property, a Holder of Securities may surrender
Securities for conversion at any time from and after the date which is 15
days prior to the anticipated effective date of the transaction until 15
days after the effective date of the transaction and at the effective time
of the transaction, the right to convert a Security into Common Shares will
be deemed to have changed into a right to convert the Security into or the
right to receive the kind and amount of cash, securities or other property
which the Holder would have received if the Holder had converted the
Security immediately prior to the transaction. If the transaction also
constitutes a Change in Control, the Holder may require the Company to
repurchase all or a portion of its Securities pursuant to paragraph 10. If,
however, prior to the date that is five years from the Issue Date, Holders
of Securities would otherwise be entitled to receive, upon conversion of
the Securities, any property (including cash) or securities of a company
("INELIGIBLE CONSIDERATION") that would not constitute "PRESCRIBED
SECURITIES" for the purpose of clause 212(1)(b)(vii)(E) of the Tax Act,
such Holders shall not be entitled to receive such Ineligible Consideration
but the Company or the successor or acquiror, as the case may be, shall
have the right (at the sole option of the Company or the successor or
acquiror, as the case may be) to deliver either such Ineligible
Consideration or Prescribed Securities with a market value comparable to
such Ineligible Consideration. The Company will give notice to Holders of
the Securities at least 30 days prior to the effective date of such
transaction in writing and by release to a business newswire stating the
consideration into which the Securities will be convertible
A-8
after the effective date of such transaction. After such notice, the
Company or the successor or acquiror, as the case may be, may not change
the consideration to be delivered upon conversion of the Securities except
in accordance with any other provision of this Indenture.
The initial conversion rate is 71.3929 shares of Common Shares
per $1,000 principal amount of Securities, or an effective initial Conversion
Price of approximately $14.01 per share, subject to adjustment in the event of
certain circumstances as specified in the Indenture. The Company will deliver a
check in lieu of any fractional share. On conversion no payment or adjustment
for any unpaid and accrued interest, or Additional Interest Amount with respect
to, the Securities will be made. If a Holder of Securities surrenders a Security
for conversion between the record date for the payment of interest and the next
interest payment date, such Security, when surrendered for conversion, must be
accompanied by payment of an amount equal to the interest thereon which the
registered Holder of Securities on such record date is to receive, unless the
Securities have been called for redemption as described in the Indenture.
To convert a Security, a Holder of Securities must (1)
complete and sign the Conversion Notice, with appropriate signature guarantee,
on the back of the Security, (2) surrender the Security to a Conversion Agent,
(3) furnish appropriate endorsements and transfer documents if required by the
Registrar or Conversion Agent, (4) pay the amount of interest, if any, the
Holder may be paid as provided in the last sentence of the above paragraph and
(5) pay any transfer or similar tax if required. A Holder of Securities may
convert a portion of a Security if the portion is $1,000 principal amount or a
positive integral multiple of $1,000 principal amount.
Any shares issued upon conversion of a Security shall bear the
Private Placement Legend until after the second anniversary of the later of the
Issue Date for the Securities and the last date on which the Company or any
Affiliate of the Company was the owner of such shares or the Security (or any
predecessor security) from which such shares were converted (or such shorter
period of time as permitted by Rule 144(k) under the Securities Act or any
successor provision thereunder) (or such longer period of time as may be
required under the Securities Act or applicable state securities laws in the
Opinion of Counsel for the Company, unless otherwise agreed by the Company and
the Holder of such Security).
(12) SUBORDINATION. The Securities are subordinated in right of payment, in the
manner and to the extent set forth in the Indenture, to the prior payment in
full of all Senior Indebtedness. Each Holder by accepting a Security agrees to
such subordination and authorizes the Trustee to give it effect.
(13) DENOMINATIONS, TRANSFER, EXCHANGE. The Securities are in registered form
without coupons in denominations of $1,000 principal amount and positive
integral multiples of $1,000 principal amount. The transfer of Securities may be
registered and Securities may be exchanged as provided in the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents. No service charge shall be made for any
such registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection
A-9
therewith. The Registrar need not exchange or register the transfer of any
Security selected for redemption in whole or in part, except the unredeemed
portion of Securities to be redeemed in part. Also, it need not exchange or
register the transfer of any Securities for a period of 15 days before the
mailing of a notice of redemption of the Securities selected to be redeemed and
in certain other circumstances provided in the Indenture.
(14) PERSONS DEEMED OWNERS. The registered Holder of a Security may be treated
as the owner of such Security for all purposes.
(15) MERGER OR CONSOLIDATION. The Company shall not consolidate with, amalgamate
or merge with or into, enter into a binding share exchange or transfer or lease
all or substantially all of its properties and assets to, another person
(including in any such case under a statutory arrangement) unless such other
person is a corporation organized under the laws of the United States, any State
thereof, the District of Columbia, the laws of Canada or any province or
territory thereof; such person assumes by supplemental indenture all the
obligations of the Company, under the Securities and this Indenture; and
immediately after giving effect to the transaction, no Default or Event of
Default shall exist; provided, however, for purposes of the foregoing, the sale,
conveyance, transfer or lease (in a single transaction or a series of
transactions) of the properties or assets of one or more Subsidiaries (other
than to the Company or another wholly-owned Subsidiary) which, if such
properties or assets were directly owned by the Company, would constitute all or
substantially all of its properties and assets on a consolidated basis, shall be
deemed to be a sale, conveyance, transfer or lease of all or substantially all
of the Company's properties and assets.
(16) AMENDMENTS, SUPPLEMENTS AND WAIVERS. Subject to certain exceptions, the
Indenture or the Securities may be amended or supplemented with the consent of
the Holders of at least a majority in aggregate principal amount of the
Securities then outstanding, and any existing Default or Event of Default may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the Securities then outstanding. Without notice to or the consent of
any Security Holder, the Indenture or the Securities may be amended or
supplemented to cure any ambiguity or inconsistency, to comply with Sections 501
and 1012 of the Indenture, to make any changes or modifications to the Indenture
necessary in connection with the registration of the Securities under the
Securities Act and the qualification of the Indenture under the TIA, to secure
the obligations of the Company in respect of the Securities, or to add to
covenants of the Company described in the Indenture for the benefit of Security
Holders or to surrender any right or power conferred upon the Company.
(17) DEFAULTS AND REMEDIES. An Event of Default includes the occurrence of any
of the following: default in payment of principal or Change in Control Price or
Redemption Price of any Security, when the same becomes due and payable; default
for 30 days in payment of accrued and unpaid interest, Additional Interest
Amount or Additional Amounts; failure by the Company for 30 days after notice to
it to comply with any of its other agreements in the Indenture or the
Securities; certain payment defaults or the acceleration of other Indebtedness
of the Company and its Subsidiaries and certain events of bankruptcy or
insolvency involving the Company or its Significant Subsidiaries. If any Event
of Default occurs and is continuing, the Trustee or the Holders of at least 25%
in aggregate principal amount of the Securities then outstanding may declare all
the Securities to be due and payable immediately, except as provided
A-10
in the Indenture. If an Event of Default specified in Section 601(v) or (vi) of
the Indenture with respect to the Company occurs, the principal of and accrued
interest on all the Securities shall IPSO FACTO become and be immediately due
and payable without any declaration or other act on the part of the Trustee or
any Security Holder. Security Holders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the Securities.
Subject to certain limitations, Holders of a majority in principal amount of the
Securities then outstanding may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Security Holders notice of any
continuing Default or Event of Default (except a Default or Event of Default in
payment) if it determines that withholding notice is in the interests of the
Security Holders. The Company must furnish an annual compliance certificate to
the Trustee.
(18) REGISTRATION RIGHTS. The Holders are entitled to registration rights as set
forth in the Registration Rights Agreement. The Holders shall be entitled to
receive Additional Interest Amount in the event of a "registration default" in
certain circumstances, all as set forth in the Registration Rights Agreement.
(19) TRUSTEE DEALINGS WITH THE COMPANY. The Trustee under the Indenture, or any
banking institution serving as successor Trustee thereunder, in its individual
or any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not Trustee.
(20) NO RECOURSE AGAINST OTHERS. No past, present or future director, officer,
employee or stockholder, as such, of the Company shall have any liability for
any obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Security Holder by accepting a Security waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
(21) AUTHENTICATION. This Security shall not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.
(22) GOVERNING LAW. This Security and any claim, counterclaim or dispute of any
kind or nature whatsoever arising out of or in any way relating to this
Security, directly or indirectly, shall be governed by, and construed in
accordance with, the laws of the State of New York applicable to agreements and
instruments entered into and wholly-performed within the State of New York.
(23) ABBREVIATIONS. Customary abbreviations may be used in the name of a
Security Holder or an assignee, such as: TEN COM (= tenants in common), TENENT
(= tenants by the entirety), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (Uniform Gifts to
Minors Act).
THE COMPANY WILL FURNISH TO ANY SECURITY HOLDER UPON WRITTEN
REQUEST AND WITHOUT CHARGE A COPY OF THE INDENTURE. REQUESTS MAY BE MADE TO:
Axcan Pharma Inc.
A-11
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇ ▇▇-▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Director Investor Relations
A-12
FORM OF ASSIGNMENT
I or we assign to:
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(Please insert social security or other identifying number )
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
(please print or type name and address)
the within Security and all rights thereunder, and hereby irrevocably
constitutes and appoints:
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Attorney to transfer the Security on the books of the Company with full power of
substitution in the premises.
Dated: ____________ Signed: ________________________________
________________________________
NOTICE: The signature(s) on this assignment must correspond
with the name as it appears upon the face of the within
Security in every particular without alteration or enlargement
or any change whatsoever and be guaranteed by a guarantor
institution participating in the Securities Transfer Agents
Medallion Program or in such other guarantee program
acceptable to the Trustee.
Signature Guarantee: ___________________________________________
In connection with any transfer of this Security occurring
prior to the date which is the earlier of (i) the date of the declaration by the
Commission of the effectiveness of a registration statement under the Securities
Act of 1933, as amended (the "Securities Act") covering resales of this Security
(which effectiveness shall not have been suspended or terminated at the date of
the transfer) and (ii) the Resale Restriction Termination Date, the undersigned
confirms that it has not utilized any general solicitation or general
advertising in connection with transfer:
[Check One]
(1) ____ to the Company or any subsidiary thereof; or
A-13
(2) ____ pursuant to and in compliance with Rule 144A under the U.S.
Securities Act of 1933, as amended; or
(3) ____ outside the United States to a person other than a "U.S.
person" in compliance with Rule 904 of Regulation S under the U.S.
Securities Act of 1933, as amended; or
(4) ____ pursuant to the exemption from registration provided by Rule
144 under the U.S. Securities Act of 1933, as amended; or
(5) ____ pursuant to an effective registration statement under the U.S.
Securities Act of 1933, as amended.
and unless the box below is checked, the undersigned confirms that such Security
is not being transferred to an "affiliate" of the Company as defined in Rule 144
under the U.S. Securities Act of 1933, as amended (an "Affiliate"):
[ ] The transferee is an Affiliate of the Company. (If the Security is
transferred to an Affiliate, the restrictive legend must remain on the Security
for two years following the date of the transfer).
Unless one of the items is checked, the Trustee will refuse to register
any of the Securities evidenced by this certificate in the name of any person
other than the registered Holder thereof; provided, however, that if items (3),
(4) or (5) is checked, the Company or the Trustee may require, prior to
registering any such transfer of the Securities, in their sole discretion, such
written legal opinions, certifications and other information as the Trustee or
the Company have reasonably requested to confirm that such transfer is being
made pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933, as amended.
If none of the foregoing items are checked, the Trustee or Registrar shall not
be obligated to register this Security in the name of any person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 216 of the Indenture shall have
been satisfied.
Dated: _________________ Signed: ________________________________
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee:
_______________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
A-14
The undersigned represents and warrants that it is purchasing
this Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the U.S.
Securities Act of 1933, as amended, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as the undersigned has requested pursuant to
Rule 144A or has determined transferor is relying upon the undersigned's
foregoing representations in order to claim the exemption from registration
provided by Rule 144A.
Dated: ___________________ Signed: _________________________________
NOTICE: To be executed by an
executive Officer
A-15
CONVERSION NOTICE
To convert this Security into Common Shares of the Company, check the box: [ ]
To convert only part of this Security, state the principal amount to be
converted (must be in multiples of $1,000):
$------------------
If you want the stock certificate made out in another person's name, fill in the
form below:
------------------------------------------------------------------------------
(Insert other person's soc. sec. or tax I.D. no.)
--------------------------------------------------------
--------------------------------------------------------
--------------------------------------------------------
--------------------------------------------------------
(Print or type other person's name, address and zip code)
--------------------------------------------------------
Date: ______________________ Signature(s):_________________________________
(Sign exactly as your name(s)
appear(s) on the other side of
this Security)
Signature(s) guaranteed by:
________________________________________
(All signatures must be guaranteed by a
guarantor institution participating in
the Securities Transfer Agents Medallion
Program or in such other guarantee
program acceptable to the Trustee.)
A-16
OPTION OF HOLDER TO ELECT PURCHASE NOTICE
Certificate No. of Security: ___________
If you want to elect to have this Security purchased by the
Company pursuant to Section 309 of the Indenture, check the box: [ ]
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 309 of the Indenture, state the
principal amount:
$-----------------------
(in an integral multiple of $1,000)
Date: ___________________ Signature(s): ________________________________
(Sign exactly as your name(s) appear(s)
on the other side of this Security)
Signature(s) guaranteed by:
_______________________________________
(All signatures must be guaranteed by a
guarantor institution participating in
the Securities Transfer Agents Medallion
Program or in such other guarantee
program acceptable to the Trustee.)
A-17
NOTICE OF ELECTION UPON TAX REDEMPTION
Certificate No. of Security: ___________
If you want to elect not to have this Security purchased by
the Company pursuant to Section 308 of the Indenture, check the box: [ ]
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 308 of the Indenture, state the
principal amount:
$-----------------------
(in an integral multiple of $1,000)
Date: _______________ Signature(s): ______________________________________
(Sign exactly as your name(s) appear(s)
on the other side of this Security)
Signature(s) guaranteed by:
_______________________________________
(All signatures must be guaranteed by a
guarantor institution participating in
the Securities Transfer Agents Medallion
Program or in such other guarantee
program acceptable to the Trustee.)
A-18
SCHEDULE A
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL SECURITY
The following exchanges of a part of this Global Security for
an interest in another Global Security or for Securities in certificated form,
have been made:
---------------------------------------------------------------------------------------------------------------------
Amount of decrease in Amount of increase in Principal amount of this Signature of authorized
Principal amount of this Principal amount of this Global Security following signatory of Trustee or
Global Security Global Security such decrease (or increase) Custodian
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------
This is included in Global Securities only.
Schedule ▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF PRIVATE PLACEMENT LEGEND
THIS SECURITY AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS SECURITY
HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"U.S. SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIROR:
(1) REPRESENTS THAT:
(A) IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A "QUALIFIED
INSTITUTIONAL BUYER" (WITHIN THE MEANING OF RULE 144A UNDER
THE U.S. SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT
DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT; OR
(B) IT IS NOT A U.S. PERSON (WITHIN THE MEANING OF REGULATION S
UNDER THE U.S. SECURITIES ACT),
(2) AGREES THAT IT WILL NOT DIRECTLY OR INDIRECTLY ENGAGE IN ANY
HEDGING TRANSACTIONS INVOLVING THIS SECURITY OR THE COMMON SHARES
ISSUABLE UPON CONVERSION OF THIS SECURITY UNLESS IN COMPLIANCE
WITH THE U.S SECURITIES ACT, AND
(3) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER,
SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL
INTEREST HEREIN, PRIOR TO THE DATE THAT IS THE LATER OF (X) TWO
YEARS AFTER THE LATER OF THE LAST ORIGINAL ISSUE DATE HEREOF
(WHICH WOULD INCLUDE THE EXERCISE OF THE OVER-ALLOTMENT OPTION)
AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS
SECURITY) OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE
144(K) UNDER THE U.S. SECURITIES ACT OR ANY SUCCESSOR PROVISION
THEREUNDER, AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY
APPLICABLE LAW, EXCEPT ONLY:
(A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF;
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME
EFFECTIVE UNDER THE U.S. SECURITIES ACT;
B-1-2
(C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE
144A UNDER THE U.S. SECURITIES ACT;
(D) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF
REGULATION S UNDER THE U.S. SECURITIES ACT; OR
(E) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT.
PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH
(3)(C) OR (D) ABOVE, A DULY COMPLETED AND SIGNED CERTIFICATE
(THE FORM OF WHICH MAY BE OBTAINED FROM THE TRUSTEE) MUST BE
DELIVERED TO THE TRUSTEE. PRIOR TO THE REGISTRATION OF ANY
TRANSFER IN ACCORDANCE WITH (3)(E) ABOVE, THE COMPANY AND THE
TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH
LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY
REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED
TRANSFER IS BEING MADE IN COMPLIANCE WITH THE U.S. SECURITIES
ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS
MADE AS TO THE AVAILABILITY OF ANY RULE 144A EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF LEGEND FOR GLOBAL SECURITY
Any Global Security authenticated and delivered hereunder
shall bear a legend (which would be in addition to any other legends required in
the case of a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN SECTION 216 OF THE INDENTURE.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
U.S. Bank National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇
Corporate Trust Department
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Re: AXCAN PHARMA INC. (the "COMPANY") 4 1/4% Convertible
Subordinated Notes due 2008 (the "Securities")
Ladies and Gentlemen:
In connection with our proposed sale of $_________ aggregate
principal amount of the Securities, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the U.S. Securities Act of
1933, as amended (the "U.S. Securities Act"), and, accordingly, we represent
that:
(1) the offer of the Securities was made in an "offshore
transaction" to a person other than a "U.S. person" (as defined in
Regulation S);
(2) either (a) at the time the buy offer was originated,
the transferee was outside the United States or we and any person
acting on our behalf reasonably believed that the transferee was
outside the United States, or (b) the transaction was executed in, on
or through the facilities of a designated off-shore securities market
and neither we nor any person acting on our behalf knows that the
transaction has been pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the
United States in contravention of the requirements of Rule 903(b) or
Rule 904(b) of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to
evade the registration requirements of the U.S. Securities Act;
(5) we have advised the transferee of the transfer
restrictions applicable to the Securities; and
(6) if we are a dealer in securities or have received a
selling concession, fee or other remuneration in respect of the
Securities, and the transfer is to occur during the Restricted Period,
then the requirements of Rule 904(c)(1) have been satisfied.
D-1-1
You, the Company and counsel for the Company are entitled to
rely upon this letter and are irrevocably authorized to produce this letter or a
copy hereof to any interested party in any administrative or legal proceedings
or official inquiry with respect to the matters covered hereby. Terms used in
this certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
____________________________
Authorized Signature
D-1-2
EXHIBIT E
Form of Notice of Transfer Pursuant to Registration Statement
AXCAN PHARMA INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇ ▇▇.-▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇.▇. Bank National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇
Corporate Trust Department
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Re: AXCAN PHARMA INC. (the "COMPANY") 4 1/4% Convertible
Subordinated Notes due 2008 (the "SECURITIES")
Ladies and Gentlemen:
Please be advised that _____________ has transferred
$___________ aggregate principal amount of the Securities or __ Common Shares,
of the Company issuable on conversion of the Securities ("STOCK") pursuant to an
effective Shelf Registration Statement on Form F-10 (File No. 333-________).
We hereby certify that the prospectus delivery requirements,
if any, of the Securities Act of 1933 as amended, have been satisfied with
respect to the transfer described above and that the above-named beneficial
owner of the Securities or Stock is named as a "SELLING SECURITY HOLDER" in the
Prospectus dated _________, or in amendments or supplements thereto, and that
the aggregate principal amount of the Securities, or number of shares of Stock
transferred are [a portion of] the Securities or Stock listed in such
Prospectus, as amended or supplemented, opposite such owner's name.
Very truly yours,
_____________________________
(Name)
E-1
EXHIBIT F
Form of Opinion of Counsel in Connection with Registration of
Securities
[Name]
[Address]
Re: AXCAN PHARMA INC. (the "COMPANY") 4 1/4% Convertible
Subordinated Notes due 2008 (the "SECURITIES")
Ladies and Gentlemen:
Reference is made to the Securities issued pursuant to a
certain indenture dated as of March 5, 2003 by and between the Company and U.S.
Bank National Association, as trustee (the "TRUSTEE"). The Company issued
$110,000,000 aggregate principal amount of Securities on February 27, 2003 and
an additional $15,000,000 aggregate principal amount of Securities in connection
with the exercise of the over-allotment option on March 5, 2003 in transactions
exempt from registration under the Securities Act of 1933, as amended (the "U.S.
SECURITIES ACT"). The Company has filed with the Securities and Exchange
Commission (the "SEC") a registration statement on Form F-10 (File No. 333-____)
(the "REGISTRATION STATEMENT") relating to the registration under the U.S.
Securities Act of $______________ principal amount of the Securities and the
Common Shares of the Company (the "SHARES") issuable upon conversion of the
Securities being registered. The Registration Statement was declared effective
by the SEC on [_____________].
We have acted as counsel for the Company in connection with
the issuance of the Securities and the preparation and filing of the
Registration Statement and are familiar with the Securities, the Indenture, the
Registration Statement, the above-mentioned SEC order and such other documents
as are necessary to render this opinion.
Based on the foregoing, it is our opinion that (1) the
Registration Statement has become effective under the U.S.Securities Act and, to
our knowledge, no stop order suspending the effectiveness of the Registration
Statement has been issued, (2) assuming that the Securities covered by the
Registration Statement and the Shares issuable upon conversion of such
Securities are sold by a relevant Holder specified in the Registration Statement
in a manner specified in the Registration Statement, such sale of the Securities
and Shares issuable upon conversion of the Securities will have been duly
registered under the U.S. Securities Act and (3) the Indenture has been duly
qualified under the Trust Indenture Act of 1939, as amended.
Yours truly,
F-1