EXHIBIT 4.1
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ECHO BAY MINES LTD.
$100,000,000
11% Junior Subordinated Debentures
due 2027
THIRD SUPPLEMENTAL INDENTURE
Dated as of December 4, 2001
BANKERS TRUST COMPANY,
a New York corporation,
as Trustee
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THIRD SUPPLEMENTAL INDENTURE dated as of December 4, 2001,
between ECHO BAY MINES LTD., a corporation duly incorporated
and existing under the laws of Canada, having its registered
office at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇-▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (the "Company"), and Bankers Trust Company, a
New York corporation, as trustee (the "Trustee") under the
Indenture dated as of March 27, 1997, between the Company and
the Trustee (the "Original Indenture").
WHEREAS the Company and the Trustee have previously executed and
delivered a First Supplemental Indenture dated as of March 27, 1997 (the
"First Supplemental Indenture"), pursuant to which the Company has issued its
11% Junior Subordinated Debentures due 2027 (the "Capital Securities");
WHEREAS the Company and the Trustee have previously executed and
delivered a Second Supplemental Indenture dated as of September 15, 1998 (the
"Second Supplemental Indenture" and, together with the Original Indenture and
the First Supplemental Indenture, the "Indentures") in order to add a covenant
to pay additional interest in certain circumstances for the benefit of
Holders;
WHEREAS the Company has entered into letter agreements with certain
Holders of Capital Securities (each a "Letter Agreement"), pursuant to which
(i) each such Holder has agreed to exchange (the "Exchange") any and all
Capital Securities held by it for Common Shares and (ii) the Company has
agreed to issue Common Shares to such Holders to effect the Exchange, in each
case on the terms and subject to the conditions contained in the Letter
Agreements;
WHEREAS the Company desires to supplement the Indenture with respect
to the Capital Securities pursuant to Section 9.2 of the Original Indenture
and Section 8.01 of the First Supplemental Indenture in order to (i) provide
the Holders of Capital Securities with conversion rights on such terms as may
be specified in an Authorizing Resolution (as defined below) and (ii) make
certain other changes to the provisions of the Original Indenture and the
First Supplemental Indenture, in each case as more fully described herein;
WHEREAS the Holders of more than a majority in aggregate principal
amount of outstanding Capital Securities
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have consented to (i) the execution by the Company and the Trustee of this
Third Supplemental Indenture and (ii) the waiver of any past default or Event
of Default that may have occurred under the terms of the Original Indenture or
the First Supplemental Indenture as a result of the execution and delivery by
the Company of the Letter Agreements, such consents having been delivered by
such Holders pursuant to the terms of Section 9.2 and Section 5.13 of the
Original Indenture, respectively; and
WHEREAS all capitalized terms used herein, but not defined herein,
are used as defined in the Original Indenture, the First Supplemental
Indenture or the Second Supplemental Indenture, as the case may be.
NOW THEREFORE the Company covenants and agrees with the Trustee as
follows:
SECTION 1. Article IX of the First Supplemental Indenture shall be
replaced, in its entirety, with the following:
ARTICLE IX
Conversion of Securities
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SECTION 9.01. Applicability; Conversion Privilege and
Conversion Rate. (a) At any time, the Board of Directors of the Company
may, pursuant to a Board Resolution (an "Authorizing Resolution"), set
out the terms pursuant to which the Holders of Capital Securities may
convert such Capital Securities into Common Shares in accordance with the
provisions of this Article IX.
(b) Subject to and upon compliance with the provisions of this
Article and following the date of an Authorizing Resolution, at the
option of the Holder thereof, any Capital Securities or any portion of
the principal amount thereof which is U.S. $1,000 or an integral multiple
of U.S. $1,000, may be converted at the principal amount thereof, or of
such portion thereof, into fully paid and non-assessable Common Shares of
the Company, at the Conversion Rate, determined as hereinafter provided,
in effect at the time of conversion. Such conversion right shall expire
on such date as shall be specified in the applicable Authorizing
Resolution. In case the Capital Securities or portion thereof are called
for
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redemption, such conversion right in respect of the Capital Securities or
portion so called shall expire at the close of business on the Redemption
Date, unless the Company defaults in making the payment due upon
redemption.
(c) The number of Common Shares to be delivered upon conversion
per $1,000 principal amount of Capital Securities (the "Conversion Rate")
shall initially be that number of Common Shares as set forth in the
applicable Authorizing Resolution. The Conversion Rate shall be adjusted
in certain instances as provided in Section 9.04.
SECTION 9.02. Exercise of Conversion Privilege. (a) In order to
exercise the conversion privilege, the Holder of any Capital Securities
to be converted shall surrender such Capital Securities, duly endorsed or
assigned to the Company or in blank, at any office or agency of the
Company maintained for that purpose pursuant to Section 10.2 of the
Indenture, accompanied by written notice to the Company (which shall be
substantially in the form set forth in Section 2.3 of the Indenture) at
such office or agency or, if applicable, by notice in accordance with the
procedures of the Depositary that the Holder elects to convert such
Capital Securities or, if less than the entire principal amount thereof
is to be converted, the portion thereof to be converted. During any
period other than an Extension Period, Capital Securities surrendered for
conversion during the period from the close of business on any record
date next preceding any Interest Payment Date to the opening of business
on such Interest Payment Date shall (except in the case of Capital
Securities or portions thereof which have been called for redemption on a
Redemption Date within such period) be accompanied by payment in New York
Clearing House funds or other funds acceptable to the Company of an
amount equal to the interest payable on such Interest Payment Date on the
principal amount of Capital Securities being surrendered for conversion;
provided, however, that Capital Securities surrendered for conversion on
an Interest Payment Date need not be accompanied by a payment and
interest on the principal amount of the Capital Securities being
converted will be paid on such Interest Payment
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Date to the Holder of such Capital Securities on the immediately
preceding record date. Except as provided in this Section 9.02(a) or as
set forth in the applicable Authorizing Resolution, no payment or
adjustment shall be made upon any conversion on account of any interest
accrued on the Capital Securities surrendered for conversion, including
any Deferred Interest, or on account of any dividends on the Common
Shares issued upon conversion.
(b) Capital Securities shall be deemed to have been converted
immediately prior to the close of business on the day of surrender of
such Capital Securities for conversion in accordance with the foregoing
provisions, and at such time the rights of the Holders of such Capital
Securities as Holders shall cease, and the Person or Persons entitled to
receive the Common Shares issuable upon conversion shall be treated for
all purposes as the record holder or holders of such Common Shares at
such time. As promptly as practicable on or after the date of conversion,
the Company shall issue and shall deliver at such office or agency a
certificate or certificates for the number of full Common Shares issuable
upon conversion, together with payment in lieu of any fraction of a
share, as provided in Section 9.03.
(c) All Capital Securities converted in accordance with the
provisions of this Article IX are, and shall be deemed to have been,
transferred to or for the account of the Company.
(d) In the case of any Capital Securities which are converted
in part only, upon such conversion, the Company shall execute and the
Trustee shall authenticate and deliver to the Holder thereof, at the
expense of the Company, a new Capital Security or Capital Securities of
authorized denominations in aggregate principal amount equal to the
unconverted portion of the principal amount of such Capital Security or
Capital Securities.
SECTION 9.03. Fractions of Shares. No fractional Common Shares
or other such securities shall be issued upon conversion of Capital
Securities. If more than one Capital Security shall be surrendered for
conversion at one time by
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the same Holder, the number of full shares which shall be issuable upon
conversion thereof shall be computed on the basis of the aggregate
principal amount of the Capital Securities (or specified portions
thereof) so surrendered. Instead of any fractional Common Share which
would otherwise be issuable upon conversion of any Capital Securities (or
specified portions thereof), any such fractional share shall be rounded
up to a full Common Share, unless otherwise provided in the applicable
Authorizing Resolution.
SECTION 9.04. Adjustment of Conversion Rate. The Conversion
Rate with respect to any Capital Security which is convertible into
Common Shares shall be subject to adjustment from time on such terms, if
any, as shall be specified in the applicable Authorizing Resolution.
SECTION 9.05. Company to Reserve Common Shares. The Company
shall at all times reserve and keep available, free from pre-emptive
rights, out of its authorized but unissued Common Shares, for the purpose
of effecting the conversion of Capital Securities, such number of its
duly authorized Common Shares then issuable upon the conversion of all
outstanding Capital Securities; provided that this Section 9.05 shall not
require the Company to make any reservation of authorized but unissued
Common Shares for so long as the Company's authorized share capital
includes an unlimited number of Common Shares.
SECTION 9.06. Taxes on Conversion. The Company will pay any and
all taxes that may be payable in respect of the issue or delivery of
Common Shares on conversion of Capital Securities pursuant hereto;
provided, however, that the Company shall not be obligated to pay any tax
on or measured by income that may be payable by any Holder. The Company
shall not, however, be required to pay any tax which may be payable in
respect of any transfer involved in the issue and delivery of Common
Shares in a name other than that of the Holder of the Capital Security or
Capital Securities to be converted, and no such issue or delivery shall
be made unless and until the Person requesting such issue has paid to the
Company the amount of any such tax, or has
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established to the satisfaction of the Company that such tax has been
paid.
SECTION 9.07. Covenant as to Common Shares. The Company
covenants that all Common Shares which may be issued upon conversion of
Capital Securities will upon issue be fully paid and non-assessable and,
except as provided in Section 9.06, the Company will pay all taxes, liens
and charges with respect to the issue thereof.
SECTION 9.08. Company as Holder of Converted Securities. All
Capital Securities surrendered for conversion pursuant to Section 9.02
shall be delivered to the Company. The Company (or any Subsidiary holding
such Capital Securities or any other Person holding such Capital
Securities for any of their respective accounts) shall be deemed to be
the Holder of such Capital Securities commencing on the close of business
on the day such Capital Securities are surrendered for conversion;
provided, however, that while any of such Capital Securities are
outstanding and held by or for the account of any person other than the
Company (or any Subsidiary or any other Person holding such Capital
Securities for any of their respective accounts), the Company (or any
Subsidiary holding such Capital Securities or any other Person holding
such Capital Securities for any of their respective accounts) shall not
be entitled to any of the rights and remedies of a Holder hereunder,
including the right to convert such Capital Securities into Common
Shares, other than the unconditional right of a Holder to receive
principal, premium and interest on such Capital Securities and the right
to enforce payment thereof as provided in Article II of the Indenture.
SECTION 9.09. Provisions in Case of Consolidation, Merger or
Sale of Assets. In case of any consolidation of the Company with, or
merger of the Company into, any other corporation, any merger of another
corporation into the Company (other than a merger which does not result
in any reclassification, conversion, exchange or cancellation of
outstanding Common Shares of the Company) or any sale or transfer of all
or
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substantially all of the assets of the Company (treating the Company and
each of its Subsidiaries as a single consolidated entity and treating any
sale by a Subsidiary as a sale by the Company for such purpose), the
corporation formed by such consolidation or resulting from such merger or
which acquires such assets, as the case may be, shall execute and deliver
to the Trustee a supplemental indenture providing that each Holder of
Capital Securities then outstanding shall have the right thereafter,
during the period such Capital Securities shall be convertible as
specified in Section 9.01, to convert such Capital Securities only into
the kind and amount of securities, cash and other property receivable
upon such consolidation, merger, sale or transfer by a holder of the
number of Common Shares of the Company into which such Capital Securities
might have been converted immediately prior to such consolidation,
merger, sale or transfer, assuming such holder of Common Shares (i) is
not a Person with which the Company consolidated or into which the
Company merged or which merged into the Company or to which such sale or
transfer was made, as the case may be ("constituent Person"), or an
Affiliate of a constituent Person and (ii) failed to exercise his rights
of election, if any, as to the kind or amount of securities, cash and
other property receivable upon such consolidation, merger, sale or
transfer (provided that if the kind or amount of securities, cash and
other property receivable upon such consolidation, merger, sale or
transfer is not the same for each Common Share of the Company held
immediately prior to such consolidation, merger, sale or transfer by
others than a constituent Person or an Affiliate thereof and in respect
of which such rights of election shall not have been exercised ("non-
electing share"), then for the purpose of this Section 9.09 the kind and
amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer by each non-electing share shall
be deemed to be the kind and amount so receivable per share by a
plurality of the non-electing shares). Such supplemental indenture shall
provide for adjustments which, for events subsequent to the effective
date of such supplemental indenture, shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Article. The
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Trustee shall not be under any responsibility to determine the
correctness of any provision contained in such supplemental indenture
relating to either the kind or amount of shares, other securities, cash
or property receivable by Holders upon the conversion of their Capital
Securities after any such consolidation, merger, sale or transfer. The
above provisions of this Section 9.09 shall similarly apply to successive
consolidations, mergers, sales or transfers.
SECTION 9.10. Responsibility of Trustee and Conversion Agent.
Neither the Trustee nor any agent appointed to effect conversions shall
at any time be under any duty or responsibility to any Holder of Capital
Securities to determine whether any facts exist which may require any
adjustment of the Conversion Rate, or with respect to the nature or
extent of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture provided to be
employed, in making the same. Neither the Trustee nor any such conversion
agent shall be accountable with respect to the validity or value (or the
kind or amount) of any Common Shares or of any securities or property
which may at any time be issued or delivered upon the conversion of any
Capital Securities; and neither the Trustee nor any such conversion agent
makes any representation with respect thereto. Neither the Trustee nor
any such conversion agent shall be responsible for any failure of the
Company to issue, transfer or deliver any Common Shares or stock
certificates or other securities or property or to make any cash payment
upon the delivery of any Capital Security for the purpose of conversion
or to comply with any of the covenants contained in this Article IX.
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SECTION 2. Section 4.01(c) of the First Supplemental Indenture shall
be replaced, in its entirety, with the following:
"(c) the occurrence of a Change of Control (other than any Change of
Control occurring as a result of the performance by the Company of its
obligations pursuant to the terms of the letter agreement dated September
5, 2001, between Franco- Nevada Mining Corporation Limited and the
Company), unless cured pursuant to Section 5.16;"
SECTION 3. Ratification of Indenture. The Indenture, as supplemented
by this Third Supplemental Indenture, is in all respects ratified and
confirmed, and this Third Supplemental Indenture shall be deemed part of the
Indenture in the manner and to the extent herein and therein provided. To the
extent any provision of this Third Supplemental Indenture differs from that of
the Indenture, the provision contained in this Third Supplemental Indenture
shall supersede the provision contained in the Indenture.
SECTION 4. Trustee Not Responsible for Recitals. The recitals herein
contained are made by the Company and not by the Trustee, and the Trustee
assumes no responsibility for the correctness thereof. The Trustee makes no
representation as to the validity or sufficiency of this Third Supplemental
Indenture.
SECTION 5. Governing Law. This Third Supplemental Indenture and each
Capital Security shall be deemed to be a contract made under the internal laws
of the State of New York, and for all purposes shall be construed in
accordance with the laws of said State.
SECTION 6. Counterparts. This Third Supplemental Indenture may be
executed in any number of counterparts each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
SECTION 7. Successors. All agreements of the Company in this Third
Supplemental Indenture and the Capital Securities shall bind its successor.
All agreements of the Trustee in this Third Supplemental Indenture shall bind
its successor.
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IN WITNESS WHEREOF, the parties hereto have caused this Third
Supplemental Indenture to be duly executed as of the day and year first above
written.
ECHO BAY MINES LTD.,
by /s/ ▇▇▇ S. Q. ▇▇▇
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Name: ▇▇▇ S. Q. Yip
Title: Vice President
BANKERS TRUST COMPANY,
as Trustee,
by /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President