FOUR SEASONS HOTELS INC.
AND
THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK,
as Trustee
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FIRST SUPPLEMENTAL INDENTURE
Dated as of June 18, 2004
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SUPPLEMENT TO INDENTURE DATED JUNE 18, 2004
1.875% Convertible Senior Notes due 2024
TABLE OF CONTENTS
Page
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION............1
1.01 DEFINITIONS.........................................................1
1.02 SECTION REFERENCES..................................................5
1.03 CURRENCY............................................................5
ARTICLE TWO GENERAL TERMS AND CONDITIONS OF THE NOTES..........................5
2.01 TITLE OF THE NOTES..................................................5
2.02 STATED MATURITY.....................................................5
2.03 LIMIT ON AMOUNT OF SERIES...........................................5
2.04 CURRENCY AND DENOMINATIONS..........................................5
2.05 INTEREST............................................................6
2.06 FORM................................................................6
2.07 SINKING FUND........................................................6
2.08 ADDITIONAL AMOUNTS..................................................6
ARTICLE THREE MAKE WHOLE PREMIUM...............................................6
3.01 MAKE WHOLE PREMIUM..................................................6
3.02 ADJUSTMENTS RELATING TO MAKE WHOLE PREMIUM..........................9
ARTICLE FOUR CONVERSION........................................................9
4.01 CONVERSION PRIVILEGE................................................9
4.02 CONVERSION PROCEDURE; CONVERSION RATE; FRACTIONAL SHARES...........11
4.03 CONVERSION RATE....................................................13
4.04 ADJUSTMENT OF CONVERSION RATE FOR LIMITED VOTING SHARES............13
4.05 CONSOLIDATION OR MERGER OF THE COMPANY.............................21
4.06 NOTICE OF ADJUSTMENT...............................................23
4.07 NOTICE IN CERTAIN EVENTS...........................................23
4.08 COMPANY TO RESERVE STOCK: REGISTRATION; LISTING....................24
4.09 TAXES ON CONVERSION................................................24
4.10 CONVERSION AFTER RECORD DATE.......................................24
4.11 RESPONSIBILITY OF TRUSTEE FOR CONVERSION PROVISIONS................25
4.12 UNCONDITIONAL RIGHT OF HOLDERS TO CONVERT..........................26
4.13 PRESCRIBED SECURITIES..............................................26
ARTICLE FIVE REDEMPTION AT THE OPTION OF THE COMPANY..........................26
5.01 RIGHT TO REDEEM....................................................26
5.02 TAX REDEMPTION.....................................................27
ARTICLE SIX REPURCHASE OF NOTES BY THE COMPANY AT THE OPTION OF HOLDERS.......27
6.01 OPTIONAL PUT.......................................................27
6.02 THE COMPANY'S RIGHT TO ELECT MANNER OF PAYMENT OF REPURCHASE PRICE.30
6.03 EFFECT OF REPURCHASE NOTICE........................................32
(i)
6.04 DEPOSIT OF REPURCHASE PRICE........................................33
6.05 SECURITIES REPURCHASED IN PART.....................................33
6.06 COVENANT TO COMPLY WITH SECURITIES LAWS UPON
REPURCHASE OF SECURITIES...........................................33
6.07 REPAYMENT TO THE COMPANY...........................................34
ARTICLE SEVEN OFFER TO PURCHASE UPON A DESIGNATED EVENT.......................34
7.01 OFFER TO PURCHASE..................................................34
7.02 THE COMPANY'S RIGHT TO ELECT MANNER OF PAYMENT OF DESIGNATED EVENT
REPURCHASE PRICE...................................................38
7.03 EFFECT OF DESIGNATED EVENT ACCEPTANCE NOTICE.......................40
7.04 DEPOSIT OF DESIGNATED EVENT REPURCHASE PRICE.......................40
7.05 SECURITIES REPURCHASED IN PART.....................................41
7.06 COVENANT TO COMPLY WITH SECURITIES LAWS UPON
REPURCHASE OF SECURITIES...........................................41
7.07 REPAYMENT TO THE COMPANY...........................................42
ARTICLE EIGHT ADDITIONAL EVENTS OF DEFAULT....................................42
8.01 EVENTS OF DEFAULT..................................................42
ARTICLE NINE MODIFICATION AND WAIVER..........................................42
9.01 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS....................42
ARTICLE TEN MISCELLANEOUS PROVISIONS..........................................43
10.01 DEFEASANCE AND COVENANT DEFEASANCE.................................43
10.02 TRUSTEE............................................................43
10.03 RATIFICATION.......................................................43
10.04 GOVERNING LAW......................................................43
10.05 EXECUTION IN COUNTERPARTS..........................................43
EXHIBIT A....................................................................A-1
EXHIBIT B....................................................................B-1
(ii)
FIRST SUPPLEMENTAL INDENTURE, dated as of June 18, 2004, between FOUR
SEASONS HOTELS INC., a corporation duly organized and existing under the laws of
the Province of Ontario (herein called the "Company"), having its principal
office at 0000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0, and THE BANK OF
NOVA SCOTIA TRUST COMPANY OF NEW YORK, a New York corporation, as trustee
(herein called the "Trustee").
RECITALS
The Company has executed and delivered to the Trustee the Indenture,
dated as of June 18, 2004 (the "Original Indenture"), providing for the issuance
from time to time of one or more series of the Company's unsecured debentures,
notes or other evidences of indebtedness as provided in the Original Indenture
(herein and in the Original Indenture called the "Securities").
Section 9.01 of the Original Indenture provides, among other things,
that the Company and the Trustee may enter into indentures supplemental to the
Original Indenture for, among other things, the purpose of establishing the form
or terms of Securities of any series as permitted by Sections 2.01 and 3.01 of
the Original Indenture.
The Company desires to create a series of Securities in the principal
amount of $250 million which series shall be designated the 1.875% Convertible
Senior Notes due 2024 (the "Notes"), and all action on the part of the Company
necessary to authorize the issuance of the Notes under the Original Indenture
and this First Supplemental Indenture has been duly taken.
All acts and things necessary to make the Notes, when executed by the
Company and completed, authenticated and delivered by the Trustee as provided in
the Original Indenture and this First Supplemental Indenture, valid and binding
obligations of the Company, have been done and performed.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes
by the Holders thereof, it is mutually agreed, for the equal and proportionate
benefit of all Holders of the Notes, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
1.01 DEFINITIONS.
For all purposes of the Original Indenture and this First Supplemental
Indenture relating to the Notes, except as otherwise expressly provided herein,
the terms defined in this Article have the meanings assigned to them in this
Article. Each capitalized term that is used in the Original Indenture and this
First Supplemental Indenture but is not defined herein shall have the meaning
specified in the Original Indenture.
"Additional Shares" has the meaning set forth in Section 3.01(a).
"Applicable Stock" means the Limited Voting Shares; provided, that, in the event
of a Designated Event occurring in which the Company is not the surviving
Person, the term "Applicable Stock" shall mean the common stock or other
securities of such surviving Person or its direct or indirect parent.
"Associate" shall have the meaning ascribed to that term in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act, as in effect on the date
hereof.
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"Bid Solicitation Agent" means the agent appointed by the Company to act as
contemplated by the definition of Trading Price and who shall not be an
Affiliate of the Company and who may be changed by the Company at any time and
from time to time.
"Calculation Agent" means the calculation agent from time to time appointed by
the Company pursuant to Section 3.01(d).
"Calculation Date" has the meaning set forth in Section 3.01(d)(i).
"Capital Stock" of any Person means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or interests
in (however designated) equity issued by that Person.
"Certificated Notes" means Notes that are in substantially the form attached
hereto as Exhibit A and that do not include the information called for by
footnotes 1 and 2 thereof.
"Change in Control" has the meaning set forth in Section 7.01(a).
"Closing Sale Price" of one share of Applicable Stock on any date means the
closing per share sale price of such Applicable Stock (or, if no closing sale
price is reported, the average of the bid and ask prices or, if there is more
than one bid or ask price, the average of the average bid and the average ask
prices) on that date as reported in composite transactions for the principal
U.S. securities exchange on which the Applicable Stock is traded or, if the
Applicable Stock is not listed on a U.S. national or regional securities
exchange, as reported by the Nasdaq National Market System or if no such price
is reported, as reported by the principal non-United States market on which the
Applicable Stock is traded, such price, if reported in Canadian dollars, to be
converted into U.S. dollars based on the Bank of Canada noon rate of exchange as
reported for conversion into U.S. dollars on that date. In the absence of such a
quotation, the Board of Directors of the issuer of the Applicable Stock shall be
entitled to make a good faith determination of the closing sale price.
"Conversion Agent" means any Person designated by the Company to act in
connection with the conversion of Notes in accordance with Article Four.
"Conversion Amount" means the number of Limited Voting Shares (including any
Additional Shares) to be delivered pursuant to a conversion under Article Four.
"Conversion Date" means the date on which a Holder surrendering Notes for
conversion has complied with the provisions of Section 4.02(b).
"Conversion Notice" has the meaning set forth in Section 4.02(b).
"Conversion Price" means at any time, $1,000 divided by the Conversion Rate in
effect at such time (rounded to two decimal places and rounded up if the third
decimal place thereof is five or more and otherwise rounded down) and, at the
date hereof, is $71.64.
"Conversion Rate" has the meaning set forth in Section 4.03.
"Conversion Value" is equal to the product of the Closing Sale Price for Limited
Voting Shares on a given day multiplied by the then current Conversion Rate.
"Current Market Price" has the meaning set forth in Section 4.04(g).
"Designated Event" has the meaning set forth in Section 7.01(a).
"Designated Event Acceptance Notice" has the meaning set forth in Section
7.01(c).
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"Designated Event Notice" has the meaning set forth in Section 7.01(b).
"Designated Event Repurchase Date" has the meaning set forth in Section 7.01(a).
"Designated Event Repurchase Offer" has the meaning set forth in Section
7.01(a).
"Designated Event Repurchase Price" has the meaning set forth in Section
7.01(a).
"Distributed Assets" has the meaning set forth in Section 4.04(d).
"Dividend Threshold Amount" has the meaning set forth in Section 4.04(e).
"Effective Date" has the meaning set forth in Section 3.01(b).
"ex date" has the meaning set forth in Section 4.04(g).
"Exchange Act" means the United States Securities Exchange Act of 1934, as
amended.
"Fair Market Value" has the meaning set forth in Section 4.04(g).
"Fundamental Change" has the meaning set forth in Section 7.01(a).
"Global Securities" means Securities that are in substantially the form attached
hereto as Exhibit A and that include the information called for by footnotes 1
and 2 thereof and that are deposited with the Depositary or its custodian and
registered in the name of the Depositary or its nominee.
"Indenture" means, collectively, the Original Indenture together with this First
Supplemental Indenture.
"Interest Payment Date" has the meaning set forth in the Securities.
"Limited Voting Shares" means the limited voting shares in the capital of the
Company as those shares exist on the date of this First Supplemental Indenture
or any other shares of Capital Stock of the Company into which such Limited
Voting Shares shall be reclassified or changed.
"Make Whole Premium" has the meaning set forth in Section 3.01(b).
"Make Whole Premium Table" has the meaning set forth in Section 3.01(b).
"Measurement Period" means the last 30 consecutive Trading Days in a fiscal
quarter.
"95% Conversion Date" has the meaning set forth in Section 4.02(e).
"95% Trading Condition" has the meaning set forth in Section 4.01(b).
"Non-Electing Share" has the meaning set forth Section 4.05.
"Note" or "Notes" means any of the Company's 1.875% Convertible Senior Notes due
2024, as amended or supplemented from time to time, issued under the Indenture.
"Notice of Election" has the meaning set forth in Section 5.02.
"NYSE" means The New York Stock Exchange, Inc.
"Original Indenture" has the meaning set forth in the first recital.
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"Principal Value Conversion" has the meaning set forth in Section 4.02(e).
"Record Date" has the meaning set forth in Section 4.04(g).
"Redemption Price" has the meaning set forth in Section 5.01.
"Reference Period" has the meaning set forth in Section 4.04(d).
"Repurchase Date" has the meaning set forth in Section 6.01(a).
"Repurchase Notice" has the meaning set forth in Section 6.01(c).
"Repurchase Price" has the meaning set forth in Section 6.01(a).
"Securities Act" means the United States Securities Act of 1933, as amended.
"Stock Price" has the meaning set forth in Section 3.01(b).
"Stock Price Cap" has the meaning set forth in Section 3.01(b).
"Stock Price Threshold" has the meaning set forth in Section 3.01(b).
"Termination of Trading" has the meaning set forth in Section 7.01(a).
"Trading Day" means:
(a) if the applicable security is listed or admitted for trading
on the NYSE or another U.S. national or regional securities
exchange, a day on which the NYSE or such other U.S. national
or regional exchange is open for business;
(b) if the applicable security is not so listed or admitted but is
quoted on the Nasdaq National Market or another similar United
States system of automated dissemination of securities prices,
a day on which trades may be made on the Nasdaq National
Market or the principal similar United States system on which
the applicable securities are quoted; or
(c) if the applicable security is not so listed or admitted for
trading on any such exchange and not so quoted on the Nasdaq
National Market or any similar U.S. system, a day on which the
principal non-U.S. national or regional exchange on which the
applicable security is listed or admitted for trading is open
for business.
"Trading Price" means:
(a) with respect to Notes, as of any date of determination, the
average of the secondary market bid quotations per $1,000 principal
amount of Notes obtained by the Bid Solicitation Agent for $2,000,000
principal amount of Notes at approximately 4:00 p.m., New York City
time, on the day in respect of which the Trading Price is being
determined from three securities dealers (none of which shall be an
Affiliate of the Company) selected by the Company, provided, that if at
least three such bids cannot reasonably be obtained by the Bid
Solicitation Agent, but two 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 Bid Solicitation Agent, this one bid will be used;
provided, however, if the Bid Solicitation Agent, through the exercise
of reasonable efforts, is unable to obtain at least one bid from a
securities dealer on a date of determination, the Trading Price of a
Note
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for such date of determination shall be deemed to be less than 95% of
the Conversion Value;
(b) with respect to Limited Voting Shares, the average of the Closing Sale
Price of one Limited Voting Share for the 20-Trading Day period
immediately preceding and including the third Business Day immediately
preceding the applicable Repurchase Date or Redemption Date (or if the
third Business Day immediately preceding the relevant date of
determination is not a Trading Day, then on the last Trading Day
immediately preceding such third Business Day); and
(c) with respect to Applicable Stock, the average of the Closing Sale Price
of one share of Applicable Stock for the 20-Trading Day period
immediately preceding and including the third Business Day immediately
preceding the Designated Event Repurchase Date (or if the third
Business Day immediately preceding the relevant date of determination
is not a Trading Day, then on the last Trading Day immediately
preceding such third Business Day).
"Trigger Event" has the meaning set forth in Section 4.04(d).
"Voting Securities" has the meaning set forth in Section 7.01(a)(i).
1.02 SECTION REFERENCES.
Each reference to a particular section or article set forth in this
First Supplemental Indenture shall, unless the context otherwise requires, refer
to this First Supplemental Indenture.
1.03 CURRENCY.
Unless otherwise specified, all references to "dollars" or "$" shall be
to United States dollars.
ARTICLE TWO
GENERAL TERMS AND CONDITIONS OF THE NOTES
2.01 TITLE OF THE NOTES.
The Notes shall be known and designated as the "1.875% Convertible
Senior Notes due 2024" of the Company.
2.02 STATED MATURITY.
The Stated Maturity of the Notes shall be July 30, 2024.
2.03 LIMIT ON AMOUNT OF SERIES.
The aggregate principal amount of Notes that may be authenticated and
delivered under this First Supplemental Indenture is limited to $250,000,000,
except for Notes authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Notes pursuant to Section 3.04, 3.05,
3.06, 9.06, 11.07 or 13.05 of the Original Indenture.
2.04 CURRENCY AND DENOMINATIONS.
The Notes shall be denominated in U.S. Dollars and shall be issued in
denominations of $1,000 and integral multiples thereof.
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2.05 INTEREST.
The Notes shall bear interest at the rate of 1.875% per annum. Interest
in respect of the Notes shall accrue from and including June 18, 2004 or from
and including the most recent Interest Payment Date to which interest has been
paid or duly provided for. The Interest Payment Dates on which interest shall be
payable in respect of the Notes shall be January 30 and July 30 in each year,
commencing January 30, 2005. The Regular Record Dates for interest in respect of
the Notes shall be January 15 and July 15 (whether or not a Business Day) in
respect of the interest payable on January 30 and July 30, respectively.
2.06 FORM.
(a) The Notes shall be issuable as Registered Securities, initially in
global form, and shall be substantially in the form set out in Exhibit
A hereto and shall be registered in the name of the Depositary, or its
nominee, and deposited with the Trustee, as custodian for the
Depositary.
(b) The Depositary for the Notes shall be the Depositary Trust Company, 00
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(c) The Conversion Agent for the Notes shall be any Person designated by
the Company to act in connection with the conversion of Notes in
accordance with Article Four. The Company has initially appointed the
Trustee as its Conversion Agent, which shall maintain an office in the
Borough of Manhattan, the City of New York, New York.
2.07 SINKING FUND.
The Notes are not subject to redemption pursuant to any sinking fund.
2.08 ADDITIONAL AMOUNTS.
The Company is required to pay Additional Amounts in respect of the
Notes in accordance with the terms of paragraph 10.05 of the Original Indenture.
ARTICLE THREE
MAKE WHOLE PREMIUM
3.01 MAKE WHOLE PREMIUM.
(a) If a Fundamental Change occurs on or before July 30, 2009, Holders
of Notes will be entitled to receive from the Company (A) upon the
repurchase of Notes tendered to a Designated Event Repurchase Offer
pursuant to Article Seven, the Make Whole Premium, or (B) upon
conversion of the Notes in accordance with Section 4.01(e), an
additional number of Limited Voting Shares (the "Additional Shares")
per $1,000 principal amount of Notes equal to (i) the sum of the Make
Whole Premium and any accrued and unpaid interest per $1,000 principal
amount of Notes to, but not including, the Conversion Date, divided by
(ii) the average of the Closing Sale Prices of the Limited Voting
Shares for the 10 Trading Days immediately preceding the Conversion
Date.
(b) The Make Whole Premium will be determined as follows:
(i) "Effective Date" means the date that the applicable Fundamental
Change becomes effective.
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(ii) "Stock Price" means the price paid per Limited Voting Share in the
transaction constituting the applicable Fundamental Change,
determined as follows:
(A) if holders of the Limited Voting Shares receive only cash in
the Fundamental Change, the Stock Price shall be the cash
amount paid per Limited Voting Share; or
(B) in all other circumstances, the Stock Price shall be the
average of the Closing Sale Prices of the Limited Voting
Shares on the 10 Trading Days up to, but not including,
the Effective Date.
(iii) "Make Whole Premium" means the amount per $1,000 original
principal amount of Notes equal to:
(A) If the Effective Date is after July 30, 2009, $0;
(B) If the Stock Price is less than $55.11 (subject to adjustment
pursuant to Section 4.04) (the "Stock Price Threshold"), $0;
and
(C) If the Stock Price is more than $150.00 (subject to
adjustment pursuant to Section 4.04) (the "Stock Price
Cap"), $0; and
(D) Otherwise, the dollar amount equal to the percentage set
forth on the table below (the "Make Whole Premium Table") for
the Stock Price and the Effective Time multiplied by $1,000:
-------------- -----------------------------------------------------------------------------------------------------------
Date of Stock Price on Date of Fundamental Change
Fundamental
Change
-----------------------------------------------------------------------------------------------------------
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------- ------- -------
$55.11 $56.00 $57.00 $58.00 $59.00 $60.00 $65.00 $70.00 $75.00 $80.00 $85.00 $90.00 $100.00 $125.00 $150.00
-------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------- ------- -------
-------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------- ------- -------
June 18, 2004 0.0% 0.8% 1.6% 2.5% 3.4% 4.3% 9.1% 14.3% 15.0% 13.6% 12.5% 11.5% 9.9% 7.4% 6.0%
July 30, 2005 0.3% 1.0% 1.8% 2.6% 3.5% 4.3% 8.8% 13.7% 14.2% 12.7% 11.4% 10.3% 8.7% 6.2% 5.0%
July 30, 2006 0.6% 1.2% 1.9% 2.6% 3.4% 4.1% 8.2% 12.8% 13.0% 11.3% 10.0% 8.8% 7.1% 4.8% 3.8%
July 30, 2007 0.7% 1.2% 1.7% 2.3% 2.9% 3.5% 7.1% 11.2% 11.2% 9.3% 7.8% 6.7% 5.0% 3.1% 2.5%
July 30, 2008 0.3% 0.6% 0.9% 1.3% 1.7% 2.2% 4.9% 8.4% 8.0% 6.0% 4.6% 3.5% 2.3% 1.4% 1.2%
July 30, 2009 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
-------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------- ------- -------
If the Stock Price is between two Stock Price amounts
on the Make Whole Premium Table or the Effective Date
is between two dates on the table, the Make Whole
Premium will be determined by straight-line
interpolation between Make Whole Premium percentages
set forth in the Make Whole Premium Table for the
higher and lower Stock Price amounts and the two
dates, as applicable, based on a 365 day year. The
Stock Prices set forth in the column headers are
subject to adjustment pursuant to Section 3.02.
For example, if the Stock Price were $60.00 and the
Effective Date were July 30, 2006, the Make Whole
Premium would be $41.00 (being 4.1% of $1,000).
(c) The Company may pay the Make Whole Premium or satisfy its obligation
to deliver Additional Shares, as the case may be, in (at the Company's
option) cash, Limited Voting Shares or a combination thereof, or in the
same form of consideration into which all or substantially all of the
Limited Voting Shares have been converted in connection with the
applicable Fundamental Change. If holders of the Limited Voting Shares
have the right to elect the form of consideration received in a
Fundamental Change, then for purposes of the foregoing the
consideration into which a Limited Voting Share has been converted
shall be deemed to equal the aggregate consideration distributed in
respect of all Limited
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Voting Shares divided by the total number of Limited Voting Shares
participating in the distribution.
(d) The value of the consideration to be delivered in respect of the Make
Whole Premium, if any, or Additional Shares, if any, will be delivered
at the time at which (i) the Designated Event Repurchase Price is to be
paid, or (ii) the Limited Voting Shares or, at the option of the
Company, cash or a combination of cash and Limited Voting Shares, are
to be delivered upon conversion of a Note, as applicable, and
calculated as follows:
(i) securities (including Limited Voting Shares) that are traded
on an United States national securities exchange or the Toronto
Stock Exchange or approved for quotation on the Nasdaq National
Market or any similar system of automated dissemination of
quotation of securities prices will be valued based on the average
Closing Sale Price on the 10 Trading Days prior to, but excluding,
the Designated Event Repurchase Date, provided that in the event
of a Fundamental Change that does not give rise to a Designated
Event Repurchase Offer, the securities will be valued based on the
average Closing Sale Price on the 10 Trading Days prior to, but
excluding, the date that is 20 Business Days following the
Effective Date (the "Calculation Date"),
(ii) other securities, assets or property (other than cash) will be
valued based on the average of the fair market value of such
securities, assets or property (other than cash) as determined by
two independent nationally recognized investment banks selected by
the Company, and
(iii) 100% of any cash.
A Calculation Agent appointed from time to time by the Company
shall, on behalf of and on request by the Company or the Trustee,
calculate (A) the Stock Price, and (B) the Make Whole Premium with
respect to such Stock Price based on the Effective Date specified
by the Company or the Trustee, and shall deliver its calculation
of the Stock Price and Make Whole Premium to the Company and the
Trustee within three Business Days of the request by the Company
or the Trustee. In addition, the Calculation Agent shall, on
behalf of and upon request by the Company or the Trustee no less
than three Business Days prior to a Designated Event Repurchase
Date or Calculation Date, as the case may be, in respect of an
Effective Date occurring on or before July 30, 2009, make the
determinations described in Section 3.01(d) above and deliver its
calculations to the Company or the Trustee by 9:00 p.m., New York
City time, on the day prior to the Designated Event Repurchase
Date or Calculation Date, as the case may be. The Company, or at
the Company's request, the Trustee in the name and at the expense
of the Company, (X) shall notify the Holders of the Stock Price,
Make Whole Premium and the estimated number of Additional Shares
(assuming the Conversion Date occurs on the Calculation Date) per
$1,000 original principal amount of Notes with respect to a
Fundamental Change as part of the Designated Event Notice or
otherwise in accordance with the notice provisions of the
Indenture and (Y) shall notify the Holders promptly upon the
opening of business on the Designated Event Repurchase Date or
Calculation Date, as the case may be, of the number of Additional
Shares (assuming the Conversion Date occurs on the Calculation
Date) (or, at the option of the Company, cash or other securities,
assets or property into which all or substantially all of the
Limited Voting Shares have been converted as of the Effective Date
as described above) to be delivered in respect of the Make Whole
Premium, if any, in connection with such Fundamental Change, and
the Company shall also publicly announce such information and
publish it on the Company's web site.
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(e) On or prior to the Designated Event Repurchase Date or the Calculation Date,
as the case may be, the Company will deposit with the Trustee or with one or
more Paying Agents (or, if the Company is acting as its own paying agent,
set aside, segregate and hold in trust as provided in Section 10.03 of the
Original Indenture) an amount sufficient to satisfy the entitlement of the
Holders of Notes under Section 3.01(a) (which, at the option of the Company
may be in the form the Company otherwise is entitled to deliver in respect
of Notes that are tendered to a Designated Event Purchase Offer or that are
converted; provided that if such payment is made on the Designated Event
Repurchase Date or Calculation Date, as the case may be, it must be received
by the Trustee or Paying Agent, as the case may be, by 10:00 a.m., New York
City time, on such date. Payment of the entitlement pursuant to Section
3.01(a) of Holders of Notes surrendered for repurchase (and not withdrawn)
prior to the Designated Event Repurchase Date or surrendered for conversion
within the period described in Section 4.01(c), will be made promptly (but
in no event more than five Business Days) following the Designated Event
Repurchase Date or Calculation Date, as the case may be, by mailing checks
in respect of cash and otherwise delivering entitlements to securities,
other assets or property for the amount payable to the Holders of such Notes
entitled thereto as they (and their addresses) shall appear in the Security
Register. To the extent that the aggregate amount of cash or Limited Voting
Shares deposited by the Company pursuant to this Section exceeds the
aggregate entitlement of the Holders of Notes under 3.01(a) that are
tendered to the Designated Event Purchase Offer to a Make Whole Premium or
that are converted in respect of the Fundamental Change and are entitled to
receive Additional Shares (or, at the option of the Company, cash or a
combination or cash and Limited Voting Shares), then, promptly after the
Designated Event Repurchase Date or Calculation Date, as the case may be,
the Paying Agent shall return any such excess to the Company.
3.02 ADJUSTMENTS RELATING TO MAKE WHOLE PREMIUM.
Whenever the Conversion Rate shall be adjusted from time to time by the
Company pursuant to Section 4.04, the Stock Price Threshold and the Stock Price
Cap shall be adjusted and each of the Stock Prices set forth in the Make Whole
Premium Table will be adjusted by multiplying each such amount by a fraction the
numerator of which is the Conversion Rate immediately prior to such adjustment
and the denominator of which is the Conversation Rate as so adjusted.
ARTICLE FOUR
CONVERSION
4.01 CONVERSION PRIVILEGE.
Subject to and upon compliance with the provisions of this Article
Four, a Holder of a Note shall have the right, at such Holder's option, to
convert all or any portion (if the portion to be converted is $1,000 or an
integral multiple of $1,000) of such Note into Limited Voting Shares at the
Conversion Rate in effect on the date of conversion only as follows:
(a) during any fiscal quarter (beginning with the fiscal quarter ending
September 30, 2004) if the Closing Sale Price of the Limited Voting Shares
for at least 20 consecutive Trading Days in the Measurement Period of the
immediately preceding fiscal quarter exceeds 130% of the Conversion Price
in effect on the last Trading Day of such Measurement Period;
(b) during the five consecutive Trading Day period immediately following any
10 consecutive Trading Day period in which the Trading Price per $1,000
principal amount of Notes for each day of such 10 consecutive Trading Day
period was (or was deemed to
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be) less than 95% of the Conversion Value of the Notes (the condition
specified in this clause (b) being the "95% Trading Condition");
(c) at any time prior to 5:00 p.m., New York City time, on the
second Business Day immediately preceding the Redemption Date, if such Note
has been called for redemption pursuant to Article Five hereof, even if the
Notes are not otherwise convertible at that time; provided the Holder has
not delivered a Designated Event Acceptance Notice in respect of a Note to
be converted, in which event such Designated Event Acceptance Notice must
be duly withdrawn in accordance with this First Supplemental Indenture;
(d) if (1) the Company issues to all holders of Limited Voting Shares, rights
or warrants entitling them to purchase Limited Voting Shares, for a period
expiring within 45 days of the record date for such issuance at an exercise
price per share that is less than the average of the Closing Sale Price of
Limited Voting Shares for the 10 consecutive Trading Days immediately
preceding, but not including, the record date for such issuance, or (2) the
Company makes a distribution, to all holders of Limited Voting Shares,
shares of Capital Stock, evidences of indebtedness, assets, or rights to
purchase its securities, which distribution has a per share value exceeding
10% of the Closing Sale Price of the Limited Voting Shares on the Trading
Day preceding the declaration date for the distribution. The Company or, at
the Company's request, the Trustee in the name and at the expense of the
Company, shall notify the Holders in writing at least 20 days before the
"ex" date for that issue or distribution. On and after the date that the
Company gives such notice, until the earlier of the close of business on
the Business Day immediately preceding the "ex" date or the date the
Company publicly announces that such distribution will not take place, the
Notes may be converted. Notwithstanding the provisions of this Section
4.01(d), Notes may not be converted pursuant to this Section 4.01(d) nor
will any adjustment to the Conversion Rate be made pursuant to the
transactions described in this Section 4.01(d) if the Holder, without
conversion of the Note, would participate, on the same basis as a holder of
Limited Voting Shares, in the distribution as if such Holder had converted
its Notes into Limited Voting Shares prior to the record date for such
distribution. If the issue or distribution does not take place, no Notes
surrendered for conversion will be converted; or
(e) during the period from and after the date that is 10 days before the
anticipated Effective Date of a Fundamental Change until and including the
close of business on the day that is the later of (i) 10 days after the
actual Effective Date; and (ii) the related Designated Event Repurchase
Date; unless, prior to that time, the Company has publicly announced that
the Fundamental Change giving rise to the conversion right will not take
place. If such Fundamental Change does not take place, no Notes surrendered
for conversion will be converted. Upon conversion pursuant to this Section
4.01(e), the Holder shall also be entitled to receive Additional Shares, if
any, as set forth in Section 3.01.
In connection with any conversion pursuant to clause (b), the Bid
Solicitation Agent shall have no obligation to determine the Trading Price of
the Notes unless the Company has requested such determination; and the Company
shall have no obligation to make such request unless a Holder of Notes has
provided it with reasonable evidence that the Trading Price per $1,000 principal
amount of the Notes would be less than 95% of the Conversion Value. At such
time, the Company shall instruct the Bid Solicitation Agent to determine the
Trading Price of the Notes beginning on the next Trading Day and on each
successive Trading Day until the Trading Price per $1,000 principal amount of
the Notes is greater than or equal to 95% of the Conversion Value.
In connection with any conversion pursuant to clause (e), the Company
or, at the Company's request, the Trustee in the name and at the expense of the
Company, shall notify the Trustee and the
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Holders in writing at least 10 Trading Days before the anticipated Effective
Date, as determined by the Board of Directors, of a Fundamental Change. Such
notice shall specify the anticipated Effective Date with respect to such
Fundamental Change, the conversion right at the option of the Holders arising as
a result thereof and whether Additional Shares will be issued in connection with
any such conversion. The Company shall also notify the Holders and the Trustee
in writing that an Effective Date has taken place within the five Trading Day
period after the Effective Date.
Whenever the Notes shall become convertible pursuant to Section 4.01,
the Company or, at the Company's request, the Trustee in the name and at the
expense of the Company, shall notify the Holders in writing of the event
triggering such convertibility, and the Company shall also publicly announce
such information and publish it on the Company's website.
4.02 CONVERSION PROCEDURE; CONVERSION RATE; FRACTIONAL SHARES.
(a) Each Note shall be convertible at the office of the Conversion Agent into
fully paid and non-assessable Limited Voting Shares (calculated to the
nearest 1/100th of a share). The Company may, at its option, satisfy its
obligation to issue Limited Voting Shares on conversion of a Note
(including Additional Shares to be delivered pursuant to Article Three) by
delivering cash or Limited Voting Shares or a combination of cash and
Limited Voting Shares. Subject to Section 4.02(e), the Note will be
converted into Limited Voting Shares or, at the option of the Company, cash
or a combination of cash and Limited Voting Shares at the Conversion Rate.
The Company will give notice of its election to deliver cash in lieu of
part or all of the Conversion Amount to the Holder converting Notes within
two Business Days of its receipt of the Holder's Conversion Notice, unless
the Company has already informed Holders of its election in connection with
a redemption of Notes pursuant to Article Five. If the Company elects to
exercise its option to deliver cash in lieu of part or all of the
Conversion Amount, the amount of cash to be delivered on conversion by a
Holder in lieu of each Limited Voting Share will be equal to the average of
the Closing Sale Prices of the Limited Voting Shares for the 10 Trading
Days commencing (i) one day after the date of the Company's notice of
election to deliver part or all of the Conversion Amount in cash if the
Company has not given a notice of redemption pursuant to Article Five, or
(ii) on the Conversion Date in the case of a conversion following notice of
redemption specifying the Company's intention to deliver cash upon
conversion . If the Company elects to pay all or a portion of the
Conversion Amount in cash, the payment, including the delivery of any
Limited Voting Shares, will be made no later than the tenth Business Day
following the Conversion Date (except in the case of Additional Shares,
which will be delivered on the Calculation Date). If the Company does not
so elect, the Limited Voting Shares, together with any cash payment for
fractional shares (except in the case of Additional Shares, which will be
delivered on the Calculation Date), will be delivered no later than the
fifth Business Day following the Conversion Date.
No payment or adjustment shall be made in respect of dividends on the
Limited Voting Shares or accrued interest, if any, on a converted Note,
except as described in Sections 3.01(a) and 4.10.
The Company shall not issue any fraction of a Limited Voting Share in
connection with any conversion of Notes, but instead shall make a cash
payment (calculated to the nearest cent) equal to such fraction multiplied
by the Closing Sale Price of the Limited Voting Shares on the last Trading
Day prior to the Conversion Date. For the purposes of determining the
existence of potential fractional interest, all Notes subject to conversion
by the Company held by a Holder shall be considered together (no matter how
many separate certificates are to be presented).
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Notwithstanding the foregoing, a Note in respect of which a Holder has
delivered a Repurchase Notice or Designated Event Acceptance Notice may be
converted only if such notice of exercise is withdrawn in accordance with
Sections 6.03 or 7.03 hereof, as the case may be, prior to the close of
business on the Business Day immediately preceding the applicable
Repurchase Date or Designated Event Repurchase Date, as the case may be.
(b) Before any Holder of a Note shall be entitled to convert the same into
Limited Voting Shares, such Holder shall, in the case of Notes issued in
global form, comply with the procedures of the Depositary in effect at that
time, and in the case of Certificated Securities, surrender such Notes,
duly endorsed to the Company or in blank, at the office of the Conversion
Agent, and shall give written notice to the Company at said office or place
in the form of the Conversion Notice attached to the Note (the "Conversion
Notice") that such Holder elects to convert the same and shall state in
writing therein the principal amount of Notes to be converted and the name
or names (with addresses) in which such Holder wishes the certificate or
certificates for Limited Voting Shares to be issued.
Before any such conversion, a Holder also shall pay all funds required, if
any, relating to interest on the Notes, as provided in Section 4.10, and
all taxes or duties, if any, as provided in Section 4.09.
If more than one Note shall be surrendered for conversion at one time by
the same Holder, the number of whole Limited Voting Shares that are
deliverable upon conversion shall be computed on the basis of the aggregate
principal amount of the Notes (or specified portions thereof to the extent
permitted thereby) so surrendered. Subject to the next succeeding sentence,
the Company will, no later than the fifth Business Day after receipt of a
Conversion Notice, issue and deliver at said office or place to such Holder
of a Note, or to such Holder's nominee or nominees, certificates (other
than in the case of Holders of Notes in book-entry form with the
Depositary, which shares shall be delivered in accordance with the
Depositary customary practices) for the number of whole Limited Voting
Shares to which such Holder shall be entitled as aforesaid, together with
cash in lieu of any fraction of a share to which such Holder would
otherwise be entitled. The Company shall not be required to deliver
certificates for Limited Voting Shares while the stock transfer books for
such stock or the Security Register are duly closed for any purpose, but
certificates for Limited Voting Shares shall be issued and delivered as
soon as practicable after the opening of such books or Security Register.
(c) A Note shall be deemed to have been converted as of the close of
business on the date of the surrender of such Note for conversion as
provided above, and the person or persons entitled to receive the Limited
Voting Shares issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such Limited Voting Shares as
of the close of business on such date. Upon delivery to the Holder of the
full number of Limited Voting Shares (including any Additional Shares) into
which the Note is convertible or cash in lieu of any such Limited Voting
Shares, together with any cash payment for fractional shares, the Company
will be deemed to have satisfied its obligation to pay (i) the principal
amount of the Note, (ii) any entitlement to Additional Shares, and (iii)
accrued but unpaid interest, if any, attributable to the period from the
most recent Interest Payment Date to the Conversion Date.
(d) In case any certificated Note shall be surrendered for partial
conversion, the Company shall execute and the Trustee shall, upon the
written order of the Company, authenticate and deliver to the Holder of the
Note so surrendered, without charge to such Holder
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(subject to the provisions of Section 4.09 hereof), a new Note or Notes in
authorized denominations in an aggregate principal amount equal to the
unconverted portion of the surrendered Certificated Securities.
(e) Notwithstanding the foregoing, if on the Conversion Date of the conversion
of a Note pursuant to the 95% Market Condition (such date, the "95%
Conversion Date") the Closing Sale Price of the Limited Voting Shares is
greater than the Conversion Price, the Company will deliver to the Holder
surrendering the Note for conversion in lieu of the number of Limited
Voting Shares (or cash or a combination of cash and Limited Voting Shares)
based on the Conversion Price then in effect, that number of Limited Voting
Shares or, at the Company's option, cash or a combination of cash and
Limited Voting Shares, with a value equal to the aggregate of the principal
amount of the Note so surrendered for conversion plus accrued and unpaid
interest up to, but not including, the Conversion Date (such conversion, a
"Principal Value Conversion"). Any Limited Voting Shares to be delivered to
the Holder by the Company upon a Principal Value Conversion shall be valued
at the Closing Sale Price of the Limited Voting Shares on the 95%
Conversion Date. The Company shall notify the Trustee and any surrendering
Holder of Notes the conversion of which is a Principal Value Conversion of
such Principal Value Conversion by the second Trading Day following the 95%
Conversion Date and, in such notice, shall state whether the Company has
determined, at its option, to deliver Limited Voting Shares or cash or a
combination of cash and Limited Voting Shares in connection with such
conversion and, if a combination, the percentages of the principal amount
in respect of which it will pay in cash or Limited Voting Shares.
(f) To the extent the Company has a rights plan in effect at the time of
conversion of Notes into Limited Voting Shares, the Holder converting such
Notes shall be entitled to receive, in addition to the Limited Voting
Shares, the rights under the rights plan associated with any Limited Voting
Shares received upon that conversion unless, before any conversion, the
rights have expired, terminated or been redeemed or unless the rights have
been separated from the Limited Voting Shares, in which case the Conversion
Rate will be adjusted as provided in Section 4.04(d)(iv), subject to
readjustment in the event of expiration, termination or redemption of such
rights. Certificates issued in respect of any such Limited Voting Shares
shall bear any legends contemplated by the rights plan.
4.03 CONVERSION RATE.
Each $1,000 original principal amount of Notes shall be convertible
into 13.9581 Limited Voting Shares (the "Conversion Rate"), subject to
adjustment as set forth herein (rounded to four decimal places and rounded up if
the fifth decimal place thereof is five or more and otherwise rounded down).
4.04 ADJUSTMENT OF CONVERSION RATE FOR LIMITED VOTING SHARES.
The Conversion Rate shall be adjusted from time to time as follows:
(a) In case the Company shall, at any time or from time to time while
any of the Notes are outstanding, issue Limited Voting Shares as a
dividend or distribution to all holders of its outstanding Limited
Voting Shares, then the Conversion Rate in effect at the opening
of business on the date next following the Record Date fixed for
the determination of stockholders entitled to receive such
dividend or other distribution shall be adjusted so that same
shall equal the rate determined by multiplying such Conversion
Rate by a fraction:
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(i) the numerator of which shall be the sum of such number of Limited
Voting Shares outstanding at the close of business on such Record
Date and the total number of Limited Voting Shares constituting
such dividend or other distribution; and
(ii) the denominator of which shall be the number of Limited Voting
Shares outstanding at the close of business on such Record Date
fixed for such determination.
Such an adjustment shall be successively made whenever Limited Voting
Shares are issued on a dividend or distribution to all holders of
outstanding Limited Voting Shares, and each such adjustment shall
become effective immediately after the opening of business on the
day following the Record Date fixed for such determination.
If any dividend or distribution of the type described in this Section
4.04(a) is declared but not so paid or made, the Conversion Rate shall
again be adjusted to the Conversion Rate which would then be in effect
if such dividend or distribution had not been declared.
(b) In case the Company shall, at any time or from time to time while
any of the Notes are outstanding, issue rights or warrants exercisable
for a period expiring within 45 days after the record date for such
issuance, to all holders of its outstanding Limited Voting Shares
entitling them to subscribe for or purchase Limited Voting Shares (or
securities convertible into or exchangeable or exercisable for Limited
Voting Shares), at a price per share (or having a conversion, exchange
or exercise price per share) less than the Closing Sale Price of the
Limited Voting Shares on the Trading Day immediately preceding the date
of the announcement of such issuance (treating the conversion, exchange
or exercise price per share of the securities convertible into or
exchangeable or exercisable for Limited Voting Shares as equal to the
quotient of (x) the sum of (i) the price for a unit of the security
convertible into or exchangeable or exercisable for Limited Voting
Shares and (ii) any additional consideration initially payable upon the
conversion, exchange or exercise of such security into Limited Voting
Shares divided by (y) the number of shares of Limited Voting Shares
initially underlying such convertible, exchangeable or exercisable
security), then the Conversion Rate shall be adjusted so that the same
shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the date fixed for determination of
stockholders entitled to receive such rights or warrants by a fraction:
(i) the numerator of which shall be the number of Limited
Voting Shares outstanding at the close of business on the date
fixed for determination of stockholders entitled to receive such
rights or warrants, plus the total number of additional Limited
Voting Shares so offered for subscription or purchase (or into
which the convertible, exchangeable or exercisable securities so
offered are convertible, exchangeable or exercisable); and
(ii) the denominator of which shall be the number of Limited
Voting Shares outstanding on the close of business on the date
fixed for determination of stockholders entitled to receive such
rights or warrants, plus the number of Limited Voting Shares (or
convertible, exchangeable or exercisable securities) which the
aggregate offering price of the total number of Limited Voting
Shares (or convertible, exchangeable or exercisable securities) so
offered for subscription or purchase (or the aggregate conversion,
exchange or exercise price of the convertible securities so
offered) would purchase at the Closing Sale Price of the Limited
Voting Shares on the Business Day immediately preceding the
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date fixed for determination of stockholders entitled to receive
such rights or warrants (determined by multiplying such total
number of shares so offered by the exercise price of such rights
or warrants and dividing the product so obtained by such Closing
Sale Price).
Such adjustment shall be successively made whenever such rights or
warrants are issued to all holders of outstanding Limited Voting
Shares and such adjustment shall become effective immediately
after the opening of business on the day following the record date
of such issuance.
To the extent that Limited Voting Shares (or securities
convertible into or exchangeable or exercisable for Limited Voting
Shares) are not delivered pursuant to such rights or warrants,
upon the expiration or termination of such rights or warrants, the
Conversion Rate shall be readjusted to the Conversion Rate which
would then be in effect had the adjustments made upon the issuance
of such rights or warrants been made on the basis of the delivery
of only the number of Limited Voting Shares (or securities
convertible into or exchangeable or exercisable for Limited Voting
Shares) actually delivered. In the event that such rights or
warrants are not so issued, the Conversion Rate shall again be
adjusted to be the Conversion Rate which would then be in effect
if the date fixed for the determination of stockholders entitled
to receive such rights or warrants had not been fixed. In
determining whether any rights or warrants entitle the holders to
subscribe for or purchase Limited Voting Shares at less than such
Closing Sale Price, and in determining the aggregate offering
price of such Limited Voting Shares, there shall be taken into
account any consideration received for such rights or warrants and
the value of such consideration if other than cash, to be
determined in good faith by the Board of Directors.
(c) In case the Company shall, at any time or from time to time while
any of the Notes are outstanding, subdivide its outstanding Limited
Voting Shares into a greater number of Limited Voting Shares, then the
Conversion Rate in effect at the opening of business on the day
following the day upon which such subdivision becomes effective shall
be proportionately increased, and conversely, in case the Company
shall, at any time or from time to time while any of the Notes are
outstanding, combine its outstanding Limited Voting Shares into a
smaller number of Limited Voting Shares, then the Conversion Rate in
effect at the opening of business on the day following the day upon
which such combination becomes effective shall be proportionately
decreased. Such increase or decrease, as the case may be, shall become
effective immediately after the opening of business on the day
following the day upon which such subdivision or combination becomes
effective.
(d) (i) In case the Company shall, at any time or from time to time while
any of the Notes are outstanding, by dividend or otherwise, distribute
to all holders of its Limited Voting Shares (including any such
distribution made in connection with a consolidation or merger in which
the Company is the continuing corporation and the Limited Voting Shares
are not changed or exchanged), shares of its Capital Stock, evidences
of its Indebtedness or other assets, including securities, but
excluding in all cases (x) any rights or warrants referred to in
Section 4.04(b), (y) dividends or distributions referred to in Section
4.04(a) and (z) dividends and distributions paid exclusively in cash
(such capital stock, evidence of its indebtedness, other assets or
securities (excluding those referred to in (x), (y) and (z)) being
distributed hereinafter in this Section 4.04(d) called the "Distributed
Assets"), then, in each such case, subject to the other provisions of
this Section 4.04(d), the Conversion Rate shall be increased so that
the same shall be equal to
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the rate determined by multiplying the Conversion Rate in effect at the
opening of business on the Record Date with respect to such
distribution by a fraction:
(A) the numerator of which shall be the Current Market Price on such
Record Date; and
(B) the denominator of which shall be the Current Market Price on such
Record Date, less the Fair Market Value on such date of the
portion of the Distributed Assets so distributed applicable to one
Limited Voting Share (determined on the basis of the number of
Limited Voting Shares outstanding on the Record Date) (determined
as provided in Section 4.04(g)).
Such adjustment shall become effective immediately prior to the opening
of business on the day following the Record Date for such distribution;
provided that if the then Fair Market Value (as so determined) of the
portion of the Distributed Assets so distributed applicable to one
Limited Voting Share is equal to or greater than the Current Market
Price of one Limited Voting Share on the Record Date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each
Holder shall be entitled to receive upon conversion the amount of
Distributed Assets such Holder would have received if such Holder had
converted such Note on the Record Date. In the event that such dividend
or distribution is not so paid or made, the Conversion Rate shall again
be adjusted to be the Conversion Rate which would then be in effect if
such dividend or distribution had not been declared.
(ii) If the Board of Directors determines the Fair Market Value
of any distribution for purposes of this Section 4.04(d) by
reference to the actual or when issued trading market for any
Distributed Assets comprising all or part of such distribution, it
must in doing so consider the prices in such market over the same
period (the "Reference Period") used in computing the Current
Market Price pursuant to Section 4.04(g) to the extent possible,
unless the Board of Directors determines in good faith that
determining the Fair Market Value during the Reference Period
would not be in the best interest of the Holders.
(iii)Notwithstanding the foregoing, if the Distributed Assets
distributed by the Company to all holders of Limited Voting Shares
consist of Capital Stock of, or similar equity interests in, a
Subsidiary or other business unit of the Company, then the
Conversion Rate shall be adjusted so that the same shall be equal
to the rate determined by dividing the Conversion Rate in effect
immediately prior to the close of business on the date fixed for
the determination of holders of Limited Voting Shares entitled to
receive such distribution by a fraction of which (A) the numerator
shall be the Spin-Off Market Price per share of the Limited Voting
Shares on the date fixed for such determination less the Spin-Off
Market Price per share or similar equity interest of the
Subsidiary or other business unit of the Company on such date, and
(B) the denominator shall be the Spin-Off Market Price per share
of the Limited Voting Shares on the date fixed for the
determination of holders of Limited Voting Shares entitled to
receive such distribution. Such adjustment shall become effective
10 Trading Days after the effective date of such distribution of
Capital Stock of, or similar equity interest in, a Subsidiary or
other business unit of the Company. In any case in which this
Section 4.04(d) is applicable, Sections 4.04(a), (b) and (e) shall
not be applicable. If such dividend or distribution is not so paid
or made, the Conversion Rate shall
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again be adjusted to be the Conversion Rate that would then be in
effect if such dividend or distribution had not been declared.
"Spin-Off Market Price" per Limited Voting Share or the Capital
Stock of, or similar equity interests in, a Subsidiary or other
business unit of the Company on any day means the average of the
daily Closing Sale Price for that Capital Stock or interest for
the 10 consecutive Trading Days commencing on and including the
fifth Trading Day after the "ex" date with respect to the issuance
or distribution requiring such computation.
(iv) Rights or warrants distributed by the Company to all holders of
its Limited Voting Shares entitling them to subscribe for or
purchase shares of the Company's Capital Stock (either initially
or under certain circumstances), which rights or warrants, until
the occurrence of a specified event or events ("Trigger Event"),
(x) are deemed to be transferred with such Limited Voting Shares,
(y) are not exercisable and (z) are also issued in respect of
future issuances of Limited Voting Shares, shall be deemed not to
have been distributed for purposes of this Section 4.04(d) (and no
adjustment to the Conversion Rate under this Section 4.04(d) will
be required) until the occurrence of the earliest Trigger Event.
If any such right or warrant is subject to subsequent events, upon
the occurrence of which such right or warrant shall become
exercisable to purchase different shares of the Capital Stock of
the Company, evidences of its indebtedness or other assets, or
entitle the holder to purchase a different number or amount of the
foregoing or to purchase any of the foregoing at a different
purchase price, then the occurrence of each such event shall be
deemed to be the date of issuance and record date with respect to
a new right or warrant (and a termination or expiration of the
existing right or warrant without exercise by the holder thereof).
Pursuant to rights issued under any Company shareholder rights
plan, if Holders of the Notes exercising the right of conversion
after the date the rights separate from the underlying Limited
Voting Shares are not entitled to receive the rights that would
otherwise be attributable to the Limited Voting Shares received
upon conversion, the Conversion Rate will be adjusted as though
the rights were being distributed to holders of Limited Voting
Shares on the date of such separation. If such an adjustment is
made and the rights are later redeemed, invalidated or terminated,
then a corresponding reversing adjustment will be made to the
Conversion Rate on an equitable basis.
In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other
event (of the type described in the preceding sentence) with
respect thereto, that resulted in an adjustment to the Conversion
Rate under this Section 4.04(d):
(A) in the case of any such rights or warrants that have been
redeemed or repurchased without exercise from all holders of
Limited Voting Shares then holding such rights or warrants,
the Conversion Rate shall be readjusted upon such redemption
or repurchase to give effect to such distribution or Trigger
Event, as the case may be, as though it were a cash
distribution, equal to the per share redemption or repurchase
price received by a holder of Limited Voting Shares with
respect to such rights or warrants (assuming such holder had
retained such rights or warrants), made to all holders of
Limited Voting Shares as of the date of such redemption or
repurchase; and
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(B) in the case of such rights or warrants which shall have
expired or been terminated without exercise, the Conversion
Rate shall be readjusted as if such rights and warrants had
never been issued.
(v) For purposes of this Section 4.04(d) and Sections 4.04(a), 4.04(b)
and 4.04(c), any dividend or distribution to which this Section
4.04(d) is applicable that also includes (x) Limited Voting Shares
to which Section 4.04(a) applies, (y) a subdivision or combination
of Limited Voting Shares to which Section 4.04(c) applies or (z)
rights or warrants to subscribe for or purchase Limited Voting
Shares or securities convertible into or exercisable or
exchangeable for Limited Voting Shares to which Section 4.04(b)
applies (or any combination thereof), shall be deemed instead to
be:
(A) a dividend or distribution of the evidences of indebtedness,
assets, shares of Capital Stock, rights or warrants, other
than such Limited Voting Shares, such subdivision or
combination or such rights or warrants or securities
convertible into or exercisable or exchangeable for Limited
Voting Shares to which Sections 4.04(a), 4.04(b) and 4.04(c)
apply, respectively (and any Conversion Rate increase required
by this Section 4.04(d) with respect to such dividend or
distribution shall then be made), immediately followed by
(B) a dividend or distribution of such Limited Voting Shares, such
subdivision or combination or such rights or warrants or
securities convertible into or exercisable or exchangeable for
Limited Voting Shares (and any further Conversion Rate
increase required by Sections 4.04(a), 4.04(b) and 4.04(c)
with respect to such dividend or distribution shall then be
made), except:
(1) the Record Date of such dividend or distribution
shall be substituted as (x) "the date fixed for the
determination of stockholders entitled to receive such
dividend or other distribution," "Record Date fixed for
such determinations" and "Record Date" within the meaning
of Section 4.04(a), (y) "the day upon which such
subdivision becomes effective" and "the day upon which
such combination becomes effective" within the meaning of
Section 4.04(c), and (z) as "the date fixed for the
determination of stockholders entitled to receive such
rights or warrants," "the Record Date fixed for the
determination of the stockholders entitled to receive such
rights or warrants" and such "Record Date" within the
meaning of Section 4.04(b); and
(2) any Limited Voting Shares included in such dividend or
distribution shall not be deemed "outstanding at the close
of business on the date fixed for such determination"
within the meaning of Section 4.04(a) and any reduction or
increase in the number of Limited Voting Shares resulting
from such subdivision or combination shall be disregarded
in connection with such dividend or distribution.
(e) In case the Company shall, at any time or from time to time while any of the
Notes are outstanding, distribute to all holders of its Limited Voting
Shares, a dividend or distribution paid exclusively in cash, in an aggregate
amount that, together with any other
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such dividends or distributions to all holders of Limited Voting Shares paid
exclusively in cash within the 12 months preceding the date of payment of
such distribution exceeds Cdn. $0.11 per Limited Voting Share (the "Dividend
Threshold Amount") (the Dividend Threshold Amount is subject to adjustment
whenever an adjustment is made to the Conversion Rate pursuant to clause
4.04(a) or (c) above, which adjustment shall be the inverse of the
adjustment made to the Conversion Rate pursuant to such clause), then, and
in each case, immediately after the close of business on the Record Date
fixed for the determination of stockholders entitled to receive such
dividend or distribution, the Conversion Rate shall be adjusted so that it
shall equal the rate determined by multiplying the Conversion Rate in effect
immediately prior to the close of business of such Record Date by a
fraction:
(A) the numerator of which shall be equal to the Current Market Price
on such Record Date minus the Dividend Threshold Amount; and
(B) the denominator of which shall be equal to the Current Market
Price on the Record Date, minus the amount of cash so distributed
in excess of the Dividend Threshold Amount applicable to one
Limited Voting Share;
such adjustment to be effective immediately prior to the opening of
business on the day following the Record Date; provided, that if the
portion of the cash so distributed in excess of the Dividend Threshold
Amount applicable to one Limited Voting Share is equal to or greater
than the Current Market Price of one Limited Voting Share on the Record
Date, in lieu of the foregoing adjustment, a Holder shall be entitled
to receive on conversion the cash that the Holder would have received
if the Holder had converted its Notes immediately prior to the Record
Date. In the event such dividend or distribution is not paid or made,
the Conversion Rate shall again be adjusted to the Conversion Rate
which would then be in effect if such dividend or distribution had not
been declared.
(f) In the event an issuer bid, tender or exchange offer made by the
Company or any Subsidiary for all or any portion of the Limited Voting
Shares shall expire and such issuer bid, tender or exchange offer (as
amended upon the expiration thereof) shall require the payment by the
Company or any Subsidiary of consideration per Limited Voting Share having a
Fair Market Value that as of the last time (the "Expiration Time") tenders
or exchanges may be made pursuant to such issuer bid, tender, or exchange
offer (as it may be amended) exceeds the Closing Sale Price on the Trading
Day next succeeding the Expiration Time, the Conversion Rate shall be
adjusted so that it shall equal the rate determined by multiplying the
Conversion Rate in effect immediately prior to the Expiration Time by a
fraction,
(i) the numerator of which shall be the sum of (x) the Fair
Market Value of the aggregate consideration payable to
shareholders based on the acceptance (up to any maximum specified
in the terms of the issuer bid, tender or exchange offer) of all
Limited Voting 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 Limited Voting
Shares outstanding (less any Purchased Shares) at the Expiration
Time and the Closing Sale Price on the Trading Day next succeeding
the Expiration Time, and
(ii) the denominator of which shall be the number of Limited Voting
Shares outstanding (including any tendered or exchanged shares) at
the Expiration Time
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multiplied by the Closing Sale Price on the Trading Day next
succeeding the Expiration Time,
such adjustment to become effective immediately prior to the opening of
business on the day following the Expiration Time. If the Company is
obligated to purchase shares pursuant to any such issuer bid, tender or
exchange offer, but the Company is permanently prevented by applicable
law from effecting any such purchases or all such purchases are
rescinded, or if the purchase or exchange of Purchased Shares is
otherwise not consummated, the Conversion Rate shall again be adjusted
to be the Conversion Rate that would then be in effect if such issuer
bid, tender or exchange offer had not been made.
(g) For purposes of this Article Four, the following terms shall have the
meanings indicated:
"Current Market Price" shall mean the average of the daily Closing Sale
Prices per Limited Voting Share for the 10 consecutive Trading Days
ending on the earlier of the date of determination and the day before
the "ex" date with respect to the dividend or distribution requiring
computation. The, "ex" date is the first date on which the Limited
Voting Shares trade regular way, without the right to receive such
issuance or distribution, on the national securities exchange or Nasdaq
National Market System or non-United States market that is being used
to determine the Closing Sale Price. Notwithstanding the foregoing,
whenever successive adjustments to the Conversion Rate are called for
pursuant to this Section 4.04, such adjustments shall be made to the
Current Market Price as may be necessary or appropriate to effectuate
the intent of this Section 4.04 and to avoid unjust or inequitable
results as determined in good faith by the Board of Directors.
"Fair Market Value" shall mean the amount which a willing buyer would
pay a willing seller in an arm's length transaction (as determined in
good faith by the Board of Directors, whose good faith determination
shall be conclusive and described in a resolution of the Board of
Directors).
"Record Date" shall mean, with respect to any dividend, distribution or
other transaction or event in which the holders of Limited Voting
Shares (or other applicable security) have the right to receive any
cash, securities or other property or in which the Limited Voting
Shares (or other applicable security) is exchanged for or converted
into any combination of cash, securities or other property, the date
fixed for determination of stockholders entitled to receive such cash,
securities or other property (whether such date is fixed by the Board
of Directors or by statute, contract or otherwise).
(h) The Company shall be entitled at its election to make such additional
increases in the Conversion Rate, in addition to those required by Sections
4.04(a), (b), (c), (d) and (e), as the Board of Directors determines
advisable to avoid or diminish any tax to holders of Limited Voting Shares
in connection with a dividend, distribution, any subdivision,
reclassification or combination of Limited Voting Shares or any issuance of
rights or warrants or similar event.
(i) To the extent permitted by applicable law, the Company may, from time to
time, increase the Conversion Rate by any amount for any period of time, if
the Board of Directors determines that the increase in the Conversion Rate
is in the best interest of the Company. Whenever the Conversion Rate is
increased pursuant to the preceding sentence, the Company shall notify the
Trustee and each Holder in writing of the increase stating the increased
Conversion Rate and the period during which it will be in effect.
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(j) In any case in which this Section 4.04 shall require that any
adjustment be made effective as of or retroactively immediately following
(1) a Record Date, (2) the date fixed for the determination of the holders
entitled to receive a dividend or distribution pursuant to Section 4.04(a),
(3) a date fixed for the determination of shareholders entitled to receive
rights or warrants pursuant to Section 4.04(b), or (4) the Expiration Time
for any issuer bid, tender or exchange offer pursuant to Section 4.04(f)
(each a "Determination Date"), the Company may elect to defer until the
applicable Adjustment Event (as hereinafter defined) issuing to the Holder
of any Notes converted after such Determination Date the Limited Voting
Shares issuable upon such conversion over and above the Limited Voting
Shares issuable upon such conversion on the basis of the Conversion Rate
prior to adjustment (and each in lieu of any fractional Limited Voting
Shares).
"Adjustment Event" shall mean in any case referred to in clause (1), above,
the occurrence of that event, provided that in the case of an adjustment
made with respect to a distribution of capital stock of, or a similar equity
interest in, a Subsidiary or other business unit of the Company, the
Adjustment Event shall be deemed to have occurred on the Business Day next
following the 10 Trading Day period referred to in Section 4.04(g); in any
case referred to in clause (2), above, the date any such dividend or
distribution is paid or made; in any case referred to in clause (3), above,
the date of expiration of such rights or warrants; and in any case referred
to in clause (4), above, the date the sale or exchange of Limited Voting
Shares pursuant to such issuer bid, tender or exchange offer is consummated
and becomes irrevocable.
(k) All calculations under this Section 4.04 shall be made to the nearest
cent or one ten-thousandth of a share, with one-half cent and 0.00005 of a
share, respectively, being rounded upward. Notwithstanding any other
provision of this Section 4.04, the Company shall not be required to make
any adjustment of the Conversion Rate unless such adjustment would require
an increase or decrease of at least 1% of such rate. Any lesser adjustment
shall be carried forward and shall be made at the time of and together with
the next subsequent adjustment which, together with any adjustment or
adjustments so carried forward, shall amount to an increase or decrease of
at least 1% in such rate. Any adjustments under this Section 4.04 shall be
made successively whenever an event requiring such an adjustment occurs.
(l) In the event that at any time, as a result of an adjustment made
pursuant to this Section 4.04, the Holder of any Notes thereafter
surrendered for conversion shall become entitled to receive any shares of
the Company other than Limited Voting Shares into which the Notes originally
were convertible, the Conversion Rate of such other shares so receivable
upon conversion of any such Note 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 Limited Voting Shares contained in subparagraphs
(a) through (k) of this Section 4.04, and the provision of Sections 4.01,
4.02 and 4.05 through 4.10 with respect to the Limited Voting Shares shall
apply on like or similar terms to any such other shares as determined in
good faith by the Board of Directors.
(m) No adjustment shall be made pursuant to this Section 4.04 if the Holders of
the Notes may participate in the transaction that would otherwise give rise
to an adjustment pursuant to this Section 4.04.
4.05 CONSOLIDATION OR MERGER OF THE COMPANY.
If any of the following events occurs, namely:
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(a) any reclassification or change of the outstanding Limited
Voting Shares into another class of stock (other than as a result
of a subdivision or combination); or
(b) any consolidation, amalgamation, statutory arrangement,
merger, binding share exchange or similar transaction of the
Company or if the Company transfers all or substantially all of its
consolidated property and assets (as determined under applicable
law) as a result of which the holders of all the Limited Voting
Shares receive cash, securities or other property (or any
combination thereof) with respect to or in exchange for all of
their Limited Voting Shares;
the Company or the successor or purchasing Person, as the case may be, shall
execute with the Trustee a supplemental indenture (which shall comply with the
Trust Indenture Act as in force at the date of execution of such supplemental
indenture, if such supplemental indenture is then required to so comply)
providing that the Holder's right to convert a Note into Limited Voting Shares
shall be changed to a right to convert a Note into the kind and amount of cash,
securities or other property that such Holder would have been entitled to
receive upon such reclassification, change, consolidation, amalgamation,
statutory arrangement, merger, binding share exchange or similar transaction,
sale or conveyance had such Notes been converted into Limited Voting Shares
immediately prior to such reclassification, change, consolidation, amalgamation,
statutory arrangement, merger, binding share exchange or similar transaction,
sale or conveyance assuming such holder of Limited Voting Shares did not
exercise its rights of election, if any, as to the kind or amount of securities,
cash or other property receivable upon such consolidation, amalgamation,
statutory arrangement, merger, binding share exchange, or similar transaction,
sale or conveyance (provided, that if the kind or amount of securities, cash or
other property receivable upon such consolidation, amalgamation, statutory
arrangement, merger, binding share exchange, or similar transaction, sale or
conveyance is not the same for each Limited Voting Share in respect of which
such rights of election shall not have been exercised ("Non-Electing Share"),
then for the purposes of this Section 4.05, the kind and amount of securities,
cash or other property receivable upon such consolidation, amalgamation,
statutory arrangement, merger, binding share exchange, or similar transaction,
sale or conveyance for 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 shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Article Four. If, in the case of any such reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance, the
stock or other securities and assets receivable thereupon by a holder of Limited
Voting Shares includes shares or other securities and assets of a corporation
other than the successor or acquiror, as the case may be, in such
reclassification, change, merger, consolidation, statutory share exchange,
combination, 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 Notes as the Board of Directors
shall reasonably consider necessary by reason of the foregoing.
The Company will give notice (to the extent permitted by applicable law
or regulation) to Holders of the Notes 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 Notes 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 Notes except in accordance with any other
provision of this First Supplemental Indenture.
In connection with the execution of such supplemental indenture the
Company shall deliver to the Trustee an Opinion of Counsel containing the
statements provided in Section 9.03 of the Original Indenture and a statement
that such supplemental indenture complies with the requirements of this Section.
The Company shall provide notice of the execution of such supplemental indenture
to each registered Holder of Notes within 20 days after execution thereof.
Failure to deliver such notice shall not affect the legality or validity of such
supplemental indenture.
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The provisions of this Section 4.05 shall similarly apply to successive
reclassifications, changes, mergers, consolidations, statutory share exchanges,
combinations, sales and conveyances.
If this Section 4.05 applies to any event or occurrence, Section 4.04
shall not apply.
4.06 NOTICE OF ADJUSTMENT.
Whenever the Conversion Rate is adjusted as provided in this Article
Four (and the Stock Price Threshold, Stock Price Cap and Make Whole Premium
Table are adjusted as provided in Section 3.02):
(a) the Company shall forthwith file with the Trustee and any
Conversion Agent for the Notes a certificate of the Chief Executive
Officer, any President or Vice-President or the Treasurer of the
Company, stating the adjusted Conversion Rate, Stock Price
Threshold, Stock Price Cap and Make Whole Premium Table, as the
case may be, determined as provided herein and setting forth in
reasonable detail such facts as shall be necessary to show the
reason for and the manner of computing such adjustment; and
(b) a notice stating that the Conversion Rate, Stock Price
Threshold, Stock Price Cap and Make Whole Premium Table, as the
case may be, have been adjusted and setting forth the adjusted
Conversion Rate, Stock Price Threshold, Stock Price Cap and Make
Whole Premium Table shall forthwith be given by the Company or, at
the Company's request, by the Trustee in the name and at the
expense of the Company, to each Holder. Any notice so given shall
be conclusively presumed to have been duly given, whether or not
the Holder receives such notice.
4.07 NOTICE IN CERTAIN EVENTS.
In case:
(a) of a consolidation or merger to which the Company is a party
and for which approval of any stockholders of the Company is
required, or of the transfer to another Person or entity or group
of Persons or entities acting in concert as a partnership, limited
partnership, syndicate or other group (within the meaning of Rule
13d-3 under the Exchange Act) of all or substantially all of the
consolidated property and assets of the Company (as determined
under applicable law); or
(b) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(c) of any action triggering an adjustment of the Conversion Rate
referred to in clauses (y) or (z) below;
then, in each case, the Company shall cause to be filed with the Trustee and the
Conversion Agent, and shall cause to be given, to the Holders of the Notes, at
least 15 days prior to the applicable date hereinafter specified, a notice
stating:
(y) the date on which a record is to be taken for the purpose of
any distribution or grant of rights or warrants or other securities
triggering an adjustment to the Conversion Rate pursuant to this
Article Four, or, if a record is not to be taken, the date as of
which the holders of record of Limited Voting Shares entitled to
such distribution, rights or warrants or other securities are to be
determined, or
(z) the date on which any reclassification, consolidation,
amalgamation, statutory arrangement, merger, binding share exchange
or similar transaction, sale or conveyance, described under clauses
(a) and (b) of Section 4.05 that may change a Holder's right to
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convert into Limited Voting Shares to a right to convert into
another kind and amount of securities or other property or assets
is expected to become effective, and the date as of which it is
expected that holders of Limited Voting Shares of record shall be
entitled to exchange their Limited Voting Shares for securities or
other property deliverable upon such reclassification,
consolidation, amalgamation, statutory arrangement, merger, binding
share exchange or similar transaction, sale or conveyance.
Failure to give such notice or any defect therein shall not affect the legality
or validity of the proceedings described in clause (a), (b) or (c) of this
Section 4.07.
4.08 COMPANY TO RESERVE STOCK: REGISTRATION; LISTING.
(a) The Company shall at all times reserve and keep available,
free from pre-emptive rights, out of its authorized but unissued
capital for the purpose of effecting the conversion of the Notes, such
number of its duly authorized Limited Voting Shares as shall from time
to time be sufficient to effect the conversion of all Notes then
outstanding into such Limited Voting Shares at any time (assuming that,
at the time of the computation of such number of shares or securities,
all such Notes would be held by a single Holder). The Company covenants
that all Limited Voting Shares that may be issued upon conversion of
Notes will upon issue be fully paid and non-assessable and free from
all liens and charges and, except as provided in Section 4.09, taxes
with respect to the issue thereof.
(b) If any Limited Voting Shares which would be issuable upon
conversion of Notes hereunder require registration with or approval of
any governmental authority before such shares or securities may be
issued upon such conversion, the Company will use its commercially
reasonable efforts to cause such shares or securities to be duly
registered or approved, as the case may be. The Company further
covenants that so long as the Limited Voting Shares shall be listed on
the NYSE or the Toronto Stock Exchange, the Company will use its
commercially reasonable efforts, if permitted by the rules of such
exchanges, to list and keep listed the Limited Voting Shares issuable
upon conversion of the Notes, and the Company will use its commercially
reasonable efforts to list the Limited Voting Shares required to be
delivered upon conversion of the Notes prior to such delivery upon any
other national securities exchange upon which the outstanding Limited
Voting Shares are listed at the time of such delivery.
4.09 TAXES ON CONVERSION.
The issue of stock certificates on conversion of Notes shall be made
without charge to the converting Holder for any documentary, stamp or similar
issue or transfer taxes in respect of the issue thereof, and the Company shall
pay any and all documentary, stamp or similar issue or transfer taxes that may
be payable in respect of the issue or delivery of Limited Voting Shares on
conversion of Notes pursuant hereto. The Company shall not, however, be required
to pay any such tax which may be payable in respect of any transfer involved in
the issue or delivery of Limited Voting Shares or the portion, if any, of the
Notes that are converted in a name other than that in which the Notes so
converted were registered, 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
such tax or has established to the satisfaction of the Company that such tax has
been paid.
4.10 CONVERSION AFTER RECORD DATE.
Except as provided in this Section 4.10 and Section 3.01(a)(B) and
Section 4.02(e), a converting Holder of Notes shall not be entitled to receive
any payment in respect of accrued and unpaid interest on any such Notes being
converted. By delivery to the holder of the number of Limited Voting Shares
-24-
(including any Additional Shares) or other consideration issuable or payable
upon conversion in accordance with this Article Four, any accrued and unpaid
interest on such Notes will be deemed to have been paid in full. If any Notes
are surrendered for conversion subsequent to the Record Date preceding an
Interest Payment Date but prior to such Interest Payment Date, the Holder of
such Notes at the close of business on such Record Date shall receive the
interest payable on such Note on such Interest Payment Date notwithstanding the
conversion thereof. Notes surrendered for conversion during the period from the
close of business on any Record Date preceding any Interest Payment Date to the
opening of business on such Interest Payment Date shall (except in the case of
Notes that have been called for redemption on a Redemption Date within such
period) be accompanied by payment from converting Holders, for the account of
the Company, in New York Clearing House funds, or other funds of an amount equal
to the interest payable on such Interest Payment Date on the Notes being
surrendered for conversion; provided, however, if the Company elects to redeem
Notes on a date, specifies a Designated Event Repurchase Date or establishes a
Calculation Date, that is after the Regular Record Date but prior to the
corresponding Interest Payment Date or, to the extent of any overdue interest at
the time of conversion with respect to the Note, and such Holder elects to
convert those Notes, the Holder will not be required to pay the Company, at the
time that Holder surrenders those Notes for conversion, the amount of interest
such Holder will have received on the Interest Payment Date.
If Notes are surrendered for conversion on or after the earlier of the
Record Date for receiving distributions in connection with a Fundamental Change
and the Effective Date, the Holder will receive on conversion the number of
Limited Voting Shares into which the Notes were convertible immediately before
the Fundamental Change.
Except as provided in this Section 4.10 and Section 3.01(a)(B) and
Section 4.02(e), no adjustments in respect of payments of interest on Notes
surrendered for conversion or any dividends or distributions on the Limited
Voting Shares or cash paid upon conversion shall be made upon the conversion of
any Notes.
4.11 RESPONSIBILITY OF TRUSTEE FOR CONVERSION PROVISIONS.
The Trustee has no duty to determine when an adjustment under this
Article Four or under Section 3.02 should be made, how it should be made or what
it should be or to determine or verify the Conversion Price and Conversion Rate.
The Trustee makes no representation as to the validity or value of any
securities or assets issued upon conversion of Notes. The Trustee shall not be
responsible for any failure of the Company to comply with this Article Four.
Each Conversion Agent other than the Company shall have the same protection
under this Section 4.11 as the Trustee.
The Company or its agents will be responsible for making all
calculations called for under the Notes including, but not limited to,
determination of the Trading Price and Closing Sale Price of the Limited Voting
Shares or Applicable Stock, as applicable, the number of Limited Voting Shares
or Applicable Stock, as applicable, and (if applicable, the amount of cash)
issuable or payable upon conversion and the amounts of interest on the Notes.
The Company or its agents will be required to deliver to the Trustee a schedule
of its calculations and the Trustee and the Conversion Agent will be entitled to
conclusively rely upon the accuracy of such calculations without independent
verification.
The rights, privileges, protections, immunities and benefits given to
the Trustee under the Original Indenture including, without limitation, its
rights to be indemnified, are extended to, and shall be enforceable by, the
Trustee in each of its capacities hereunder, and each Paying Agent or Conversion
Agent acting hereunder.
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4.12 UNCONDITIONAL RIGHT OF HOLDERS TO CONVERT.
Notwithstanding any other provision in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to convert
its Note in accordance with this Article Four and to bring an action for the
enforcement of any such right to convert, and such rights shall not be impaired
or affected in any material respect without the consent of such Holder.
4.13 PRESCRIBED SECURITIES.
Notwithstanding any other provision of this Indenture, if, before June
20, 2009 Holders of Notes otherwise would be entitled to receive, upon
conversion of the Notes, any property (including cash) or securities that would
not constitute "prescribed securities" for the purposes of clause
212(1)(b)(vii)(E) of the Income Tax Act (Canada) (which is referred to as
"ineligible consideration"), such Holders shall only be entitled to receive
"prescribed securities" of a type specified by the Board of Directors and shall
not be entitled to receive any such ineligible consideration, but the Company or
any 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" for the
purposes of clause 212(1)(b)(vii)(E) of the Income Tax Act (Canada) with a Fair
Market Value equal to the Fair Market Value of such ineligible consideration.
ARTICLE FIVE
REDEMPTION AT THE OPTION OF THE COMPANY
5.01 RIGHT TO REDEEM.
Prior to August 4, 2009, the Notes will not be redeemable at the option of the
Company except pursuant to the provisions of Section 5.02 hereof. In addition to
redemption as provided in that Section, beginning on August 4, 2009, the
Company, at its option, may redeem the Notes for cash in accordance with Article
Eleven of the Original Indenture at any time in whole, or from time to time in
part, at a redemption price equal to 100% of the principal amount of Notes to be
redeemed plus any accrued and unpaid interest on those Notes to, but not
including, the Redemption Date (the "Redemption Price"), in accordance with the
terms of the Notes and in accordance with Article Eleven of the Original
Indenture. If the Company elects not to redeem all of the Notes, the Trustee
will select the Notes to be redeemed in principal amounts of $1,000 or integral
multiples thereof by lot or on a pro rata basis. If a portion of a Holder's
Notes is selected for partial redemption and the Holder converts a portion of
its Notes, the converted portion will be deemed to be taken from the portion
selected for redemption. In the event that the Company intends to exercise its
right to satisfy its obligation to issue Limited Voting Shares on conversion of
a Note (including Additional Shares) by delivering cash in lieu of all or some
of Limited Voting Shares to which a Holder of Notes that elects to convert those
notes in accordance with Section 4.01(c) otherwise would be entitled, in
addition to the information contemplated by Section 11.04 of the Original
Indenture to be included in a notice of redemption, the notice of redemption
shall state:
(a) that, notwithstanding the right of the Holder to receive Limited
Voting shares on conversion of a Note, the Company is exercising
its right deliver cash in lieu of all or some of the Limited Voting
Shares;
(b) if the Company will deliver cash in lieu of only some of those
Limited Voting Shares, the percentages of the principal amount of
Notes converted in respect of which it will pay in cash or Limited
Voting Shares; and
(c) the method for determining the amount of cash to be delivered
in lieu of each Limited Voting Share.
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5.02 TAX REDEMPTION.
The Company, at its option, shall have the right to redeem the Notes,
in whole but not in part (other than as a result of a Holder having delivered a
Notice of Election), at the Redemption Price in accordance with Section 11.08 of
the Original Indenture; provided that, notwithstanding Section 11.08 of the
Original Indenture, no notice of redemption may be given earlier than 60 days
prior to the earliest date on which the Company would be obligated to pay
Additional Amounts. In such event, the Company will give the Trustee and the
Holders of the Notes not less than 30 days' nor more than 60 days' notice of
this redemption, except that (i) the Company will not give notice of redemption
earlier than 60 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 notice of such redemption, each Holder who does not wish
to have the Company redeem its Notes pursuant to this Section 5.02 shall be
entitled to elect to (i) convert its Notes pursuant to Article Four or (ii) not
have its Notes redeemed, provided that no Additional Amounts that arise solely
as a result of the change or amendment specified in Section 11.08 of the
Original Indenture that gave rise to the right of the Company to redeem notes
pursuant to this Section will be payable by the Company on any payment with
respect to the Notes after the Redemption Date. All future payments will be
subject to the deduction or withholding of any Canadian taxes required by law to
be deducted or withheld. In the event that cash payments which a Holder would
otherwise be entitled to receive from the Company are insufficient to pay
applicable Canadian taxes, the Company may require from the Holder, as a
condition to the Holder's right to receive any Limited Voting Shares on
conversion or other amounts from the Company, an amount of cash sufficient to
pay applicable Canadian taxes.
Where no such election is made, the Notes of a Holder shall be redeemed
without any further action. If a Holder does not elect to convert its Notes
pursuant to Article Four but wishes to elect to not have its Notes redeemed
pursuant to clause (ii) of the preceding paragraph, such Holder must deliver to
the Company (if the Company 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 upon Tax Redemption (the "Notice of Election") on the
back of the Notes, 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 a Business
Day at least five Business Days prior to the Redemption Date.
A Holder may withdraw any Notice of Election by delivering to the
Company (if the Company is acting as its own Paying Agent), or to a Paying Agent
designated by the Company in the notice of redemption, a written notice of
withdrawal prior to the close of business on the Business Day prior to the
Redemption Date.
ARTICLE SIX
REPURCHASE OF NOTES BY THE COMPANY
AT THE OPTION OF HOLDERS
6.01 OPTIONAL PUT.
(a) Notes shall be repurchased by the Company, at the option of the
Holder thereof, on any of July 30, 2009, July 30, 2014 and July 30,
2019 (each, a "Repurchase Date"), at a repurchase price equal to
100% of the principal amount of those Notes plus accrued and unpaid
interest to, but not including, such Repurchase Date (the
"Repurchase Price"), subject to satisfaction by or on behalf of the
Holder of the requirements set forth in Section 6.01(c).
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(b) No later than 25 Business Days prior to each Repurchase Date, the
Company shall provide a written notice of the repurchase right to
the Trustee and to each Holder. The notice shall include a form of
Repurchase Notice to be completed by the Holder and shall state, as
applicable:
(i) the date by which the Repurchase Notice must be delivered to
the Paying Agent in order for a Holder to exercise the
repurchase right;
(ii) the Repurchase Date;
(iii) the Repurchase Price;
(iv) whether the Repurchase Price will be paid in cash or,
if permitted hereunder, in Limited Voting Shares, or a
combination of cash and Limited Voting Shares and, in the
case of a combination, the percentage of each;
(v) if the Company elects to pay the Repurchase Price in
Limited Voting Shares or a combination of cash and Limited
Voting Shares, that the number of Limited Voting Shares each
Holder will receive will equal the portion of the Repurchase
Price to be paid in Limited Voting Shares divided by the
Trading Price of one Limited Voting Share;
(vi) if the Company elects to pay the Repurchase Price in
Limited Voting Shares or a combination of cash and Limited
Voting Shares, the method of calculating the Trading Price
of the Limited Voting Shares;
(vii) that because the Trading Price of one Limited Voting
Share will be determined prior to the Repurchase Date,
Holders of the Notes will bear the market risk that the
Limited Voting Shares to be received will decline in value
between the date such Trading Price is determined and the
Repurchase Date;
(viii)if the Notes then may be converted, the name and address of
the Paying Agent and the Conversion Agent, the Conversion
Rate and any adjustments thereto, and that the Notes as to
which a Repurchase Notice has been given may be converted if
they are otherwise convertible pursuant to Article Four only
if the Repurchase Notice has been withdrawn in accordance
with the terms of this First Supplemental Indenture;
(ix) that certificated Notes must be surrendered to the Paying
Agent to collect payment;
(x) that the Repurchase Price for any Note as to which a
Repurchase Notice has been duly given and not withdrawn will
be paid promptly following the later of the Repurchase Date
and the time of surrender of such Note;
(xi) the procedures the Holder must follow to exercise its
right to require Notes be repurchased under this Section
6.01;
(xii) the conversion rights, if any, of the Notes;
(xiii) the procedures for withdrawing a Repurchase Notice;
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(xiv) that, unless the Company defaults in making payment
of such Repurchase Price, interest on Notes surrendered for
repurchase by the Company will cease to accrue on and after
the Repurchase Date; and
(xv) the CUSIP number(s) of the Notes.
At the Company's request, the Trustee shall give the notice of
repurchase right in the Company's name and at the Company's
expense if the Company has made such a request of the Trustee at
least three Business Days (unless a shorter period shall be
satisfactory to the Trustee) prior to the date by which such
notice of repurchase right must be given to the Holder in
accordance with this Section 6.01(b); provided, further, that the
text of the notice of repurchase right shall be prepared by the
Company.
(c) A Holder may exercise its right specified in Section 6.01(a) upon delivery
of a written notice of repurchase (a "Repurchase Notice") to the Paying
Agent at any time during the period beginning at 9:00 a.m., New York City
time, on the date that is 20 Business Days immediately preceding the
relevant Repurchase Date until 5:00 p.m., New York City time, on the
Business Day immediately preceding such Repurchase Date, stating:
(i) the certificate number(s) of the Note(s) that the Holder will
deliver to be repurchased or the appropriate Depositary procedures
if Certificated Notes have not been issued;
(ii) the portion of the principal amount of the Note(s) that the Holder
will deliver to be repurchased, which portion must be $1,000 or an
integral multiple of $1,000;
(iii)that such Note(s) shall be repurchased by the Company on the
Repurchase Date pursuant to the terms and conditions specified in
the Notes and in this First Supplemental Indenture; and
(iv) in the event the Company elects, pursuant to Section 6.02, to
pay the Repurchase Price, in whole or in part, in Limited Voting
Shares but such portion of the Repurchase Price shall ultimately
be paid to such Holder entirely in cash because any of the
conditions to payment of the Repurchase Price in Limited Voting
Shares is not satisfied prior to 5:00 p.m., New York City time, on
the Business Day immediately preceding the relevant Repurchase
Date, as set forth in Section 6.02, whether such Holder elects to
(A) withdraw such Repurchase Notice as to some or all of the Notes
to which such Repurchase Notice relates (stating the principal
amount and certificate numbers, if any or the appropriate
Depositary procedures, if applicable, of the Notes as to which
such withdrawal shall relate), or (B) receive cash in respect of
the entire Repurchase Price for all Notes (or portions thereof) to
which such Repurchase Notice relates.
The delivery of such certificated Note, if applicable, to the Paying
Agent with, or at any time after delivery of, the Repurchase Notice
(together with all necessary endorsements) at the offices of the Paying
Agent shall be a condition to the receipt by the Holder of the
Repurchase Price therefor; provided, however, that such Repurchase
Price shall be so paid pursuant to this Section 6.01 only if the Note
so delivered to the Paying Agent shall conform in all respects to the
description thereof in the related Repurchase Notice.
If a Holder, in such Holder's Repurchase Notice and in any written
notice of withdrawal delivered by such Holder pursuant to the terms of
Section 6.03, fails to indicate such Holder's choice with respect to
the election set forth in Section 6.01(c)(iv), such Holder shall be
deemed to have elected to receive cash in respect of the entire
Repurchase Price
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for all Notes subject to such Repurchase Notice in the circumstances
set forth in such Section 6.01(c)(iv).
The Company shall repurchase from the Holder thereof, pursuant to this
Section 6.01, a portion of a Note, so long as the principal amount of
such portion is $1,000 or an integral multiple of $1,000. Provisions of
this First Supplemental Indenture that apply to the repurchase of all
of a Note also apply to the repurchase of that portion of that Note.
Any repurchase by the Company contemplated pursuant to the provisions
of this Section 6.01 shall be consummated by the delivery of the
consideration to be received by the Holder promptly following the later
of the Repurchase Date and the time of book-entry transfer or delivery
of the Note.
Notwithstanding anything contained herein to the contrary, any Holder
delivering to the Paying Agent the Repurchase Notice contemplated by
Section 6.01(c) shall have the right to withdraw such Repurchase Notice
at any applicable time prior to 5:00 p.m., New York City time, on the
Business Day immediately preceding the Repurchase Date by delivery of a
written notice of withdrawal to the Paying Agent in accordance with
Section 6.03.
The Paying Agent shall promptly notify the Company of the receipt by it
of any Repurchase Notice or written notice of withdrawal thereof.
6.02 THE COMPANY'S RIGHT TO ELECT MANNER OF PAYMENT OF REPURCHASE PRICE.
(a) If the Notes are to be repurchased on July 30, 2009 pursuant to Section
6.01(a), the Repurchase Price must be paid in cash. If the Securities are to
be repurchased on July 30, 2014 or July 30, 2019, pursuant to Section
6.01(a), the Repurchase Price may be paid, at the option of the Company, in
cash or Limited Voting Shares, or in any combination of cash and Limited
Voting Shares (or in the case of a Fundamental Change in which all or
substantially all of the Limited Voting Shares have been converted as of the
Effective Date into the right to receive securities or other assets or
property, an amount of such other securities or other assets or property),
subject to the conditions set forth in Section 6.02(b). The Company shall
designate, in the notice of repurchase right delivered pursuant to Section
6.01(b), whether the Company will repurchase the Notes for cash or, if
permitted hereunder, Limited Voting Shares, or, if a combination of cash and
Limited Voting Shares, the percentages of the Repurchase Price in respect of
which it will pay in cash or Limited Voting Shares; provided, however, that
the Company will pay cash for fractional interests in a Limited Voting
Share. For purposes of determining the existence of potential fractional
interests, all Notes subject to repurchase by the Company held by a Holder
shall be considered together (no matter how many separate certificates are
to be presented). Each Holder whose Notes are repurchased pursuant to
Section 6.01 shall receive the same percentage of cash or, if permitted
hereunder, Limited Voting Shares in payment of the Repurchase Price for such
Notes, except (i) as provided in this Section 6.02(a) with regard to the
payment of cash in lieu of fractional Limited Voting Shares and (ii) in the
event that the Company is unable to purchase the Notes of the Holder or
Holders for Limited Voting Shares because any necessary qualifications or
registration of the Limited Voting Shares under applicable securities laws
cannot be obtained, the Company may purchase the Notes of such Holder or
Holders for cash. The Company may not change its election with respect to
the consideration (or components or percentages of components thereof) to be
paid once the Company has given its notice of repurchase right to Holders
except in the event of a failure to satisfy, prior to 5:00 p.m., New York
City time, on the Business Day immediately preceding the Repurchase Date,
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any condition to the payment of the Repurchase Price in whole or in part, in
Limited Voting Shares.
(b) If the Company elects to pay all or a portion of the Repurchase Price of
Notes in respect of which a Repurchase Notice pursuant to Section 6.01(c)
has been given in Limited Voting Shares, the number of Limited Voting Shares
to be issued shall be equal to the portion of the Repurchase Price to be
paid in Limited Voting Shares divided by the Trading Price on the Repurchase
Date of one Limited Voting Share, subject to satisfaction of the conditions
set forth in the second succeeding paragraph.
The Company will not issue any fractional Limited Voting Shares in payment
of the Repurchase Price. Instead, the Company will make a cash payment
(calculated to the nearest cent) equal to such fraction multiplied by the
Trading Price of one Limited Voting Share. If a Holder elects to have more
than one Note purchased, the number of Limited Voting Shares shall be based
on the aggregate amount of Notes to be purchased.
The Company's right to exercise its election to repurchase Notes through the
issuance of Limited Voting Shares shall be conditioned upon:
(i) the registration of such Limited Voting Shares under the
Securities Act, if required;
(ii) any qualification or registration of such Limited Voting Shares
under applicable state securities laws, if necessary, or the
availability of an exemption from such qualification and
registration;
(iii)the listing of such Limited Voting Shares on the Toronto Stock
Exchange or a United States national securities exchange or the
quotation of the Limited Voting Shares in an inter-dealer
quotation system of any registered United States national
securities association;
(iv) the receipt by the Trustee of an Officers' Certificate
stating: (A) that the terms of the issuance of the Limited Voting
Shares are in conformity with this First Supplemental Indenture;
(B) that the Limited Voting Shares to be issued in payment of the
Repurchase Price in respect of Notes have been duly authorized
and, when issued and delivered pursuant to the terms of this First
Supplemental Indenture in payment of the Repurchase Price in
respect of Notes, will be validly issued, fully paid,
non-assessable and free from pre-emptive rights; (C) that the
conditions in this clause (iv)(A) and (iv)(B) above, the
conditions in clauses (i) to (iii) above and the condition set
forth in the second succeeding paragraph regarding issuance of a
press release have been satisfied in all material respects; and
(D) the number of Limited Voting Shares to be issued for each
$1,000 principal amount of Notes and the Closing Sale Price of a
Limited Voting Share on each Trading Day during the period
commencing on the first Trading Day of the period during which the
Trading Price is calculated and ending on the Trading Day
immediately preceding the Repurchase Date; and
(v) the receipt by the Trustee of an Opinion of Counsel stating that:
(A) the Limited Voting Shares to be issued in payment of the
Repurchase Price in respect of Notes have been duly authorized,
and when issued and delivered pursuant to the terms of this First
Supplemental Indenture in payment of the Repurchase Price in
respect of Notes, will be validly issued, fully paid and
non-assessable and, to the best of such counsel's knowledge, free
from pre-emptive rights; and (B)
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the conditions in clauses (i) through (iii) above have been
satisfied in all material respects.
If the foregoing conditions are not satisfied with respect to a
Holder or Holders prior to 5:00 p.m., New York City time, on the
Business Day immediately preceding the Repurchase Date, and the
Company has elected to repurchase the Notes pursuant to this
Section 6.02 through the issuance of Limited Voting Shares, the
Company shall pay the entire Repurchase Price of the Notes to such
Holder or Holders in cash.
Upon determination of the actual number of Limited Voting Shares
to be issued upon repurchase of Notes, the Company shall be
required to disseminate a press release through a public medium as
is customary for such a press release.
(c) All Limited Voting Shares delivered upon the repurchase of Notes shall be
newly issued shares, shall be duly authorized, validly issued, fully paid
and non-assessable, and shall be free from pre-emptive rights and free of
any lien or adverse claim.
(d) If a Holder of a repurchased Note is paid in Limited Voting Shares,
the Company shall pay any documentary, stamp or similar issue or transfer
tax due on such issue of Limited Voting Shares. However, the Holder shall
pay any such tax which is due because the Holder requests the Limited Voting
Shares to be issued in a name other than the Holder's name. The Paying Agent
may refuse to deliver the certificates representing the Limited Voting
Shares being issued in a name other than the Holder's name until the Paying
Agent receives a sum sufficient to pay any such tax which will be due
because the Limited Voting Shares are to be issued in a name other than the
Holder's name.
6.03 EFFECT OF A REPURCHASE NOTE.
Upon receipt by the Paying Agent of the Repurchase Notice specified in
Section 6.01(c), the Holder of the Note in respect of which such Repurchase
Notice was given shall (unless such Repurchase Notice is withdrawn as specified
in the following paragraph) thereafter be entitled to receive solely the
Repurchase Price with respect to such Note. Such Repurchase Price shall be paid
to such Holder, subject to receipts of cash and/or securities by the Paying
Agent, promptly following the later of (a) the Repurchase Date with respect to
such Security (provided the conditions in Section 6.01(c) have been satisfied)
and (b) the time of delivery of such Note, with the necessary endorsements, to
the Paying Agent by the Holder thereof in the manner required by Section
6.01(c). Notes in respect of which a Repurchase Notice has been given by the
Holder thereof may not be converted pursuant to Article Four on or after the
date of the delivery of such Repurchase Notice unless such Repurchase Notice has
first been validly withdrawn as specified in the following paragraph.
A Repurchase Notice may be withdrawn by means of a written notice of
withdrawal delivered to the office of the Paying Agent in accordance with the
Repurchase Notice at any time prior to 5:00 p.m., New York City time, on the
Business Day immediately preceding the Repurchase Date, specifying:
(a) the certificate number, if any, or the appropriate Depositary
procedures, if applicable, of the Note in respect of which
such notice of withdrawal is being submitted;
(b) the principal amount of the Note with respect to which such
notice of withdrawal is being submitted; and
(c) the principal amount, if any, of such Note which remains
subject to the original Repurchase Notice and which has been
or will be delivered for repurchase by the Company.
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6.04 DEPOSIT OF REPURCHASE PRICE.
Prior to 10:00 a.m., New York City time, on the applicable Repurchase
Date, the Company shall deposit with the Paying Agent (or if the Company or a
Subsidiary or an Affiliate of any of them is acting as the Paying Agent, it
shall segregate and hold in trust as provided in Section 10.03 of the Original
Indenture) an amount of cash (in immediately available funds if deposited on
such Business Day) and/or Limited Voting Shares, if permitted hereunder,
sufficient to pay the aggregate Repurchase Price of all the Notes or portions
thereof which are to be repurchased on such Repurchase Date.
If the Paying Agent holds, in accordance with the terms hereof, at
10:00 a.m., New York City time, on the Business Day immediately following the
applicable Repurchase Date, cash and/or Limited Voting Shares, if permitted
hereunder, sufficient to pay the Repurchase Price of any Notes for which a
Repurchase Notice has been tendered and not withdrawn pursuant to Section 6.03,
then, immediately after such Repurchase Date, such Notes will cease to be
outstanding and interest on such Notes will cease to accrue, whether or not such
Notes are delivered to the Paying Agent, and the rights of the Holders in
respect thereof shall terminate (other than the right to receive the Repurchase
Price upon delivery of such Notes).
Promptly after the later of the Repurchase Date and the delivery of a
properly completed Repurchase Notice and any Notes required to accompany that
Repurchase Notice, the Company shall deliver to each Holder entitled to receive
Limited Voting Shares through the Paying Agent, cash and, to the extent any
portion of the Repurchase Price is to be satisfied with Limited Voting Shares, a
certificate (other than in the case of Holders of Notes in book-entry form with
the Depositary, which shares shall be delivered in accordance with the
Depositary customary practices) for the number of full Limited Voting Shares
issuable in payment of the Repurchase Price and cash in lieu of any fractional
interests. The person in whose name the certificate for the Limited Voting
Shares is registered shall be treated as a holder of record of Limited Voting
Shares on the Repurchase Date. No payment or adjustment will be made for
dividends on the Limited Voting Shares the Record Date for which occurred on or
prior to the Repurchase Date. The Company shall not be required to deliver
certificates for Limited Voting Shares while the stock transfer books for such
stock or the Security Register are duly closed for any purpose, but certificates
for Limited Voting Shares shall be issued and delivered as soon as practicable
after the opening of such books or Security Register.
6.05 SECURITIES REPURCHASED IN PART.
Any Certificated Security that is to be repurchased only in part shall
be surrendered at the office of the Paying Agent (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 such Holder's attorney duly authorized in writing) and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Note, without charge, a new Note or Notes, of any authorized denomination
as requested by such Holder in aggregate principal amount equal to, and in
exchange for, the portion of the principal amount of the Note so surrendered
which is not repurchased.
6.06 COVENANT TO COMPLY WITH SECURITIES LAWS UPON REPURCHASE OF SECURITIES.
When complying with the provisions of Section 6.01 hereof (provided
that such offer or purchase constitutes an "issuer tender offer" for purposes of
Rule 13e-4 (which term, as used herein, includes any successor provision
thereto) under the Exchange Act at the time of such offer or purchase), and
subject to any exemptions available under applicable law, the Company shall:
(a) comply with Rule 13e-4 and Rule 14e-1 (or any successor provision)
under the Exchange Act, as applicable;
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(b) file the related Schedule TO (or any successor schedule, form
or report) under the Exchange Act, as and if applicable; and
(c) otherwise comply with all federal and state and Canadian
provincial securities laws so as to permit the rights and
obligations under Article Six to be exercised in the time and
in the manner specified therein.
To the extent that the provisions of any securities laws or regulations
conflict with the provisions of this Article Six, the Company's compliance with
such laws and regulations shall not in and of itself cause a breach of its
obligations under this Article Six.
6.07 REPAYMENT TO THE COMPANY.
The Paying Agent shall return to the Company any cash or Limited Voting
Shares that remain unclaimed for two years (or such shorter period under the
applicable abandoned property laws to permit such return to the Company),
together with interest or dividends, if any, thereon, held by it for the payment
of the Repurchase Price; provided, however, to the extent that the aggregate
amount of cash or Limited Voting Shares deposited by the Company pursuant to
Section 6.04 exceeds the aggregate Repurchase Price of the Notes or portions
thereof which the Company is obligated to repurchase on the Repurchase Date,
then, promptly after the Repurchase Date, the Paying Agent shall return any such
excess to the Company.
ARTICLE SEVEN
OFFER TO PURCHASE UPON A DESIGNATED eVENT
7.01 OFFER TO PURCHASE.
(a) If a Designated Event occurs before the maturity of the Notes, the
Company shall make an offer (the "Designated Event Repurchase Offer") to
repurchase all of the Notes not previously called for redemption at a
purchase price (the "Designated Event Repurchase Price") equal to the sum of
(i) 100% of the principal amount of the Notes, plus (ii) any accrued and
unpaid interest to, but not including, the Designated Event Repurchase Date,
plus (iii), if the Designated Event Repurchase Offer is being made in
respect of a Fundamental Change that constitutes a Change in Control with an
Effective Date that is on or before July 30, 2009, a Make Whole Premium, if
any. The Company shall purchase Notes in respect of which such offer is
accepted by a Holder in accordance with Section 7.01(c) on the date that is
30 Business Days after a Designated Event Notice has been mailed (the
"Designated Event Repurchase Date").
A "Designated Event" will be deemed to have occurred upon a Fundamental
Change or Termination of Trading; provided that a Fundamental Change or
Termination of Trading occurring on or prior to June 20, 2009 shall not be a
Designated Event unless such Fundamental Change or Termination of Trading
also constitutes a "Change in Control".
A "Change in Control" will be deemed to have occurred at such time as:
(i) any Person (including its Affiliates and Associates) other than
Xxxxxxx Xxxxx, his spouse, any of his issue and the spouses of any
of them, his or their legal representatives, any corporation of
which all of the voting shares are beneficially owned, directly or
indirectly, by any one or more of the foregoing, and any trust the
only beneficiaries of which are any one or more of the foregoing,
becomes the beneficial owner of more than 50% of the total number
of votes attaching to the Company's share capital entitled to
general voting rights (collectively,
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"Voting Securities") or other securities into which the Voting
Securities are reclassified or changed; or
(ii) there is consummated any consolidation, merger, amalgamation,
binding share exchange, statutory arrangement or similar
transaction involving the Company in which the Company is not the
continuing or surviving corporation or pursuant to which the
Limited Voting Shares would be converted into cash, securities or
other property, in each case other than a consolidation, merger,
amalgamation, binding share exchange, statutory arrangement or
similar transaction in which holders of the Voting Securities
immediately before the consummation of the transaction hold
(directly or indirectly) at least a majority of the votes attached
to the share capital of the continuing or surviving Person
immediately after the consummation of the transaction.
A "Fundamental Change" is any transaction or event (whether by
means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification,
recapitalization or otherwise) in connection with which all or
substantially all of the Limited Voting Shares are exchanged for,
converted into, acquired for or constitute solely the right to
receive, consideration (excluding cash payments for fractional
shares) that is not all or substantially all common shares, common
stock or American Depositary Shares that are (i) listed on, or
immediately after the transaction or event will be listed on, the
Toronto Stock Exchange or a United States national securities
exchange, or (ii) approved, or immediately after the transaction
or event will be approved, for quotation on the Nasdaq National
Market or any similar United States system of automated
dissemination of quotations of securities prices.
A "Termination of Trading" will be deemed to have occurred if the
Limited Voting Shares (or other securities or property into which
the Notes are then convertible, including, without limitation,
"prescribed securities" as described in Section 4.05) are neither
listed for trading on the Toronto Stock Exchange or a United
States national securities exchange nor approved for trading on
the Nasdaq National Market or any similar United States system of
automated dissemination of quotations of securities prices.
(b) Within 30 days after the occurrence of a Designated Event, the Company shall
give to the Trustee and to all Holders of Notes and to beneficial owners as
required by applicable law a notice (the "Designated Event Notice") of the
occurrence of such Designated Event and the Designated Event Repurchase
Offer. The Designated Event Notice will state:
(i) that a Designated Event has occurred and a Designated Event
Repurchase Offer is being made pursuant to Section 7.01 of this
First Supplemental Indenture and that all Notes validly tendered
and not withdrawn will be purchased in accordance with the terms
of Section 7.01;
(ii) the events causing a Designated Event and the date of such
Designated Event;
(iii) the date by which a Holder must accept the Designated Event
Repurchase Offer by delivering a Designated Event Acceptance
Notice tendering the Notes to be repurchased to the Company;
(iv) the Designated Event Repurchase Date;
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(v) whether the Designated Event Repurchase Price, if any, will be
paid in cash or shares of Applicable Stock, or a combination
thereof and, in the case of a combination thereof, the
percentage of each;
(vi) the Designated Event Repurchase Price (including the Make Whole
Premium, if any, and the amount of accrued interest to be paid
on the Notes to be repurchased to but not including the
Designated Event Repurchase Date);
(vii) the name and address of the Paying Agent and the Conversion
Agent;
(viii) the Conversion Rate applicable on the date of the Designated
Event Notice and any adjustments to the Conversion Rate;
(ix) that the Notes as to which a Designated Event Acceptance Notice
has been delivered by the Holder may be converted if they are
otherwise convertible pursuant to Article Four only if the
Designated Event Repurchase Offer is not accepted or, if
accepted, the Designated Event Acceptance Notice has been
withdrawn in accordance with the terms of this First
Supplemental Indenture;
(x) that, if certificated Notes, the Notes with appropriate
endorsements must be surrendered to the Paying Agent to collect
payment;
(xi) that the Designated Event Repurchase Price (including the Make
Whole Premium, if any) for any Note as to which a Designated
Event Acceptance Notice has been duly given and not withdrawn
will be paid promptly following the later of the Designated
Event Repurchase Date and the time of surrender of such Note;
(xii) the procedures the Holder must follow to accept the Designated
Event Repurchase Offer;
(xiii) the conversion rights, if any, of the Notes;
(xiv) the procedures for withdrawing a Designated Event Acceptance
Notice; and
(xv) that, unless the Company defaults in making payment of the
Designated Event Repurchase Price, interest on Notes surrendered
for repurchase by the Company will cease to accrue on and after
the Designated Event Repurchase Date.
At the Company's request, the Trustee shall give the Designated
Event Notice in the Company's name and at the Company's expense
if the Company makes such request of the Trustee at least three
Business Days (unless a shorter period shall be satisfactory to
the Trustee) prior to the date by which such Designated Event
Notice must be given to the Holders in accordance with this
Section 7.01(b); provided, further, that the text of the
Designated Event Notice shall be prepared by the Company.
(c) A Holder may accept the Designated Event Purchase Offer in respect of all of
the Holder's Notes or a portion of those Notes with a principal amount of
$1,000 or integral multiples of $1,000 upon delivery of a written notice of
acceptance (a "Designated Event Acceptance Notice"), substantially in the
form of Exhibit B hereto, to the Paying Agent at any time from the opening
of business on the date of the Designated Event Notice until 5:00 p.m., New
York City time, on the third Business Day immediately preceding the
Designated Event Repurchase Date, stating:
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(i) the certificate number(s) of the Note(s) that the Holder will
deliver to be repurchased or the appropriate depositary
procedures if certificated Notes have not been issued;
(ii) the portion of the principal amount of the Note(s) that the
Holder will deliver to be repurchased, which portion must be
$1,000 or an integral multiple of $1,000;
(iii) that the Holder of such Note(s) accepts the offer to purchase as
disclosed in the Designated Event Notice pursuant to the terms
and conditions specified in the Notes and in this First
Supplemental Indenture; and
(iv) in the event the Company elects, pursuant to Section 7.02, to pay
the Designated Event Repurchase Price, in whole or in part, in
shares of Applicable Stock but such portion of the Designated
Event Repurchase Price shall ultimately be paid to such Holder
entirely in cash because any of the conditions to payment of the
Designated Event Repurchase Price in shares of Applicable Stock is
not satisfied prior to 5:00 p.m., New York City time, on the
Business Day immediately preceding the Designated Event Repurchase
Date, as set forth in Section 7.02(b), whether such Holder elects
to (A) withdraw such Designated Event Acceptance Notice as to some
or all of the Notes to which such Designated Event Acceptance
Notice relates (stating the principal amount and certificate
numbers, if any, or the appropriate Depositary procedures, if
applicable, of the Notes as to which such withdrawal shall
relate), or (B) receive cash in respect of the entire Designated
Event Repurchase Price for all Notes (or portions thereof) to
which such Designated Event Acceptance Notice relates.
The delivery of such Note to the Paying Agent with, or at any time
after delivery of, the Designated Event Acceptance Notice (together, in
each case, with all necessary endorsements) at the offices of the
Paying Agent shall be a condition to the receipt by the Holder of the
Designated Event Repurchase Price; provided, however, that such
Designated Event Repurchase Price shall be so paid pursuant to this
Section 7.01 only if the Note so delivered to the Paying Agent shall
conform in all respects to the description thereof set forth in the
related Designated Event Acceptance Notice. Such Holder of Notes so
deposited shall be entitled to receive from the Paying Agent a
non-transferable receipt of deposit evidencing such deposit.
If a Holder, in such Holder's Designated Event Acceptance Notice and in
any written notice of withdrawal delivered by such Holder pursuant to
the terms of Section 7.03, fails to indicate such Holder's choice with
respect to the election set forth in Section 7.01(c)(iv), such Holder
shall be deemed to have elected to receive cash in respect of the
entire Designated Event Repurchase Price for all Notes subject to such
Designated Event Acceptance Notice in the circumstances set forth in
such Section 7.01(c)(iv).
The Company shall repurchase from the Holder thereof, pursuant to this
Section 7.01, a portion of a Note, so long as the principal amount of
such portion is $1,000 or an integral multiple of $1,000. Provisions of
this First Supplemental Indenture that apply to the repurchase of all
of a Note also apply to the repurchase of that portion of that Note.
Any repurchase by the Company contemplated pursuant to the provisions
of this Section 7.01 shall be consummated by the delivery of the
consideration to be received by the Holder promptly following the later
of the Designated Event Repurchase Date and the time of delivery of the
Note.
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Notwithstanding anything contained herein to the contrary, any Holder
delivering to the Paying Agent the Designated Event Acceptance Notice
contemplated by this Section 7.01(c) shall have the right to withdraw
such Designated Event Acceptance Notice at any time prior to 5:00 p.m.,
New York City time, on the Business Day immediately preceding the
Designated Event Repurchase Date by delivery of a written notice of
withdrawal to the Paying Agent in accordance with Section 7.03.
The Paying Agent shall promptly notify the Company of the receipt by it
of any Designated Event Acceptance Notice or written notice of
withdrawal thereof.
7.02 THE COMPANY'S RIGHT TO ELECT MANNER OF PAYMENT OF DESIGNATED EVENT
REPURCHASE PRICE.
(a) The Company may pay the Designated Event Repurchase Price in, at the
option of the Company, cash or shares of Applicable Stock, or in any
combination of cash and shares of Applicable Stock, (or in the case of a
Fundamental Change in which all or substantially all of the Limited Voting
Shares have been converted as of the Effective Date into the right to
receive securities or other assets or property, an amount of such other
securities or other assets or property) subject to the conditions set forth
in Section 7.02(b). The Company shall designate, in the Designated Event
Notice delivered pursuant to Section 7.01(b), whether the Company will
repurchase the Notes for cash or shares of Applicable Stock, or, if a
combination of cash and shares of Applicable Stock, the percentages of the
Designated Event Repurchase Price in respect of which it will pay in cash or
shares of Applicable Stock; provided, however, that the Company will pay
cash for fractional interests in shares of Applicable Stock. For purposes of
determining the existence of potential fractional interests, all Notes
subject to repurchase by the Company held by a Holder shall be considered
together (no matter how many separate certificates are to be presented).
Each Holder whose Notes are repurchased pursuant to Section 7.01 shall
receive the same percentage of cash or shares of Applicable Stock in payment
of the Designated Event Repurchase Price for such Notes, except (i) as
provided in this Section 7.02(a) with regard to the payment of cash in lieu
of fractional shares of Applicable Stock and (ii) in the event that the
Company is unable to purchase the Notes of a Holder or Holders for shares of
Applicable Stock because any necessary qualifications or registrations of
the shares of Applicable Stock under applicable securities laws cannot be
obtained, the Company may purchase the Notes of such Holder or Holders for
cash. The Company may not change its election with respect to the
consideration (or components or percentages of components thereof) to be
paid once the Company has given its Designated Event Notice to Holders
except in the event of a failure to satisfy, prior to 5:00 p.m., New York
City time, on the Business Day immediately preceding the Designated Event
Repurchase Date, any condition to the payment of the Designated Event
Repurchase Price, in whole or in part, in shares of Applicable Stock.
(b) If the Company elects to pay all or a portion of the Designated Event
Repurchase Price of Notes in respect of which a Designated Event Acceptance
Notice pursuant to Section 7.01(c) has been given in Applicable Stock, the
number of shares of Applicable Stock to be issued shall be equal to (i) the
portion of the Designated Event Repurchase Price to be paid in Applicable
Stock divided by (ii) the Trading Price of one share of Applicable Stock,
subject to satisfaction of the conditions set forth in the second succeeding
paragraph.
The Company will not issue any fraction of a share of Applicable Stock in
payment of the Designated Event Repurchase Price. Instead, the Company will
make a cash payment (calculated to the nearest cent) equal to such fraction
multiplied by the Trading Price of
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one share of Applicable Stock. If a Holder elects to have more than one Note
purchased, the number of shares of Applicable Stock shall be based on the
aggregate amount of Notes to be purchased.
The Company's right to exercise its election to repurchase Notes through the
issuance of shares of Applicable Stock shall be conditioned upon:
(i) the registration of such shares of Applicable Stock under the
Securities Act and the Exchange Act, in each case, if required;
and
(ii) any qualification or registration of such shares of Applicable
Stock under applicable state securities laws, if necessary, or
the availability of an exemption from such qualification and
registration;
(iii) the listing of such shares of Applicable Stock to be issued upon
the purchase of the Notes on the Toronto Stock Exchange or a
United States national securities exchange or quotation of the
Applicable Stock on the Nasdaq National Market System or any
similar United States system of automated dissemination of
quotation of securities prices;
(iv) the receipt by the Trustee of an Officers' Certificate stating
(A): that the terms of the issuance of the shares of Applicable
Stock are in conformity with this First Supplemental Indenture;
(B) that the shares of Applicable Stock to be issued in payment
of the Designated Event Repurchase Price in respect of Notes have
been duly authorized and, when issued and delivered pursuant to
the terms of this First Supplemental Indenture in payment of the
Designated Event Repurchase Price in respect of Notes, will be
validly issued, fully paid, non-assessable and free from
pre-emptive rights; (C) that the conditions in this clause
(iii)(A) and in clause (iii)(B) above, the conditions in clauses
(i) and (ii) above and the condition set forth in the second
succeeding paragraph regarding issuance of a press release have
been satisfied in all material respects; and (D) the number of
shares of Applicable Stock to be issued for each $1,000 principal
amount of Notes and the Closing Sale Price of a share of
Applicable Stock on each Trading Day during the period commencing
on the first Trading Day of the period during which the Trading
Price is calculated and ending on the Trading Day immediately
preceding the Designated Event Repurchase Date; and
(v) the receipt by the Trustee of an Opinion of Counsel stating
that: (A) the shares of Applicable Stock to be issued by the
Company in payment of the Designated Event Repurchase Price in
respect of Notes have been duly authorized, and when issued and
delivered pursuant to the terms of this First Supplemental
Indenture in payment of the Designated Event Repurchase Price in
respect of Notes, will be validly issued, fully paid and
non-assessable and, to the best of such counsel's knowledge, free
from pre-emptive rights; and (B) the conditions in clauses (i)
and (ii) above have been satisfied in all material respects.
If the foregoing conditions are not satisfied with respect to a Holder
or Holders prior to 5:00 p.m., New York City time, on the Business Day
immediately preceding the Designated Event Repurchase Date, and the
Company has elected to repurchase the Notes pursuant to this Section
7.02 through the issuance of shares of Applicable Stock, the Company
shall pay the entire Designated Event Repurchase Price of the Notes of
such Holder or Holders in cash.
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Upon determination of the actual number of shares of Applicable Stock
to be issued upon repurchase of Notes, the Company shall be required to
disseminate a press release through a public medium as is customary for
such a press release.
(c) All shares of Applicable Stock delivered upon repurchase of Notes shall be
newly issued shares, shall be duly authorized, validly issued, fully paid
and non-assessable, and shall be free from pre-emptive rights and free of
any lien or adverse claim.
(d) If a Holder of a repurchased Note is paid in shares of Applicable Stock, the
Company shall pay any documentary, stamp or similar issue or transfer tax
due on such issue of Applicable Stock. However, the Holder shall pay any
such tax which is due because the Holder requests the Applicable Stock to be
issued in a name other than the Holder's name. The Paying Agent may refuse
to deliver the certificates representing the shares of Applicable Stock
being issued in a name other than the Holder's name until the Paying Agent
receives a sum sufficient to pay any such tax which will be due because the
shares of Applicable Stock are to be issued in a name other than the
Holder's name.
7.03 EFFECT OF DESIGNATED EVENT ACCEPTANCE NOTICE.
Upon receipt by the Paying Agent of the Designated Event Acceptance
Notice specified in Section 7.01(c), the Holder of the Note in respect of which
such Designated Event Acceptance Notice was given shall (unless such Designated
Event Acceptance Notice is withdrawn as specified in the following paragraph)
thereafter be entitled to receive solely the Designated Event Repurchase Price
with respect to such Note. Such Designated Event Repurchase Price shall be paid
to such Holder, subject to receipts of cash and/or securities by the Paying
Agent, promptly following the later of (a) the Designated Event Repurchase Date
with respect to such Note (provided the conditions in Section 7.01(c) have been
satisfied) and (b) the time of delivery of such Note and the necessary
endorsements to the Paying Agent by the Holder thereof in the manner required by
Section 7.01(c). Notes in respect of which a Designated Event Acceptance Notice
has been given by the Holder thereof may not be converted pursuant to Article
Four on or after the date of the delivery of such Designated Event Acceptance
Notice unless such Designated Event Acceptance Notice has first been validly
withdrawn as specified in the following paragraph.
A Designated Event Acceptance Notice may be withdrawn by means of a
written notice of withdrawal delivered to the office of the Paying Agent in
accordance with the Designated Event Acceptance Notice at any time prior to 5:00
p.m., New York City time, on the Business Day immediately preceding the
Designated Event Repurchase Date, specifying:
(a) the principal amount of the Note with respect to which such
notice of withdrawal is being submitted;
(b) the certificate number, if any, or the appropriate Depository
procedures, if applicable, of the Note in respect of which
such notice of withdrawal is being submitted; and
(c) the principal amount, if any, of such Note that remains
subject to the original Designated Event Acceptance Notice and
which has been or will be delivered for repurchase by the
Company.
7.04 DEPOSIT OF DESIGNATED EVENT REPURCHASE PRICE.
Prior to 10:00 a.m., New York City time, on the applicable Designated
Event Repurchase Date, the Company shall deposit with the Paying Agent (or if
the Company or a Subsidiary or an Affiliate of any of them is acting as the
Paying Agent, it shall segregate and hold in trust as provided in Section 10.03
of the Original Indenture) an amount of cash (in immediately available funds if
deposited on such
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Business Day) and/or Applicable Stock, if permitted hereunder, sufficient to pay
the aggregate Designated Event Repurchase Price of all the Notes or portions
thereof which are to be repurchased on such Designated Event Repurchase Date.
If the Paying Agent holds, in accordance with the terms hereof, at
10:00 a.m., New York City time, on the Business Day immediately following the
applicable Designated Event Repurchase Date, cash and/or Applicable Stock, if
permitted hereunder, sufficient to pay the Designated Event Repurchase Price of
any Notes for which a Designated Event Acceptance Notice has been tendered and
not withdrawn pursuant to Section 7.03, then, immediately after such Designated
Event Repurchase Date, such Notes will cease to be outstanding and interest on
such Notes will cease to accrue, whether or not such Notes are delivered to the
Paying Agent, and the rights of the Holders in respect thereof shall terminate
(other than the right to receive the Designated Event Repurchase Price upon
delivery of such Notes).
Promptly after the later of the Designated Event Repurchase Date and
the delivery of a properly completed Designated Event Acceptance Notice and any
Notes required to accompany that Designated Event Acceptance Notice, the Company
shall deliver to each Holder entitled to receive shares of Applicable Stock
through the Paying Agent, a certificate (other than in the case of Holders of
Notes in book-entry form with the Depositary, which shares shall be delivered in
accordance with the Depositary customary practices) for the number of full
shares of Applicable Stock issuable in payment of the Designated Event
Repurchase Price and cash in lieu of any fractional interests. The person in
whose name the certificate for the shares of Applicable Stock is registered
shall be treated as a holder of record of Applicable Stock on the Designated
Event Repurchase Date. No payment or adjustment will be made for dividends on
the shares of Applicable Stock the Record Date for which occurred on or prior to
the Designated Event Repurchase Date. The Company shall not be required to
deliver certificates for Limited Voting Shares while the stock transfer books
for such stock or the Security Register are duly closed for any purpose, but
certificates for Limited Voting Shares shall be issued and delivered as soon as
practicable after the opening of such books or Security Register.
7.05 SECURITIES PURCHASED IN PART.
Any Certificated Security that is to be repurchased only in part shall
be surrendered at the office of the Paying Agent (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 such Holder's attorney duly authorized in writing) and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Note, without charge, a new Note or Notes, of any authorized denomination
as requested by such Holder in aggregate principal amount equal to, and in
exchange for, the portion of the principal amount of the Security so surrendered
which is not repurchased.
7.06 COVENANT TO COMPLY WITH SECURITIES LAWS UPON REPURCHASE OF SECURITIES.
When complying with the provisions of Section 7.01 hereof (provided
that such offer or purchase constitutes an "issuer tender offer" for purposes of
Rule 13e-4 (which term, as used herein, includes any successor provision
thereto) under the Exchange Act at the time of such offer or purchase), and
subject to any exemptions available under applicable law, the Company shall:
(a) comply with Rule 13e-4 and Rule 14e-1 (or any successor
provision) under the Exchange Act, as applicable;
(b) file the related Schedule TO (or any successor schedule, form
or report) under the Exchange Act, as and if applicable; and
(c) otherwise comply with all federal, state and Canadian
provincial securities laws so as to permit the rights and
obligations under Article Seven to be exercised in the time
and in the manner specified therein.
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To the extent that the provisions of any securities laws or regulations
conflict with the provisions of this Article Seven, the Company's compliance
with such laws and regulations shall not in and of itself cause a breach of its
obligations under this Article Seven.
7.07 REPAYMENT TO THE COMPANY.
The Paying Agent shall return to the Company any cash or shares of
Applicable Stock that remain unclaimed for two years (or such shorter period
under the applicable abandoned property laws to permit such return to the
Company), together with interest or dividends, if any, thereon, held by it for
the payment of the Designated Event Repurchase Price; provided, however, to the
extent that the aggregate amount of cash or shares of Applicable Stock deposited
by the Company pursuant to Section 7.04 exceeds the aggregate Designated Event
Repurchase Price of the Notes or portions thereof which the Company is obligated
to repurchase as of the Designated Event Repurchase Date then, promptly after
the Designated Event Repurchase Date, the Paying Agent shall return any such
excess to the Company.
ARTICLE EIGHT
ADDITIONAL EVENTS OF DEFAULT
8.01 EVENTS OF DEFAULT.
Pursuant to Sections 3.01(q) and 5.01(i) of the Original Indenture,
with respect to the Notes, in addition to the Events of Default contained in
Section 5.01 of the Original Indenture so long as any Notes are outstanding the
following shall be Events of Default:
(a) if the Company fails to satisfy its conversion obligation
(including any entitlement in respect of Additional Shares)
following the exercise by the Holder of the right to convert
that Note pursuant to and in accordance with Article Four of
this First Supplemental Indenture, unless such failure is
cured within five days after written notice of default is
given to the Company by the Trustee or the Holder of such
Note,
(b) if the Company fails to provide timely notice of a Designated
Event or to make a Designated Event Repurchase Offer in
accordance with the terms of Article Seven, and
(c) if the Company fails to make payment of the Designated Event
Repurchase Price with respect to any Note when the amount
becomes due and payable.
ARTICLE NINE
MODIFICATION AND WAIVER
9.01 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
In addition to the limitations on supplemental indentures provided in
Section 9.02 of the Original Indenture (including the limitations provided in
Sections 9.02(a) to (c) of the Original Indenture), so long as any Notes are
outstanding, no modification or amendment of the Indenture or the Notes may be
effected without the consent or affirmative vote of each Holder of outstanding
Notes that would:
(a) reduce the Redemption Price or Designated Event Repurchase
Price or change the time at which or circumstances under which
Notes may or will be redeemed or repurchased pursuant to
Article Five, Article Six and Article Seven;
(b) impair the right of a Holder of Notes to convert any Note or
reduce the number of Limited Voting Shares or any other
property receivable upon conversion other than as contemplated
in this First Supplemental Indenture; or
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(c) modify the provisions of clauses (a) or (b), above.
ARTICLE TEN
MISCELLANEOUS PROVISIONS
10.01 DEFEASANCE AND COVENANT DEFEASANCE.
Notwithstanding anything to the contrary herein or in the Original
Indenture, Article Fourteen of the Original Indenture with respect to defeasance
and covenant defeasance and Article Four of the Original Indenture with respect
to satisfaction and discharge shall not apply to the Notes.
10.02 TRUSTEE.
The Trustee makes no undertaking or representations in respect of, and
shall not be responsible in any manner whatsoever for and in respect of, the
validity or sufficiency of this First Supplemental Indenture or the proper
authorization or the due execution hereof by the Company or for or in respect of
the recitals and statements contained herein, all of which recitals and
statements are made solely by the Company.
10.03 RATIFICATION.
Except as expressly amended hereby, the Original Indenture shall
continue in full force and effect in accordance with the provisions thereof and
the Original Indenture is in all respects hereby ratified and confirmed. This
First Supplemental Indenture and all its provisions shall be deemed a part of
the Original Indenture in the manner and to the extent herein and therein
provided.
10.04 GOVERNING LAW.
THIS FIRST SUPPLEMENTAL INDENTURE AND THE NOTES SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
10.05 EXECUTION IN COUNTERPARTS.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, all as of the day and year first
above written.
FOUR SEASONS HOTELS INC.
By /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer,
Executive Vice President
and Treasurer
THE BANK OF NOVA SCOTIA TRUST
COMPANY OF NEW YORK, as Trustee
By /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
EXHIBIT A
[FACE OF NOTE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY 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 THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THIS NOTE 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 THEREOF. THIS NOTE IS
EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE 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.](1)
FOUR SEASONS HOTELS INC.
1.875% Convertible Senior Notes due 2024
Certificate No.: CUSIP No.:
------------------ ---------------
FOUR SEASONS HOTELS INC., an Ontario, Canada corporation (the
"Company"), promises to pay to____________________, or registered assigns, the
principal amount of _______________ Dollars ($ ) [, or such
greater or lesser amount as is indicated in the records of the Trustee and the
Depositary,](2) on July 30, 2024, and to pay interest thereon from June 18, 2004
or from the most recent Interest Payment Date to which interest has been paid or
duly provided for, on January 30 and July 30 in each year (each, an "Interest
Payment Date"), commencing on January 30, 2005, at the rate of 1.875% per annum,
until the principal hereof is paid or made available for payment at July 30,
2024 or upon acceleration, or until such date on which the Notes are converted,
redeemed or repurchased as provided herein, and at the rate of 1.875% per annum
on any overdue principal and on any overdue instalment of interest. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in the Indenture, be paid to the Person in whose name
this Note (or one or more predecessor Notes) is registered at the close of
business on the regular record date for such interest, which will be January 15
or July 15 (whether or not a Business Day), as the case may be, next preceding
the corresponding Interest Payment Date (a "Regular Record Date"). Any such
interest not so punctually
----------------------------
(1) This legend should be included only if the Note is a Global Security.
(2) This phrase should be included only if the Note is a Global Security.
A-1
paid or duly provided for will forthwith cease to be payable to the holder on
such Regular Record Date and may be paid (a) to the Person in whose name this
Note (or one or more Predecessor Securities) is registered at the close of
business on a special record date for the payment of such defaulted interest to
be fixed by the Trustee (a "Special Record Date"), notice whereof will be given
to holders not less than 10 days prior to such Special Record Date, or (b) at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Notes may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in the Indenture
dated as of June 18, 2004 between the Company and The Bank of Nova Scotia Trust
Company as Trustee, as supplemented by that certain First Supplemental
Indenture, dated as of June 18, 2004 between the Company and the Trustee (the
Indenture as so supplemented is herein called the "Indenture").
The provisions on the back of this certificate are incorporated as if
set forth on the face hereof.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated: FOUR SEASONS HOTELS INC.
------------------------------
By:
-------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture.
THE BANK OF NOVA SCOTIA TRUST
COMPANY OF NEW YORK, as
Trustee
By:
---------------------------
Authorized Signatory
Dated:
------------------------------
A-2
[FORM OF REVERSE OF NOTE]
1.875% Convertible Senior Notes due 2024
This Note is one of a duly authorized issue of 1.875% Convertible
Senior Notes due 2024 (the "Notes") of FOUR SEASONS HOTELS INC., an Ontario,
Canada corporation (the "Company"), issued under an Indenture dated as of June
18, 2004 between the Company and THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW
YORK, as trustee (the "Trustee") (the "Original Indenture") as supplemented by a
first supplemental indenture (the "First Supplemental Indenture") dated the same
date (the Original Indenture as supplemented by the First Supplemental Indenture
being referred to herein as the "Indenture"). The terms of the Note include
those stated in the Indenture, those made part of the Indenture by reference to
the Trust Indenture Act of 1939, as amended ("TIA"), and those set forth in this
Note. This Note is subject to all such terms, and Holders are referred to the
Indenture and the TIA for a statement of all such terms. In the event of any
inconsistency between the terms of this Note and the terms of the Indenture, the
terms of the Indenture shall control. Capitalized terms used but not defined
herein have the meanings assigned to them in the Indenture.
1. METHOD OF PAYMENT.
Payment of the principal of and interest on the Notes shall be in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts or in Limited Voting Shares
or Applicable Stock, as the case may be, as permitted in the Indenture. The
Holder must surrender the Notes to the Paying Agent to collect payment of
principal. Payment of interest on Certificated Notes will be made by check
mailed to the address of the Person entitled thereto as such address appears in
the Security Register. Notwithstanding the foregoing, so long as the Notes are
registered in the name of a Depositary or its nominee, all payments with respect
to the Notes shall be made by wire transfer of immediately available funds to
the account of the Depositary or its nominee.
2. PAYING AGENT, REGISTRAR, CONVERSION AGENT AND BID SOLICITATION AGENT.
Initially, The Bank of Nova Scotia Trust Company of New York will act
as Paying Agent, Conversion Agent and Security Registrar. The Company may
appoint and change any Paying Agent, Security Registrar or Conversion Agent
without notice, other than notice to the Trustee; provided that the Company will
maintain at least one Paying Agent in the State of New York, The City of New
York, Borough of Manhattan, which shall initially be an office or agency of the
Trustee. The Company or any of its Subsidiaries or any of their Affiliates may
act as Paying Agent, Security Registrar or Conversion Agent. None of the Company
or any Subsidiary or any Affiliate of any of them may act as Bid Solicitation
Agent.
3. NOTES UNSECURED.
The Notes are general unsecured obligations of the Company limited to
up to $250,000,000 aggregate principal amount. The Indenture does not limit
other indebtedness of the Company, secured or unsecured.
4. ADDITIONAL AMOUNTS.
The Company will pay to the Holders such Additional Amounts as may
become payable under Section 10.05 of the Original Indenture.
A-3
5. REDEMPTION AT THE OPTION OF THE COMPANY.
Except as provided in Section 5.02 of the First Supplemental Indenture,
the Company will not have the right to redeem the Notes prior to August 4, 2009.
On or after August 4, 2009, the Company may, at its option, redeem the Notes for
cash at any time as a whole, or from time to time in part, at a redemption price
equal to 100% of the principal amount of Notes to be redeemed plus any accrued
and unpaid interest on those Notes to, but not including, the Redemption Date
(the "Redemption Price").
Subject to Section 11.08 of the Original Indenture, notice of
redemption will be mailed at least 30 days but not more than 60 days before the
Redemption Date to each Holder of Notes to be redeemed at the Holder's
registered address. If cash sufficient to pay the Redemption Price of all Notes
(or portions thereof) to be redeemed on the Redemption Date is deposited with
the Paying Agent prior to 10:00 a.m., New York City time, on the Redemption
Date, then on such Redemption Date interest ceases to accrue on such Notes or
portions thereof. Notes in denominations larger than $1,000 of principal amount
may be redeemed in part but only in integral multiples of $1,000 of principal
amount.
No sinking fund is provided for the Notes.
6. REDEMPTION FOR TAX REASONS.
The Company shall have the right to redeem the Notes, in whole but not
in part (other than as a result of a Holder having delivered a Notice of
Election) at the Redemption Price, if (1) there is any change or amendment
(including any announced prospective change or amendment) to the laws (or any
regulations or rulings promulgated thereunder) of Canada or of any political
subdivision or taxing authority thereof or therein, affecting taxation, or any
change in the application or interpretation of such laws, regulations or rulings
by any applicable legislative body, court, governmental agency or regulatory
authority of Canada or of any political subdivision or taxing authority thereof
or therein, which change or amendment is announced or becomes effective on or
after June 18, 2004 and, in a written opinion to the Company of legal counsel of
recognized standing, as a result of such change or amendment, the Company has or
will (assuming, in the case of any announced prospective change or amendment,
that such announced change or amendment will become effective as of the date
specified in such announcement and in the form announced) become obligated to
pay, on the next succeeding date on which interest is due, Additional Amounts
with respect to any Note pursuant to Section 10.05 of the Original Indenture and
(2) the Company (or its successor), in its business judgment, determines that
such obligation cannot be avoided by the use of reasonable measures available to
it and that it delivers to the Trustee an Officer's Certificate attesting to
such change and obligation to pay Additional Amounts. In such event, the Company
will give the Trustee and the Holders of the Notes not less than 30 days' nor
more than 60 days' notice of this redemption, except that (i) the Company will
not give notice of redemption earlier than 60 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, each Holder who does not wish
to have the Company redeem its Notes pursuant to Section 5.02 of the First
Supplemental Indenture can elect to (i) convert its Notes pursuant to Article
Four of the First Supplemental Indenture or (ii) not have its Notes redeemed,
provided that no Additional Amounts that arise solely as a result of the change
in Canadian tax law that caused the Additional Amounts to be payable will be
payable on any payment with respect to the Notes after such Redemption Date. All
future payments will be subject to the deduction or withholding of any Canadian
taxes required by law to be deducted or withheld. In the event that cash
payments that a Holder would otherwise be entitled to receive from the Company
are insufficient to pay applicable Canadian taxes, the Company may require from
the Holder as a condition to the Holder's right to receive any
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Limited Voting Shares on conversion or other amounts from the Company, an amount
of cash sufficient to pay applicable Canadian taxes.
Where no such election is made, the Holder will have its Notes redeemed
without any further action. If a Holder does not elect to convert its Notes
pursuant to Article Four of the First Supplemental Indenture but wishes to elect
to not have its Notes redeemed pursuant to clause (ii) of the preceding
paragraph, such Holder must deliver to the Company (if the Company 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 upon Tax
Redemption (the "Notice of Election") on the back of the Notes, 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 a Business Day at least five Business Days
prior to the Redemption Date.
A Holder may withdraw any Notice of Election by delivering to the
Company (if the Company is acting as its own Paying Agent), or to a Paying Agent
designated by the Company in the notice of redemption, a written notice of
withdrawal prior to the close of business on the Business Day prior to the
Redemption Date.
7. REPURCHASE BY THE COMPANY AT THE OPTION OF THE HOLDER.
Subject to the terms and conditions of the Indenture, the Company shall
become obligated to repurchase, at the option of the Holder, all or any portion
of the Notes held by such Holder on July 30, 2009, July 30, 2014 and July 30,
2019 in integral multiples of $1,000 at a repurchase price equal to 100% of the
principal amount of those Notes plus accrued and unpaid interest to, but not
including, such Repurchase Date (the "Repurchase Price"). No later than 25
Business Days prior to each Repurchase Date, the Company shall provide a written
notice of the repurchase right to the Trustee and to each Holder. To exercise
such right, a Holder shall deliver to the Paying Agent a Repurchase Notice
containing the information set forth in the Indenture, at any time from 9:00
a.m., New York City time, on the date that is 20 Business Days immediately
preceding such Repurchase Date until 5:00 p.m., New York City time, on the
Business Day immediately preceding such Repurchase Date, and shall deliver the
Notes to the Paying Agent as set forth in the Indenture.
If the Notes are to be repurchased on July 30, 2009, the Repurchase
Price must be paid in cash. If the Notes are to be repurchased on July 30, 2014
or July 30, 2019, the Repurchase Price may be paid, at the option of the
Company, in cash or Limited Voting Shares, or in any combination thereof,
subject to the terms and conditions of the Indenture.
Holders have the right to withdraw any Repurchase Notice by delivering
to the Paying Agent a written notice of withdrawal in accordance with the
provisions of the Indenture.
8. MAKE WHOLE PREMIUM UPON A FUNDAMENTAL CHANGE.
If a Fundamental Change occurs on or before July 30, 2009, Holders of
Notes will be entitled to receive from the Company (a) upon the repurchase of
Notes tendered to a Designated Event Repurchase Offer pursuant to Article Seven
of the First Supplemental Indenture, the Make Whole Premium, or (b) upon
conversion of the Notes in accordance with Section 4.01(e) of the First
Supplemental Indenture, an additional number of Limited Voting Shares (the
"Additional Shares") per $1,000 principal amount of Notes equal to (i) the sum
of the Make Whole Premium and any accrued and unpaid interest per $1,000
principal amount of Notes to, but not including, the Conversion Date, divided by
(ii) the average of the Closing Sale Prices of the Limited Voting Shares for the
10 Trading Days immediately preceding the Conversion Date. The Company may pay
the Make Whole Premium or satisfy its obligation to deliver Additional Shares,
as the case may be, in (at the Company's option) Limited Voting Shares, cash or
a combination thereof, or in the same form of consideration into which all or
substantially all of the Limited
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Voting Shares have been converted in connection with the applicable Fundamental
Change, valued as set forth in the Indenture. If Holders of the Limited Voting
Shares have the right to elect the form of consideration received in a
Fundamental Change, then for purposes of the foregoing the consideration into
which a Limited Voting Share has been converted shall be deemed to equal the
aggregate consideration distributed in respect of all Limited Voting Shares of
the Company divided by the total number of Limited Voting Shares participating
in the distribution.
9. DESIGNATED EVENT REPURCHASE OFFER.
Subject to the terms and conditions of the Indenture, if a Designated
Event occurs before the maturity of the Notes, the Company shall make a
"Designated Event Repurchase Offer" to repurchase all of the Notes not
previously called for redemption at a purchase price (the "Designated Event
Repurchase Price") equal to the sum of (i) 100% of the principal amount of the
Notes, plus (ii) any accrued and unpaid interest to, but not including, the
Designated Event Repurchase Date, plus (iii), if the Designated Event Repurchase
Offer is being made in respect of a Fundamental Change that constitutes a Change
in Control with an Effective Date that is on or before July 30, 2009, a Make
Whole Premium, if any. The Company shall purchase Notes in respect of which such
offer is accepted by a Holder in accordance with Section 7.01(c) of the First
Supplemental Indenture on the date that is 30 Business Days after a Designated
Event Notice has been mailed (the "Designated Event Repurchase Date"). To accept
the Designated Event Repurchase Offer, a Holder must deliver to the Paying Agent
a Designated Event Acceptance Notice containing the information set forth in the
Indenture, at any time prior to 5:00 p.m., New York City time, on the third
Business Day immediately preceding the Designated Event Repurchase Date, and
shall deliver the Notes to be repurchased to the Paying Agent as set forth in
the Indenture.
The Designated Event Repurchase Price may be paid, at the option of the
Company, in cash or by the issuance and delivery of shares of Applicable Stock,
or in any combination thereof, subject to the terms and conditions of the
Indenture.
Holders have the right to withdraw any Designated Event Acceptance
Notice by delivering to the Paying Agent a written notice of withdrawal in
accordance with the provisions of the Indenture.
10. CONVERSION.
Subject to and upon compliance with the provisions of the Indenture
(including, without limitation, the conditions to conversion of this Note set
forth in Section 4.01 and Section 4.02 of the First Supplemental Indenture), a
Holder shall have the right, at such Holder's option, to convert the Holder's
Note (or any portion of the principal amount thereof that is $1,000 or an
integral multiple $1,000), into Limited Voting Shares (subject to the Company's
right to deliver cash or Limited Voting Shares or a combination of cash and
Limited Voting Shares pursuant to Article Four of the First Supplemental
Indenture), solely upon the occurrence of one or more of the following events:
(a) during any fiscal quarter (beginning with the fiscal quarter
ending September 30, 2004) if the Closing Sale Price of the
Limited Voting Shares for at least 20 consecutive Trading Days in
the last 30 consecutive Trading Days in the immediately preceding
fiscal quarter exceeds 130% of the Conversion Price in effect on
the last Trading Day of that immediately preceding fiscal quarter;
(b) during the five consecutive Trading Day period immediately
following any 10 consecutive Trading Day period in which the
Trading Price per $1,000 principal amount of Notes for each day of
such 10 consecutive Trading Day period was (or was deemed to be)
less than 95% of the product of the Closing Sale Price for Limited
Voting Shares on such Trading Day multiplied by the Conversion
Rate;
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(c) at any time prior to 5:00 p.m., New York City time, on the
second Business Day immediately preceding the Redemption Date, if
such Note has been called for redemption pursuant to Article Five
of the First Supplemental Indenture even if the Notes are not
otherwise convertible at that time; provided the Holder has not
delivered a Designated Event Acceptance Notice in respect of a
Note to be converted, in which event such Designated Event
Acceptance Notice must be duly withdrawn in accordance with the
First Supplemental Indenture;
(d) if (1) the Company issues, to all holders of Limited Voting
Shares, rights or warrants entitling them to purchase Limited
Voting Shares, for a period expiring within 45 days of the record
date for such issuance at an exercise price per share that is less
than the average of the Closing Sale Price of Limited Voting
Shares for the 10 consecutive Trading Days immediately preceding,
but not including, the record date for such issuance, or (2) the
Company makes a distribution, to all holders of Limited Voting
Shares, of shares of Capital Stock, evidences of indebtedness,
assets, or rights to purchase its securities, which distribution
has a per share value exceeding 10% of the Closing Sale Price of
the Limited Voting Shares on the Trading Day preceding the
declaration date for the distribution. The Company or, at the
Company's request, the Trustee in the name and at the expense of
the Company, shall notify the Holders in writing at least 20 days
before the "ex" date for that issue or distribution. On and after
the date that the Company gives such notice, until the earlier of
the close of business on the Business Day immediately preceding
the "ex" date or the date the Company publicly announces that such
distribution will not take place, the Notes may be converted.
Notwithstanding the provisions of Section 4.01(d) of the First
Supplemental Indenture, Notes may not be converted pursuant
thereto nor will any adjustment to the Conversion Rate be made
pursuant to the transactions described in Section 4.01(d) of the
First Supplemental Indenture if the Holder, without conversion of
the Note, would participate, on the same basis as a holder of
Limited Voting Shares, in the distribution as if such Holder had
converted its Notes into Limited Voting Shares prior to the record
date for such distribution. If the issue or distribution does not
take place, no Note surrendered for conversion will be converted;
or
(e) during the period from and after the date that is 10 days before
the anticipated Effective Date of a Fundamental Change until and
including the close of business on the day that is the later of
(i) 10 days after the actual Effective Date and (ii) the related
Designated Event Repurchase Date; unless, prior to that time, the
Company has publicly announced that the Fundamental Change giving
rise to the conversion right will not take place. If such
Fundamental Change does not take place, no Notes surrendered for
conversion will be converted. Upon such conversion pursuant to
Section 4.01(e) of the First Supplemental Indenture, the Holder
shall also be entitled to receive Additional Shares, if any, as
set forth in Section 3.01 of the First Supplemental Indenture.
The Company will notify Holders of any event giving rise to the right
to convert the Notes as specified above in accordance with the Indenture.
A Note in respect of which a Holder has delivered a Repurchase Notice
or Designated Event Acceptance Notice, as the case may be, requiring the Company
to repurchase such Note may be converted only if such Repurchase Notice or
Designated Event Acceptance Notice is withdrawn in accordance with the terms of
the Indenture.
Subject to and upon compliance with the provisions of the Indenture,
each Note will initially be convertible into 13.9581 Limited Voting Shares per
$1,000 principal amount of Notes to be converted or
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such Conversion Rate as adjusted from time to time as provided in the Indenture.
The Company may satisfy its obligation to issue Limited Voting Shares on
conversion of a Note (including Additional Shares), at its option, by delivering
cash or Limited Voting Shares or a combination of cash and Limited Voting
Shares, at the Company's option.
To surrender a Note for conversion, a Holder must, in the case of
Global Securities, comply with the applicable procedures of the Depositary in
effect at that time, and in the case of Certificated Securities, (1) surrender
the Note to the Conversion Agent, (2) complete and manually sign the conversion
notice below (or complete and manually sign a facsimile of such notice) and
deliver such notice to the Conversion Agent, (3) furnish appropriate
endorsements and transfer documents and (4) pay all funds required, if any,
relating to interest and any withholding, transfer or similar tax, if required.
No fractional Limited Voting Shares shall be issued upon conversion of
any Note. Instead, the Company shall pay a cash adjustment as provided in the
Indenture.
No payment or adjustment will be made for accrued and unpaid interest
or dividends on the Limited Voting Shares, except as provided in the Indenture.
If any of the following events occurs, namely:
(a) any reclassification or change of the outstanding Limited
Voting Shares into another class of stock (other than as a
result of a subdivision or combination); or
(b) any consolidation, amalgamation, statutory arrangement,
merger, binding share exchange or similar transaction of the
Company or if the Company transfers all or substantially all
of its consolidated property and assets (as determined under
applicable law) as a result of which the holders of all the
Limited Voting Shares receive cash, securities or other
property (or any combination thereof) with respect to or in
exchange for all of their Limited Voting Shares;
the Company or the successor or purchasing Person, as the case may be, shall
execute with the Trustee a supplemental indenture providing that the Holder's
right to convert a Note into Limited Voting Shares shall be changed to a right
to convert a Note into the kind and amount of cash, securities or other property
that such Holder would have been entitled to receive upon such reclassification,
change, consolidation, amalgamation, statutory arrangement, merger, binding
share exchange or similar transaction, sale or conveyance had such Notes been
converted into Limited Voting Shares immediately prior to such reclassification,
change, consolidation, amalgamation, statutory arrangement, merger, binding
share exchange or similar transaction, sale or conveyance.
Notwithstanding any other provision of the Indenture, if, before June
20, 2009 Holders of Notes otherwise would be entitled to receive, upon
conversion of the Notes, any property (including cash) or securities that would
not constitute "prescribed securities" for the purposes of clause
212(1)(b)(vii)(E) of the Income Tax Act (Canada) (which is referred to as
"ineligible consideration"), such Holders shall only be entitled to receive
"prescribed securities" of a type specified by the Board of Directors and shall
not be entitled to receive any such ineligible consideration, but the Company or
any 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" for the
purposes of clause 212(1)(b)(vii)(E) of the Income Tax Act (Canada) with a Fair
Market Value equal to the Fair Market Value of such ineligible consideration.
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11. DENOMINATIONS; TRANSFER; EXCHANGE.
The Notes are in registered form, without coupons, in denominations of
$1,000 of principal amount and integral multiples of $1,000. A Holder may
transfer or exchange Notes in accordance with the Indenture. The Security
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture.
12. PERSONS DEEMED OWNERS.
The registered Holder of this Note may be treated as the owner of this
Note for all purposes (except as otherwise required by law).
13. UNCLAIMED MONEY OR NOTES.
The Trustee and the Paying Agent shall return to the Company upon
written request any cash or securities held by them for the payment of any
amount with respect to the Notes that remains unclaimed for two years (or such
shorter period under the applicable abandoned property laws to permit such
return to the Company).
14. AMENDMENT; WAIVER.
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Notes may be amended with the written consent or affirmative
vote of the Holders of not less than a majority in aggregate principal amount of
the outstanding Notes and (ii) certain Defaults may be waived with the written
consent or affirmative vote of the Holders of not less than a majority in
aggregate principal amount of the outstanding Notes.
Without the consent of any Holders, the Company, when authorized by or
pursuant to a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more supplemental indentures for any of the
following purposes:
(a) to evidence the succession of another Person to the Company
and the assumption by that successor of the covenants of the
Company contained in the Indenture and in the Securities;
(b) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power conferred upon the
Company;
(c) to add any additional Events of Default;
(d) to change or eliminate any of the provisions of the Indenture;
provided that any such change or elimination shall become
effective only when there is no Security outstanding of any
series created prior to the execution of such supplemental
indenture that is entitled to the benefit of such provision;
(e) to evidence and provide for the acceptance of appointment by a
successor trustee with respect to Securities of one or more
series; or
(f) cure any ambiguity, to correct or supplement any provision in
the Indenture that may be defective or inconsistent with any
other provisions, or to make any other provisions with respect
to matters or questions arising under the Indenture, provided
those provisions shall not adversely affect the interests of
Holders in any material respect.
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15. DEFAULTS AND REMEDIES.
If any Event of Default other than as a result of certain events of
bankruptcy, insolvency or reorganization of the Company or its Significant
Subsidiaries occurs and is continuing, the principal of all the Notes may be
declared due and payable in the manner and with the effect provided in the
Indenture. If an Event of Default occurs as a result of certain events of
bankruptcy, insolvency or reorganization of the Company or its Significant
Subsidiaries, the principal of all the Notes shall become due and payable
immediately without any declaration or other act on the part of the Trustee or
any Holder, all as and to the extent provided in the Indenture.
16. TRUSTEE DEALINGS WITH THE COMPANY.
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with and collect obligations owed to it
by the Company or its Affiliates and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee.
17. CALCUATIONS IN RESPECT OF NOTES.
The Company or its agents will be responsible for making all
calculations called for under the Notes including, but not limited to,
determination of the Make Whole Premium and Additional Shares, Trading Price and
Closing Sale Price of the Limited Voting Shares or Applicable Stock, as
applicable, the number of Limited Voting Shares or Applicable Stock, as
applicable, and (if applicable, the amount of cash) issuable or payable upon
conversion and the amounts of interest on the Notes. Any calculations made in
good faith and without manifest error will be final and binding on Holders of
the Notes. The Company or its agents will be required to deliver to the Trustee
a schedule of its calculations and the Trustee will be entitled to conclusively
rely upon the accuracy of such calculations without independent verification.
18. RECOURSE AGAINST OTHERS.
A director, officer, employee, shareholder or representative or agent,
as such, of the Company shall not have any liability for any obligations of the
Company under the Notes or the Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation. By accepting a Note each
Holder waives and releases all such liability. Such waiver and release shall be
part of the consideration for the issue of the Notes.
19. AUTHENTICATION.
This Note shall not be valid until an authorized signatory of the
Trustee manually signs the Trustee's Certificate of Authentication on the other
side of this Note.
20. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Noteholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (joint tenants with right of survivorship and not as tenants
in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
21. INDENTURE TO CONTROL; GOVERNING LAW.
IN THE CASE OF ANY CONFLICT BETWEEN THE PROVISIONS OF THIS NOTE AND THE
INDENTURE, THE PROVISIONS OF THE INDENTURE SHALL CONTROL. THE
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INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
The Company will furnish to any Noteholder upon written request and
without charge a copy of the Indenture. Requests may be made to:
FOUR SEASONS HOTELS INC.
0000 Xxxxxx Xxxxxx
Xxxxxxx, XX X0X 0X0
Facsimile No. (000) 000-0000
Attn: General Counsel
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
________________________________________________________________________________
(Insert assignee's soc. sec. or tax ID no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint agent to transfer this Note on the books of the
Company. The agent may substitute another to act for him.
Your Signature:
Date:
------------------------------- ----------------------------
(Sign exactly as your
name appears on the other
side of this Note)
Signature Guaranteed
Participant in a Recognized Signature
Guarantee Medallion Program
By:
--------------------------------------------
Authorized Signatory
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CONVERSION NOTICE
To convert this Note into Limited Voting Shares of the Company, check the box
|_|; provided, however:
o under the Indenture, the Company may, at its sole option, in
lieu of delivering a number of Limited Voting Shares upon
conversion of all or any part of the Note, deliver cash or
Limited Voting Shares or a combination of cash and Limited
Voting Shares, and
o under Section 3.02(e) of the First Supplemental Indenture, a
Holder converting its Note in a Principal Value Conversion
shall receive, in lieu of a number of Limited Voting Shares
based on the Conversion Price, cash or Limited Voting Shares
or a combination of cash and Limited Voting Shares, at the
Company's sole option, with a value equal to the principal
amount of the Note so surrendered for conversion.
To convert only part of this Note, state the principal amount to be converted
(which must be $1,000 or an integral multiple of $1,000):___________________
If you want the stock certificate made out in another person's name fill in the
form below:
________________________________________________________________________________
(Insert assignee's soc. sec. or tax ID no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint agent to transfer this Note on the books of the
Company. The agent may substitute another to act for him.
Your Signature:
Date:
------------------------------- -----------------------------
(Sign exactly as your name
appears on the other
side of this Note)
Signature Guaranteed
Participant in a Recognized Signature
Guarantee Medallion Program
By:
--------------------------------------------
Authorized Signatory
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NOTICE OF ELECTION UPON TAX REDEMPTION
Certificate No. of Note: ___________
If you elect not to have this Note redeemed by the Company pursuant to Section
5.02 of the First Supplemental Indenture, check the box: |_|
If you elect to have only part of this Note redeemed by the Company pursuant to
Section 5.02 of the Indenture, state the principal amount:
$_______________
(must be in an integral multiple of $1,000)
Date: _________________
Signature(s):
-------------------------------------------------
(Sign exactly as your name(s) appear(s)
on the other side of this Note)
Signature(s) guaranteed by:
__________________________________________________
(All signatures must be guaranteed by a guarantor
institution participating in the Notes Transfer
Agents Medallion Program or in such other
guarantee program acceptable to the Trustee.)
Payments of interest on the Notes and deemed interest arising on maturity,
redemption, purchase or conversion of the Note or an assignment or other
transfer of the Note to a person resident in Canada may be subject to Canadian
taxes, which may be substantial. Holders should consult their own tax advisors
in considering whether to elect their option to not to have their Notes
redeemed.
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EXHIBIT B
[Form of Designated Event Acceptance Notice]
The Bank of Nova Scotia Trust Company of New York
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Office
Re: Four Seasons Hotels Inc. (the "Company")
1.875% Convertible Senior Notes due 2024
This is a Designated Event Acceptance Notice as defined in Section 7.01(c) of
the First Supplemental Indenture dated as of June 18, 2004 to the Indenture
dated as of June 18, 2004 between the Company and The Bank of Nova Scotia Trust
Company of New York, as Trustee. Terms used but not defined herein shall have
the meanings ascribed to them in the Indenture as supplemented by the First
Supplemental Indenture.
I elect to have the following aggregate principal amount of Notes purchased by
the Company pursuant to Section 7.01 of the First Supplemental Indenture (in
multiples of $1,000):
$______________________________________________
(must be an integral multiple of $1,000)
Certificate No(s). of Notes:
-------------------------------------
I agree that the Notes will be purchased on the Designated Event Repurchase Date
pursuant to the terms and conditions specified in the Notes and the First
Supplemental Indenture.
If the Company elects, pursuant to Section 7.02 of the First Supplemental
Indenture, to pay the Designated Event Repurchase Price, in whole or in part, in
shares of Applicable Stock but such portion of the Designated Event Repurchase
Price shall ultimately be paid to Holders entirely in cash because any of the
conditions to payment of the Designated Event Repurchase Price in shares of
Applicable Stock is not satisfied prior to 5:00 p.m., New York City time, on the
Business Day immediately preceding the Designated Event Repurchase Date, as set
forth in Section 7.02(b) of the First Supplemental Indenture, I hereby elect to:
[ ] withdraw this Designated Event
Acceptance Notice as to $___________________ in
principal amount of Notes with the following certificate
numbers:______________________________________________________
to which this Designated Event Acceptance Notice relates;
[ ] receive cash in respect of the entire Designated Event
Repurchase Price for all Notes (or portions thereof) to which
this Designated Event Acceptance Notice relates.
Signed:
______________________________
Signature Guaranteed
Participant in a Recognized Signature
Guarantee Medallion Program
By:
--------------------------------------------
Authorized Signatory
B-1
