Exhibit 99.4
NORTEL NETWORKS CORPORATION
COMPUTERSHARE TRUST COMPANY OF CANADA
AND
HOLDERS
FROM TIME TO TIME
--------------------------
PURCHASE CONTRACT AND UNIT AGREEMENT
--------------------------
DATED AS OF JUNE 12, 2002
TABLE OF CONTENTS
Page
PARTIES ................................................................................................ 1
RECITALS ................................................................................................ 1
PART I - GENERAL PROVISIONS
ARTICLE ONE
Definitions and Other Provisions of General Application
Section 1.01. Definitions................................................................................ 2
Acceleration Date.......................................................................... 2
Acceleration Event......................................................................... 2
Act........................................................................................ 3
Affiliate.................................................................................. 3
Agent...................................................................................... 3
Agreement.................................................................................. 3
Applicable Market Value.................................................................... 3
Authorized Officers........................................................................ 3
Board of Directors......................................................................... 3
Board Resolution........................................................................... 3
Business Day............................................................................... 3
Certificate................................................................................ 4
Closing Price.............................................................................. 4
Common Share Settlement.................................................................... 4
Common Shares.............................................................................. 4
Company.................................................................................... 4
Company Order.............................................................................. 4
Current Market Price....................................................................... 4
Custodial Agreement........................................................................ 4
Custodian.................................................................................. 4
Depositary................................................................................. 4
Early Settlement........................................................................... 4
Early Settlement Date...................................................................... 4
Early Settlement Rate...................................................................... 4
Early Settlement Upon Cash Merger.......................................................... 4
Early Settlement Upon Cash Merger Date..................................................... 5
Exchange Act............................................................................... 5
Expiration Date............................................................................ 5
Expiration Time............................................................................ 5
Global Certificate......................................................................... 5
Global Purchase Contract Certificate....................................................... 5
i
TABLE OF CONTENTS
(Continued)
Page
Global Unit Certificate.................................................................... 5
Holder..................................................................................... 5
NYSE....................................................................................... 5
Officers' Certificate...................................................................... 5
Opinion of Counsel......................................................................... 5
Outstanding Certificates................................................................... 5
Outstanding Purchase Contracts............................................................. 6
Payment Date............................................................................... 6
Person..................................................................................... 6
Predecessor Certificate.................................................................... 6
Principal Subsidiary....................................................................... 6
Purchase Contract.......................................................................... 6
Purchase Contract Certificate.............................................................. 7
Purchase Contract Component................................................................ 7
Purchase Contract Register................................................................. 7
Purchase Contract Registrar................................................................ 7
Purchased Shares........................................................................... 7
Record Date................................................................................ 7
Reference Price............................................................................ 7
Reorganization Event....................................................................... 7
Representatives............................................................................ 7
Responsible Officer........................................................................ 7
Securities................................................................................. 7
Securities Act............................................................................. 7
Settlement Date............................................................................ 7
Settlement Rate............................................................................ 7
Stock Transfer Office...................................................................... 7
Threshold Appreciation Price............................................................... 8
Trading Day................................................................................ 8
Treasury Strip Component................................................................... 8
Treasury Strips............................................................................ 8
TSX........................................................................................ 8
Underwriting Agreement..................................................................... 8
Unit....................................................................................... 8
Unit Certificate........................................................................... 8
Unit Order................................................................................. 8
Unit Register.............................................................................. 8
Unit Registrar............................................................................. 8
Section 1.02. Compliance Certificates and Opinions....................................................... 8
Section 1.03. Form of Documents Delivered to Agent....................................................... 9
Section 1.04. Acts of Holders; Record Dates.............................................................. 10
Section 1.05. Notices, etc., to Agent and the Company.................................................... 11
ii
TABLE OF CONTENTS
(Continued)
Page
Section 1.06. Notice to Holders; Waiver.................................................................. 12
Section 1.07. Effect of Headings and Table of Contents................................................... 12
Section 1.08. Successors and Assigns..................................................................... 12
Section 1.09. Severability Clause........................................................................ 13
Section 1.10. Benefits of Agreement...................................................................... 13
Section 1.11. Governing Law.............................................................................. 13
Section 1.12. Legal Holidays............................................................................. 13
Section 1.13. Counterparts............................................................................... 13
Section 1.14. Inspection of Agreement.................................................................... 13
Section 1.15. Obligations of the Company................................................................. 14
Section 1.16. Force Majeure.............................................................................. 14
Section 1.17. Custody and Audit.......................................................................... 14
Section 1.18. Reports.................................................................................... 15
Section 1.19. Confidential Information................................................................... 15
Section 1.20. Legal Advice............................................................................... 15
ARTICLE TWO
The Agent
Section 2.01. Certain Duties and Responsibilities........................................................ 16
Section 2.02. Notice of Default.......................................................................... 16
Section 2.03. Certain Rights of Agent.................................................................... 17
Section 2.04. Not Responsible for Recitals............................................................... 17
Section 2.05. May Hold Units............................................................................. 18
Section 2.06. Money Held in Custody...................................................................... 18
Section 2.07. Compensation and Expense................................................................... 18
iii
TABLE OF CONTENTS
(Continued)
Page
Section 2.08. Corporate Agent Required; Eligibility...................................................... 19
Section 2.09. Resignation and Removal; Appointment of Successor.......................................... 19
Section 2.10. Acceptance of Appointment by Successor..................................................... 20
Section 2.11. Merger, Conversion, Consolidation or Succession to Business................................ 21
Section 2.12. Preservation of Information; Communications to Holders..................................... 21
Section 2.13. No Obligations of Agent.................................................................... 21
Section 2.14. Agent of the Holders....................................................................... 22
Section 2.15. Tax Compliance............................................................................. 22
Section 2.16. Appointment of Affiliate for Service of Process............................................ 22
Section 2.17. Limitation of Liability.................................................................... 22
ARTICLE THREE
Supplemental Agreements
Section 3.01. Supplemental Agreements without Consent of Holders......................................... 23
Section 3.02. Supplemental Agreements with Consent of Holders............................................ 24
Section 3.03. Execution of Supplemental Agreements....................................................... 24
Section 3.04. Effect of Supplemental Agreements.......................................................... 24
Section 3.05. Reference to Supplemental Agreements....................................................... 24
ARTICLE FOUR
Consolidation, Merger, Sale or Conveyance
Section 4.01. Covenant Not to Merge, Consolidate, Sell or Convey Property
Except Under Certain Conditions .................................................................. 25
Section 4.02. Rights and Duties of Successor Corporation................................................. 25
Section 4.03. Opinion of Counsel to Agent................................................................ 25
iv
TABLE OF CONTENTS
(Continued)
Page
ARTICLE FIVE
Covenants
Section 5.01. Performance Under Purchase Contracts....................................................... 26
Section 5.02. Maintenance of Office or Agency............................................................ 26
Section 5.03. Company to Reserve Common Shares; Listing of Common Shares................................. 26
Section 5.04. Covenants as to Common Shares.............................................................. 27
Section 5.05. Statements of Officers of the Company as to Default........................................ 27
Section 5.06. Appointment of Agent of Service of Process................................................. 27
PART II - PURCHASE CONTRACTS
ARTICLE SIX
Purchase Contract Certificate Forms
Section 6.01. Forms of Purchase Contract Certificates Generally.......................................... 27
ARTICLE SEVEN
Purchase Contract Certificates
Section 7.01. Purchase Contracts: Title and Terms....................................................... 28
Section 7.02. Rights and Obligations Evidenced by the Purchase Contract Certificates..................... 28
Section 7.03. Execution, Authentication, Delivery and Dating of Purchase Contract Certificates........... 29
Section 7.04. Temporary Purchase Contract Certificates................................................... 29
Section 7.05. Purchase Contract Certificate Registration; Registration of Transfer and Exchange.......... 30
Section 7.06. Mutilated, Destroyed, Lost and Stolen Purchase Contract Certificates....................... 32
Section 7.07. Persons Deemed Owners of Purchase Contracts................................................ 33
Section 7.08. Cancellation of Purchase Contract Certificates............................................. 34
v
TABLE OF CONTENTS
(Continued)
Page
ARTICLE EIGHT
The Purchase Contracts
Section 8.01. Issuance of Common Shares.................................................................. 34
Section 8.02. Delivery of Common Shares.................................................................. 35
Section 8.03. Adjustment of Settlement Rate.............................................................. 36
Section 8.04. Notice of Adjustments and Certain Other Events............................................. 42
Section 8.05. Acceleration Event; Notice................................................................. 43
Section 8.06. Early Settlement........................................................................... 43
Section 8.07. Early Settlement Upon Cash Merger.......................................................... 44
Section 8.08. No Fractional Shares....................................................................... 46
Section 8.09. Charges and Taxes.......................................................................... 47
Section 8.10. Company to Deal Only With Agent............................................................ 47
ARTICLE NINE
Purchase Contract Remedies
Section 9.01. Restoration of Purchase Contract Rights and Remedies....................................... 47
Section 9.02. Rights and Remedies Cumulative for Purchase Contracts...................................... 48
Section 9.03. Delay or Omission Not Waiver of Purchase Contract Rights and Remedies...................... 48
Section 9.04. Undertaking for Costs -- Purchase Contracts................................................ 48
Section 9.05. Waiver of Stay or Extension Laws for Purchase Contracts.................................... 48
PART III - UNITS
ARTICLE TEN
Unit Certificate Forms
Section 10.01. Forms of Unit Certificates Generally...................................................... 49
vi
TABLE OF CONTENTS
(Continued)
Page
ARTICLE ELEVEN
The Units
Section 11.01. Units: Title and Terms................................................................... 49
Section 11.02. Rights and Obligations Evidenced by the Unit Certificates................................. 50
Section 11.03. Execution, Delivery and Dating of Unit Certificates....................................... 51
Section 11.04. Temporary Unit Certificates............................................................... 51
Section 11.05. Unit Certificate Registration; Registration of Transfer and
Exchange of Unit Certificates. ........................................................... 52
Section 11.06. Mutilated, Destroyed, Lost and Stolen Unit Certificates................................... 54
Section 11.07. Persons Deemed Owners of Unit Certificates................................................ 55
Section 11.08. Cancellation of Unit Certificates......................................................... 55
Section 11.09. Separation and Withdrawal of Treasury Strip Component..................................... 56
Section 11.10. Recreation of Units....................................................................... 56
ARTICLE TWELVE
The Treasury Strips
Section 12.01. Custodial Arrangement..................................................................... 57
Section 12.02. Instruction Regarding Payment of Amounts Received in Respect of Treasury Strips........... 57
Section 12.03. Delivery of Treasury Strips Upon Occurrence of an Acceleration Event...................... 58
Section 12.04. Delivery of Treasury Strips Upon Early Settlement or Early Settlement Upon Cash Merger.... 58
ARTICLE THIRTEEN
Unit Remedies
Section 13.01. Restoration of Unit Rights and Remedies................................................... 58
vii
TABLE OF CONTENTS
(Continued)
Page
Section 13.02. Rights and Remedies Cumulative for Units.................................................. 58
Section 13.03. Delay or Omission Not Waiver of Unit Rights and Remedies.................................. 59
Section 13.04. Undertaking for Costs -- Units............................................................ 59
viii
TABLE OF CONTENTS
(Continued)
Page
----
Schedule 1 Treasury Strips
EXHIBIT A Form of Purchase Contract Certificate........................................ A-1
EXHIBIT B Form of Unit Certificate..................................................... X-0
XXXXXXX X Xxxxxxxxxx Xxxxxxxxxxxx...................................................... X-0
XXXXXXX X Election for Early Settlement................................................ D-1
EXHIBIT E Election for Early Settlement Upon Cash Merger............................... E-1
EXHIBIT F Holder's Election for Withdrawal of Treasury Strip Component................. F-1
EXHIBIT G Holder's Instruction to Agent and Custodian.................................. X-0
XXXXXXX X Xxxx Xxxxx................................................................... H-1
ix
PARTIES
PURCHASE CONTRACT AND UNIT AGREEMENT, dated as of June 12,
2002, among NORTEL NETWORKS CORPORATION, a Canadian corporation (the "Company"),
Computershare Trust Company of Canada, acting as purchase contract agent (the
"Agent") for Holders from time to time, except when acting as Purchase Contract
Registrar and Unit Registrar for the Company, and Holders from time to time.
Capitalized terms used herein have those meanings ascribed to them in Section
1.01.
RECITALS
WHEREAS, on and from the date hereof the Holders from time to
time and the Company have entered into this Agreement, under which the Company
has agreed to issue and deliver Common Shares to such Holders pursuant to the
Purchase Contracts on the Settlement Date or, at the option of any Holder, on an
Early Settlement Date or Early Settlement Upon Cash Merger Date, in
consideration for the purchase price of $22,542.43 per Purchase Contract paid by
the initial Holders to the Company on the original issue date of the Purchase
Contracts; and
WHEREAS, simultaneously with entering into the Purchase
Contracts with the Company, the initial Holders will have acquired Treasury
Strips, as contemplated in the prospectus supplement relating to the Units dated
June 6, 2002, which will have been delivered to the Custodian in accordance
with the Custodial Agreement; and
WHEREAS, for the convenience of the Holders, the Holders wish
to appoint the Agent to instruct the Custodian as to who the Holders are on the
Unit Register and the manner by which all payments with respect to the Treasury
Strips that are received by the Custodian are to be made to Holders and to
administer all deliveries made on settlement of the Purchase Contracts; and
WHEREAS, the Company acknowledges such appointment and agrees
to make all deliveries under the Purchase Contracts to the Agent, to give all
notices to Holders to the Agent and to otherwise deal with the Agent as agent
for the Holders, all as set forth herein; and
WHEREAS, the Company has appointed the Agent to act as
Purchase Contract Registrar and Unit Registrar for the Company; and
WHEREAS, the Company acknowledges, and the Agent and the
Holders agree, that the Agent's duties to the Holders in respect of the Treasury
Strips evidenced by Units as set forth in this Agreement are only for
convenience of the Holders, and that the Company shall not have any obligations
or responsibilities with respect to the administration, custody or any payments
of the Treasury Strips and further that substantially all of the duties and
responsibilities of the Agent contemplated in this Agreement are in respect of
the Purchase Contracts and the Units insofar as they evidence the Purchase
Contracts and the administration thereof; and
WHEREAS, to accurately reflect the obligations and rights of
the parties hereto as their interest appear, this Agreement is divided into
three distinct parts, whereby Part I sets forth general provisions that are
applicable to the parties hereto, Part II sets forth provisions that address the
obligations and rights of the parties hereto with respect to the Purchase
Contracts and
Part III sets forth provisions that address the obligations and rights of the
Agent and the Holders (but not the Company) when such Holders own Purchase
Contracts evidenced by Units;
NOW THEREFORE, in consideration of the premises and the
purchase of the Units by the Holders thereof, it is mutually agreed as follows:
PART I - GENERAL PROVISIONS
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 1.01. Definitions.
For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to
any particular Article, Section or other subdivision; and
(3) all references to "$" herein shall mean United States
dollars.
"Acceleration Date" means the date, if any, on which an
Acceleration Event occurs.
"Acceleration Event" means the occurrence of any of the
following events on or after August 15, 2002 (except as provided below): (i) a
decree, judgment, or order by a court having jurisdiction in the premises shall
have been entered adjudging the Company a bankrupt or insolvent or approving as
properly filed a petition seeking reorganization, readjustment, arrangement,
composition or similar relief for the Company under any bankruptcy, insolvency
or other similar applicable law or ordering the appointment of a receiver or
liquidator or trustee or assignee in bankruptcy or insolvency of the Company or
of a substantial part of its property, or for the winding up or liquidation of
its affairs, and such decree, judgment or order shall have remained in force for
a period of 60 consecutive days; or any substantial part of the property of the
Company shall be sequestered or attached and shall not be returned to the
possession of the Company or released from such attachment whether by filing of
a bond or stay or otherwise within 60 consecutive days thereafter; or (ii) the
Company shall institute proceedings to be adjudicated a voluntary bankrupt, or
shall consent to the filing of a bankruptcy proceeding against it, or shall file
a petition or answer or consent seeking reorganization, readjustment,
arrangement, composition or similar relief under any bankruptcy, insolvency or
other similar applicable law or the Company shall consent to the filing of any
such petition, or shall consent to the appointment of a receiver or liquidator
or trustee or assignee in bankruptcy or insolvency for it or of a substantial
part of its property, or shall make an assignment for the benefit of creditors,
2
or shall be unable, or admit in writing its inability, to pay its debts
generally as they become due, or corporate action shall be taken by the Company
in furtherance of any of the aforesaid actions. The occurrence of any of the
above events before August 15, 2002 shall not constitute an Acceleration Event
when it occurs, but if such event is continuing on August 15, 2002, it shall
constitute an Acceleration Event on that date.
"Act" when used with respect to any Holder, has the meaning
specified in Section 1.04(a).
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent" means the Person named as the "Agent" in the first
paragraph of this Agreement until a successor Agent shall have become such
pursuant to the applicable provisions of this Agreement, and thereafter "Agent"
shall mean the Person who is then the Agent hereunder.
"Agreement" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Applicable Market Value" has the meaning specified in Section
8.01(b).
"Authorized Officers" means, with respect to the Company, any
two of the President and Chief Executive Officer, the Chief Legal Officer, the
Chief Financial Officer or any one of the aforesaid together with any one of the
Corporate Secretary, the Controller, the Treasurer, any Assistant Secretary, any
Assistant Controller or any Assistant Treasurer.
"Board of Directors" means the board of directors of the
Company or a duly authorized committee of that board.
"Board Resolution" means one or more resolutions of the Board
of Directors, a copy of which has been certified by the Corporate Secretary or
an Assistant Secretary of the Company to have been duly adopted by the Board of
Directors and to be in full force and effect on the date of such certification
and delivered to the Agent.
"Business Day" means any day that is not a Saturday, Sunday or
a day on which the NYSE, the TSX or banking institutions or trust companies in
The City of New York or The City of Toronto are authorized or obligated by law
or executive order to be closed.
"Certificate" means a Unit Certificate or a Purchase Contract
Certificate.
"Closing Price" has the meaning specified in Section 8.01(b).
3
"Common Share Settlement" has the meaning specified in Section
8.02.
"Common Shares" means the Common Shares, without nominal or
par value, of the Company.
"Company" means the Person named as the "Company" in the first
paragraph of this Agreement until a successor shall have become such, and
thereafter "Company" shall mean such successor.
"Company Order" or "Company Request" means a written order or
request signed in the name of the Company by its Authorized Officers.
"Current Market Price" has the meaning specified in Section
8.03(a)(7).
"Custodial Agreement" means the custodial agreement, dated as
of June 12, 2002, between the Agent and the Custodian.
"Custodian" means the Person named as the "Custodian" under
the Custodial Agreement.
"Depositary" means a clearing agency registered under the
Exchange Act that is designated to act as Depositary for the Units or Purchase
Contracts as contemplated by Section 7.05(h).
"Early Settlement" has the meaning specified in Section
8.06(a).
"Early Settlement Date" has the meaning specified in Section
8.06(a)
"Early Settlement Rate" has the meaning specified in Section
8.06(b).
"Early Settlement Upon Cash Merger" has the meaning specified
in Section 8.07(a).
"Early Settlement Upon Cash Merger Date" has the meaning
specified in Section 8.07(a).
"Exchange Act" means the United States Securities Exchange Act
of 1934, as amended, and any statute successor thereto, in each case as amended
from time to time.
"Expiration Date" has the meaning specified in Section
1.04(f).
"Expiration Time" has the meaning specified in Section
8.03(a)(6).
"Global Certificate" means a Global Purchase Contract
Certificate or a Global Unit Certificate.
"Global Purchase Contract Certificate" means a Purchase
Contract Certificate that evidences all or part of the Purchase Contracts and is
registered in the name of a Depositary or a nominee thereof.
4
"Global Unit Certificate" means a Unit Certificate that
evidences all or part of the Units and is registered in the name of a Depositary
or a nominee thereof.
"Holder" means a Person in whose name a Unit evidenced by a
Unit Certificate is registered in the Unit Register or a Person in whose name a
Purchase Contract evidenced by a Purchase Contract Certificate is registered in
the Purchase Contract Register.
"NYSE" has the meaning specified in Section 8.01(b).
"Officers' Certificate" means a certificate signed on behalf
of the Company by Authorized Officers.
"Opinion of Counsel" means an opinion in writing signed by
legal counsel, who may be an employee of or counsel to the Company and includes
one or more opinions by one or more legal counsel.
"Outstanding Certificates" means, as of the date of
determination, all Certificates theretofore authenticated, executed and
delivered under this Agreement, except:
(i) Certificates theretofore cancelled by the Agent or
delivered to the Agent for cancellation; and
(ii) Certificates in exchange for or in lieu of which other
Certificates have been authenticated, executed on behalf of the Holder
and delivered pursuant to this Agreement, other than any such
Certificate in respect of which there shall have been presented to the
Agent proof satisfactory to it that such Certificate is held by a bona
fide purchaser.
"Outstanding Purchase Contracts" means, as of the date of
determination, all Purchase Contracts evidenced by then outstanding Purchase
Contract Certificates or outstanding Unit Certificates, except: (i) Purchase
Contracts evidenced by outstanding Purchase Contract Certificates or outstanding
Unit Certificates for which the Holder has exercised its right to Early
Settlement in accordance with Section 8.06, (ii) Purchase Contracts evidenced by
outstanding Purchase Contract Certificates or outstanding Unit Certificates for
which the Holder has exercised its right to Early Settlement Upon Cash Merger in
accordance with Section 8.07, and (iii) if an Acceleration Event has occurred;
provided, however, that in determining whether the Holders of the requisite
number of Purchase Contracts have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Purchase Contracts owned by the
Company or any Affiliate of the Company shall be disregarded and deemed not to
be outstanding, except that, in determining whether the Agent shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Purchase Contracts which the Agent actually knows to be
so owned shall be so disregarded. Purchase Contracts so owned which have been
pledged in good faith may be regarded as outstanding if the pledgee establishes
to the satisfaction of the Agent the pledgee's right so to act with respect to
such Purchase Contracts and that the pledgee is not the Company or any Affiliate
of the Company.
5
"Payment Date" means August 15 and February 15 of each year,
commencing August 15, 2002 and ending August 15, 2005.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Predecessor Certificate" of any particular Certificate means
every previous Certificate evidencing all or a portion of the rights and
obligations of the Holder under the Units or Purchase Contracts evidenced
thereby; and, for the purposes of this definition, any Certificate authenticated
and delivered under Section 7.06 or 11.06 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Certificate shall be deemed to evidence the
same rights and obligations of the Holder as the mutilated, destroyed, lost or
stolen Certificate.
"Principal Subsidiary" means Nortel Networks Limited, a
Canadian corporation.
"Purchase Contract" means a prepaid forward purchase contract,
(i) which is an agreement of purchase and sale, obligating the Company to issue
and deliver to the Holder, and entitling the Holder to receive, a number of
Common Shares equal to the Settlement Rate on the terms and subject to the
conditions set forth in Article Eight hereof, and (ii) which may or may not be
evidenced by a Unit. As used herein, "Purchase Contract" refers to Purchase
Contracts evidenced by Unit Certificates and/or Purchase Contract Certificates,
as the context may require.
"Purchase Contract Certificate" means a certificate evidencing
the rights of a Holder in respect of the number of Purchase Contracts specified
in such certificate.
"Purchase Contract Component" has the meaning specified in
Section 11.02.
"Purchase Contract Register" and "Purchase Contract Registrar"
have the respective meanings specified in Section 7.05(a).
"Purchased Shares" has the meaning specified in Section
8.03(a)(6).
"Record Date" for the amounts payable on any Payment Date
means the fifteenth day (whether or not a Business Day), as the case may be,
next preceding such Payment Date; provided, however, to the extent such amounts
are payable on a Payment Date with respect to a Global Certificate, the "Record
Date" shall mean the Business Day immediately prior to such Payment Date.
"Reference Price" means $1.410 per Common Share.
"Reorganization Event" has the meaning specified in Section
8.03(b).
"Representatives" means Credit Suisse First Boston
Corporation, X.X. Xxxxxx Securities Inc. and Xxxxxxx Xxxxx Barney Inc, acting as
representatives for the underwriters named in the Underwriting Agreement.
6
"Responsible Officer" means, when used with respect to the
Agent, any officer or officers of the Agent assigned by the Agent to administer
its stock transfer matters.
"Securities" has the meaning specified in Section 8.03(a)(4).
"Securities Act" means the United States Securities Act of
1933, as amended, and any statute successor thereto, in each case as amended
from time to time.
"Settlement Date" means August 15, 2005.
"Settlement Rate" has the meaning specified in Section
8.01(a).
"Stock Transfer Office" means (i) the principal office of the
Agent in Xxxxxxx, Xxxxxxx, Xxxxxx at which at any particular time its stock
transfer business shall be administered, which office at the date hereof is
located at 000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx and (ii)
the offices of the Agent or its Affiliate, Computershare Trust Company, Inc.,
located in New York, New York, which office at the date hereof is located at 00
Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx Xxx Xxxx.
"Threshold Appreciation Price" means $1.692 per Common Share.
"Trading Day" has the meaning specified in Section 8.01(b).
"Treasury Strip Component" has the meaning specified in
Section 11.02.
"Treasury Strips" means the zero-coupon United States Treasury
securities in the face amounts, and with the maturity dates, specified in
Schedule 1 hereto.
"TSX" means the Toronto Stock Exchange.
"Underwriting Agreement" means the underwriting agreement
relating to the Units dated June 6, 2002 between the Company and the several
underwriters named therein.
"Unit" means and evidences the ownership by a Holder of (i)
one Purchase Contract and (ii) six Treasury Strips of $1,000 denomination each
that mature from February 15, 2003 through August 15, 2005 and a pro rata
portion of Treasury Strips maturing on August 15, 2002, as specified in Schedule
1 hereto.
"Unit Certificate" means a certificate evidencing the rights
of a Holder in respect of the number of Units specified on such certificate.
"Unit Order" means a written order, substantially in the form
of Exhibit H hereto, signed in the name of the Company by its Authorized
Officers solely in connection with the execution of Units by the Agent.
"Unit Register" and "Unit Registrar" have the respective
meanings specified in Section 11.05(a).
7
Section 1.02. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement, upon
any application or request by the Company to the Agent to take any action under
any provision of this Agreement, the Company shall furnish to the Agent an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Agreement relating to the proposed action have been complied with
and an Opinion of Counsel addressed to the Company and the Agent stating that,
in the opinion of such counsel, all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Agreement relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement shall include:
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he or she has made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.03. Form of Documents Delivered to Agent.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his or her certificate or opinion is
based are erroneous. Any such certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company unless such counsel knows, or in the exercise of reasonable care
8
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Agreement, they may, but need not, be consolidated
and form one instrument.
Section 1.04. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Agent and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Agreement and (subject to Section 2.01) conclusive in favor of the Agent and the
Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him or her the execution thereof.
Where such execution is by a signer acting in a capacity other than his or her
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his or her authority. The fact and date of the execution of
any such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner which the Agent deems sufficient.
(c) The ownership of Units shall be proved by the Unit
Register, and the ownership of Purchase Contracts shall be proved by the
Purchase Contract Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Unit or Purchase Contract
shall bind every future Holder of the same Unit or Purchase Contract and the
Holder of every Certificate evidencing such Unit or Purchase Contract issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the Agent
or the Company in reliance thereon, whether or not notation of such action is
made upon such Certificate.
(e) The Agent may set any day as a record date for the purpose
of determining the Holders entitled to give, make or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted by this Agreement to be given, made or taken by Holders. With respect
to any such action, the Agent shall set such a record date if requested to do so
by the Holders of at least 10% of the Outstanding Certificates, and with
9
respect to any such action that relates to any of the Purchase Contracts, the
Agent shall set such a record date if requested to do so by the Company. If any
record date is set pursuant to this paragraph, the Holders on such record date,
and no other Holders, shall be entitled to take the relevant action, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date (as defined in the next paragraph) by Holders of the requisite
number on such record date. Nothing in this paragraph shall be construed to
prevent the Agent from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be cancelled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite number on the
date such action is taken. Promptly after any record date is set pursuant to
this paragraph, the Agent shall cause notice of such record date, the proposed
action by Holders and the applicable Expiration Date to be given to each Holder
in the manner set forth in Section 1.06.
(f) With respect to any record date set pursuant to this
Section, the Agent (or, in the case of a record date requested by the Company or
the Holders of at least 10% of the Outstanding Certificates, the Company or such
Holders, respectively) may designate any date as the "Expiration Date" whereby
any action as described in this Section must be taken on or prior to such date
for such action to be effective and from time to time may change the Expiration
Date to any earlier or later date; provided that no such change shall be
effective unless notice of the proposed new Expiration Date is given to the
Agent in writing (in the case of a record date requested by the Company or the
Holders of at least 10% of the Outstanding Certificates), and to each Holder in
the manner set forth in Section 1.06, on or prior to the existing Expiration
Date. If an Expiration Date is not designated with respect to any record date
set pursuant to this Section, the Agent shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right and, if applicable, the right of the
Company or the Holders of at least 10% of the Outstanding Certificates to change
the Expiration Date as provided in this paragraph. Notwithstanding the
foregoing, no Expiration Date shall be later than the 180th day after the
applicable record date.
Section 1.05. Notices, etc., to Agent and the Company.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Agreement to be made upon, given or furnished to, or filed with,
(1) the Agent by any Holder or by the Company shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first-class postage prepaid, to the
Agent at Computershare Trust Company of Canada, 000 Xxxxxxxxxx Xxxxxx,
0xx Xxxxx, Xxxxxxx, Xxxxxx X0X 0X0, Attention: Manager, Client
Servicing, or at any other address previously furnished in writing by
the Agent to the Holders and the Company, or
(2) the Company by the Agent or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first-class postage prepaid, to the
10
Company at Nortel Networks Corporation, 0000 Xxxxx Xxxx, Xxxxx 000,
Xxxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0, Attention: Corporate Secretary, or
at any other address previously furnished in writing to the Agent by
the Company, or
(3) the Custodian by the Agent or by any Holder shall be
sufficient for any purpose hereunder (unless otherwise herein expressly
provided) if made, given, furnished or filed in writing and personally
delivered or mailed, first-class postage prepaid, to the Custodian at
Citibank, N.A., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxx Xxxxxx, Vice President, 24th Floor, Zone 5 or at any other
address previously furnished in writing by the Custodian to the Agent
and the Holders.
Section 1.06. Notice to Holders; Waiver
Where this Agreement provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at its address as it appears in the Unit
Register or Purchase Contract Register, as the case may be, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Holders is given by mail, neither
the failure to mail such notice, nor any defect in any notice so mailed to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Agreement provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Agent, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then notice shall be deemed to have been duly given if published in an
English language newspaper of general circulation in each of the United States
and Canada, currently expected to be The Wall Street Journal (U.S. Eastern
Edition) and The Globe and Mail (National Edition), respectively, or such other
method of notification as shall be made with the approval of the Agent shall
constitute a sufficient notification for every purpose hereunder.
Section 1.07. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
Section 1.08. Successors and Assigns.
All covenants and agreements in this Agreement by the Company
shall bind its successors and assigns, whether so expressed or not.
11
Section 1.09. Severability Clause.
In case any provision in this Agreement or in the Units or
Purchase Contracts shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions hereof and thereof shall
not in any way be affected or impaired thereby.
Section 1.10. Benefits of Agreement.
Nothing in this Agreement or in the Units or Purchase
Contracts, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder and the Holders, any benefits or any legal
or equitable right, remedy or claim under this Agreement. The Holders from time
to time shall be beneficiaries of this Agreement and shall be bound by all of
the terms and conditions hereof and of the Units or Purchase Contracts evidenced
by their Certificates by their acceptance of delivery thereof.
Section 1.11. Governing Law.
This Agreement, the Units and Purchase Contracts shall be
governed by and construed in accordance with the laws of the State of New York.
Section 1.12. Legal Holidays.
In any case where any Early Settlement Date, any Early
Settlement Upon Cash Merger Date or the Settlement Date shall not be a Business
Day, then (notwithstanding any other provision of this Agreement or of the
Certificates) Purchase Contracts shall not be performed and Early Settlement or
Early Settlement Upon Cash Merger shall not be effected on such date, but the
Purchase Contracts shall be performed, or Early Settlement or Early Settlement
Upon Cash Merger effected, as applicable, on the next succeeding Business Day
with the same force and effect as if made on such Early Settlement Date, Early
Settlement Upon Cash Merger Date or Settlement Date, as the case may be;
provided, that no interest shall accrue or be payable for the period from and
after any such Early Settlement Date, Early Settlement Upon Cash Merger Date or
Settlement Date, as the case may be.
Section 1.13. Counterparts.
This Agreement may be executed in any number of counterparts,
each of which, when so executed, shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
Section 1.14. Inspection of Agreement.
A copy of this Agreement shall be available at all reasonable
times at the Stock Transfer Office for inspection by any Holder.
Section 1.15. Obligations of the Company.
The Company undertakes to perform, with respect to the
Purchase Contracts, such obligations and only such obligations as are
specifically set forth in this Agreement, and no
12
implied covenants or obligations of any other kind or for any other purpose
shall be read into this Agreement against the Company, including, without
limitation, with respect to the Units or Treasury Strips. For the avoidance of
doubt, the Company's obligations in this Agreement are limited to those
expressly stated in Parts I and II of this Agreement, and the Company shall
assume no responsibility in any respect for, including the accuracy or
performance of, any of the provisions set forth in Part III of this Agreement;
provided, however, the Company acknowledges that each Unit evidences ownership
of a Purchase Contract, which shall be settled in accordance with Article Eight
hereunder, and, as a convenience to the Holders, the Company shall authorize the
Agent to execute Purchase Contracts evidenced by Unit Certificates that also
evidence Treasury Strips.
Section 1.16. Force Majeure.
The Company and the Agent shall not be liable to the other, or
held in breach of this Agreement, if prevented, hindered, or delayed in the
performance or observance of any provision contained herein by reason of act of
God, riots, acts of war, epidemics, governmental action or judicial order,
earthquakes, or any other similar causes (including, but not limited to,
mechanical, electronic or communication interruptions, disruptions or failures).
Performance times under this Agreement shall be extended for a period of time
equivalent to the time lost because of any delay that is excusable under this
Section.
Section 1.17. Custody and Audit.
Unless otherwise instructed by the Company, all correspondence
including Holder account inquiry letters shall be retained for a period of two
(2) years after completion of the services requested by such correspondence. The
Company and the Agent (acting as Purchase Contract Registrar and Unit Registrar)
shall meet periodically to agree on mutually acceptable retention periods for
all other documents.
The Company shall have the right through its internal auditors
or independent auditors, to examine, audit or inspect all records,
documentation, ledgers, registers, books of account, share certificate
inventories and other information maintained by the Agent (acting as Purchase
Contract Registrar and Unit Registrar) which relates in any way to the services
provided under this Agreement.
Upon the termination of this Agreement the Agent (acting as
Purchase Contract Registrar and Unit Registrar) shall deliver the registers,
ledgers, books of account, copies of documentation, Holder correspondence, share
certificate inventories and all other retained documents with respect to its
services to the Company or to such party as the Company may direct and shall
certify to the Company the delivery of all such materials in its possession
under the hand of the Authorized Officers. The Company shall acknowledge receipt
or delivery of the materials under the hand of any officer.
Section 1.18. Reports.
The Agent (acting as Purchase Contract Registrar and Unit
Registrar) shall prepare and submit to the Company at least semi-annually, and
such other times as the Company may request, reports on duties performed and
services provided to Holders. Such reports shall be prepared in a manner which
will provide the Company the ability to analyze transactions on an aggregate,
geographic and quantitative basis. The Agent (acting as Purchase Contract
Registrar and Unit Registrar) shall respond to reasonable requests for
additional Holder information as the Company may require from time to time.
13
Section 1.19. Confidential Information.
The Agent (acting as the Purchase Contract Registrar and Unit
Registrar) shall hold in confidence throughout the term of this Agreement,
including any renewal period, and for a period of three years thereafter and
shall not, unless required by law, court proceeding or order of any regulatory
authority or authorized third parties having a bona fide need to know for
purposes in connection with this Agreement, any information related to the
Holder accounts or services provided hereunder. In any case the Agent (acting as
the Purchase Contract Registrar and Unit Registrar) is entitled to communicate
Holder information to such Holders or if legally required to do so.
The Agent (acting as the Purchase Contract Registrar and Unit
Registrar) shall take reasonable steps to ensure that neither it nor any of its
employees having access to information related to the Holder accounts or
services provided hereunder uses such information for any other purpose except
in accordance with the terms of this Agreement.
ARTICLE TWO
The Agent
Section 2.01. Certain Duties and Responsibilities.
(a) (1) The Agent undertakes to perform, with respect to the
Units, the Treasury Strips and the Purchase Contracts, such duties and
only such duties as are specifically set forth in this Agreement, and no
implied covenants or obligations shall be read into this Agreement against
the Agent; and
(2) The Agent shall exercise the degree of care, diligence
and skill that a reasonably prudent person would exercise in comparable
circumstances, and, in the absence of bad faith or negligence on its part,
shall not be obligated in any particular circumstance, unless a reasonably
prudent person would in such circumstance, to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order or
other paper or document, provided that in the case of any certificates or
opinions which are specifically
14
required by any provisions hereof to be furnished to the Agent, the Agent
shall be under a duty to determine whether or not they conform to the
requirements of this Agreement.
(b) No provision of this Agreement shall be construed to relieve
the Agent from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(1) this paragraph (b) shall not be construed to limit the
effect of paragraph (a) of this Section;
(2) the Agent shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Agent was negligent in ascertaining the pertinent facts; and
(3) no provision of this Agreement shall require the Agent
to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the exercise of
any of its rights or powers.
(c) Whether or not therein expressly so provided, every provision
of this Agreement relating to the conduct or affecting the liability of or
affording protection to the Agent shall be subject to the provisions of this
Section.
Section 2.02. Notice of Default.
Within 90 days after the Agent has actual knowledge of the
occurrence of any breach by the Company hereunder, the Agent shall transmit by
mail to all Holders, as their names and addresses appear in the Unit Register
and Purchase Contract Register, respectively, notice of such breach hereunder,
unless such breach shall have been cured or waived.
Section 2.03. Certain Rights of Agent.
Subject to the provisions of Section 2.01:
(a) the Agent may act and rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent or order
or other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by an Officers' Certificate, Company Order or
Company Request, and any resolution of the Board of Directors of the
Company may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement the Agent
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Agent (unless
other evidence is specifically prescribed herein) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate of the Company;
15
(d) the Agent may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Agent, in its discretion, may make reasonable further
inquiry or investigation into such facts or matters related to the
execution and delivery of the Purchase Contracts as it may see fit, and,
if the Agent shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney; and
(f) the Agent may execute any of its powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys
and the Agent shall not be responsible for any misconduct or negligence on
the part of any agent or attorney appointed with due care by it hereunder.
(g) The Agent shall retain the right not to act and shall not be
liable for refusing to act unless it shall have received clear
instructions and documentation and sufficient time to give effect to such
instructions and documentation.
Section 2.04. Not Responsible for Recitals.
The Agent assumes no responsibility for the correctness of the
recitals contained herein.
Section 2.05. May Hold Units.
Any Unit Registrar, Purchase Contract Registrar, or any agent of the
Company or the Agent, in its individual or any other capacity, may become the
owner of Units or Purchase Contracts and may otherwise deal with the Company
with the same rights it would have if it were not Unit Registrar, Purchase
Contract Registrar, or such agent, or the Agent.
Section 2.06. Money Held in Custody.
All money held by the Agent hereunder shall be held by it as agent
for the Holders entitled to such money. The Agent shall be under no obligation
to invest or pay interest on any money received by it hereunder.
Section 2.07. Compensation and Expense.
(a) The Agent shall be paid by the Company upon demand:
(1) full compensation for all services to be rendered by the
Agent (in its capacity as Purchase Contract Registrar and Unit Registrar)
hereunder during the term of this Agreement; and
16
(2) for all expenses to be incurred by the Agent in its
capacity as Purchase Contract Registrar and Unit Registrar hereunder
(including the reasonable compensation and the expenses and disbursements
of its agents and counsel during the term of this Agreement).
(b) The Agent acknowledges receipt from Credit Suisse First Boston
Corporation on behalf of the Holders of Units on the date hereof of:
(1) payment of its full compensation in advance for all
services to be rendered by the Agent (in its capacity as Agent for the
Holders) hereunder during the term of this Agreement; and
(2) payment in advance for all expected expenses to be
incurred by the Agent (in its capacity as Agent for the Holders) hereunder
(including the reasonable compensation and the expenses and disbursements
of its agents and counsel during the term of this Agreement).
(c) In no event shall the Agent resign or fail to perform its
duties (i) as Agent for the Holders because of any insufficiency of compensation
or expense; prepayment; or (ii) as Purchase Contact Registrar and Unit
Registrar because of any insufficiency of compensation or expense reimbursements
without providing the Company with prior 30-day written notice of such
insufficiency, and such insufficiency is continuing after such 30-day notice
period.
Section 2.08. Corporate Agent Required; Eligibility.
There shall at all times be an Agent hereunder which shall be a
corporation organized and doing business in Canada or any province of Canada and
authorized under such laws to carry on the business of a trust company and
having a Stock Transfer Office in Xxxxxxx, Xxxxxxx, if there be such a
corporation in Toronto, Ontario qualified and eligible under this Article and
willing to act on reasonable terms. If at any time the Agent shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
Section 2.09. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Agent and no appointment of a
successor Agent pursuant to this Article shall become effective until the
acceptance of appointment by the successor Agent in accordance with the
applicable requirements of Section 2.10.
(b) The Agent may resign at any time by giving written notice
thereof to the Company and the Holders of the Outstanding Certificates 60 days
prior to the effective date of such resignation. If the instrument of acceptance
by a successor Agent required by Section 2.10 shall not have been delivered to
the Agent within 30 days after the giving of such notice of resignation, the
resigning Agent may petition any court of competent jurisdiction for the
appointment of a successor Agent.
(c) The Agent may be removed at any time by Act of the Holders of
a majority of the Outstanding Purchase Contracts delivered to the Agent and the
Company.
(d) If at any time,
17
(1) the Agent shall cease to be eligible under Section 2.08
and shall fail to resign after written request therefor by the Company or
by any such Holder, or
(2) the Agent shall become incapable of acting or shall be
adjudged bankrupt or insolvent or a receiver of the Agent or of its
property shall be appointed or any public officer shall take charge or
control of the Agent or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company, may remove the Agent, or (ii) any
Holder who has been a bona fide Holder of a Unit or a Purchase Contract for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Agent and
the appointment of a successor Agent.
(e) If the Agent shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Agent for any cause, the
Company shall promptly appoint a successor Agent and shall comply with the
applicable requirements of Section 2.10. If no successor Agent shall have been
so appointed by the Company and accepted appointment in the manner required by
Section 2.10, any Holder who has been a bona fide Holder for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Agent.
(f) The Company shall give, or shall cause such successor Agent to
give, prompt notice of each resignation and each removal of the Agent and each
appointment of a successor Agent by mailing written notice of such event by
first class mail, postage prepaid, to all Holders as their names and addresses
appear in the Unit Register and Purchase Contract Register, respectively. Each
notice shall include the name of the successor Agent and the address of its
Stock Transfer Office.
(g) Upon the appointment of a successor Agent pursuant to this
Article, the predecessor Agent shall promptly deliver to the successor Agent any
remaining portion of the compensation and expenses received in advance by the
predecessor Agent pursuant to either Section 2.07(b) or this Section 2.09(g) (to
the extent such compensation and expenses were paid for the Agent's services
hereunder as Agent for the Holders), such portion to be equal to the product of
the aggregate amount paid to it under Section 2.07(b) or this Section 2.09(g)
and a fraction, whose numerator is the number of days remaining until the
Settlement Date and whose denominator is the number of days remaining until the
Settlement Date plus the number of days such predecessor Agent has performed the
duties hereunder.
Section 2.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Agent,
every such successor Agent so appointed shall execute, acknowledge and deliver
to the Company and to the retiring Agent (with a copy to each Holder of
Outstanding Certificates) an instrument accepting such appointment, and
thereupon the resignation or removal of the predecessor Agent shall become
effective and such successor Agent, without any further act, deed or conveyance,
shall become vested with all the rights, powers, agencies and duties of the
predecessor Agent; but, on the request of the Company or the successor Agent,
such predecessor Agent shall execute and deliver an instrument transferring to
such successor Agent all the rights and powers of the
18
predecessor Agent and shall duly assign, transfer and deliver to such successor
Agent all property and money held by such retiring Agent hereunder. Each such
successor Agent whose office is not located in New York, New York shall execute
and deliver to the Company an appointment of an agent of such successor Agent
for service of process in the Borough of Manhattan in The City of New York
substantially on the terms of Section 2.16.
(b) Upon request of any such successor Agent, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Agent all such rights, powers and agencies referred
to in paragraph (a) of this Section.
(c) No successor Agent shall accept its appointment unless at the
time of such acceptance such successor Agent shall be qualified and eligible
under this Article.
Section 2.11. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Agent may be amalgamated, merged or
converted or with which it may be consolidated, or any corporation resulting
from any amalgamation, merger, conversion or consolidation to which the Agent
shall be a party, or any corporation succeeding to or purchasing all or
substantially all the stock transfer and/or corporate trust business of the
Agent, shall be the successor of the Agent hereunder, provided such corporation
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto. In case any Certificates shall have been executed, but not
delivered, by the Agent then in office, any successor by amalgamation, merger,
conversion or consolidation to such Agent may adopt such execution and deliver
the Certificates so executed with the same effect as if such successor Agent had
itself executed such Certificates.
Section 2.12. Preservation of Information; Communications to
Holders.
(a) The Agent shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders received by the Agent
in its capacity as Unit Registrar and Purchase Contract Registrar.
(b) If three or more Holders (herein referred to as "applicants")
apply in writing to the Agent and furnish to the Agent reasonable proof that
each such applicant has owned a Purchase Contract for a period of at least six
months preceding the date of such application, and such application states that
the applicants desire to communicate with other Holders with respect to their
rights under this Agreement or under the Purchase Contracts and is accompanied
by a copy of the form of proxy or other communication which such applicants
propose to transmit, then the Agent shall, within five Business Days after the
receipt of such application, afford such applicants access to the information
preserved at the time by the Agent in accordance with Section 2.12(a).
(c) Every Holder, by receiving and holding Certificates, agrees
with the Company and the Agent that none of the Company, the Agent nor any agent
of any of them shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders in accordance with
Section 2.12(b), regardless of the source from which such information was
derived.
19
(d) The Agent agrees to forward to Holders as soon as reasonably
practicable any notices or other communications addressed to Holders (including
tax information) that it receives from the Company.
Section 2.13. No Obligations of Agent.
Except to the extent otherwise provided in this Agreement or the
Custodial Agreement, the Agent assumes no obligations and shall not, in any
event, be subject to any liability under this Agreement, the Custodial Agreement
or any Purchase Contract in respect of the obligations of the Company or the
Holder thereunder.
Section 2.14. Agent of the Holders.
Except when the Agent is acting in its capacity as the Purchase
Contract Registrar or the Unit Registrar hereunder (whereby it acts in its
capacity as agent of the Company), the Agent shall be acting solely as agent of
the Holders in connection with this Agreement, the Purchase Contracts and the
Units and does not assume any fiduciary obligation or relationship of agency or
trust for or with the Company.
Section 2.15. Tax Compliance.
(a) Upon instructions of the Company, the Agent shall prepare such
tax returns as are requested by the Company and, on behalf of the Company, file
such returns.
(b) The Agent shall comply with any direction received from the
Company with respect to the application of such requirements to matters
specifically involving the Purchase Contracts, and may for purposes of this
Agreement rely on any such direction in accordance with the provisions of
Section 2.01(a)(2) hereof.
(c) The Agent shall maintain all appropriate records documenting
compliance with such requirements, and shall make such records available on
request to the Company or to its authorized representative (in the case of such
requirements in connection with the Purchase Contracts) and to any Holder of
Outstanding Certificates or to its authorized representative.
Section 2.16. Appointment of Affiliate for Service of Process.
The Agent hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby. The Agent irrevocably appoints Computershare
Trust Company, Inc., currently located at 00 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx, or its successors or assigns, as its authorized agent in the Borough
of Manhattan in The City of New York upon which process may be served in any
such suit or proceeding, and agrees that service of process upon such agent, and
written notice of said service to the Agent, by the person serving the same to
such address, shall be deemed in every respect effective service of process upon
the Agent in any such suit or proceeding. The Agent shall provide to the Company
evidence of acceptance of such appointment concurrent with execution of this
Agreement.
20
Section 2.17. Limitation of Liability.
(a) The Agent, when acting as Purchase Contract Registrar shall
not incur any liability in refusing in good faith to effect any transfer which
in its judgment is improper or unauthorized, or in carrying out honestly and in
good faith, with due diligence and without negligence, any transfer which in its
judgment is proper or authorized. The Agent shall be fully indemnified and held
harmless by the Company in all cases where the Agent has acted in accordance
with the foregoing or with the Company's instructions.
(b) The Company hereby undertakes to indemnify and hold harmless
the Agent, its affiliates, their current and former directors, officers,
employees and agents from and against any and all claims, demands, losses,
penalties, costs, expenses, fees and liabilities, including, without limitation,
legal fees and expenses, directly or indirectly arising out of, in connection
with, or in respect of, Parts I and II of this Agreement and the Agent's role as
Unit Registrar in Part III of this Agreement, except where same results directly
and principally from negligence, willful misconduct or bad faith on the part of
the Agent. For the avoidance of doubt, the Company shall not indemnify the Agent
for its role as Agent for the Holders under Part III of this Agreement, except
for its role as Unit Registrar.
(c) The Agent shall be under no obligation to prosecute or defend
any action or suit arising out of its relationship with the Company under this
Agreement which may involve expense or liability, but will do so at the request
of the Company provided that the Company furnishes an indemnity satisfactory to
the Agent against any expense or liability which might be incurred.
(d) The Agent shall give prompt and timely notice to the Company
of all demands, claims, assessments, proceedings, suits and actions made against
the Agent arising in consequences of, arising from or in any way relating to
this Agreement. The Company agrees that its obligation to indemnify the Agent
hereunder shall accrue and become enforceable without prior demand or any other
precedent action or proceeding, and shall survive the resignation or removal of
the Agent or the termination of this Agreement.
(e) The Agent (when acting as Purchase Contract or Unit Registrar)
shall incur no responsibility or liability in regards to any claims, demands,
losses, penalties, expenses, fees, costs and liabilities, including without
limitation, legal fees and expenses, in regards to any and all claims regarding
the assets deposited with the Agent (acting as the Purchase Contract or Unit
Registrar) or for any action taken or not taken in connection with or under
this Agreement, except where same results directly and principally from its
negligence, willful misconduct or bad faith.
(f) Under no circumstances whatsoever shall the Agent (acting as
the Purchase Contract or Unit Registrar) be liable for special, indirect,
incidental or consequential loss or damage of any kind whatsoever (including
but not limited to, lost profits) even if the Agent (acting as the Purchase
Contract or Unit Registrar) has been advised of the possibility of such loss or
damage.
ARTICLE THREE
Supplemental Agreements
Section 3.01. Supplemental Agreements without Consent of Holders.
Without the consent of any Holders, the Company (subject to Section
3.03) and the Agent, at any time and from time to time, may enter into one or
more agreements supplemental hereto, in form satisfactory to the Company
(subject to Section 3.03) and the Agent, for any of the following purposes:
(1) to evidence the succession of another Person to the Company,
and the assumption by any such successor of the covenants of the Company
herein and in the Purchase Contracts; or
21
(2) to evidence and provide for the acceptance of appointment
hereunder by a successor Agent; or
(3) to make provision with respect to the rights of Holders
pursuant to the requirements of Section 8.06(b); or
(4) to cure any ambiguity, to correct or supplement any provisions
herein which may be inconsistent with any other provisions herein, or to
make any other provisions with respect to such matters or questions
arising under this Agreement, but in each case only (a) with respect to
matters involving the Purchase Contracts and (b) to the extent such action
does not adversely affect the rights or obligations of the Holders.
Section 3.02. Supplemental Agreements with Consent of Holders.
Except as set forth in Section 3.01, without the consent of the
Holder of each Outstanding Purchase Contract affected thereby, the Company and
the Agent shall not enter into any agreement or agreements supplemental hereto
for the purpose of modifying in any manner any of the terms of this Agreement,
the Units or the Purchase Contracts.
Section 3.03. Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby of
the agencies created by this Agreement, the Agent shall be entitled to receive
and (subject to Section 2.01) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental agreement is
authorized or permitted by this Agreement.
Section 3.04. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this Article,
this Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Agreement for all purposes; and every Holder
of Certificates theretofore or thereafter authenticated, executed on behalf of
the Holders and delivered hereunder shall be bound thereby.
Section 3.05. Reference to Supplemental Agreements.
Certificates executed and delivered after the execution of any
supplemental agreement pursuant to this Article may, and shall if required by
the Agent, bear a notation in form approved by the Agent, acting on an Opinion
of Counsel, as to any matter provided for in such supplemental agreement. If the
Agent shall so determine (or, in the case of any supplemental agreement
affecting the Purchase Contracts, if the Company shall so request), new
Certificates so modified as to conform, in the opinion of the Agent, acting on
an Opinion of Counsel, and (if such Certificates were prepared at the Company's
request) the Company, to any such supplemental agreement may be prepared,
executed and delivered by the Agent in exchange for Outstanding Certificates.
22
ARTICLE FOUR
Consolidation, Merger, Sale or Conveyance
Section 4.01. Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions.
So long as there are any Outstanding Purchase Contracts, the Company
will not amalgamate or merge with any other corporation or enter into any
reorganization or effect any conveyance, transfer or lease of all or
substantially all of the assets of it and its subsidiaries, taken as a whole
(other than with or to the Principal Subsidiary or any other subsidiary of the
Company that was in existence as of June 6, 2002), unless in any such case
either (i) the Company shall be the surviving corporation or one of the
continuing corporations, or (ii) the successor corporation (or the person that
leases or that acquires by conveyance or transfer all or substantially all of
the assets of the Company and its subsidiaries, taken as a whole) expressly
assumes the obligations outstanding of the Company under the Outstanding
Purchase Contracts and this Agreement, and the Company or such successor
corporation is not, immediately after such amalgamation, merger, conveyance,
transfer or lease, in default in the performance of any of such obligations.
Section 4.02. Rights and Duties of Successor Corporation.
In case of any such amalgamation, merger, reorganization,
conveyance, transfer or lease and upon any such assumption by the successor
corporation, such successor corporation shall succeed to and be substituted for
the Company with the same effect as if it had been named herein as the Company.
In case of any such amalgamation, merger, reorganization,
conveyance, transfer or lease, such change in phraseology and form (but not in
substance) may be made in the Certificates evidencing Units or Purchase
Contracts thereafter to be issued as may be appropriate.
Section 4.03. Opinion of Counsel to Agent.
The Agent, subject to Sections 2.01 and 2.03, may receive addressed
to it an Opinion of Counsel as conclusive evidence that any such amalgamation,
consolidation, merger, reorganization, sale or conveyance, and any such
assumption, complies with the provisions of this Article.
ARTICLE FIVE
Covenants
Section 5.01. Performance Under Purchase Contracts.
The Company covenants and agrees for the benefit of the Holders that
it will duly and punctually perform its obligations under the Purchase Contracts
in accordance with the terms of the Purchase Contracts and this Agreement.
23
Section 5.02. Maintenance of Office or Agency.
The Agent shall maintain in Toronto, Ontario and New York, New York
an office or agency where Certificates may be presented or surrendered for
issuance of Common Shares upon settlement, Early Settlement, Early Settlement
Upon Cash Merger or the occurrence of an Acceleration Event, where Certificates
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company, the Agent or the Custodian (including with
respect to delivery and payment instructions for Treasury Strips) in respect of
the Units, the Purchase Contracts and this Agreement may be served. The Agent
shall give prompt written notice to the Holders of the location, and any change
in the location, of such office or agency. If at any time the Agent shall fail
to maintain any such required office or agency or shall fail to furnish the
Holders with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Stock Transfer Office.
Section 5.03. Company to Reserve Common Shares; Listing of Common
Shares.
(a) The Company shall at all times prior to the Settlement Date
reserve and keep available, free from preemptive rights, out of its authorized
but unissued Common Shares the full number of Common Shares issuable upon
settlement of all Outstanding Purchase Contracts.
(b) The Company further covenants that so long as the Common
Shares are listed on the NYSE and the TSX, or each respective successor stock
market, the Company shall cause all Common Shares issuable upon settlement of
all Purchase Contracts to be listed on such stock exchanges.
(c) The Company further covenants to the Holders that, if required
under U.S. federal securities laws, it shall use commercially reasonable efforts
to (1) have in effect a registration statement under the Securities Act covering
the Common Shares to be delivered in respect of the Purchase Contracts being
settled and (2) deliver a related current prospectus in connection therewith, in
each case in a form that may be used in connection with Early Settlement under
Section 8.06 and Early Settlement Upon Cash Merger under Section 8.07.
Section 5.04. Covenants as to Common Shares.
The Company covenants that all Common Shares that are issued upon
settlement of any Outstanding Purchase Contract will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable.
Section 5.05. Statements of Officers of the Company as to Default.
The Company will deliver to the Agent, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in breach in the performance and observance of any of the terms,
provisions and conditions hereof, and if the Company is in breach, specifying
all such breaches and the nature and status thereof of which they may have
knowledge.
24
Section 5.06. Appointment of Agent of Service of Process.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby. The Company irrevocably appoints CT
Corporation System, located at 000 0xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000 as its
authorized agent in the Borough of Manhattan in The City of New York upon which
process may be served in any such suit or proceeding, and agrees that service of
process upon such agent, and written notice of said service to the Company, by
the person serving the same to such address, shall be deemed in every respect
effective service of process upon the Company in any such suit or proceeding.
PART II - PURCHASE CONTRACTS
ARTICLE SIX
Purchase Contract Certificate Forms
Section 6.01. Forms of Purchase Contract Certificates Generally.
(a) The Purchase Contract Certificates shall be in substantially
the form set forth in Exhibit A hereto, with such letters, numbers or other
marks of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by any Depositary therefor,
or as may, consistent herewith, be determined by the Authorized Officers
executing such Purchase Contract Certificates, as evidenced by their execution
of the Purchase Contract Certificates.
(b) The definitive Purchase Contract Certificates shall be
printed, lithographed or engraved on steel engraved borders or may be produced
in any other manner, all as determined by the Authorized Officers executing the
Purchase Contract Certificates, consistent with the provisions of this
Agreement, as evidenced by their execution thereof.
(c) Every Global Purchase Contract Certificate authenticated and
delivered hereunder shall bear a legend in substantially the following form:
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AND UNIT AGREEMENT HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS
CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE
OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN
SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AND UNIT AGREEMENT.
25
ARTICLE SEVEN
Purchase Contract Certificates
Section 7.01. Purchase Contracts: Title and Terms.
The aggregate number of Purchase Contracts (if any) evidenced by
Purchase Contract Certificates authenticated, executed on behalf of the Holders
and delivered hereunder is limited to 25,000 (subject to increase up to a
maximum of 28,750 to the extent the over-allotment option of the underwriters
under the Underwriting Agreement is exercised) minus the number of Purchase
Contracts evidenced by Units, except for Purchase Contract Certificates
authenticated, executed and delivered upon registration of transfer of, in
exchange for, or in lieu of, other Purchase Contract Certificates pursuant to
Section 3.05, 7.04, 7.05, 7.06 or 8.06.
The Purchase Contract Certificates shall be issuable only in
registered form.
Section 7.02. Rights and Obligations Evidenced by the Purchase
Contract Certificates.
Each Purchase Contract Certificate shall evidence the Purchase
Contracts specified therein, with each such Purchase Contract representing the
rights of the Holder under one Purchase Contract. Prior to the Company's
issuance and delivery of Common Shares under the Purchase Contracts, the
Purchase Contracts shall not entitle the Agent or the Holders to any of the
rights of a holder of Common Shares, including, without limitation, the right to
vote or receive any dividends or other payments or to consent or to receive
notice as shareholders in respect of the meetings of shareholders or for the
election of directors of the Company or for any other matter, or any other
rights whatsoever as shareholders of the Company, except to the extent otherwise
expressly provided in this Agreement.
Section 7.03. Execution, Authentication, Delivery and Dating of
Purchase Contract Certificates.
(a) Upon the execution and delivery of this Agreement, and at any
time and from time to time thereafter, the Company may deliver Purchase Contract
Certificates, together with a Company Order, executed by the Company to the
Agent for authentication and delivery, and the Agent (acting as Purchase
Contract Registrar) shall authenticate and deliver them in accordance with this
Agreement. The execution and authentication of the Purchase Contract
Certificates may be by manual or facsimile signature.
(b) Upon receiving notification from the Agent that a Holder has
withdrawn the Treasury Strips from some or all of the Units owned by such Holder
in accordance with Section 11.09, the Company shall execute and deliver to the
Agent, and the Agent (acting as Purchase Contract Registrar) shall authenticate,
a Purchase Contract Certificate, registered in the name of such Holder,
evidencing the same Purchase Contracts as were evidenced by such Units. If the
Holder fails to specify in the notice to the Agent referred to in Section
11.09(a)(1) whether it wants to hold such Purchase Contracts directly in the
form of a definitive Purchase Contract Certificate or as a beneficial owner in a
Global Purchase Contract Certificate, such Purchase Contracts shall be evidenced
by a beneficial interest in a Global Purchase Contract Certificate.
26
(c) Purchase Contract Certificates shall be manually executed on
behalf of the Company by Authorized Officers. Purchase Contract Certificates
bearing the manual signatures of individuals who were at any time Authorized
Officers of the Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Purchase Contract Certificates or did not
hold such offices at the date of such Purchase Contract Certificates.
(d) Each Purchase Contract Certificate shall be dated the date of
its authentication.
(e) No Purchase Contract Certificate shall be entitled to any
benefit under this Agreement or be valid or obligatory for any purpose unless
there appears on such Purchase Contract Certificate a certificate of
authentication substantially in the form provided for herein executed by an
authorized officer of the Agent (acting as Purchase Contract Registrar) by
manual signature, and such certificate upon any Purchase Contract Certificate
shall be conclusive evidence, and the only evidence, that such Purchase Contract
Certificate has been duly authenticated and delivered hereunder.
Section 7.04. Temporary Purchase Contract Certificates.
(a) Pending the preparation of definitive Purchase Contract
Certificates, the Company shall execute and deliver to the Agent, and the Agent
(acting as Purchase Contract Registrar) shall authenticate and deliver, in lieu
of such definitive Purchase Contract Certificates, temporary Purchase Contract
Certificates which are in substantially the form set forth in Exhibit A, with
such letters, numbers or other marks of identification or designation and such
legends or endorsements printed, lithographed or engraved thereon as may,
consistent herewith, be determined by the Company, as evidenced by the execution
of the Purchase Contract Certificates.
(b) If temporary Purchase Contract Certificates are issued, the
Company will cause definitive Purchase Contract Certificates to be prepared
without unreasonable delay. After the preparation of definitive Purchase
Contract Certificates, the temporary Purchase Contract Certificates shall be
exchangeable for definitive Purchase Contract Certificates upon surrender of the
temporary Purchase Contract Certificates at the Stock Transfer Office, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Purchase Contract Certificates, the Company shall execute and deliver
to the Agent, and the Agent (acting as Purchase Contract Registrar) shall
authenticate and deliver, in exchange therefor, one or more definitive Purchase
Contract Certificates evidencing the same Purchase Contracts, as the temporary
Purchase Contract Certificate or Purchase Contract Certificates so surrendered.
Until so exchanged, the temporary Purchase Contract Certificates shall in all
respects evidence the same entitlements and the same obligations with respect to
the same Purchase Contracts, evidenced thereby as definitive Purchase Contract
Certificates.
27
Section 7.05. Purchase Contract Certificate Registration;
Registration of Transfer and Exchange.
(a) The Agent shall keep at the Stock Transfer Office a register
(the "Purchase Contract Register") in which, subject to such reasonable
regulations as it may prescribe, the Agent shall provide for the registration of
Purchase Contract Certificates and of transfers of Purchase Contract
Certificates (the Agent, in such capacity, the "Purchase Contract Registrar").
(b) Upon surrender for registration of transfer of any Purchase
Contract Certificate at the Stock Transfer Office, the Agent shall execute and
deliver, in the name of the designated transferee or transferees, one or more
new Purchase Contract Certificates evidencing the same Purchase Contracts.
(c) At the option of the Holder, Purchase Contract Certificates
may be exchanged for other Purchase Contract Certificates evidencing the same
Purchase Contracts upon surrender of the Purchase Contract Certificates to be
exchanged at the Stock Transfer Office. Whenever any Purchase Contract
Certificates are so surrendered for exchange, the Company shall execute and
deliver to the Agent, and the Agent (acting as Purchase Contract Registrar)
shall authenticate and deliver, the Purchase Contract Certificates which the
Holder making the exchange is entitled to receive.
(d) All Purchase Contract Certificates issued upon any
registration of transfer or exchange of a Purchase Contract Certificate shall
evidence the ownership of the same Purchase Contracts and be entitled to the
same entitlements and subject to the same obligations, under this Agreement as
the Purchase Contracts evidenced by the Purchase Contract Certificate
surrendered upon such registration of transfer or exchange.
(e) Every Purchase Contract Certificate presented or surrendered
for registration of transfer or for exchange shall (if so required by the Agent)
be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Agent (acting as Purchase Contract Registrar) duly executed,
by the Holder thereof or his attorney duly authorized in writing.
(f) No service charge shall be made for any registration of
transfer or exchange of a Purchase Contract Certificate, but the Agent (acting
as Purchase Contract Registrar) may require payment from the Holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Purchase Contract
Certificates, other than any exchanges pursuant to Sections 3.05, 7.05(b), and
7.06 not involving any transfer. Notwithstanding the foregoing or any other
provision in this Agreement or any schedule of fees, the Agent (acting as
Purchase Contract Registrar) may seek such additional compensation, costs and
expenses from any Holder for any additional time, effort, responsibility, cost,
and/or expense incurred or expended by the Agent (acting as Purchase Contract
Registrar), including without limitation for any rush transfer request, in order
to comply with any function as Agent (acting as Purchase Contract Registrar).
(g) Notwithstanding the foregoing, the Company shall not be
obligated to execute and deliver to the Agent, and the Agent (acting as Purchase
Contract Registrar) shall not
28
be obligated to authenticate and deliver, any Purchase Contract Certificate
presented or surrendered for registration of transfer or for exchange on or
after the Settlement Date or the Acceleration Date. In lieu of delivery of a new
Purchase Contract Certificate, upon satisfaction of the applicable conditions
specified above in this Section and receipt of appropriate registration or
transfer instructions from such Holder, the Agent shall, if the Settlement Date
or the Acceleration Event has occurred, deliver the Common Shares issuable upon
settlement of the Purchase Contracts evidenced by such Purchase Contract
Certificate.
(h) The provisions of clauses (1), (2), (3), (4) and (5) below
shall apply only to Global Purchase Contract Certificates:
(1) Each Global Purchase Contract Certificate executed under
this Agreement shall be registered in the name of the Depositary
designated for such Global Purchase Contract Certificate or a nominee
thereof and delivered to such Depositary or a nominee thereof or custodian
therefor, and each such Global Purchase Contract Certificate shall
constitute a single Purchase Contract Certificate for all purposes of this
Agreement.
(2) No Global Purchase Contract Certificate may be exchanged
in whole or in part for Purchase Contract Certificates registered, and no
transfer of a Global Purchase Contract Certificate in whole or in part may
be registered, in the name of any Person other than the Depositary for
such Global Purchase Contract Certificate or a nominee thereof unless (A)
such Depositary (i) has notified the Agent that it is unwilling or unable
to continue as Depositary for such Global Purchase Contract Certificate or
(ii) has ceased to be a clearing agency registered under the Exchange Act
or (B) there shall have occurred and be continuing a breach by the Company
in respect to its obligations under this Agreement.
(3) Subject to clause (2) above, any exchange of a Global
Purchase Contract Certificate for other Purchase Contract Certificates may
be made in whole or in part, and all Purchase Contract Certificates issued
in exchange for a Global Purchase Contract Certificate or any portion
thereof shall be registered in such names as the Depositary for such
Global Purchase Contract Certificate shall direct.
(4) Every Purchase Contract Certificate authenticated and
delivered upon registration of transfer of, or in exchange for or in lieu
of, a Global Purchase Contract Certificate or any portion thereof, whether
pursuant to this Section, Section 7.04, 7.06 or 8.06 or otherwise, shall
be executed on behalf of the Holders and delivered in the form of, and
shall be, a Global Purchase Contract Certificate, unless such Purchase
Contract Certificate is registered in the name of a Person other than the
Depositary for such Global Purchase Contract Certificate or a nominee
thereof.
(5) The rights of each beneficial owner of a Global Purchase
Contract Certificate, whereby ownership and transfers are maintained and
made through book entries by the Depositary, shall be exercised only
through the Depositary and shall be limited to those established by law
and agreements between such beneficial owners and the Depositary and/or
its participants.
29
Section 7.06. Mutilated, Destroyed, Lost and Stolen Purchase
Contract Certificates.
(a) If any mutilated Purchase Contract Certificate is surrendered
to the Agent, the Company shall execute and deliver to the Agent, and the Agent
(acting as Purchase Contract Registrar) shall authenticate and deliver in
exchange therefor, a new Purchase Contract Certificate, evidencing the same
Purchase Contracts and bearing a number not contemporaneously outstanding.
(b) If there shall be delivered to the Company and the Agent (i)
evidence to the Company's and the Agent's satisfaction of the destruction, loss
or theft of any Purchase Contract Certificate, and (ii) such security, indemnity
or surety at the cost of the Holder as may be required by the Company, in its
sole discretion, or the Agent, in its sole discretion, to save the Agent, the
Company and any of their respective agents harmless, then, in the absence of
notice to the Company or the Agent that such Purchase Contract Certificate has
been acquired by a bona fide purchaser, the Company shall execute and deliver to
the Agent, and the Agent (acting as Purchase Contract Registrar) shall
authenticate and deliver to the Holder, in lieu of any such destroyed, lost or
stolen Purchase Contract Certificate, a new Purchase Contract Certificate,
evidencing the same Purchase Contracts and bearing a number not
contemporaneously outstanding.
(c) Notwithstanding the foregoing, the Company shall not be
obligated to execute and deliver to the Agent, and the Agent (acting as Purchase
Contract Registrar) shall not be obligated to authenticate and deliver to the
Holder, any Purchase Contract Certificate on or after the Settlement Date or the
Acceleration Date. In lieu of delivery of a new Purchase Contract Certificate,
upon satisfaction of the applicable conditions specified above in this Section
and receipt of appropriate registration or transfer instructions from such
Holder, the Agent shall, if the Settlement Date or the Acceleration Event has
occurred, deliver the Common Shares issuable in respect of the Purchase
Contracts evidenced by such Purchase Contract Certificate.
(d) Upon the issuance of any new Purchase Contract Certificate
under this Section, the Agent (acting as Purchase Contract Registrar) may
require the payment by the Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Agent or the Custodian)
connected therewith.
(e) Every new Purchase Contract Certificate issued pursuant to
this Section in lieu of any destroyed, lost or stolen Purchase Contract
Certificate shall constitute an original additional contractual obligation of
the Company and of the Agent, whether or not the destroyed, lost or stolen
Purchase Contract Certificate shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Agreement.
(f) The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or settlement of mutilated, destroyed, lost or stolen Purchase
Contract Certificates.
30
Section 7.07. Persons Deemed Owners of Purchase Contracts.
(a) Prior to due presentment of a Purchase Contract Certificate
for registration of transfer, the Company and the Agent, and any agent of the
Company or the Agent, may treat the Person in whose name such Purchase Contract
Certificate is registered as the owner of the Purchase Contracts evidenced
thereby and for all other purposes whatsoever, and neither the Company nor the
Agent, nor any agent of the Company or the Agent, shall be affected by notice to
the contrary.
(b) Notwithstanding the foregoing, with respect to any Global
Purchase Contract Certificate, (i) nothing herein shall prevent the Company, the
Agent or any agent of the Company or the Agent, from giving effect to any
written certification, proxy or other authorization furnished by any Depositary
(or its nominee), as a Holder, with respect to such Global Purchase Contract
Certificate or impair, as between such Depositary and owners of beneficial
interests in such Global Purchase Contract Certificate, the operation of
customary practices governing the exercise of rights of such Depositary (or its
nominee) as Holder of such Global Purchase Contract Certificate and (ii) the
Company, the Agent and any agent of the Company or the Agent shall be entitled
to deal with the Depositary for all purposes of this Agreement as the sole
Holder of the Purchase Contracts evidenced by Global Purchase Contract
Certificates and shall have no obligation to the beneficial owners of such
Global Purchase Contract Certificates.
Section 7.08. Cancellation of Purchase Contract Certificates.
(a) All Purchase Contract Certificates surrendered for delivery of
Common Shares on or after the Settlement Date, on or after the occurrence of an
Acceleration Event or pursuant to an Early Settlement or an Early Settlement
Upon Cash Merger or in connection with the registration of transfer or exchange
shall, if surrendered to any Person other than the Agent, be delivered to the
Agent (acting as Purchase Contract Registrar) and, if not already cancelled,
shall be promptly cancelled by it. The Company may at any time deliver to the
Agent (acting as Purchase Contract Registrar) for cancellation any Purchase
Contract Certificates previously executed and delivered hereunder which the
Company may have acquired in any manner whatsoever, and all Purchase Contract
Certificates so delivered shall be promptly cancelled by the Agent(acting as
Purchase Contract Registrar). No Purchase Contract Certificates shall be
executed and delivered in lieu of or in exchange for any Purchase Contract
Certificates cancelled as provided in this Section, except as expressly
permitted by this Agreement. All cancelled Purchase Contract Certificates held
by the Agent (acting as Purchase Contract Registrar) shall be disposed of in
accordance with the Agent's customary policies.
(b) If the Company or any Affiliate of the Company shall acquire
any Purchase Contract Certificate, such acquisition shall not operate as a
cancellation of such Purchase Contract Certificate unless and until such
Purchase Contract Certificate is delivered to the Agent (acting as Purchase
Contract Registrar) cancelled or for cancellation.
31
ARTICLE EIGHT
The Purchase Contracts
Section 8.01. Issuance of Common Shares.
(a) Each Purchase Contract is an agreement of purchase and sale
which shall obligate the Company to issue on the Settlement Date, in
consideration of the purchase price of $22,542.33 per Purchase Contract paid by
the initial Holders a number of Common Shares equal to the Settlement Rate,
unless an Acceleration Event, an Early Settlement or an Early Settlement Upon
Cash Merger occurs on or prior to the Settlement Date. The "Settlement Rate" is
equal to: (i) if the Applicable Market Value (as defined below) is greater than
the Threshold Appreciation Price, 16,885.93 Common Shares per Purchase Contract;
(ii) if the Applicable Market Value is less than or equal to the Threshold
Appreciation Price but is greater than the Reference Price, a number of Common
Shares per Purchase Contract equal to $28,571.00 divided by the Applicable
Market Value; and (iii) if the Applicable Market Value is less than or equal to
the Reference Price, 20,263.12 Common Shares per Purchase Contract, in each case
subject to adjustment as provided in Section 8.03. As provided in Section 8.08,
no fractional Common Share will be issued upon settlement of Purchase Contracts.
On the Settlement Date, the Company shall calculate the Settlement Rate as
aforesaid and provide a written notice to the Agent setting forth the Settlement
Rate and the calculation thereof in reasonable detail.
(b) The "Applicable Market Value" means the average of the Closing
Prices per Common Share on each of the twenty consecutive Trading Days ending on
the third Trading Day immediately preceding the Settlement Date. The "Closing
Price" of the Common Shares on any date of determination means the closing sale
price during regular trading hours (or, if no closing price is reported, the
last reported sale price) of the Common Shares on the New York Stock Exchange
(the "NYSE") on such date or, if the Common Shares are not listed for trading on
the NYSE on any such date, as reported in the composite transactions for the
principal United States securities exchange on which the Common Shares are so
listed, or if the Common Shares are not so listed on a United States national or
regional securities exchange, as reported by The Nasdaq Stock Market, or, if the
Common Shares are not so reported, the last quoted bid price for the Common
Shares in the over-the-counter market as reported by the National Quotation
Bureau or similar organization, or, if such bid price is not available, the
market value of the Common Shares on such date as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Company. A "Trading Day" means a day on which the Common Shares (A) are not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) have
traded at least once on any national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Shares.
Section 8.02. Delivery of Common Shares.
Unless an Acceleration Event shall have occurred on or prior to the
Settlement Date, on the Settlement Date, subject to Section 8.03(b), the Agent
shall notify the Company of the number of Common Shares to be delivered in
respect of Outstanding Purchase Contracts pursuant to the Settlement Rate and
all amounts to be paid in respect of any fractional shares and
32
the Company shall deliver or cause to be delivered to the Agent, for the benefit
of the Holders of the Outstanding Purchase Contracts, one or more certificates
representing such number of Common Shares registered in the name of the Agent
(or its nominee) as custodian for the Holders (such certificates for Common
Shares, together with any dividends or distributions with respect thereto for
which a record date and payment date for such dividend or distribution has
occurred after the Settlement Date, being hereinafter referred to as the "Common
Share Settlement") to which the Holders are entitled hereunder. Subject to the
foregoing, upon surrender of a Certificate to the Agent on or after the
Settlement Date, together with settlement instructions thereon duly completed
and executed, the Holder of such Certificate shall be entitled to receive in
exchange therefor that number of whole Common Shares which such Holder is
entitled to receive pursuant to the provisions of this Article (after taking
into account all Purchase Contracts, including those evidenced by Units, then
held by such Holder) together with cash in lieu of fractional shares as provided
in Section 8.08 and any dividends or distributions with respect to such shares
constituting part of the Common Share Settlement, but without any interest
thereon, and the Certificate so surrendered shall forthwith be cancelled. Such
shares shall be registered in the name of the Holder or the Holder's designee as
specified in the settlement instructions on the Certificate. For the avoidance
of doubt, no Holder shall be entitled to any dividends or distributions with
respect to the Common Shares for which the record date occurs prior to the
Settlement Date.
If any Common Shares issued in respect of a Purchase Contract are to
be registered in the name of a Person other than the Person in whose name the
Certificate evidencing such Purchase Contract is registered, no such
registration shall be made unless the Person requesting such registration has
paid any transfer and other taxes required by reason of such registration in a
name other than that of the registered Holder of the Certificate evidencing such
Purchase Contract or has established to the satisfaction of the Agent that such
tax either has been paid or is not payable.
Section 8.03. Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Share Splits, Etc.
(1) Share Dividends. If the Company shall after the date of
this Agreement pay a dividend or make a distribution to all holders of the
outstanding Common Shares in Common Shares, the Settlement Rate in effect
at the opening of business on the date following the date fixed for the
determination of shareholders entitled to receive such dividend or other
distribution shall be increased by dividing such Settlement Rate by a
fraction of which the numerator shall be the number of Common Shares
outstanding at the close of business on the date fixed for such
determination and the denominator shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution, such increase to become effective immediately after the
opening of business on the day following the date fixed for such
determination. If any dividend or distribution of the type described in
this Section 8.03(a)(1) is declared but not so paid or made, the
Settlement Rate shall again be adjusted to the Settlement Rate which would
then be in effect if such dividend or distribution had not been declared.
33
(2) Share Purchase Rights. If the Company issues rights or
warrants to all or substantially all holders of its outstanding Common
Shares that entitle the holders of its Common Shares for a period expiring
within 60 days after the record date for the determination of shareholders
entitled to receive such rights or warrants, to subscribe for or purchase
Common Shares, or securities convertible into Common Shares, at a price
per share less than the Current Market Price on the date fixed for the
determination of shareholders entitled to receive such rights or warrants
(other than pursuant to a dividend reinvestment plan), the Settlement Rate
shall be adjusted so that the same shall equal the rate determined by
dividing such Settlement Rate in effect at the opening of business on the
date following the date fixed for such determination by a fraction of
which the numerator shall be the number of Common Shares outstanding at
the close of business on the date fixed for such determination plus the
number of shares which the aggregate offering price of the total number of
shares so offered would purchase at such Current Market Price, and of
which the denominator shall be the number of Common Shares outstanding on
the close of business on the date fixed for such determination plus the
number of additional Common Shares so offered for subscription or
purchase. Such increase shall become effective immediately after the
opening of business on the day following the date fixed for the
determination. To the extent that Common Shares are not delivered pursuant
to such rights or warrants, upon the expiration or termination of such
rights or warrants the Settlement Rate shall be readjusted to be the
Settlement 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
delivery of only the number of Common Shares actually delivered. If such
rights or warrants are not so issued, the Settlement Rate shall again be
adjusted to be the Settlement Rate which would then be in effect if such
date fixed for the determination of shareholders 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 Common Shares
at less than such Current Market Price, and in determining the aggregate
offering price of such Common Shares, there shall be taken into account
any consideration received for such rights or warrants, with the value of
such consideration, if other than cash, to be determined by the Board of
Directors.
(3) Share Splits; Reverse Splits. If the outstanding Common
Shares shall be subdivided into a greater number of Common Shares, the
Settlement 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, if the outstanding Common
Shares shall be combined into a smaller number of Common Shares, the
Settlement Rate in effect at the opening of business on the day following
the day upon which such combination becomes effective shall be
proportionately reduced, such increase or reduction, as the case may be,
to become effective immediately after the opening of business on the day
following the day upon which such subdivision or combination becomes
effective.
(4) Debt or Asset Distributions. If the Company shall, by
dividend or otherwise, distribute to all holders of its Common Shares
shares of any class of capital stock of the Company (other than any
dividends or distributions to which Section 8.03(a)(1) applies) or
evidences of its indebtedness, cash or other assets (including securities,
but excluding (i) any rights or warrants of a type referred to in
34
Sections 8.03(a)(1) or 8.03(a)(2), (ii) rights described in the second
succeeding paragraph of this Section 8.03(a)(4) (including rights
distributed to all holders of its Common Shares pursuant to a shareholder
rights plan) and (iii) dividends and distributions paid exclusively in
cash) (the foregoing hereinafter in this Section 8.03(a)(4) called the
"Securities"), then, in each such case, the Settlement Rate shall be
increased so that the same shall be equal to the rate determined by
dividing the Settlement Rate in effect immediately prior to the close of
business on the record date with respect to such distribution by a
fraction of which the numerator shall be the Current Market Price on such
date less the fair market value (as determined by the Board of Directors,
whose determination shall be conclusive and described in a resolution of
the Board of Directors) on such date of the portion of the Securities so
distributed applicable to one Common Share and the denominator shall be
such Current Market Price, such increase to become effective immediately
prior to the opening of business on the day following the record date;
provided, however, that in the event the then fair market value (as so
determined by the Board of Directors) of the portion of the Securities so
distributed applicable to one Common Share is equal to or greater than the
Current Market Price on the record date, in lieu of the foregoing
adjustment, the Company may elect to deliver to each Holder on the
Settlement Date upon settlement of a Purchase Contract the amount of
Securities such Holder would have received as a holder of Common Shares
immediately prior to such record date. If such dividend or distribution is
not so paid or made, the Settlement Rate shall again be adjusted to be the
Settlement Rate which would then be in effect if such dividend or
distribution had not been declared. If the Board of Directors determines
the fair market value of any distribution for purposes of this Section
8.03(a)(4) by reference to the actual or when issued trading market for
any securities comprising all or part of such distribution, it must in
doing so consider the prices in such market over the same period used in
computing the Current Market Price pursuant to Section 8.03(a)(5) to the
extent possible.
Rights or warrants distributed by the Company to all holders of
Common Shares entitling the holders thereof 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: (i) are deemed to be transferred with such
Common Shares; (ii) are not exercisable; and (iii) are also issued in
respect of future issuances of Common Shares, shall be deemed not to have
been distributed for purposes of this Section 8.03(a)(4) (and no
adjustment to the Settlement Rate under this Section 8.03(a)(4) shall be
made).
35
For purposes of this Section 8.03(a)(4) and Sections 8.03(a)(1) and
(2), any dividend or distribution to which this Section 8.03(a)(4) is
applicable that also includes Common Shares, or rights or warrants to
subscribe for or purchase Common Shares to which Section 8.03(a)(2)
applies (or both), shall be deemed instead to be (1) a dividend or
distribution of the evidences of indebtedness, assets, shares of capital
stock, rights or warrants other than such Common Shares or rights or
warrants to which Section 8.03(a)(2) applies (and any Settlement Rate
increase required by this Section 8.03(a)(4) with respect to such dividend
or distribution shall then be made) immediately followed by (2) a dividend
or distribution of such Common Shares or such rights or warrants (and any
further Settlement Rate increase required by Sections 8.03(a)(1) and (2)
with respect to such dividend or distribution shall then be made, except
that (A) the record date of such dividend or distribution shall be
substituted as "the date fixed for the determination of shareholders
entitled to receive such dividend or other distribution," "record date
fixed for such determination" and "record date" within the meaning of
Section 8.03(a)(1) and as "the date fixed for the determination of
shareholders entitled to receive such rights or warrants," "the record
date fixed for the determination of the shareholders entitled to receive
such rights or warrants" and "such record date" within the meaning of
Section 8.03(a)(2) and (B) any Common 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
8.03(a)(1)).
(5) Cash Distributions. If the Company shall, by dividend or
otherwise, distribute to all holders of its Common Shares cash (excluding
any cash that is distributed in a Reorganization Event to which Section
8.03(b) applies or as part of a distribution referred to in paragraph (4)
of this Section) in an aggregate amount that, combined together with (i)
the aggregate amount of any other such all cash distributions to all
holders of its Common Shares within the 12 months preceding the date of
payment of such distribution and in respect of which no adjustment
pursuant to this paragraph (5) or paragraph (6) of this Section has been
made and (ii) the aggregate of any cash plus the fair market value (as
determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution) of consideration payable
in respect of any tender offers (within the meaning of U.S. federal
securities laws) by the Company or any of its subsidiaries for all or any
portion of the Common Shares concluded within the 12 months preceding the
date of payment of such distribution and in respect of which no adjustment
pursuant to this paragraph (5) of this Section has been made, exceeds 15%
of the product of the Current Market Price on the date for the
determination with respect to such distribution times the number of Common
Shares outstanding on such date, then, and in each such case, immediately
after the close of business on such date of determination, the Settlement
Rate shall be adjusted so that the same shall equal the rate determined by
dividing the Settlement Rate in effect immediately prior to the close of
business on the date fixed for determination by a fraction (i) the
numerator of which is the Current Market Price on the date fixed for such
determination less an amount equal to the quotient of (x) the excess of
such combined amount over such 15% and (y) the number of Common Shares
outstanding on such date for determination and (ii) the denominator of
which shall be equal to the Current Market Price per Common Share on such
date of determination; provided, however, that if the portion of the cash
so
36
distributed applicable to one Common Share is equal to or greater than the
Current Market Price of the Common Shares on the record date, in lieu of
the foregoing adjustment, the Company may elect to deliver to each Holder
upon settlement of a Purchase Contract an amount of cash equal to the cash
and the fair market value of the non-cash consideration (as determined by
the Board of Directors, whose determination shall be conclusive and
described in a Board Resolution) such Holder would have received as a
holder of Common Shares immediately prior to such record date.
(6) Tender Offers. If a tender or exchange offer within the
meaning of the U.S. securities laws made by the Company or any subsidiary
of the Company for all or any portion of the Common Shares expires and
such tender or exchange offer (as amended upon the expiration thereof)
requires the Company or such subsidiary to pay to shareholders (based on
the acceptance (up to any maximum specified in the terms of the tender or
exchange offer) of Purchased Shares, as hereinafter defined) an aggregate
consideration that has a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a
Board Resolution) that combined together with (I) the aggregate of the
cash plus the fair market value (as determined by the Board of Directors,
whose determination shall be conclusive and described in a Board
Resolution), as of the expiration of such tender or exchange offer, of
consideration payable in respect of any other tender or exchange offer, by
the Company or any subsidiary of the Company for all or any portion of the
Common Shares expiring within the 12 months preceding the expiration of
such tender or exchange offer and in respect of which no adjustment
pursuant to paragraph (5) of this Section or this paragraph (6) has been
made and (II) the aggregate amount of any distributions to all holders of
the Common Shares made exclusively in cash within 12 months preceding the
expiration of such tender or exchange offer and in respect of which no
adjustment pursuant to paragraph (5) of this Section or this paragraph (6)
has been made, exceeds 15% of the product of the Current Market Price per
Common Share as of the last time (the "Expiration Time") tenders could
have been made pursuant to such tender or exchange offer (as it may be
amended) times the number of Common Shares outstanding (including any
tendered shares) at the Expiration Time, then, and in each such case,
immediately prior to the opening of business on the day after the date of
the Expiration Time, the Settlement Rate shall be adjusted so that the
same shall equal the rate determined by dividing the Settlement Rate
immediately prior to close of business on the date of the Expiration Time
by a fraction (i) the numerator of which shall be equal to (A) the product
of (I) the Current Market Price per Common Share on the date of the
Expiration Time and (II) the number of Common Shares outstanding
(including any tendered shares) at the Expiration Time less (B) the amount
of cash plus the fair market value (determined as aforesaid) of the
aggregate consideration payable to shareholders based on the acceptance
(up to any maximum specified in the terms of the tender or exchange offer)
of Purchased Shares, and (ii) the denominator of which shall be equal to
the product of (A) the Current Market Price per Common Share as of the
Expiration Time and (B) the number of Common Shares outstanding (including
any tendered shares) as of the Expiration Time less the number of all
shares validly tendered 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").
37
(7) "Current Market Price". The "Current Market Price" per
Common Share on any day means the average of the daily Closing Prices per
Common Share for the ten consecutive Trading Days immediately prior to the
date in question; provided, however, that (1) if the "ex" date (as
hereinafter defined) for any event (other than the issuance or
distribution requiring such computation) that requires an adjustment to
the Settlement Rate occurs during such ten consecutive Trading Days, the
Closing Price for each Trading Day prior to the "ex" date for such other
event shall be adjusted by dividing such Closing Price by the same
fraction by which the Settlement Rate is so required to be adjusted as a
result of such other event, (2) if the "ex" date for any event (other than
the issuance or distribution requiring such computation) that requires an
adjustment to the Settlement Rate occurs on or after the "ex" date for the
issuance or distribution requiring such computation and prior to the day
in question, the Closing Price for each Trading Day on and after the "ex"
date for such other event shall be adjusted by dividing such Closing Price
by the reciprocal of the fraction by which the Settlement Rate is so
required to be adjusted as a result of such other event, and (3) if the
"ex" date for the issuance or distribution requiring such computation is
prior to the day in question, after taking into account any adjustment
required pursuant to clause (1) or (2) of this proviso, the Closing Price
for each Trading Day on or after such "ex" date shall be adjusted by
adding thereto the amount of any cash and the fair market value (as
determined by the Board of Directors, whose determination shall be
conclusive and described in a resolution of the Board of Directors) of the
evidences of indebtedness, shares of capital stock or assets being
distributed applicable to one Common Share as of the close of business on
the day before such "ex" date. For purposes of this paragraph, the term
"ex" date, (1) when used with respect to any issuance or distribution,
means the first date on which the Common Shares trade regular way on the
relevant exchange or in the relevant market from which the Closing Price
was obtained without the right to receive such issuance or distribution,
(2) when used with respect to any subdivision or combination of Common
Shares, means the first date on which the Common Shares trade regular way
on such exchange or in such market after the time at which such
subdivision or combination becomes effective, and (3) when used with
respect to any tender or exchange offer means the first date on which the
Common Shares trade regular way on such exchange or in such market after
the Expiration Time of such offer. Notwithstanding the foregoing, whenever
successive adjustments to the Settlement Rate are called for pursuant to
this Section 8.03(a), such adjustments shall be made to the Current Market
Price as may be necessary or appropriate to effectuate the intent of this
Section 8.03(a) and to avoid unjust or inequitable results as determined
in good faith by the Board of Directors (whose determination shall be
conclusive and described in a Board Resolution).
(b) Adjustment for Consolidation, Merger or Other Reorganization
Event. If any of the following events occur: (i) any reclassification or change
of the outstanding Common Shares (other than a change in par value, or from par
value to no par value, or from no par value to par value, or as a result of a
subdivision or combination), (ii) any amalgamation, arrangement, consolidation,
merger, share exchange or combination of the Company with another corporation
(other than with or into the Principal Subsidiary or any other subsidiary of the
Company that was in existence as of June 6, 2002) as a result of which holders
of Common Shares shall be entitled to receive shares of stock, securities or
other property or assets (including cash) with respect to or in exchange for
such Common Shares, or (iii) any sale or conveyance of the properties and
38
assets of the Company as an entirety or substantially as an entirety to any
other corporation as a result of which holders of Common Shares shall be
entitled to receive shares of stock, securities or other property or assets
(including cash) with respect to or in exchange for such Common Shares (other
than to the Principal Subsidiary or any other subsidiary of the Company that was
in existence as of June 6, 2002) (any such event, a "Reorganization Event"), the
Company may, in its sole discretion, elect to deliver to each Holder on the
Settlement Date, with respect to each Purchase Contract, the kind and amount of
shares of stock, other securities or other property or assets (including cash)
receivable upon such Reorganization Event by a Holder of the number of Common
Shares issuable upon settlement of the Purchase Contract if the Settlement Date
had occurred immediately prior to such Reorganization Event, assuming such
holder of Common Shares did not exercise his or her rights of election, if any,
as to the kind or amount of securities, cash or other property receivable upon
such Reorganization Event (provided that, if the kind or amount of securities,
cash or other property receivable upon such Reorganization Event is not the same
for each Common Share in respect of which such rights of election have not been
exercised ("non-electing share"), then, for the purposes of this Section
8.03(b), the kind and amount of securities, cash or other property receivable
upon such Reorganization Event 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). In the event of such a Reorganization Event, the Person formed by such
amalgamation, consolidation, merger or exchange or the Person which acquires the
assets of the Company or, in the event of a liquidation or dissolution of the
Company, the Company or a liquidating trust created in connection therewith,
shall execute and deliver to the Agent an agreement supplemental hereto
providing that the Holders of each Outstanding Purchase Contract shall have the
rights provided by this Section 8.03. Such supplemental agreement shall provide
for adjustments which, for events subsequent to the effective date of such
supplemental agreement, shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Section. If, in the case of any such
Reorganization Event, the stock or other securities and assets receivable
thereupon by a holder of Common Shares includes shares of stock or other
securities and assets of a corporation other than the successor or purchasing
corporation, as the case may be, in such Reorganization Event, then such
supplemental agreement shall also be executed by such other corporation and
shall contain such additional provisions to protect the interests of the Holders
of each Outstanding Purchase Contract as the Board of Directors shall reasonably
consider necessary by reason of the foregoing. The above provisions of this
Section shall similarly apply to successive Reorganization Events. If the
Company fails to make the election referred to in the first full sentence of
this paragraph (b), each Holder will have the right to early settle its Purchase
Contracts on the same basis and in accordance with the same procedures as
provided for under Section 8.07, whether or not the Reorganization Event is a
Cash Merger for purposes of Section 8.07(a).
(c) Calculating Adjustment of Settlement Rate. All calculations
under this Article shall be made by the Company, and adjustments to the
Settlement Rate will be calculated to the nearest 1/10,000th of a share. No
adjustment in the Settlement Rate will be required unless such adjustment would
require an increase or decrease of at least one percent in the Settlement Rate;
provided, however, that any adjustments which by reason of the foregoing are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. If an adjustment is to be made to the Settlement Rate
pursuant to paragraph (1), (2), (3), (4), (5) or (6) of Section 8.03(a), an
adjustment shall also be made to the Applicable Market Value solely to determine
which of clauses (i), (ii) or (iii) of the definition of Settlement Rate in
39
Section 8.01(a) will apply on the Settlement Date. Such adjustment shall be made
by multiplying the Applicable Market Value by a fraction, the numerator of which
shall be the Settlement Rate immediately after such adjustment pursuant to
paragraph (1), (2), (3), (4), (5) or (6) of Section 8.03(a) and the denominator
of which shall be the Settlement Rate immediately before such adjustment,
provided that if such adjustment to the Settlement Rate is required to be made
pursuant to the occurrence of any of the events contemplated by paragraph (1),
(2), (3), (4), (5) or (6) of Section 8.03(a) during the period taken into
consideration for determining the Applicable Market Value, appropriate and
customary adjustments shall be made to the Settlement Rate.
Section 8.04. Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein provided,
the Company shall:
(i) forthwith compute the adjusted Settlement Rate in
accordance with Section 8.03 and prepare and transmit to the Agent an
Officers' Certificate setting forth the adjusted Settlement Rate, the
method of calculation thereof in reasonable detail, and the facts
requiring such adjustment and upon which such adjustment is based; and
(ii) within ten Business Days following the occurrence of an
event that permits or requires an adjustment to the Settlement Rate
pursuant to Section 8.03 (or if the Company is not aware of such
occurrence, as soon as practicable after becoming so aware), provide a
written notice to the Agent of the occurrence of such event and a
statement in reasonable detail setting forth the method by which the
adjustment to the Settlement Rate was determined and setting forth the
adjusted Settlement Rate.
(b) The Agent shall not at any time be under any duty or
responsibility to any Holder of Purchase Contracts or Units to determine whether
any facts exist which may require any adjustment of the Settlement Rate, or with
respect to the nature or extent or calculation of any such adjustment when made,
or with respect to the method employed in making the same. The Agent shall not
be accountable with respect to the validity or value (or the kind or amount) of
any Common Shares, or of any securities or property, which may at the time be
issued or delivered under any Purchase Contract; and the Agent makes no
representation with respect thereto. The Agent shall not be responsible for any
failure of the Company to issue, transfer or deliver any Common Shares pursuant
to a Purchase Contract or to comply with any of the duties, responsibilities or
covenants of the Company contained in this Article.
Section 8.05. Acceleration Event; Notice.
If an Acceleration Event occurs, the Purchase Contracts and the
obligations and rights of the Company and the Holders thereunder shall
immediately and automatically accelerate, without the necessity of any notice or
action by any Holder, the Agent or the Company. Upon the occurrence of an
Acceleration Event, the Company shall give written notice to the Agent and to
the Holders of Purchase Contracts in accordance with Sections 1.05 and 1.06.
Upon and after the occurrence of an Acceleration Event, the Holders will be
entitled to receive
40
from the Company 20,263.12 Common Shares per Purchase Contract, which number
shall be adjusted in the same manner and at the same time as the Settlement Rate
is adjusted.
Section 8.06. Early Settlement.
(a) Commencing August 15, 2002, and subject to and upon compliance
with the provisions of this Section 8.06 at the option of the Holder of Purchase
Contracts (including Purchase Contracts evidenced by Units), Purchase Contracts
may be settled early ("Early Settlement") as provided herein. In order to
exercise the right to effect Early Settlement with respect to any Purchase
Contracts (including Purchase Contracts evidenced by Units), the Holder of the
Certificate evidencing such Purchase Contracts shall deliver such Certificate to
the Agent at the Stock Transfer Office duly endorsed for transfer in blank with
the form of Election for Early Settlement on the reverse thereof duly completed.
If the foregoing requirements are first satisfied with respect to Purchase
Contracts at or prior to 5:00 p.m., Toronto time, on a Business Day, such day
shall be the "Early Settlement Date" with respect to such Purchase Contracts and
if such requirements are first satisfied after 5:00 p.m., Toronto time, on a
Business Day or on a day that is not a Business Day, the "Early Settlement Date"
with respect to such Purchase Contracts shall be the next succeeding Business
Day. The Agent shall promptly notify the Company of the Early Settlement and
such notification shall include the number of Common Shares to be issued and
delivered pursuant to Section 8.06(b) and the names in which the Common Shares
are to be registered.
(b) Upon Early Settlement of Purchase Contracts (including
Purchase Contracts evidenced by Units) by a Holder, the Company shall issue, and
such Holder shall be entitled to receive, a number of Common Shares upon
settlement of each Purchase Contract as to which Early Settlement is effected
equal to the Early Settlement Rate. The "Early Settlement Rate" shall initially
be equal to 16,011.04 Common Shares per Purchase Contract for the period on or
after August 15, 2002 and prior to February 15, 2003 and 16,885.93 Common Shares
per Purchase Contract for the period on or after February 15, 2003 and shall be
adjusted in the same manner and at the same time as the Settlement Rate is
adjusted. As promptly as practicable after Early Settlement of Purchase
Contracts in accordance with the provisions of this Section 8.06, the Company
shall issue and shall deliver to the Agent at the Stock Transfer Office a
certificate or certificates for the full number of Common Shares issuable upon
such Early Settlement together with payment in lieu of any fraction of a share,
as provided in Section 8.08.
(c) The Company shall cause the Common Shares issuable upon Early
Settlement of Purchase Contracts to be issued and delivered to the Agent, for
delivery to the Holder thereof or its designee, no later than the third Business
Day after receipt of notification pursuant to Section 8.06(a) from the Agent.
(d) Upon Early Settlement of any Purchase Contracts, and subject
to receipt of the Common Shares from the Company, the Agent shall, in accordance
with the instructions provided by the Holder thereof on the applicable form of
Election for Early Settlement on the reverse of the Certificate evidencing the
related Units or Purchase Contracts, as the case may be, deliver the full number
of Common Shares issuable upon such Early Settlement together with payment in
lieu of any fraction of a share, as provided in Section 8.08.
41
(e) In the event that Early Settlement is effected with
respect to Purchase Contracts evidenced by less than all the Units or Purchase
Contracts evidenced by a Certificate, upon such Early Settlement the Company
shall execute and deliver to the Agent, and the Agent shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a Certificate
evidencing the Units or Purchase Contracts as to which Early Settlement was not
effected.
(f) Notwithstanding the foregoing, no election for Early
Settlement by any Holder will be permitted at any time during which an effective
registration statement under the Securities Act and a related current prospectus
covering the Common Shares to be delivered in respect of the Purchase Contracts
being settled is required under the U.S. federal securities laws but is not
available.
Section 8.07. Early Settlement Upon Cash Merger. (a)
Commencing August 15, 2002, upon any amalgamation, arrangement, consolidation,
merger or other reorganization event with respect to the Company of the type
described in clause (ii) of Section 8.03(b) in which all of the Common Shares
outstanding immediately prior to such event are exchanged for or converted into
consideration at least 30% of the value of which (such 30% determination based
on a valuation provided by a nationally recognized investment banking firm
selected by the Company) consists of cash or cash equivalents (any such event a
"Cash Merger"), the Company shall be required to offer the Holder of each
Purchase Contract the right to settle the Purchase Contract prior to the
Settlement Date (an "Early Settlement Upon Cash Merger" and the date on which
such early settlement occurs, which shall occur immediately prior to the Merger
Effective Date (as defined below), the "Early Settlement Upon Cash Merger Date")
as provided herein; provided, however, that no Early Settlement Upon Cash Merger
shall be permitted if on the Early Settlement Upon Cash Merger Date an effective
registration statement under the Securities Act and a related current prospectus
covering Common Shares to be delivered in respect of the Purchase Contracts
being settled is required under the U.S. federal securities laws but is not
available. The Company or, at the request and expense of the Company, the Agent,
shall give all Holders of Purchase Contracts notice of any proposed Cash Merger
and of the right of Early Settlement Upon Cash Merger arising as a result
thereof at least 25 days prior to the date on which the Cash Merger is to become
effective (the "Merger Effective Date"). The Company shall also deliver a copy
of such notice to the Agent and the Custodian.
Each such notice shall contain:
(i) the date, which shall be not more than five
Business Days prior to the Merger Effective Date, by which the Early
Settlement Upon Cash Merger right must be exercised (the "Merger
Election Date");
(ii) an explanation of how the Settlement Rate in
effect as a result of such Cash Merger will be calculated, which shall
be calculated in accordance with Section 8.01(a) hereof, by
substituting for the Applicable Market Value the volume-weighted
average trading price of the Common Shares on the NYSE during regular
trading hours for the five Trading Days ending on the Trading Day
immediately preceding the Merger Election Date or, if the Common Shares
are not listed for trading on the NYSE on the Merger Election Date, the
market value of the Common Shares on such date as determined by a
nationally recognized independent investment banking firm
42
retained for this purpose by the Company (the "Early Settlement Upon
Cash Merger Rate");
(iii) to the extent known to the Company, the kind
and amount of securities, cash and other property receivable pursuant
to the Cash Merger by the holders of Common Shares; and
(iv) the instructions a Holder must follow to
exercise the Early Settlement Upon Cash Merger right.
(b) To exercise the Early Settlement Upon Cash Merger
right, a Holder shall deliver to the Agent at the Stock Transfer Office on or
before 5:00 p.m., New York City time on the Merger Election Date specified in
the notice (i) the Certificate(s) evidencing the Units or Purchase Contracts, as
applicable, with respect to which the Early Settlement Upon Cash Merger right is
being exercised duly endorsed in blank with the form of Election for Early
Settlement Upon Cash Merger on the reverse thereof duly completed and (ii)
payment of any transfer or similar taxes payable in connection with the issuance
of Common Shares to any person than the Holder (if applicable).
(c) Effective on the Early Settlement Upon Cash Merger
Date, the exercising Holder or its designee shall become a holder of Common
Shares and shall be entered on the register for the Common Shares as the
registered holder of that number of Common Shares deliverable under such
Holder's Purchase Contracts for which such Early Settlement Upon Cash Merger was
exercised, determined with reference to the Settlement Rate (determined in
accordance with Section 8.07(a)(ii)) (with the intent that such Holder or its
designee shall participate in the Cash Merger as the registered holder of such
Common Shares) and the Company (or the successor to the Company resulting from
the Cash Merger) shall, as promptly as practicable following the Merger
Effective Date, deliver or cause to be delivered such Holder's or its designee's
Common Share certificates, in accordance with Section 8.02. In the event an
Early Settlement Upon Cash Merger right is exercised by a Holder in accordance
with the terms hereof, all references herein to Settlement Date shall be deemed
to refer to such Early Settlement Upon Cash Merger Date.
(d) Upon the Early Settlement Upon Cash Merger of any
Purchase Contracts, the Agent shall instruct the Custodian to transfer to the
Holder the Treasury Strips evidenced by any Units that also evidence such
Purchase Contracts in accordance with the instructions provided by the Holder
thereof on the applicable form of Election for Early Settlement Upon Cash Merger
on the reverse of the Certificate evidencing the related Units, or Purchase
Contracts, as applicable.
(e) In the event that Early Settlement Upon Cash Merger
is effected with respect to Purchase Contracts evidenced by fewer than all the
Units evidenced by a Certificate, upon such Early Settlement Upon Cash Merger
the Company (or the successor to the Company resulting from the Cash Merger)
shall execute and the Agent shall authenticate, countersign and deliver to the
Holder thereof, at the expense of the Company, a Certificate evidencing the
Units, or as applicable the Purchase Contracts, as to which Early Settlement
Upon Cash Merger was not effected.
43
(f) If (1) a Holder of Purchase Contracts does not elect
to exercise its Early Settlement Upon Cash Merger right, or (2) if a Holder of
Purchase Contracts exercises its Early Settlement Upon Cash Merger right but the
Cash Merger does not occur for any reason, then such Holder's Purchase Contracts
will not be settled and will remain outstanding.
(g) Notwithstanding the foregoing, no election for Early
Settlement Upon Cash Merger by any Holder will be permitted at any time during
which an effective registration statement and current prospectus covering the
Common Shares to be delivered in respect of the Purchase Contracts being settled
is required under the U.S. federal securities laws but is not available.
Section 8.08. No Fractional Shares.
No fractional Common Shares or scrip representing fractional
Common Shares shall be issued or delivered upon settlement on the Settlement
Date, upon Early Settlement, upon Early Settlement Upon Cash Merger or upon an
Acceleration Event. If Certificates evidencing more than one Purchase Contract
are surrendered for settlement at one time by the same Holder, the number of
full Common Shares to be delivered upon settlement shall be computed on the
basis of the aggregate number of Purchase Contracts evidenced by the
Certificates so surrendered by that Holder. Instead of any fractional Common
Share which would otherwise be deliverable upon settlement of any Purchase
Contracts on the Settlement Date, upon Early Settlement, upon Early Settlement
Upon Cash Merger or upon an Acceleration Event, the Company, through the Agent,
shall make a cash payment in respect of such fractional interest in an amount
equal to the value of such fractional shares at the Closing Price per share on
the Trading Day immediately preceding the Settlement Date, the Early Settlement
Date, the Early Settlement Upon Cash Merger Date or upon an Acceleration Event,
respectively. Such payment shall be regarded as a purchase price adjustment in
respect of the purchase price of Common Shares under a Purchase Contract. The
Company shall provide the Agent from time to time with sufficient funds to
permit the Agent to make all cash payments required by this Section 8.08 in a
timely manner.
Section 8.09. Charges and Taxes.
The Company shall pay all stock transfer and similar taxes
attributable to the initial issuance and delivery of the Common Shares pursuant
to the Purchase Contracts; provided, however, that the Company shall not be
required to pay any such tax or taxes which may be payable in respect of any
exchange of or substitution for a Certificate evidencing a Purchase Contract or
any issuance of a Common Share in a name other than that of the registered
Holder of a Unit Certificate surrendered in respect of the Purchase Contracts
evidenced thereby or a registered Holder of a Purchase Contract Certificate
surrendered in respect of the Purchase Contracts evidenced thereby, other than
in the name of the Agent, as custodian for such Holder, and the Company shall
not be required to issue or deliver such share certificates or Certificates or
Common Shares unless or until the Person or Persons requesting the transfer or
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid
or is not due.
44
Section 8.10. Company to Deal Only With Agent.
All of the Company's obligations hereunder to provide notice
or deliver any Common Shares, money or other property to the Holders shall be
fully satisfied if the Company provides such notice, or delivers such Common
Shares, money or other property, to the Agent, and in no event shall the Company
be responsible for any failure of the Agent to timely perform its obligations
under this Agreement.
ARTICLE NINE
Purchase Contract Remedies
Section 9.01. Restoration of Purchase Contract Rights and
Remedies.
If any Holder of Purchase Contracts has instituted any
proceeding to enforce any right or remedy under this Agreement or the related
Purchase Contracts and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to such Holder, then and in every
such case, subject to any determination in such proceeding, the Agent, the
Company and such Holder shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of such Holder
shall continue as though no such proceeding had been instituted.
Section 9.02. Rights and Remedies Cumulative for Purchase
Contracts.
Except as otherwise provided with respect to the replacement
of mutilated, destroyed, lost or stolen Purchase Contract Certificates in
Section 7.06(f), no right or remedy herein conferred upon or reserved to the
Holders of Purchase Contracts is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Section 9.03. Delay or Omission Not Waiver of Purchase
Contract Rights and Remedies.
No delay or omission of any Holder of Purchase Contracts to
exercise any right or remedy shall impair any such right or remedy or constitute
a waiver of any such right. Every right and remedy given by this Article or by
law to the Holders of Purchase Contracts may be exercised from time to time, and
as often as may be deemed expedient, by such Holders.
Section 9.04. Undertaking for Costs -- Purchase Contracts.
The Company and the Agent agree, and each Holder of any
Purchase Contract by its acceptance of the related Purchase Contract Certificate
evidencing such Purchase Contract shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Agreement, or in any suit against the Agent for any action
taken, suffered or omitted by it as Agent, the filing by any party litigant in
such suit of
45
an undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; provided that
the provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Agent, to any suit instituted by any
Holder or group of Holders, holding in the aggregate more than 10% of the
Outstanding Purchase Contracts, or for enforcement of the right to receive
delivery of Common Shares under the Purchase Contracts.
Section 9.05. Waiver of Stay or Extension Laws for Purchase
Contracts.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants made by it herein or the performance by it of its obligations under
this Agreement; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law.
PART III - UNITS
ARTICLE TEN
Unit Certificate Forms
Section 10.01. Forms of Unit Certificates Generally.
(a) The Unit Certificates shall be in substantially the
form set forth in Exhibit B hereto, with such letters, numbers or other marks of
identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange or quotation system on which the Units are listed or quoted
or any Depositary therefor.
(b) The definitive Unit Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the Agent or the Responsible Officer
executing the Unit Certificates, consistent with the provisions of this
Agreement, as evidenced by their execution thereof.
(c) Every Global Unit Certificate authenticated, executed
on behalf of the Holders and delivered hereunder shall bear a legend in
substantially the following form:
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF
THE PURCHASE CONTRACT AND UNIT AGREEMENT HEREINAFTER REFERRED
TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE
THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN
PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS
CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME
OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF,
EXCEPT
46
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AND UNIT AGREEMENT.
ARTICLE ELEVEN
The Units
Section 11.01. Units: Title and Terms.
(a) Upon and as a consequence of receiving one or more
Units evidenced by a Unit Certificate, the Holder of such Unit Certificate shall
thereby:
(i) become a party to this Agreement and the
Custodial Agreement;
(ii) confirm and ratify the appointment by such
Holder of the Agent and the Custodian to act for and on behalf of such
Holder as set out in this Agreement and the Custodial Agreement,
respectively;
(iii) confirm and ratify any and all acts taken by
the Agent or the Custodian under or as contemplated by this Agreement
and the Custodial Agreement for or on behalf of such Holder including
without limitation in anticipation of such Holder acquiring the
Purchase Contract and Treasury Strips evidenced by such Unit;
(iv) have authorized, consented to and effected for
all purposes contemplated by this Agreement and the Custodial Agreement
the creation of such Units as the evidence of ownership of the Purchase
Contract and Treasury Strips evidenced by it; and
(v) if such Holder is an initial Holder, be deemed to
have agreed to purchase from Credit Suisse First Boston Corporation, as
one of the Representatives, the Treasury Strips relating to the Units
evidenced by a Unit Certificate and to have directed that such Treasury
Strips be delivered to the custody of the Custodian in accordance with
the terms of the Custodial Agreement.
(b) The aggregate number of Units evidenced by Unit
Certificates authenticated, executed on behalf of the Holders and delivered
hereunder is limited to 25,000 (subject to increase up to a maximum of 28,750 to
the extent the over-allotment option of the underwriters under the Underwriting
Agreement is exercised) minus the number of separate Purchase Contracts, except
for Unit Certificates authenticated, executed and delivered upon registration of
transfer of, in exchange for, or in lieu of, other Unit Certificates pursuant to
Section 3.05, 8.06, 11.04, 11.05, 11.06, 11.09 or 11.10.
The Certificates shall be issuable only in registered form and
only in denominations of a single Unit and any integral multiple thereof.
47
Section 11.02. Rights and Obligations Evidenced by the Unit
Certificates.
Each Unit Certificate shall evidence the number of Units
specified therein, with each such Unit evidencing the ownership by the Holder
thereof of (a) one Treasury Strip with a face amount of $1,000 maturing on each
Payment Date from February 15, 2003 through August 15, 2005 and such Holder's
pro rata portion of Treasury Strips that mature on August 15, 2002 (the
"Treasury Strip Component" of such Unit) and (b) one Purchase Contract (the
"Purchase Contract Component" of such Unit). Prior to the Company's issuance and
delivery of Common Shares under the Purchase Contracts, the Units shall not
entitle the Agent or the Holders to any of the rights of a holder of Common
Shares, including, without limitation, the right to vote or receive any
dividends or other payments or to consent or to receive notice as shareholders
in respect of the meetings of shareholders or for the election of directors of
the Company or for any other matter, or any other rights whatsoever as
shareholders of the Company, except to the extent otherwise expressly provided
in this Agreement. In no event shall the Company have any rights or obligations
at any time with respect to the Treasury Strip Component of any Units or with
respect to the sale price thereof. In no event shall the Company have any rights
or obligations with respect to the Units except as explicitly set forth in Parts
I and II of this Agreement and in connection with executing and delivering to
the Agent Unit Orders as set forth in Section 11.03.
Section 11.03. Execution, Delivery and Dating of Unit
Certificates.
(a) Upon the execution and delivery of this Agreement,
and at any time and from time to time thereafter, pursuant to a Unit Order
advising that the requirements for the issuance of Units have been satisfied,
and solely for the convenience of Holders, Unit Certificates shall be executed
and delivered by the Agent in accordance with this Agreement. For the avoidance
of doubt, the Company shall have no rights or obligations with respect to the
Treasury Strips evidenced by any Units. The execution of the Unit Certificates
may be by manual or facsimile signature.
(b) On the date hereof, the Agent shall, in accordance
with the provisions of this Agreement, execute and deliver the Unit Certificates
pursuant to a Unit Order, registered in such names and in denominations as
directed in writing by the Representatives.
(c) The Unit Certificates shall be manually executed on
behalf of the Agent by a Responsible Officer. Unit Certificates bearing the
manual signatures of individuals who were at any time Responsible Officers of
the Agent shall bind the Agent, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the execution and delivery of
such Unit Certificates or did not hold such offices at the date of such Unit
Certificates.
(d) Each Unit Certificate shall be dated the date of its
execution.
Section 11.04. Temporary Unit Certificates.
(a) Pending the preparation of definitive Unit
Certificates, the Agent shall execute and deliver, in lieu of such definitive
Unit Certificates, temporary Unit Certificates which are in substantially the
form set forth in Exhibit B with such letters, numbers or other marks of
identification or designation and such legends or endorsements printed,
lithographed or
48
engraved thereon as may be required by the rules of any securities exchange or
quotation system on which the Units are listed, or as may, consistently
herewith, be determined by the Agent, as evidenced by the execution of the Unit
Certificates.
(b) If temporary Unit Certificates are issued, the Agent
will cause definitive Unit Certificates to be prepared without unreasonable
delay. After the preparation of definitive Unit Certificates, the temporary Unit
Certificates shall be exchangeable for definitive Unit Certificates upon
surrender of the temporary Unit Certificates at the Stock Transfer Office,
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Unit Certificates, the Agent shall execute and deliver in exchange
therefor, one or more definitive Unit Certificates evidencing a like number of
Units as the temporary Unit Certificate or Unit Certificates so surrendered.
Until so exchanged, the temporary Unit Certificates shall in all respects
evidence the same benefits and the same obligations with respect to the Units
evidenced thereby as definitive Unit Certificates.
Section 11.05. Unit Certificate Registration; Registration of
Transfer and Exchange of Unit Certificates.
(a) The Agent shall keep at the Stock Transfer Office a
register (the "Unit Register") in which, subject to such reasonable regulations
as it may prescribe, the Agent shall provide for the registration of Unit
Certificates and of transfers of Unit Certificates (the Agent, in such capacity,
the "Unit Registrar").
(b) Upon surrender for registration of transfer of any
Unit Certificate at the Stock Transfer Office, the Agent shall execute and
deliver, in the name of the designated transferee or transferees, one or more
new Unit Certificates evidencing a like number of Units.
(c) At the option of the Holder, Unit Certificates may be
exchanged for other Unit Certificates evidencing a like number of Units upon
surrender of the Unit Certificates to be exchanged at the Stock Transfer Office.
Whenever any Unit Certificates are so surrendered for exchange, the Agent shall
execute and deliver the Unit Certificates which the Holder making the exchange
is entitled to receive.
(d) All Unit Certificates issued upon any registration of
transfer or exchange of a Unit Certificate shall evidence the ownership of the
same Units and be entitled to the same entitlements and subject to the same
obligations under this Agreement as the Units evidenced by the Unit Certificate
surrendered upon such registration of transfer or exchange.
(e) Every Unit Certificate presented or surrendered for
registration of transfer or for exchange shall (if so required by the Agent) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Agent duly executed, by the Holder thereof or his attorney
duly authorized in writing.
(f) No service charge shall be made for any registration
of transfer or exchange of a Unit Certificate, but the Agent may require payment
from the Holder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Unit Certificates, other than any exchanges pursuant to Sections
3.05, 11.05(h) and 11.06 not involving any transfer. Notwithstanding the
foregoing
49
or any other provision in this Agreement or any schedule of fees, the Agent
(acting as Unit Registrar) may seek such additional compensation, costs and
expenses from any Holder for any additional time, effort, responsibility, cost,
and/or expense incurred or expended by the Agent (acting as Unit Registrar),
including without limitation for any rush transfer request, in order to comply
with any function as Agent (acting as Unit Registrar).
(g) Notwithstanding the foregoing, the Agent shall not be
obligated to execute and deliver any Unit Certificate in exchange for any Unit
Certificate presented or surrendered for registration of transfer or for
exchange on or after the Settlement Date or the Acceleration Date. In lieu of
delivery of a new Unit Certificate, upon satisfaction of the applicable
conditions specified above in this Section and receipt of appropriate
registration or transfer instructions from such Holder, the Agent shall (i) if
the Settlement Date or an Acceleration Event has occurred, deliver the Common
Shares issuable in respect of the Purchase Contracts evidenced by the Unit
Certificate and (ii) if an Acceleration Event shall have occurred prior to the
Settlement Date, direct the Custodian to deliver the Treasury Strips evidenced
by the Unit Certificate to the Holder, subject to the applicable conditions and
in accordance with the applicable provisions of Article Eight hereof.
(h) The provisions of clauses (1), (2), (3), (4) and (5)
below shall apply only to Global Unit Certificates:
(1) Each Global Unit Certificate executed under this
Agreement shall be registered in the name of the Depositary designated
for such Global Unit Certificate or a nominee thereof and delivered to
such Depositary or a nominee thereof or custodian therefor, and each
such Global Unit Certificate shall constitute a single Unit Certificate
for all purposes of this Agreement.
(2) No Global Unit Certificate may be exchanged in
whole or in part for Certificates registered, and no transfer of a
Global Unit Certificate in whole or in part may be registered, in the
name of any Person other than the Depositary for such Global Unit
Certificate or a nominee thereof unless (A) such Depositary (i) has
notified the Agent that it is unwilling or unable to continue as
Depositary for such Global Unit Certificate or (ii) has ceased to be a
clearing agency registered under the Exchange Act or (B) there shall
have occurred and be continuing a breach by the Company in respect to
its obligations under one or more Purchase Contracts or (C) the Holder
has elected (i) to withdraw the Treasury Strip Component with respect
to one or more Units in accordance with Section 11.09 and (ii) to hold
the remaining Purchase Contract Component of such Units in the form of
a definitive Purchase Contract Certificate evidencing the Purchase
Contracts.
(3) Subject to clause (2) above, any exchange of a
Global Unit Certificate for other Unit Certificates may be made in
whole or in part, and all Unit Certificates issued in exchange for a
Global Unit Certificate or any portion thereof shall be registered in
such names as the Depositary for such Global Unit Certificate shall
direct.
50
(4) Every Unit Certificate authenticated and
delivered upon registration of transfer of, or in exchange for or in
lieu of, a Global Unit Certificate or any portion thereof, whether
pursuant to this Section 11.05, Section 3.05, 8.06, 11.04, 11.06, 11.09
or 11.10 or otherwise, shall be executed on behalf of the Holders and
delivered in the form of, and shall be, a Global Unit Certificate,
unless such Unit Certificate is registered in the name of a Person
other than the Depositary for such Global Unit Certificate or a nominee
thereof.
(5) The rights of each beneficial owner of a Global
Unit Certificate, whereby ownership and transfers are maintained and
made through book entries by the Depositary, shall be exercised only
through the Depositary and shall be limited to those established by law
and agreements between such beneficial owners and the Depositary and/or
its participants.
Section 11.06. Mutilated, Destroyed, Lost and Stolen Unit
Certificates.
(a) If any mutilated Unit Certificate is surrendered to
the Agent, the Agent shall execute and deliver in exchange therefor a new Unit
Certificate, evidencing the same number of Units and bearing a number not
contemporaneously outstanding.
(b) If there shall be delivered to the Agent (i) evidence
to the Agent's satisfaction of the destruction, loss or theft of any Unit
Certificate, and (ii) such security indemnity or surety at the cost of the
Holder as may be required by the Agent, in its sole discretion, to save the
Agent, the Company and any of their respective agents harmless, then, in the
absence of notice to the Agent that such Unit Certificate has been acquired by a
bona fide purchaser, the Agent shall execute and deliver to the Holder, in lieu
of any such destroyed, lost or stolen Unit Certificate, a new Unit Certificate,
evidencing the same number of Units and bearing a number not contemporaneously
outstanding.
(c) Notwithstanding the foregoing, the Agent shall not be
obligated to execute and deliver to the Holder any Unit Certificate on or after
the Settlement Date or the Acceleration Date. In lieu of delivery of a new Unit
Certificate, upon satisfaction of the applicable conditions specified above in
this Section and receipt of appropriate registration or transfer instructions
from such Holder, the Agent shall (i) if the Settlement Date or an Acceleration
Event has occurred, deliver the Common Shares issuable upon settlement of the
Purchase Contracts evidenced by such Unit Certificate, or (ii) if an
Acceleration Event shall have occurred prior to the Settlement Date, instruct
the Custodian to deliver the Treasury Strips evidenced by such Unit Certificate
to such Holder, in each case subject to the applicable conditions and in
accordance with the applicable provisions of Article Eight hereof.
(d) Upon the issuance of any new Unit Certificate under
this Section 11.06, the Agent may require the payment by the Holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Agent or the Custodian) connected therewith.
(e) Every new Unit Certificate issued pursuant to this
Section 11.06 in lieu of any destroyed, lost or stolen Unit Certificate shall
constitute an original additional contractual
51
obligation of the Company (to the extent of the Purchase Contract Component of
the Unit evidenced by such Unit Certificate) and of the Agent, whether or not
the destroyed, lost or stolen Unit Certificate (or such Purchase Contract
Component evidenced by such Unit Certificate) shall be at any time enforceable
by anyone, and shall be entitled to all the benefits of this Agreement.
(f) The provisions of this Section 11.06 are exclusive
and shall preclude (to the extent lawful) all other rights and remedies with
respect to the replacement or settlement of mutilated, destroyed, lost or stolen
Unit Certificates.
Section 11.07. Persons Deemed Owners of Unit Certificates.
(a) Prior to due presentment of a Unit Certificate for
registration of transfer, the Company (with respect solely to the related
Purchase Contracts) and the Agent, and any agent of the Company (with respect
solely to the related Purchase Contracts) or the Agent, may treat the Person in
whose name such Unit Certificate is registered in the Unit Register as the owner
of the Units evidenced thereby, for the purpose of receiving payments from the
Custodian of amounts on the Treasury Strips, performance of the Purchase
Contracts and for all other purposes whatsoever, whether or not the payment of
amounts on the Treasury Strips constituting a part of the Units evidenced
thereby shall be overdue and notwithstanding any notice to the contrary, and
neither the Company nor the Agent, nor any agent of the Company or the Agent,
shall be affected by notice to the contrary.
(b) Notwithstanding the foregoing, with respect to any
Global Unit Certificate, (i) nothing herein shall prevent the Company (with
respect solely to the related Purchase Contracts), the Agent or any agent of the
Company or the Agent, from giving effect to any written certification, proxy or
other authorization furnished by any Depositary (or its nominee), as a Holder,
with respect to such Global Unit Certificate or impair, as between such
Depositary and owners of beneficial interests in such Global Unit Certificate,
the operation of customary practices governing the exercise of rights of such
Depositary (or its nominee) as Holder of such Global Unit Certificate and (ii)
the Company, the Agent and any agent of the Company or the Agent shall be
entitled to deal with the Depositary for all purposes of this Agreement as the
sole Holder of the Units evidenced by Global Unit Certificates and shall have no
obligations to the beneficial owners of such Global Unit Certificates.
Section 11.08. Cancellation of Unit Certificates.
(a) All Unit Certificates surrendered for delivery of
Common Shares and Treasury Strips on or after the Settlement Date, on or after
the occurrence of an Acceleration Event, pursuant to an Early Settlement or an
Early Settlement Upon Cash Merger, pursuant to the separation and withdrawal of
the Treasury Strip Component underlying the Units or in connection with the
registration of transfer or exchange shall, if surrendered to any Person other
than the Agent, be delivered to the Agent and, if not already cancelled, shall
be promptly cancelled by it. The Company may at any time deliver to the Agent
for cancellation any Unit Certificates previously executed and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Unit Certificates so delivered shall be promptly cancelled by the Agent. No Unit
Certificates shall be executed and delivered in lieu of or in exchange for any
Unit Certificates cancelled as provided in this Section, except as expressly
permitted by this
52
Agreement. All cancelled Unit Certificates held by the Agent shall be disposed
of in accordance with the Agent's customary policies.
(b) If the Company or any Affiliate of the Company shall
acquire any Unit Certificate, such acquisition shall not operate as a
cancellation of such Unit Certificate unless and until such Unit Certificate is
delivered to the Agent cancelled or for cancellation.
Section 11.09. Separation and Withdrawal of Treasury Strip
Component.
(a) Commencing August 15, 2002, a Holder may separate the
Treasury Strip Component from the related Purchase Contract Component in respect
of some or all of the Units held by such Holder and withdraw the Treasury Strip
Component from the custody of the Custodian by (1) delivering the related Units
to the Agent accompanied by a notice to the Agent, substantially in the form of
Exhibit F hereto, (2) specifying in such notice to the Agent whether such Holder
wishes to hold the Purchase Contracts being separated directly in the form of a
definitive Purchase Contract Certificate or as a beneficial owner in a Global
Purchase Contract Certificate, and (3) requesting that the Agent instruct the
Custodian to release the Treasury Strip Component evidenced by such Units,
whereupon the Agent shall promptly give such instruction to the Custodian. Upon
receipt of notification by the Agent from the Custodian that the Holder's
Treasury Strips constituting the Treasury Strip Component of the Units described
in the preceding sentence have been delivered to such Holder, the Agent shall
promptly:
(i) cancel the related Units; and
(ii) notify the Company that such Holder has
withdrawn its Treasury Strips from the cancelled Units.
(b) Holders which elect to separate and withdraw the
Treasury Strip Component in accordance with this Section 11.09 shall be
responsible for any fees or expenses payable to the Agent or the Custodian for
its services in connection therewith, and the Company shall not be responsible
for any such fees or expenses.
Section 11.10. Recreation of Units.
(a) At any time from and after August 15, 2002 and on or
prior to the fifteenth Business Day immediately preceding the Settlement Date, a
Holder of Purchase Contracts shall have the right to recreate Units in
accordance with this Section 11.10 by (i) delivering such Purchase Contracts to
the Agent, accompanied by a notice to the Agent to instruct the Custodian to
accept the correct amount of Treasury Strips (whereupon the Agent shall instruct
the Custodian to receive, on a specific date for each Unit being recreated,
$1,000 face amount of each of the Treasury Strips that would be then remaining
as the Treasury Strip Component of a Unit, each with the same CUSIP number as
the Treasury Strips originally comprising the Treasury Strip Component of the
Unit), and (ii) delivering to the Custodian such proper amount of Treasury
Strips. Upon receipt of the Treasury Strips described in clause (ii) above, the
Custodian shall promptly notify the Agent of the amount and type of such
Treasury Strips.
53
(b) Holders which recreate Units in accordance with this
Section 11.10 shall be responsible for any fees or expenses payable to the Agent
or the Custodian for its services in connection therewith, and the Company shall
not be responsible for any such fees or expenses.
(c) For the avoidance of doubt, whether or not a Holder
which recreates Units pursuant to this Section 11.10 fails to effect a
book-entry transfer of the Purchase Contracts or fails to deliver a Purchase
Contract Certificate to the Agent after depositing the Treasury Strips with the
Custodian, such Treasury Strips and any payments made on such Treasury Strips
shall continue at all times to be owned by such Holder and shall be held in the
name of the Custodian or its nominee as agent for such Holder, until such
Purchase Contracts are so transferred or the Purchase Contract Certificate is so
delivered, as the case may be, or, with respect to a Purchase Contract
Certificate, such Holder provides evidence satisfactory to the Company and the
Agent that such Purchase Contract Certificate has been destroyed, lost or
stolen, together with any indemnity that may be required by the Agent and the
Company, as set forth in Section 11.06.
ARTICLE TWELVE
The Treasury Strips
Section 12.01. Custodial Arrangement.
Concurrent with the closing of the offering of the Units under
the Underwriting Agreement, the Agent shall have entered into the Custodial
Agreement with the Custodian to which the Treasury Strips acquired by the
Holders, which are described on Schedule 1 hereto, are to be delivered. On the
date of execution and delivery of this Agreement, Credit Suisse First Boston
Corporation (on behalf of itself and the other underwriters named in the
Underwriting Agreement ) shall have acquired the Treasury Strips, shall have
sold the Treasury Strips to the Holders, and shall have delivered the Treasury
Strips to the Custodian in accordance with the Custodial Agreement. For greater
certainty, by agreeing to subscribe for a Unit, each Holder shall be considered
to have agreed to purchase Treasury Strips from the underwriters named in the
Underwriting Agreement. The Agent shall cause the Custodian or its nominee to be
the holder of security entitlements with regard to such Treasury Strips on the
records of the Federal Reserve Bank of New York for and on behalf of the Holders
of Units. The Agent acknowledges that each Unit shall evidence in part the
applicable Holder's ownership of that Holder's Treasury Strips and that Holder's
pro rata portion of Treasury Strips maturing on August 15, 2002 delivered to and
held by the Custodian under the Custodial Agreement.
Section 12.02. Instruction Regarding Payment of Amounts
Received in Respect of Treasury Strips.
(a) On or prior to each Payment Date the Agent shall
inform the Custodian who the registered Holders of Units are on the Unit
Registrar at the close of business on the Record Date with respect to such
Payment Date and the Agent shall instruct the Custodian to deliver all amounts
its receives on the Treasury Strips maturing on such Payment Date to such
Holders.
(b) In any case where any Payment Date shall not be a
Business Day, then (notwithstanding any other provision of this Agreement or of
the Unit Certificates) the Agent
54
shall instruct the Custodian to make payments of amounts received by the
Custodian with respect to the Treasury Strips on the next succeeding Business
Day; provided, that no interest shall accrue or be payable for the period from
and after any such Payment Date.
Section 12.03. Delivery of Treasury Strips Upon Occurrence of
an Acceleration Event.
If an Acceleration Event occurs, the Agent shall request from
each registered Holder of Units by written request mailed to such Holder at his
address as it appears in the Unit Register, delivery instructions in respect of
all Treasury Strips owned by such Holder and evidenced by Unit Certificates held
by such Holder. The Agent shall provide such instructions to the Custodian.
Section 12.04. Delivery of Treasury Strips Upon Early
Settlement or Early Settlement Upon Cash Merger.
Commencing August 15, 2002, upon Early Settlement or Early
Settlement Upon Cash Merger by any Holder of any Purchase Contracts evidenced by
Units in accordance with Section 8.06 or Section 8.07, as the case may be, the
Agent shall instruct the Custodian to deliver the Treasury Strips evidenced by
such Units to such Holder in accordance with the instructions provided by such
Holder on the applicable form of Election for Early Settlement or Early
Settlement Upon Cash Merger, as the case may be.
ARTICLE THIRTEEN
Unit Remedies
Section 13.01. Restoration of Unit Rights and Remedies.
If any Holder of Units has instituted any proceeding to
enforce any right or remedy under this Agreement or the Units and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to such Holder, then and in every such case, subject to any
determination in such proceeding, the Agent and such Holder shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of such Holder shall continue as though no such
proceeding had been instituted.
Section 13.02. Rights and Remedies Cumulative for Units.
Except as otherwise provided with respect to the replacement
of mutilated, destroyed, lost or stolen Unit Certificates in 11.06(f), no right
or remedy herein conferred upon or reserved to the Holders of Units is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
55
Section 13.03. Delay or Omission Not Waiver of Unit Rights and
Remedies.
No delay or omission of any Holder of Units to exercise any
right or remedy shall impair any such right or remedy or constitute a waiver of
any such right. Every right and remedy given by this Article or by law to the
Holders of Units may be exercised from time to time, and as often as may be
deemed expedient, by such Holders.
Section 13.04. Undertaking for Costs -- Units.
All parties to this Agreement agree, and each Holder of any
Unit by its acceptance of the related Unit Certificate evidencing such Unit
shall be deemed to have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this Agreement, or in
any suit against the Agent for any action taken, suffered or omitted by it as
Agent, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; provided that the provisions of
this Section shall not apply to any suit instituted by the Agent, to any suit
instituted by any Holder or group of Holders, holding in the aggregate more than
10% of the Outstanding Units, or to any suit instituted by any Holder for the
enforcement of any payment on any Treasury Strip on or after the respective
Payment Date therefor constituting a part of the Units held by such Holder, or
for enforcement of the right to receive delivery of Common Shares under the
Purchase Contracts.
56
IN WITNESS WHEREOF, the Company and the Agent have caused this
Agreement to be duly executed as of the day and year first above written and all
Holders of Purchase Contracts or Units shall be become parties hereto upon
acceptance by them of Purchase Contract Certificates or Unit Certificates, as
the case may be, issued in accordance with the terms hereof.
NORTEL NETWORKS CORPORATION
By: _________________________________
Name:
Title:
By: _________________________________
Name:
Title:
COMPUTERSHARE TRUST COMPANY OF CANADA,
AS AGENT
By: _________________________________
Name:
Title:
By: _________________________________
Name:
Title:
57
Schedule 1
TREASURY STRIPS
AGGREGATE
TREASURY
MATURITY FACE AMOUNT CUSIP ISSUE DATE PURCHASE COST(1) STRIPS(2)
August 15, 2002.................. $ (3) 000000XX0 8/17/92 $349.19 8,750,000.00
February 15, 2003................ 1,000 000000XX0 2/15/93 989.08 25,000,000.00
August 15, 2003.................. 1,000 000000XX0 8/15/93 975.93 25,000,000.00
February 15, 2004................ 1,000 000000XX0 2/15/94 959.04 25,000,000.00
August 15, 2004.................. 1,000 000000XX0 8/15/94 939.27 25,000,000.00
February 15, 2005................ 1,000 000000XX0 2/15/95 920.14 25,000,000.00
August 15, 2005.................. 1,000 000000XX0 2/15/86 895.82 25,000,000.00
-------------------
(1) Per Treasury Strip, except for Treasury Strips maturing on August 15,
2002.
(2) As of the date of this Agreement.
(3) Pro rata portion equals $350 per Unit.
58
EXHIBIT A
NORTEL NETWORKS CORPORATION
PURCHASE CONTRACTS
No. R- _________ _________ Purchase Contracts
This Purchase Contract Certificate certifies that
______________ is the registered Holder of the number of Purchase Contracts set
forth above with Nortel Networks Corporation, a Canadian corporation (the
"Company"). Capitalized terms that are used but not defined herein have those
meanings ascribed to them in the Purchase Contract and Unit Agreement (the
"Purchase Contract Agreement"), dated as of June 12, 2002, among the Company,
Computershare Trust Company of Canada, as purchase contract agent thereunder
(the "Agent"), and Holders from time to time (as defined therein).
Each Purchase Contract evidenced hereby is an agreement of
purchase and sale that obligates the Company to issue, in consideration of the
purchase price paid at the time such Purchase Contract was initially issued by
the Company, on August 15, 2005 (the "Settlement Date"), a number of Common
Shares, without nominal or par value per share ("Common Shares"), of the Company
determined by reference to the Settlement Rate, unless an Acceleration Event, an
Early Settlement or an Early Settlement Upon Cash Merger occurs on or prior to
the Settlement Date, all as provided in the Purchase Contract Agreement and more
fully described on the reverse hereof.
Reference is hereby made to the further provisions set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
A-1
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.
NORTEL NETWORKS CORPORATION
By: _________________________________
Name:
Title:
By: _________________________________
Name:
Title:
Dated:
This is one of the Purchase Contract Certificates referred to in the
within mentioned Purchase Contract Agreement.
COMPUTERSHARE TRUST COMPANY OF CANADA, AS AGENT
By: ___________________________
Authorized Officer
A-2
[Form of Reverse of Purchase Contract Certificate]
Each Purchase Contract evidenced hereby is governed by the
Purchase Contract and Unit Agreement, to which Purchase Contract and Unit
Agreement and supplemental agreements thereto reference is hereby made for a
description of the respective rights, limitations of rights, obligations, duties
and immunities thereunder of the Agent, the Company, and the Holders and of the
terms upon which the Purchase Contract Certificates are, and are to be, executed
and delivered.
Each Purchase Contract evidenced hereby is an agreement of
purchase and sale that obligates the Company to issue and deliver, on the
Settlement Date, a number of Common Shares of the Company determined by
reference to the Settlement Rate, unless an Acceleration Event, Early Settlement
or Early Settlement Upon Cash Merger occurs on or prior to the Settlement Date.
The "Settlement Rate" is equal to (a) if the Applicable Market Value (as defined
below) is greater than $1.692 per Common Share (the "Threshold Appreciation
Price"), 16,885.93 Common Shares per Purchase Contract; (b) if the Applicable
Market Value is less than or equal to the Threshold Appreciation Price but is
greater than $1.410 per Common Share (the "Reference Price"), a number of Common
Shares per Purchase Contract equal to $28,571.00 divided by the Applicable
Market Value and (c) if the Applicable Market Value is less than or equal to the
Reference Price, 20,263.12 Common Shares per Purchase Contract; in each case
subject to adjustment as provided in the Purchase Contract Agreement. No
fractional Common Share will be issued upon settlement of Purchase Contracts, as
provided in the Purchase Contract Agreement.
The "Applicable Market Value" means the average of the Closing
Prices per Common Share on each of the twenty consecutive Trading Days ending on
the third Trading Day immediately preceding the Settlement Date. The "Closing
Price" of the Common Shares on any date of determination means the closing sale
price (or, if no closing sale price is reported, the last reported sale price)
of the Common Shares on the New York Stock Exchange (the "NYSE") on such date
or, if the Common Shares are not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the principal United States
securities exchange on which the Common Shares are so listed, or if the Common
Shares are not so listed on a United States national or regional securities
exchange, as reported by The Nasdaq Stock Market, or, if the Common Shares are
not so reported, the last quoted bid price for the Common Shares in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization, or, if such bid price is not available, the market value of the
Common Shares on such date as determined by a nationally recognized independent
investment banking firm retained for this purpose by the Company. A "Trading
Day" means a day on which the Common Shares (A) are not suspended from trading
on any national or regional securities exchange or association or
over-the-counter market at the close of business and (b) have traded at least
once on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of the Common
Shares.
If an Acceleration Event occurs, the Company shall give
written notice to the Agent. Upon and after the occurrence of an Acceleration
Event, the Holders will be entitled to receive from the Company 20,263.12 Common
Shares per Purchase Contract, subject to adjustment
A-3
in the same manner and at the same time as the Settlement Rate is adjusted, as
set forth in the Purchase Contract Agreement.
Commencing August 15, 2002 and subject to and upon compliance
with the provisions of the Purchase Contract Agreement, at the option of the
Holder thereof:
(1) Purchase Contracts may be settled early ("Early
Settlement"). In order to exercise the right to effect Early Settlement
with respect to any Purchase Contracts evidenced by this Purchase
Contract Certificate, the Holder of this Purchase Contract Certificate
shall deliver this Purchase Contract Certificate to the Agent at the
Stock Transfer Office duly endorsed for transfer in blank with the form
of Election for Early Settlement set forth below duly completed. Upon
Early Settlement of Purchase Contracts by a Holder, the Holder shall be
entitled to receive a number of Common Shares per Purchase Contract
determined by reference to the Early Settlement Rate. In the event that
Early Settlement is effected with respect to Purchase Contracts
underlying less than all the Purchase Contracts evidenced by a Purchase
Contract Certificate, upon such Early Settlement the Company shall
execute and deliver to the Agent, and the Agent shall authenticate and
deliver to the Holder thereof, at the expense of the Holder, a Purchase
Contract Certificate evidencing the Purchase Contract or Contracts as
to which Early Settlement was not effected. The "Early Settlement Rate"
shall initially be equal to 16,011.04 Common Shares per Purchase
Contract for the period from August 15, 2002 and prior to February 15,
2003 and 16,885.93 Common Shares per Purchase Contract for the period
on or after February 15, 2003 and shall be adjusted in the same manner
and at the same time as the Settlement Rate is adjusted as provided in
the Purchase Contract and Unit Agreement; and
(2) Purchase Contracts may be settled early upon a Cash Merger
("Early Settlement Upon Cash Merger"). In order to exercise the right
to effect an Early Settlement Upon Cash Merger with respect to any
Purchase Contracts evidenced by this Purchase Contract Certificate, the
Holder of this Purchase Contract Certificate shall deliver this
Purchase Contract Certificate to the Agent at the Stock Transfer Office
duly endorsed for transfer in blank with the form of Election for Early
Settlement Upon Cash Merger set forth below duly completed on or prior
to the Merger Election Date set forth in the notice to Holders. Upon an
Early Settlement Upon Cash Merger of Purchase Contracts by a Holder,
the Holder shall be entitled to receive a number of the Common Shares
for each Purchase Contract equal to the Early Settlement Upon Cash
Merger Rate (as defined below). In the event that Early Settlement Upon
Cash Merger is effected with respect to Purchase Contracts underlying
less than all the Purchase Contracts evidenced by a Purchase Contract
Certificate, upon such Early Settlement Upon Cash Merger the Company
shall execute and deliver to the Agent, and the Agent shall
authenticate and deliver to the Holder thereof, at the expense of the
Holder, a Purchase Contract Certificate evidencing the Purchase
Contract or Contracts as to which Early Settlement Upon Cash Merger was
not effected.
The "Early Settlement Upon Cash Merger Rate" shall be equal to
(a) if the Applicable Market Value (as defined below) is greater than the
Threshold Appreciation Price, 16,885.93 Common Shares per Purchase Contract; (b)
if the Applicable Market Value is less than
A-4
or equal to the Threshold Appreciation Price but is greater than the Reference
Price, a number of Common Shares per Purchase Contract equal to $28,571.00
divided by the Applicable Market Value; and (c) if the Applicable Market Value
is less than or equal to the Reference Price 20,263.12 Common Shares per
Purchase Contract; in each case subject to adjustment as provided in the
Purchase Contract Agreement. No fractional Common Share will be issued upon
settlement of Purchase Contracts, as provided in the Purchase Contract
Agreement. For purposes of the calculation of the Cash Merger Early Settlement
Rate, the "Applicable Market Value" shall be the volume-weighted average trading
price of the Common Shares on the NYSE during regular trading hours for the five
Trading Days ending on the Trading Day immediately preceding the Merger Election
Date (as defined in the Purchase Contract Agreement) or, if the Common Shares
are not listed for trading on the NYSE on the Merger Election Date, the market
value of the Common Shares on such date as determined by a nationally recognized
investment banking firm retained for this purpose by the Company.
The Purchase Contract Certificates are issuable only in
registered form and only in denominations of a single Purchase Contract and any
integral multiple thereof. The transfer of any Purchase Contract Certificate
will be registered and Purchase Contract Certificates may be exchanged as
provided in the Purchase Contract Agreement. The Purchase Contract Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents permitted by the Purchase Contract Agreement. No service
charge shall be required for any such registration of transfer or exchange, but
the Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
Subject to certain limited exceptions, the provisions of the
Purchase Contract Agreement may not be amended without the consent of each of
the Holders of the Outstanding Purchase Contracts affected thereby.
The Purchase Contracts shall for all purposes be governed by,
and construed in accordance with, the laws of the State of New York.
The Purchase Contracts shall not, prior to the settlement
thereof and the issuance and delivery of Common Shares thereunder, entitle the
Holder to any of the rights of a holder of Common Shares.
"$" means U.S. dollars in this Purchase Contract Certificate.
A copy of the Purchase Contract Agreement is available for
inspection at the Stock Transfer Office during business hours of the Agent.
A-5
EXHIBIT B
EQUITY UNITS
EVIDENCING OWNERSHIP OF PURCHASE
CONTRACTS OF NORTEL NETWORKS
CORPORATION AND TREASURY STRIPS
No. R- ____________ __________ Units
This Unit Certificate certifies that ______________ is the
registered Holder of the number of Units set forth above. Each Unit evidences
the ownership by the Holder of the Treasury Strips (the "Treasury Strip
Component" of this Unit) and one Purchase Contract of Nortel Networks
Corporation, a Canadian corporation (the "Company") (the "Purchase Contract
Component" of this Unit). Capitalized terms that are used but not defined herein
have those meanings ascribed to them in the Purchase Contract and Unit Agreement
(the "Purchase Contract Agreement"), dated as of June 12, 2002, among the
Company, Computershare Trust Company of Canada, as purchase contract agent
thereunder (the "Agent") and Holders from time to time (as defined therein).
Any amounts received by the Custodian from the U.S. government
on the Treasury Strips on each August 15 and February 15, commencing August 15,
2002 (or in each case if payments on the Treasury Strips are not received on
such date, on the date when such amounts are received by the Custodian) (each a
"Payment Date"), shall be forwarded by the Custodian by wire transfer in same
day funds no later than _______, New York City time, on the Payment Date, to the
Person in whose name this Unit Certificate (or a Predecessor Unit Certificate)
is registered at the close of business on the Record Date with respect to such
Payment Date.
Each Purchase Contract evidenced hereby is an agreement of
purchase and sale that obligates the Company to issue, in consideration of the
purchase price paid at the time such Purchase Contract was initially issued by
the Company, on August 15, 2005 (the "Settlement Date") a number of Common
Shares, without nominal or par value per share ("Common Shares"), of the Company
equal to the Settlement Rate, unless an Acceleration Event, an Early Settlement
or an Early Settlement Upon Cash Merger occurs on or prior to the Settlement
Date, all as provided in the Purchase Contract Agreement and more fully
described on the reverse hereof.
Reference is hereby made to the further provisions set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
B-1
IN WITNESS WHEREOF, the Agent has caused this instrument to be
duly executed.
COMPUTERSHARE TRUST COMPANY OF
CANADA, AS AGENT
By: _______________________________
Name:
Title:
B-2
[Form of Reverse of Unit Certificate]
Each Purchase Contract Component evidenced hereby is governed
by the Purchase Contract Agreement, to which Purchase Contract Agreement and
supplemental agreements thereto reference is hereby made for a description of
the respective rights, limitations of rights, obligations, duties and immunities
thereunder of the Agent, the Company, and the Holders and of the terms upon
which the Unit Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby is an agreement of
purchase and sale that obligates the Company to issue and deliver, on the
Settlement Date, a number of Common Shares of the Company equal to the
Settlement Rate, unless an Acceleration Event, Early Settlement or Early
Settlement Upon Cash Merger occurs on or prior to the Settlement Date. The
"Settlement Rate" is equal to (a) if the Applicable Market Value (as defined
below) is greater than $1.692 (the "Threshold Appreciation Price"), 16,885.93
Common Shares per Purchase Contract, (b) if the Applicable Market Value is less
than or equal to the Threshold Appreciation Price but is greater than the
Reference Price, a number of Common Shares per Purchase Contract equal to
$28,571.00 divided by the Applicable Market Value and (c) if the Applicable
Market Amount is less than or equal to the Reference Price, 20,263.12 Common
Shares per Purchase Contract, in each case subject to adjustment as provided in
the Purchase Contract Agreement. No fractional Common Share will be issued upon
settlement of Purchase Contracts, as provided in the Purchase Contract
Agreement.
The "Applicable Market Value" means the average of the Closing
Prices per Common Share on each of the twenty consecutive Trading Days ending on
the third Trading Day immediately preceding the Settlement Date. The "Closing
Price" of the Common Shares on any date of determination means the closing sale
price (or, if no closing price is reported, the last reported sale price) of the
Common Shares on the New York Stock Exchange (the "NYSE") on such date or, if
the Common Shares are not listed for trading on the NYSE on any such date, as
reported in the composite transactions for the principal United States
securities exchange on which the Common Shares are so listed, or if the Common
Shares are not so listed on a United States national or regional securities
exchange, as reported by The Nasdaq Stock Market, or, if the Common Shares are
not so reported, the last quoted bid price for the Common Shares in the
over-the-counter market as reported, the last quoted bid price for the Common
Shares in the over-the-counter market as reported by the National Quotation
Bureau or similar organization, or, if such bid price is not available, the
market value of the Common Shares on such date as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Company. A "Trading Day" means a day on which the Common Shares (A) are not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (b) have
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Shares.
If an Acceleration Event occurs, the Company shall give
written notice to the Agent. Upon and after the occurrence of an Acceleration
Event, the Holders will be entitled to received from the Company 20,263.12
Common Shares per Purchase Contract, subject to adjustment in the same manner
and at the same time as the Settlement Rate is adjusted, as set
B-3
forth in the Purchase Contract Agreement. Upon and after the occurrence of an
Acceleration Event, the Units shall thereafter evidence ownership of the
Treasury Strips forming the Treasury Strip Component of such Units in accordance
with the provisions of the Purchase Contract Agreement.
Commencing August 15, 2002 and subject to and upon compliance
with the provisions of the Purchase Contract Agreement, at the option of the
Holder hereof:
(1) Purchase Contracts evidenced by Units may be settled early
("Early Settlement"). In order to exercise the right to effect Early
Settlement with respect to any Purchase Contracts evidenced by this
Unit Certificate, the Holder of this Unit Certificate shall deliver
this Unit Certificate to the Agent at the Stock Transfer Office duly
endorsed for transfer in blank with the form of Election for Early
Settlement set forth below duly completed. Upon Early Settlement of
Purchase Contracts by a Holder of the related Units, the Holder shall
be entitled to receive (i) a number of Common Shares on account of each
Purchase Contract forming the Purchase Contract Component of such Units
equal to the Early Settlement Rate and (ii) delivery of that Holder's
Treasury Strips forming the Treasury Strip Component of such Units. The
"Early Settlement Rate" shall initially be equal to 16,011.04 Common
Shares per Purchase Contract for the period from August 15, 2002 and
prior to February 15, 2003 and 16,885.93 Common Shares per Purchase
Contract for the period on or after February 15, 2003 and shall be
adjusted in the same manner and at the same time as the Settlement Rate
is adjusted as provided in the Purchase Contract Agreement. In the
event that Early Settlement is effected with respect to Purchase
Contracts underlying less than all the Units evidenced by a Unit
Certificate, upon such Early Settlement the Agent shall execute and
deliver to the Holder thereof, at the expense of the Holder, a Unit
Certificate evidencing the Units as to which Early Settlement was not
effected; and
(2) Purchase Contracts evidenced by Units may be settled early
upon a Cash Merger ("Early Settlement Upon Cash Merger"). In order to
exercise the right to effect Early Settlement Upon Cash Merger with
respect to any Purchase Contracts evidenced by this Unit Certificate,
the Holder of this Unit Certificate shall deliver this Unit Certificate
to the Agent at the Stock Transfer Office duly endorsed for transfer in
blank with the form of Election for Early Settlement set forth below
duly completed on or prior to the Merger Election Date set forth in the
notice to Holders. Upon Early Settlement Upon Cash Merger of Purchase
Contracts by a Holder of the Units evidencing ownership of such
Purchase Contracts, the Holder shall be entitled to receive (i) a
number of Common Shares per Purchase Contract forming the Purchase
Contract Component of such Units equal to the Early Settlement Upon
Cash Merger Rate and (ii) delivery of that Holder's Treasury Strips
forming the Treasury Strip Component of such Units. In the event that
Early Settlement Upon Cash Merger is effected with respect to Purchase
Contracts evidenced by fewer than all the Units evidenced by a Unit
Certificate, upon such Early Settlement Upon Cash Merger the Agent
shall execute and deliver to the Holder thereof, at the expense of the
Holder, a Unit Certificate evidencing the Units as to which Early
Settlement Upon Cash Merger was not effected,
B-4
The "Early Settlement Upon Cash Merger Rate" shall be equal to
(a) if the Applicable Market Value (as defined below) is greater than the
Threshold Appreciation Price, 16,885.93 Common Shares per Purchase Contract; (b)
if the Applicable Market Value is less than or equal to the Threshold
Appreciation Price but is greater than the Reference Price, a number of Common
Shares per Purchase Contract equal to $28,571.00 divided by the Applicable
Market Value; and (c) if the Applicable Market Amount is less than or equal to
the Reference Price, 20,263.12 Common Shares per Purchase Contract; in each case
subject to adjustment as provided in the Purchase Contract Agreement. No
fractional Common Share will be issued upon settlement of Purchase Contracts, as
provided in the Purchase Contract Agreement. For purposes of the calculation of
the Early Settlement Upon Cash Merger Rate, the Applicable Market Value shall be
the volume-weighted average trading price of the Common Shares on the NYSE for
the five Trading Days ending on the Trading Day immediately preceding the Merger
Election Date, or if the Common Shares are not listed for trading on the NYSE on
the Merger Election Date, the market value of the Common Shares on such date as
determined by a nationally recognized investment banking firm retained for this
purpose by the Company.
Upon and as a consequence of receiving one or more Units
evidenced by this Unit Certificate, the Holder of such Units shall thereby:
(i) become a party to the Purchase Contract
Agreement and the Custodial Agreement;
(ii) confirm and ratify the appointment by such
Holder of the Agent and the Custodian to act for and on behalf of such
Holder as set out in the Purchase Contract Agreement and the Custodial
Agreement, respectively;
(iii) confirm and ratify any and all acts taken
by the Agent or the Custodian under or as contemplated by the Purchase
Contract Agreement and the Custodial Agreement for or on behalf of such
Holder including without limitation in anticipation of such Holder
acquiring the Purchase Contract and Treasury Strips evidenced by such
Unit;
(iv) have authorized, consented to and effected
for all purposes contemplated by the Purchase Contract Agreement and
the Custodial Agreement the creation of the Unit as the evidence of
ownership of the Purchase Contract and Treasury Strips evidenced by it;
and
(v) if such Holder is an initial Holder, be
deemed to have agreed to purchase from Credit Suisse First Boston
Corporation, as one of the Representatives, the Treasury Strips
relating to such Units evidenced by this Unit Certificate and to have
directed that such Treasury Strips be delivered to the custody of the
Custodian in accordance with the terms of the Custodial Agreement.
A Holder may separate the Treasury Strip Component from the
related Purchase Contract Component in respect of some or all of the Units
evidenced by this Unit Certificate and withdraw that Holder's Treasury Strips
from the custody of the Custodian in accordance with Section 11.09 of the
Purchase Contract Agreement.
B-5
The Unit Certificates are issuable only in registered form and
only in denominations of a single Unit and any integral multiple thereof. The
transfer of any Unit Certificate will be registered and Unit Certificates may be
exchanged as provided in the Purchase Contract Agreement. The Unit Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents permitted by the Purchase Contract Agreement. No service
charge shall be required for any such registration of transfer or exchange, but
the Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
Subject to certain limited exceptions, the provisions of the
Purchase Contract Agreement may not be amended without the consent of each of
the Holders of the Outstanding Units affected thereby.
The Purchase Contracts shall for all purposes be governed by,
and construed in accordance with, the laws of the State of New York.
The Purchase Contracts shall not, prior to the settlement
thereof and the issuance and delivery of Common Shares thereunder, entitle the
Holder to any of the rights of a holder of Common Shares.
"$" means U.S. dollars in this Purchase Contract Certificate.
A copy of the Purchase Contract Agreement is available for
inspection at the Stock Transfer Office during business hours of the Agent.
B-6
EXHIBIT C
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for Common
Shares deliverable upon settlement on or after the Settlement Date of the
Purchase Contracts evidenced by the number of [Units evidenced by this Unit
Certificate] [Purchase Contracts evidenced by this Purchase Contract
Certificate] be registered in the name of, and delivered, together with a check
in payment for any fractional share, to the undersigned at the address indicated
below unless a different name and address have been indicated below. If shares
are to be registered in the name of a Person other than the undersigned, the
undersigned will pay any transfer or other taxes payable incident thereto.
Dated:__________________________ _____________________________
Signature
If shares are to be registered in the name
of and delivered to a Person other than the REGISTERED HOLDER,
Holder, please print such Person's name and
address:
Please print name and address
of Registered Holder:
________________________________ _____________________________
Name Name
________________________________ _____________________________
Address Address
Social Security or other Taxpayer Social Security or other
Identification Number, if any Taxpayer Identification
Number, if any
[Delivery Instructions for Treasury Strips upon an Acceleration Event:]
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
C-1
EXHIBIT D
ELECTION FOR EARLY SETTLEMENT
The undersigned Holder of this [Unit Certificate] [Purchase
Contract Certificate] hereby irrevocably exercises the option to effect Early
Settlement in accordance with the terms of the Purchase Contract and Unit
Agreement with respect to the Purchase Contracts [evidenced by the number of
Units evidenced by this Unit Certificate] [evidenced by this Purchase Contract
Certificate] specified below. The undersigned Holder directs that a certificate
for Common Shares deliverable upon such Early Settlement be registered in the
name of, and delivered, together with a check in payment for any fractional
share and any [Unit Certificate] [Purchase Contract Certificate] representing
any [Units] [Purchase Contracts] evidenced hereby as to which Early Settlement
of the related Purchase Contracts is not effected, to the undersigned at the
address indicated below unless a different name and address have been indicated
below. [Treasury Strips deliverable upon such Early Settlement will be delivered
in accordance with the delivery instructions set forth below.] If shares are to
be registered in the name of a Person other than the undersigned, the
undersigned will pay any transfer tax payable incident thereto.
Dated:_____________________ ______________________________
Signature
Number of [Units] [[Purchase Contracts] evidenced hereby as to which Early
Settlement [of the related Purchase Contracts] is being elected:
REGISTERED HOLDER
Please print name and address of Registered Holder:
Name:___________________________________________________________________________
Address:________________________________________________________________________
Social Security or other Taxpayer Identification Number, if any:________________
If shares or Certificates are to be registered in the name of and delivered to
[and Treasury Strips are to be delivered to] a Person other than the Holder,
please print such Person's name and address:
Name:___________________________________________________________________________
Address:________________________________________________________________________
Social Security or other Taxpayer Identification Number, if any:________________
[Delivery Instructions for Treasury Strips upon Early Settlement:]
________________________________________________________________________________
________________________________________________________________________________
_______________________________________________________________________________
D-1
EXHIBIT E
ELECTION FOR EARLY SETTLEMENT UPON CASH MERGER
The undersigned Holder of this [Unit Certificate] [Purchase
Contract Certificate] hereby irrevocably exercises the option to effect Early
Settlement Upon Cash Merger in accordance with the terms of the Purchase
Contract and Unit Agreement with respect to the Purchase Contracts [evidenced by
the number of Units evidenced by this Unit Certificate] [evidenced by this
Purchase Contract Certificate] specified below. The undersigned Holder directs
that a certificate for Common Shares deliverable upon such Early Settlement Upon
Cash Merger be registered in the name of, and delivered, together with a check
in payment for any fractional share and any [Unit Certificate] [Purchase
Contract Certificate] representing any [Units] [Purchase Contracts] evidenced
hereby as to which Early Settlement Upon Cash Merger of the related Purchase
Contracts is not effected, to the undersigned at the address indicated below
unless a different name and address have been indicated below. [Upon such Early
Settlement Upon Cash Merger, Treasury Strips will be delivered in accordance
with the delivery instructions set forth below.] If shares are to be registered
in the name of a Person other than the undersigned, the undersigned will pay any
transfer tax payable incident thereto.
Dated:_____________________________ ____________________________
Signature
Number of [Units] [[Purchase Contracts] evidenced hereby as to which Early
Settlement Upon Cash Merger [of the related Purchase Contracts] is being
elected:____________________
REGISTERED HOLDER
Please print name and address of Registered Holder:
Name:___________________________________________________________________________
Address:________________________________________________________________________
Social Security or other Taxpayer Identification Number, if any:________________
If shares or Certificates are to be registered in the name of and delivered to
[and Treasury Strips are to be delivered to] a Person other than the Holder,
please print such Person's name and address:
Name:___________________________________________________________________________
Address:________________________________________________________________________
Social Security or other Taxpayer Identification Number, if any:________________
[Delivery Instructions for Treasury Strips Upon Early Settlement Upon Cash
Merger:]
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
E-1
EXHIBIT F
HOLDER'S ELECTION FOR WITHDRAWAL
OF TREASURY STRIP COMPONENT
The undersigned Holder of [this Unit Certificate] [these
Units] hereby exercises the option to withdraw the Holder's Treasury Strips in
accordance with the terms of the Purchase Contract Agreement with respect to
such Treasury Strips [evidenced by the number of Units evidenced by this Unit
Certificate] [evidenced by the Units] specified below. The undersigned Holder
directs the Agent to instruct the Custodian to deliver the Holder's withdrawn
Treasury Strips in accordance with the delivery instructions set forth below.
The undersigned Holder directs that [Purchase Contracts] [a Purchase Contract
Certificate], evidencing the remaining Purchase Contract Component related to
the Units from which the Treasury Strips have been withdrawn, be registered in
the name of, and delivered to, the undersigned Holder at the address indicated
below unless a different name and address have been indicated below. The
undersigned Holder directs that [a Unit Certificate] [the Holder's beneficial
ownership in a Global Unit Certificate] representing any Units evidenced hereby
as to which withdrawal of the related Treasury Strips is not effected, be
registered in the name of, and delivered to, [the undersigned Holder at the
address indicated below unless a different name and address have been indicated
below] [The Depository Trust Company or its nominee].
Dated:____________________________ ______________________________
Signature
Number of Units evidenced hereby as to which withdrawal of the related Treasury
Strips is being elected:
REGISTERED HOLDER
Please print name and address of Registered Holder:
Name:___________________________________________________________________________
Address:________________________________________________________________________
Social Security or other Taxpayer Identification Number, if any:________________
If Treasury Strips are to be delivered to a Person other than the Holder, please
print such Person's name and address:
Name:___________________________________________________________________________
Address:________________________________________________________________________
Social Security or other Taxpayer Identification Number, if any:________________
F-1
Delivery Instructions for [Units] [Unit Certificates] for which withdrawal of
the Treasury Strips is not effected.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Delivery Instructions for [Purchase Contracts] [Purchase Contract Certificates]
representing the remaining Purchase Contract Component of the Units from which
the Treasury Strips has been withdrawn.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
F-2
EXHIBIT G
HOLDER'S INSTRUCTION TO AGENT
Computershare Trust Company of Canada,
as Agent
000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
Attn: Corporate Action
Telecopy: (000) 000-0000
Re: Recreation of Units
The undersigned Holder hereby notifies you that it intends to deliver _______
Treasury Strip Components to Citibank, N.A., as Custodian and _______ Purchase
Contracts to Computershare Trust Company of Canada, as Agent on [insert date],
and the undersigned Holder hereby requests that the Agent instruct the Custodian
to receive such Treasury Strip Components on such date. Subject to receiving
confirmation that the Treasury Strips referred to in the preceding sentence have
been received, the undersigned Holder instructs the Agent, in accordance with
Section 11.10 of the Purchase Contract Agreement, dated as of June _______, 2002
(the "Purchase Contract Agreement"), among Nortel Networks Corporation,
Computershare Trust Company of Canada, as Agent, and the Holders to recreate the
requisite number of Units. The undersigned Holder hereby instructs the Agent to
execute a Unit Certificate representing the requisite number of Units (or, in
the case of a Global Unit Certificate, to increase the number of Units
represented thereby). Capitalized terms used herein but not defined shall have
the meaning set forth in the Purchase Contract Agreement.
Date: ____________________ Signature: ___________________________
Signature Guarantee: ___________________
G-1
Please print name and address of Holder:
Name:___________________________________________________________________________
Social Security or other Taxpayer Identification Number, if any:
Address:________________________________________________________________________
G-2
EXHIBIT H
FORM OF UNIT ORDER
Computershare Trust Company of Canada
000 Xxxxxxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Manager, Client Servicing
Dear Sirs:
RE: EXECUTION AND DELIVERY OF UNIT CERTIFICATES
The undersigned hereby confirms that it has been advised by
the Custodian that the Custodian holds Treasury Strips set out in Schedule -
hereto in accordance with the terms of the Custodial Agreement, which Treasury
Strips are owned by Holders and which Treasury Strips are not currently
evidenced by Unit Certificates. The undersigned further advises that it has
issued on the date hereof - Purchase Contracts (which Purchase Contracts are not
currently evidenced by Purchase Contract Certificates or Unit Certificates). In
accordance with Sections 11.01 and 11.03 of the Purchase Contract and Unit
Agreement, dated as of June 12, 2002 (the "Purchase Contract Agreement"), among
you, us and holders named therein, you are hereby advised that the requirements
for the issuance of Units evidencing Purchase Contracts and Treasury Strips have
been satisfied and therefore that you shall execute and deliver - Unit
Certificates [if Global Unit Certificates held by DTC: in the name of Cede &
Co., as nominee for The Depository Trust Company,] as evidence of the ownership
by Holders of the Purchase Contracts and Treasury Strips. Capitalized terms used
herein but not defined shall have the meaning set forth in the Purchase Contract
Agreement.
Date:_____________________________ NORTEL NETWORKS CORPORATION
By:_____________________________
By:_____________________________
H-1
