Exhibit 7.1
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TRUST INDENTURE
DATED AS OF THE [30th] DAY OF JULY, 2007
BETWEEN
ZARLINK SEMICONDUCTOR INC.
and
COMPUTERSHARE TRUST COMPANY OF CANADA
PROVIDING FOR THE ISSUE OF DEBENTURES
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TABLE OF CONTENTS
ARTICLE 1 INTERPRETATION .................................................. 1
1.1 Definitions ........................................................ 1
1.2 Meaning of "Outstanding" ........................................... 9
1.3 Interpretation ..................................................... 10
1.4 Headings Etc ....................................................... 10
1.5 Day not a Business Day ............................................. 10
1.6 Applicable Law ..................................................... 10
1.7 Monetary References ................................................ 10
1.8 Invalidity, Etc .................................................... 10
1.9 Language ........................................................... 11
1.10 Successors and Assigns ............................................ 11
1.11 Benefits of Indenture ............................................. 11
ARTICLE 2 THE DEBENTURES .................................................. 11
2.1 Limit of Debentures ................................................ 11
2.2 Terms of Debentures of any Series .................................. 11
2.3 Form of Debentures ................................................. 13
2.4 Form and Terms of Initial Debentures ............................... 13
2.5 Certification and Delivery of Additional Debentures ................ 23
2.6 Issue of Global Debentures ......................................... 24
2.7 Execution of Debentures ............................................ 25
2.8 Certification ...................................................... 25
2.9 Interim Debentures or Certificates ................................. 25
2.10 Mutilation, Loss, Theft or Destruction ............................ 26
2.11 Concerning Interest ............................................... 26
2.12 Debentures to Rank Pari Passu ..................................... 27
2.13 Payments of Amounts Due on Maturity ............................... 27
2.14 Payment of Interest ............................................... 27
2.15 Withholding Tax ................................................... 28
2.16 Unconditional Right of Holders to Receive Payment ................. 29
ARTICLE 3 REGISTRATION, TRANSFER, EXCHANGE AND OWNERSHIP .................. 30
3.1 Fully Registered Debentures ........................................ 30
3.2 Global Debentures .................................................. 30
3.3 Transferee Entitled to Registration ................................ 32
3.4 No Notice of Trusts ................................................ 32
3.5 Registers Open for Inspection ...................................... 32
3.6 Exchanges of Debentures ............................................ 32
3.7 Closing of Registers ............................................... 33
3.8 Charges for Registration, Transfer and Exchange .................... 33
3.9 Ownership of Debentures ............................................ 34
ARTICLE 4 REDEMPTION AND PURCHASE OF DEBENTURES ........................... 34
4.1 Applicability of Article ........................................... 34
4.2 Partial Redemption ................................................. 35
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4.3 Notice of Redemption ............................................... 35
4.4 Debentures Due on Redemption Dates ................................. 36
4.5 Deposit of Redemption Monies or Common Shares ...................... 36
4.6 Right to Pay Redemption Price in Common Shares ..................... 36
4.7 Failure to Surrender Debentures Called for Redemption .............. 38
4.8 Cancellation of Debentures Redeemed ................................ 39
4.9 Purchase of Debentures by the Corporation .......................... 39
4.10 Right to Repay Principal Amount in Common Shares .................. 40
ARTICLE 5 SUBORDINATION OF DEBENTURES ..................................... 42
5.1 Applicability of Article ........................................... 42
5.2 Order of Payment ................................................... 42
5.3 Subrogation to Rights of Holders of Senior Indebtedness ............ 43
5.4 Obligation to Pay Not Impaired ..................................... 44
5.5 No Payment if Senior Indebtedness in Default ....................... 44
5.6 Payment on Debentures Permitted .................................... 45
5.7 Confirmation of Subordination ...................................... 45
5.8 Knowledge of Debenture Trustee ..................................... 45
5.9 Debenture Trustee May Hold Senior Indebtedness ..................... 45
5.10 Rights of Holders of Senior Indebtedness Not Impaired ............. 46
5.11 Altering the Senior Indebtedness .................................. 46
5.12 Additional Indebtedness ........................................... 46
5.13 Right of Debentureholder to Convert Not Impaired .................. 46
5.14 Invalidated Payments .............................................. 46
5.15 Contesting Security ............................................... 46
5.16 No Set-Off ........................................................ 46
ARTICLE 6 CONVERSION OF DEBENTURES ........................................ 47
6.1 Applicability of Article ........................................... 47
6.2 Notice of Expiry of Conversion Privilege ........................... 47
6.3 Revival of Right to Convert ........................................ 47
6.4 Manner of Exercise of Right to Convert ............................. 47
6.5 Adjustment of Conversion Price ..................................... 49
6.6 No Requirement to Issue Fractional Common Shares ................... 52
6.7 Corporation to Reserve Common Shares ............................... 52
6.8 Cancellation of Converted Debentures ............................... 53
6.9 Certificate as to Adjustment ....................................... 53
6.10 Notice of Special Matters ......................................... 53
6.11 Protection of Debenture Trustee ................................... 53
ARTICLE 7 COVENANTS OF THE CORPORATION .................................... 54
7.1 To Pay Principal, Premium (if any) and Interest .................... 54
7.2 To Pay Debenture Trustee's Remuneration ............................ 54
7.3 To Give Notice of Default .......................................... 54
7.4 Preservation of Existence, etc ..................................... 54
7.5 Annual Certificate of Compliance ................................... 55
7.6 No Dividends on Common Shares if Event of Default .................. 55
7.7 Performance of Covenants by Debenture Trustee ...................... 55
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7.8 Listing ............................................................ 55
ARTICLE 8 DEFAULT ......................................................... 55
8.1 Events of Default .................................................. 55
8.2 Notice of Events of Default ........................................ 57
8.3 Waiver of Default .................................................. 57
8.4 Enforcement by the Debenture Trustee ............................... 58
8.5 No Suits by Debentureholders ....................................... 59
8.6 Application of Monies by Debenture Trustee ......................... 59
8.7 Notice of Payment by Debenture Trustee ............................. 60
8.8 Debenture Trustee May Demand Production of Debentures .............. 60
8.9 Remedies Cumulative ................................................ 60
8.10 Judgment Against the Corporation .................................. 61
ARTICLE 9 SATISFACTION AND DISCHARGE ...................................... 61
9.1 Cancellation ....................................................... 61
9.2 Non-Presentation of Debentures ..................................... 61
9.3 Repayment of Unclaimed Monies or Common Shares ..................... 61
9.4 Discharge .......................................................... 62
9.5 Satisfaction ....................................................... 62
9.6 Continuance of Rights, Duties and Obligations ...................... 64
ARTICLE 10 COMMON SHARE INTEREST PAYMENT ELECTION ......................... 64
10.1 Common Share Interest Payment Election ............................ 64
ARTICLE 11 SUCCESSORS ..................................................... 67
11.1 Restrictions on Amalgamation, Merger and Sale of
Certain Assets, etc ............................................... 67
11.2 Vesting of Powers in Successor .................................... 67
ARTICLE 12 COMPULSORY ACQUISITION ......................................... 68
12.1 Definitions ....................................................... 68
12.2 Offer for Debentures .............................................. 68
12.3 Offeror's Notice to Dissenting Shareholders ....................... 69
12.4 Delivery of Debenture Certificates ................................ 69
12.5 Payment of Consideration to Debenture Trustee ..................... 69
12.6 Consideration to be held in Trust ................................. 69
12.7 Completion of Transfer of Debentures to Offeror ................... 70
12.8 Communication of Offer to Corporation ............................. 70
ARTICLE 13 MEETINGS OF DEBENTUREHOLDERS ................................... 70
13.1 Right to Convene Meeting .......................................... 70
13.2 Notice of Meetings ................................................ 71
13.3 Chairman .......................................................... 72
13.4 Quorum ............................................................ 72
13.5 Power to Adjourn .................................................. 72
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13.6 Show of Hands ..................................................... 73
13.7 Poll .............................................................. 73
13.8 Voting ............................................................ 73
13.9 Proxies ........................................................... 73
13.10 Persons Entitled to Attend Meetings .............................. 74
13.11 Powers Exercisable by Extraordinary Resolution ................... 74
13.12 Meaning of "Extraordinary Resolution" ............................ 76
13.13 Powers Cumulative ................................................ 77
13.14 Minutes .......................................................... 77
13.15 Instruments in Writing ........................................... 77
13.16 Binding Effect of Resolutions .................................... 77
13.17 Evidence of Rights Of Debentureholders ........................... 77
13.18 Concerning Serial Meetings ....................................... 77
ARTICLE 14 NOTICES ........................................................ 78
14.1 Notice to the Corporation ......................................... 78
14.2 Notice to Debentureholders ........................................ 78
14.3 Notice to Debenture Trustee ....................................... 79
14.4 Mail Service Interruption ......................................... 79
ARTICLE 15 CONCERNING THE DEBENTURE TRUSTEE ............................... 79
15.1 Eligibility; Disqualification ..................................... 79
15.2 No Conflict of Interest ........................................... 79
15.3 Replacement of Debenture Trustee .................................. 79
15.4 Duties of Debenture Trustee ....................................... 80
15.5 Reliance Upon Declarations, Opinions, etc ......................... 80
15.6 Evidence and Authority to Debenture Trustee, Opinions, etc ........ 81
15.7 Officer's Certificates Evidence ................................... 82
15.8 Experts, Advisers and Agents ...................................... 82
15.9 Debenture Trustee May Deal in Debentures .......................... 82
15.10 Investment of Monies Held by Debenture Trustee ................... 82
15.11 Debenture Trustee Not Ordinarily Bound ........................... 83
15.12 Debenture Trustee Not Required to Give Security .................. 83
15.13 Debenture Trustee Not Bound to Act on Corporation's Request ...... 83
15.14 Conditions Precedent to Debenture Trustee's Obligations
to Act Hereunder ................................................. 83
15.15 Authority to Carry on Business ................................... 84
15.16 Compensation and Indemnity ....................................... 84
15.17 Anti-Money Laundering ............................................ 85
15.18 Acceptance of Debenture Trustee .................................. 85
15.19 Third Party Interests ............................................ 85
15.20 Privacy Laws ..................................................... 85
ARTICLE 16 SUPPLEMENTAL INDENTURES ........................................ 85
16.1 Supplemental Indentures ........................................... 85
ARTICLE 17 EXECUTION AND FORMAL DATE ...................................... 86
17.1 Execution ......................................................... 86
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17.2 Formal Date ....................................................... 87
SCHEDULE "A" FORM OF INITIAL DEBENTURE .................................... A-1
SCHEDULE "B" FORM OF REDEMPTION NOTICE .................................... B-1
SCHEDULE "C" FORM OF MATURITY NOTICE ...................................... C-1
SCHEDULE "D" FORM OF CHANGE OF CONTROL PURCHASE NOTICE .................... D-1
SCHEDULE "E" FORM OF NOTICE OF ELECTION UPON TAX REDEMPTION ............... E-1
SCHEDULE "F" FORM OF NOTICE OF CONVERSION ................................. F-1
THIS INDENTURE made as of the [30th] day of July, 2007.
AMONG:
ZARLINK SEMICONDUCTOR INC., a corporation duly incorporated under
the Canada Business Corporations Act (hereinafter called the
"Corporation")
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COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company incorporated
under the federal laws of Canada (hereinafter called the "Debenture
Trustee")
WITNESSETH THAT:
WHEREAS the Corporation, under the laws relating thereto, is duly authorized to
create and issue the Debentures to be issued as herein provided;
AND WHEREAS, when certified by the Debenture Trustee and issued as in this
Indenture provided, all necessary steps in relation to the Corporation have been
duly enacted, passed and/or confirmed and other proceedings taken and conditions
complied with to make the creation and issue of the Debentures proposed to be
issued hereunder legal, valid and binding on the Corporation in accordance with
the laws applicable to the Corporation;
AND WHEREAS the Corporation deems it necessary, to assist in the financing of
the proposed Acquisition, to create and issue the Initial Debentures to be
created and issued in the manner hereinafter appearing;
AND WHEREAS the foregoing recitals are made as representations and statements of
fact by the Corporation and not by the Debenture Trustee;
NOW THEREFORE it is hereby covenanted, agreed and declared as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions
In this Indenture and in the Debentures, unless there is something in the
subject matter or context inconsistent therewith, the expressions following
shall have the following meanings, namely:
"this Indenture", "this Trust Indenture", "hereto", "herein", "hereby",
"hereunder", "hereof" and similar expressions refer to this Indenture and
not to any particular Article, Section, subsection, clause, subdivision or
other portion hereof and include any and every instrument supplemental or
ancillary hereto;
"Acquisition" means the acquisition by the Corporation of LHI by means of
the merger pursuant to the Acquisition Agreement;
"Acquisition Agreement" means an agreement and plan of merger dated June
25, 2007, among the Corporation, Merger Sub, LHI and Navigant Capital
Advisors, LLC as representative of LHI's stockholders, pursuant to which
the Corporation will indirectly acquire Legerity and LHI's other
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Subsidiaries through the cash merger of Merger Sub with and into LHI as
the surviving company of such merger;
"Acquisition Closing Date" means the date of consummation of the
Acquisition pursuant to the Acquisition Agreement;
"Additional Amounts" has the meaning ascribed thereto in Section 2.15;
"Additional Debentures" means Debentures of any one or more series, other
than the first series of Debentures being the Initial Debentures, issued
under this Indenture;
"Additional Interest Amount" has the meaning ascribed thereto in
subsection 2.4(b);
"Additional Shares" has the meaning attributed thereto in subsection
2.4(f)(i);
"Applicable Procedures" means the rules and procedures of the Depository
as in effect from time to time;
"Applicable Securities Legislation" means applicable securities laws
(including published rules, regulations, policies, blanket orders, rulings
and instruments) in each of the provinces of Canada and the United States;
"Beneficial Holder" means any person who holds a beneficial interest in a
Global Debenture as shown on the books of the Depository or a Depository
Participant;
"Beneficial Ownership" has the same meaning as set forth in the Securities
Act (Ontario);
"Business Day" means any day other than a Saturday, Sunday or any other
day that the office of the Debenture Trustee in Toronto, Ontario is not
generally open for business;
"Canadian Taxes" means any present or future tax, duty, levy, impost,
assessment or other governmental charge (including, without limitation,
penalties, interest and other liabilities related thereto) imposed or
levied by or on behalf of the Government of Canada or of any province or
territory thereof or by any authority or agency therein or thereof having
the power to tax, including pursuant to the Tax Act;
"Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, but excluding any
debt securities convertible into such equity;
"CBCA" means the Canada Business Corporations Act and any act that may be
substituted therefor, as same may be amended from time to time;
"Change of Control" means an occurrence involving the acquisition by any
Person, or group of Persons acting jointly or in concert, of voting
control or direction over 50% or more of the outstanding Common Shares (on
a fully-diluted basis including after giving effect to the conversion or
exchange of securities convertible into, exchangeable for, or otherwise
carrying the right to acquire Common Shares).
"Change of Control Effective Date" means the date on which any Change of
Control becomes effective;
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"Change of Control Corporation Notice" has the meaning attributed thereto
in subsection 2.4(k)(ii);
"Change of Control Purchase Date" has the meaning attributed thereto in
subsection 2.4(k)(i);
"Change of Control Purchase Notice" has the meaning attributed thereto in
subsection 2.4(k)(iii);
"Change of Control Purchase Offer" has the meaning attributed thereto in
subsection 2.4(k)(i);
"Change of Control Purchase Price" of any Initial Debenture, means 101% of
the principal amount of the Initial Debenture to be purchased plus accrued
and unpaid interest, if any, to, but excluding, the Change of Control
Purchase Date
"Common Shares" means common shares of the Corporation;
"Common Share Bid Request" means a request for bids to purchase Common
Shares (to be issued by the Corporation on the Common Share Delivery Date)
made by the Debenture Trustee in accordance with the Common Share Interest
Payment Election Notice and that shall make the acceptance of any bid
conditional upon the acceptance of sufficient bids to result in aggregate
proceeds from such issue and sale of Common Shares that, together with the
cash payments by the Corporation in lieu of fractional Common Shares, if
any, equal the Interest Obligation;
"Common Share Delivery Date" means a date, not more than 90 days and not
less than one Business Day prior to the applicable Interest Payment Date,
upon which Common Shares are issued by the Corporation and delivered to
the Debenture Trustee for sale pursuant to Common Share Purchase
Agreements;
"Common Share Interest Payment Election" means an election to satisfy an
Interest Obligation on the applicable Interest Payment Date in the manner
described in the Common Share Interest Payment Election Notice;
"Common Share Interest Payment Election Amount" means the sum of the
amount of the aggregate proceeds resulting from the sale of Common Shares
on the Common Share Delivery Date pursuant to acceptable bids obtained
pursuant to the Common Share Bid Requests, together with any amount paid
by the Corporation in respect of fractional Common Shares pursuant to
Section 6.6, that is equal to the aggregate amount of the Interest
Obligation in respect of which the Common Share Interest Payment Election
Notice was delivered;
"Common Share Interest Payment Election Notice" means a written notice
made by the Corporation to the Debenture Trustee specifying:
(a) the Interest Obligation to which the election relates;
(b) the Common Share Interest Payment Election Amount;
(c) the investment banks, brokers or dealers through which the Debenture
Trustee shall seek bids to purchase the Common Shares and the
conditions of such bids, which may include the minimum number of
Common Shares, minimum price per Common Share, timing for closing
for bids and such other matters as the Corporation may specify; and
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(d) that the Debenture Trustee shall accept through the investment
banks, brokers or dealers selected by the Corporation only those
bids which comply with such notice;
"Common Share Proceeds Investment" has the meaning attributed thereto in
subsection 10.1(h);
"Common Share Purchase Agreement" means an agreement in customary form
among the Corporation, the Debenture Trustee and the Persons making
acceptable bids pursuant to a Common Share Bid Request, which implies with
all applicable laws, including the Application Securities Legislation and
the rules and regulations of any stock exchange on which the Debentures or
Common Shares are then listed;
"Common Share Redemption Right" has the meaning attributed thereto in
subsection 4.6(a);
"Common Share Repayment Right" has the meaning attributed thereto in
subsection 4.10(a);
"Conversion Price" means the dollar amount for which each Common Share may
be issued from time to time upon the conversion of Debentures or any
series of Debentures which are by their terms convertible in accordance
with the provisions of Article 6;
"Conversion Rate" means the number of Common Shares issuable upon the
conversion of each Cdn$1,000 principal amount of Initial Debentures which
shall initially be 408.1633 Common Shares; provided, however that if the
Conversion Price is adjusted in accordance with the provisions of this
Indenture, the Conversion Rate shall equal that number which shall equal
1,000 divided by the Conversion Price as adjusted, rounded up to the
nearest four decimal points;
"Corporation's Auditors" or "Auditors of the Corporation" means an
independent firm of chartered accountants duly appointed as auditors of
the Corporation;
"Corporation" means Zarlink Semiconductor Inc. and includes any successor
to or of the Corporation that shall have complied with the provisions of
Article 11;
"Counsel" means a barrister or solicitor or firm of barristers or
solicitors retained or employed by the Debenture Trustee or retained or
employed by the Corporation and acceptable to the Debenture Trustee;
"Current Market Price" means the volume-weighted average trading price per
Common Share on the Toronto Stock Exchange and the New York Stock Exchange
(or, if the Common Shares are not listed thereon, on such stock exchange
or stock exchanges on which the Common Shares are listed as may be
selected for such purpose by or on behalf of the Directors and approved by
the Debenture Trustee, or if the Common Shares are not listed on any stock
exchange, then on the over-the-counter market) for the 20 consecutive
Trading Days ending on the third Business Day preceding the relevant date.
The weighted average price shall be determined by dividing the aggregate
sale price of all Common Shares sold on the said exchange, exchanges or
market, as the case may be, during the said 20 consecutive Trading Days by
the total number of Common Shares so sold. The conversion rate used for
conversion of United States dollars to Canadian dollars, and vice versa,
will be the Bank of Canada noon spot rate on the date of determination.
"Date of Conversion" has the meaning ascribed thereto in subsection
6.4(b);
"Debenture Liabilities" has the meaning ascribed thereto in Section 5.1;
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"Debenture Trustee" means Computershare Trust Company of Canada or its
successor or successors for the time being as trustee hereunder;
"Debentureholders" or "holders" means the Persons for the time being
entered in the register for Debentures as registered holders of Debentures
or any transferees of such Persons by endorsement or delivery;
"Debentures" means the debentures, notes or other evidences of
indebtedness of the Corporation issued and certified hereunder, or deemed
to be issued and certified hereunder, including, without limitation, the
Initial Debentures, and for the time being outstanding, whether in
definitive or interim form;
"Deemed year" has the meaning attributed thereto in subsection 2.11(b);
"Defeased Debentures" has the meaning attributed thereto in Section 9.6;
"Depository Participant" means a broker, dealer, bank, other financial
institution or other person for whom from time to time, a Depository
effects book entry for a Global Debenture deposited with the Depository;
"Depository" means, with respect to the Debentures of any series issuable
or issued in the form of one or more Global Debentures, the person
designated as depository by the Corporation pursuant to Section 3.2 until
a successor depository shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depository" shall mean each
person who is then a depository hereunder, and if at any time there is
more than one such person, "Depository" as used with respect to the
Debentures of any series shall mean each depository with respect to the
Global Debentures of such series;
"Directors" means the directors of the Corporation being referenced and
reference to action by the Directors means action by the directors of the
Corporation;
"Eligible Senior Creditor" means a Senior Creditor specified in an
Officer's Certificate pursuant to Section 5.7 that has entered into a
written agreement with the Debenture Trustee granting to such Senior
Creditor the rights of consent contemplated by Sections 8.1, 8.4, 13.11,
13.15 and 16.1;
"especially affected series" has the meaning attributed thereto in
subsection 13.2(b)(i);
"Event of Default" has the meaning ascribed thereto in Section 8.1;
"Excluded Holder" has the meaning attributed thereto in Section 2.15;
"Excluded Taxes" has the meaning attributed thereto in Section 2.15;
"Extraordinary Resolution" has the meaning ascribed thereto in Section
13.12;
"Freely Tradeable" means, in respect of shares of capital of any class of
any corporation, shares which can be traded by the holder thereof without
any restriction under Applicable Securities Legislation or pursuant to the
rules of the stock exchange(s) upon which such shares are listed at the
time, such as hold periods, except in the case of restrictions on trading
where there is an undisclosed change or a distribution by a control
person;
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"Fully Registered Debentures" means Debentures registered as to both
principal and interest;
"Generally Accepted Accounting Principles" means generally accepted
accounting principles from time to time approved by the Financial
Accounting Standards Board (United States);
"Global Debenture" means a Debenture that is issued to and registered in
the name of the Depository, or its nominee, pursuant to Section 2.6 for
purposes of being held by or on behalf of the Depository as custodian for
participants in the Depository's book-entry only registration system;
"Government Obligations" means securities issued or guaranteed by the
Government of Canada or any province thereof;
"Ineligible Consideration" has the meaning attributed thereto in
subsection 2.4(k)(vi);
"Initial Debentures" means the Debentures designated as "6.0% Convertible
Unsecured Subordinated Debentures" and described in Section 2.4;
"Initial Interest Amount" has the meaning attributed thereto in subsection
2.4(b);
"Initial Interest Payment Date" has the meaning attributed thereto in
subsection 2.4(b);
"Interest Account" has the meaning attributed thereto in subsection
10.1(h);
"Interest Obligation" means the obligation of the Corporation to pay
interest on the Debentures, as and when the same becomes due;
"Interest Payment Date" means a date specified in a Debenture as the date
on which interest on such Debenture shall become due and payable;
"Legerity" means Legerity, Inc., a wholly-owned subsidiary of LHI;
"LHI" means Legerity Holdings, Inc.;
"Make Whole Amount" has the meaning attributed thereto in subsection
2.4(f)(i)
"Maturity Account" means an account or accounts required to be established
by the Corporation (and which shall be maintained by and subject to the
control of the Debenture Trustee) for each series of Debentures pursuant
to and in accordance with this Indenture;
"Maturity Date" means the date specified for maturity of any Debentures;
"Maturity Notice" has the meaning attributed thereto in subsection 2.4(f);
"Merger Sub" means ZLE Inc., an indirect wholly-owned subsidiary of the
Corporation;
"Non-Resident" means a non-resident of Canada within the meaning of the
Tax Act;
"Offering" means a public offering by short form prospectus and amended
registration statement on Form F-10 of the Corporation dated July [24],
2007 of 75,000 subscription receipts exchangeable for the Initial
Debentures;
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"Officer's Certificate" means a certificate of the Corporation signed by
any one authorized officer or director of the Corporation, on behalf of
the Corporation, in his capacity as an officer or director of the
Corporation, as the case may be, and not in his personal capacity;
"Offering Closing Date" means July [30], 2007, the closing date of the
Offering;
"Periodic Offering" means an offering of Debentures of a series from time
to time, the specific terms of which Debentures, including, without
limitation, the rate or rates of interest, if any, thereon, the stated
maturity or maturities thereof and the redemption provisions, if any, with
respect thereto, are to be determined by the Corporation upon the issuance
of such Debentures from time to time;
"Person" includes an individual, corporation, company, partnership, joint
venture, association, trust, trustee, unincorporated organization or
government or any agency or political subdivision thereof;
"Public Acquiror Change of Control" means any event constituting a Change
of Control that would otherwise require the Corporation to make a Change
of Control Purchase Offer in accordance with subsection 2.4(l), where
either (a) the acquiror or (b) if not the acquiror, a direct or indirect
Majority-owned subsidiary of the acquiror or (c) if not the acquiror or
any direct or indirect Majority-owned subsidiary of the acquiror, a
corporation by which the acquiror is directly or indirectly
Majority-owned, has a class of common shares traded on the Toronto Stock
Exchange, a U.S. national securities exchange or quoted on the NASDAQ
Stock Exchange or which will be so traded or quoted when issued or
exchanged in connection with such Change of Control, and the acquiror has
designated such common shares to serve as the Public Acquiror Shares in
the transaction. "Majority-owned" for the purposes of this definition
means having Beneficial Ownership of more than 50% of the total voting
power of the respective Person's Voting Stock;
"Public Acquiror Shares" means the class of common shares of an entity
referred to in section (a), (b), or (c) of the first sentence of the
definition of Public Acquiror Change of Control that has been designated
to serve as the public acquiror common shares in the transaction;
"Redemption Date" has the meaning attributed thereto in Section 4.3;
"Redemption Notice" has the meaning attributed thereto in Section 4.3;
"Redemption Price" means, in respect of a Debenture, the amount, excluding
interest, payable on the Redemption Date fixed for such Debenture, which
amount may be payable by the issuance of Freely Tradeable Common Shares as
provided for in Section 4.6;
"Regular Record Date" means, with respect to each Interest Payment Date,
the June 30 or December 31 (or on the next Business Day, if such date is
not a Business Day), as the case may be, next preceding such Interest
Payment Date;
"Senior Creditor" means a holder or holders of Senior Indebtedness and
includes any representative or representatives or trustee or trustees of
any such holder or holders;
"Senior Indebtedness Documentation" means all documentation executed and
delivered in favour of the Senior Creditors in relation to the Senior
Indebtedness, including, without limitation, any principal agreement such
as a loan agreement or note purchase agreement;
"Senior Indebtedness" shall mean the principal of and the interest and
premium (or any other amounts payable thereunder), if any, on:
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(a) all indebtedness (including any indebtedness to trade creditors),
liabilities and obligations of the Corporation (other than
indebtedness evidenced by the Initial Debentures and any future
series), whether outstanding on the date of this Indenture or
thereafter created, incurred, assumed or guaranteed in connection
with the acquisition by the Corporation of any businesses,
properties or other assets or for monies borrowed or raised by
whatever means (including, without limitation, by means of
commercial paper, bankers' acceptances, letters of credit, debt
instruments, bank debt and financial leases, and any liability
evidenced by bonds, debentures, notes or similar instruments) or in
connection with the acquisition of any businesses, properties or
other assets or for monies borrowed or raised by whatever means
(including, without limitation, by means of commercial paper,
bankers' acceptances, letters of credit, debt instruments, bank debt
and financial leases, and any liability evidenced by bonds,
debentures, notes or similar instruments) by others including,
without limitation, any Subsidiary of the Corporation for payment of
which the Corporation is responsible or liable, whether absolutely
or contingently;
(b) all indebtedness, liabilities and obligations under the guarantees
now or at any time hereafter granted by the Corporation or any of
its Subsidiaries in respect of the obligations, liabilities and
indebtedness under the Senior Indebtedness Documentation; and
(c) renewals, extensions, restructurings, refinancings and refundings of
any such indebtedness, liabilities or obligations;
unless in each case it is provided by the terms of the instrument creating
or evidencing such indebtedness, liabilities or obligations that such
indebtedness, liabilities or obligations are pari passu with or
subordinate in right of payment to Debentures that by their terms are
subordinated, which for greater certainty includes the Initial Debentures;
and "Senior Indebtedness" shall in all events, include all of the
obligations of each borrower, issuer, and/or guarantor under the Senior
Indebtedness Documentation;
"Senior Security" means all mortgages, liens, pledges, charges (whether
fixed or floating), security interests or other encumbrances of any kind,
contingent or absolute, held by or on behalf of any Secured Creditor and
in any manner securing any Senior Indebtedness;
"Serial Meeting" has the meaning attributed thereto in Section 13.2(b)(i);
"Share Price" has the meaning attributed thereto in subsection 2.4(f)(ii);
"Subscription Receipt Agreement" means the subscription receipt agreement
entered into on the date hereof among the Corporation, CIBC World Markets
Inc. on behalf of the Underwriters (as defined in the Subscription Receipt
Agreement) and Computershare Trust Company of Canada;
"Subsidiary" when used to indicate a relationship with a person or
company, has the same meaning as set forth in the CBCA;
"Successor" has the meaning attributed thereto in Section 11.1;
"Tax Act" means the Income Tax Act (Canada) as amended from time to time;
"TIA" means the United States Trust Indenture Act of 1939;
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"Time of Expiry" means the time of expiry of certain rights with respect
to the conversion of Debentures under Article 6, which is to be set forth
for each series of Debentures, which by their terms are to be convertible;
"Total Redemption Price" has the meaning attributed thereto in Schedule
"B";
"Trading Day" means, with respect to the Toronto Stock Exchange, New York
Stock Exchange or other market for securities on which the Common Shares
of the Corporation are listed, any day on which any such exchange or
market is open for trading or quotation;
"United States" means the United States of America, its territories and
possessions, any state of the United States and the District of Columbia;
"Voting Stock" of a Person means all classes of Capital Stock or other
interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence of any
contingency within the control of such person to satisfy) to vote in the
election of directors, managers or trustees thereof;
"Written Direction of the Corporation" means an instrument in writing
signed by any one officer or director of the Corporation on behalf of the
Corporation; and
"1933 Act" means the United States Securities Act of 1933, as amended.
1.2 Meaning of "Outstanding"
Every Debenture certified and delivered by the Debenture Trustee hereunder
shall be deemed to be outstanding until it is cancelled, converted or redeemed
or delivered to the Debenture Trustee for cancellation, conversion or redemption
and monies and/or Common Shares, as the case may be, for the payment thereof
shall have been set aside under Article 9, provided that:
(a) Debentures which have been partially redeemed, purchased or
converted shall be deemed to be outstanding only to the extent of
the unredeemed, unpurchased or unconverted part of the principal
amount thereof;
(b) when a new Debenture has been issued in substitution for a Debenture
which has been lost, stolen or destroyed, only one of such
Debentures shall be counted for the purpose of determining the
aggregate principal amount of Debentures outstanding; and
(c) for the purposes of any provision of this Indenture entitling
holders of outstanding Debentures to vote, sign consents,
requisitions or other instruments or take any other action under
this Indenture, or to constitute a quorum of any meeting of
Debentureholders, Debentures owned directly or indirectly, legally
or equitably, by the Corporation or a Subsidiary of the Corporation
shall be disregarded except that:
(i) for the purpose of determining whether the Debenture Trustee
shall be protected in relying on any such vote, consent,
acquisition or other instrument or action, or on the holders
of Debentures present or represented at any meeting of
Debentureholders, only the Debentures which the Debenture
Trustee knows are so owned shall be so disregarded; and
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(ii) Debentures so owned which have been pledged in good faith
other than to the Corporation or a Subsidiary of the
Corporation shall not be so disregarded if the pledgee shall
establish to the satisfaction of the Debenture Trustee the
pledgee's right to vote such Debentures, sign consents,
requisitions or other instruments or take such other actions
in his discretion free from the control of the Corporation or
a Subsidiary of the Corporation.
1.3 Interpretation
In this Indenture:
(a) words importing the singular number or masculine gender shall
include the plural number or the feminine or neuter genders, and
vice versa;
(b) all references to Articles and Schedules refer, unless otherwise
specified, to articles of and schedules to this Indenture;
(c) all references to Sections refer, unless otherwise specified, to
sections, subsections or clauses of this Indenture; and
(d) words and terms denoting inclusiveness (such as "include" or
"includes" or "including"), whether or not so stated, are not
limited by and do not imply limitation of their context or the words
or phrases which precede or succeed them.
1.4 Headings Etc.
The division of this Indenture into Articles and Sections, the provision
of a Table of Contents and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation of this
Indenture or of the Debentures.
1.5 Day not a Business Day
In the event that any day on or before which any action required to be
taken hereunder is not a Business Day, then such action shall be required to be
taken on or before the requisite time on the next succeeding day that is a
Business Day.
1.6 Applicable Law
This Indenture and the Debentures shall be construed in accordance with
the laws of the Province of Ontario and the federal laws of Canada applicable
therein and shall be treated in all respects as Ontario contracts.
1.7 Monetary References
Whenever any amounts of money are referred to herein, such amounts shall
be deemed to be in lawful money of Canada unless otherwise expressed.
1.8 Invalidity, Etc.
Any provision hereof which is prohibited or unenforceable shall be
ineffective only to the extent of such prohibition or unenforceability, without
invalidating the remaining provisions hereof.
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1.9 Language
Each of the parties hereto hereby acknowledges that it has consented to
and requested that this Indenture and all documents relating thereto, including,
without limiting the generality of the foregoing, the form of Debenture attached
hereto as Schedule "A", be drawn up in the English language only.
1.10 Successors and Assigns
All covenants and agreements in this Indenture by the Corporation shall
bind its successors and assigns, whether expressed or not.
1.11 Benefits of Indenture
Nothing in this Indenture or in the Debentures, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, any paying agent and the holders of Debentures, any benefit or any
legal or equitable right, remedy or claim under this Indenture.
ARTICLE 2
THE DEBENTURES
2.1 Limit of Debentures
The aggregate principal amount of Debentures authorized to be issued under
this Indenture is unlimited, but Debentures may be issued only upon and subject
to the conditions and limitations herein set forth.
2.2 Terms of Debentures of any Series
The Debentures may be issued in one or more series. There shall be
established herein or in or pursuant to one or more indentures supplemental
hereto, prior to the initial issuance of Debentures of any particular series:
(a) the designation of the Debentures of the series (which need not
include the term "Debentures"), which shall distinguish the
Debentures of the series from the Debentures of all other series;
(b) any limit upon the aggregate principal amount of the Debentures of
the series that may be certified and delivered under this Indenture
(except for Debentures certified and delivered upon registration of,
transfer of, amendment of, or in exchange for, or in lieu of, other
Debentures of the series pursuant to Sections 2.9, 2.10, 3.2, 3.3
and 3.6);
(c) the date or dates on which the principal of the Debentures of the
series is payable;
(d) the rate or rates at which the Debentures of the series shall bear
interest, if any, the date or dates from which such interest shall
accrue, on which such interest shall be payable and on which a
record, if any, shall be taken for the determination of holders to
whom such interest shall be payable and/or the method or methods by
which such rate or rates or date or dates shall be determined;
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(e) the place or places where the principal of and any interest on
Debentures of the series shall be payable or where any Debentures of
the series may be surrendered for registration of transfer or
exchange;
(f) the right, if any, of the Corporation to redeem Debentures of the
series, in whole or in part, at its option and the period or periods
within which, the price or prices at which and any terms and
conditions upon which, Debentures of the series may be so redeemed,
pursuant to any sinking fund or otherwise;
(g) the obligation, if any, of the Corporation to redeem, purchase or
repay Debentures of the series pursuant to any mandatory redemption,
sinking fund or analogous provisions or at the option of a holder
thereof and the price or prices at which, the period or periods
within which, the date or dates on which, and any terms and
conditions upon which, Debentures of the series shall be redeemed,
purchased or repaid, in whole or in part, pursuant to such
obligations;
(h) if other than denominations of Cdn$1,000 and any integral multiple
thereof, the denominations in which Debentures of the series shall
be issuable;
(i) subject to the provisions of this Indenture, any trustees,
Depositories, authenticating or paying agents, transfer agents or
registrars or any other agents with respect to the Debentures of the
series;
(j) any other events of default or covenants with respect to the
Debentures of the series;
(k) whether and under what circumstances the Debentures of the series
will be convertible into or exchangeable for securities of any
Person;
(l) the form and terms of the Debentures of the series;
(m) if applicable, that the Debentures of the series shall be issuable
in whole or in part as one or more Global Debentures and, in such
case, the Depository or Depositories for such Global Debentures in
whose name the Global Debentures will be registered, and any
circumstances other than or in addition to those set forth in
Section 2.9 or 3.2 or those applicable with respect to any specific
series of Debentures, as the case may be, in which any such Global
Debenture may be exchanged for Fully Registered Debentures, or
transferred to and registered in the name of a person other than the
Depository for such Global Debentures or a nominee thereof;
(n) if other than Canadian currency, the currency in which the
Debentures of the series are issuable; and
(o) any other terms of the Debentures of the series (which terms shall
not be inconsistent with the provisions of this Indenture).
All Debentures of any one series shall be substantially identical, except
as may otherwise be established herein or by or pursuant to a resolution of the
Directors, Officer's Certificate or in an indenture supplemental hereto. All
Debentures of any one series need not be issued at the same time and may be
issued from time to time, including pursuant to a Periodic Offering, consistent
with the terms of this Indenture, if so provided herein, by or pursuant to such
resolution of the Directors, Officer's Certificate or in an indenture
supplemental hereto.
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2.3 Form of Debentures
Except in respect of the Initial Debentures, the form of which is provided
for herein, the Debentures of each series shall be substantially in such form or
forms (not inconsistent with this Indenture) as shall be established herein or
by or pursuant to one or more resolutions of the Directors (as set forth in a
resolution of the Directors or to the extent established pursuant to, rather
than set forth in, a resolution of the Directors, in an Officer's Certificate
detailing such establishment) or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture and may have
imprinted or otherwise reproduced thereon such legend or legends or
endorsements, not inconsistent with the provisions of this Indenture, as may be
required to comply with any law or with any rules or regulations pursuant
thereto or with any rules or regulations of any securities exchange or
securities regulatory authority or to conform to general usage, all as may be
determined by the director or officer of the Corporation executing such
Debentures, as conclusively evidenced by his or her execution of such
Debentures.
2.4 Form and Terms of Initial Debentures
(a) The principal amount of Initial Debentures authorized for issuance
is limited in the aggregate principal amount to Cdn$86,250,000 and
shall be designated as "6.0% Convertible Unsecured Subordinated
Debentures". An aggregate of Cdn$75,000,000 principal amount of
Initial Debentures will be issued on the Acquisition Closing Date
pursuant to the exchange of subscription receipts, each subscription
receipt representing the right to receive Cdn$1,000 principal amount
of Initial Debentures, and up to an aggregate of Cdn$11,250,000
principal amount of Initial Debentures may be issued pursuant to the
over-allotment option granted by the Corporation to the Underwriters
(as defined in the Subscription Receipt Agreement) of the Offering.
The subscription receipts will be issued pursuant to the
Subscription Receipt Agreement.
(b) The maturity date (the "Maturity Date") for the Initial Debentures
will be September 30, 2012. Holders of Initial Debentures will
receive, on the third Business Day following the Maturity Date, an
amount equal to the principal amount of the Initial Debentures, plus
the accrued and unpaid interest thereon to, but excluding the
Maturity Date. The Initial Debentures shall bear interest from and
including the date of issue at the rate of 6.0% per annum, payable
in equal semi-annual instalments, not in advance, on June 30 and
December 31 in each year, the first such payment to fall due on
December 31, 2007, payable after as well as before maturity and
after as well as before default, with interest on amounts in default
at the same rate, compounded semi-annually. The amount of interest
(the "Initial Interest Amount") payable on the first Interest
Payment Date of December 31, 2007 (the "Initial Interest Payment
Date") will include an additional amount (the "Additional Interest
Amount") equal to the amount of 0.016% of the principal amount of
the Initial Debentures per day (which is equivalent to 6.0% per
annum) from the Offering Closing Date until the date of issue of the
Initial Debentures, unless the effective rate of interest comprising
the Initial Interest Amount would infringe applicable legislation
(in which case the actual Initial Interest Amount will include only
such amount as will not infringe applicable legislation, and the
amount payable on each subsequent Interest Payment Date will be
increased by the maximum permissible amount, until the full
Additional Interest Amount has been paid). For the avoidance of
doubt, no portion of the Initial Interest Amount shall accrue before
the date of issue of the Initial Debentures.
(c) The Initial Debentures will be redeemable in accordance with the
terms of Article 4 of the Indenture, provided that the Initial
Debentures will not be redeemable on or before
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September 30, 2011. After September 30, 2011 and on or before the
Maturity Date, the Initial Debentures may be redeemed in whole or in
part from time to time at the option of the Corporation at a price
equal to their Redemption Price on notice as provided for in Section
4.3 of this Indenture provided that the Current Market Price on the
date on which such notice of redemption is given is at least 125% of
the Conversion Price (as stated in subsection 2.4(e) of this
Indenture) in respect of the Initial Debentures and the Corporation
shall have provided to the Debenture Trustee an Officer's
Certificate confirming such Current Market Price. The Redemption
Price for the Initial Debentures will be a price equal to their
principal amount plus accrued and unpaid interest thereon. The
Redemption Notice for the Initial Debentures shall be in the form of
Schedule "B" to this Indenture.
(d) The Initial Debentures will be subordinated to the Senior
Indebtedness of the Corporation in accordance with the provisions of
Article 5 to the Indenture. The Initial Debentures will rank pari
passu with each other Debenture in accordance with Section 2.12 of
this Indenture.
(e) Upon and subject to the provisions and conditions of Article 6 of
the Indenture, the holder of each Initial Debenture shall have the
right at such holder's option, at any time prior to the close of
business on the Maturity Date or, if called for redemption, prior to
the close of business on the last Business Day immediately preceding
the date specified by the Corporation for redemption of the Initial
Debentures by notice to the holders of Initial Debentures in
accordance with subsection 2.4(c) and Section 4.3 of this Indenture
(the earlier of which will be the "Time of Expiry" for the purposes
of Article 6 of this Indenture in respect of the Initial
Debentures), to convert the whole or, in the case of an Initial
Debenture of a denomination in excess of Cdn$1,000, any part which
is Cdn$1,000 or an integral multiple thereof, of the principal
amount of such Initial Debenture into fully paid, non-assessable and
Freely Tradeable Common Shares at the Conversion Price in respect of
the Initial Debentures in effect on the date (herein called the
"Date of Conversion") on which it is so surrendered in accordance
with the provisions of this Indenture. Holders converting their
Initial Debentures shall become holders of record of Common Shares
on the Business Day immediately after the Date of Conversion.
Notwithstanding the foregoing, no Initial Debentures may be
converted during the five Business Days preceding June 30 and
December 31 each year.
The Conversion Price in effect on the date hereof for each Common
Share to be issued upon the conversion of Initial Debentures shall
be Cdn$2.45, representing a Conversion Rate of 408.1633 Common
Shares. No adjustment will be made for dividends on Common Shares
issuable upon conversion or for interest accrued on Initial
Debentures surrendered for conversion, however, holders converting
their Initial Debentures will receive a cash payment for interest
that has accrued but not been paid from the most recently completed
Interest Payment Date to, but excluding, the Date of Conversion.
Holders converting their Initial Debentures on an Interest Payment
Date will receive the respective interest payment. The Conversion
Price applicable to the Common Shares, securities or other property
receivable on the conversion of the Initial Debentures is subject to
adjustment pursuant to the provisions of Section 6.5.
(f) Make Whole Amount
(i) Subject to the provisions hereof, if a Change of Control
occurs in which more than 10% of the consideration for the
Common Shares in the transaction(s) constituting the Change of
Control consists of (i) cash other than cash payments for
fractional
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Common Shares and cash payments made in respect of dissenter's
appraisal rights, or (ii) equity securities or other property
not listed on a recognized stock exchange, the Corporation
will issue upon conversion the number of shares otherwise
issuable in accordance with the applicable Conversion Rate
plus, subject to the prior approval of any relevant stock
exchange, a certain number of additional shares determined by
reference to the table in subsection 2.4(f)(iii) (the
"Additional Shares") on conversion to effect payment of a make
whole amount (the "Make Whole Amount") to the holders of
Initial Debentures who convert their Initial Debentures at any
time during the period that is 10 Trading Days prior to the
Change of Control Effective Date and ending on the date that
is the Change of Control Purchase Date; provided that
notwithstanding any other provisions hereof, such Additional
Shares shall be issued solely in respect of a conversion of
Initial Debentures hereunder.
(ii) The number of Additional Shares per Cdn$1,000 principal amount
of Initial Debentures constituting the Make Whole Amount shall
be determined by reference to the table in subsection
2.4(f)(iii) and will be based on the Change of Control
Effective Date and the price paid per Common Share in the
transaction constituting the Change of Control (the "Share
Price"). If holders of the Common Shares receive only cash in
the transaction constituting the Change of Control, the Share
Price shall be equal to the cash amount paid per Common Share;
in all other cases, the Share Price shall be equal to the
Current Market Price immediately preceding the applicable
Change of Control Effective Date; provided, however, that if
the Share Price or the applicable Change of Control Effective
Date are not set forth in the table in subsection 2.4(f)(iii)
then, in such event:
(I) if the actual Share Price on the Change of Control
Effective Date is between two Share Price amounts on the
table or the Change of Control Effective Date is between
two dates on the table, the number of Additional Shares
will be determined by straight-line interpolation
between the number of Additional Shares set forth for
the higher and lower Share Price amounts and the two
dates, as applicable, based on a 365-day year;
(II) if the Share Price on the Change of Control Effective
Date is in excess of Cdn$8.00 per Common Share (subject
to adjustment as described in subsection 2.4(f)(v)), no
Additional Shares shall be issued in respect of the Make
Whole Amount; and
(III) if the Share Price on the Change of Control Effective
Date is less than Cdn$1.81 per Common Share (subject to
adjustment as described in subsection 2.4(f)(v)), no
Make Whole Amount shall be paid.
(iii) The following table sets forth the Share Price and number of
Additional Shares issuable on conversion per Cdn$1,000
principal amount of Convertible Debentures:
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Make Whole Amount upon a Change of Control
(Number of Additional Shares per Cdn$1,000 of Initial Debentures)
Share Price on Change of Control Effective Date
Change of Control Cdn$1.81 Cdn$2.00 Cdn$2.50 Cdn$3.00 Cdn$3.50 Cdn$4.00 Cdn$4.50 Cdn$5.00 Cdn$6.00 Cdn$7.00 Cdn$8.00
Effective Date
July 17, 2007 144.322 115.770 73.210 52.917 41.361 33.684 28.025 23.600 17.028 12.362 8.899
July 17, 2008 136.424 105.781 61.732 42.533 32.635 26.483 22.073 18.650 13.570 9.953 7.251
July 17, 2009 130.589 96.813 49.789 31.137 22.884 18.401 15.360 13.023 9.555 7.081 5.227
July 17, 2010 127.697 89.158 37.513 18.541 11.831 9.303 7.794 6.636 4.907 3.673 2.747
July 17, 2011 131.078 84.609 24.919 5.761 0.000 0.000 0.000 0.000 0.000 0.000 0.000
July 17, 2012 144.323 91.836 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
(iv) Notwithstanding the foregoing, in no event will the total
number of Common Shares issuable upon conversion exceed
552.523 per Cdn$1,000 principal amount of Initial Debentures,
subject to adjustment in the same manner as the Conversion
Price as set forth in Section 6.5 except that such adjustment
shall be the inverse of the adjustment made to the Conversion
Price.
(v) The Share Prices set forth in the first row of the table in
subsection 2.4(f)(iii) will be adjusted as of any date on
which the Conversion Price of the Initial Debentures is
adjusted pursuant to Section 6.5. The adjusted Share Prices
will equal the Share Prices applicable immediately prior to
such adjustment multiplied by a fraction, the numerator of
which is the Conversion Price immediately subsequent to the
adjustment giving rise to the Share Price adjustment and the
denominator of which is the Conversion Price immediately prior
to the adjustment. The number of Additional Shares will be
adjusted in the same manner as the Conversion Price pursuant
to Section 6.5, except that such adjustment shall be the
inverse of the adjustment made to the Conversion Price.
(vi) For the avoidance of doubt, the Corporation shall not be
obliged to pay the Make Whole Amount otherwise than by the
issuance of Additional Shares upon conversion. By delivering
the number of Common Shares issuable on conversion to the
Debenture Trustee, the Corporation shall be deemed to have
satisfied its obligation to pay the principal amount of the
Initial Debentures so converted.
(g) Notwithstanding the foregoing, it will not constitute a Change of
Control if at least 90% of the consideration for the Common Shares
(excluding cash payments for fractional Common Shares and cash
payments made in respect of dissenters' appraisal rights) in the
transaction(s) constituting the Change of Control consists of common
shares traded on the Toronto Stock Exchange, or a U.S. national
securities exchange, or which will be so traded when issued or
exchanged in connection with the Change of Control, and as a result
of such transaction(s) the Debentures become convertible solely into
such shares; provided, however, that if prior to the date that is
five years plus one day from the last date of original issuance of
the Initial Debentures, holders of Initial Debentures would
otherwise be entitled to receive, upon conversion of the Initial
Debentures, any ineligible consideration, such holders shall not be
entitled to receive such ineligible consideration but the
Corporation or the successor or acquiror, as the case may be, shall
have the right (at the sole option of the Corporation or the
successor or acquiror, as the case may be) to deliver either such
ineligible consideration or "prescribed securities" for the purposes
of clause 212(l)(b)(vii)(E) of the Tax Act with a market value equal
to the market value of such ineligible consideration.
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(h) On redemption or on maturity of the Initial Debentures, the
Corporation may, at its option and subject to the provisions of
Sections 4.6 and 4.10 of the Indenture as applicable, and subject to
regulatory approval, elect to satisfy its obligation to pay all or a
portion of the principal amount of the Initial Debentures by issuing
and delivering to the holders of Initial Debentures fully paid,
non-assessable and Freely Tradeable Common Shares. If the
Corporation elects to exercise such option, it shall deliver a
maturity notice (the "Maturity Notice") to the holders of the
Initial Debentures in the form of Schedule "C". Notwithstanding the
foregoing, the Corporation may not issue Common Shares to satisfy
its interest payment obligations on the Maturity Date.
(i) The Initial Debentures shall be issued in denominations of Cdn$1,000
and integral multiples of Cdn$1,000 and the Debenture Trustee is
hereby appointed as registrar and transfer agent for the Initial
Debentures. Each Initial Debenture and the certificate of the
Debenture Trustee endorsed thereon shall be issued in substantially
the form set out in Schedule "A" to this Indenture, and may have
imprinted or otherwise reproduced thereon such legend or legends or
endorsements, not inconsistent with the provisions of this
Indenture, as may be required to comply with any law or with any
rules or regulations pursuant thereto or with any rules or
regulations of any securities exchange or securities regulatory
authority or to conform with general usage, all as may be determined
by the director or officer of the Corporation executing such Initial
Debenture in accordance with Section 2.7 of the Indenture, as
conclusively evidenced by his or her execution of an Initial
Debenture. Each Initial Debenture shall additionally bear such
distinguishing letters and numbers as the Debenture Trustee shall
approve. Notwithstanding the foregoing, an Initial Debenture may be
in such other form or forms as may, from time to time, be approved
by a resolution of the Directors or as specified in an Officer's
Certificate. The Initial Debentures may be engraved, lithographed,
printed, mimeographed or typewritten or partly in one form and
partly in another.
The Initial Debentures shall be issued as Global Debentures and the
Depository for the Initial Debentures shall be CDS Clearing and
Depository Services Inc. The Global Debentures shall be registered
in the name of the Depository (or any nominee of the Depository). No
beneficial holder will receive definitive certificates representing
their interest in Initial Debentures except as provided in Section
3.2 of the Indenture. A Global Debenture may be exchanged for
Initial Debentures in registered form that are not Global
Debentures, or transferred to and registered in the name of a person
other than the Depository for such Global Debentures or nominee
thereof as provided in Section 3.2 of the Indenture.
(j) Upon and subject to the provisions and conditions of Article 10 of
the Indenture, the Corporation may elect, from time to time, to
satisfy all or any part of the Interest Obligation on the Initial
Debentures on any Interest Payment Date (other than interest payment
obligations on the Maturity Date) by delivering Common Shares to the
Debenture Trustee.
(k) Change of Control:
(i) If a Change of Control occurs prior to the Maturity Date
(subject to the provisions of subsection 6.5(d)), the
Corporation shall, subject to its rights in the event of a
Public Acquiror Change of Control and its obligation to issue
Additional Shares on conversion to effect payment of a Make
Whole Amount in the circumstances described in subsection
2.4(f)(i), offer (the "Change of Control Purchase Offer") to
purchase all of the outstanding Initial Debentures at the
Change of Control Purchase Price on the date that is 30
Business Days after the date of the Change of
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Control Corporation Notice provided pursuant to subsection
2.4(k)(ii) (the "Change of Control Purchase Date").
(ii) On or before the 10th day after the Corporation knows of the
occurrence of a Change of Control, the Corporation shall mail
a written notice of the Change of Control setting out the
terms of the Change of Control Purchase Offer to the Debenture
Trustee and to each Debentureholder (and to beneficial owners
as required by applicable law) (the "Change of Control
Corporation Notice"). The Change of Control Corporation Notice
shall include the form of a Change of Control Purchase Notice
(as defined in subsection 2.4(k)(iii)) to be completed by the
Debentureholder and shall state:
(I) the events causing such Change of Control;
(II) the Change of Control Effective Date;
(III) the last date by which the Change of Control Purchase
Notice must be delivered to accept the Change of Control
Purchase Offer pursuant to this subsection 2.4(k);
(IV) the Change of Control Purchase Date;
(V) the Change of Control Purchase Price;
(VI) the Debentureholder's right to accept the Change of
Control Purchase Offer;
(VII) the name and address of the Debenture Trustee;
(VIII) the then effective Conversion Price and any adjustments
to the Conversion Price resulting from such Change of
Control;
(IX) the procedures that the Debentureholder must follow to
exercise rights under Article 6 and that Initial
Debentures as to which a Change of Control Purchase
Notice has been given may be converted into Common
Shares pursuant to Article 6 of this Indenture only to
the extent that the Change of Control Purchase Notice
has been withdrawn in accordance with the terms of this
Indenture;
(X) the procedures that the Debentureholder must follow to
accept the Change of Control Purchase Offer;
(XI) the procedures for withdrawing a Change of Control
Purchase Notice;
(XII) that, unless the Corporation fails to pay such Change of
Control Purchase Price, Initial Debentures covered by
any Change of Control Purchase Notice will cease to be
outstanding and interest will cease to accrue on and
after the Change of Control Purchase Date; and
(XIII) the CUSIP number of the Initial Debentures.
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At the Corporation's request, the Debenture Trustee shall give
such Change of Control Corporation Notice in the Corporation's
name and at the Corporation's expense; provided, that, in all
cases, the text of such Change of Control Corporation Notice
shall be prepared by the Corporation.
(iii) A Debentureholder may exercise its rights specified in this
subsection 2.4(k) upon delivery of a written notice (which
shall be in substantially the form attached as Schedule "D"
under the heading "Change of Control Purchase Notice" and
which may be delivered by letter, overnight courier, hand
delivery, facsimile transmission or in any other written form)
of the exercise of such rights (a "Change of Control Purchase
Notice") to the Corporation or the Debenture Trustee not less
than five Business Days prior to the Change of Control
Purchase Date, subject to extension to comply with applicable
law.
(I) The Change of Control Purchase Notice shall state: (A)
the certificate number (if such Initial Debenture is
held other than in global form) of the Initial Debenture
which the Debentureholder will deliver to be purchased,
(B) the portion of the principal amount of the Initial
Debenture which the Debentureholder will deliver to be
purchased and (C) that such Initial Debenture shall be
purchased as of the Change of Control Purchase Date
pursuant to the Change of Control Purchase Offer.
(II) The delivery of an Initial Debenture for which a Change
of Control Purchase Notice has been timely delivered to
and actually received by the Debenture Trustee and not
validly withdrawn prior to the Change of Control
Purchase Date (together with all necessary endorsements)
at the office of such Debenture Trustee shall be a
condition to the receipt by the Debentureholder of the
Change of Control Purchase Price therefor.
(III) The Corporation shall only offer to purchase, pursuant
to this subsection 2.4(k), a portion of an Initial
Debenture if the principal amount of such portion is
Cdn$1,000 or an integral multiple of Cdn$1,000
(provisions of this Indenture that apply to the purchase
of all of an Initial Debenture also apply to the
purchase of such portion of such Initial Debenture).
(IV) Notwithstanding anything herein to the contrary, any
Debentureholder delivering to the Debenture Trustee the
Change of Control Purchase Notice contemplated by this
subsection 2.4(k)(iii) shall have the right to withdraw
such Change of Control Purchase Notice in whole or in a
portion thereof that is a principal amount of Cdn$1,000
or in an integral multiple thereof at any time prior to
the close of business on the fifth Business Day
immediately preceding the Change of Control Purchase
Date by delivery of a written notice of withdrawal to
the Debenture Trustee in accordance with subsection
2.4(l)(ii).
(V) The Debenture Trustee shall promptly notify the
Corporation of the receipt by it of any Change of
Control Purchase Notice or written withdrawal thereof.
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(iv) Anything herein to the contrary notwithstanding, in the case
of Global Debentures, any Change of Control Purchase Notice
may be delivered or withdrawn and such Initial Debentures may
be surrendered or delivered for purchase in accordance with
the Applicable Procedures in effect from time to time.
(v) If 90% or more in aggregate principal amount of the Initial
Debentures outstanding on the date of the giving of the Change
of Control Corporation Notice have been tendered for purchase
on the Change of Control Purchase Date, the Corporation will
have the right to redeem all the remaining Initial Debentures
on such date at the Change of Control Purchase Price. Notice
of such redemption must be given by the Corporation to the
Debenture Trustee prior to the Change of Control Purchase
Date, and as soon as possible thereafter, by the Debenture
Trustee to the holders of the Initial Debentures not tendered
for purchase.
(vi) If a Change of Control also constitutes a Public Acquiror
Change of Control, instead of making a Change of Control
Purchase Offer for the Change of Control Purchase Price, and
instead of issuing Additional Shares, if applicable, on
conversion to effect payment of a Make Whole Amount, the
Corporation may elect to adjust the Conversion Price and
related conversion obligation such that, from and after the
Change of Control Effective Date of the Public Acquiror Change
of Control, the Initial Debentures will be convertible into
Public Acquiror Shares provided, however, that if prior to the
date that is five years plus one day from the last date of
original issuance of each of the Initial Debentures,
Debentureholders would otherwise be entitled to receive, upon
conversion of any Initial Debentures, any property (including
cash) or securities that would not constitute "prescribed
securities" for the purposes of clause 212(1)(b)(vii)(E) of
the Tax Act ("ineligible consideration"), such holders shall
not be entitled to receive such ineligible consideration but
the Corporation, or its successor or acquiror, as the case may
be, shall have the right (at the sole option of the
Corporation, or its successor or acquiror, as the case may
be,) to deliver either such ineligible consideration or
"prescribed securities" for the purposes of clause
212(1)(b)(vii)(E) of the Tax Act with a market value equal to
the market value of such ineligible consideration.
In the event that the Corporation makes an election subject to
subsection 2.4(k)(vi) hereof, the Corporation shall not be
required to make a Change of Control Purchase Offer and the
Conversion Price shall be adjusted by multiplying the
Conversion Price in effect immediately before the Public
Acquiror Change of Control by the following fraction:
(I) the numerator of which will be the volume-weighted
average of the trading prices of the Public Acquiror
Shares for the five consecutive Trading Days prior to,
or if the Public Acquiror Shares do not trade until
after the Change of Control Effective Date of such
Public Acquiror Change of Control, the five consecutive
Trading Days subsequent to, but excluding the Change of
Control Effective Date of such Public Acquiror Change of
Control; and
(II) the denominator of which will be (1) in the case of a
merger, consolidation, amalgamation, arrangement or
binding share exchange pursuant to which Common Shares
are converted into cash, securities or other property,
the value of all cash and any other consideration, as
determined by the Directors, payable per Common Share,
or (2) in the case of any other Public
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Acquiror Change of Control, the volume-weighted average
of the trading prices of the Common Shares for the five
consecutive Trading Days immediately prior to, but
excluding the Change of Control Effective Date of such
Public Acquiror Change of Control.
Not later than 10 Trading Days prior to the expected Change of
Control Effective Date of a Public Acquiror Change of Control,
the Corporation shall provide to all Debentureholders and the
Debenture Trustee a notification (a "Public Acquisition
Notice") stating whether the Corporation shall:
(I) elect to adjust the Conversion Price and related
conversion obligation under subsection 2.4(k)(vi), in
which case the Corporation will not be required to make
a Change of Control Purchase Offer or mail a Change of
Control Corporation Notice, or
(II) not elect to adjust the Conversion Price and related
conversion obligation under subsection 2.4(k)(vi), in
which case the Corporation will be required to make a
Change of Control Purchase Offer.
(vii) The Corporation shall deposit cash at the time and in the
manner as provided in subsection 2.4(m), sufficient to pay the
aggregate Change of Control Purchase Price of all Initial
Debentures to be purchased pursuant to this subsection 2.4(k).
(l) Effect of Change of Control Purchase Notice:
(i) Upon receipt by the Debenture Trustee of a properly completed
Change of Control Purchase Notice from a Debentureholder, the
Debentureholder of the Initial Debenture in respect of which
such Change of Control Purchase Notice was given shall (unless
such Change of Control Purchase Notice is withdrawn as
specified in subsection 2.4(l)(ii)) thereafter be entitled to
receive the Change of Control Purchase Price with respect to
such Initial Debenture, subject to the occurrence of the
Change of Control Effective Date. Such Change of Control
Purchase Price shall be paid to such Debentureholder promptly
following the later of (1) the Change of Control Purchase Date
(provided that the conditions in subsection 2.4(k) have been
satisfied) and (2) the time of delivery of such Initial
Debenture to and actual receipt thereof by the Debenture
Trustee in the manner required by subsection 2.4(k)(iii).
Initial Debentures in respect of which a Change of Control
Purchase Notice has been given by the Debentureholder thereof
may not be converted into Common Shares pursuant to Article 6
on or after the date of the delivery of such Change of Control
Purchase Notice unless such Change of Control Purchase Notice
has first been validly withdrawn in accordance with subsection
2.4(l)(ii)) with respect to the Initial Debentures to be
converted.
(ii) A Change of Control Purchase Notice may be withdrawn by means
of a written notice (which may be delivered by mail, overnight
courier, hand delivery, facsimile transmission or in any other
written form) of withdrawal delivered by the Debentureholder
to the Debenture Trustee at any time prior to the close of
business on the fifth Business Day immediately preceding the
Change of Control Purchase Date, specifying (1) the principal
amount of the Initial Debenture or portion thereof (which must
be a principal amount of Cdn$1,000 or an integral multiple of
Cdn$1,000 in excess thereof) with respect to which such notice
of withdrawal is
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being submitted, (2) if certificated Debentures have been
issued, the certificate number of the Initial Debenture being
withdrawn in whole or in part, and (3) the portion of the
principal amount of the Initial Debenture that will remain
subject to the Change of Control Purchase Notice, which
portion must be a principal amount of Cdn$1,000 or an integral
multiple thereof.
(m) Deposit of Change of Control Purchase Price:
(i) At or before 11:00 a.m. Toronto time on the Business Day
preceding the applicable Change of Control Purchase Date, the
Corporation shall deposit with the Debenture Trustee an amount
of money (in immediately available funds), sufficient to pay
the aggregate Change of Control Purchase Price of all the
Initial Debentures or portions thereof that are to be
purchased as of the Change of Control Purchase Date.
(ii) If the Debenture Trustee holds, in accordance with the terms
hereof, money sufficient to pay the Change of Control Purchase
Price of any Initial Debenture for which a Change of Control
Purchase Notice has been tendered and not withdrawn in
accordance with this Indenture then, on the Change of Control
Purchase Date, such Initial Debenture will cease to be
outstanding, whether or not the Initial Debenture is delivered
to the Debenture Trustee, and interest shall cease to accrue,
and the rights of the Debentureholder in respect of the
Initial Debenture shall terminate (other than the right to
receive the Change of Control Purchase Price as aforesaid).
The Corporation shall publicly announce the principal amount
of Initial Debentures purchased on or as soon as practicable
after the Change of Control Purchase Date.
(iii) The Debenture Trustee will promptly return to the respective
Debentureholders thereof any Initial Debentures with respect
to which a Change of Control Purchase Notice has been
withdrawn in compliance with this Indenture.
(iv) If a Change of Control Purchase Date falls after a Regular
Record Date and on or before the related Interest Payment
Date, then interest on the Initial Debentures payable on such
Interest Payment Date will instead be payable on such Interest
Payment Date to the Debentureholders in whose names the
Initial Debentures are registered at the close of business on
such Regular Record Date.
(n) To the extent that the aggregate amount of cash deposited by the
Corporation pursuant to subsection 2.4(m) exceeds the aggregate
Change of Control Purchase Price of the Initial Debentures that the
Corporation is obligated to purchase, then promptly after the Change
of Control Purchase Date the Debenture Trustee shall return any such
excess cash to the Corporation.
(o) Redemption for Withholding Tax Reasons:
(i) The Corporation may at any time, in accordance with the
procedure described at Article 4 of this Indenture, redeem in
whole but not in part the outstanding Initial Debentures at a
redemption price of 100% of the principal amount thereof plus
accrued interest, if any, to the date of redemption but
without reduction for applicable Canadian Taxes (except in
respect of Excluded Holders and other than Excluded Taxes) if
it has become or would become obligated on or before the next
Interest Payment Date to pay any Additional Amounts in respect
of the Initial Debentures as a result of any change from the
date hereof in any laws or regulations
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of Canada or any political subdivision or taxing authority
thereof (including any proposed amendment thereto), or any
change from the date hereof in any interpretation or
application of such laws or regulations by any legislative
body, court, governmental agency, taxing authority or
regulatory authority (including any such change resulting from
the enactment of any legislation or the publication of any
judicial decision or regulatory or administrative
determination) of Canada or any political subdivision or
taxing authority thereof; provided however that the
Corporation cannot avoid the obligation to pay the Additional
Amounts by taking reasonable measures available to it and that
the Corporation delivers to the Debenture Trustee an opinion
of legal counsel specializing in Canadian federal income
taxation confirming that such change results in an obligation
to pay the Additional Amounts. Subject to satisfaction of
certain conditions, the Corporation may elect to satisfy its
obligation to pay the redemption price, in whole or in part,
by delivering Common Shares as further described in Section
4.6 of this Indenture.
(ii) Upon receiving such notice of redemption, each holder who does
not wish to have the Corporation redeem its Initial Debentures
will have the right to elect to:
(I) convert its Initial Debentures in accordance with
Article 6 of this Indenture; or
(II) not have its Initial Debentures redeemed, provided that
no Additional Amounts will be payable on any payment of
interest or principal with respect to the Initial
Debentures after such redemption date. All future
payments will be subject to the deduction or withholding
of any tax required by law to be deducted or withheld.
(iii) Where no election is made, the holder will have its Initial
Debentures redeemed without any further action. If a holder
does not elect to convert its Initial Debentures but wishes to
elect not to have its Initial Debentures redeemed, such holder
must deliver to the Debenture Trustee a written notice of
election as set out in Schedule "E" or any other form of
written notice substantially similar to such notice of
election, in each case duly dated and signed, so as to be
received by the Debenture Trustee no later than the close of
business on a Business Day at least five Business Days prior
to the redemption date. A holder may withdraw any notice of
election by delivering to the Debenture Trustee a written
notice of withdrawal prior to the close of business on the
Business Day prior to the redemption date.
2.5 Certification and Delivery of Additional Debentures
The Corporation may from time to time request the Debenture Trustee to
certify and deliver Additional Debentures of any series by delivering to the
Debenture Trustee the documents referred to below in this Section 2.5 whereupon
the Debenture Trustee shall certify such Debentures and cause the same to be
delivered in accordance with the Written Direction of the Corporation referred
to below or pursuant to such procedures acceptable to the Debenture Trustee as
may be specified from time to time by a Written Direction of the Corporation.
The maturity date, issue date, interest rate (if any) and any other terms of the
Debentures of such series shall be set forth in or determined by or pursuant to
such Written Direction of the Corporation and procedures. In certifying such
Debentures, the Debenture Trustee shall be entitled to receive and shall be
fully protected in relying upon, unless and until such documents have been
superseded or revoked:
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(a) an Officer's Certificate and/or executed supplemental indenture by
or pursuant to which the form and terms of such Additional
Debentures were established;
(b) a Written Direction of the Corporation requesting certification and
delivery of such Additional Debentures and setting forth delivery
instructions, provided that, with respect to Debentures of a series
subject to a Periodic Offering:
(i) such Written Direction of the Corporation may be delivered by
the Corporation to the Debenture Trustee prior to the delivery
to the Debenture Trustee of such Additional Debentures of such
series for certification and delivery;
(ii) the Debenture Trustee shall certify and deliver Additional
Debentures of such series for original issue from time to
time, in an aggregate principal amount not exceeding the
aggregate principal amount, if any, established for such
series, pursuant to a Written Direction of the Corporation or
pursuant to procedures acceptable to the Debenture Trustee as
may be specified from time to time by a Written Direction of
the Corporation;
(iii) the maturity date or dates, issue date or dates, interest rate
or rates (if any) and any other terms of Additional Debentures
of such series shall be determined by an executed supplemental
indenture or by Written Direction of the Corporation or
pursuant to such procedures; and
(iv) if provided for in such procedures, such Written Direction of
the Corporation may authorize certification and delivery
pursuant to oral or electronic instructions from the
Corporation which oral or electronic instructions shall be
promptly confirmed in writing;
(c) an opinion of Counsel, in form and substance satisfactory to the
Debenture Trustee, acting reasonably, to the effect that all
requirements imposed by this Indenture or by law in connection with
the proposed issue of Additional Debentures have been complied with,
subject to the delivery of certain documents or instruments
specified in such opinion; and
(d) an Officer's Certificate certifying that the Corporation is not in
default under this Indenture, that the terms and conditions for the
certification and delivery of Additional Debentures (including those
set forth in Section 15.6 and the requirements of the CBCA), have
been complied with subject to the delivery of any documents or
instruments specified in such Officer's Certificate and that no
Event of Default exists or will exist upon such certification and
delivery.
2.6 Issue of Global Debentures
(a) The Corporation may specify that the Debentures of a series are to
be issued in whole or in part as one or more Global Debentures
registered in the name of a Depository, or its nominee, designated
by the Corporation in the Written Direction of the Corporation
delivered to the Debenture Trustee at the time of issue of such
Debentures, and in such event the Corporation shall execute and the
Debenture Trustee shall certify and deliver one or more Global
Debentures that shall:
(i) represent an aggregate amount equal to the principal amount of
the outstanding Debentures of such series to be represented by
one or more Global Debentures;
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(ii) be delivered by the Debenture Trustee to such Depository or
pursuant to such Depository's instructions; and
(iii) bear a legend substantially to the following effect:
"This Debenture is a Global Debenture within the meaning of the
Indenture herein referred to and is registered in the name of a
Depository or a nominee thereof. This Debenture may not be
transferred to or exchanged for Debentures registered in the name of
any person other than the Depository or a nominee thereof and no
such transfer may be registered except in the limited circumstances
described in the Trust Indenture dated as of the [30th] day of July,
2007 between Zarlink Semiconductor Inc. and Computershare Trust
Company of Canada (the "Indenture"). Every Debenture authenticated
and delivered upon registration of, transfer of, or in exchange for,
or in lieu of, this Debenture shall be a Global Debenture subject to
the foregoing, except in such limited circumstances described in the
Indenture."
(b) Each Depository designated for a Global Debenture must, at the time
of its designation and at all times while it serves as such
Depository, be a clearing agency registered or designated under the
securities legislation of the jurisdiction where the Depository has
its principal offices.
2.7 Execution of Debentures
All Debentures shall be signed (either manually or by facsimile signature)
by any one authorized director or officer of the Corporation, holding office at
the time of signing. A facsimile signature upon a Debenture shall for all
purposes of this Indenture be deemed to be the signature of the person whose
signature it purports to be. Notwithstanding that any person whose signature,
either manual or in facsimile, appears on a Debenture as a director or officer
of the Corporation, may no longer hold such office at the date of the Debenture
or at the date of the certification and delivery thereof, such Debenture shall
be valid and binding upon the Corporation and entitled to the benefits of this
Indenture.
2.8 Certification
No Debenture shall be issued or, if issued, shall be obligatory or shall
entitle the holder to the benefits of this Indenture, until it has been manually
certified by or on behalf of the Debenture Trustee substantially in the form set
out in this Indenture, in the relevant supplemental indenture, or in some other
form approved by the Debenture Trustee. Such certification on any Debenture
shall be conclusive evidence that such Debenture is duly issued, is a valid
obligation of the Corporation and the holder is entitled to the benefits hereof.
The certificate of the Debenture Trustee signed on the Debentures, or
interim Debentures hereinafter mentioned, shall not be construed as a
representation or warranty by the Debenture Trustee as to the validity of this
Indenture or of the Debentures or interim Debentures or as to the issuance of
the Debentures or interim Debentures and the Debenture Trustee shall in no
respect be liable or answerable for the use made of the Debentures or interim
Debentures or any of them or the proceeds thereof. The certificate of the
Debenture Trustee signed on the Debentures or interim Debentures shall, however,
be a representation and warranty by the Debenture Trustee that the Debentures or
interim Debentures have been duly certified by or on behalf of the Debenture
Trustee pursuant to the provisions of this Indenture.
2.9 Interim Debentures or Certificates
Pending the delivery of definitive Debentures of any series to the
Debenture Trustee, the Corporation may issue and the Debenture Trustee may
certify in lieu thereof interim Debentures in such
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forms and in such denominations and signed in such manner as provided herein,
entitling the holders thereof to definitive Debentures of the series when the
same are ready for delivery; or the Corporation may execute and the Debenture
Trustee may certify a temporary Debenture for the whole principal amount of
Debentures of the series then authorized to be issued hereunder and deliver the
same to the Debenture Trustee and thereupon the Debenture Trustee may issue its
own interim certificates in such form and in such amounts, not exceeding in the
aggregate the principal amount of the temporary Debenture so delivered to it, as
the Corporation or the Corporation, on behalf of the Corporation, and the
Debenture Trustee may approve entitling the holders thereof to definitive
Debentures of the series when the same are ready for delivery; and, when so
issued and certified, such interim or temporary Debentures or interim
certificates shall, for all purposes but without duplication, rank in respect of
this Indenture equally with Debentures duly issued hereunder and, pending the
exchange thereof for definitive Debentures, the holders of the interim or
temporary Debentures or interim certificates shall be deemed without duplication
to be Debentureholders and entitled to the benefit of this Indenture to the same
extent and in the same manner as though the said exchange had actually been
made. Forthwith after the Corporation shall have delivered the definitive
Debentures to the Debenture Trustee, the Debenture Trustee shall cancel such
temporary Debentures, if any, and shall call in for exchange all interim
Debentures or certificates that shall have been issued and forthwith after such
exchange shall cancel the same. No charge shall be made by the Corporation or
the Debenture Trustee to the holders of such interim or temporary Debentures or
interim certificates for the exchange thereof. All interest paid upon interim or
temporary Debentures or interim certificates shall be noted thereon as a
condition precedent to such payment unless paid by cheque to the registered
holders thereof.
2.10 Mutilation, Loss, Theft or Destruction
In case any of the Debentures issued hereunder shall become mutilated or
be lost, stolen or destroyed, the Corporation, in its discretion, may issue, and
thereupon the Debenture Trustee shall certify and deliver, a new Debenture upon
surrender and cancellation of the mutilated Debenture, or in the case of a lost,
stolen or destroyed Debenture, in lieu of and in substitution for the same, and
the substituted Debenture shall be in a form approved by the Debenture Trustee
and shall be entitled to the benefits of this Indenture and rank equally in
accordance with its terms with all other Debentures issued or to be issued
hereunder. In case of loss, theft or destruction the applicant for a substituted
Debenture shall furnish to the Corporation and to the Debenture Trustee such
evidence of the loss, theft or destruction of the Debenture as shall be
satisfactory to them in their discretion and shall also furnish a surety bond
and an indemnity satisfactory to them in their discretion. The applicant shall
pay all reasonable expenses incidental to the issuance of any substituted
Debenture.
2.11 Concerning Interest
(a) All Debentures issued hereunder, whether originally or upon exchange
or in substitution for previously issued Debentures which are
interest bearing, shall bear interest (i) from and including their
issue date, or (ii) from and including the last Interest Payment
Date to which interest shall have been paid or made available for
payment on the outstanding Debentures of that series, whichever
shall be the later, or, in respect of Debentures subject to a
Periodic Offering, from and including their issue date or from and
including the last Interest Payment Date to which interest shall
have been paid or made available for payment on such Debentures, in
all cases, to but excluding the next Interest Payment Date.
(b) Unless otherwise specifically provided in the terms of the
Debentures of any series, interest for any period of less than six
months shall be computed on the basis of a year of 365 days. Subject
to subsection 2.4(b) in respect of the method for calculating the
Initial Interest Amount to be paid on the Initial Debentures on the
first Interest Payment Date in respect thereof, with respect to any
series of Debentures, whenever interest is computed on a basis of
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a year (the "deemed year") which contains fewer days than the actual
number of days in the calendar year of calculation, such rate of
interest shall be expressed as a yearly rate for purposes of the
Interest Act (Canada) by multiplying such rate of interest by the
actual number of days in the calendar year of calculation and
dividing it by the number of days in the deemed year.
2.12 Debentures to Rank Pari Passu
The Debentures will be direct unsecured obligations of the Corporation.
Each Debenture of the same series of Debentures will rank pari passu with each
other Debenture of the same series (regardless of their actual date or terms of
issue) and, subject to statutory preferred exceptions, with all other present
and future subordinated and unsecured indebtedness of the Corporation (other
than Senior Indebtedness) except for sinking fund provisions (if any) applicable
to different series of Debentures or other similar types of obligations of the
Corporation.
2.13 Payments of Amounts Due on Maturity
Except as may otherwise be provided herein or in any supplemental
indenture in respect of any series of Debentures and subject to Section 4.10,
payments of amounts due upon maturity of the Debentures will be made in the
following manner. The Corporation will establish and maintain with the Debenture
Trustee a Maturity Account for each series of Debentures. Each such Maturity
Account shall be maintained by and be subject to the control of the Debenture
Trustee for the purposes of this Indenture. On or before 11:00 a.m., (Toronto
time) on the Business Day immediately prior to each Maturity Date for Debentures
outstanding from time to time under this Indenture, the Corporation will deliver
to the Debenture Trustee by electronic funds transfer (or otherwise provide
immediately available funds) for deposit in the applicable Maturity Account in
an amount sufficient to pay the cash amount payable in respect of such
Debentures (including the principal amount together with any accrued and unpaid
interest thereon less any tax required by law to be deducted). The Debenture
Trustee, on behalf of the Corporation, will pay to each holder entitled to
receive payment the principal amount of and premium (if any) and accrued and
unpaid interest on the Debenture, upon surrender of the Debenture at the
principal office of the Debenture Trustee. The delivery of such funds to the
Debenture Trustee for deposit to the applicable Maturity Account will satisfy
and discharge the liability of the Corporation for the Debentures to which the
delivery of funds relates to the extent of the amount delivered (plus the amount
of any tax deducted as aforesaid) and such Debentures will thereafter to that
extent not be considered as outstanding under this Indenture and such holder
will have no other right in regard thereto other than to receive out of the
money so delivered or made available the amount to which it is entitled.
2.14 Payment of Interest
The following provisions shall apply to Debentures, except as otherwise
provided in subsection 2.4(b) or specified in a resolution of the Directors, an
Officer's Certificate or a supplemental indenture relating to a particular
series of Additional Debentures:
(a) As interest becomes due on each Debenture (except at maturity, on
conversion or on redemption, when interest may at the option of the
Corporation be paid upon surrender of such Debenture) the
Corporation, either directly or through the Debenture Trustee or any
agent of the Debenture Trustee, shall send or forward by prepaid
ordinary mail, electronic transfer of funds or such other means as
may be agreed to by the Debenture Trustee, payment of such interest
(less any tax required to be withheld therefrom) to the order of the
registered holder of such Debenture appearing on the registers
maintained by the Debenture Trustee at the close of business on the
fifth Business Day prior to the applicable Interest Payment Date and
addressed to the holder at the holder's last address appearing on
the register, unless such
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holder otherwise directs. If payment is made by cheque, such cheque
shall be forwarded at least three Business Days prior to each date
on which interest becomes due and if payment is made by other means
(such as electronic transfer of funds, provided the Debenture
Trustee must receive confirmation of receipt of funds prior to being
able to wire funds to holders), such payment shall be made in a
manner whereby the holder receives credit for such payment on the
date such interest on such Debenture becomes due. The mailing of
such cheque or the making of such payment by other means shall, to
the extent of the sum represented thereby, plus the amount of any
tax other than withholding tax withheld as aforesaid, satisfy and
discharge all liability for interest on such Debenture, unless in
the case of payment by cheque, such cheque is not paid at par on
presentation. In the event of non-receipt of any cheque for or other
payment of interest by the person to whom it is so sent as
aforesaid, the Corporation or the Debenture Trustee will issue to
such person a replacement cheque or other payment for a like amount
upon being furnished with such evidence of non-receipt as it shall
reasonably require and upon being indemnified to its satisfaction.
Notwithstanding the foregoing, if the Corporation is prevented by
circumstances beyond its control (including, without limitation, any
interruption in mail service) from making payment of any interest
due on each Debenture in the manner provided above, the Corporation
may make payment of such interest or make such interest available
for payment in any other manner acceptable to the Debenture Trustee
with the same effect as though payment had been made in the manner
provided above.
(b) Notwithstanding subsection 2.14(a), if a series of Debentures is
represented by a Global Debenture, then all payments of interest on
the Global Debenture shall be made by electronic funds transfer to
the Depository or its nominee for subsequent payment to Beneficial
Holders of interests in that Global Debenture, unless the
Corporation and the Depository otherwise agree. None of the
Corporation, the Debenture Trustee or any agent of the Debenture
Trustee for any Debenture issued as a Global Debenture will be
liable or responsible to any person for any aspect of the records
related to or payments made on account of beneficial interests in
any Global Debenture or for maintaining, reviewing, or supervising
any records relating to such beneficial interests.
2.15 Withholding Tax
The Corporation may be required to deduct and withhold an amount on
account of Canadian Taxes, in respect of any payment to be made on or in
connection with the Debentures. If the Corporation is required to withhold or
deduct any amount on account of Canadian Taxes, the Corporation will make such
withholding or deduction and pay as additional interest the additional amounts
("Additional Amounts") necessary so that the net amount received by each holder
of Debentures, after all applicable withholdings or deductions have been made
(including with respect to Additional Amounts), will not be less than the amount
the holder would have received if the Canadian Taxes had not been withheld or
deducted. However, no Additional Amounts will be payable with respect to a
payment made to a holder of former holder of Debentures (an "Excluded Holder")
in respect of the beneficial owner thereof:
(a) with which the Corporation does not deal at arm's length (within the
meaning of the Tax Act) at the time of making such payment;
(b) that is subject to such Canadian Taxes by reason of its failure to
comply with any certification, identification, information,
documentation or other reporting requirement if compliance is
required by law, regulation, administrative practice or an
applicable treaty as a precondition to exemption from, or a
reduction in the rate of deduction or withholding of, such Canadian
Taxes (provided that in the case of any imposition or change in any
such
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certification, identification, information, documentation or other
reporting requirements which applies generally to holders of
Debentures who are not residents of Canada, at least 60 days prior
to the effective date of any imposition or change, the Corporation
shall give written notice, in the manner provided herein, to the
Debenture Trustee and the holders of the Debentures then outstanding
of such imposition or change, as the case may be, and provide the
Debenture Trustee and such holders with such forms or documentation,
if any, as may be required to comply with such certification,
identification, information, documentation, or other reporting
requirements); or
(c) that is subject to such Canadian Taxes by reason of its carrying on
business in or otherwise being connected with Canada or any province
or territory thereof otherwise than by the mere holding of such
Debentures or the receipt of payment, or exercise of any enforcement
rights thereunder;
and no Additional Amounts will be payable with respect to any estate,
inheritance, gift, sales, excise, transfer, personal property or similar tax,
assessment or governmental charge (the "Excluded Taxes").
The Corporation will remit the amount it withholds or deducts to the
relevant authority. Additional Amounts will be paid in cash semi-annually, at
maturity, on any Redemption Date, on a Date of Conversion or on any purchase
date. With respect to references in this Indenture to the payment of principal
or interest on any Debenture, such references shall be deemed to include the
payment of Additional Amounts to the extent that, in such context, Additional
Amounts are, were or would be payable.
The Corporation will furnish to the Debenture Trustee, within 30 days
after the date the payment of any Canadian Taxes is due pursuant to applicable
law, certified copies of tax receipts evidencing that such payment has been
made. The Corporation will indemnify and hold harmless each holder of Debentures
(other than an Excluded Holder or with respect to Excluded Taxes) and upon
written request reimburse each such holder for the amount of (i) any Canadian
Taxes so levied or imposed and paid by such holder as a result of payments made
under or with respect to the Debentures, (ii) any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto, and
(iii) any Canadian Taxes levied or imposed and paid by such holder with respect
to any reimbursement under (i) and(ii) above, but excluding any Excluded Taxes.
The Debenture Trustee shall have no obligation to verify any payments
under the Tax Act or any provision of provincial, state, local or foreign tax
law. The Debenture Trustee shall at all times be indemnified and held harmless
by the Corporation from and against any personal liabilities of the Debenture
Trustee incurred in connection with the failure of the Corporation or its
agents, to report, remit or withhold taxes as required by the Tax Act or
otherwise failing to comply with the Tax Act. This indemnification shall survive
the resignation or removal of the Debenture Trustee and the termination of this
Indenture solely to the extent that such liabilities have been incurred in
connection with taxation years occurring during the term of this Indenture.
2.16 Unconditional Right of Holders to Receive Payment
Notwithstanding any other provision of this Indenture, the right of any
Debentureholder to receive payment of principal of or interest on the Debenture,
on or after the respective due dates expressed in the Debenture, or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of the Debentureholder.
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ARTICLE 3
REGISTRATION, TRANSFER, EXCHANGE AND OWNERSHIP
3.1 Fully Registered Debentures
(a) With respect to each series of Debentures issuable as Fully
Registered Debentures, the Corporation shall cause to be kept by and
at the principal office of the Debenture Trustee in Toronto, Ontario
and by the Debenture Trustee or such other registrar as the
Corporation, with the approval of the Debenture Trustee, may appoint
at such other place or places, if any, as may be specified in the
Debentures of such series or as the Corporation may designate with
the approval of the Debenture Trustee, a register in which shall be
entered the names and addresses of the holders of Fully Registered
Debentures and particulars of the Debentures held by them
respectively and of all transfers of Fully Registered Debentures.
Such registration shall be noted on the Debentures by the Debenture
Trustee or other registrar unless a new Debenture shall be issued
upon such transfer.
(b) No transfer of a Fully Registered Debenture shall be valid unless
made on such register referred to in subsection 3.1(a) by the
registered holder or such holder's executors, administrators or
other legal representatives or an attorney duly appointed by an
instrument in writing in form and execution satisfactory to the
Debenture Trustee or other registrar upon surrender of the
Debentures together with a duly executed form of transfer acceptable
to the Debenture Trustee and upon compliance with such other
reasonable requirements as the Debenture Trustee or other registrar
may prescribe, nor unless the name of the transferee shall have been
noted on the Debenture by the Debenture Trustee or other registrar.
3.2 Global Debentures
(a) With respect to each series of Debentures issuable in whole or in
part as one or more Global Debentures, the Corporation shall cause
to be kept by and at the principal offices of the Debenture Trustee
in Toronto, Ontario and by the Debenture Trustee or such other
registrar as the Corporation, with the approval of the Debenture
Trustee, may appoint at such other place or places, if any, as the
Corporation may designate with the approval of the Debenture
Trustee, a register in which shall be entered the name and address
of the holder of each such Global Debenture (being the Depository,
or its nominee, for such Global Debenture) as holder thereof and
particulars of the Global Debenture held by it, and of all transfers
thereof. If any Debentures of such series are at any time not Global
Debentures, the provisions of Section 3.1 shall govern with respect
to registrations and transfers of such Debentures.
(b) Notwithstanding any other provision of this Indenture, a Global
Debenture may not be transferred by the registered holder thereof
and accordingly, no definitive certificates shall be issued to
Beneficial Holders except in the following circumstances or as
otherwise specified in a resolution of the Directors, an Officer's
Certificate or a supplemental indenture relating to a particular
series of Additional Debentures:
(i) Global Debentures may be transferred by a Depository to a
nominee of such Depository or by a nominee of a Depository to
such Depository or to another nominee of such Depository or by
a Depository or its nominee to a successor Depository or its
nominee;
(ii) Global Debentures may be transferred at any time after (i) the
Depository for such Global Debentures or the Corporation has
notified the Debenture Trustee that the
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Depository is unwilling or unable to continue as Depository
for such Global Debentures, or (ii) the Depository ceases to
be eligible to be a Depository under subsection 2.6(b),
provided in each case that at the time of such transfer the
Corporation has not appointed a successor Depository for such
Global Debentures;
(iii) Global Debentures may be transferred at any time after the
Corporation has determined, in its sole discretion, to
terminate the book-entry only registration system in respect
of such Global Debentures and has communicated such
determination to the Debenture Trustee in writing;
(iv) Global Debentures may be transferred at any time after the
Debenture Trustee has determined that an Event of Default has
occurred and is continuing with respect to the Debentures of
the series issued as a Global Debenture, provided that
Beneficial Holders representing, in the aggregate, more than
25% of the aggregate principal amount of the Debentures of
such series advise the Depository in writing, through the
Depository Participants, that the continuation of the
book-entry only registration system for such series of
Debentures is no longer in their best interest and also
provided that at the time of such transfer the Debenture
Trustee has not waived the Event of Default pursuant to
Section 8.3;
(v) Global Debentures may be transferred if required by applicable
law; or
(vi) Global Debentures may be transferred if the book-entry only
registration system ceases to exist.
(c) With respect to the Global Debentures, unless and until definitive
certificates have been issued to Beneficial Holders pursuant to
subsection 3.2(b):
(i) the Corporation and the Debenture Trustee may deal with the
Depository for all purposes (including paying interest on the
Debentures) as the sole holder of such series of Debentures
and the authorized representative of the Beneficial Holders;
(ii) the rights of the Beneficial Holders shall be exercised only
through the Depository and shall be limited to those
established by law and agreements between such Beneficial
Holders and the Depository or the Depository Participants;
(iii) the Depository will make book entry transfers among the
Depository Participants; and
(iv) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of
Debentureholders evidencing a specified percentage of the
outstanding Debentures, the Depository shall be deemed to be
counted in that percentage only to the extent that it has
received instructions to such effect from the Beneficial
Holders or the Depository Participants, and has delivered such
instructions to the Debenture Trustee.
(d) Whenever a notice or other communication is required to be provided
to Debentureholders, unless and until definitive certificate(s) have
been issued to Beneficial Holders pursuant to this Section 3.2, the
Debenture Trustee shall provide all such notices and communications
to the Depository and the Depository shall deliver such notices and
communications to such Beneficial Holders in accordance with
Applicable Securities Legislation. Upon the
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termination of the book-entry only registration system on the
occurrence of one of the conditions specified in subsection 3.2(b)
with respect to a series of Debentures issued hereunder, the
Debenture Trustee shall notify all applicable Beneficial Holders,
through the Depository, of the availability of definitive Debenture
certificates. Upon surrender by the Depository of the certificate(s)
representing the Global Debentures and receipt of new registration
instructions from the Depository, the Debenture Trustee shall
deliver the definitive Debenture certificates for such Debentures to
the holders thereof in accordance with the new registration
instructions and thereafter, the registration and transfer of such
Debentures will be governed by Section 3.1 and the remaining
Sections of this Article 3.
3.3 Transferee Entitled to Registration
The transferee of a Debenture shall be entitled, after the appropriate
form of transfer is lodged with the Debenture Trustee or other registrar and
upon compliance with all other conditions in that behalf required by this
Indenture or by law, to be entered on the register as the owner of such
Debenture free from all equities or rights of set-off or counterclaim between
the Corporation and the transferor or any previous holder of such Debenture,
save in respect of equities of which the Corporation is required to take notice
by statute or by order of a court of competent jurisdiction.
3.4 No Notice of Trusts
Neither the Corporation nor the Debenture Trustee nor any registrar shall
be bound to take notice of or see to the execution of any trust (other than that
created by this Indenture) whether express, implied or constructive, in respect
of any Debenture, and may transfer the same on the direction of the person
registered as the holder thereof, whether named as trustee or otherwise, as
though that person were the beneficial owner thereof.
3.5 Registers Open for Inspection
The registers referred to in Sections 3.1 and 3.2 shall at all reasonable
times be open for inspection by the Corporation, the Debenture Trustee or any
Debentureholder. Every registrar, including the Debenture Trustee, shall from
time to time when requested so to do by the Corporation or by the Debenture
Trustee, in writing, furnish the Corporation or the Debenture Trustee, as the
case may be, with a list of names and addresses of holders of registered
Debentures entered on the register kept by them and showing the principal amount
and serial numbers of the Debentures held by each such holder, provided the
Debenture Trustee shall be entitled to charge a reasonable fee to provide such a
list.
3.6 Exchanges of Debentures
(a) Subject to Section 3.7, Debentures in any authorized form or
denomination, other than Global Debentures, may be exchanged for
Debentures in any other authorized form or denomination, of the same
series and date of maturity, bearing the same interest rate and of
the same aggregate principal amount as the Debentures so exchanged.
(b) In respect of exchanges of Debentures permitted by subsection
3.6(a), Debentures of any series may be exchanged only at the
principal offices of the Debenture Trustee in Toronto, Ontario or at
such other place or places, if any, as may be specified in the
Debentures of such series and at such other place or places as may
from time to time be designated by the Corporation with the approval
of the Debenture Trustee. Any Debentures tendered for exchange shall
be surrendered to the Debenture Trustee. The Corporation shall
execute and
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the Debenture Trustee shall certify all Debentures necessary to
carry out exchanges as aforesaid. All Debentures surrendered for
exchange shall be cancelled.
(c) Debentures issued in exchange for Debentures which at the time of
such issue have been selected or called for redemption at a later
date shall be deemed to have been selected or called for redemption
in the same manner and shall have noted thereon a statement to that
effect.
3.7 Closing of Registers
(a) Neither the Corporation nor the Debenture Trustee nor any registrar
shall be required to:
(i) make transfers or exchanges of, or convert, any Debentures on
any Interest Payment Date for such Debentures or during the
five preceding Business Days;
(ii) make transfers or exchanges of any Debentures on the day of
any selection by the Debenture Trustee of Debentures to be
redeemed or during the five preceding Business Days; or
(iii) make transfers or exchanges of any Debentures which will have
been selected or called for redemption unless upon due
presentation thereof for redemption such Debentures shall not
be redeemed.
(b) Subject to any restriction herein provided, the Corporation with the
approval of the Debenture Trustee may at any time close any register
for any series of Debentures, other than those kept at the principal
offices of the Debenture Trustee in Xxxxxxx, Xxxxxxx, and transfer
the registration of any Debentures registered thereon to another
register (which may be an existing register) and thereafter such
Debentures shall be deemed to be registered on such other register.
Notice of such transfer shall be given to the holders of such
Debentures.
3.8 Charges for Registration, Transfer and Exchange
For each Debenture exchanged, registered, transferred or discharged from
registration, the Debenture Trustee or other registrar, except as otherwise
herein provided, may make a reasonable charge for its services and in addition
may charge a reasonable sum for each new Debenture issued (such amounts to be
agreed upon from time to time by the Debenture Trustee and the Corporation), and
payment of such charges and reimbursement of the Debenture Trustee or other
registrar for any stamp taxes or governmental or other charges required to be
paid shall be made by the party requesting such exchange, registration, transfer
or discharge from registration as a condition precedent thereto. Notwithstanding
the foregoing provisions, no charge shall be made to a Debentureholder
hereunder:
(a) for any exchange, registration, transfer or discharge from
registration of any Debenture applied for within a period of two
months from the date of the first delivery of Debentures of that
series or, with respect to Debentures subject to a Periodic
Offering, within a period of two months from the date of delivery of
any such Debenture;
(b) for any exchange of any interim or temporary Debenture or interim
certificate that has been issued under Section 2.9 for a definitive
Debenture;
(c) for any exchange of a Global Debenture as contemplated in Section
3.2;
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(d) for any exchange of any Debenture resulting from a partial
redemption under Section 4.2;
(e) for any exchange of any Debenture resulting from a partial
conversion under subsection 6.4(d); or
(f) for any exchange of any Debenture resulting from a partial purchase
under subsection 2.4(k).
3.9 Ownership of Debentures
(a) Unless otherwise required by law, the person in whose name any
registered Debenture is registered shall for all the purposes of
this Indenture be and be deemed to be the owner thereof and payment
of or on account of the principal of and premium, if any, on such
Debenture and interest thereon shall be made to such registered
holder.
(b) The registered holder for the time being of any registered Debenture
shall be entitled to the principal, premium, if any, and/or interest
evidenced by such instruments, respectively, free from all equities
or rights of set-off or counterclaim between the Corporation and the
original or any intermediate holder thereof and all persons may act
accordingly and the receipt of any such registered holder for any
such principal, premium or interest shall be a good discharge to the
Corporation and/or the Debenture Trustee for the same and neither
the Corporation nor the Debenture Trustee shall be bound to inquire
into the title of any such registered holder.
(c) Where Debentures are registered in more than one name, the
principal, premium, if any, and interest from time to time payable
in respect thereof may be paid to the order of all such holders,
failing written instructions from them to the contrary, and the
receipt of any one of such holders therefor shall be a valid
discharge, to the Debenture Trustee, any registrar and to the
Corporation.
(d) In the case of the death of one or more joint holders of any
Debenture the principal, premium, if any, and interest from time to
time payable thereon may be paid to the order of the survivor or
survivors of such registered holders and the receipt of any such
survivor or survivors therefor shall be a valid discharge to the
Debenture Trustee and any registrar and to the Corporation.
ARTICLE 4
REDEMPTION AND PURCHASE OF DEBENTURES
4.1 Applicability of Article
Subject to regulatory approval, the Corporation shall have the right at
its option to redeem, either in whole at any time or in part from time to time
before maturity, either by payment of money, by issuance of fully paid,
non-assessable and Freely Tradeable Common Shares as provided in Section 4.6 or
any combination thereof, any Debentures issued hereunder of any series which by
their terms are made so redeemable (subject, however, to any applicable
restriction on the redemption of Debentures of such series) at such rate or
rates of premium, if any, and on such date or dates and in accordance with such
other provisions as shall have been determined at the time of issue of such
Debentures and as shall have been expressed in this Indenture, in the
Debentures, in an Officer's Certificate, or in a supplemental indenture
authorizing or providing for the issue thereof, or in the case of Additional
Debentures issued pursuant to a Periodic Offering, in the Written Direction of
the Corporation requesting the certification and delivery thereof.
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Subject to regulatory approval, the Corporation shall also have the right
at its option to repay, either in whole or in part, on maturity, either by
payment of money in accordance with Section 2.13, by issuance of fully paid,
non-assessable and Freely Tradeable Common Shares as provided in Section 4.10 or
any combination thereof, any Debentures issued hereunder of any series which by
their terms are made so repayable on maturity (subject however, to any
applicable restriction on the repayment of the principal amount of the
Debentures of such series) at such rate or rates of premium, if any, and on such
date or dates and in accordance with such other provisions as shall have been
determined at the time of issue of such Debenture and shall have been expressed
in this Indenture, in the Debentures, in an Officer's Certificate, or in a
supplemental indenture authorizing or providing for the issue thereof, or in the
case of Additional Debentures issued pursuant to a Periodic Offering, in the
Written Direction of the Corporation requesting the certification and delivery
thereof.
4.2 Partial Redemption
If less than all the Debentures of any series for the time being
outstanding are at any time to be redeemed, or if a portion of the Debentures
being redeemed are being redeemed for cash and a portion of such Debentures are
being redeemed by the payment of Freely Tradeable Common Shares pursuant to
Section 4.6, the Debentures to be so redeemed shall be selected by the Debenture
Trustee on a pro rata basis to the nearest multiple of Cdn$1,000 in accordance
with the principal amount of the Debentures registered in the name of each
holder or in such other manner as the Debenture Trustee deems equitable, subject
to the approval of the Toronto Stock Exchange or such other exchange on which
the Debentures are then listed, as may be required from time to time. Unless
otherwise specifically provided in the terms of any series of Debentures, no
Debenture shall be redeemed in part unless the principal amount redeemed is
Cdn$1,000 or a multiple thereof. For this purpose, the Debenture Trustee may
make, and from time to time vary, regulations with respect to the manner in
which such Debentures may be drawn for redemption in part or for redemption in
cash and regulations so made shall be valid and binding upon all holders of such
Debentures notwithstanding the fact that as a result thereof one or more of such
Debentures may become subject to redemption in part only or for cash only. In
the event that one or more of such Debentures becomes subject to redemption in
part only, upon surrender of any such Debentures for payment of the Redemption
Price, together with interest accrued to but excluding the Redemption Date, the
Corporation shall execute and the Debenture Trustee shall certify and deliver
without charge to the holder thereof or upon the holder's order one or more new
Debentures for the unredeemed part of the principal amount of the Debenture or
Debentures so surrendered or, with respect to a Global Debenture, the Depository
shall make notations on the Global Debenture of the principal amount thereof so
redeemed. Unless the context otherwise requires, the terms "Debenture" or
"Debentures" as used in this Article 4 shall be deemed to mean or include any
part of the principal amount of any Debenture which in accordance with the
foregoing provisions has become subject to redemption.
4.3 Notice of Redemption
Notice of redemption (the "Redemption Notice") of any series of Debentures
shall be given to the holders of the Debentures so to be redeemed not more than
60 days nor, subject to subsection 4.6(b), less than 30 days prior to the date
fixed for redemption (the "Redemption Date") in the manner provided in Section
14.2. Every such notice shall specify the aggregate principal amount of
Debentures called for redemption, the Redemption Date, the Redemption Price and
the address of the principal office of the Debenture Trustee to which the
Debentures are to be tendered for payment and shall state that interest upon the
principal amount of Debentures called for redemption shall cease to be payable
from and after the Redemption Date. In addition, unless all the outstanding
Debentures are to be redeemed, the Redemption Notice shall specify:
(a) the distinguishing letters and numbers of the registered Debentures
which are to be redeemed (or of such thereof as are registered in
the name of such Debentureholder);
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(b) in the case of a published notice, the distinguishing letters and
numbers of the Debentures which are to be redeemed or, if such
Debentures are selected by terminal digit or other similar system,
such particulars as may be sufficient to identify the Debentures so
selected;
(c) in the case of a Global Debenture, that the redemption will take
place in such manner as may be agreed upon by the Depository, the
Debenture Trustee and the Corporation; and
(d) in all cases, the principal amounts of such Debentures or, if any
such Debenture is to be redeemed in part only, the principal amount
of such part.
In the event that all Debentures to be redeemed are registered Debentures,
publication shall not be required.
4.4 Debentures Due on Redemption Dates
Notice having been given as aforesaid, all the Debentures so called for
redemption shall thereupon be and become due and payable at the Redemption
Price, together with accrued interest to but excluding the Redemption Date, on
the Redemption Date specified in such notice, in the same manner and with the
same effect as if it were the date of maturity specified in such Debentures,
anything therein or herein to the contrary notwithstanding, and from and after
such Redemption Date, if the monies necessary to redeem, or the Common Shares to
be issued to redeem, such Debentures shall have been deposited as provided in
Section 4.5 and affidavits or other proof satisfactory to the Debenture Trustee
as to the publication and/or mailing of such notices shall have been lodged with
it, interest upon the Debentures shall cease. If any question shall arise as to
whether any notice has been given as above provided and such deposit made, such
question shall be decided by the Debenture Trustee whose decision shall be final
and binding upon all parties in interest.
4.5 Deposit of Redemption Monies or Common Shares
Redemption of Debentures shall be provided for by the Corporation
depositing with the Debenture Trustee, on or before 11:00 a.m. Toronto Time on
the Business Day immediately prior to the Redemption Date specified in such
notice, such sums of money, or certificates representing such Common Shares, or
both as the case may be, as may be sufficient to pay the Redemption Price of the
Debentures so called for redemption, plus accrued and unpaid interest thereon up
to but excluding the Redemption Date. The Corporation shall also deposit with
the Debenture Trustee a sum of money sufficient to pay any charges or expenses
which may be incurred by the Debenture Trustee in connection with such
redemption. Every such deposit shall be irrevocable. From the sums so deposited,
or certificates so deposited, or both, the Debenture Trustee shall pay or cause
to be paid, or issue or cause to be issued, to the holders of such Debentures so
called for redemption, upon surrender of such Debentures, the principal, premium
(if any) and interest (if any) and the Additional Amounts (if any) to which they
are respectively entitled on redemption.
4.6 Right to Pay Redemption Price in Common Shares
(a) Subject to the other provisions of this Section 4.6 and applicable
regulatory approval, the Corporation may, at its option, in exchange
for or in lieu of paying the Redemption Price in money, elect to
satisfy its obligation to pay all or any portion of the Redemption
Price by issuing and delivering to holders on the Redemption Date
that number of Freely Tradeable Common Shares obtained by dividing
the Redemption Price by 95% of the then Current Market Price of the
Common Shares on the Redemption Date (the "Common Share Redemption
Right").
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(b) The Corporation shall exercise the Common Share Redemption Right by
so specifying in the Redemption Notice which shall be delivered to
the Debenture Trustee and the holders of Debentures not more than 60
days and not less than 30 days prior to the Redemption Date. The
Redemption Notice shall also specify the aggregate principal amount
of Debentures in respect of which it is exercising the Common Share
Redemption Right.
(c) The Corporation's right to exercise the Common Share Redemption
Right shall be conditional upon the following conditions being met
on the Business Day preceding the Redemption Date:
(i) the issuance of the Common Shares on the exercise of the
Common Share Redemption Right shall be made in accordance with
Applicable Securities Legislation and such Common Shares shall
be issued as Freely Tradeable Common Shares and fully paid and
non-assessable;
(ii) the listing of such additional Common Shares on each stock
exchange on which the Common Shares are then listed;
(iii) the Corporation being a reporting issuer in good standing or
equivalent under Applicable Securities Legislation where the
distribution of such Freely Tradeable Common Shares occurs;
(iv) no Event of Default shall have occurred and be continuing;
(v) the receipt by the Debenture Trustee of an Officer's
Certificate stating that conditions (i), (ii), (iii) and (iv)
above have been satisfied and setting forth the number of
Common Shares to be delivered for each Cdn$1,000 principal
amount of Debentures and the Current Market Price of the
Common Shares on the Redemption Date; and
(vi) the receipt by the Debenture Trustee of an opinion of Counsel
to the effect that such Common Shares have been duly
authorized and, when issued and delivered pursuant to the
terms of this Indenture in payment of the Redemption Price,
will be validly issued as fully paid and non-assessable, that
conditions (i) and (ii) above have been satisfied and that,
relying exclusively on certificates of good standing issued by
the relevant securities authorities, condition (iii) above is
satisfied, except that the opinion in respect of condition
(iii) need not be expressed with respect to a province of
Canada or in the United States if certificates are not issued
in those jurisdictions.
If the foregoing conditions are not satisfied prior to the close of
business on the Business Day preceding the Redemption Date, the
Corporation shall pay the Redemption Price in cash in accordance
with Section 4.5 unless the Debentureholder waives the conditions
which are not satisfied.
(d) In the event that the Corporation duly exercises its Common Share
Redemption Right, the Corporation shall at or before 11:00 a.m.
(Toronto time) on the Redemption Date, deliver to the Debenture
Trustee, for delivery to and on account of the holders, upon the due
presentation and surrender of the Debentures, the Common Shares to
which such holders are entitled.
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(e) No fractional Common Shares shall be delivered upon the exercise of
the Common Share Redemption Right but, in lieu thereof, the
Corporation shall pay to the Debenture Trustee for the account of
the holders, at the time contemplated in subsection 4.6(d), the cash
equivalent thereof determined on the basis of the Current Market
Price of the Common Shares on the Redemption Date (less any tax
required by law to be deducted, if any).
(f) A holder of Debentures shall be treated as the shareholder of record
of the Common Shares issued on due exercise by the Corporation of
its Common Share Redemption Right effective immediately after the
close of business on the Redemption Date, and shall be entitled to
all substitutions therefor, all income earned thereon or accretions
thereto and all dividends or distributions (including dividends or
distributions in kind) thereon and arising thereafter, and in the
event that the Debenture Trustee receives the same, it shall hold
the same in trust for the benefit of such holder.
(g) The Corporation shall at all times reserve and keep available out of
its authorized Common Shares (if the number thereof is or becomes
limited), solely for the purpose of issue and delivery upon the
exercise of the Corporation's Common Share Redemption Right as
provided herein, and shall issue to Debentureholders to whom Freely
Tradeable Common Shares will be issued pursuant to exercise of the
Common Share Redemption Right, such number of Freely Tradeable
Common Shares as shall be issuable in such event. All Freely
Tradeable Common Shares which shall be so issuable shall be duly and
validly issued as fully paid and non-assessable.
(h) The Corporation shall comply with all Applicable Securities
Legislation regulating the issue and delivery of Freely Tradeable
Common Shares upon exercise of the Common Share Redemption Right and
shall cause to be listed and posted for trading such Common Shares
on each stock exchange on which the Common Shares are then listed.
(i) The Corporation shall from time to time promptly pay, or make
provision satisfactory to the Debenture Trustee for the payment of,
all taxes and charges which may be imposed by the laws of Canada or
any province or territory thereof (except income tax or security
transfer tax, if any) which shall be payable with respect to the
issuance or delivery of Freely Tradeable Common Shares to holders
upon exercise of the Common Share Redemption Right pursuant to the
terms of the Debentures and of this Indenture.
(j) Interest accrued and unpaid on the Debentures on the Redemption Date
will be paid to holders of Debentures, in cash, in the manner
contemplated in Section 4.5 subject to the ability of the
Corporation to issue Common Shares as provided in Article 10.
4.7 Failure to Surrender Debentures Called for Redemption
In case the holder of any Debenture so called for redemption shall fail on
or before the Redemption Date so to surrender such holder's Debenture, or shall
not within such time accept payment of the redemption monies payable, or take
delivery of certificates representing such Common Shares issuable in respect
thereof, or give such receipt therefor, if any, as the Debenture Trustee may
require, such redemption monies may be set aside in trust, or such certificates
may be held in trust without interest, either in the deposit department of the
Debenture Trustee or in a chartered bank, and such setting aside shall for all
purposes be deemed a payment to the Debentureholder of the sum or Common Shares
so set aside and, to that extent, the Debenture shall thereafter not be
considered as outstanding hereunder and the Debentureholder shall have no other
right except to receive payment out of the monies so paid and deposited, or take
delivery of the certificates so deposited, or both, upon surrender and delivery
up of such holder's Debenture of the
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Redemption Price, as the case may be, of such Debenture plus any accrued but
unpaid interest thereon to but excluding the Redemption Date. In the event that
any money, or certificates for Common Shares, required to be deposited hereunder
with the Debenture Trustee or any depository or paying agent on account of
principal, premium, if any, or interest, if any, on Debentures issued hereunder
shall remain so deposited for a period of six years from the Redemption Date,
then such monies or certificates for Common Shares, together with any
accumulated interest thereon or any dividends paid thereon, shall at the end of
such period be paid over or delivered over by the Debenture Trustee or such
depository or paying agent to the Corporation on its demand, and thereupon the
Debenture Trustee shall not be responsible to Debentureholders for any amounts
owing to them and subject to applicable law, thereafter the holder of a
Debenture in respect of which such money was so repaid to the Corporation shall
have no rights in respect thereof except to obtain payment of the money or
certificates due from the Corporation, subject to any limitation period provided
by the laws of Ontario. Notwithstanding the foregoing, the Debenture Trustee
will pay any remaining funds prior to the expiry of six years after the
Redemption Date to the Corporation upon receipt from the Corporation, or one of
its Subsidiaries, of an unconditional letter of credit from a Canadian chartered
bank in an amount equal to or in excess of the amount of the remaining funds. If
the remaining funds are paid to the Corporation prior to the expiry of six years
after the Redemption Date, the Corporation shall reimburse the Debenture Trustee
for any amounts required to be paid by the Debenture Trustee to a holder of a
Debenture pursuant to the redemption after the date of such payment of the
remaining funds to the Corporation but prior to six years after the redemption.
4.8 Cancellation of Debentures Redeemed
Subject to the provisions of Sections 4.2 and 4.9 as to Debentures
redeemed or purchased in part, all Debentures redeemed and paid under this
Article 4 shall forthwith be delivered to the Debenture Trustee and cancelled
and no Debentures shall be issued in substitution therefor.
4.9 Purchase of Debentures by the Corporation
Unless otherwise specifically provided with respect to a particular series
of Debentures, the Corporation may at any time and from time to time, purchase
Debentures in the market (which shall include purchases from or through an
investment dealer or a firm holding membership on a recognized stock exchange)
or by tender or by private contract, at any price; provided, however, that if an
Event of Default has occurred and is continuing, the Corporation and its
affiliates will not have the right to purchase Debentures by private contract.
All Debentures so purchased may, at the option of the Corporation, be delivered
to the Debenture Trustee and shall be cancelled and no Debentures shall be
issued in substitution therefor.
If, upon an invitation for tenders, more Debentures are tendered at the
same lowest price that the Corporation is prepared to accept, the Debentures to
be purchased by the Corporation shall be selected by the Debenture Trustee on a
pro rata basis or in such other manner consented to by the Toronto Stock
Exchange which the Debenture Trustee considers appropriate, from the Debentures
tendered by each tendering Debentureholder who tendered at such lowest price.
For this purpose the Debenture Trustee may make, and from time to time amend,
regulations with respect to the manner in which Debentures may be so selected,
and regulations so made shall be valid and binding upon all Debentureholders,
notwithstanding the fact that as a result thereof one or more of such Debentures
become subject to purchase in part only. The holder of a Debenture of which a
part only is purchased, upon surrender of such Debenture for payment, shall be
entitled to receive, without expense to such holder, one or more new Debentures
for the unpurchased part so surrendered, and the Debenture Trustee shall certify
and deliver such new Debenture or Debentures upon receipt of the Debenture so
surrendered or, with respect to a Global Debenture, the Depository shall make
notations on the Global Debenture of the principal amount thereof so purchased.
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4.10 Right to Repay Principal Amount in Common Shares
(a) Subject to the other provisions of this Section 4.10 and to
applicable regulatory approval, the Corporation may, at its option,
in exchange for or in lieu of paying all or any portion of the
principal amount of the Debentures outstanding in money, elect to
satisfy its obligation to repay all or any portion of the principal
amount of the Debentures outstanding by issuing and delivering to
holders on the Maturity Date that number of Freely Tradeable Common
Shares obtained by dividing the principal amount of the Debentures
by 95% of the Current Market Price of the Common Shares (the "Common
Share Repayment Right") on the Maturity Date.
(b) The Corporation shall exercise the Common Share Repayment Right by
so specifying in the Maturity Notice, which shall be delivered to
the Debenture Trustee and the holders of Debentures not more than 60
days and not less than 30 days prior to the Maturity Date.
(c) The Corporation's right to exercise the Common Share Repayment Right
shall be conditional upon the following conditions being met on the
Business Day preceding the Maturity Date:
(i) the issuance of the Common Shares on the exercise of the
Common Share Repayment Right shall be made in accordance with
Applicable Securities Legislation and such Common Shares shall
be issued as fully paid and non-assessable Freely Tradeable
Common Shares;
(ii) the listing of such additional Common Shares on each stock
exchange on which the Common Shares are then listed;
(iii) the Corporation being a reporting issuer in good standing
under Applicable Securities Legislation where the distribution
of such Freely Tradeable Common Shares occurs;
(iv) no Event of Default shall have occurred and be continuing;
(v) the receipt by the Debenture Trustee of an Officer's
Certificate stating that conditions (i), (ii), (iii) and (iv)
above have been satisfied and setting forth the number of
Common Shares to be delivered for each Cdn$1,000 principal
amount of Debentures and the Current Market Price of the
Common Shares on the Maturity Date; and
(vi) the receipt by the Debenture Trustee of an opinion of Counsel
to the effect that such Common Shares have been duly
authorized and, when issued and delivered pursuant to the
terms of this Indenture in payment of the principal amount of
the Debentures outstanding will be validly issued as fully
paid and non-assessable, that conditions (i) and (ii) above
have been satisfied and that, relying exclusively on
certificates of good standing issued by the relevant
securities authorities, condition (iii) above is satisfied,
except that the opinion in respect of condition (iii) need not
be expressed with respect to a province of Canada or in the
United States if certificates are not issued in those
jurisdictions.
If the foregoing conditions are not satisfied prior to the close of
business on the Business Day preceding the Maturity Date, the
Corporation shall pay the principal amount of the
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Debentures outstanding in cash in accordance with Section 2.13,
unless the Debentureholder waives the conditions which are not
satisfied.
(d) In the event that the Corporation duly exercises its Common Share
Repayment Right, the Corporation shall at or before 11:00 a.m.
(Toronto time) on the Maturity Date, deliver to the Debenture
Trustee, for delivery to and on account of the holders, upon the due
presentation and surrender of the Debentures, the Freely Tradeable
Common Shares to which such holders are entitled. The Corporation
shall also deposit with the Debenture Trustee a sum of money
sufficient to pay any charges or expenses which may be incurred by
the Debenture Trustee in connection with the Common Share Repayment
Right. Every such deposit shall be irrevocable. From the
certificates so deposited in addition to amounts payable by the
Debenture Trustee pursuant to Section 2.13, the Debenture Trustee
shall pay or cause to be paid, to the holders of such Debentures,
upon surrender of such Debentures, the principal amount of and
premium (if any) on the Debentures to which they are respectively
entitled on maturity and deliver to such holders the certificates to
which such holders are entitled. The delivery of such certificates
to the Debenture Trustee will satisfy and discharge the liability of
the Corporation for the Debentures to which the delivery of
certificates relates to the extent of the amount delivered (plus the
amount of any certificates sold to pay applicable taxes in
accordance with this Section 4.10) and such Debentures will
thereafter to that extent not be considered as outstanding under
this Indenture and such holder will have no other right in regard
thereto other than to receive out of the certificates so delivered,
the certificate(s) to which it is entitled.
(e) No fractional Freely Tradeable Common Shares shall be delivered upon
the exercise of the Common Share Repayment Right but, in lieu
thereof, the Corporation shall pay to the Debenture Trustee for the
account of the holders, at the time contemplated in subsection
4.10(d), the cash equivalent thereof determined on the basis of the
Current Market Price of the Common Shares on the Maturity Date (less
any tax required by law to be deducted, if any).
(f) A holder shall be treated as the shareholder of record of the Freely
Tradeable Common Shares issued on due exercise by the Corporation of
its Common Share Repayment Right effective immediately after the
close of business on the Maturity Date, and shall be entitled to all
substitutions therefor, all income earned thereon or accretions
thereto and all dividends or distributions (including dividends or
distributions in kind) thereon and arising thereafter, and in the
event that the Debenture Trustee receives the same, it shall hold
the same in trust for the benefit of such holder.
(g) The Corporation shall at all times reserve and keep available out of
its authorized Common Shares (if the number thereof is or becomes
limited), solely for the purpose of issue and delivery upon the
exercise of the Common Share Repayment Right as provided herein, and
shall issue to Debentureholders to whom Common Shares will be issued
pursuant to exercise of the Common Share Repayment Right, such
number of Freely Tradeable Common Shares as shall be issuable in
such event. All Freely Tradeable Common Shares which shall be so
issuable shall be duly and validly issued as fully paid and
non-assessable.
(h) The Corporation shall comply with all Applicable Securities
Legislation regulating the issue and delivery of Freely Tradeable
Common Shares upon exercise of the Common Share Repayment Right and
shall cause to be listed and posted for trading such Freely
Tradeable Common Shares on each stock exchange on which the Common
Shares are then listed.
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(i) The Corporation shall from time to time promptly pay, or make
provision satisfactory to the Debenture Trustee for the payment of,
all taxes and charges which may be imposed by the laws of Canada or
any province or territory thereof (except income tax, withholding
tax or security transfer tax, if any) which shall be payable with
respect to the issuance or delivery of Freely Tradeable Common
Shares to holders upon exercise of the Common Share Repayment Right
pursuant to the terms of the Debentures and of this Indenture.
(j) Interest accrued and unpaid on the Debentures on the Maturity Date
will be paid to holders of Debentures, in cash, in the manner
contemplated in Section 2.14, subject to the ability of the
Corporation to issue Common Shares as provided in Article 10.
ARTICLE 5
SUBORDINATION OF DEBENTURES
5.1 Applicability of Article
The indebtedness, liabilities and obligations evidenced by any Debentures
issued hereunder of any series which by their terms are subordinate, including
on account of principal interest or otherwise, but excluding the issuance of
Common Shares or other securities in accordance with Article 6, any redemption
pursuant to Article 4, or at maturity pursuant to Article 4 (collectively, the
"Debenture Liabilities"), shall be subordinated and postponed and subject in
right of payment, to the extent and in the manner hereinafter set forth in the
following sections of this Article 5, to the prior indefeasible payment in full
in cash, of all Senior Indebtedness of the Corporation and each holder of any
such Debenture by his acceptance thereof agrees to and shall be bound by the
provisions of this Article 5.
5.2 Order of Payment
Upon any distribution of the assets of the Corporation on any dissolution,
winding up, total liquidation or reorganization of the Corporation (whether in
bankruptcy, insolvency or receivership proceedings, or upon an "assignment for
the benefit of creditors" or any other marshalling of the assets and liabilities
of the Corporation, or otherwise):
(a) all Senior Indebtedness shall first be paid indefeasibly in full, or
provision made for such payment, in cash before any payment is made
on account of the principal of or interest on the indebtedness
evidenced by the Debentures;
(b) any payment or distribution of assets of the Corporation, whether in
cash, property or securities, to which the holders of the Debentures
or the Debenture Trustee on behalf of such holders would be entitled
except for the provisions of this Article 5 shall be paid or
delivered by the trustee in bankruptcy, receiver, assignee for the
benefit of creditors, or other liquidating agent making such payment
or distribution, directly to the holders of Senior Indebtedness or
their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments
evidencing any of such Senior Indebtedness may have been issued, to
the extent necessary to pay all Senior Indebtedness in full after
giving effect to any concurrent payment or distribution, or
provision therefor, to the holders of such Senior Indebtedness; and
(c) the Senior Creditors or a receiver or a receiver-manager of the
Corporation or of all or part of its assets or any other enforcement
agent may sell, mortgage, or otherwise dispose of the Corporation
assets in whole or in part, free and clear of all Debenture
Liabilities and without
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the approval of the Debentureholders or the Debenture Trustee or any
requirement to account to the Debenture Trustee or the
Debentureholders.
The rights and priority of the Senior Indebtedness and the subordination
pursuant hereto shall not be affected by:
(i) the time, sequence or order of creating, granting, executing,
delivering of, or registering, perfecting or failing to
register or perfect any security notice, caveat, financing
statement or other notice in respect of the Senior Security;
(ii) the time or order of the attachment, perfection or
crystallization of any security constituted by the Senior
Security;
(iii) the taking of any collection, enforcement or realization
proceedings pursuant to the Senior Security;
(iv) the date of obtaining of any judgment or order of any
bankruptcy court or any court administering bankruptcy,
insolvency or similar proceedings as to the entitlement of the
Senior Creditors, or any of them or the Debentureholders or
other Trustee or any of them to any money or property of the
Corporation;
(v) the failure to exercise any power or remedy reserved to the
Senior Creditors under the Senior Security or to insist upon a
strict compliance with any terms thereof;
(vi) whether any Senior Security is now perfected, hereafter ceases
to be perfected, is avoidable by any trustee in bankruptcy or
like official or is otherwise set aside, invalidated or
lapses;
(vii) the date of giving or failing to give notice to or making
demand upon the Corporation; or
(viii) any other matter whatsoever.
All payments to holders of Senior Indebtedness pursuant to this Section 5.2
shall be paid first to holders of Senior Indebtedness consisting of debt for
monies borrowed (and excluding indebtedness to trade creditors), and then shall
be paid to holders of all other Senior Indebtedness.
5.3 Subrogation to Rights of Holders of Senior Indebtedness
Subject to the payment in full of all Senior Indebtedness, the holders of
the Debentures shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of assets of the Corporation
to the extent of the application thereto of such payments or other assets which
would have been received by the holders of the Debentures but for the provisions
hereof until the principal of and interest on the Debentures shall be paid in
full, and no such payments or distributions to the holders of the Debentures of
cash, property or securities, which otherwise would be payable or distributable
to the holders of the Senior Indebtedness, shall, as between the Corporation,
its creditors other than the holders of Senior Indebtedness, and the holders of
Debentures, be deemed to be a payment by the Corporation to the holders of the
Senior Indebtedness or on account of the Senior Indebtedness, it being
understood that the provisions of this Article 5 are and are intended solely for
the purpose of defining the relative rights of the holders of the Debentures, on
the one hand, and the holders of Senior Indebtedness, on the other hand.
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Xxx Xxxxxxxxx Trustee, for itself and on behalf of each of the
Debentureholders, hereby waives any and all rights to require a Senior Creditor
to pursue or exhaust any rights or remedies with respect to the Corporation or
any property and assets subject to the Senior Security or in any other manner to
require the marshalling of property, assets or security in connection with the
exercise by the Senior Creditors of any rights, remedies or recourses available
to them.
5.4 Obligation to Pay Not Impaired
Nothing contained in this Article 5 or elsewhere in this Indenture or in
the Debentures is intended to or shall impair, as between the Corporation, its
creditors other than the holders of Senior Indebtedness, and the holders of the
Debentures, the obligation of the Corporation, which is absolute and
unconditional, to pay to the holders of the Debentures the principal of and
interest on the Debentures, as and when the same shall become due and payable in
accordance with their terms, or affect the relative rights of the holders of the
Debentures and creditors of the Corporation other than the holders of the Senior
Indebtedness, nor shall anything herein or therein prevent the Debenture Trustee
or the holder of any Debenture from exercising all remedies otherwise permitted
by applicable law upon default under this Indenture, subject to the rights, if
any, under this Article 5 of the holders of Senior Indebtedness in respect of
cash, property or securities of the Corporation received upon the exercise of
any such remedy.
5.5 No Payment if Senior Indebtedness in Default
Upon the maturity of any Senior Indebtedness by lapse of time,
acceleration or otherwise, then, except as provided in Section 5.8, all
principal of (and premium, if any) and interest on and other amounts in respect
of all such matured Senior Indebtedness shall first be paid in full, or shall
first have been duly provided for, before any payment is made on account of
principal of or interest on the Debentures.
In case of default with respect to any Senior Indebtedness, unless and
until such default shall have been cured or waived or shall have ceased to
exist, no payment (by purchase of Debentures or otherwise) shall be made by the
Corporation with respect to the principal of or interest on the Debentures and
neither the Debenture Trustee nor the holders of Debentures shall be entitled to
demand, accelerate, institute proceedings for the collection of, or receive any
payment or benefit (including without limitation by set-off, combination of
accounts or otherwise in any manner whatsoever) on account of the Debentures
after the happening of such a default (except as provided in Section 5.8), and
unless and until such default shall have been cured or waived or shall have
ceased to exist, such payments shall be held in trust for the benefit of, and,
if and when such Senior Indebtedness shall have become due and payable, shall be
paid over to, the holders of the Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any indenture under which
any instruments evidencing an amount of the Senior Indebtedness remaining unpaid
until all such Senior Indebtedness shall have been paid in full, after giving
effect to any concurrent payment or distribution to the holders of such Senior
Indebtedness; provided, however, that the foregoing shall in no way prohibit,
restrict or prevent the Debenture Trustee from taking such actions as may be
necessary to preserve claims of the Debenture Trustee and/or the holders of the
Debentures under this Indenture in any bankruptcy, reorganization or insolvency
proceeding (including, without limitation, the filing of proofs of claim in any
such bankruptcy, reorganization or insolvency proceedings by or against the
Corporation or its Subsidiaries and exercising its rights to vote as an
unsecured creditor under any such bankruptcy, reorganization or insolvency
proceedings commenced by or against the Corporation or its Subsidiaries).
The fact that any payment hereunder is prohibited by this Section 5.5
shall not prevent the failure to make such payment from being an Event of
Default hereunder.
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5.6 Payment on Debentures Permitted
Nothing contained in this Article 5 or elsewhere in this Indenture, or in
any of the Debentures, shall affect the obligation of the Corporation to make,
or prevent the Corporation from making, at any time except during the pendency
of any dissolution, winding up or liquidation of the Corporation or
reorganization proceedings specified in Section 5.2 affecting the affairs of the
Corporation, any payment of principal of or interest on the Debentures, except
that the Corporation shall not make any such payment other than as contemplated
by this Article 5, if it is in default in payment of any Senior Indebtedness.
The fact that any such payment is prohibited by this Section 5.6 shall not
prevent the failure to make such payment from being an Event of Default
hereunder. Nothing contained in this Article 5 or elsewhere in this Indenture,
or in any of the Debentures, shall prevent the conversion of the Debentures or
the application by the Debenture Trustee of any monies deposited with the
Debenture Trustee hereunder for the purpose, to the payment of or on account of
the principal of or interest on the Debentures. Notwithstanding the provisions
of this Article 5 or any provision in this Indenture or in the Debentures
contained, the Debenture Trustee shall not be charged with knowledge of the
existence of any Senior Indebtedness or of any default in the payment thereof,
unless and until the Debenture Trustee shall have received written notice
thereof from the Corporation or from the holder of Senior Indebtedness or from
the representative of any such holder.
5.7 Confirmation of Subordination
Each holder of Debentures by his acceptance thereof authorizes and directs
the Debenture Trustee in his behalf to take such action as may be necessary or
appropriate to effect the subordination as provided in this Article 5 and
appoints the Debenture Trustee his attorney-in-fact for any and all such
purposes. This power of attorney, being coupled with an interest and rights,
shall be irrevocable. Upon request of the Corporation, and upon being furnished
an Officer's Certificate stating that one or more named persons are holders of
Senior Indebtedness, or the representative or representatives of such holders,
or the trustee or trustees under which any instrument evidencing such Senior
Indebtedness may have been issued, and specifying the amount and nature of such
Senior Indebtedness, the Debenture Trustee shall enter into a written agreement
or agreements with the Corporation and the person or persons named in such
Officer's Certificate providing that such person or persons are entitled to all
the rights and benefits of this Article 5 as the holder or holders,
representative or representatives, or trustee or trustees of the Senior
Indebtedness specified in such Officer's Certificate and in such agreement. Such
agreement shall be conclusive evidence that the indebtedness specified therein
is Senior Indebtedness, however, nothing herein shall impair the rights of any
holder of Senior Indebtedness who has not entered into such an agreement.
5.8 Knowledge of Debenture Trustee
Notwithstanding the provisions of this Article 5, the Debenture Trustee
will not be charged with knowledge of the existence of any fact that would
prohibit the making of any payment of monies to or by the Debenture Trustee, or
the taking of any other action by the Debenture Trustee, unless and until the
Debenture Trustee has received written notice thereof from the Corporation, any
Debentureholder or any holder or representative of any class of Senior
Indebtedness or on its behalf.
5.9 Debenture Trustee May Hold Senior Indebtedness
The Debenture Trustee is entitled to all the rights set forth in this
Article 5 with respect to any Senior Indebtedness at the time held by it, to the
same extent as any other holder of Senior Indebtedness, and nothing in this
Indenture deprives the Debenture Trustee of any of its rights as such holder.
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5.10 Rights of Holders of Senior Indebtedness Not Impaired
No right of any present or future holder of any Senior Indebtedness to
enforce the subordination herein will at any time or in any way be prejudiced or
impaired by any act or failure to act on the part of the Corporation or by any
non-compliance by the Corporation with the terms, provisions and covenants of
this Indenture, regardless of any knowledge thereof which any such holder may
have or be otherwise charged with.
5.11 Altering the Senior Indebtedness
The holders of the Senior Indebtedness have the right to extend, renew,
revise, restate, modify or amend the terms of the Senior Indebtedness (including
increasing the principal amount of the Senior Indebtedness) or any security
therefor and to release, sell or exchange such security and otherwise to deal
freely with the Corporation, all without notice to or consent of the
Debentureholders or the Debenture Trustee and without affecting the liabilities
and obligations of the parties to this Indenture or the Debentureholders or the
Debenture Trustee.
5.12 Additional Indebtedness
This Indenture does not restrict the Corporation from incurring additional
indebtedness for borrowed money or otherwise or mortgaging, pledging or charging
its properties to secure any indebtedness.
5.13 Right of Debentureholder to Convert Not Impaired
The subordination of the Debentures to the Senior Indebtedness and the
provisions of this Article 5 do not impair in any way the right of a
Debentureholder to convert its Debentures pursuant to Article 6.
5.14 Invalidated Payments
In the event that any of the Senior Indebtedness shall be paid in full and
subsequently, for whatever reason, such formerly paid or satisfied Senior
Indebtedness becomes unpaid or unsatisfied, the terms and conditions of this
Article 5 shall be reinstated and the provisions of this Article 5 shall again
be operative until all Senior Indebtedness is repaid in full, provided that such
reinstatement shall not give the Senior Creditors any rights or recourses
against the Debenture Trustee or the Debentureholders for amounts paid to the
Debentureholders subsequent to such payment or satisfaction in full and prior to
such reinstatement.
5.15 Contesting Security
The Debenture Trustee, for itself and on behalf of the Debentureholders,
agrees that it shall not contest or bring into question the validity, perfection
or enforceability of any of the Senior Security, or the relative priority of the
Senior Security.
5.16 No Set-Off
Each of the Corporation and the Debenture Trustee agrees, and each holder
of a Debenture, by his acceptance thereof, likewise agrees, that it shall have
no rights of set-off or counterclaim with respect to the principal of, premium,
if any, and interest on the Debentures at any time when any payment of, or in
respect of, such amounts to the Debenture Trustee or the holder of a Debenture
is prohibited by this Article 5 or is otherwise required to be paid to the
holders of Senior Indebtedness or their representative or to the trustee under
any indenture under which any instruments evidencing any of such Senior
Indebtedness may have been issued, as their respective interests may appear.
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ARTICLE 6
CONVERSION OF DEBENTURES
6.1 Applicability of Article
Any Debentures issued hereunder of any series which by their terms are
convertible (subject, however, to any applicable restriction of the conversion
of Debentures of such series) will be convertible into Common Shares or other
securities, at such conversion rate or rates, and on such date or dates and in
accordance with such other provisions as shall have been determined at the time
of issue of such Debentures and shall have been expressed in this Indenture, in
such Debentures, in an Officer's Certificate, or in a supplemental indenture
authorizing or providing for the issue thereof.
Such right of conversion shall extend only to the maximum number of whole
Common Shares into which the aggregate principal amount of the Debenture or
Debentures surrendered for conversion at any one time by the holder thereof may
be converted. Fractional interests in Common Shares shall be adjusted for in the
manner provided in Section 6.6.
6.2 Notice of Expiry of Conversion Privilege
Notice of the expiry of the conversion privileges of the Debentures other
than on the Maturity Date, shall be given by or on behalf of the Corporation,
not more than 60 days and not less than 30 days prior to the date fixed for the
Time of Expiry, in the manner provided in Section 14.2.
6.3 Revival of Right to Convert
If the redemption of any Debenture called for redemption by the
Corporation is not made or the payment of the purchase price of any Debenture
which has been tendered in acceptance of an offer by the Corporation to purchase
Debentures for cancellation is not made, in the case of a redemption upon due
surrender of such Debenture or in the case of a purchase on the date on which
such purchase is required to be made, as the case may be, then, provided the
Time of Expiry has not passed, the right to convert such Debentures shall revive
and continue as if such Debenture had not been called for redemption or tendered
in acceptance of the Corporation's offer, respectively.
6.4 Manner of Exercise of Right to Convert
(a) The holder of a Debenture desiring to convert such Debenture in
whole or in part into Common Shares shall surrender such Debenture
to the Debenture Trustee at its principal office in Toronto, Ontario
together with the conversion notice in the form attached hereto as
Schedule "F" or any other written notice in a form satisfactory to
the Debenture Trustee, in either case duly executed by the holder or
his executors or administrators or other legal representatives or
his or their attorney duly appointed by an instrument in writing in
form and executed in a manner satisfactory to the Debenture Trustee,
exercising his right to convert such Debenture in accordance with
the provisions of this Article; provided that with respect to a
Global Debenture, the obligation to surrender a Debenture to the
Debenture Trustee shall be satisfied if the Debenture Trustee makes
notation on the Global Debenture of the principal amount thereof so
converted and the Debenture Trustee is provided with all other
documentation which it may request. Thereupon such Debentureholder
or, subject to payment of all applicable stamp or security transfer
taxes or other governmental charges and compliance with all
reasonable requirements of the Debenture Trustee, its nominee(s) or
assignee(s) shall be entitled to be entered in the books of the
Corporation as at the Business Day immediately after the Date of
Conversion (or such later date as is specified in
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subsection 6.4(b)) as the holder of the number of Common Shares into
which such Debenture is convertible in accordance with the
provisions of this Article and, as soon as practicable thereafter,
the Corporation shall deliver to such Debentureholder or, subject as
aforesaid, his nominee(s) or assignee(s), a certificate or
certificates for such Common Shares and make or cause to be made any
payment of interest to which such holder is entitled in accordance
with subsection 6.4(e) hereof or in respect of fractional Common
Shares as provided in Section 6.6.
(b) For the purposes of this Article, a Debenture shall be deemed to be
surrendered for conversion on the date (the "Date of Conversion") on
which it is so surrendered when the register of the Debenture
Trustee is open and in accordance with the provisions of this
Article or, in the case of a Global Debenture which the Debenture
Trustee received notice of and all necessary documentation in
respect of the exercise of the conversion rights and, in the case of
a Debenture so surrendered by post or other means of transmission,
on the date on which it is received by the Debenture Trustee at its
office specified in subsection 6.4(a); provided that if a Debenture
is surrendered for conversion on a day on which the register of
Common Shares is closed the person or persons entitled to receive
Common Shares shall become the holder or holders of record of such
Common Shares as at the date on which such register is next
reopened.
(c) Any part, being Cdn$1,000 or an integral multiple thereof, of a
Debenture in a denomination in excess of Cdn$1,000 may be converted
as provided in this Article and all references in this Indenture to
conversion of Debentures shall be deemed to include conversion of
such part.
(d) Upon a holder of any Debenture exercising the right of conversion in
respect of only a part of the Debenture and surrendering such
Debenture to the Debenture Trustee, in accordance with subsection
6.4(a) the Debenture Trustee shall cancel the same and shall without
charge forthwith certify and deliver to the holder a new Debenture
or Debentures in an aggregate principal amount equal to the
unconverted part of the principal amount of the Debenture so
surrendered or, with respect to a Global Debenture, the Debenture
Trustee shall make notations on the Global Debenture of the
principal amount thereof so converted.
(e) The holder of a Debenture surrendered for conversion in accordance
with this Section 6.4 shall be entitled (subject to any applicable
restriction on the right to receive interest on conversion of
Debentures of any series) to receive accrued and unpaid interest in
respect thereof from the most recently completed Interest Payment
Date to, but excluding the Date of Conversion of such Debentures and
the Common Shares issued upon such conversion shall rank only in
respect of dividends declared in favour of shareholders of record on
and after the Business Day immediately after the Date of Conversion
or such later date as such holder shall become the holder of record
of such Common Shares pursuant to subsection 6.4(b), from which
applicable date they will for all purposes be and be deemed to be
issued and outstanding as fully paid and non-assessable Common
Shares.
(f) The Corporation shall comply with all Applicable Securities
Legislation regulating the issue and delivery of Freely Tradeable
Common Shares upon exercise of conversion rights hereunder and shall
cause to be listed and posted for trading such Common Shares on each
stock exchange on which the Common Shares are then listed.
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6.5 Adjustment of Conversion Price
The Conversion Price in effect at any date shall be subject to adjustment
from time to time as set forth below.
(a) If and whenever at any time prior to the Time of Expiry the
Corporation shall (i) subdivide or redivide the outstanding Common
Shares into a greater number of Common Shares, (ii) reduce, combine
or consolidate the outstanding Common Shares into a smaller number
of Common Shares, or (iii) issue Common Shares to the holders of all
or substantially all of the outstanding Common Shares by way of a
dividend (other than the issue of Common Shares to holders of Common
Shares who have elected to receive dividends in the form of Common
Shares in lieu of cash dividends paid in the ordinary course on the
Common Shares), the Conversion Price in effect on the effective date
of such subdivision, redivision, reduction, combination or
consolidation or on the record date for such issue of Common Shares
by way of a dividend shall, in the case of any of the events
referred to in (i) and (iii) above, be decreased in proportion to
the number of outstanding Common Shares resulting from such
subdivision, redivision or dividend, or shall, in the case of any of
the events referred to in (ii) above, be increased in proportion to
the number of outstanding Common Shares resulting from such
reduction, combination or consolidation. Such adjustment shall be
made successively whenever any event referred to in this subsection
6.5(a) shall occur. Any such issue of Common Shares by way of a
dividend shall be deemed to have been made on the record date for
the dividend for the purpose of calculating the number of
outstanding Common Shares under subsections (b) and (c) of this
Section 6.5.
(b) If and whenever at any time prior to the Time of Expiry the
Corporation shall fix a record date for the issuance of options,
rights or warrants to all or substantially all the holders of its
outstanding Common Shares (other than for the issue of Common Shares
to holders of Common Shares who have elected to receive dividends in
the form of Common Shares in lieu of cash dividends paid in the
ordinary course on the Common Shares) entitling them, for a period
expiring not more than 45 days after such record date, to subscribe
for or purchase Common Shares (or securities convertible into Common
Shares) at a price per share (or having a conversion or exchange
price per share) less than 95% of the Current Market Price of a
Common Share on such record date (other than pursuant to a dividend
reinvestment plan of the Corporation), the Conversion Price shall be
adjusted immediately after such record date so that it shall equal
the price determined by multiplying the Conversion Price in effect
on such record date by a fraction, of which the numerator shall be
the total number of Common Shares outstanding on such record date
plus a number of Common Shares equal to the quotient obtained by
dividing the aggregate price of the total number of additional
Common Shares offered for subscription or purchase (or the aggregate
conversion or exchange price of the convertible securities so
offered) by such Current Market Price per Common Share, and of which
the denominator shall be the total number of Common Shares
outstanding on such record date plus the total number of additional
Common Shares offered for subscription or purchase (or into which
the convertible securities so offered are convertible). Such
adjustment shall be made successively whenever such a record date is
fixed. To the extent that any such options, rights or warrants are
not so issued or any such options, rights or warrants are not
exercised prior to the expiration thereof, the Conversion Price
shall be re-adjusted to the Conversion Price which would then be in
effect if such record date had not been fixed or to the Conversion
Price which would then be in effect if only the number of Common
Shares (or securities convertible into Common Shares) actually
issued upon the exercise of such options, rights or warrants were
included in such fraction, as the case may be.
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(c) If and whenever at any time prior to the Time of Expiry the
Corporation shall fix a record date for the paying of a dividend to
all or substantially all the holders of its outstanding Common
Shares of (i) shares of any class other than Common Shares and other
than shares distributed to holders of Common Shares who have elected
to receive dividends in the form of such shares in lieu of dividends
paid in the ordinary course, (ii) rights, options or warrants
(excluding rights, options or warrants entitling the holders thereof
for a period of not more than 45 days to subscribe for or purchase
Common Shares or securities convertible into Common Shares), (iii)
evidences of its indebtedness, or (iv) assets (excluding dividends
paid in the ordinary course) then, in each such case, the Conversion
Price shall be adjusted immediately after such record date so that
it shall equal the price determined by multiplying the Conversion
Price in effect on such record date by a fraction, of which the
numerator shall be the total number of Common Shares outstanding on
such record date multiplied by the Current Market Price per Common
Share on such record date, less the fair market value (as determined
by the Corporation, with the approval of the Debenture Trustee,
which determination shall be conclusive) of such rights, options or
warrants or evidences of indebtedness or assets so distributed, and
of which the denominator shall be the total number of Common Shares
outstanding on such record date multiplied by such Current Market
Price per Common Share. Such adjustment shall be made successively
whenever such a record date is fixed. To the extent that such
dividend is not so declared, the Conversion Price shall be
re-adjusted to the Conversion Price which would then be in effect if
such record date had not been fixed or to the Conversion Price which
would then be in effect based upon such rights, options or warrants
or evidences of indebtedness or assets actually distributed, as the
case may be. In clause (iv) of this subsection (c) the term
"dividends paid in the ordinary course" shall include the value of
any securities or other property or assets distributed in lieu of
cash dividends paid in the ordinary course at the option of
shareholders.
(d) If and whenever at any time prior to the Time of Expiry, there is a
reclassification of the Common Shares or a capital reorganization of
the Corporation other than as described in subsection 6.5(a) or a
consolidation, amalgamation, arrangement or merger of the
Corporation with or into any other Person or other entity; or a sale
or conveyance of the property and assets of the Corporation as an
entirety or substantially as an entirety to any other Person or
other entity or a liquidation, dissolution or winding-up of the
Corporation, any holder of a Debenture who has not exercised its
right of conversion prior to the effective date of such
reclassification, capital reorganization, consolidation,
amalgamation, arrangement or merger, sale or conveyance or
liquidation, dissolution or winding-up, upon the exercise of such
right thereafter (and subject to the rights of the Corporation
pursuant to subsection 2.4(k)(vi) hereof), shall be entitled to
receive and shall accept, in lieu of the number of Common Shares
then sought to be acquired by it, the number of shares or other
securities or property of the Corporation or of the Person or other
entity resulting from such reclassification, capital reorganization,
consolidation, amalgamation, arrangement or merger, or to which such
sale or conveyance may be made or which holders of Common Shares
receive pursuant to such liquidation, dissolution or winding-up, as
the case may be, that such holder of a Debenture would have been
entitled to receive on such reclassification, capital
reorganization, consolidation, amalgamation, arrangement or merger,
sale or conveyance or liquidation, dissolution or winding-up, if, on
the record date or the effective date thereof, as the case may be,
the holder had been the registered holder of the number of Common
Shares sought to be acquired by it and to which it was entitled to
acquire upon the exercise of the conversion right. Notwithstanding
the foregoing, if, prior to the date that is five years plus one day
from the last date of original issuance of each of the Debentures,
holders of Debentures would otherwise be entitled to receive, upon
conversion of any Debentures, any property (including cash) or
securities that would not constitute "prescribed securities" for
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the purposes of clause 212(1)(b)(vii)(E) of the Tax Act ("ineligible
consideration"), such holders shall not be entitled to receive such
ineligible consideration but the Corporation, or its successor or
acquiror, as the case may be, shall have the right (at the sole
option of the Corporation, or its successor or acquiror, as the case
may be,) to deliver either such ineligible consideration or
"prescribed securities" for the purposes of clause 212(1)(b)(vii)(E)
of the Tax Act with a market value equal to the market value of such
ineligible consideration.
If determined appropriate by the Corporation to give effect to or to
evidence the provisions of this subsection 6.5(d), the Corporation,
its successor, or such purchasing Person or other entity, as the
case may be, shall, prior to or contemporaneously with any such
reclassification, capital reorganization, consolidation,
amalgamation, arrangement, merger, sale or conveyance or
liquidation, dissolution or winding-up or other similar transaction,
enter into an indenture which shall provide, to the extent possible,
for the application of the provisions set forth in this Indenture
with respect to the rights and interests thereafter of the holder of
Debentures to the end that the provisions set forth in this
Indenture shall thereafter correspondingly be made applicable, as
nearly as may reasonably be, with respect to any shares or other
securities or property to which a holder of Debentures is entitled
on the exercise of its conversion rights thereafter. Any indenture
entered into between the Corporation and the Debenture Trustee
pursuant to the provisions of this subsection 6.5(d) shall be a
supplemental indenture entered into pursuant to the provisions of
Article 16. Any indenture entered into between the Corporation, any
successor to the Corporation or such purchasing Person or other
entity and the Debenture Trustee shall provide for adjustments which
shall be as nearly equivalent as may be practicable to the
adjustments provided in this subsection 6.5(d) and which shall apply
to successive reclassifications, capital reorganizations,
consolidations, amalgamations, mergers, sales or conveyances and to
any successive liquidation, dissolution or winding up or other
similar transaction;
(e) In any case in which this Section 6.5 shall require that an
adjustment shall become effective immediately after a record date
for an event referred to herein, the Corporation may defer, until
the occurrence of such event, issuing to the holder of any Debenture
converted after such record date and before the occurrence of such
event the additional Common Shares issuable upon such conversion by
reason of the adjustment required by such event before giving effect
to such adjustment; provided, however, that the Corporation shall
deliver to such holder an appropriate instrument evidencing such
holder's right to receive such additional Common Shares upon the
occurrence of the event requiring such adjustment and the right to
receive any dividends on such additional Common Shares declared in
favour of holders of record of Common Shares on and after the Date
of Conversion or such later date as such holder would, but for the
provisions of this subsection 6.5(e), have become the holder of
record of such additional Common Shares pursuant to subsection
6.4(b).
(f) The adjustments provided for in this Section 6.5 are cumulative and
shall apply to successive subdivisions, redivisions, reductions,
combinations, consolidations, distributions, issues or other events
resulting in any adjustment under the provisions of this Section,
provided that, notwithstanding any other provision of this Section,
no adjustment of the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in
the Conversion Price then in effect; provided however, that any
adjustments which by reason of this subsection 6.5(f) are not
required to be made shall be carried forward and taken into account
in any subsequent adjustment.
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For greater certainty, there will be no adjustment of the Conversion
Price in respect of any event described in this Section 6.5 if
Debentureholders are allowed to participate as though they had
converted their Debentures prior to the applicable record date or
effective date and any relevant stock exchange has approved such
participation.
(g) For the purpose of calculating the number of Common Shares
outstanding, Common Shares owned by or for the benefit of the
Corporation shall not be counted.
(h) In the event of any question arising with respect to the adjustments
provided in this Section 6.5, such question shall be conclusively
determined by a firm of nationally recognized chartered accountants
appointed by the Corporation and acceptable to the Debenture Trustee
(who may be the auditors of the Corporation); such accountants shall
have access to all necessary records of the Corporation and such
determination shall be binding upon the Corporation, the Debenture
Trustee, and the Debentureholders.
(i) In case the Corporation shall take any action affecting the Common
Shares other than action described in this Section 6.5, which in the
opinion of the Directors, would materially affect the rights of
Debentureholders, the Conversion Price shall be adjusted in such
manner and at such time, by action of the Directors, subject to the
prior written consent of the Toronto Stock Exchange or such other
exchange on which the Debentures are then listed, as the Directors
in their sole discretion may determine to be equitable in the
circumstances. Failure of the Directors to make such an adjustment
shall be conclusive evidence that they have determined that it is
equitable to make no adjustment in the circumstances.
(j) Subject to the prior written consent of the Toronto Stock Exchange
or such other exchange on which the Debentures are then listed, no
adjustment in the Conversion Price shall be made in respect of any
event described in subsections 6.5(a), 6.5(b) or 6.5(c) other than
the events described in subsections 6.5(a)(i) or 6.5(a)(ii) if the
holders of the Debentures are entitled to participate in such event
on the same terms mutatis mutandis as if they had converted their
Debentures prior to the effective date or record date, as the case
may be, of such event.
(k) Except as stated above in this Section 6.5, no adjustment will be
made in the Conversion Price for any Debentures as a result of the
issuance of Common Shares at less than the Current Market Price for
such Common Shares on the date of issuance or the then applicable
Conversion Price.
6.6 No Requirement to Issue Fractional Common Shares
The Corporation shall not be required to issue fractional Common Shares
upon the conversion of Debentures pursuant to this Article. If more than one
Debenture shall be surrendered for conversion at one time by the same holder,
the number of whole Common Shares issuable upon conversion thereof shall be
computed on the basis of the aggregate principal amount of such Debentures to be
converted. If any fractional interest in a Common Share would, except for the
provisions of this Section, be deliverable upon the conversion of any principal
amount of Debentures, the Corporation shall, in lieu of delivering any
certificate representing such fractional interest, make a cash payment to the
holder of such Debenture of an amount equal to the fractional interest which
would have been issuable multiplied by the Current Market Price of the Common
Shares on the Date of Conversion (less applicable withholding taxes, if any).
6.7 Corporation to Reserve Common Shares
The Corporation covenants with the Debenture Trustee that it will at all
times reserve and keep available out of its authorized Common Shares, solely for
the purpose of issue upon conversion of Debentures
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as in this Article provided, and conditionally allot to Debentureholders who may
exercise their conversion rights hereunder, such number of Common Shares as
shall then be issuable upon the conversion of all outstanding Debentures. The
Corporation covenants with the Debenture Trustee that all Common Shares which
shall be so issuable shall be duly and validly issued as fully paid and
non-assessable.
6.8 Cancellation of Converted Debentures
Subject to the provisions of Section 6.4 as to Debentures converted in
part, all Debentures converted in whole or in part under the provisions of this
Article shall be forthwith delivered to and cancelled by the Debenture Trustee
and no Debenture shall be issued in substitution therefor.
6.9 Certificate as to Adjustment
The Corporation shall from time to time immediately after the occurrence
of any event which requires an adjustment or readjustment as provided in Section
6.5, deliver an Officer's Certificate to the Debenture Trustee specifying the
nature of the event requiring the same and the amount of the adjustment
necessitated thereby and setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based, which
certificate and the amount of the adjustment specified therein shall be verified
by an opinion of a firm of nationally recognized chartered accountants appointed
by the Corporation and acceptable to the Debenture Trustee (who may be the
auditors of the Corporation) and shall be conclusive and binding on all parties
in interest. When so approved, the Corporation shall, except in respect of any
subdivision, redivision, reduction, combination or consolidation of the Common
Shares, forthwith give notice to the Debentureholders in the manner provided in
Section 14.2 specifying the event requiring such adjustment or readjustment and
the results thereof, including the resulting Conversion Price.
6.10 Notice of Special Matters
The Corporation covenants with the Debenture Trustee that so long as any
Debenture remains outstanding, it will give notice to the Debenture Trustee, and
to the Debentureholders in the manner provided in Section 14.2, of its intention
to fix a record date for any event referred to in subsection 6.5(a), 6.5(b) or
6.5(c) (other than the subdivision, redivision, reduction, combination or
consolidation of its Common Shares or in connection with the Proposed
Acquisition) which may give rise to an adjustment in the Conversion Price, and,
in each case, such notice shall specify the particulars of such event and the
record date and the effective date for such event; provided that the Corporation
shall only be required to specify in such notice such particulars of such event
as shall have been fixed and determined on the date on which such notice is
given. Such notice shall be given not less than 14 days in each case prior to
such applicable record date.
6.11 Protection of Debenture Trustee
Subject to Section 15.4, the Debenture Trustee:
(a) shall not at any time be under any duty or responsibility to any
Debentureholder to determine whether any facts exist which may
require any adjustment in the Conversion Price, or with respect to
the nature or extent of any such adjustment when made, or with
respect to the method employed in making the same;
(b) shall not be accountable with respect to the validity or value (or
the kind or amount) of any Common Shares or of any shares or other
securities or property which may at any time be issued or delivered
upon the conversion of any Debenture;
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(c) shall not be responsible for any failure of the Corporation to make
any cash payment or to issue, transfer or deliver Common Shares or
share certificates upon the surrender of any Debenture for the
purpose of conversion, or to comply with any of the covenants
contained in this Article; and
(d) shall be entitled to act and rely on any adjustment calculation of
the Corporation.
ARTICLE 7
COVENANTS OF THE CORPORATION
The Corporation hereby covenants and agrees with the Debenture Trustee for
the benefit of the Debenture Trustee and the Debentureholders, that so long as
any Debentures remain outstanding:
7.1 To Pay Principal, Premium (if any) and Interest
The Corporation will duly and punctually pay or cause to be paid to every
Debentureholder the principal of, premium (if any) and interest accrued on the
Debentures of which it is the holder on the dates, at the places and in the
manner mentioned herein and in the Debentures.
7.2 To Pay Debenture Trustee's Remuneration
The Corporation will pay the Debenture Trustee reasonable remuneration for
its services as Debenture Trustee hereunder and will repay to the Debenture
Trustee on demand all monies which shall have been paid by the Debenture Trustee
in connection with the execution of the trusts hereby created and such monies
including the Debenture Trustee's remuneration. Such remuneration shall continue
to be payable until the trusts hereof be finally wound up and whether or not the
trusts of this Indenture shall be in the course of administration by or under
the direction of a court of competent jurisdiction. Any amount due under this
Section and unpaid 30 days after written request for such payment shall bear
interest from the expiration of such 30 days at a rate per annum equal to the
then rate charged by the Debenture Trustee under similar indentures from time to
time, payable on demand.
7.3 To Give Notice of Default
The Corporation shall promptly notify the Debenture Trustee upon obtaining
knowledge of any Event of Default hereunder.
7.4 Preservation of Existence, etc.
Subject to the express provisions hereof, the Corporation will carry on
and conduct its activities, and cause its Subsidiaries to carry on and conduct
their businesses, in a proper, efficient and business-like manner and in
accordance with good business practices; and, subject to the express provisions
hereof, it will do or cause to be done all things necessary to preserve and keep
in full force and effect its and its Subsidiaries' respective existences and
rights; provided, however, that the Corporation shall not be required to
preserve and keep in full force and effect any Subsidiary's existence and rights
if, in the judgment of the Corporation, the preservation thereof is no longer
desirable in the conduct of the business of the Corporation and its
Subsidiaries, taken as a whole, and the loss thereof is not disadvantageous in
any material respect to the Debentureholders.
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7.5 Annual Certificate of Compliance
The Corporation shall deliver to the Debenture Trustee, within 90 days
after the end of each calendar year, an Officer's Certificate as to the
knowledge of such officer or director of the Corporation who executes the
Officer's Certificate, of the Corporation's compliance with all conditions and
covenants of this Indenture certifying that after reasonable investigation and
inquiry, the Corporation has complied with all covenants, conditions or other
requirements contained in this Indenture, the non-compliance with which could,
with the giving of notice, lapse of time or otherwise, constitute an Event of
Default hereunder, or if such is not the case, setting forth with reasonable
particulars any steps taken or proposed to be taken to remedy such Event of
Default.
7.6 No Dividends on Common Shares if Event of Default
The Corporation shall not declare or pay any dividends to the holders of
its issued and outstanding Common Shares after the occurrence of an Event of
Default unless and until such default shall have been cured or waived or shall
have ceased to exist.
7.7 Performance of Covenants by Debenture Trustee
If the Corporation shall fail to perform any of its covenants contained in
this Indenture, the Debenture Trustee may notify the Debentureholders of such
failure on the part of the Corporation or may itself perform any of the
covenants capable of being performed by it, but (subject to Sections 8.2 and
15.4) shall be under no obligation to do so or to notify the Debentureholders.
All sums so expended or advanced by the Debenture Trustee shall be repayable as
provided in Section 7.2. No such performance, expenditure or advance by the
Debenture Trustee shall be deemed to relieve the Corporation of any default
hereunder.
7.8 Listing
The Corporation shall use commercially reasonable efforts to ensure that
the Common Shares are listed and posted for trading on the Toronto Stock
Exchange and the New York Stock Exchange and the Initial Debentures are listed
and posted for trading on the Toronto Stock Exchange, to maintain such listing
and posting for trading of the Common Shares on the Toronto Stock Exchange and
the New York Stock Exchange and the Initial Debentures on the Toronto Stock
Exchange, and to maintain the Corporation's status as a "reporting issuer", or
the equivalent thereof, under Applicable Securities Legislation.
ARTICLE 8
DEFAULT
8.1 Events of Default
Each of the following events constitutes, and is herein sometimes referred
to as, an "Event of Default":
(a) failure for 15 days to pay interest on the Debentures when due;
(b) failure to pay principal or premium, if any, on the Debentures when
due whether at maturity, upon redemption, by declaration or
otherwise;
(c) failure for 15 days to deliver when due any Make Whole Amount,
deliverable upon conversion of the Initial Debentures;
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(d) default in the observance or performance of any material covenant of
this Indenture by the Corporation which remains unremedied for a
period of 30 days after notice in writing has been given by the
Debenture Trustee to the Corporation specifying such default and
requiring the Corporation to remedy such default;
(e) failure by the Corporation to make a Change of Control Purchase
Offer as and when required hereunder or to adjust the Conversion
Price, if the Corporation has so elected to do so, in the case of a
Public Acquiror Change of Control;
(f) if a decree or order of a Court having jurisdiction is entered
adjudging the Corporation bankrupt or insolvent under the Bankruptcy
and Insolvency Act (Canada) or any other bankruptcy, insolvency or
analogous laws, or issuing sequestration or process of execution
against, or against any substantial part of, the property of the
Corporation or appointing a receiver of, or of any substantial part
of, the property of the Corporation or ordering the winding-up or
liquidation of its affairs, and any such decree or order continues
unstayed and in effect for a period of 60 days;
(g) if the Corporation institutes proceedings to be adjudicated a
bankrupt or insolvent, or consents to the institution of bankruptcy
or insolvency proceedings against it under the Bankruptcy and
Insolvency Act (Canada) or any other bankruptcy, insolvency or
analogous laws, or consents to the filing of any such petition or to
the appointment of a receiver of, or of any substantial part of, the
property of the Corporation or makes a general assignment for the
benefit of creditors, or admits in writing its inability to pay its
debts generally as they become due;
(h) if a resolution is passed for the winding-up or liquidation of the
Corporation except in the course of carrying out or pursuant to a
transaction in respect of which the conditions of Section 11.1 are
duly observed and performed; or
(i) if, after the date of this Indenture, any proceedings with respect
to the Corporation are taken with respect to a compromise or
arrangement, with respect to creditors of the Corporation generally,
under the applicable legislation of any jurisdiction;
in each and every such event the Debenture Trustee may, in its discretion, but
subject to the provisions of this Section, and shall, upon receipt of a request
in writing signed by the holders of not less than 25% in principal amount of the
Debentures then outstanding, subject to the provisions of Section 8.3, by notice
in writing to the Corporation declare the principal of and interest on all
Debentures then outstanding and all other monies outstanding hereunder to be due
and payable and the same shall forthwith become immediately due and payable to
the Debenture Trustee, and the Corporation shall forthwith pay to the Debenture
Trustee for the benefit of the Debentureholders such principal, accrued and
unpaid interest and interest on amounts in default on such Debentures (and,
where such a declaration is based upon a voluntary winding-up or liquidation of
the Corporation, the premium, if any, on the Debentures then outstanding which
would have been payable upon the redemption thereof by the Corporation on the
date of such declaration) and all other monies outstanding hereunder, together
with subsequent interest at the rate borne by the Debentures on such principal,
interest and such other monies from the date of such declaration until payment
is received by the Debenture Trustee, such subsequent interest to be payable at
the times and places and in the monies mentioned in and according to the tenor
of the Debentures. Such payment when made shall be deemed to have been made in
discharge of the Corporation's obligations hereunder and any monies so received
by the Debenture Trustee shall be applied in the manner provided in Section 8.6;
provided that, notwithstanding any other provision of this Indenture, the
Debenture Trustee shall not be bound by and shall not take, and no
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Debentureholder is or shall be entitled to take, any action under or pursuant to
this Section 8.1 without the written consent of any Eligible Senior Creditor.
For greater certainty, for the purposes of this Section 8.1, a series of
Debentures shall be in default in respect of an Event of Default if such Event
of Default relates to a default in the payment of principal, premium, if any,
interest or Additional Amounts on the Debentures of such series in which case
references to Debentures in this Section 8.1 shall refer to Debentures of that
particular series.
For the purposes of this Article 8, where the Event of Default refers to
an Event of Default with respect to a particular series of Debentures as
described in this Section 8.1, then this Article 8 shall apply mutatis mutandis
to the Debentures of such series and references in this Article 8 to the
Debentures shall mean Debentures of the particular series and references to the
Debentureholders shall refer to the Debentureholders of the particular series,
as applicable.
8.2 Notice of Events of Default
If an Event of Default shall occur and be continuing the Debenture Trustee
shall, within 30 days after it receives written notice of the occurrence of such
Event of Default, give notice of such Event of Default to the Debentureholders
in the manner provided in Section 14.2, provided that notwithstanding the
foregoing, unless the Debenture Trustee shall have been requested to do so by
the holders of at least 25% of the principal amount of the Debentures then
outstanding, the Debenture Trustee shall not be required to give such notice if
the Debenture Trustee in good faith shall have determined that the withholding
of such notice is in the best interests of the Debentureholders and shall have
so advised the Corporation in writing.
When notice of the occurrence of an Event of Default has been given and
the Event of Default is thereafter cured, notice that the Event of Default is no
longer continuing shall be given by the Debenture Trustee to the
Debentureholders within 15 days after the Debenture Trustee becomes aware the
Event of Default has been cured.
8.3 Waiver of Default
Upon the happening of any Event of Default hereunder:
(a) the holders of the Debentures shall have the power (in addition to
the powers exercisable by Extraordinary Resolution as hereinafter
provided) by requisition in writing by the holders of not less than
66 2/3% of the principal amount of Debentures then outstanding, to
instruct the Debenture Trustee to waive any Event of Default and to
cancel any declaration made by the Debenture Trustee pursuant to
Section 8.1 and the Debenture Trustee shall thereupon waive the
Event of Default and cancel such declaration, or either, upon such
terms and conditions as shall be prescribed in such requisition;
provided that notwithstanding the foregoing if the Event of Default
has occurred by reason of the nonobservance or non-performance by
the Corporation of any covenant applicable only to one or more
series of Debentures, then the holders of a majority of the
principal amount of the outstanding Debentures of that series shall
be entitled to exercise the foregoing power and the Debenture
Trustee shall so act and it shall not be necessary to obtain a
waiver from the holders of any other series of Debentures; and
(b) the Debenture Trustee, so long as it has not become bound to declare
the principal and interest on the Debentures then outstanding to be
due and payable, or to obtain or enforce payment of the same, shall
have power to waive any Event of Default if, in the Debenture
Trustee's opinion, the same shall have been cured or adequate
satisfaction made therefor, and
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in such event to cancel any such declaration theretofore made by the
Debenture Trustee in the exercise of its discretion, upon such terms
and conditions as the Debenture Trustee may deem advisable.
No such act or omission either of the Debenture Trustee or of the
Debentureholders shall extend to or be taken in any manner whatsoever to affect
any subsequent Event of Default or the rights resulting therefrom.
8.4 Enforcement by the Debenture Trustee
Subject to the provisions of Section 8.3 and to the provisions of any
Extraordinary Resolution that may be passed by the Debentureholders and to the
provisions of this Section, if the Corporation shall fail to pay to the
Debenture Trustee, forthwith after the same shall have been declared to be due
and payable under Section 8.1, the principal of and premium (if any) and
interest on all Debentures then outstanding, together with any other amounts due
hereunder, the Debenture Trustee may in its discretion and shall upon receipt of
a request in writing signed by the holders of not less than 25% in principal
amount of the Debentures then outstanding and upon being funded and indemnified
to its reasonable satisfaction against all costs, expenses and liabilities to be
incurred, proceed in its name as trustee hereunder to obtain or enforce payment
of such principal of and premium (if any) and interest on all the Debentures
then outstanding together with any other amounts due hereunder by such
proceedings authorized by this Indenture or by law or equity as the Debenture
Trustee in such request shall have been directed to take, or if such request
contains no such direction, or if the Debenture Trustee shall act without such
request, then by such proceedings authorized by this Indenture or by suit at law
or in equity as the Debenture Trustee shall deem expedient; provided that,
notwithstanding any other provision of this Indenture, the Debenture Trustee
shall not be bound by and shall not take, and no Debentureholder is or shall be
entitled to take, any action under or pursuant to this Section 8.4 without the
written consent of any Eligible Senior Creditor.
The Debenture Trustee shall be entitled and empowered, either in its own
name or as Debenture Trustee of an express trust, or as attorney-in-fact for the
holders of the Debentures, or in any one or more of such capacities, to file
such proof of debt, amendment of proof of debt, claim, petition or other
document as may be necessary or advisable in order to have the claims of the
Debenture Trustee and of the holders of the Debentures allowed in any
insolvency, bankruptcy, liquidation or other judicial proceedings relative to
the Corporation or its creditors or relative to or affecting its property. The
Debenture Trustee is hereby irrevocably appointed (and the successive respective
holders of the Debentures by taking and holding the same shall be conclusively
deemed to have so appointed the Debenture Trustee) the true and lawful
attorney-in-fact of the respective holders of the Debentures with authority to
make and file in the respective names of the holders of the Debentures or on
behalf of the holders of the Debentures as a class, subject to deduction from
any such claims of the amounts of any claims filed by any of the holders of the
Debentures themselves, any proof of debt, amendment of proof of debt, claim,
petition or other document in any such proceedings and to receive payment of any
sums becoming distributable on account thereof, and to execute any such other
papers and documents and to do and perform any and all such acts and things for
and on behalf of such holders of the Debentures, as may be necessary or
advisable in the opinion of the Debenture Trustee, in order to have the
respective claims of the Debenture Trustee and of the holders of the Debentures
against the Corporation or its property allowed in any such proceeding, and to
receive payment of or on account of such claims; provided, however, that subject
to Section 8.3, nothing contained in this Indenture shall be deemed to give to
the Debenture Trustee, unless so authorized by Extraordinary Resolution, any
right to accept or consent to any plan of reorganization or otherwise by action
of any character in such proceeding to waive or change in any way any right of
any Debentureholder.
The Debenture Trustee shall also have the power at any time and from time
to time to institute and to maintain such suits and proceedings as it may be
advised shall be necessary or advisable to preserve and protect
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its interests and the interests of the Debentureholders; provided that,
notwithstanding any other provision of this Indenture, the Debenture Trustee
shall not be bound by and shall not take, and no Debentureholder is or shall be
entitled to take, any action under or pursuant to this Section 8.4 without the
written consent of any Eligible Senior Creditor.
All rights of action hereunder may be enforced by the Debenture Trustee
without the possession of any of the Debentures or the production thereof on the
trial or other proceedings relating thereto. Any such suit or proceeding
instituted by the Debenture Trustee shall be brought in the name of the
Debenture Trustee as trustee of an express trust, and any recovery of judgment
shall be for the rateable benefit of the holders of the Debentures subject to
the provisions of this Indenture. In any proceeding brought by the Debenture
Trustee (and also any proceeding in which a declaratory judgment of a court may
be sought as to the interpretation or construction of any provision of this
Indenture, to which the Debenture Trustee shall be a party) the Debenture
Trustee shall be held to represent all the holders of the Debentures, and it
shall not be necessary to make any holders of the Debentures parties to any such
proceeding.
8.5 No Suits by Debentureholders
No holder of any Debenture shall have any right to institute any action,
suit or proceeding at law or in equity for the purpose of enforcing payment of
the principal of or interest on the Debentures or for the execution of any trust
or power hereunder or for the appointment of a liquidator or receiver or for a
receiving order under the Bankruptcy and Insolvency Act (Canada) or to have the
Corporation wound up or to file or prove a claim in any liquidation or
bankruptcy proceeding or for any other remedy hereunder, unless: (a) such holder
shall previously have given to the Debenture Trustee written notice of the
happening of an Event of Default hereunder; and (b) the Debentureholders by
Extraordinary Resolution or by written instrument signed by the holders of at
least 25% in principal amount of the Debentures then outstanding shall have made
a request to the Debenture Trustee and the Debenture Trustee shall have been
afforded reasonable opportunity either itself to proceed to exercise the powers
hereinbefore granted or to institute an action, suit or proceeding in its name
for such purpose; and (c) the Debentureholders or any of them shall have
furnished to the Debenture Trustee, when so requested by the Debenture Trustee,
sufficient funds and security and indemnity satisfactory to it against the
costs, expenses and liabilities to be incurred therein or thereby; and (d) the
Debenture Trustee shall have failed to act within a reasonable time after such
notification, request and offer of indemnity and such notification, request and
offer of indemnity are hereby declared in every such case, at the option of the
Debenture Trustee, to be conditions precedent to any such proceeding or for any
other remedy hereunder by or on behalf of the holder of any Debentures.
8.6 Application of Monies by Debenture Trustee
(a) Except as herein otherwise expressly provided, any monies received
by the Debenture Trustee from the Corporation pursuant to the
foregoing provisions of this Article 8, or as a result of legal or
other proceedings or from any trustee in bankruptcy or liquidator of
the Corporation, shall be applied, together with any other monies in
the hands of the Debenture Trustee available for such purpose, as
follows:
(i) first, in payment or in reimbursement to the Debenture Trustee
of its compensation, costs, charges, expenses, borrowings,
advances or other monies furnished or provided by or at the
instance of the Debenture Trustee in or about the execution of
its trusts under, or otherwise in relation to, this Indenture,
with interest thereon as herein provided;
(ii) second, but subject as hereinafter in this Section 8.6
provided, in payment, ratably and proportionately to the
holders of Debentures, of the principal of and premium (if
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any) and accrued and unpaid interest and interest on amounts
in default on the Debentures which shall then be outstanding
in the priority of principal first and then premium and then
accrued and unpaid interest and interest on amounts in default
unless otherwise directed by Extraordinary Resolution and in
that case in such order or priority as between principal,
premium (if any) and interest as may be directed by such
resolution; and
(iii) third, in payment of the surplus, if any, of such monies to
the Corporation or its assigns;
provided, however, that no payment shall be made pursuant to clause
(ii) above in respect of the principal, premium or interest on any
Debenture held, directly or indirectly, by or for the benefit of the
Corporation or any Subsidiary (other than any Debenture pledged for
value and in good faith to a Person other than the Corporation or
any Subsidiary but only to the extent of such Person's interest
therein) except subject to the prior payment in full of the
principal, premium (if any) and interest (if any) on all Debentures
which are not so held.
(b) The Debenture Trustee shall not be bound to apply or make any
partial or interim payment of any monies coming into its hands if
the amount so received by it, after reserving thereout such amount
as the Debenture Trustee may think necessary to provide for the
payments mentioned in subsection 8.6(a), is insufficient to make a
distribution of at least 2% of the aggregate principal amount of the
outstanding Debentures, but it may retain the money so received by
it and invest or deposit the same as provided in Section 15.10 until
the money or the investments representing the same, with the income
derived therefrom, together with any other monies for the time being
under its control shall be sufficient for the said purpose or until
it shall consider it advisable to apply the same in the manner
hereinbefore set forth. The foregoing shall, however, not apply to a
final payment in distribution hereunder.
8.7 Notice of Payment by Debenture Trustee
Not less than 15 days' notice shall be given in the manner provided in
Section 14.2 by the Debenture Trustee to the Debentureholders of any payment to
be made under this Article 8. Such notice shall state the time when and place
where such payment is to be made and also the liability under this Indenture to
which it is to be applied. After the day so fixed, unless payment shall have
been duly demanded and have been refused, the Debentureholders will be entitled
to interest only on the balance (if any) of the principal monies, premium (if
any) and interest due (if any) to them, respectively, on the Debentures, after
deduction of the respective amounts payable in respect thereof on the day so
fixed.
8.8 Debenture Trustee May Demand Production of Debentures
The Debenture Trustee shall have the right to demand production of the
Debentures in respect of which any payment of principal, interest or premium
required by this Article 8 is made and may cause to be endorsed on the same a
memorandum of the amount so paid and the date of payment, but the Debenture
Trustee may, in its discretion, dispense with such production and endorsement,
upon such indemnity being given to it and to the Corporation as the Debenture
Trustee shall deem sufficient.
8.9 Remedies Cumulative
No remedy herein conferred upon or reserved to the Debenture Trustee, or
upon or to the holders of Debentures is intended to be exclusive of any other
remedy, but each and every such remedy shall be
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cumulative and shall be in addition to every other remedy given hereunder or now
existing or hereafter to exist by law or by statute.
8.10 Judgment Against the Corporation
The Corporation covenants and agrees with the Debenture Trustee that, in
case of any judicial or other proceedings to enforce the rights of the
Debentureholders, judgment may be rendered against it in favour of the
Debentureholders or in favour of the Debenture Trustee, as trustee for the
Debentureholders, for any amount which may remain due in respect of the
Debentures and premium (if any) and the interest thereon and any other monies
owing hereunder.
ARTICLE 9
SATISFACTION AND DISCHARGE
9.1 Cancellation
All Debentures shall forthwith after payment thereof be delivered to the
Debenture Trustee and cancelled by it. The Debenture Trustee shall furnish to it
a destruction certificate setting out the designating numbers of the Debentures
so cancelled.
9.2 Non-Presentation of Debentures
In case the holder of any Debenture shall fail to present the same for
payment on the date on which the principal, premium (if any) or the interest
thereon or represented thereby becomes payable either at maturity or otherwise
or shall not accept payment on account thereof and give such receipt therefor,
if any, as the Debenture Trustee may require:
(a) the Corporation shall be entitled to pay or deliver to the Debenture
Trustee and direct it to set aside; or
(b) in respect of monies or Common Shares in the hands of the Debenture
Trustee which may or should be applied to the payment of the
Debentures, the Corporation shall be entitled to direct the
Debenture Trustee to set aside; or
(c) if the redemption was pursuant to notice given by the Debenture
Trustee, the Debenture Trustee may itself set aside;
the principal, premium (if any) or the interest, as the case may be, in trust to
be paid to the holder of such Debenture upon due presentation or surrender
thereof in accordance with the provisions of this Indenture; and thereupon the
principal, premium (if any) or the interest payable on or represented by each
Debenture in respect whereof such monies or Common Shares, if applicable, have
been set aside shall be deemed to have been paid and the holder thereof shall
thereafter have no right in respect thereof except that of receiving delivery
and payment of the monies or Common Shares, if applicable, so set aside by the
Debenture Trustee upon due presentation and surrender thereof, subject always to
the provisions of Section 9.3.
9.3 Repayment of Unclaimed Monies or Common Shares
Subject to applicable law, any monies or Common Shares, if applicable, set
aside under Section 9.2 and not claimed by and paid to holders of Debentures as
provided in Section 9.2 within six years after the date of such setting aside
shall be repaid and delivered to the Corporation by the Debenture Trustee and
thereupon the Debenture Trustee shall be released from all further liability
with respect to such monies or Common
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Shares, if applicable, and thereafter the holders of the Debentures in respect
of which such monies or Common Shares, if applicable, were so repaid to the
Corporation shall have no rights in respect thereof except to obtain payment and
delivery of the monies or Common Shares, if applicable, from the Corporation
subject to any limitation provided by the laws of the Province of Ontario.
Notwithstanding the foregoing, the Debenture Trustee will pay any remaining
funds prior to the expiry of six years after the setting aside described in
Section 9.2 to the Corporation upon receipt from the Corporation, or one of its
Subsidiaries, of an uncontested letter of credit from a Canadian chartered bank
in an amount equal to or in excess of the amount of the remaining funds. If the
remaining funds are paid to the Corporation prior to the expiry of six years
after such setting aside, the Corporation shall reimburse the Debenture Trustee
for any amounts so set aside which are required to be paid by the Debenture
Trustee to a holder of a Debenture after the date of such payment of the
remaining funds to the Corporation but prior to six years after such setting
aside.
9.4 Discharge
The Debenture Trustee shall at the written request of the Corporation
release and discharge this Indenture and execute and deliver such instruments as
it shall be advised by Counsel are requisite for that purpose and to release the
Corporation from its covenants herein contained (other than the provisions
relating to the indemnification of the Debenture Trustee), upon proof being
given to the reasonable satisfaction of the Debenture Trustee that the principal
and premium (if any) of and interest (including interest on amounts in default,
if any), on all the Debentures and all other monies payable hereunder have been
paid or satisfied or that all the Debentures having matured or having been duly
called for redemption, payment of the principal of and interest (including
interest on amounts in default, if any) on such Debentures and of all other
monies payable hereunder has been duly and effectually provided for in
accordance with the provisions hereof.
9.5 Satisfaction
(a) The Corporation shall be deemed to have fully paid, satisfied and
discharged all of the outstanding Debentures of any series and the
Debenture Trustee, at the expense of the Corporation, shall execute
and deliver proper instruments acknowledging the full payment,
satisfaction and discharge of such Debentures, when, with respect to
all of the outstanding Debentures or all of the outstanding
Debentures of any series, as applicable, either:
(i) the Corporation has deposited or caused to be deposited with
the Debenture Trustee as trust funds or property in trust for
the purpose of making payment on such Debentures, an amount in
money or Common Shares, if applicable, sufficient to pay,
satisfy and discharge the entire amount of principal, premium,
if any, and interest, if any, to maturity or any repayment
date or Redemption Dates, as the case may be, of such
Debentures; or
(ii) the Corporation has deposited or caused to be deposited with
the Debenture Trustee as property in trust for the purpose of
making payment on such Debentures:
(I) if the Debentures are issued in Canadian dollars, such
amount in Canadian dollars of direct obligations of, or
obligations the principal and interest of which are
guaranteed by, the Government of Canada or Common
Shares, if applicable; or
(II) if the Debentures are issued in a currency or currency
unit other than Canadian dollars, cash in the currency
or currency unit in which the Debentures are payable
and/or such amount in such currency or currency unit of
direct obligations of, or obligations the principal and
interest of
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which are guaranteed by, the Government of Canada or the
government that issued the currency or currency unit in
which the Debentures are payable or Common Shares, if
applicable;
as will, together with the income to accrue thereon and
reinvestment thereof, be sufficient to pay and discharge the
entire amount of principal and accrued and unpaid interest to
maturity or any repayment date, as the case may be, of all
such Debentures;
and in either event:
(iii) the Corporation has paid, caused to be paid or made provisions
to the satisfaction of the Debenture Trustee for the payment
of all other sums payable with respect to all of such
Debentures (together with all applicable expenses of the
Debenture Trustee in connection with the payment of such
Debentures); and
(iv) the Corporation has delivered to the Debenture Trustee an
Officer's Certificate stating that all conditions precedent
herein provided relating to the payment, satisfaction and
discharge of all such Debentures have been complied with.
Any deposits with the Debenture Trustee referred to in this Section
9.5 shall be irrevocable, subject to Section 9.6, and shall be made
under the terms of an escrow and/or trust agreement in form and
substance satisfactory to the Debenture Trustee and which provides
for the due and punctual payment of the principal of, and interest
and premium, if any, on the Debentures being satisfied.
(b) Upon the satisfaction of the conditions set forth in this Section
9.5 with respect to all the outstanding Debentures, or all the
outstanding Debentures of any series, as applicable, the terms and
conditions of the Debentures, including the terms and conditions
with respect thereto set forth in this Indenture (other than those
contained in Articles 2, 4 and 6 and Section 8.4 and the provisions
of Article 1 pertaining to the foregoing provisions) shall no longer
be binding upon or applicable to the Corporation.
(c) Any funds or obligations deposited with the Debenture Trustee
pursuant to this Section 9.5 shall be denominated in the currency or
denomination of the Debentures in respect of which such deposit is
made.
(d) If the Debenture Trustee is unable to apply any money or securities
in accordance with this Section 9.5 by reason of any legal
proceeding or any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such
application, the Corporation's obligations under this Indenture and
the affected Debentures shall be revived and reinstated as though no
money or securities had been deposited pursuant to this Section 9.5
until such time as the Debenture Trustee is permitted to apply all
such money or securities in accordance with this Section 9.5,
provided that if the Corporation has made any payment in respect of
principal, premium or interest on Debentures or, as applicable,
other amounts because of the reinstatement of its obligations, the
Corporation shall be subrogated to the rights of the holders of such
Debentures to receive such payment from the money or securities held
by the Debenture Trustee.
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9.6 Continuance of Rights, Duties and Obligations
(a) Where trust funds or trust property have been deposited pursuant to
Section 9.5, the holders of Debentures and the Corporation shall
continue to have and be subject to their respective rights, duties
and obligations under Articles 2, 4 and 6 and the provisions of
Article 1 pertaining to the foregoing provisions, as may be
applicable.
(b) In the event that, after the deposit of trust funds or trust
property pursuant to Section 9.5 in respect of a series of
Debentures (the "Defeased Debentures"), any holder of any of the
Defeased Debentures from time to time converts its Debentures to
Common Shares or other securities of the Corporation in accordance
with subsection 2.4(e), Article 6 or any other provision of this
Indenture, the Debenture Trustee shall upon receipt of a Written
Direction of the Corporation return to the Corporation from time to
time the proportionate amount of the trust funds or other trust
property deposited with the Debenture Trustee pursuant to Section
9.5 in respect of the Defeased Debentures which is applicable to the
Defeased Debentures so converted (which amount shall be based on the
applicable principal amount of the Defeased Debentures being
converted in relation to the aggregate outstanding principal amount
of all the Defeased Debentures).
(c) In the event that, after the deposit of trust funds or trust
property pursuant to Section 9.5 the Corporation is required to
purchase any outstanding Debentures pursuant to subsection 2.4(k) in
relation to Initial Debentures or to purchase or make an offer to
purchase Debentures pursuant to any other similar provisions
relating to any other series of Debentures, the Corporation shall be
entitled to use any trust money or trust property deposited with the
Debenture Trustee pursuant to Section 9.5 for the purpose of paying
to any holders of Defeased Debentures who have accepted a Change of
Control Purchase Offer pursuant to subsection 2.4(k) the Change of
Control Purchase Price payable to such holders in respect of such
offer relating to Initial Debentures (or the total offer price
payable in respect of an offer relating to any other series of
Debentures). Upon receipt of a Written Direction from the
Corporation, the Debenture Trustee shall be entitled to pay to such
holder from such trust money or trust property deposited with the
Debenture Trustee pursuant to Section 9.5 in respect of the Defeased
Debentures which is applicable to the Defeased Debentures held by
such holders who have accepted a Change of Control Purchase Offer
pursuant to subsection 2.4(k) (which amount shall be based on the
applicable principal amount of the Defeased Debentures held by
holders that accepted the Change of Control Purchase Offer in
relation to the aggregate outstanding principal amount of all the
Defeased Debentures).
ARTICLE 10
COMMON SHARE INTEREST PAYMENT ELECTION
10.1 Common Share Interest Payment Election
(a) Provided that the Corporation is not in default, no Event of Default
has occurred under this Indenture and that all applicable regulatory
approvals have been obtained (including any required approval of any
stock exchange on which the Debentures or Common Shares are then
listed), the Corporation shall have the right, from time to time
before the Maturity Date, to make a Common Share Interest Payment
Election in respect of any Interest Obligation by delivering a
Common Share Interest Payment Election Notice to the Debenture
Trustee no later than the earlier of: (i) the date required by
applicable law or the rules of any stock exchange on which the
Debentures or Common Shares are then listed, and (ii) the day which
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is 15 Business Days prior to the Interest Payment Date to which the
Common Share Interest Payment Election relates. The Common Share
Interest Payment Election shall not be available for interest
payable on the Maturity Date.
(b) Upon receipt of a Common Share Interest Payment Election Notice, the
Debenture Trustee shall, in accordance with this Article 10 and such
Common Share Interest Payment Election Notice, deliver Common Share
Bid Requests to the investment banks, brokers or dealers identified
by the Corporation, in its absolute discretion, in the Common Share
Interest Payment Election Notice. In connection with the Common
Share Interest Payment Election, the Debenture Trustee shall have
the power to: (i) accept delivery of the Common Shares from the
Corporation and process the Common Shares in accordance with the
Common Share Interest Payment Election Notice and this Article 10;
(ii) accept bids with respect to, and consummate sales of, such
Common Shares, each as the Corporation shall direct in its absolute
discretion through the investment banks, brokers or dealers
identified by the Corporation in the Common Share Interest Payment
Election Notice; (iii) invest the proceeds of such sales on the
direction of the Corporation in Government Obligations which mature
prior to an applicable Interest Payment Date and use such proceeds
to pay the Interest Obligation in respect of which the Common Share
Interest Payment Election was made; and (iv) perform any other
action necessarily incidental thereto as directed by the Corporation
in its absolute discretion. The Common Share Interest Payment
Election Notice shall direct the Debenture Trustee to solicit and
accept only, and each Common Share Bid Request shall provide that
the acceptance of any bid is conditional on the acceptance of,
sufficient bids to result in aggregate proceeds from such issue and
sale of Common Shares which, together with the cash payments by the
Corporation in lieu of fractional Common Shares, if any, equal the
Interest Obligation on the Common Share Delivery Date.
(c) The Common Share Interest Payment Election Notice shall provide for,
and all bids shall be subject to, the right of the Corporation, by
delivering written notice to the Debenture Trustee at any time prior
to the consummation of such delivery and sale of the Common Shares
on the Common Share Delivery Date, to withdraw the Common Share
Interest Payment Election (which shall have the effect of
withdrawing each related Common Share Bid Request), whereupon the
Corporation shall be obliged to pay in cash the Interest Obligation
in respect of which the Common Share Interest Payment Election
Notice has been delivered.
(d) Any sale of Common Shares pursuant to this Article 10 may be made to
one or more Persons whose bids are solicited, but all such sales
with respect to a particular Common Share Interest Payment Election
shall take place concurrently on the Common Share Delivery Date.
(e) The amount received by a holder of a Debenture in respect of the
Interest Obligation or the entitlement thereto will not be affected
by whether or not the Corporation elects to satisfy the Interest
Obligation pursuant to a Common Share Interest Payment Election.
(f) The Debenture Trustee shall inform the Corporation promptly
following receipt of any bid or bids for Common Shares solicited
pursuant to the Common Share Bid Requests. The Debenture Trustee
shall accept such bid or bids as the Corporation, in its absolute
discretion, shall direct by Written Direction of the Corporation,
provided that the aggregate proceeds of all sales of Common Shares
resulting from the acceptance of such bids, together with the amount
of any cash payment by the Corporation in lieu of any fractional
Common Shares, on the Common Share Delivery Date, must be equal to
the related Common Share Interest Payment Election Amount in
connection with any bids so accepted, the Corporation, the Debenture
Trustee (if required by the Corporation in its absolute discretion)
and the
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applicable bidders shall, not later than the Common Share Delivery
Date, enter into Common Share Purchase Agreements and shall comply
with all Applicable Securities Legislation, including the securities
rules and regulations of any stock exchange on which the Debentures
or Common Shares are then listed. The Corporation shall pay all fees
and expenses in connection with the Common Share Purchase Agreements
including the fees and commissions charged by the investment banks,
brokers and dealers and the fees of the Debenture Trustee.
(g) Provided that: (i) all conditions specified in each Common Share
Purchase Agreement to the closing of all sales thereunder have been
satisfied, other than the delivery of the Common Shares to be sold
thereunder against payment of the purchase price thereof; and (ii)
the purchasers under each Common Share Purchase Agreement shall be
ready, willing and able to perform thereunder, in each case on the
Common Share Delivery Date, the Corporation shall, on the Common
Share Delivery Date, deliver to the Debenture Trustee the Common
Shares to be sold on such date, an amount in cash equal to the value
of any fractional Common Shares and an Officer's Certificate to the
effect that all conditions precedent to such sales, including those
set forth in this Indenture and in each Common Share Purchase
Agreement, have been satisfied. Upon such deliveries, the Debenture
Trustee shall consummate such sales on such Common Share Delivery
Date by the delivery of the Common Shares to such purchasers against
payment to the Debenture Trustee in immediately available funds of
the purchase price therefor in an aggregate amount equal to the
Common Share Interest Payment Election Amount (less any amount
attributable to any fractional Common Shares), whereupon the sole
right of a holder of Debentures to receive such holder's portion of
the Common Share Interest Payment Election Amount will be to receive
same from the Debenture Trustee out of the proceeds of such sales of
Common Shares plus any amount received by the Debenture Trustee from
the Corporation attributable to any fractional Common Shares in full
satisfaction of the Interest Obligation and the holder will have no
further recourse to the Corporation in respect of the Interest
Obligation.
(h) The Debenture Trustee shall, on the Common Share Delivery Date, use
the sale proceeds of the Common Shares (together with any cash
received from the Corporation in lieu of any fractional Common
Shares) to purchase, on the direction of the Corporation in writing,
Government Obligations which mature prior to the applicable Interest
Payment Date and which the Debenture Trustee is required to hold
until maturity (the "Common Share Proceeds Investment") and shall,
on such date, deposit the balance, if any, of such sale proceeds in
an account established by the Corporation (and which shall be
maintained by and subject to the control of the Debenture Trustee)
(the "Interest Account") for such Debentures. The Debenture Trustee
shall hold such Common Share Proceeds Investment (but not income
earned thereon) under its exclusive control in an irrevocable trust
for the benefit of the holders of the Debentures. At least one
Business Day prior to the Interest Payment Date, the Debenture
Trustee shall deposit amounts from the proceeds of the Common Share
Proceeds Investment in the Interest Account to bring the balance of
the Interest Account to the Common Share Interest Payment Election
Amount. On the Interest Payment Date, the Debenture Trustee shall
pay the funds held in the Interest Account to the holders of record
of the Debentures on the Interest Payment Date (less any tax
required to be deducted, if any) and, provided that there is no
Event of Default, shall remit amounts, if any, in respect of income
earned on the Common Share Proceeds Investment or otherwise in
excess of the Common Share Interest Payment Election Amount to the
Corporation.
(i) Neither the making of a Common Share Interest Payment Election nor
the consummation of sales of Common Shares on a Common Share
Delivery Date shall (i) result in the holders of
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the Debentures not being entitled to receive on the applicable
Interest Payment Date cash in an aggregate amount equal to the
Interest Obligation payable on such date or (ii) entitle such
holders to receive any Common Shares in satisfaction of such
Interest Obligation.
(j) No fractional Common Shares will be issued in satisfaction of
interest but in lieu thereof the Corporation will satisfy such
fractional interest by a cash payment equal to the Current Market
Price of such fractional interest (less any tax required to be
deducted, if any.)
ARTICLE 11
SUCCESSORS
11.1 Restrictions on Amalgamation, Merger and Sale of Certain Assets, etc.
Subject to the provisions of Article 12, the Corporation shall not enter
into any transaction or series of transactions whereby all or substantially all
of its undertaking, property or assets would become the property of any other
Person (herein called a "Successor") whether by way of reorganization,
consolidation, amalgamation, arrangement, merger, transfer, sale or otherwise
(other than a short-form amalgamation pursuant to the CBCA), unless:
(a) prior to or contemporaneously with the consummation of such
transaction the Corporation and the Successor shall have executed
such instruments and done such things as, in the opinion of Counsel,
are necessary or advisable to establish that upon the consummation
of such transaction:
(i) the Successor will have assumed all the covenants and
obligations of the Corporation under this Indenture in respect
of the Debentures;
(ii) the Debentures will be valid and binding obligations of the
Successor entitling the holders thereof, as against the
Successor, to all the rights of Debentureholders under this
Indenture; and
(iii) in the case of an entity organized otherwise than under the
laws of the Province of Ontario, shall attorn to the
jurisdiction of the courts of the Province of Ontario;
(b) such transaction, in the opinion of Counsel, shall be on such terms
as to substantially preserve and not impair any of the rights and
powers of the Debenture Trustee or of the Debentureholders
hereunder; and
(c) no condition or event shall exist as to the Corporation (at the time
of such transaction) or the Successor (immediately after such
transaction) and after giving full effect thereto or immediately
after the Successor shall become liable to pay the principal monies,
premium, if any, interest and other monies due or which may become
due hereunder, which constitutes or would constitute an Event of
Default hereunder.
11.2 Vesting of Powers in Successor
Whenever the conditions of Section 11.1 shall have been duly observed and
performed, any Successor formed by or resulting from such transaction shall
succeed to, and be substituted for, and may exercise every right and power of
the Corporation under this Indenture with the same effect as though the
Successor had been named as the Corporation herein and thereafter, except in the
case of a lease or other similar disposition of property to the Successor, the
Corporation shall be relieved of all obligations and
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covenants under this Indenture and the Debentures forthwith upon the Corporation
delivering to the Debenture Trustee an opinion of Counsel to the effect that the
transaction shall not result in any material adverse tax consequences to the
Corporation or the Successor. The Debenture Trustee will, at the expense of the
Successor, execute any documents which it may be advised by Counsel are
necessary or advisable for effecting or evidencing such release and discharge.
ARTICLE 12
COMPULSORY ACQUISITION
12.1 Definitions
In this Article:
(a) "Affiliate" and "Associate" when used to indicate a relationship
with a person or company, shall have the same meanings as set forth
in Ontario Securities Commission Rule 45-501 and the Securities Act
(Ontario), respectively;
(b) "Dissenting Debentureholders" means a Debentureholder who does not
accept an Offer referred to in Section 12.2 and includes any
assignee of the Debenture of a Debentureholder to whom such an Offer
is made, whether or not such assignee is recognized under this
Indenture;
(c) "Offer" means an offer to acquire outstanding Debentures where, as
of the date of the offer to acquire, the Debentures that are subject
to the offer to acquire, together with the Offeror's Debentures,
constitute in the aggregate 20% or more of the outstanding principal
amount of the Debentures;
(d) "offer to acquire" includes an acceptance of an offer to sell;
(e) "Offeror" means a person, or two or more persons acting jointly or
in concert, who make an Offer to acquire Debentures;
(f) "Offeror's Notice" means the notice described in Section 12.3; and
(g) "Offeror's Debentures" means Debentures beneficially owned, or over
which control or direction is exercised, on the date of an Offer by
the Offeror, any Affiliate or Associate of the Offeror or any person
or company acting jointly or in concert with the Offeror.
12.2 Offer for Debentures
If an Offer for all of the outstanding Debentures (other than Debentures
held by or on behalf of the Offeror or an Affiliate or Associate of the Offeror)
is made and:
(a) within the time provided in the Offer for its acceptance or within
60 days after the date the Offer is made, whichever period is the
shorter, the Offer is accepted by Debentureholders representing at
least 90% of the outstanding principal amount of the Debentures,
other than the Offeror's Debentures;
(b) the Offeror is bound to take up and pay for, or has taken up and
paid for the Debentures of the Debentureholders who accepted the
Offer; and
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(c) the Offeror complies with Sections 12.3 and 12.5;
the Offeror is entitled to acquire, and the Dissenting Debentureholders are
required to sell to the Offeror, the Debentures held by the Dissenting
Debentureholders for the same consideration per Debenture payable or paid, as
the case may be, under the Offer.
12.3 Offeror's Notice to Dissenting Shareholders
Where an Offeror is entitled to acquire Debentures held by Dissenting
Debentureholders pursuant to Section 12.2 and the Offeror wishes to exercise
such right, the Offeror shall send by registered mail within 30 days after the
date of termination of the Offer a notice (the "Offeror's Notice") to each
Dissenting Debentureholder stating that:
(a) Debentureholders holding at least 90% of the principal amount of all
outstanding Debentures, other than Offeror's Debentures, have
accepted the Offer;
(b) the Offeror is bound to take up and pay for, or has taken up and
paid for, the Debentures of the Debentureholders who accepted the
Offer;
(c) Dissenting Debentureholders must transfer their respective
Debentures to the Offeror on the terms on which the Offeror acquired
the Debentures of the Debentureholders who accepted the Offer within
21 days after the date of the sending of the Offeror's Notice; and
(d) Dissenting Debentureholders must send their respective Debenture
certificate(s) to the Debenture Trustee within 21 days after the
date of the sending of the Offeror's Notice.
12.4 Delivery of Debenture Certificates
A Dissenting Debentureholder to whom an Offeror's Notice is sent pursuant
to Section 12.3 shall, within 21 days after the sending of the Offeror's Notice,
send his or her Debenture certificate(s) to the Debenture Trustee duly endorsed
for transfer.
12.5 Payment of Consideration to Debenture Trustee
Within 21 days after the Offeror sends an Offeror's Notice pursuant to
Section 12.3, the Offeror shall pay or transfer to the Debenture Trustee, or to
such other person as the Debenture Trustee may direct, the cash or other
consideration that is payable to Dissenting Debentureholders pursuant to Section
12.2. The acquisition by the Offeror of all Debentures held by all Dissenting
Debentureholders shall be effective as of the time of such payment or transfer.
12.6 Consideration to be held in Trust
The Debenture Trustee, or the person directed by the Debenture Trustee,
shall hold in trust for the Dissenting Debentureholders the cash or other
consideration they or it receives under Section 12.5. The Debenture Trustee, or
such persons, shall deposit cash in a separate account in a Canadian chartered
bank, or other body corporate, any of whose deposits are insured by the Canada
Deposit Insurance Corporation, and shall place other consideration in the
custody of a Canadian chartered bank or such other body corporate.
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12.7 Completion of Transfer of Debentures to Offeror
Within 30 days after the date of the sending of an Offeror's Notice
pursuant to Section 12.3, the Debenture Trustee, if the Offeror has complied
with Section 12.5, shall:
(a) do all acts and things and execute and cause to be executed all
instruments as in the Debenture Trustee's opinion may be necessary
or desirable to cause the transfer of the Debentures of the
Dissenting Debentureholders to the Offeror;
(b) send to each Dissenting Debentureholder who has complied with
Section 12.4 the consideration to which such Dissenting
Debentureholder is entitled under this Article 12; and
(c) send to each Dissenting Debentureholder who has not complied with
Section 12.4 a notice stating that:
(i) his or her Debentures have been transferred to the Offeror;
(ii) the Debenture Trustee or some other person designated in such
notice are holding in trust the consideration for such
Debentures; and
(iii) the Debenture Trustee, or such other person, will send the
consideration to such Dissenting Debentureholder as soon as
possible after receiving such Dissenting Debentureholder's
Debenture certificate(s) or such other documents as the
Debenture Trustee or such other person may require in lieu
thereof;
and the Debenture Trustee is hereby appointed the agent and attorney, and is
granted power of attorney with respect to the Debentures, of the Dissenting
Debentureholders for the purposes of giving effect to the foregoing provisions
including, without limitation, the power and authority to execute such transfers
as may be necessary or desirable in respect of the book-entry only registration
system of the Depository.
12.8 Communication of Offer to Corporation
An Offeror cannot make an Offer for Debentures unless, concurrent with the
communication of the Offer to any Debentureholder, a copy of the Offer is
provided to the Corporation.
ARTICLE 13
MEETINGS OF DEBENTUREHOLDERS
13.1 Right to Convene Meeting
The Debenture Trustee or the Corporation may at any time and from time to
time, and the Debenture Trustee shall, on receipt of a written request of the
Corporation or a written request signed by the holders of not less than 25% of
the principal amount of the Debentures then outstanding and upon receiving
funding and being indemnified to its reasonable satisfaction by the Corporation
or by the Debentureholders signing such request against the costs which may be
incurred in connection with the calling and holding of such meeting, convene a
meeting of the Debentureholders. In the event of the Debenture Trustee failing,
within 30 days after receipt of any such request and such funding of indemnity,
to give notice convening a meeting, the Corporation or such Debentureholders, as
the case may be, may convene such meeting. Every such meeting shall be held in
the City of Toronto or at such other place as may be approved or determined by
the Debenture Trustee.
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13.2 Notice of Meetings
(a) At least 21 days' notice of any meeting shall be given to the
Debentureholders in the manner provided in Section 14.2 and a copy
of such notice shall be sent by post to the Debenture Trustee,
unless the meeting has been called by it. Such notice shall state
the time when and the place where the meeting is to be held and
shall state briefly the general nature of the business to be
transacted thereat and it shall not be necessary for any such notice
to set out the terms of any resolution to be proposed or any of the
provisions of this Article. The accidental omission to give notice
of a meeting to any holder of Debentures shall not invalidate any
resolution passed at any such meeting. A holder may waive notice of
a meeting either before or after the meeting.
(b) If the business to be transacted at any meeting by Extraordinary
Resolution or otherwise, or any action to be taken or power
exercised by instrument in writing under Section 13.15, especially
affects the rights of holders of Debentures of one or more series in
a manner or to an extent differing in any material way from that in
or to which the rights of holders of Debentures of any other series
are affected (determined as provided in subsections 13.2(c) and
13.2(d)), then:
(i) a reference to such fact, indicating each series of Debentures
in the opinion of the Debenture Trustee so especially affected
(hereinafter referred to as the "especially affected series")
shall be made in the notice of such meeting, and in any such
case the meeting shall be and be deemed to be and is herein
referred to as a "Serial Meeting"; and
(ii) the holders of Debentures of an especially affected series
shall not be bound by any action taken at a Serial Meeting or
by instrument in writing under Section 13.15 unless in
addition to compliance with the other provisions of this
Article 13:
(I) at such Serial Meeting: (I) there are Debentureholders
present in person or by proxy and representing at least
25% in principal amount of the Debentures then
outstanding of such series, subject to the provisions of
this Article 13 as to quorum at adjourned meetings; and
(II) the resolution is passed by the affirmative vote of
the holders of more than 50% (or in the case of an
Extraordinary Resolution not less than 66 2/3%) of the
principal amount of the Debentures of such series then
outstanding voted on the resolution; or
(II) in the case of action taken or power exercised by
instrument in writing under Section 13.15, such
instrument is signed in one or more counterparts by the
holders of not less than 66 2/3% in principal amount of
the Debentures of such series then outstanding.
(c) Subject to subsection 13.2(d), the determination as to whether any
business to be transacted at a meeting of Debentureholders, or any
action to be taken or power to be exercised by instrument in writing
under Section 13.15, especially affects the rights of the
Debentureholders of one or more series in a manner or to an extent
differing in any material way from that in or to which it affects
the rights of Debentureholders of any other series (and is therefor
an especially affected series) shall be determined by an opinion of
Counsel, which shall be binding on all Debentureholders, the
Debenture Trustee and the Corporation for all purposes hereof.
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(d) A proposal:
(i) to extend the maturity of Debentures of any particular series
or to reduce the principal amount thereof, the rate of
interest or redemption premium thereon or to impair any
conversion right thereof;
(ii) to modify or terminate any covenant or agreement which by its
terms is effective only so long as Debentures of a particular
series are outstanding; or
(iii) to reduce with respect to Debentureholders of any particular
series any percentage stated in Sections 13.2, 13.4, 13.12 and
13.15;
shall be deemed to especially affect the rights of the
Debentureholders of such series in a manner differing in a material
way from that in which it affects the rights of holders of
Debentures of any other series, whether or not a similar extension,
reduction, modification or termination is proposed with respect to
Debentures of any or all other series.
13.3 Chairman
Some person, who need not be a Debentureholder, nominated in writing by
the Debenture Trustee shall be chairman of the meeting and if no person is so
nominated, or if the person so nominated is not present within 15 minutes from
the time fixed for the holding of the meeting, a majority of the
Debentureholders present in person or by proxy shall choose some person present
to be chairman.
13.4 Quorum
Subject to the provisions of Section 13.12, at any meeting of the
Debentureholders a quorum shall consist of Debentureholders present in person or
by proxy and representing at least 25% in principal amount of the outstanding
Debentures and, if the meeting is a Serial Meeting, at least 25% of the
Debentures then outstanding of each especially affected series. If a quorum of
the Debentureholders shall not be present within 30 minutes from the time fixed
for holding any meeting, the meeting, if summoned by the Debentureholders or
pursuant to a request of the Debentureholders, shall be dissolved, but in any
other case the meeting shall be adjourned to the same day in the next week
(unless such day is not a Business Day in which case it shall be adjourned to
the next following Business Day thereafter) at the same time and place and no
notice shall be required to be given in respect of such adjourned meeting. At
the adjourned meeting, the Debentureholders present in person or by proxy shall,
subject to the provisions of Section 13.12, constitute a quorum and may transact
the business for which the meeting was originally convened notwithstanding that
they may not represent 25% of the principal amount of the outstanding Debentures
or of the Debentures then outstanding of each especially affected series. Any
business may be brought before or dealt with at an adjourned meeting which might
have been brought before or dealt with at the original meeting in accordance
with the notice calling the same. No business shall be transacted at any meeting
unless the required quorum be present at the commencement of business.
13.5 Power to Adjourn
The chairman of any meeting at which a quorum of the Debentureholders is
present may, with the consent of the holders of a majority in principal amount
of the Debentures represented thereat, adjourn any such meeting and no notice of
such adjournment need be given except such notice, if any, as the meeting may
prescribe.
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13.6 Show of Hands
Every question submitted to a meeting shall, subject to Section 13.7, be
decided in the first place by a majority of the votes given on a show of hands
except that votes on Extraordinary Resolutions shall be given in the manner
hereinafter provided. At any such meeting, unless a poll is duly demanded as
herein provided, a declaration by the chairman that a resolution has been
carried or carried unanimously or by a particular majority or lost or not
carried by a particular majority shall be conclusive evidence of the fact. The
chairman of any meeting shall be entitled, both on a show of hands and on a
poll, to vote in respect of the Debentures, if any, held by him.
13.7 Poll
On every Extraordinary Resolution, and on any other question submitted to
a meeting when demanded by the chairman or by one or more Debentureholders or
proxies for Debentureholders, a poll shall be taken in such manner and either at
once or after an adjournment as the chairman shall direct. Questions other than
Extraordinary Resolutions shall, if a poll be taken, be decided by the votes of
the holders of a majority in principal amount of the Debentures and of each
especially affected series, if applicable, represented at the meeting and voted
on the poll.
13.8 Voting
On a show of hands every person who is present and entitled to vote,
whether as a Debentureholder or as proxy for one or more Debentureholders or
both, shall have one vote. On a poll each Debentureholder present in person or
represented by a proxy duly appointed by an instrument in writing shall be
entitled to one vote in respect of each Cdn$1,000 principal amount of Debentures
of which he shall then be the holder. In the case of any Debenture denominated
in a currency or currency unit other than Canadian dollars, the principal amount
thereof for these purposes shall be computed in Canadian dollars on the basis of
the conversion of the principal amount thereof at the applicable spot buying
rate of exchange for such other currency or currency unit as reported by the
Bank of Canada at the close of business on the Business Day next preceding the
meeting. Any fractional amounts resulting from such conversion shall be rounded
to the nearest Cdn$100. A proxy need not be a Debentureholder. In the case of
joint holders of a Debenture, any one of them present in person or by proxy at
the meeting may vote in the absence of the other or others but in case more than
one of them be present in person or by proxy, they shall vote together in
respect of the Debentures of which they are joint holders.
13.9 Proxies
A Debentureholder may be present and vote at any meeting of
Debentureholders by an authorized representative. The Corporation (in case it
convenes the meeting) or the Debenture Trustee (in any other case) for the
purpose of enabling the Debentureholders to be present and vote at any meeting
without producing their Debentures, and of enabling them to be present and vote
at any such meeting by proxy and of lodging instruments appointing such proxies
at some place other than the place where the meeting is to be held, may from
time to time make and vary such regulations as it shall think fit providing for
and governing any or all of the following matters:
(a) the form of the instrument appointing a proxy, which shall be in
writing, and the manner in which the same shall be executed and the
production of the authority of any person signing on behalf of a
Debentureholder;
(b) the deposit of instruments appointing proxies at such place as the
Debenture Trustee, the Corporation or the Debentureholder convening
the meeting, as the case may be, may, in the
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notice convening the meeting, direct and the time, if any, before
the holding of the meeting or any adjournment thereof by which the
same must be deposited; and
(c) the deposit of instruments appointing proxies at some approved place
or places other than the place at which the meeting is to be held
and enabling particulars of such instruments appointing proxies to
be mailed, faxed, or sent by other electronic means before the
meeting to the Corporation or to the Debenture Trustee at the place
where the same is to be held and for the voting of proxies so
deposited as though the instruments themselves were produced at the
meeting.
Any regulations so made shall be binding and effective and the votes given
in accordance therewith shall be valid and shall be counted. Save as such
regulations may provide, the only persons who shall be recognized at any meeting
as the holders of any Debentures, or as entitled to vote or be present at the
meeting in respect thereof, shall be Debentureholders and persons whom
Debentureholders have by instrument in writing duly appointed as their proxies.
13.10 Persons Entitled to Attend Meetings
The Corporation and the Debenture Trustee, by their respective officers
and directors, the Auditors of the Corporation and the legal advisers of the
Corporation, may attend any meeting of the Debentureholders, but shall have no
vote as such.
13.11 Powers Exercisable by Extraordinary Resolution
In addition to the powers conferred upon them by any other provisions of
this Indenture or by law, a meeting of the Debentureholders shall have the
following powers exercisable from time to time by Extraordinary Resolution,
subject in the case of the matters in paragraphs (a), (b), (c), (d) and (l) to
receipt of the prior approval of the Toronto Stock Exchange (if applicable) or
such other exchange on which the Debentures are then listed:
(a) power to authorize the Debenture Trustee to grant extensions of time
for payment of any principal, premium or interest on the Debentures,
whether or not the principal, premium, or interest, the payment of
which is extended, is at the time due or overdue;
(b) power to sanction any modification, abrogation, alteration,
compromise or arrangement of the rights of the Debentureholders or
the Debenture Trustee against the Corporation, or against its
property, whether such rights arise under this Indenture or the
Debentures or otherwise;
(c) power to assent to any modification of or change in or addition to
or omission from the provisions contained in this Indenture or any
Debenture which shall be agreed to by the Corporation and to
authorize the Debenture Trustee to concur in and execute any
indenture supplemental hereto embodying any modification, change,
addition or omission;
(d) power to sanction any scheme for the reconstruction, reorganization
or recapitalization of the Corporation or for the consolidation,
amalgamation or merger of the Corporation with any other Person or
for the sale, leasing, transfer or other disposition of all or
substantially all of the undertaking, property and assets of the
Corporation or any part thereof, provided that no such sanction
shall be necessary in respect of any such transaction if the
provisions of Section 11.1 shall have been complied with;
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(e) power to direct or authorize the Debenture Trustee to exercise any
power, right, remedy or authority given to it by this Indenture in
any manner specified in any such Extraordinary Resolution or to
refrain from exercising any such power, right, remedy or authority;
(f) power to waive, and direct the Debenture Trustee to waive, any
default hereunder and/or cancel any declaration made by the
Debenture Trustee pursuant to Section 8.1 either unconditionally or
upon any condition specified in such Extraordinary Resolution;
(g) power to restrain any Debentureholder from taking or instituting any
suit, action or proceeding for the purpose of enforcing payment of
the principal, premium or interest on the Debentures, or for the
execution of any trust or power hereunder;
(h) power to direct any Debentureholder who, as such, has brought any
action, suit or proceeding to stay or discontinue or otherwise deal
with the same upon payment, if the taking of such suit, action or
proceeding shall have been permitted by Section 8.5, of the costs,
charges and expenses reasonably and properly incurred by such
Debentureholder in connection therewith;
(i) power to assent to any compromise or arrangement with any creditor
or creditors or any class or classes of creditors, whether secured
or otherwise, and with holders of any Common Shares or other
securities of the Corporation;
(j) power to appoint a committee with power and authority (subject to
such limitations, if any, as may be prescribed in the resolution) to
exercise, and to direct the Debenture Trustee to exercise, on behalf
of the Debentureholders, such of the powers of the Debentureholders
as are exercisable by Extraordinary Resolution or other resolution
as shall be included in the resolution appointing the committee. The
resolution making such appointment may provide for payment of the
expenses and disbursements of and compensation to such committee.
Such committee shall consist of such number of persons as shall be
prescribed in the resolution appointing it and the members need not
be themselves Debentureholders. Every such committee may elect its
chairman and may make regulations respecting its quorum, the calling
of its meetings, the filling of vacancies occurring in its number
and its procedure generally. Such regulations may provide that the
committee may act at a meeting at which a quorum is present or may
act by minutes signed by the number of members thereof necessary to
constitute a quorum. All acts of any such committee within the
authority delegated to it shall be binding upon all
Debentureholders. Neither the committee nor any member thereof shall
be liable for any loss arising from or in connection with any action
taken or omitted to be taken by them in good faith;
(k) power to remove the Debenture Trustee from office and to appoint a
new Debenture Trustee or Debenture Trustees provided that no such
removal shall be effective unless and until a new Debenture Trustee
or Debenture Trustees shall have become bound by this Indenture;
(l) power to sanction the exchange of the Debentures for or the
conversion thereof into shares, bonds, debentures or other
securities or obligations of the Corporation or of any other Person
formed or to be formed;
(m) power to authorize the distribution in specie of any shares or
securities received pursuant to a transaction authorized under the
provisions of subsection 13.11(l); and
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(n) power to amend, alter or repeal any Extraordinary Resolution
previously passed or sanctioned by the Debentureholders or by any
committee appointed pursuant to subsection 13.11(j);
provided that, notwithstanding any other provision of this Indenture, the
Debenture Trustee shall not be bound by and shall not take, and no
Debentureholder is or shall be entitled to take, any action under or pursuant to
this Section 13.11 without the written consent of any Eligible Senior Creditor.
13.12 Meaning of "Extraordinary Resolution"
(a) The expression "Extraordinary Resolution" when used in this
Indenture means, subject as hereinafter in this Article provided, a
resolution proposed to be passed as an Extraordinary Resolution at a
meeting of Debentureholders (including an adjourned meeting) duly
convened for the purpose and held in accordance with the provisions
of this Article at which the holders of not less than 25% of the
principal amount of the Debentures then outstanding, and if the
meeting is a Serial Meeting, at which holders of not less than 25%
of the principal amount of the Debentures then outstanding of each
especially affected series, are present in person or by proxy and
passed by the favourable votes of the holders of not less than 66
2/3% of the principal amount of the Debentures, and if the meeting
is a Serial Meeting by the affirmative vote of the holders of not
less than 66 2/3% of each especially affected series, in each case
present or represented by proxy at the meeting and voted upon on a
poll on such resolution.
(b) If, at any such meeting, the holders of not less than 25% of the
principal amount of the Debentures then outstanding and, if the
meeting is a Serial Meeting, 25% of the principal amount of the
Debentures then outstanding of each especially affected series, in
each case are not present in person or by proxy within 30 minutes
after the time appointed for the meeting, then the meeting, if
convened by or on the requisition of Debentureholders, shall be
dissolved but in any other case it shall stand adjourned to such
date, being not less than 14 nor more than 60 days later, and to
such place and time as may be appointed by the chairman. Not less
than 10 days notice shall be given of the time and place of such
adjourned meeting in the manner provided in Section 14.2. Such
notice shall state that at the adjourned meeting the
Debentureholders present in person or by proxy shall form a quorum.
At the adjourned meeting the Debentureholders present in person or
by proxy shall form a quorum and may transact the business for which
the meeting was originally convened and a resolution proposed at
such adjourned meeting and passed thereat by the affirmative vote of
holders of not less than 66 2/3% of the principal amount of the
Debentures and, if the meeting is a Serial Meeting, by the
affirmative vote of the holders of not less than 66 2/3% of the
principal amount of the Debentures of each especially affected
series, in each case present or represented by proxy at the meeting
and voted upon on a poll shall be an Extraordinary Resolution within
the meaning of this Indenture, notwithstanding that the holders of
not less than 25% in principal amount of the Debentures then
outstanding, and if the meeting is a Serial Meeting, holders of not
less than 25% of the principal amount of the Debentures then
outstanding of each especially affected series, are not present in
person or by proxy at such adjourned meeting.
(c) Votes on an Extraordinary Resolution shall always be given on a poll
and no demand for a poll on an Extraordinary Resolution shall be
necessary.
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13.13 Powers Cumulative
Any one or more of the powers in this Indenture stated to be exercisable
by the Debentureholders by Extraordinary Resolution or otherwise may be
exercised from time to time and the exercise of any one or more of such powers
from time to time shall not be deemed to exhaust the rights of the
Debentureholders to exercise the same or any other such power or powers
thereafter from time to time.
13.14 Minutes
Minutes of all resolutions and proceedings at every meeting as aforesaid
shall be made and duly entered in books to be from time to time provided for
that purpose by the Debenture Trustee at the expense of the Corporation, and any
such minutes as aforesaid, if signed by the chairman of the meeting at which
such resolutions were passed or proceedings had, or by the chairman of the next
succeeding meeting of the Debentureholders, shall be prima facie evidence of the
matters therein stated and, until the contrary is proved, every such meeting, in
respect of the proceedings of which minutes shall have been made, shall be
deemed to have been duly held and convened, and all resolutions passed thereat
or proceedings taken thereat to have been duly passed and taken.
13.15 Instruments in Writing
All actions which may be taken and all powers that may be exercised by the
Debentureholders at a meeting held as hereinbefore in this Article provided may
also, where permitted by applicable laws, be taken and exercised by
Debentureholders by an instrument in writing signed in one or more counterparts
and the expressions " resolution" and "Extraordinary Resolution" when used in
this Indenture shall include an instrument so signed; provided that,
notwithstanding any other provision of this Indenture, the Debenture Trustee
shall not be bound by and shall not take, and no Debentureholder is or shall be
entitled to take, any action under or pursuant to this Section 13.15 without the
written consent of any Eligible Senior Creditor.
13.16 Binding Effect of Resolutions
Every resolution and every Extraordinary Resolution passed in accordance
with the provisions of this Article at a meeting of Debentureholders shall be
binding upon all the Debentureholders, whether present at or absent from such
meeting, and every instrument in writing signed by Debentureholders in
accordance with Section 13.15 shall be binding upon all the Debentureholders,
whether signatories thereto or not, and each and every Debentureholder and the
Debenture Trustee (subject to the provisions for its indemnity herein contained)
shall be bound to give effect accordingly to every such resolution,
Extraordinary Resolution and instrument in writing.
13.17 Evidence of Rights Of Debentureholders
(a) Any request, direction, notice, consent or other instrument which
this Indenture may require or permit to be signed or executed by the
Debentureholders may be in any number of concurrent instruments of
similar tenor signed or executed by such Debentureholders.
(b) The Debenture Trustee may, in its discretion, require proof of
execution in cases where it deems proof desirable and may accept
such proof as it shall consider proper.
13.18 Concerning Serial Meetings
If in the opinion of Counsel any business to be transacted at any meeting,
or any action to be taken or power to be exercised by instrument in writing
under Section 13.15, does not adversely affect the rights of the
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holders of Debentures of one or more series, the provisions of this Article 13
shall apply as if the Debentures of such series were not outstanding and no
notice of any such meeting need be given to the holders of Debentures of such
series. Without limiting the generality of the foregoing, a proposal to modify
or terminate any covenant or agreement which is effective only so long as
Debentures of a particular series are outstanding shall be deemed not to
adversely affect the rights of the holders of Debentures of any other series.
ARTICLE 14
NOTICES
14.1 Notice to the Corporation
Any notice to the Corporation under the provisions of this Indenture shall
be valid and effective if delivered to the Corporation at 000 Xxxxx Xxxx,
Xxxxxx, Xxxxxxx, X0X 0X0, Attention: Chief Executive Officer, Facsimile No.:
(000) 000-0000, and a copy (which shall not constitute notice) delivered to
XxXxxxxx Xxxxxxxx LLP, Suite 2500, 0000 Xx Xx Xxxxxxxxxxx Xxxx, Xxxxxxxx,
Xxxxxx, X0X 0X0, Attention: Xxxxx Xxxxxxxxx, Facsimile No.: (000) 000-0000, or
if given by registered letter, postage prepaid, to such offices and so addressed
and if mailed, shall be deemed to have been effectively given three days
following the mailing thereof. The Corporation may from time to time notify the
Debenture Trustee in writing of a change of address which thereafter, until
changed by like notice, shall be the address of the Corporation for all purposes
of this Indenture.
If by reason of any interruption of mail service, actual or threatened,
any notice to be given to the Corporation would reasonably be unlikely to reach
its destination by the time notice by mail is deemed to have been given pursuant
to this Section 14.1, such notice shall be valid and effective only if delivered
at the appropriate address in accordance with this Section 14.1.
14.2 Notice to Debentureholders
All notices to be given hereunder with respect to the Debentures shall be
deemed to be validly given to the holders thereof if sent by first class mail,
postage prepaid, by letter or circular addressed to such holders at their post
office addresses appearing in any of the registers hereinbefore mentioned and
shall be deemed to have been effectively given three days following the day of
mailing. Accidental error or omission in giving notice or accidental failure to
mail notice to any Debentureholder or the inability of the Corporation to give
or mail any notice due to anything beyond the reasonable control of the
Corporation shall not invalidate any action or proceeding founded thereon.
If any notice given in accordance with the foregoing paragraph would be
unlikely to reach the Debentureholders to whom it is addressed in the ordinary
course of post by reason of an interruption in mail service, whether at the
place of dispatch or receipt or both, the Corporation shall give such notice by
publication at least once in a daily national newspaper of general circulation.
Any notice given to Debentureholders by publication shall be deemed to
have been given on the day on which publication shall have been effected at
least once in each of the newspapers in which publication was required.
All notices with respect to any Debenture may be given to whichever one of
the holders thereof (if more than one) is named first in the registers
hereinbefore mentioned, and any notice so given shall be sufficient notice to
all holders of any persons interested in such Debenture.
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14.3 Notice to Debenture Trustee
Any notice to the Debenture Trustee under the provisions of this Indenture
shall be valid and effective if delivered to the Debenture Trustee at its
principal office in the City of Toronto at 000 Xxxxxxxxxx Xxx., 9th Floor, North
Tower, Toronto, Ontario, M5J 2Y1, Attention: Manager, Corporate Trust or if sent
by facsimile to facsimile number (000) 000-0000, Attention: Manager, Corporate
Trust, or if given by registered letter, postage prepaid, to such office and so
addressed and, if mailed, shall be deemed to have been effectively given three
days following the mailing thereof.
14.4 Mail Service Interruption
If by reason of any interruption of mail service, actual or threatened,
any notice to be given to the Debenture Trustee would reasonably be unlikely to
reach its destination by the time notice by mail is deemed to have been given
pursuant to Section 14.3 such notice shall be valid and effective only if
delivered at the appropriate address in accordance with Section 14.3.
ARTICLE 15
CONCERNING THE DEBENTURE TRUSTEE
15.1 Eligibility; Disqualification.
This Indenture shall always have a Debenture Trustee who satisfies the
requirements of TIA ss.310(a)(1) or Rule 10a-5 promulgated thereunder, which
Rule 10a-5 states that any trust company, acting as trustee under an indenture
qualified or to be qualified under the TIA and filed in connection with
offerings on a registration statement on Form F-10 that is incorporated and
regulated as a trust company under the laws of Canada or any of its provinces or
territories and that is subject to supervision or examination pursuant to the
Trust Companies Act (Canada), R.S.C. 1985, or the Canada Deposit Insurance
Corporation Act, R.S.C. 1985 shall not be subject to the requirement of domicile
in the United States under TIA ss.310(a); provided, however, that each trustee
eligible for appointment under Rule 10a-5 shall file as part of the registration
statement for the securities to which the trusteeship relates a consent to
service of process and power of attorney on Form F-X. The Debenture Trustee
shall have a combined capital and surplus of at least US$20,000,000, as set
forth in its most recent published annual report of condition.
15.2 No Conflict of Interest
The Debenture Trustee represents to the Corporation that at the date of
execution and delivery by it of this Indenture there exists no material conflict
of interest in the role of the Debenture Trustee as a fiduciary hereunder but
if, notwithstanding the provisions of this Section 15.2, such a material
conflict of interest exists, or hereafter arises, the validity and
enforceability of this Indenture, and the Debentures issued hereunder, shall not
be affected in any manner whatsoever by reason only that such material conflict
of interest exists or arises but the Debenture Trustee shall, within 30 days
after ascertaining that it has a material conflict of interest, either eliminate
such material conflict of interest or resign in the manner and with the effect
specified in Section 15.3.
15.3 Replacement of Debenture Trustee
The Debenture Trustee may resign its trust and be discharged from all
further duties and liabilities hereunder by giving to the Corporation 60 days
notice in writing or such shorter notice as the Corporation may accept as
sufficient. If at any time a material conflict of interest exists in the
Debenture Trustee's role as a fiduciary hereunder the Debenture Trustee shall,
within 30 days after ascertaining that such a material conflict of interest
exists, either eliminate such material conflict of interest or resign in the
manner and with
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the effect specified in this Section 15.3. The validity and enforceability of
this Indenture and of the Debentures issued hereunder shall not be affected in
any manner whatsoever by reason only that such a material conflict of interest
exists. In the event of the Debenture Trustee resigning or being removed or
being dissolved, becoming bankrupt, going into liquidation or otherwise becoming
incapable of acting hereunder, the Corporation shall forthwith appoint a new
Debenture Trustee unless a new Debenture Trustee has already been appointed by
the Debentureholders. Failing such appointment by the Corporation, the retiring
Debenture Trustee or any Debentureholder may apply to a Judge of the Superior
Court of Justice of Ontario, on such notice as such Judge may direct at the
Corporation's expense, for the appointment of a new Debenture Trustee but any
new Debenture Trustee so appointed by the Corporation or by the Court shall be
subject to removal as aforesaid by the Debentureholders and the appointment of
such new Debenture Trustee shall be effective only upon such new Debenture
Trustee becoming bound by this Indenture. Any new Debenture Trustee appointed
under any provision of this Section 15.3 shall be a corporation authorized to
carry on the business of a trust company in all of the provinces and territories
of Canada. On any new appointment the new Debenture Trustee shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named herein as Debenture Trustee.
Any company into which the Debenture Trustee may be merged or, with or to
which it may be consolidated, amalgamated or sold, or any company resulting from
any merger, consolidation, sale or amalgamation to which the Debenture Trustee
shall be a party, or any company succeeding to the corporate trust business of
the Debenture Trustee shall be the successor Debenture Trustee under this
Indenture without the execution of any instrument or any further act.
Nevertheless, upon the written request of the successor Debenture Trustee or of
the Corporation and upon payment of all amounts due to it under Section 7.2, the
Debenture Trustee ceasing to act shall execute and deliver an instrument
assigning and transferring to such successor Debenture Trustee, upon the terms
herein expressed, all the rights, powers and trusts of the Debenture Trustee so
ceasing to act, and shall duly assign, transfer and deliver all property and
money held by such Debenture Trustee to the successor Debenture Trustee so
appointed in its place. Should any deed, conveyance or instrument in writing
from the Corporation be required by any new Debenture Trustee for more fully and
certainly vesting in and confirming to it such estates, properties, rights,
powers and trusts, then any and all such deeds, conveyances and instruments in
writing shall on request of said new Debenture Trustee, be made, executed,
acknowledged and delivered by the Corporation.
15.4 Duties of Debenture Trustee
In the exercise of the rights, duties and obligations prescribed or
conferred by the terms of this Indenture, the Debenture Trustee shall act
honestly and in good faith and exercise that degree of care, diligence and skill
that a reasonably prudent trustee would exercise in comparable circumstances.
15.5 Reliance Upon Declarations, Opinions, etc.
In the exercise of its rights, duties and obligations hereunder the
Debenture Trustee may, if acting in good faith, rely, as to the truth of the
statements and accuracy of the opinions expressed therein, upon statutory
declarations, opinions, reports or certificates furnished pursuant to any
covenant, condition or requirement of this Indenture or required by the
Debenture Trustee to be furnished to it in the exercise of its rights and duties
hereunder, if the Debenture Trustee examines such statutory declarations,
opinions, reports or certificates and determines that they comply with Section
15.6, if applicable, and with any other applicable requirements of this
Indenture. The Debenture Trustee may nevertheless, in its discretion, require
further proof in cases where it deems further proof desirable. Without
restricting the foregoing, the Debenture Trustee may rely on an opinion of
Counsel satisfactory to the Debenture Trustee notwithstanding that it is
delivered by a solicitor or firm which acts as solicitors for the Corporation.
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15.6 Evidence and Authority to Debenture Trustee, Opinions, etc.
The Corporation shall furnish to the Debenture Trustee evidence of
compliance with the conditions precedent provided for in this Indenture relating
to any action or step required or permitted to be taken by the Corporation or
the Debenture Trustee under this Indenture or as a result of any obligation
imposed under this Indenture, including without limitation, the certification
and delivery of Debentures hereunder, the satisfaction and discharge of this
Indenture and the taking of any other action to be taken by the Debenture
Trustee at the request of or on the application of the Corporation, forthwith if
and when (a) such evidence is required by any other Section of this Indenture to
be furnished to the Debenture Trustee in accordance with the terms of this
Section 15.6, or (b) the Debenture Trustee, in the exercise of its rights and
duties under this Indenture, gives the Corporation written notice requiring it
to furnish such evidence in relation to any particular action or obligation
specified in such notice.
Such evidence shall consist of:
(a) a certificate made by any one officer or Director of the
Corporation, on behalf of the Corporation, stating that any such
condition precedent has been complied with in accordance with the
terms of this Indenture;
(b) an opinion of Counsel that such condition precedent has been
complied with in accordance with the terms of this Indenture; and
(c) in the case of any such condition precedent compliance with which is
subject to review or examination by auditors or accountants, an
opinion or report of the Auditors of the Corporation whom the
Debenture Trustee for such purposes hereby approves, that such
condition precedent has been complied with in accordance with the
terms of this Indenture.
Whenever such evidence relates to a matter other than the certificates and
delivery of Debentures and the satisfaction and discharge of this Indenture, and
except as otherwise specifically provided herein, such evidence may consist of a
report or opinion of any solicitor, auditor, accountant, engineer or appraiser
or any other person whose qualifications give authority to a statement made by
him, provided that if such report or opinion is furnished by a director, officer
or employee of the Corporation, on behalf of the Corporation, it shall be in the
form of a statutory declaration. Such evidence shall be, so far as appropriate,
in accordance with the immediately preceding paragraph of this Section.
Each statutory declaration, certificate, opinion or report with respect to
compliance with a condition precedent provided for in the Indenture shall
include (a) a statement by the person giving the evidence that he has read and
is familiar with those provisions of this Indenture relating to the condition
precedent in question, (b) a brief statement of the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such evidence are based, (c) a statement that, in the belief of the person
giving such evidence, he has made such examination or investigation as is
necessary to enable him to make the statements or give the opinions contained or
expressed therein, and (d) a statement whether in the opinion of such person the
conditions precedent in question have been complied with or satisfied.
The Corporation shall furnish to the Debenture Trustee at any time if the
Debenture Trustee reasonably so requires, its certificate that the Corporation
has complied with all covenants, conditions or other requirements contained in
this Indenture, the non-compliance with which would, with the giving of notice
or the lapse of time, or both, or otherwise, constitute an Event of Default, or
if such is not the case, specifying the covenant, condition or other requirement
which has not been complied with and giving particulars of such non-compliance.
The Corporation shall, whenever the Debenture Trustee so requires, furnish the
Debenture Trustee with evidence by way of statutory declaration, opinion, report
or certificate as specified by the
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Debenture Trustee as to any action or step required or permitted to be taken by
the Corporation or as a result of any obligation imposed by this Indenture.
15.7 Officer's Certificates Evidence
Except as otherwise specifically provided or prescribed by this Indenture,
whenever in the administration of the provisions of this Indenture the Debenture
Trustee shall deem it necessary or desirable that a matter be proved or
established prior to taking or omitting any action hereunder, the Debenture
Trustee, if acting in good faith, may rely upon an Officer's Certificate.
15.8 Experts, Advisers and Agents
The Debenture Trustee may:
(a) employ or retain and act and rely on the opinion or advice of or
information obtained from any solicitor, auditor, valuer, engineer,
surveyor, appraiser or other expert, whether obtained by the
Debenture Trustee or by the Corporation, or otherwise, and shall not
be liable for acting, or refusing to act, in good faith on any such
opinion or advice and may pay proper and reasonable compensation for
all such legal and other advice or assistance as aforesaid; and
(b) employ such agents and other assistants as it may reasonably require
for the proper discharge of its duties hereunder, and may pay
reasonable remuneration for all services performed for it (and shall
be entitled to receive reasonable remuneration for all services
performed by it) in the discharge of the trusts hereof and
compensation for all disbursements, costs and expenses made or
incurred by it in the discharge of its duties hereunder and in the
management of the trusts hereof and any solicitors employed or
consulted by the Debenture Trustee may, but need not be, solicitors
for the Corporation.
15.9 Debenture Trustee May Deal in Debentures
Subject to Sections 15.2 and 15.4, the Debenture Trustee may, in its
personal or other capacity, buy, sell, lend upon and deal in the Debentures and
generally contract and enter into financial transactions with the Corporation or
otherwise, without being liable to account for any profits made thereby.
15.10 Investment of Monies Held by Debenture Trustee
Unless otherwise provided in this Indenture, any monies held by the
Debenture Trustee, which, under the trusts of this Indenture, may or ought to be
invested or which may be on deposit with the Debenture Trustee or which may be
in the hands of the Debenture Trustee, may be invested and reinvested in the
name or under the control of the Debenture Trustee in securities in which, under
the laws of the Province of Ontario, trustees are authorized to invest trust
monies, provided that such securities are expressed to mature within two years
or such shorter period selected to facilitate any payments expected to be made
under this Indenture, after their purchase by the Debenture Trustee, and unless
and until the Debenture Trustee shall have declared the principal of and
interest on the Debentures to be due and payable, the Debenture Trustee shall so
invest such monies at the written direction of the Corporation given in a
reasonably timely manner. Pending the investment of any monies as hereinbefore
provided, such monies may be deposited in the name of the Debenture Trustee in
any chartered bank of Canada or, with the consent of the Corporation, in the
deposit department of the Debenture Trustee or any other loan or trust company
authorized to accept deposits under the laws of Canada or any Province thereof
at the rate of interest, if any, then current on similar deposits. The
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Corporation shall receive the Debenture Trustee's prevailing rate for all monies
held by it, as may change from time to time.
Unless and until the Debenture Trustee shall have declared the principal
of and interest on the Debentures to be due and payable, the Debenture Trustee
shall pay over to the Corporation all interest received by the Debenture Trustee
in respect of any investments or deposits made pursuant to the provisions of
this Section.
15.11 Debenture Trustee Not Ordinarily Bound
Except as provided in Section 8.2 and as otherwise specifically provided
herein, the Debenture Trustee shall not, subject to Section 15.4, be bound to
give notice to any person of the execution hereof, nor to do, observe or perform
or see to the observance or performance by the Corporation of any of the
obligations herein imposed upon the Corporation or of the covenants on the part
of the Corporation herein contained, nor in any way to supervise or interfere
with the conduct of the Corporation's business, unless the Debenture Trustee
shall have been required to do so in writing by the holders of not less than 25%
of the aggregate principal amount of the Debentures then outstanding or by any
Extraordinary Resolution of the Debentureholders passed in accordance with the
provisions contained in Article 13, and then only after it shall have been
funded and indemnified to its satisfaction against all actions, proceedings,
claims and demands to which it may render itself liable and all costs, charges,
damages and expenses which it may incur by so doing.
15.12 Debenture Trustee Not Required to Give Security
The Debenture Trustee shall not be required to give any bond or security
in respect of the execution of the trusts and powers of this Indenture or
otherwise in respect of the premises.
15.13 Debenture Trustee Not Bound to Act on Corporation's Request
Except as in this Indenture otherwise specifically provided, the Debenture
Trustee shall not be bound to act in accordance with any direction or request of
the Corporation until a duly authenticated copy of the instrument or resolution
containing such direction or request shall have been delivered to the Debenture
Trustee, and the Debenture Trustee shall be empowered to act upon any such copy
purporting to be authenticated and believed by the Debenture Trustee to be
genuine.
15.14 Conditions Precedent to Debenture Trustee's Obligations to Act Hereunder
The obligation of the Debenture Trustee to commence or continue any act,
action or proceeding for the purpose of enforcing the rights of the Debenture
Trustee and of the Debentureholders hereunder shall be conditional upon the
Debentureholders furnishing when required by notice in writing by the Debenture
Trustee, sufficient funds to commence or continue such act, action or proceeding
and indemnity reasonably satisfactory to the Debenture Trustee to protect and
hold harmless the Debenture Trustee against the costs, charges and expenses and
liabilities to be incurred thereby and any loss and damage it may suffer by
reason thereof.
None of the provisions contained in this Indenture shall require the
Debenture Trustee to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers unless indemnified as aforesaid.
The Debenture Trustee may, before commencing or at any time during the
continuance of any such act, action or proceeding require the Debentureholders
at whose instance it is acting to deposit with the
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Debenture Trustee the Debentures held by them for which Debentures the Debenture
Trustee shall issue receipts.
15.15 Authority to Carry on Business
The Debenture Trustee represents to the Corporation that at the date of
execution and delivery by it of this Indenture it is authorized to carry on the
business of a trust company in the Province of Ontario but if, notwithstanding
the provisions of this Section 15.5, it ceases to be so authorized to carry on
business, the validity and enforceability of this Indenture and the securities
issued hereunder shall not be affected in any manner whatsoever by reason only
of such event but the Debenture Trustee shall, within 90 days after ceasing to
be authorized to carry on the business of trust company in the Province of
Ontario, either become so authorized or resign in the manner and with the effect
specified in Section 15.3.
15.16 Compensation and Indemnity
(a) The Corporation shall pay to the Debenture Trustee from time to time
compensation for its services hereunder as agreed separately by the
Corporation and the Debenture Trustee, and shall pay or reimburse
the Debenture Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Debenture Trustee
in the administration or execution of its duties under this
Indenture (including the reasonable and documented compensation and
disbursements of its Counsel and all other advisers and assistants
not regularly in its employ), both before any default hereunder and
thereafter until all duties of the Debenture Trustee under this
Indenture shall be finally and fully performed. The Debenture
Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust.
(b) The Corporation hereby indemnifies and saves harmless the Debenture
Trustee and its directors, officers, employees and agents from and
against any and all loss, damages, charges, expenses, claims,
demands, actions or liability whatsoever which may be brought
against the Debenture Trustee or which it may suffer or incur as a
result of or arising out of the performance of its duties and
obligations hereunder save only in the event of the negligent
failure to act, or the willful misconduct or bad faith of the
Debenture Trustee. This indemnity will survive the termination or
discharge of this Indenture and the resignation or removal of the
Debenture Trustee. The Debenture Trustee shall notify the
Corporation promptly of any claim for which it may seek indemnity.
The Corporation shall defend the claim and the Debenture Trustee
shall co-operate in the defence. The Debenture Trustee may have
separate counsel and the Corporation shall pay the reasonable fees
and expenses of such Counsel. The Corporation need not pay for any
settlement made without its consent, which consent must not be
unreasonably withheld. This indemnity shall survive the resignation
or removal of the Debenture Trustee or the discharge of this
Indenture.
(c) The Corporation need not reimburse any expense or indemnify against
any loss or liability incurred by the Debenture Trustee through
negligence or bad faith or breach of the Debenture Trustee's duties
hereunder.
(d) Provisions contained in this Section 15.16 shall survive the
resignation or removal of the Trustee and the discharge of this
Debenture.
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15.17 Anti-Money Laundering
The DebentureTrustee shall retain the right not to act and shall not be
liable for refusing to act if, due to a lack of information or for any other
reason whatsoever, the Debenture Trustee, in its sole judgment and acting
reasonably, determines that such act might cause it to be in non-compliance with
any applicable anti-money laundering or anti-terrorist legislation, regulation
or guideline. Further, should the Debenture Trustee, in its sole judgment and
acting reasonably, determine at any time that its acting under this Indenture
has resulted in its being in non-compliance with any applicable anti-money
laundering or anti-terrorist legislation, regulation or guideline, then it shall
have the right to resign on 10 days' written notice to the Corporation or any
shorter period of time as agreed to by the Corporation, provided that:
(a) the Debenture Trustee's written notice shall describe the
circumstances of such non-compliance; and
(b) if such circumstances are rectified to the Debenture Trustee's
satisfaction within such 15 day period, then such resignation shall
not be effective.
15.18 Acceptance of Debenture Trustee
The Debenture Trustee hereby accepts the trusts in this Indenture declared
and provided for and agrees to perform the same upon the terms and conditions
herein set forth and to hold all rights, privileges and benefits conferred
hereby and by law in trust for the various persons who shall from time to time
be Debentureholders, subject to all the terms and conditions herein set forth.
15.19 Third Party Interests
Each party to this Indenture hereby represents to the Debenture Trustee
that any account to be opened by, or interest to held by the Debenture Trustee
in connection with this Indenture, for or to the credit of such party, either
(i) is not intended to be used by or on behalf of any third party; or (ii) is
intended to be used by or on behalf of a third party, in which case the
Corporation hereto agrees to complete and execute forthwith a declaration in the
Debenture Trustee's prescribed form as to the particulars of such third party.
15.20 Privacy Laws
The parties acknowledge that federal and/or provincial legislation that
addresses the protection of individuals' personal information (collectively,
"Privacy Laws") applies to obligations and activities under this Indenture.
Despite any other provision of this Indenture, neither party shall take or
direct any action that would contravene, or cause the other to contravene,
applicable Privacy Laws. The Corporation shall, prior to transferring or causing
to be transferred personal information to the Debenture Trustee, obtain and
retain required consents of the relevant individuals to the collection, use and
disclosure of their personal information, or shall have determined that such
consents either have previously been given upon which the parties can rely or
are not required under the Privacy Laws. The Debenture Trustee shall use
commercially reasonable efforts to ensure that its services hereunder comply
with Privacy Laws.
ARTICLE 16
SUPPLEMENTAL INDENTURES
16.1 Supplemental Indentures
From time to time the Debenture Trustee and, when authorized by a
resolution of its Directors, the Corporation, may, and they shall when required
by this Indenture, execute, acknowledge and deliver by their
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proper officers deeds or indentures supplemental hereto which thereafter shall
form part hereof, for any one or more of the following purposes:
(a) providing for the issuance of Additional Debentures under this
Indenture;
(b) adding to the covenants of the Corporation herein contained for the
protection of the Debentureholders, or of the Debentures of any
series, or providing for events of default, in addition to those
herein specified;
(c) making such provisions not inconsistent with this Indenture as may
be necessary or desirable with respect to matters or questions
arising hereunder, including the making of any modifications in the
form of the Debentures which do not affect the substance thereof and
which in the opinion of the Debenture Trustee relying on an opinion
of Counsel will not be prejudicial to the interests of the
Debentureholders;
(d) evidencing the succession, or successive successions, of others to
the Corporation and the covenants of and obligations assumed by any
such successor in accordance with the provisions of this Indenture;
(e) giving effect to any Extraordinary Resolution passed as provided in
Article 13; and
(f) for any other purpose not inconsistent with the terms of this
Indenture;
provided that, in no event shall the Debenture Trustee enter into any deed or
indenture supplemental hereto for the purpose of making, evidencing or giving
effect to any change to Article 5 hereof without the written consent of an
Eligible Senior Creditor.
Unless the supplemental indenture requires the consent or concurrence of
Debentureholders or the holders of a particular series of Debentures, as the
case may be, by Extraordinary Resolution, the consent or concurrence of
Debentureholders or the holders of a particular series of Debentures, as the
case may be, shall not be required in connection with the execution,
acknowledgement or delivery of a supplemental indenture. The Corporation and the
Debenture Trustee may amend any of the provisions of this Indenture related to
matters of United States law or the issuance of Debentures into the United
States in order to ensure that such issuances can be made in accordance with
applicable law in the United States without the consent or approval of the
Debentureholders. Further, the Corporation and the Debenture Trustee may without
the consent or concurrence of the Debentureholders or the holders of a
particular series of Debentures, as the case may be, by supplemental indenture
or otherwise, make any changes or corrections in this Indenture which it shall
have been advised by Counsel are required for the purpose of curing or
correcting any ambiguity or defective or inconsistent provisions or clerical
omissions or mistakes or manifest errors contained herein or in any indenture
supplemental hereto or any Written Direction of the Corporation provided for the
issue of Debentures, providing that in the opinion of the Debenture Trustee
(relying upon an opinion of Counsel) the rights of the Debentureholders are in
no way prejudiced thereby.
ARTICLE 17
EXECUTION AND FORMAL DATE
17.1 Execution
This Indenture may be executed and delivered by facsimile and in
counterparts, each of which when so executed and delivered shall be deemed to be
an original and such counterparts together shall constitute
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one and the same instrument and notwithstanding their date of execution they
shall be deemed to be dated as of the date hereof.
17.2 Formal Date
For the purpose of convenience this Indenture may be referred to as
bearing the formal date of July [30], 2007 irrespective of the actual date of
execution hereof.
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IN WITNESS WHEREOF the parties hereto have executed this agreement as of
the date first written above.
ZARLINK SEMICONDUCTOR INC.
By:
--------------------------------------
By:
--------------------------------------
COMPUTERSHARE TRUST COMPANY
OF CANADA
By:
--------------------------------------
By:
--------------------------------------
SCHEDULE "A"
FORM OF INITIAL DEBENTURE
TO THE TRUST INDENTURE BETWEEN
ZARLINK SEMICONDUCTOR INC. AND
COMPUTERSHARE TRUST COMPANY OF CANADA
A-2
SCHEDULE "A"
This Initial Debenture is a Global Debenture within the meaning of the Indenture
herein referred to and is registered in the name of a Depository or a nominee
thereof. This Initial Debenture may not be transferred to or exchanged for
Initial Debentures registered in the name of any person other than the
Depository or a nominee thereof and no such transfer may be registered except in
the limited circumstances described in the Indenture. Every Initial Debenture
authenticated and delivered upon registration of, transfer of, or in exchange
for, or in lieu of, this Initial Debenture shall be a Global Debenture subject
to the foregoing, except in such limited circumstances described in the
Indenture.
Unless this Initial Debenture is presented by an authorized representative of
CDS Clearing and Depository Services Inc.("CDS") to the Issuer or its agent for
registration of transfer, exchange or payment, and any Initial Debenture issued
in respect thereof is registered in the name of CDS & CO., or in such other name
as is requested by an authorized representative of CDS (and any payment is made
to CDS & Co. or to such other entity as is requested by an authorized
representative of CDS), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since as the registered holder hereof,
CDS & CO. has an interest herein.
No. 2007-001 CUSIP 000000XX0
Cdn$o
ZARLINK SEMICONDUCTOR INC.
(A CORPORATION GOVERNED BY THE CANADA BUSINESS CORPORATIONS ACT)
6.0% CONVERTIBLE UNSECURED SUBORDINATED DEBENTURE
ZARLINK SEMICONDUCTOR INC. (the "Corporation") for value received hereby
acknowledges itself indebted and, subject to the provisions of the trust
indenture (the "Indenture") dated as of o, 2007 between the Corporation and
Computershare Trust Company of Canada (the "Debenture Trustee"), promises to pay
to the registered holder hereof on the maturity date of this Initial Debenture,
as hereinafter described, or on such earlier date as the principal amount hereof
may become due in accordance with the provisions of the Indenture, the principal
sum of o million Dollars (Cdn$o) in lawful money of Canada on presentation and
surrender of this Initial Debenture at the principal office of the Debenture
Trustee in Toronto, Ontario in accordance with the terms of the Indenture.
The maturity date (the "Maturity Date") for the Initial Debentures shall be
September 30, 2012. Holders of Initial Debentures will receive, on the third
Business Day following the Maturity Date an amount equal to the principal amount
of the Initial Debentures, plus the accrued and unpaid interest thereon to, but
excluding the Maturity Date. The Initial Debentures shall bear interest from the
date of issue at the rate of 6.0% per annum, payable semi-annually, not in
advance, on June 30 and December 31 in each year, the first such payment to fall
due on December 31, 2007, payable after as well as before maturity and after as
well as before default, with interest on amounts in default at the same rate,
compounded semi-annually. The first interest payment will include accrued
interest from the date hereof to, but excluding, December 31, 2007 and an amount
equal to 0.016% of the principal amount of the Initial Debentures per day (which
is equivalent to 6.0% per annum) from July [30], 2007 to the date hereof. The
first interest payment payable on December 31, 2007 shall be in the amount of
Cdn$o per Cdn$1,000 principal amount of Initial Debentures.
Interest hereon shall be payable by cheque mailed by prepaid ordinary mail or by
electronic transfer of funds to the registered holder hereof and, subject to the
provisions of the Indenture, the mailing of such cheque or the sending of the
electronic transfer of funds, as the case may be, shall, to the extent of the
sum represented
A-3
thereby (plus the amount of any tax withheld), satisfy and discharge all
liability for interest on this Initial Debenture.
This Initial Debenture is one of the 6.0% Convertible Unsecured Subordinated
Debentures (referred to herein as the "Initial Debentures") of the Corporation
issued or issuable in one or more series under the provisions of the Indenture.
Subject to the terms of the Indenture, additional Initial Debentures may be
issued pursuant to the Indenture after the date hereof. Reference is hereby
expressly made to the Indenture for a description of the terms and conditions
upon which the Initial Debentures are or are to be issued and held and the
rights and remedies of the holders of the Initial Debentures and of the
Corporation and of the Debenture Trustee, all to the same effect as if the
provisions of the Indenture were herein set forth to all of which provisions the
holder of this Initial Debenture by acceptance hereof assents.
The Initial Debentures are issuable only in denominations of Cdn$1,000 and
integral multiples thereof. Upon compliance with the provisions of the
Indenture, Initial Debentures of any denomination may be exchanged for an equal
aggregate principal amount of Initial Debentures in any other authorized
denomination or denominations.
The whole, or if this Initial Debenture is a denomination in excess of
Cdn$1,000, any part which is Cdn$1,000 or an integral multiple thereof, of the
principal of this Initial Debenture is convertible, at the option of the holder
hereof, upon surrender of this Initial Debenture at the principal office of the
Debenture Trustee in Xxxxxxx, Xxxxxxx, at any time prior to the close of
business on the Maturity Date or, if this Initial Debenture is called for
redemption on or prior to such date, then up to but not after the close of
business on the last Business Day immediately preceding the date specified for
redemption of this Initial Debenture, into fully paid, non-assessable and Freely
Tradeable Common Shares (without adjustment for interest accrued hereon or for
dividends on Common Shares issuable upon conversion) at a conversion price of
Cdn$2.45 per Share, (the "Conversion Price") per Common Share, being a
conversion rate of approximately 408.2 Common Shares for each Cdn$1,000
principal amount of Initial Debentures, all subject to the terms and conditions
and in the manner set forth in the Indenture. The Indenture makes provision for
the adjustment of the Conversion Price in the events therein specified. No
fractional Common Shares will be issued on any conversion but in lieu thereof,
the Corporation will satisfy such fractional interest by a cash payment equal to
the fractional interest multiplied by the volume-weighted average trading price
per share for Common Shares for 20 consecutive Trading Days ending on the day
preceding the relevant date of determination on the Toronto Stock Exchange and
the New York Stock Exchange (or, if the Common Shares are not listed thereon, on
such stock exchange on which the Common Shares are listed as may be selected for
such purpose by or on behalf of the Corporation and approved by the Debenture
Trustee, or if the Common Shares are not listed on any stock exchange, then on
the over-the-counter market) (the "Current Market Price"). The weighted average
price shall be determined by dividing the aggregate sale price of all Common
Shares sold on the said exchanges or market, as the case may be, during the said
20 consecutive Trading Days by the total number of Common Shares so sold.
This Initial Debenture may be redeemed at the option of the Corporation on the
terms and conditions set out in the Indenture at the redemption price therein
and herein set out provided that this Initial Debenture is not redeemable on or
before September 30, 2011 except in the event of the satisfaction of certain
conditions after a Change of Control has occurred and except to satisfy certain
withholding tax-related obligations arising following a change in laws,
regulations, rules or interpretations described in the Indenture. The
Corporation may redeem this Initial Debenture at any time at a redemption price
of 100% of the principal amount hereof plus accrued interest, if any, to satisfy
withholding tax-related obligations arising following a change in applicable
laws, regulations, rules or interpretations. After September 30, 2011 and on or
before the Maturity Date the Initial Debentures may be redeemed at the option of
the Corporation at the redemption price equal to the principal amount of the
Initial Debentures (the "Redemption Price") provided, among other things, the
Current Market Price is at least 125% of the Conversion Price and, in addition
thereto, at the time of
A-4
redemption, the Corporation shall pay to the holder accrued and unpaid interest
and otherwise on the terms and conditions described in the Indenture. The
Corporation may, on notice as provided in the Indenture, at its option and
subject to any applicable regulatory approval, elect to satisfy its obligation
to pay all or a portion of the applicable Redemption Price by the issue of that
number of Freely Tradeable Common Shares obtained by dividing the applicable
Redemption Price by 95% of the Current Market Price of the Common Shares on the
Redemption Date.
In the event of a Change of Control, subject to the terms and conditions of the
Indenture, the Corporation shall become obligated, subject to certain exceptions
described in the Indenture, to offer to purchase all of the outstanding Initial
Debentures. The Corporation shall offer to purchase all or any part specified by
the holder of Initial Debentures (so long as the principal amount of such part
is Cdn$1,000 or an integral multiple of Cdn$1,000) of the Initial Debentures
held by such holder on a date specified by the Corporation that is 30 Business
Days after the date that a Change of Control Corporation Notice is delivered, at
a purchase price equal to 101% of the principal amount thereof together with
accrued and unpaid interest, if any, to, but excluding, the Change of Control
Purchase Date. The holder shall have the right to withdraw any Change of Control
Purchase Notice at any time prior to the close of business on the fifth Business
Day next preceding the Change of Control Purchase Date by delivering a written
notice of withdrawal to the Debenture Trustee in accordance with the terms of
the Indenture.
If 90% or more in aggregate principal amount of the Initial Debentures
outstanding on the date of the giving of the Change of Control Corporation
Notice have been tendered for purchase on the Change of Control Purchase Date,
the Corporation will have the right to redeem all the remaining Initial
Debentures on such date at the Change of Control Purchase Price, together with
accrued and unpaid interest to such date. Notice of such redemption must be
given by the Corporation to the Debenture Trustee prior to the Change of Control
Purchase Date, and as soon as possible thereafter, by the Debenture Trustee to
the holders of the Initial Debentures not tendered for purchase.
The Corporation may, on notice as provided in the Indenture, at its option and
subject to any applicable regulatory approval, elect to satisfy the obligation
to repay all or any portion of the principal amount of this Initial Debenture
due on the Maturity Date by the issue of that number of Freely Tradeable Common
Shares obtained by dividing the principal amount of this Initial Debenture to be
paid for in Common Shares pursuant to the exercise by the Corporation of the
Common Share Repayment Right by 95% of the weighted average trading price of the
Common Shares on the Toronto Stock Exchange and the New York Stock Exchange for
the 20 consecutive Trading Days ending on the day preceding the Maturity Date.
The indebtedness evidenced by this Initial Debenture, and by all other Initial
Debentures now or hereafter certified and delivered under the Indenture, is a
direct unsecured obligation of the Corporation, and is subordinated in right of
payment, to the extent and in the manner provided in the Indenture, to the prior
payment of all Senior Indebtedness (including any indebtedness to trade
creditors), whether outstanding at the date of the Indenture or thereafter
created, incurred, assumed or guaranteed.
The principal hereof may become or be declared due and payable before the stated
maturity in the events, in the manner, with the effect and at the times provided
in the Indenture.
The Indenture contains provisions making binding upon all holders of Debentures
outstanding thereunder (or in certain circumstances specific series of
Debentures) resolutions passed at meetings of such holders held in accordance
with such provisions and instruments signed by the holders of a specified
majority of Debentures outstanding (or specific series), which resolutions or
instruments may have the effect of amending the terms of this Initial Debenture
or the Indenture.
A-5
This Initial Debenture may only be transferred, upon compliance with the
conditions prescribed in the Indenture, in one of the registers to be kept at
the principal office of the Debenture Trustee in Toronto, Ontario and in such
other place or places and/or by such other registrars (if any) as the
Corporation with the approval of the Debenture Trustee may designate. No
transfer of this Initial Debenture shall be valid unless made on the register by
the registered holder hereof or his executors or administrators or other legal
representatives, or his or their attorney duly appointed by an instrument in
form and substance satisfactory to the Debenture Trustee or other registrar, and
upon compliance with such reasonable requirements as the Debenture Trustee
and/or other registrar may prescribe and upon surrender of this Initial
Debenture for cancellation. Thereupon a new Initial Debenture or Initial
Debentures in the same aggregate principal amount shall be issued to the
transferee in exchange hereof.
This Initial Debenture shall not become obligatory for any purpose until it
shall have been certified by the Debenture Trustee under the Indenture.
If any of the provisions of this Initial Debenture are inconsistent with the
provisions of the Indenture, the provisions of the Indenture shall take
precedence and shall govern. Capitalized words or expressions used in this
Initial Debenture shall, unless otherwise defined herein, have the meaning
ascribed thereto in the Indenture.
IN WITNESS WHEREOF ZARLINK SEMICONDUCTOR INC. has caused this Initial Debenture
to be signed by its authorized representatives as of the o day of o, 2007.
ZARLINK SEMICONDUCTOR INC.
By:
----------------------------------
By:
----------------------------------
(FORM OF DEBENTURE TRUSTEE'S CERTIFICATE)
This Initial Debenture is one of the 6.0% Convertible Unsecured Subordinated
Debentures referred to in the Indenture within mentioned.
COMPUTERSHARE TRUST COMPANY OF CANADA
By
----------------------------------
(Authorized Officer)
(FORM OF REGISTRATION PANEL)
(No writing hereon except by Debenture Trustee or other registrar)
--------------------------------------------------------------------------------
Signature of Debenture
Date of Registration In Whose Name Registered Trustee or Registrar
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
A-6
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
___________________, whose address and social insurance number, if applicable,
are set forth below, this Initial Debenture (or Cdn$ _______________ principal
amount hereof*) of Zarlink Semiconductor Inc. standing in the name(s) of the
undersigned in the register maintained by the Corporation with respect to such
Initial Debenture and does hereby irrevocably authorize and direct the Debenture
Trustee to transfer such Initial Debenture in such register, with full power of
substitution in the premises.
Dated:
--------------------------------------------------------------------------
Address of Transferee:
----------------------------------------------------------
(Street Address, City, Province and Postal Code)
Social Insurance Number of Transferee, if applicable:
*If less than the full principal amount of the within Initial Debenture is to be
transferred, indicate in the space provided the principal amount (which must be
Cdn$1,000 or an integral multiple thereof, unless you hold an Initial Debenture
in a non-integral multiple of Cdn$1,000 by reason of your having exercised your
right to exchange upon the making of an Offer, in which case such Initial
Debenture is transferable only in its entirety) to be transferred.
1. The signature(s) to this assignment must correspond with the name(s) as
written upon the face of this Initial Debenture in every particular
without alteration or any change whatsoever. The signature(s) must be
guaranteed by a Canadian chartered bank or trust company or by a member of
an acceptable Medallion Guarantee Program. Notarized or witnessed
signatures are not acceptable as guaranteed signatures. The Guarantor must
affix a stamp bearing the actual words: "SIGNATURE GUARANTEED".
2. The registered holder of this Initial Debenture is responsible for the
payment of any documentary, stamp or other transfer taxes that may be
payable in respect of the transfer of this Initial Debenture.
Signature of Guarantor:
---------------------------------- -------------------------------------------
Authorized Officer Signature of transferring registered holder
----------------------------------
Name of Institution
A-7
EXHIBIT "1"
TO CDS GLOBAL DEBENTURE
ZARLINK SEMICONDUCTOR INC.
6.0% CONVERTIBLE UNSECURED SUBORDINATED DEBENTURES
Initial Aggregate Principal Amount: Cdn$o
CUSIP: 000000XX0
Authorization:
------------------
ADJUSTMENTS
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Date Amount of Increase Amount of Decrease New Principal Amount Authorization
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SCHEDULE "B"
FORM OF REDEMPTION NOTICE
TO THE TRUST INDENTURE BETWEEN
ZARLINK SEMICONDUCTOR INC. AND
COMPUTERSHARE TRUST COMPANY OF CANADA
B-2
SCHEDULE "B"
FORM OF REDEMPTION NOTICE
ZARLINK SEMICONDUCTOR INC.
o% CONVERTIBLE UNSECURED SUBORDINATED DEBENTURES
REDEMPTION NOTICE
To: Holders of o% Convertible Unsecured Subordinated Debentures (the
"Debentures") of Zarlink Semiconductor Inc. (the "Corporation")
Note: All capitalized terms used herein have the meaning ascribed thereto in the
Indenture mentioned below, unless otherwise indicated.
Notice is hereby given pursuant to Section 4.3 of the trust indenture (the
"Indenture") dated as of July [30], 2007 between the Corporation and
Computershare Trust Company of Canada (the "Debenture Trustee"), that the
aggregate principal amount of Cdn$o of the Cdn$o of Debentures outstanding will
be redeemed as of o (the "Redemption Date"), upon payment of a redemption amount
of Cdn$1,000 for each Cdn$1,000 principal amount of Debentures, being equal to
the aggregate of (i) Cdn$o (the "Redemption Price"), and (ii) all accrued and
unpaid interest hereon to but excluding the Redemption Date (collectively, the
"Total Redemption Price").
The Total Redemption Price will be payable upon presentation and surrender of
the Debentures called for redemption at the following corporate trust office:
Computershare Trust Company of Canada
000 Xxxxxxxxxx Xxx.
0xx Xxxxx, Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
The interest upon the principal amount of Debentures called for redemption shall
cease to be payable from and after the Redemption Date, unless payment of the
Total Redemption Price shall not be made on presentation for surrender of such
Debentures at the above-mentioned corporate trust office on or after the
Redemption Date or prior to the setting aside of the Total Redemption Price
pursuant to the Indenture.
Pursuant to Section 4.6 of the Indenture, the Corporation hereby irrevocably
elects to satisfy its obligation to pay to the holders of Debentures Cdn$o of
the Redemption Price payable to holders of Debentures in accordance with this
notice by issuing and delivering to the holders that number of Freely Tradeable
Common Shares obtained by dividing the Redemption Price by 95% of the then
Current Market Price of the Common Shares.
No fractional Common Shares shall be delivered upon the exercise by the
Corporation of the above-mentioned redemption right but, in lieu thereof, the
Corporation shall pay the cash equivalent thereof determined on the basis of the
Current Market Price of Common Shares on the Redemption Date (less any tax
required to be deducted, if any).
In this connection, upon presentation and surrender of the Debentures for
payment on the Redemption Date, the Corporation shall, on the Redemption Date,
make the delivery to the Debenture Trustee, at the above-mentioned corporate
trust office, for delivery to and on account of the holders, of certificates
representing the Freely Tradeable Common Shares to which holders are entitled
together with the cash equivalent in lieu of fractional Common Shares, cash for
all accrued and unpaid interest up to, but excluding, the Redemption
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Date, and, if only a portion of the Debentures are to be redeemed by issuing
Freely Tradeable Common Shares, cash representing the balance of the Redemption
Price.
DATED: o
ZARLINK SEMICONDUCTOR INC.
----------------------------------------
(Authorized Director or Officer of
Zarlink Semiconductor Inc.)
SCHEDULE "C"
FORM OF MATURITY NOTICE
TO THE TRUST INDENTURE BETWEEN
ZARLINK SEMICONDUCTOR INC. AND
COMPUTERSHARE TRUST COMPANY OF CANADA
C-2
SCHEDULE "C"
FORM OF MATURITY NOTICE
ZARLINK SEMICONDUCTOR INC.
o% CONVERTIBLE UNSECURED SUBORDINATED DEBENTURES
MATURITY NOTICE
To: Holders of o% Convertible Unsecured Subordinated Debentures (the
"Debentures") of Zarlink Semiconductor Inc. (the "Corporation")
Note: All capitalized terms used herein have the meaning ascribed thereto in the
Indenture mentioned below, unless otherwise indicated.
Notice is hereby given pursuant to subsection 4.10(b) of the trust indenture
(the "Indenture") dated as ofJuly [30], 2007 between the Corporation and
Computershare Trust Company of Canada, as trustee (the "Debenture Trustee"),
that the Debentures are due and payable as of o (the "Maturity Date") and the
Corporation elects to satisfy its obligation to pay to holders of Debentures
Cdn$o of the principal amount of the Debentures outstanding on the Maturity Date
by issuing and delivering to the holders that number of Freely Tradeable Common
Shares equal to the number obtained by dividing such principal amount of the
Debentures by 95% of the Current Market Price of Common Shares on the Maturity
Date.
No fractional Common Shares shall be delivered on exercise by the Corporation of
the above mentioned repayment right but, in lieu thereof, the Corporation shall
pay the cash equivalent thereof determined on the basis of the Current Market
Price of Common Shares on the Maturity Date (less any tax required to be
deducted, if any).
In this connection, upon presentation and surrender of the Debentures for
payment on the Maturity Date, the Corporation shall, on the Maturity Date, make
delivery to the Debenture Trustee, at its principal corporate trust office in
Xxxxxxx, Xxxxxxx, for delivery to and on account of the holders, of certificates
representing the Freely Tradeable Common Shares to which holders are entitled
together with the cash equivalent in lieu of fractional Common Shares, cash for
all accrued and unpaid interest up to, but excluding, the Maturity Date and if
only a portion of the Debentures are to be repaid by issuing Freely Tradeable
Common Shares, cash representing the balance of the principal amount and premium
(if any) due on the Maturity Date.
DATED: o
ZARLINK SEMICONDUCTOR INC.
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(Authorized Director or Officer
of Zarlink Semiconductor Inc.)
SCHEDULE "D"
FORM OF CHANGE OF CONTROL PURCHASE NOTICE
TO THE TRUST INDENTURE BETWEEN
ZARLINK SEMICONDUCTOR INC. AND
COMPUTERSHARE TRUST COMPANY OF CANADA
D-2
SCHEDULE "D"
FORM OF CHANGE OF CONTROL PURCHASE NOTICE
To: Zarlink Semiconductor Inc.
The undersigned registered owner of this Initial Debenture hereby
irrevocably acknowledges receipt of a notice from Zarlink Semiconductor Inc.
(the "Corporation") as to the occurrence of a Change of Control with respect to
the Corporation and setting forth the terms and conditions of the Corporation's
offer to purchase all outstanding Initial Debentures and accepts such offer and
instructs the Corporation to purchase the entire principal amount of this
Initial Debenture, or the portion thereof (which is Cdn$1,000 or an integral
multiple thereof) below designated, in accordance with the terms of the
Indenture referred to in this Initial Debenture at the Change of Control
Purchase Price, together with accrued and unpaid interest to, but excluding,
such date, to the registered holder hereof.
Dated:
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(Signature(s))
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* Signature Guaranty
Principal amount to be purchased (in an
integral multiple of Cdn$1,000, if less
than all):
----------------------------------------
NOTICE: The signature to the foregoing Election must correspond to the Name as
written upon the face of this Initial Debenture in every particular, without any
alteration or change whatsoever.
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* The signature must be guaranteed by a Canadian Schedule 1 chartered bank,
a major trust company, a member of an acceptable Medallion Guarantee
Program or any other guarantee program acceptable to the Debenture
Trustee.
SCHEDULE "E"
FORM OF NOTICE OF ELECTION UPON TAX REDEMPTION
TO THE TRUST INDENTURE BETWEEN
ZARLINK SEMICONDUCTOR INC. AND
COMPUTERSHARE TRUST COMPANY OF CANADA
E-2
SCHEDULE "E"
FORM OF NOTICE OF ELECTION UPON TAX REDEMPTION
Certificate No. of Initial Debenture
If you elect not to have this Initial Debenture redeemed by the
Corporation pursuant to subsection 2.4(o) of the Indenture, check the box: [ ]
If you elect to have only part of this Initial Debenture redeemed by the
Corporation pursuant to subsection 2.4(o) of the Indenture, state the principal
amount:
Cdn$
---------------------------------------
(must be an integral multiple of Cdn$1,000)
Your signature
Date:
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(sign exactly as your name appears on the
other side of this Initial Debenture)
* Signature guaranteed by:
By:
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* The signature must be guaranteed by a Canadian Schedule 1 chartered bank,
a major trust company, a member of a recognized stock exchange, a member
of an acceptable Medallion Guarantee Program or any other guarantee
program acceptable to the Registrar.
SCHEDULE "F"
FORM OF NOTICE OF CONVERSION
TO THE TRUST INDENTURE BETWEEN
ZARLINK SEMICONDUCTOR INC. AND
COMPUTERSHARE TRUST COMPANY OF CANADA
F-2
SCHEDULE "F"
FORM OF NOTICE OF CONVERSION
TO: ZARLINK SEMICONDUCTOR INC.
Note: All capitalized terms used herein have the meaning ascribed thereto in the
Indenture mentioned below, unless otherwise indicated.
The undersigned registered holder of o% Convertible Unsecured Subordinated
Debentures bearing Certificate No. o irrevocably elects to convert such
Debentures (or Cdn$o principal amount thereof*) in accordance with the terms of
the Indenture referred to in such Debentures and tenders herewith the
Debentures, and, if applicable, directs that the Common Shares of Zarlink
Semiconductor Inc. issuable upon a conversion be issued and delivered to the
person indicated below. (If Common Shares are to be issued in the name of a
person other than the holder, all requisite transfer taxes must be tendered by
the undersigned).
Dated:
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(Signature of Registered Holder)
* If less than the full principal amount of the Debentures, indicate in the
space provided the principal amount (which must be Cdn$1,000 or integral
multiples thereof).
------------------------------------
NOTE: If Common Shares are to be issued in the name of a person other than the
holder, the signature must be guaranteed by a chartered bank, a trust
company or by a member of an acceptable Medallion Guarantee Program. The
Guarantor must affix a stamp bearing the actual words: "SIGNATURE
GUARANTEED".
(Print name in which Common Shares are to be issued, delivered and registered)
Name:
--------------------------------------------
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(Address)
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(City, Province and Postal Code)
Name of guarantor:
-------------------------------
Authorized signature:
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