EXHIBIT 7.1
EXECUTION COPY
FAIRFAX FINANCIAL HOLDINGS LIMITED
Up to US$200,000,000 Aggregate Principal Amount of
5% Convertible Senior Debentures due 2023
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INDENTURE
Dated as of July 14, 2003
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The Bank of New York
TRUSTEE
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE..............................................................1
Section 1.1. Definitions............................................................................1
Section 1.2. Other Definitions......................................................................5
Section 1.3. Incorporation by Reference of Trust Indenture Act......................................6
Section 1.4. Rules of Construction..................................................................7
Section 1.5. Acts of Holders........................................................................7
ARTICLE II THE SECURITIES.........................................................................................8
Section 2.1. Form and Dating........................................................................8
Section 2.2. Execution and Authentication...........................................................9
Section 2.3. Registrar, Paying Agent, Conversion Agent and Calculation Agent.......................10
Section 2.4. Paying Agent to Hold Money and Securities in Trust....................................10
Section 2.5. Securityholder Lists..................................................................10
Section 2.6. Transfer and Exchange.................................................................11
Section 2.7. Replacement Securities................................................................12
Section 2.8. Outstanding Securities; Determinations of Holders' Action.............................13
Section 2.9. Temporary Securities..................................................................13
Section 2.10. Cancellation..........................................................................14
Section 2.11. Persons Deemed Owners.................................................................14
Section 2.12. Global Securities.....................................................................14
Section 2.13. CUSIP Numbers.........................................................................19
Section 2.14. Ranking...............................................................................19
ARTICLE III REDEMPTION AND PURCHASES.............................................................................19
Section 3.1. Company's Right to Redeem; Notices to Trustee.........................................19
Section 3.2. Selection of Securities to Be Redeemed................................................20
Section 3.3. Notice of Redemption..................................................................20
Section 3.4. Effect of Notice of Redemption........................................................21
Section 3.5. Deposit of Redemption Price...........................................................21
Section 3.6. Securities Redeemed in Part...........................................................22
Section 3.7. Purchase of Securities by the Company at Option of the Holder.........................22
Section 3.8. Offer to Purchase of Securities upon Change of Control................................24
Section 3.9. Company's Right to Elect Manner of Payment of Redemption Price, Purchase Price,
Change of Control Purchase Price for Payment or Principal
Amount at Stated Maturity.............................................................28
Section 3.10. Effect of Notice of Redemption, Purchase Notice, Change of Control Purchase
Notice or Payment Notice at Stated Maturity...........................................34
Section 3.11. Deposit of Redemption Price, Purchase Price or Change of Control Purchase Price.......35
Section 3.12. Securities Purchased in Part..........................................................36
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Section 3.13. Covenant to Comply With Securities Laws Upon Purchase of Securities...................36
Section 3.14. Repayment to the Company..............................................................36
ARTICLE IV COVENANTS.............................................................................................37
Section 4.1. Payment of Securities.................................................................37
Section 4.2. SEC and Other Reports.................................................................37
Section 4.3. Compliance Certificate................................................................37
Section 4.4. Further Instruments and Acts..........................................................37
Section 4.5. Maintenance of Office or Agency.......................................................38
Section 4.6. Delivery of Certain Information.......................................................38
Section 4.7. Payment of Additional Amounts.........................................................38
Section 4.8. Statement by Officers as to Default...................................................39
ARTICLE V SUCCESSOR CORPORATION..................................................................................40
Section 5.1. When Company May Merge or Transfer Assets.............................................40
ARTICLE VI DEFAULTS AND REMEDIES.................................................................................41
Section 6.1. Events of Default.....................................................................41
Section 6.2. Acceleration..........................................................................44
Section 6.3. Other Remedies........................................................................44
Section 6.4. Waiver of Past Defaults...............................................................44
Section 6.5. Control by Majority...................................................................44
Section 6.6. Limitation on Suits...................................................................45
Section 6.7. Rights of Holders to Receive Payment..................................................45
Section 6.8. Collection Suit by Trustee............................................................45
Section 6.9. Trustee May File Proofs of Claim......................................................45
Section 6.10. Priorities............................................................................46
Section 6.11. Undertaking for Costs.................................................................46
Section 6.12. Waiver of Stay, Extension or Usury Laws...............................................47
ARTICLE VII TRUSTEE..............................................................................................47
Section 7.1. Duties of Trustee.....................................................................47
Section 7.2. Rights of Trustee.....................................................................48
Section 7.3. Individual Rights of Trustee..........................................................50
Section 7.4. Trustee's Disclaimer..................................................................50
Section 7.5. Notice of Defaults....................................................................50
Section 7.6. Reports by Trustee to Holders.........................................................50
Section 7.7. Compensation and Indemnity............................................................50
Section 7.8. Replacement of Trustee................................................................51
Section 7.9. Successor Trustee by Merger...........................................................52
Section 7.10. Eligibility; Disqualification.........................................................52
Section 7.11. Preferential Collection of Claims Against Company.....................................52
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ARTICLE VIII DISCHARGE OF INDENTURE..............................................................................52
Section 8.1. Discharge of Liability on Securities..................................................52
Section 8.2. Repayment to the Company..............................................................53
ARTICLE IX AMENDMENTS............................................................................................53
Section 9.1. Without Consent of Holders............................................................53
Section 9.2. With Consent of Holders...............................................................54
Section 9.3. Compliance with Trust Indenture Act...................................................55
Section 9.4. Revocation and Effect of Consents, Xxxxxxx and Actions................................55
Section 9.5. Notation on or Exchange of Securities.................................................56
Section 9.6. Trustee to Sign Supplemental Indentures...............................................56
Section 9.7. Effect of Supplemental Indentures.....................................................56
ARTICLE X CONVERSIONS............................................................................................56
Section 10.1. Conversion Privilege..................................................................56
Section 10.2. Conversion Procedure; Conversion Rate; Fractional Shares..............................57
Section 10.3. Adjustment of Conversion Rate.........................................................59
Section 10.4. Effect of Reclassification, Consolidation, Merger or Sale.............................67
Section 10.5. Taxes on Shares Issued................................................................68
Section 10.6. Reservation of Shares, Shares to Be Fully Paid; Compliance with
Governmental Requirements; Listing of Shares..........................................68
Section 10.7. Responsibility of Trustee.............................................................69
Section 10.8. Notice To Holders Prior To Certain Actions............................................69
Section 10.9. Payment of Cash in Lieu of Shares.....................................................70
Section 10.10. Unconditional Right Of Holders To Convert.............................................71
ARTICLE XI MISCELLANEOUS.........................................................................................72
Section 11.1. Trust Indenture Act Controls..........................................................72
Section 11.2. Notices...............................................................................72
Section 11.3. Communication by Holders with Other Holders...........................................73
Section 11.4. Certificate and Opinion as to Conditions Precedent....................................73
Section 11.5. Statements Required in Certificate or Opinion.........................................73
Section 11.6. Separability Clause...................................................................73
Section 11.7. Rules by Trustee, Paying Agent, Conversion Agent and Registrar.......................73
Section 11.8. Legal Holidays........................................................................74
Section 11.9. GOVERNING LAW.........................................................................74
Section 11.10. Agent for Service; Submission to Jurisdiction; Waiver of Immunities...................74
Section 11.11. No Recourse Against Others............................................................74
Section 11.12. Successors............................................................................74
Section 11.13. Multiple Originals....................................................................75
Section 11.14. Repurchase of Securities by the Company...............................................75
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EXHIBIT A Form of Global Security
EXHIBIT B Form of Certificated Security
EXHIBIT C Transfer Certificate
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INDENTURE dated as of July 14, 2003 between FAIRFAX FINANCIAL HOLDINGS
LIMITED, a company duly organized and existing under the laws of Canada (the
"COMPANY"), and THE BANK OF NEW YORK, a New York banking corporation (the
"TRUSTEE").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Company's 5% Convertible
Senior Debentures due 2023:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.
"144A GLOBAL SECURITY" means a permanent Global Security in the form of
the Security attached hereto as Exhibit A that is deposited with, and registered
in the name of, the Depositary, representing Securities sold in reliance on Rule
144A under the Securities Act.
"ADDITIONAL INTEREST" means Additional Interest as defined in the
Registration Rights Agreement.
"AFFILIATE" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" when used with respect to any specified person means the power to
direct or cause the direction of the management and policies of such person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"APPLICABLE PROCEDURES" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Security, in each case to the
extent applicable to such transaction and as in effect from time to time.
"BOARD OF DIRECTORS" means either the board of directors of the Company
or any duly authorized committee of such board.
"BOARD RESOLUTION" means a resolution of the Board of Directors.
"BUSINESS DAY" means each day of the year other than a Saturday or a
Sunday or other day on which banking institutions in The City of New York are
required or authorized by law or regulation to close.
"CALCULATION AGENT" means initially The Bank of New York and its
successors and assigns.
"CAPITAL STOCK" for any corporation means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) stock issued by that corporation.
"CERTIFICATED SECURITIES" means Securities that are in the form of the
Securities attached hereto as Exhibit B.
"COMPANY" means the party named as the "Company" in the first Section of
this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent such successor or
successors.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
signed in the name of the Company by any two Officers.
"CONVERSION PRICE" as of any date means $1,000 divided by the Conversion
Rate as of such date.
"CONVERSION RATE" has the meaning set forth in Section 10.2(a) hereof.
"CORPORATE TRUST OFFICE" means the principal office of the Trustee at
which at any time its corporate trust business shall be administered, which
office at the date hereof is located at 000 Xxxxxxx Xxxxxx, Xxxxx 00X, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Corporate Trust Trustee Administration, or such other
address as the Trustee may designate from time to time by notice to the Holders
and the Company, or the principal corporate trust office of any successor
Trustee (or such other address as a successor Trustee may designate from time to
time by notice to the Holders and the Company).
"DEFAULT" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"GLOBAL SECURITIES" means Securities that are in the form of the
Securities attached hereto as Exhibit A and to the extent that such Securities
are required to bear the Legend required by Section 2.6, such Securities will be
in the form of a 144A Global Security.
"HOLDER" or "SECURITYHOLDER" means a person in whose name a Security is
registered on the Registrar's books.
"INDENTURE" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof, including the provisions of the TIA
that are deemed to be a part hereof.
"INTEREST PAYMENT DATE" means January 15 and July 15 of each year,
commencing January 15, 2004.
"INTEREST RECORD DATE" means January 1 and July 1 of each year.
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"ISSUE DATE" of any Security means the date on which such Security was
originally issued or deemed issued as set forth on the face of the Security.
"MULTIPLE VOTING SHARES" means the multiple voting shares of the Company
as it exists on the date of this Indenture or any other shares of Capital Stock
of the Company into which such Multiple Voting Shares shall be reclassified or
changed.
"NOTICE OF REDEMPTION" means notice given to the Trustee pursuant to
Section 3.3.
"NYSE" means The New York Stock Exchange, Inc.
"OFFICER" means the Chairman of the Board, the Vice Chairman, the Chief
Executive Officer, the President, any Vice President, the Treasurer, the
Controller, or the Secretary or any Assistant Treasurer or Assistant Secretary
of the Company.
"OFFICERS' CERTIFICATE" means a written certificate containing the
information specified in Sections 11.4 and 11.5, signed in the name of the
Company by any two Officers, and delivered to the Trustee. An Officers'
Certificate given pursuant to Section 4.3 shall be signed by an authorized
financial or accounting Officer of the Company but need not contain the
information specified in Sections 11.4 and 11.5.
"OPINION OF COUNSEL" means a written opinion containing the information
specified in Sections 11.4 and 11.5, from legal counsel. The counsel may be an
employee of, or counsel to, the Company.
"PERSON" or "PERSON" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.
"PRINCIPAL AMOUNT" means $1,000 per Security.
"REDEMPTION DATE" or "REDEMPTION DATE" means the date specified for
redemption of the Securities in accordance with the terms of the Securities and
this Indenture.
"REDEMPTION PRICE" or "redemption price" has the meaning set forth in
Section 5 of the Securities.
"REGISTRATION RIGHTS AGREEMENT" means the Resale Registration Rights
Agreement, dated as of the date hereof, among the Company and Banc of America
Securities LLC.
"RESPONSIBLE OFFICER" means, when used with respect to the Trustee, any
officer within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant treasurer, trust officer or any
other officer of the Trustee who customarily performs functions similar to those
performed by the persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred because of such person's
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knowledge of and familiarity with the particular subject and who shall have
direct responsibility for the administration of this Indenture.
"RESTRICTED SECURITY" means a Security required to bear the restrictive
legend set forth in the form of Security set forth in Exhibits A and B of this
Indenture.
"RULE 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.
"SALE PRICE" means, with respect to any security on any day, the closing
per share sale price, regular way, on such day or, in case no such sale takes
place on such day, the average of the reported closing bid and asked prices,
regular way, in each case as quoted on the NYSE consolidated tape or, if such
security is not quoted or listed or admitted to trading on the NYSE consolidated
tape, on the principal U.S. national securities exchange or quotation system on
which such security is quoted or listed or admitted to trading or, if not quoted
or listed or admitted to trading on any U.S. national securities exchange or
quotation system, the average of the closing bid and asked prices of such
security on the over-the-counter market on the day in question as reported by
the National Quotation Bureau Incorporated, or a similar generally accepted
reporting service or, if no such price is reported, as reported by the principal
other non-U.S. market on which such security is traded, such price to be
converted into U.S. dollars based on the Federal Reserve Bank of New York noon
buying rate as reported for the exchange of U.S. dollars into Canadian dollars
on such trading date, or if not so available, in such manner as furnished by any
NYSE member firm selected from time to time by the Board of Directors for that
purpose, or a price determined in good faith by the Board of Directors or, to
the extent permitted by applicable law, a duly authorized committee thereof,
whose determination shall be conclusive.
"SEC" means the United States Securities and Exchange Commission.
"SECURITIES" means any of the Company's 5% Convertible Senior Debentures
due 2023, as amended or supplemented from time to time, issued under this
Indenture.
"SECURITYHOLDER" or "HOLDER" means a person in whose name a Security is
registered on the Registrar's books.
"SERIES 1 PREFERRED SHARES" means the Series 1 preferred shares of the
Company as it exists on the date of the Indenture and any other shares of
Capital Stock of the Company into which such Series 1 preferred shares shall be
reclassified of changed.
"SHARES" means the subordinate voting shares of the Company as it exists
on the date of this Indenture or any other shares of Capital Stock of the
Company into which such Shares shall be reclassified or changed.
"STATED MATURITY", when used with respect to any Security, means July 15,
2023.
"SUBSIDIARY" means any person of which at least a majority of the
outstanding Voting Stock shall at the time directly or indirectly be owned or
controlled by the Company or by one or more Subsidiaries or by the Company and
one or more Subsidiaries.
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"TIA" means the United States Trust Indenture Act of 1939 as in effect on
the date of this Indenture, provided, however, that in the event the TIA is
amended after such date, TIA means, to the extent required by any such
amendment, the TIA as so amended.
"TRADING DAY" means a day during which trading in securities generally
occurs on the NYSE or, if the Shares are not listed on the NYSE, on the
principal U.S. national securities exchange on which the Shares then are traded
or, if the Shares are not listed for trading on a U.S. national securities
exchange, on the National Association of Securities Dealers Automated Quotation
System or, if the Shares are not quoted on the National Association of
Securities Dealers Automated Quotation System, on the principal other market on
which the Shares are then traded.
"TRUSTEE" means the party named as the "Trustee" in the first paragraph
of this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent such successor or
successors.
"VOTING STOCK" of a person means Capital Stock of such person of the
class or classes pursuant to which the holders thereof have the general voting
power under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such person (irrespective of whether or not
at the time Capital Stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).
Section 1.2. Other Definitions
Term Section: Defined in:
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"Additional Amounts"....................................... 4.7(a)
"Adjustment Event"......................................... 10.3(k)
"Agent Members"............................................ 2.12(e)
"Applicable Stock"......................................... 3.8(c)
"beneficial owner"......................................... 3.9(a)
"cash"..................................................... 3.10(a)
"Cash Amount".............................................. 10.9
"Cash Settlement Notice Period"............................ 10.9
"Change of Control"........................................ 3.9(a)
"Change of Control Purchase Date".......................... 3.9(a)
"Change of Control Purchase Notice"........................ 3.9(c)
"Change of Control Purchase Price"......................... 3.9(a)
"Company Notice"........................................... 3.10(d)
"Company Notice Date"...................................... 3.10(b)
"Controlling Shareholder".................................. 6.1
"Conversion Agent"......................................... 2.3
"Conversion Obligation".................................... 10.9
"Conversion Retraction Period.............................. 10.9
"Conversion Settlement Averaging Period"................... 10.9
"Current Market Price"..................................... 10.3(f)
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"Depositary"............................................... 2.1(a)
"Determination Date"....................................... 10.3(k)
"Designated Subsidiary".................................... 6.1
"Distributed Assets"....................................... 10.3(d)
"Event of Default"......................................... 6.1
"Excluded Holder".......................................... 4.7(a)
"Ex-Dividend Time"......................................... 10.1(b)
"Exchange Act"............................................. 2.12(e)
"Expiration Time".......................................... 10.3(e)
"Fair Market Value"........................................ 10.3(g)
"Final Notice Date"........................................ 10.9
"Fiscal Quarter"........................................... 10.1(a)
"Legal Holiday"............................................ 11.8
"Legend"................................................... 2.6(f)
"Market Price"............................................. 3.10(c)
"non-electing share" ...................................... 10.4
"Notice of Conversion"..................................... 10.2(b)
"Notice of Default"........................................ 6.1
"Paying Agent"............................................. 2.3
"Purchase Date"............................................ 3.7(a)
"Purchase Notice".......................................... 3.7(a)
"Purchase Price"........................................... 3.7(a)
"Purchased Shares"......................................... 10.3(f)
"QIBs"..................................................... 2.1(a)
"Record Date".............................................. 10.3(g)
"Registrar"................................................ 2.3
"Rule 144A Information".................................... 4.6
"Securities Act"........................................... 2.6(f)
"Taxes".................................................... 4.7(a)
"Trigger Event"............................................ 10.3(d)
Section 1.3. Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:
"COMMISSION" means the SEC.
"INDENTURE SECURITIES" means the Securities.
"INDENTURE SECURITY HOLDER" means a Securityholder.
"INDENTURE TO BE QUALIFIED" means this Indenture.
"INDENTURE TRUSTEE" or "institutional trustee" means the Trustee.
"OBLIGOR" on the indenture securities means the Company.
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All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
Section 1.4. Rules of Construction. Unless the context otherwise
requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles as in
effect in Canada from time to time;
(c) "or" is not exclusive;
(d) "including" means including, without limitation; and
(e) words in the singular include the plural, and words in the plural
include the singular.
Section 1.5. Acts of Holders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by an agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is hereby expressly required, to the
Company, as described in Section 11.2. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to such officer the execution thereof.
Where such execution is by a signer acting in a capacity other than such
signer's individual capacity, such certificate or affidavit shall also
constitute sufficient proof of such signer's authority. The fact and date of the
execution of any such instrument or writing, or the authority of the person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.
(c) The principal amount and serial number of any Security and the
ownership of Securities shall be proved by the register maintained by the
Registrar for the Securities.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange
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therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustee or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.
(e) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to a Board Resolution, fix in advance a record
date for the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Company
shall have no obligation to do so. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act may be
given before or after such record date, but only the Holders of record at the
close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after the
record date.
ARTICLE II
THE SECURITIES
Section 2.1. Form and Dating The Securities and the Trustee's certificate
of authentication shall be substantially in the form of Exhibits A and B, which
are a part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage (provided that any
such notation, legend or endorsement required by usage is in a form acceptable
to the Company). The Company shall provide any such notations, legends or
endorsements to the Trustee in writing. Each Security shall be dated the date of
its authentication.
(a) 144A Global Securities. Securities offered and sold within the United
States to qualified institutional buyers as defined in Rule 144A ("QIBS") in
reliance on Rule 144A shall be issued, initially in the form of a 144A Global
Security, which shall be deposited with the Trustee at its Corporate Trust
Office, as custodian for the Depositary (as defined below) and registered in the
name of The Depository Trust Company ("DTC") or the nominee thereof (DTC, or any
successor thereto, and any such nominee being hereinafter referred to as the
"DEPOSITARY"), duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the 144A Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depositary as hereinafter provided.
(b) Global Securities in General. Each Global Security shall represent
such of the outstanding Securities as shall be specified therein and each shall
provide that it shall represent the aggregate amount of outstanding Securities
from time to time endorsed thereon and that the aggregate amount of outstanding
Securities represented thereby may from time to time
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be reduced or increased, as appropriate, to reflect exchanges, redemptions,
repurchases and conversions.
Any adjustment of the aggregate principal amount of a Global Security to
reflect the amount of any increase or decrease in the amount of outstanding
Securities represented thereby shall be made by the Trustee in accordance with
instructions given by the Holder thereof as required by Section 2.12 hereof and
shall be made on the records of the Trustee and the Depositary.
(c) Book-Entry Provisions. This Section 2.1(c) shall apply only to Global
Securities deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with this
Section 2.1(c), authenticate and deliver initially one or more Global Securities
that (a) shall be registered in the name of the Depositary, (b) shall be
delivered by the Trustee to the Depositary or pursuant to the Depositary's
instructions and (c) shall be substantially in the form of Exhibit A attached
hereto.
(d) Certificated Securities. Securities not issued as interests in the
Global Securities will be issued in certificated form substantially in the form
of Exhibit B attached hereto.
Section 2.2. Execution and Authentication. The Securities shall be
executed on behalf of the Company by any Officer. The signature of the Officer
on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at the time of the execution of the Securities Officers shall bind the
Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of authentication of such Securities.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized signatory, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
The Trustee shall authenticate and deliver the Securities for original
issue in an aggregate principal amount of up to US$200,000,000 upon one or more
Company Orders without any further action by the Company (other than as
contemplated in Section 11.4 and Section 11.5 hereof). The aggregate principal
amount of the Securities due at the Stated Maturity thereof outstanding at any
time may not exceed the amount set forth in the foregoing sentence.
The Securities shall be issued only in registered form without coupons
and only in denominations of US$1,000 of principal amount and any integral
multiple of US$1,000.
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Section 2.3. Registrar, Paying Agent, Conversion Agent and Calculation
Agent. The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("REGISTRAR"), an office
or agency where Securities may be presented for purchase or payment ("PAYING
AGENT") and an office or agency where Securities may be presented for conversion
("CONVERSION AGENT"). The Registrar shall keep a register of the Securities and
of their transfer and exchange. The Company may have one or more co-registrars,
one or more additional paying agents and one or more additional conversion
agents. The term Paying Agent includes any additional paying agent, including
any named pursuant to Section 4.5. The term Conversion Agent includes any
additional conversion agent, including any named pursuant to Section 4.5.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent, Calculation Agent or co-registrar (in
each case, if such Registrar, agent or co-registrar is a Person other than the
Trustee). The agreement shall implement the provisions of this Indenture that
relate to such agent. The Company shall notify the Trustee of the name and
address of any such agent. If the Company fails to maintain a Registrar, Paying
Agent or Conversion Agent, the Trustee shall act as such and shall be entitled
to appropriate compensation therefor pursuant to Section 7.7. The Company or any
Subsidiary or an Affiliate of either of them may act as Paying Agent, Registrar,
Conversion Agent or co-registrar.
The Company initially appoints the Trustee as Registrar, Conversion
Agent, Calculation Agent and Paying Agent in connection with the Securities.
Section 2.4. Paying Agent to Hold Money and Securities in Trust. Except
as otherwise provided herein, on or prior to each due date of payments in
respect of any Security, the Company shall deposit with the Paying Agent a sum
of money (in immediately available funds if deposited on the due date) or Shares
sufficient to make such payments when so becoming due. The Company shall require
each Paying Agent (other than the Trustee) to agree in writing that the Paying
Agent shall hold in trust for the benefit of Securityholders or the Trustee all
money and Shares held by the Paying Agent for the making of payments in respect
of the Securities and shall notify the Trustee of any default by the Company in
making any such payment. At any time during the continuance of any such default,
the Paying Agent shall, upon the written request of the Trustee, forthwith pay
to the Trustee all money and Shares so held in trust. If the Company, a
Subsidiary or an Affiliate of either of them acts as Paying Agent, it shall
segregate the money and Shares held by it as Paying Agent and hold it as a
separate trust fund. The Company at any time may require a Paying Agent to pay
all money and Shares held by it to the Trustee and to account for any funds and
Shares disbursed by it. Upon doing so, the Paying Agent shall have no further
liability for the money or Shares.
Section 2.5. Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall cause to be furnished to the Trustee at least
semiannually on June 1 and December 1 a listing of Securityholders dated within
15 days of the date on which the list is furnished and at such other times as
the Trustee may request in writing a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of
Securityholders.
10
Section 2.6. Transfer and Exchange. Subject to Section 2.12 hereof, (a)
upon surrender for registration of transfer of any Security, together with a
written instrument of transfer satisfactory to the Registrar duly executed by
the Securityholder or such Securityholder's attorney duly authorized in writing,
at the office or agency of the Company designated as Registrar or co-registrar
pursuant to Section 2.3, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of any authorized denomination or
denominations, of a like aggregate principal amount. The Company shall not
charge a service charge for any registration of transfer or exchange, but the
Company may require payment of a sum sufficient to pay all taxes, assessments or
other governmental charges that may be imposed in connection with the transfer
or exchange of the Securities from the Securityholder requesting such transfer
or exchange.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination or denominations, of a like aggregate
principal amount upon surrender of the Securities to be exchanged, together with
a written instrument of transfer satisfactory to the Registrar duly executed by
the Securityholder or such Securityholder's attorney duly authorized in writing,
at such office or agency. Whenever any Securities are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive.
The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of Securities selected for redemption (except,
in the case of Securities to be redeemed in part, the portion thereof not to be
redeemed) or any Securities in respect of which a Purchase Notice or Change of
Control Purchase Notice has been given and not withdrawn by the Holder thereof
in accordance with the terms of this Indenture (except, in the case of
Securities to be purchased in part, the portion thereof not to be purchased) or
any Securities for a period of 15 days before the mailing of a notice of
redemption of Securities to be redeemed.
(b) Notwithstanding any provision to the contrary herein, so long as a
Global Security remains outstanding and is held by or on behalf of the
Depositary, transfers of a Global Security, in whole or in part, shall be made
only in accordance with Section 2.12 and this Section 2.6(b). Transfers of a
Global Security shall be limited to transfers of such Global Security in whole
or in part, to the Depositary, to nominees of the Depositary or to a successor
of the Depositary or such successor's nominee.
(c) Successive registrations and registrations of transfers and exchanges
as aforesaid may be made from time to time as desired, and each such
registration shall be noted on the register for the Securities.
(d) Any Registrar appointed pursuant to Section 2.3 hereof shall provide
to the Trustee such information as the Trustee may reasonably require in
connection with the delivery by such Registrar of Securities upon transfer or
exchange of Securities.
(e) No Registrar shall be required to make registrations of transfer or
exchange of Securities during any periods designated in the text of the
Securities or in this Indenture as periods during which such registration of
transfers and exchanges need not be made.
11
(f) If Securities are issued upon the transfer, exchange or replacement
of Securities subject to restrictions on transfer and bearing the legends set
forth on the forms of Security attached hereto as Exhibits A and B setting forth
such restrictions (collectively, the "LEGEND"), or if a request is made to
remove the Legend on a Security, the Securities so issued shall bear the Legend,
or the Legend shall not be removed, as the case may be, unless there is
delivered to the Company and the Registrar such satisfactory evidence, which
shall include an Opinion of Counsel, as may be reasonably required by the
Company and the Registrar and the Trustee (if not the same Person as the
Trustee), that neither the Legend nor the restrictions on transfer set forth
therein are required to ensure that transfers thereof comply with the provisions
of Rule 144A or Rule 144 under the Securities Act of 1933, as amended
("SECURITIES ACT") or that such Securities are not "restricted" within the
meaning of Rule 144 under the Securities Act. Upon (i) provision of such
satisfactory evidence, or (ii) notification by the Company to the Trustee and
Registrar of the sale of such Security pursuant to a registration statement that
is effective at the time of such sale, the Trustee, at the written direction of
the Company, shall authenticate and deliver a Security that does not bear the
Legend. If the Legend is removed from the face of a Security and the Security is
subsequently held by the Company or an Affiliate of the Company, the Legend
shall be reinstated.
Section 2.7. Replacement Securities. If (a) any mutilated Security is
surrendered to the Trustee, or (b) the Company and the Trustee receive evidence
to their satisfaction of the destruction, loss or theft of any Security, and
there is delivered to the Company and the Trustee such security or indemnity as
may be required by them to save each of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute and upon its written request the
Trustee shall authenticate and deliver, in exchange for any such mutilated
Security or in lieu of any such destroyed, lost or stolen Security, a new
Security of like tenor and principal amount, bearing a certificate number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, or is about to be purchased by the
Company pursuant to Article 3 hereof, the Company in its discretion may, instead
of issuing a new Security, pay or purchase such Security, as the case may be.
Upon the issuance of any new Securities under this Section 2.7, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section 2.7 in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.
The provisions of this Section 2.7 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
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Section 2.8. Outstanding Securities; Determinations of Holders' Action.
Securities outstanding at any time are all the Securities authenticated by the
Trustee except for those cancelled by it, those paid pursuant to Section 2.7,
those delivered to it for cancellation and those described in this Section 2.8
as not outstanding. A Security does not cease to be outstanding because the
Company or an Affiliate thereof holds the Security; provided, however, that in
determining whether the Holders of the requisite principal amount of Securities
have given or concurred in any request, demand, authorization, direction,
notice, consent, waiver, or other Act hereunder, Securities owned by the Company
or any other obligor upon the Securities or any Affiliate of the Company or such
other obligor shall be disregarded and deemed not to be outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent, waiver or other
Act, only Securities which a Responsible Officer of the Trustee actually knows
to be so owned shall be so disregarded. Subject to the foregoing, only
Securities outstanding at the time of such determination shall be considered in
any such determination (including, without limitation, determinations pursuant
to Articles 6 and 9).
If a Security is replaced pursuant to Section 2.7, the replaced Security
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Security is held by a bona fide purchaser unaware that such
Security has been replaced.
If the Paying Agent holds, in accordance with this Indenture, on a
Redemption Date, or on the Business Day following a Purchase Date or a Change of
Control Purchase Date, or on Stated Maturity, money or securities, if permitted
hereunder, sufficient to pay Securities payable on that date, then immediately
after such Redemption Date, Purchase Date, Change of Control Purchase Date or
Stated Maturity, as the case may be, such Securities shall cease to be
outstanding and interest, including additional interest, if any, on such
Securities shall cease to accrue; provided, that if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made.
If a Security is converted in accordance with Article 10, then from and
after the time of conversion on the date of conversion, such Security shall
cease to be outstanding and interest, including additional interest, if any,
shall cease to accrue on such Security.
Section 2.9. Temporary Securities. Pending the preparation of definitive
Securities, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
conclusively evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 2.3,
without charge to the Holder. Upon surrender for cancellation of any one
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or more temporary Securities the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
Section 2.10. Cancellation. All Securities surrendered for payment,
purchase by the Company pursuant to Article 3, conversion, redemption or
registration of transfer or exchange shall, if surrendered to any person other
than the Trustee, be delivered to the Trustee and shall be promptly cancelled by
it. The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly cancelled by the Trustee. The Company may not issue new
Securities to replace Securities it has paid or delivered to the Trustee for
cancellation or that any Holder has converted pursuant to Article 10. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Securities held by the Trustee shall be disposed of by
the Trustee in accordance with the Trustee's customary procedure.
Section 2.11. Persons Deemed Owners. Prior to due presentment of a
Security for registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of
principal of the Security or the payment of any Redemption Price, Purchase Price
or Change of Control Purchase Price in respect thereof, and interest thereon,
for the purpose of conversion and for all other purposes whatsoever, whether or
not such Security be overdue, and neither the Company, the Trustee nor any agent
of the Company or the Trustee shall be affected by notice to the contrary.
Section 2.12. Global Securities. (a) Notwithstanding any other provisions
of this Indenture or the Securities, (A) transfers of a Global Security, in
whole or in part, shall be made only in accordance with Section 2.6 and Section
2.12(a)(i), (B) transfers of a beneficial interest in a Global Security for a
Certificated Security shall comply with Section 2.6, Section 2.12(a)(ii) below
and Section 2.12(e)(1) below, and (C) transfers of a Certificated Security shall
comply with Section 2.6 and Sections 2.12(a)(iii) and (iv) below.
(i) Transfer of Global Security. A Global Security may not be
transferred, in whole or in part, to any person other than the Depositary
or a nominee or any successor thereof, and no such transfer to any such
other person may be registered; provided that this clause (i) shall not
prohibit any transfer of a Security that is issued in exchange for a Global
Security but is not itself a Global Security. No transfer of a Security to
any person shall be effective under this Indenture or the Securities unless
and until such Security has been registered in the name of such person.
Nothing in this Section 2.12(a)(i) shall prohibit or render ineffective any
transfer of a beneficial interest in a Global Security effected in
accordance with the other provisions of this Section 2.12(a).
(ii) Restrictions on Transfer of a Beneficial Interest in a Global
Security for a Certificated Security. A beneficial interest in a Global
Security may not be
14
exchanged for a Certificated Security except upon satisfaction of the
requirements set forth below and in Section 2.12(e)(1) below. Upon receipt
by the Trustee of a transfer of a beneficial interest in a Global Security
in accordance with Applicable Procedures for a Certificated Security in the
form satisfactory to the Trustee, together with:
(A) so long as the Securities are Restricted Securities,
certification in the form set forth in Exhibit C;
(B) written instructions to the Trustee to make, or direct the
Registrar to make, an adjustment on its books and records
with respect to such Global Security to reflect a decrease in
the aggregate principal amount of the Securities represented
by the Global Security, such instructions to contain
information regarding the Depositary account to be credited
with such decrease; and
(C) if the Company so requests, an Opinion of Counsel or other
evidence reasonably satisfactory to it as to the compliance
with the restrictions set forth in the Legend,
then the Trustee shall cause, or direct the Registrar to cause, in
accordance with the standing instructions and procedures existing between
the Depositary and the Registrar, the aggregate principal amount of the
Securities represented by the Global Security to be decreased by the
aggregate principal amount of the Certificated Security to be issued, shall
issue such Certificated Security and shall debit or cause to be debited to
the account of the person specified in such instructions a beneficial
interest in the Global Security equal to the principal amount of the
Certificated Security so issued.
(iii) Transfer and Exchange of Certificated Securities. When
Certificated Securities are presented to the Registrar with a request:
(y) to register the transfer of such Certificated Securities; or
(z) to exchange such Certificated Securities for an equal principal
amount at maturity of Certificated Securities of other authorized
denominations,
the Registrar shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; provided, however,
that the Certificated Securities surrendered for transfer or exchange:
(1) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the
Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing; and
(2) so long as such Securities are Restricted Securities, such
Securities are being transferred or exchanged pursuant to an
effective registration statement under the Securities Act or
pursuant to clause (A), (B) or (C)
15
below, and are accompanied by the following additional information
and documents, as applicable:
(A) if such Certificated Securities are being delivered to the
Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to
that effect; or
(B) if such Certificated Securities are being transferred to the
Company, a certification to that effect; or
(C) if such Certificated Securities are being transferred
pursuant to an exemption from registration, (i) a
certification to that effect (in the form set forth in
Exhibit C, if applicable) and (ii) if the Company so
requests, an opinion of counsel or other evidence reasonably
satisfactory to it as to the compliance with the restrictions
set forth in the Legend.
(iv) Restrictions on Transfer of a Certificated Security for a
Beneficial Interest in a Global Security. A Certificated Security may not
be exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below.
Upon receipt by the Trustee of a Certificated Security, duly endorsed or
accompanied by appropriate instruments of transfer, in form satisfactory to the
Trustee, together with:
(I) so long as the Securities are Restricted Securities, certification,
in the form set forth in Exhibit C, that such Certificated Security is
being transferred to a QIB in accordance with Rule 144A; and
(II) written instructions directing the Trustee to make, or to direct the
Registrar to make, an adjustment on its books and records with respect to
such Global Security to reflect an increase in the aggregate principal
amount of the Securities represented by the Global Security, such
instructions to contain information regarding the Depositary account to
be credited with such increase,
then the Trustee shall cancel such Certificated Security and cause, or direct
the Registrar to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Registrar, the aggregate
principal amount of Securities represented by the Global Security to be
increased by the aggregate principal amount of the Certificated Security to be
exchanged, and shall credit or cause to be credited to the account of the person
specified in such instructions a beneficial interest in the Global Security
equal to the principal amount of the Certificated Security so cancelled. If no
Global Securities are then outstanding, the Company
16
shall issue and the Trustee shall authenticate, upon Company Order, a new Global
Security in the appropriate principal amount at maturity.
(b) Subject to the succeeding paragraph, every Security shall be subject
to the restrictions on transfer provided in the Legend including the delivery of
an opinion of counsel, if so provided. Whenever any Restricted Security is
presented or surrendered for registration of transfer or for exchange for a
Security registered in a name other than that of the Holder, such Security must
be accompanied by a certificate in substantially the form set forth in Exhibit
C, dated the date of such surrender and signed by the Holder of such Security,
as to compliance with such restrictions on transfer. The Registrar shall not be
required to accept for such registration of transfer or exchange any Security
not so accompanied by a properly completed certificate.
(c) The restrictions imposed by the Legend upon the transferability of
any Security shall cease and terminate when such Security has been sold pursuant
to an effective registration statement under the Securities Act or transferred
in compliance with Rule 144 under the Securities Act (or any successor provision
thereto) or, if earlier, upon the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision). Any Security as to which such restrictions on transfer shall have
expired in accordance with their terms or shall have terminated may, upon a
surrender of such Security for exchange to the Registrar in accordance with the
provisions of this Section 2.12 (accompanied, in the event that such
restrictions on transfer have terminated by reason of a transfer in compliance
with Rule 144 or any successor provision, by an Opinion of Counsel having
substantial experience in practice under the Securities Act and otherwise
reasonably acceptable to the Company, addressed to the Company and in form
acceptable to the Company, to the effect that the transfer of such Security has
been made in compliance with Rule 144 or such successor provision), be exchanged
for a new Security, of like tenor and aggregate principal amount, which shall
not bear the restrictive Legend. The Company shall inform the Trustee of the
effective date of any registration statement registering the Securities under
the Securities Act. The Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the aforementioned
opinion of counsel or registration statement.
(d) As used in the preceding two paragraphs of this Section 2.12, the
term "transfer" encompasses any sale, pledge, transfer, loan, hypothecation, or
other disposition of any Security.
(e) The provisions of clauses (1), (2), (3) and (4) below shall apply
only to Global Securities:
(1) Notwithstanding any other provisions of this Indenture or the
Securities, a Global Security shall not be exchanged in whole or in
part for a Security registered in the name of any person other than
the Depositary or one or more nominees thereof, provided that a
Global Security may be exchanged for Securities registered in the
names of any person designated by the Depositary in the event that
(i) the Depositary has notified the Company that it is unwilling or
unable to continue as Depositary for such Global Security or such
Depositary has ceased to be a "clearing agency"
17
registered under the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), and a successor Depositary is not appointed by the
Company within 90 days or (ii) an Event of Default has occurred and
is continuing with respect to the Securities. Any Global Security
exchanged pursuant to clause (i) above shall be so exchanged in whole
and not in part, and any Global Security exchanged pursuant to clause
(ii) above may be exchanged in whole or from time to time in part as
directed by the Depositary. Any Security issued in exchange for a
Global Security or any portion thereof shall be a Global Security;
provided that any such Security so issued that is registered in the
name of a person other than the Depositary or a nominee thereof shall
not be a Global Security.
(2) Securities issued in exchange for a Global Security or any portion
thereof shall be issued in definitive, fully registered form, without
interest coupons, shall have an aggregate principal amount equal to
that of such Global Security or portion thereof to be so exchanged,
shall be registered in such names and be in such authorized
denominations as the Depositary shall designate and shall bear the
applicable legends provided for herein. Any Global Security to be
exchanged in whole shall be surrendered by the Depositary to the
Trustee, as Registrar. With regard to any Global Security to be
exchanged in part, either such Global Security shall be so
surrendered for exchange or, if the Trustee is acting as custodian
for the Depositary or its nominee with respect to such Global
Security, the principal amount thereof shall be reduced, by an amount
equal to the portion thereof to be so exchanged, by means of an
appropriate adjustment made on the records of the Trustee. Upon any
such surrender or adjustment, the Trustee shall authenticate and
deliver the Security issuable on such exchange to or upon the order
of the Depositary or an authorized representative thereof.
(3) Subject to the provisions of clause (5) below, the registered Holder
may grant proxies and otherwise authorize any person, including Agent
Members (as defined below) and persons that may hold interests
through Agent Members, to take any action which a holder is entitled
to take under this Indenture or the Securities.
(4) In the event of the occurrence of any of the events specified in
clause (1) above, the Company will promptly make available to the
Trustee a reasonable supply of Certificated Securities in definitive,
fully registered form, without interest coupons.
(5) Neither any members of, or participants in, the Depositary
(collectively, the "AGENT MEMBERS") nor any other persons on whose
behalf Agent Members may act shall have any rights under this
Indenture with respect to any Global Security registered in the name
of the Depositary or any nominee thereof, or under any such Global
Security, and the Depositary or such nominee, as the case may be, may
be treated by the Company, the
18
Trustee and any agent of the Company or the Trustee as the absolute
owner and holder of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from
giving effect to any written certification, proxy or other
authorization furnished by the Depositary or such nominee, as the
case may be, or impair, as between the Depositary, its Agent Members
and any other person on whose behalf an Agent Member may act, the
operation of customary practices of such Persons governing the
exercise of the rights of a holder of any Security.
Section 2.13. CUSIP Numbers. The Company may issue the Securities with
one or more "CUSIP" numbers (if then generally in use), and, if so, the Trustee
shall use CUSIP numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the CUSIP numbers.
Section 2.14. Ranking. The indebtedness of the Company arising under or
in connection with this Indenture and every outstanding Security issued under
this Indenture from time to time constitutes and will constitute a senior
unsecured general obligation of the Company, ranking equally with other existing
and future senior unsecured Indebtedness of the Company and ranking senior in
right of payment to any future Indebtedness of the Company that is expressly
made subordinate to the Securities by the terms of such Indebtedness. For
purposes of this Section 2.14 only, "Indebtedness" means, without duplication,
the principal or face amount of (i) all obligations for borrowed money, (ii) all
obligations evidenced by debentures, notes or other similar instruments, (iii)
all obligations in respect of letters of credit or bankers acceptances or
similar instruments (or reimbursement obligations with respect thereto), (iv)
all obligations to pay the deferred purchase price of property or services,
except trade accounts payable arising in the ordinary course of business, (v)
all obligations as lessee which are capitalized in accordance with generally
accepted accounting principles, and (vi) all Indebtedness of others guaranteed
by the Company or any of its Subsidiaries or for which the Company or any of its
Subsidiaries is legally responsible or liable (whether by agreement to purchase
indebtedness of, or to supply funds or to invest in, others).
ARTICLE III
REDEMPTION AND PURCHASES
Section 3.1. Company's Right to Redeem; Notices to Trustee. Prior to July
15, 2008, the Company, at its option, may redeem the Securities in accordance
with the provisions of Section 5(a) and Section 7 of the Securities. If the
Company elects to redeem Securities pursuant to Section 5(a) of the Securities,
it shall notify the Trustee in writing of the Redemption Date, the Principal
Amount at Maturity of Securities to be redeemed and the Redemption Price payable
on the Redemption Date.
19
On or after July 15, 2008, the Company, at its option, may redeem the
Securities in accordance with the provisions of Section 5(b) and Section 7 of
the Securities. If the Company elects to redeem Securities pursuant to Section
5(b) of the Securities, it shall notify the Trustee in writing of the Redemption
Date, the Principal Amount at Maturity of Securities to be redeemed and the
Redemption Price payable on the Redemption Date.
In the event that the Company elects to redeem the Securities on a date
that is after any Interest Record Date but before the date of payment of such
interest, the Company shall be required to pay any accrued and unpaid interest,
including additional interest, if any, to the redeemed Holder only and not the
Holder on any applicable Interest Record Date.
The Company shall give the notice to the Trustee provided for in this
Section 3.1 by a Company Order, at least 40 days before the Redemption Date
(unless a shorter notice shall be satisfactory to the Trustee) in accordance
with Section 11.2 of this Indenture.
Section 3.2. Selection of Securities to Be Redeemed. If less than all the
Securities are to be redeemed, unless the procedures of the Depositary provide
otherwise, the Trustee shall select the Securities to be redeemed by lot or on a
pro rata basis. The Trustee shall make the selection within five Business Days
after it receives the notice provided for in Section 3.1 from outstanding
Securities not previously called for redemption. The Trustee may select for
redemption portions of the principal amount of Securities that have
denominations larger than US$1,000.
Securities and portions of Securities that the Trustee selects shall be
in principal amounts of US$1,000 or an integral multiple of US$1,000. Provisions
of this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption. The Trustee shall notify the
Company promptly of the Securities or portions of the Securities to be redeemed.
Securities and portions of Securities that are to be redeemed are
convertible by the Holder until the close of business on the Business Day prior
to the Redemption Date. If any Security selected for partial redemption is
converted in part before termination of the conversion right with respect to the
portion of the Security so selected, the converted portion of such Security
shall be deemed (so far as may be) to be the portion selected for redemption.
Securities which have been converted during a selection of Securities to be
redeemed may be treated by the Trustee as outstanding for the purpose of such
selection.
Section 3.3. Notice of Redemption. At least 30 days but not more than 60
days before a Redemption Date, the Company shall mail a Notice of Redemption by
first-class mail, postage prepaid, to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the Conversion Rate;
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(4) the name and address of the Paying Agent and Conversion Agent;
(5) that Securities called for redemption may be converted at any time
before the close of business on the second Business Day prior to the
Redemption Date;
(6) that Holders who want to convert their Securities must satisfy the
requirements set forth in Section 8 of the Securities;
(7) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(8) if fewer than all of the outstanding Securities are to be redeemed,
the certificate numbers, if any, and principal amounts of the
particular Securities to be redeemed;
(9) that, unless the Company defaults in making payment of such
Redemption Price, interest, including additional interest, if any,
on Securities called for redemption will cease to accrue interest on
and after the Redemption Date;
(10) the CUSIP number(s) of the Securities;
(11) whether the Company will exercise its election to deliver Shares in
lieu of some or all of the Redemption Price;
(12) the percentage of the Redemption Price to be paid in Shares and the
method of calculating the Current Market Price of the Shares;
(13) the procedures that Holders must follow to withdraw any Redemption
Notice with respect to the Securities; and
(14) any other information the Company wants to present.
At the Company's request, the Trustee shall give the Notice of Redemption
in the Company's name and at the Company's expense, provided that the Company
makes such request at least five Business Days (unless a shorter period shall be
satisfactory to the Trustee) prior to the date by which such notice of
redemption must be given to Holders in accordance with this Section 3.3.
Section 3.4. Effect of Notice of Redemption. Once notice of redemption is
given, Securities called for redemption become due and payable on the Redemption
Date and at the Redemption Price stated in the notice except for Securities
which are converted in accordance with the terms of this Indenture. Upon
surrender to the Paying Agent, such Securities shall be paid at the Redemption
Xxxxx stated in the notice.
Section 3.5. Deposit of Redemption Price. Prior to 10:00 a.m. (New York
City time), on the Redemption Date, the Company shall deposit with the Paying
Agent (or if the Company or a Subsidiary or an Affiliate of either of them is
the Paying Agent, shall segregate
21
and hold in trust) an amount of cash (in immediately available funds if
deposited on such Redemption Date) or shares of Applicable Stock, if permitted
hereunder, sufficient as evidenced in writing by a certified public accountant
to pay the Redemption Price of all Securities to be redeemed on that date other
than Securities or portions of Securities called for redemption which on or
prior thereto have been delivered by the Company to the Trustee for cancellation
or have been converted. The Paying Agent shall as promptly as practicable return
to the Company any money not required for that purpose because of conversion of
Securities pursuant to Article 10. If such money is then held by the Company in
trust and is not required for such purpose it shall be discharged from such
trust.
Section 3.6. Securities Redeemed in Part. Upon surrender of a Security
that is redeemed in part, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder a new Security in an authorized
denomination equal in principal amount to the unredeemed portion of the Security
surrendered.
Section 3.7. Purchase of Securities by the Company at Option of the
Holder. (a) General. Securities shall be purchased by the Company pursuant to
Section 6 of the Securities at the option of the Holder on July 15, 2008, July
15, 2013 and July 15, 2018 (each, a "PURCHASE DATE"), at a purchase price equal
to the principal amount of those Securities plus accrued and unpaid interest,
including additional interest, if any, on such Purchase Date (the "PURCHASE
PRICE"), subject to the provisions of Section 3.9. Purchases of Securities
hereunder shall be made, at the option of the Holder thereof, upon:
(1) delivery to the Paying Agent by the Holder of a written notice of
purchase (a "PURCHASE NOTICE") during the period beginning at any
time from the opening of business on the date that is 20 Business
Days prior to the relevant Purchase Date until the close of business
on the third Business Day prior to such Purchase Date stating:
(A) the certificate number of the Security which the Holder will
deliver to be purchased or the appropriate Depositary
procedures if Certificated Securities have not been issued,
(B) the portion of the principal amount of the Security which the
Holder will deliver to be purchased, which portion must be in
principal amounts of US$1,000 or an integral multiple of
US$1,000,
(C) that such Security shall be purchased by the Company as of
the Purchase Date pursuant to the terms and conditions
specified in Section 6 of the Securities and in this
Indenture, and
(D) in the event the Company elects, pursuant to Section 3.8(c),
to pay the Purchase Price, in whole or in part, in Shares but
such portion of the
22
Purchase Price shall ultimately be paid to such Holder
entirely in cash because any of the conditions to payment of
the Purchase Price in Shares is not satisfied prior to the
close of business on the relevant Purchase Date, as set forth
in Section 3.8, whether such Holder elects (i) to withdraw
such Purchase Notice as to some or all of the Securities to
which such Purchase Notice relates (stating the principal
amount and certificate numbers, if any, of the Securities as
to which such withdrawal shall relate), or (ii) to receive
cash in respect of the entire Purchase Price for all
Securities (or portions thereof) to which such Purchase
Notice relates; and
(2) delivery of such Security to the Paying Agent at any time after
delivery of the Purchase Notice (together with all necessary
endorsements) at the offices of the Paying Agent, such delivery
being a condition to receipt by the Holder of the Purchase Price
therefor; provided, however, that such Purchase Price shall be so
paid pursuant to this Section 3.7 only if the Security so delivered
to the Paying Agent shall conform in all respects to the description
thereof in the related Purchase Notice.
If a Holder, in such Xxxxxx's Purchase Notice and in any written notice
of withdrawal delivered by such Holder pursuant to the terms of Section 3.8,
fails to indicate such Xxxxxx's choice with respect to the election set forth in
clause (D) of Section 3.7(a)(1), such Holder shall be deemed to have elected to
receive cash in respect of the entire Purchase Price for all Securities subject
to such Purchase Notice in the circumstances set forth in such clause (D).
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.7, a portion of a Security, if the principal amount of such portion is
US$1,000 or an integral multiple of US$1,000. Provisions of this Indenture that
apply to the purchase of all of a Security also apply to the purchase of such
portion of such Security.
Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.7 shall be consummated by the delivery of the consideration to be
received by the Holder promptly following the later of the Purchase Date and the
time of delivery of the Security.
Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent the Purchase Notice contemplated by this Section 3.7(a) shall
have the right to withdraw such Purchase Notice at any time prior to the close
of business on the Purchase Date by delivery of a written notice of withdrawal
to the Paying Agent in accordance with Section 3.9.
The Paying Agent shall promptly notify the Company of the receipt by it
of any Purchase Notice or written notice of withdrawal thereof.
23
Section 3.8. Offer to Purchase of Securities upon Change of Control. (a)
(1) The Company shall be required to offer to purchase all of the Securities not
previously purchased by the Company as of a date that is 30 days after notice of
the occurrence of a Change of Control (subject to certain exceptions set forth
below) pursuant to Section 3.8(b) at a purchase price equal to the principal
amount of those Securities, plus accrued and unpaid interest and additional
interest, if any, on those Securities (the "CHANGE OF CONTROL PURCHASE PRICE"),
as of the date that is 30 days after the date of a notice of Change of Control
delivered by the Company (the "CHANGE OF CONTROL PURCHASE DATE"), subject to
satisfaction by or on behalf of the Holder of the requirements set forth in
Section 3.8(c).
A "Change of Control" will be deemed to have occurred at such time after
the Securities are originally issued when any of the following events shall
occur:
(i) the acquisition by Mr. X. Xxxx Xxxxx (the "CONTROLLING
SHAREHOLDER") of beneficial ownership, directly or indirectly, through a
purchase, merger or other acquisition transaction or series of purchase,
merger or other acquisition transactions, of 70% or more of the aggregate
of the Company's Multiple Voting Shares and Shares then outstanding, other
than any acquisition by the Company, any of the Company's subsidiaries, or
any of the Company's employee benefit plans (except that the Controlling
Shareholder shall be deemed to have beneficial ownership of all securities
he has the right to acquire, whether the right is currently exercisable or
is exercisable only upon the occurrence of a subsequent condition); or
(ii) the number of the Company's Series 1 Preferred Shares and the
Company's Multiple Voting Shares collectively beneficially held, directly
or indirectly, by the Controlling Shareholder (or any of his heirs,
executors or administrators) falls below 1,197,480 shares; or
(iii) the acquisition by any person, including any syndicate or
group deemed to be a "person" under Section 13(d) (3) of the Exchange Act
of beneficial ownership, directly or indirectly through a purchase, merger
or other acquisition transaction or series of purchase, merger or other
acquisition transactions, of shares of the Capital Stock of the Company
entitling that person to exercise 50% or more of the total voting power of
all shares of the Capital Stock of the Company entitled to vote generally
in elections of directors, other than any acquisition by any of the
Company, any of its subsidiaries or any of the employee benefit plans of
the Company (except that any of those persons shall be deemed to have
beneficial ownership of all securities it has the right to acquire, whether
the right is currently exercisable or is exercisable only upon the
occurrence of a subsequent condition); or
(iv) the Company consolidates or merges with or into any other
person, any merger of another person into the Company, or any conveyance,
transfer, sale, lease or other disposition, substantially as an entirety,
of all or substantially all of the Company's properties and assets to
another person, other than:
(A) any transaction: (1) where the Company or one of its
Affiliates is the surviving or continuing or resulting entity;
(2)
24
where more than 50% of the Board of Directors of the surviving
or continuing or resulting entity were members of the Company's
Board of Directors; (3) that does not result in any
reclassification, conversion, exchange or cancellation of
outstanding shares of the Company's Capital Stock; and (4)
pursuant to which holders of the Company's Capital Stock
immediately prior to the transaction have the entitlement to
exercise, directly or indirectly, 50% or more of the total
voting power of all shares of Capital Stock entitled to vote
generally in elections of directors of the continuing or
surviving Person immediately after giving effect to such
issuance; and (B) any merger, share exchange, transfer of assets
or similar transaction solely for the purpose of changing the
Company's jurisdiction of incorporation and resulting in a
reclassification, conversion or exchange of outstanding shares
of Shares, if at all, solely into shares of Shares, ordinary
shares or American Depositary Shares of the surviving Person or
a direct or indirect parent of the surviving corporation.
(2) Notwithstanding the provisions of Section 3.8(a)(1), the Company shall not
be required to make an offer to purchase the Securities of the Holders upon a
Change of Control pursuant to this Section 3.8 if:
(i) the Sale Price per share of Shares for any five trading days within
(1) the period of 10 consecutive trading days ending immediately
after the later of the Change of Control or the public announcement
of the Change of Control, in the case of a Change of Control under
clause (i) or (ii) of Section 3.8(a)(1) above, or (2) the period of
10 consecutive trading days ending immediately before the Change of
Control, in the case of a Change of Control under clause (iii) of
Section 3.8(a)(1) above, exceeds the Conversion Price of the
Securities in effect on each of those five trading days; or
(ii) 90% of the consideration in the transaction or transactions (other
than cash payments for fractional shares and cash payments made in
respect of dissenters' appraisal rights) constituting a Change of
Control consists of Shares, ordinary shares or American Depositary
Shares traded or to be traded immediately following a Change of
Control on a United States national securities exchange or the
Nasdaq National Market, and, as a result of the transaction or
transactions, the Securities become convertible into Shares,
ordinary shares or American Depositary Shares (and any rights
attached thereto).
For the purposes of this Section 3.8, (x) whether a person is a "beneficial
owner" shall be determined in accordance with Rule 13d-3 under the Exchange Act
and (y) the term "person" includes any syndicate or group that would be deemed
to be a "person" under Section 13(d)(3) of the Exchange Act.
25
(a) No later than 30 Business Days after the occurrence of a Change of
Control, the Company shall mail a written notice of the Change of Control by
first class mail to the Trustee and to each Holder (and to beneficial owners as
required by applicable law). The notice shall include a form of Change of
Control Purchase Notice to be completed by the Holder and shall briefly state,
as applicable:
(1) the events causing a Change of Control and the date of such Change
of Control;
(2) the date by which the Change of Control Purchase Notice pursuant to
this Section 3.8 must be delivered to the Paying Agent in order for
a Holder to exercise the repurchase rights;
(3) the Change of Control Purchase Date;
(4) the Change of Control Purchase Price;
(5) whether the Change of Control Purchase Price will be paid in cash or
Applicable Stock, or a combination thereof;
(6) if the Company elects to pay Shares, the method of calculating the
Market Price of the Shares;
(7) the name and address of the Paying Agent and the Conversion Agent;
(8) the Conversion Rate and any adjustments thereto;
(9) that the Securities as to which a Change of Control Purchase Notice
has been given may be converted if they are otherwise convertible
pursuant to Article X hereof only if the Change of Control Purchase
Notice has been withdrawn in accordance with the terms of this
Indenture;
(10) that the Securities must be surrendered to the Paying Agent to
collect payment;
(11) that the Change of Control Purchase Price for any Security as to
which a Change of Control Purchase Notice has been duly given and
not withdrawn will be paid promptly following the later of the
Change of Control Purchase Date and the time of surrender of such
Security as described in (8);
(12) the procedures the Holder must follow to exercise rights under this
Section 3.8;
(13) the conversion rights, if any, of the Securities;
(14) the procedures for withdrawing a Change of Control Purchase Notice;
26
(15) that, unless the Company defaults in making payment of such Change
of Control Purchase Price, interest, if any, on Securities
surrendered for purchase by the Company will cease to accrue on and
after the Change of Control Purchase Date; and
(16) the CUSIP number(s) of the Securities.
(b) A Holder may accept the Change of Control purchase offer specified in
Section 3.8(a) upon delivery of a written notice of purchase (a "CHANGE OF
CONTROL PURCHASE NOTICE") to the Paying Agent at any time on or prior to the
close of business on the Change of Control Purchase Date stating:
(1) the certificate number of the Security which the Holder will deliver
to be purchased or the appropriate depositary procedures if
Certificated Securities have not been issued;
(2) the portion of the principal amount of the Security which the Holder
will deliver to be purchased, which portion must be US$1,000 or an
integral multiple of US$1,000;
(3) that such Security shall be purchased pursuant to the terms and
conditions specified in Section 6 of the Securities and in this
Indenture; and
(4) in the event the Company elects, pursuant to Section 3.9, to pay the
Change of Control Purchase Price, in whole or in part, in shares of
Applicable Stock but such portion of the Change of Control Purchase
Price shall ultimately be paid to such Holder entirely in cash
because any of the conditions to payment of the Change of Control
Purchase Price in shares of Applicable Stock is not satisfied prior
to the close of business on the third Business Day prior to the
relevant Change of Control Purchase Date, as set forth in Section
3.9, whether such Holder elects (i) to withdraw such Change of
Control Purchase Notice as to some or all of the Securities to which
such Change of Control Purchase Notice relates (stating the
principal amount and certificate numbers, if any, of the Securities
as to which such withdrawal shall relate), or (ii) to receive cash
in respect of the entire Change of Control Purchase Price for all
Securities (or portions thereof) to which such Change of Control
Purchase Notice relates.
"APPLICABLE STOCK" means (i) the Shares and (ii) in the event of a
merger, consolidation or other similar transaction involving the Company that is
otherwise permitted hereunder in which the Company is not the surviving
corporation, the common stock, ordinary shares or American Depositary Shares of
such surviving corporation or its direct or indirect parent corporation.
The delivery of such Security to the Paying Agent with the Change of
Control Purchase Notice (together with all necessary endorsements) at the
offices of the Paying Agent shall be a condition to the receipt by the Holder of
the Change of Control Purchase Price
27
therefor; provided, however, that such Change of Control Purchase Price shall be
so paid pursuant to this Section 3.8 and Section 3.9 only if the Security so
delivered to the Paying Agent shall conform in all respects to the description
thereof set forth in the related Change of Control Purchase Notice.
If a Holder, in such Holder's Change of Control Purchase Notice and in
any written notice of withdrawal delivered by such Holder pursuant to the terms
of Section 3.10, fails to indicate such Holder's choice with respect to the
election set forth in Section 3.8(c)(4), such Holder shall be deemed to have
elected to receive cash in respect of the entire Change of Control Purchase
Price for all Securities subject to such Change of Control Purchase Notice in
the circumstances set forth in such Section 3.8(c)(4).
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.8 and Section 3.9, a portion of a Security if the principal amount of
such portion is US$1,000 or an integral multiple of US$1,000. Provisions of this
Indenture that apply to the purchase of all of a Security also apply to the
purchase of such portion of such Security.
Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.8 and Section 3.9 shall be consummated by the delivery of the
consideration to be received by the Holder on the Change of Control Purchase
Date.
Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent the Change of Control Purchase Notice contemplated by this
Section 3.8(c) shall have the right to withdraw such Change of Control Purchase
Notice at any time prior to the close of business on the Change of Control
Purchase Date by delivery of a written notice of withdrawal to the Paying Agent
in accordance with Section 3.10.
The Paying Agent shall promptly notify the Company of the receipt by it
of any Change of Control Purchase Notice or written withdrawal thereof.
Section 3.9. Company's Right to Elect Manner of Payment of Redemption
Price, Purchase Price, Change of Control Purchase Price for Payment of Principal
Amount at Stated Maturity. (a) The Securities to be purchased on any Redemption
Date, Purchase Date or Change of Control Purchase Date or to be paid at Stated
Maturity, as the case may be, pursuant to Section 3.1, 3.7(a), 3.8(a) and 4.1,
respectively, may be paid for, in whole or in part, at the election of the
Company, in U.S. legal tender ("CASH") or shares of Applicable Stock, or in any
combination of cash and shares of Applicable Stock, subject to the conditions
set forth in Sections 3.9(c) and (d). The Company shall designate, in the
Company Notice delivered pursuant to Section 3.9(d), whether the Company will
purchase the Securities for cash or shares of Applicable Stock, or, if a
combination thereof, the percentages of the Redemption Price, Purchase Price,
Change of Control Purchase Price or Payment of Principal Amount at Maturity, as
the case may be, of Securities in respect of which it will pay in cash or shares
of Applicable Stock; provided that the Company will pay cash for fractional
interests in shares of Applicable Stock. For purposes of determining the
existence of potential fractional interests, all Securities subject to purchase
by the Company held by a Holder shall be considered together (no matter how many
separate certificates are to be presented). Each Holder whose Securities are
purchased pursuant to Section 3.1, 3.7, or 3.8, or at Stated Maturity, as the
case may be, shall receive the
28
same percentage of cash or shares of Applicable Stock in payment of the
Redemption Price, Change of Control Purchase Price, Purchase Price or Principal
Amount at Stated Maturity for such Securities, except (i) as provided in this
Section 3.9(a) with regard to the payment of cash in lieu of fractional shares
of Applicable Stock and (ii) in the event that the Company is unable to purchase
the Securities of a Holder or Holders for shares of Applicable Stock because any
necessary qualifications or registrations of the shares of Applicable Stock
under applicable state securities laws cannot be obtained, the Company may
purchase the Securities of such Holder or Holders for cash. The Company may not
change its election with respect to the consideration (or components or
percentages of components thereof) to be paid once the Company has given its
Company Notice to Holders except pursuant to Section 3.9(b) or pursuant to
Section 3.9(d) in the event of a failure to satisfy, prior to the close of
business on the Business Day immediately preceding the Redemption Date, Purchase
Date, Change of Control Purchase Date or Stated Maturity, as the case may be,
any condition to the payment of the Redemption Price, Purchase Price, Change of
Control Purchase Price or Principal Amount at Stated Maturity, as the case may
be, in whole or in part, in shares of Applicable Stock.
At least three Business Days before each Company Notice Date, the Company
shall deliver an Officers' Certificate to the Trustee specifying:
(i) the manner of payment selected by the Company,
(ii) the information required by Section 3.9(d) in the Company
Notice,
(iii) if the Company elects to pay the Redemption Price, Purchase
Price, Change of Control Purchase Price or Principal Amount at
Stated Maturity, as the case may be, or a specified percentage
thereof, in shares of Applicable Stock, that the conditions to
such manner of payment set forth in Section 3.9(c) have been or
will be complied with, and
(iv) whether the Company desires the Trustee to give the Company
Notice required by Section 3.9(d).
(b) Purchase with Cash. At the option of the Company, the Redemption
Price, Purchase Price, Change of Control Purchase Price or Principal Amount at
Stated Maturity, as the case may be, of Securities in respect of which a Notice
of Redemption pursuant to Section 3.3, Purchase Notice pursuant to Section 3.1,
3.7(a) or Change of Control Purchase Notice pursuant to Section 3.8(c), as the
case may be, has been given, or a specified percentage thereof, may be paid by
the Company with cash equal to the aggregate Redemption Price, Purchase Price,
Change of Control Purchase Price or Principal Amount at Stated Maturity, as the
case may be, of such Securities. The Redemption Price, Purchase Price or Change
of Control Purchase Price, as the case may be, of Securities in respect of which
a Purchase Notice pursuant to Section 3.7(a) or Change of Control Purchase
Notice pursuant to Section 3.8(c), as the case may be, has been given shall, for
all other Purchase Dates or Change of Control Purchase Dates, as the case may
be, be paid in cash. The Company Notice, as provided in Section 3.9(d), shall be
sent to Holders (and to beneficial owners as required by applicable law) not
less than 20 Business Days prior to
29
such Purchase Date or Change of Control Purchase Date, as the case may be (the
"COMPANY NOTICE DATE").
(c) Payment by Issuance of Shares of Applicable Stock. On each Redemption
Date, Purchase Date, Change of Control Purchase Date and at Stated Maturity, as
applicable, at the option of the Company, the Redemption Price, Purchase Price,
Change of Control Purchase Price or Notice of Redemption pursuant to Section
3.3, as the case may be, of Securities in respect of which a Notice of
Redemption pursuant to Section 3.3, Purchase Notice pursuant to Section 3.7(a),
Change of Control Purchase Notice pursuant to Section 3.9(c) or, if the Company
shall pay all or a portion of the Principal Amount at Stated Maturity in shares
of Applicable Stock, the Company shall deliver a notice of payment in shares of
Applicable Stock at least 30 days prior to Stated Maturity ("Payment Notice at
Stated Maturity"), as the case may be, has been given, or a specified percentage
thereof, may be paid by the Company by the issuance of a number of shares of
Applicable Stock equal to the quotient obtained by dividing (i) the portion of
the Redemption Price, Purchase Price, Change of Control Purchase Price or
Principal Amount at Stated Maturity, as the case may be, to be paid in shares of
Applicable Stock by (ii) 98.25% of the Market Price determined by the Company in
the Company Notice, subject to the next succeeding paragraph.
The Company will not issue fractional shares of Applicable Stock in
payment of the Redemption Price, Purchase Price, Change of Control Purchase
Price or Principal Amount at Stated Maturity, as the case may be. Instead, the
Company will pay cash based on the current market price for all fractional
shares. It is understood that if a Holder elects to have more than one Security
purchased, the number of shares of Applicable Stock shall be based on the
aggregate amount of Securities to be purchased.
If the Company elects to purchase the Securities by the issuance of
shares of Applicable Stock or in any combination of cash and Applicable Stock,
the Company Notice, as provided in Section 3.9(d), shall be sent to the Holders
(and to beneficial owners as required by applicable law) not later than the
Company Notice Date.
The Company's right to exercise its election to redeem, purchase or pay
for Securities through the issuance of shares of Applicable Stock shall be
conditioned upon:
(i) the Company's not having given its Company Notice of an election
to pay entirely in cash and its giving of timely Company Notice of an
election to purchase all or a specified percentage of the Securities with
shares of Applicable Stock as provided herein;
(ii) the registration of such shares of Applicable Stock under the
Securities Act and the Exchange Act, in each case, if required;
(iii) the listing of such shares of Applicable Stock on a United
States national securities exchange or the quotation of such shares of
Applicable Stock in an inter-dealer quotation system of any registered
United States national securities association;
30
(iv) any necessary qualification or registration under applicable
state securities laws or the availability of an exemption from such
qualification and registration; and
(v) the receipt by the Trustee of an Officers' Certificate and an
Opinion of Counsel each stating that (A) the terms of the issuance of the
shares of Applicable Stock are in conformity with this Indenture and (B)
the shares of Applicable Stock to be issued by the Company in payment of
the Redemption Price, Purchase Price, Change of Control Purchase Price or
Principal Amount at Stated Maturity, as the case may be, in respect of
Securities have been duly authorized and, when issued and delivered
pursuant to the terms of this Indenture in payment of the Redemption Price,
Purchase Price, Change of Control Purchase Price or Principal Amount at
Stated Maturity, as the case may be, in respect of the Securities, will be
validly issued, fully paid and non-assessable and, to the best of such
counsel's knowledge, free from preemptive rights, and, in the case of such
Officers' Certificate, stating that the conditions above and the condition
set forth in the second succeeding sentence have been satisfied and, in the
case of such Opinion of Counsel, stating that the conditions in clauses (i)
through (iv) above have been satisfied.
Such Officers' Certificate shall also set forth the number of shares of
Applicable Stock to be issued for each US$1,000 principal amount of Securities
and the Sale Price of a share of Applicable Stock on each trading day during the
period commencing on the first trading day of the period during which the Market
Price is calculated and ending on the third day prior to the applicable Purchase
Date or Change of Control Purchase Date, as the case may be. If the foregoing
conditions are not satisfied with respect to a Holder or Holders prior to the
close of business on the last day prior to the Purchase Date or Change of
Control Purchase Date, as the case may be, and the Company has elected to
purchase the Securities pursuant to this Section 3.9 through the issuance of
shares of Applicable Stock, the Company shall pay the entire Redemption Price,
Purchase Price, Change of Control Purchase Price or Principal Amount at Stated
Maturity, as the case may be, of the Securities of such Holder or Holders in
cash.
The "MARKET PRICE" means the average of the Sale Prices of the shares of
Applicable Stock for the 20-trading day period immediately preceding and
including the third day prior to the applicable Redemption Date, Purchase Date,
Change of Control Purchase Date or at Stated Maturity, as the case may be, (if
the third Business Day prior to the applicable Purchase Date is a trading day,
or if not, then on the last trading day prior to the third Business Day),
appropriately adjusted to take into account the occurrence, during the period
commencing on the first of the trading days during the 20-trading day period and
ending on the Redemption Date, Purchase Date, Change of Control Purchase Date or
at Stated Maturity, as the case may be, of any event described in Sections 10.3
or 10.4.
Upon determination of the actual number of shares of Applicable Stock to
be issued upon redemption or repurchase of Securities, the Company shall be
required to disseminate a press release containing this information or publish
the information on the Company's Web site or through such other public medium as
the Company may use at that time.
31
(d) Notice of Election. In connection with any purchase of Securities
pursuant to Section 5, 6 or 7 of the Securities, the Company shall give notice
to Holders setting forth information specified in this Section 3.9(d) (the
"COMPANY NOTICE").
In the event the Company has elected to pay the Redemption Price,
Purchase Price, Change of Control Purchase Price or Principal Amount at Stated
Maturity, as the case may be (or a specified percentage thereof), with shares of
Applicable Stock, the Company Notice shall:
(1) state that each Holder will receive a number of shares of Applicable
Stock with a value equal to 98.25% of the Market Price determined as
of a specified date prior to the Redemption Date, Purchase Date,
Change of Control Purchase Date or Stated Maturity, as the case may
be, equal to such specified percentage of the Redemption Price,
Purchase Price, Change of Control Purchase Price or Principal Amount
at Stated Maturity, as the case may be, of the Securities held by
such Holder (except any cash amount to be paid in lieu of fractional
shares);
(2) set forth the method of calculating the Market Price of the shares
of Applicable Stock; and
(3) state that because the Market Price of shares of Applicable Stock
will be determined prior to the Redemption Date, Purchase Date,
Change of Control Purchase Date or Stated Maturity, as the case may
be, Holders of the Securities will bear the market risk with respect
to the value of the shares of Applicable Stock to be received from
the date such Market Price is determined to the Redemption Date,
Purchase Date, Change of Control Purchase Date or Stated Maturity,
as the case may be.
In any case, each Company Notice shall include a form of Notice of
Redemption, Purchase Notice, Change of Control Purchase Notice or Payment Notice
at Stated Maturity, as the case may be, to be completed by a Holder and shall
briefly state, as applicable:
(i) the Redemption Price, Purchase Price, Change of Control
Purchase Price or Principal Amount at Stated Maturity, as the
case may be, and the Conversion Rate;
(ii) the name and address of the Paying Agent and the Conversion
Agent;
(iii) that Securities as to which a Notice of Redemption, Purchase
Notice, Change of Control Purchase Notice or Payment Notice
at Stated Maturity, as the case may be, has been given may be
converted if they are otherwise convertible only in
accordance with Article X hereof and Section 8 of the
Securities if the applicable Notice of Redemption, Purchase
Notice, Change of Control Purchase Notice or Payment Notice
at Stated Maturity, as the case
32
may be, has been withdrawn in accordance with the terms of
this Indenture;
(iv) that Securities must be surrendered to the Paying Agent to
collect payment;
(v) that the Redemption Price, Purchase Price, Change of Control
Purchase Price or Principal Amount at Stated Maturity, as the
case may be, for any security as to which a Notice of
Redemption, Purchase Notice, Change of Control Purchase
Notice or Payment Notice at Stated Maturity, as the case may
be, has been given and not withdrawn will be paid promptly
following the later of the Redemption Date, Purchase Date,
Change of Control Purchase Date or Stated Maturity, as the
case may be, and the time of surrender of such Security as
described in (iv);
(vi) the procedures the Holder must follow to exercise its put
rights under Section 3.7 or 3.9, as the case may be, and a
brief description of those rights;
(vii) the conversion rights of the Securities;
(viii) the procedures for withdrawing a Notice of Redemption,
Purchase Notice, Change of Control Purchase Notice or Payment
Notice at Stated Maturity, as the case may be (including,
without limitation, for a conditional withdrawal pursuant to
the terms of Section 3.7(a)(1)(D), Section 3.9(c)(4)or
Section 3.11);
(ix) that, unless the Company defaults in making payment on
Securities for which a Notice of Redemption, Purchase Notice,
Change of Control Purchase Notice or Payment Notice at Stated
Maturity, as the case may be, has been submitted, interest,
if any, on such Securities will cease to accrue on the
Redemption Date, Purchase Date, Change of Control Purchase
Date or at Stated Maturity, as the case may be; and
(x) the CUSIP number of the Securities.
At the Company's request, the Trustee shall give such Company Notice in
the Company's name and at the Company's expense; provided, however, that, in all
cases, the text of such Company Notice shall be prepared by the Company.
(e) Covenants of the Company. All shares of the Shares delivered upon
purchase of the Securities shall be newly issued shares or treasury shares,
shall be duly authorized, validly issued, fully paid and nonassessable, and
shall be free from preemptive rights and free of any lien or adverse claim.
33
(f) Taxes. If a Holder of a purchased Security is paid in shares of
Applicable Stock, the Company shall pay any documentary, stamp or similar issue
or transfer tax due on such issue of Applicable Stock. However, the Holder shall
pay any such tax which is due because the Holder requests the Applicable Stock
to be issued in a name other than the Holder's name. The Paying Agent may refuse
to deliver the certificates representing the shares of Applicable Stock being
issued in a name other than the Holder's name until the Paying Agent receives a
sum sufficient to pay any tax which will be due because the shares of Applicable
Stock are to be issued in a name other than the Holder's name. Nothing herein
shall preclude any income tax withholding required by law or regulations.
Section 3.10. Effect of Notice of Redemption, Purchase Notice, Change of
Control Purchase Notice or Payment Notice at Stated Maturity. Upon receipt by
the Paying Agent of the Notice of Redemption, Purchase Notice, Change of Control
Purchase Notice or Payment Notice at Stated Maturity specified in Section 3.3,
3.7(a), Section 3.8(c) or 3.9, as applicable, the Holder of the Security in
respect of which such Notice of Redemption, Purchase Notice, Change of Control
Purchase Notice or Payment Notice at Stated Maturity, as the case may be, was
given shall (unless such Notice of Redemption, Purchase Notice, Change of
Control Purchase Notice or Payment Notice at Stated Maturity, as the case may
be, is withdrawn as specified in the following two paragraphs) thereafter be
entitled to receive solely the Redemption Price, Purchase Price, Change of
Control Purchase Price or Principal Amount at Stated Maturity, as the case may
be, with respect to such Security. Such Redemption Price, Purchase Price, Change
of Control Purchase Price or Principal Amount at Stated Maturity shall be paid
to such Holder, subject to receipts of funds and/or securities by the Paying
Agent, promptly following the later of (x) the Redemption Date, Purchase Date,
the Change of Control Purchase Date or Stated Maturity, as the case may be, with
respect to such Security (provided the conditions in Section 3.3, 3.7(a) or
Section 3.8(c) or 3.9, as applicable, have been satisfied) and (y) the time of
delivery of such Security to the Paying Agent by the Holder thereof in the
manner required by Section 3.7(a) or Section 3.9(c), as applicable. Securities
in respect of which a Notice of Redemption, Purchase Notice, Change of Control
Purchase Notice or Payment Notice at Stated Maturity has been given by the
Holder thereof may not be converted pursuant to Article X hereof on or after the
date of the delivery of such Notice of Redemption, Purchase Notice, Change of
Control Purchase Notice or Payment Notice at Stated Maturity unless such Notice
of Redemption, Purchase Notice, Change of Control Purchase Notice or Payment
Notice at Stated Maturity has first been validly withdrawn as specified in the
following two paragraphs.
A Notice of Redemption, Purchase Notice, Change of Control Purchase
Notice or Notice of Payment at Stated Maturity may be withdrawn by means of a
written notice of withdrawal delivered to the office of the Paying Agent in
accordance with the Notice of Redemption, Purchase Notice, Change of Control
Purchase Notice or Notice of Payment at Stated Maturity, as the case may be, at
any time prior to the close of business on the third Business Day prior to the
Redemption Date, Purchase Date, the close of business on the Business Day
immediately preceding the Change of Control Purchase Date or Stated Maturity, as
the case may be, specifying:
(1) the certificate number, if any, of the Security in respect of
which such notice of withdrawal is being submitted,
34
(2) the principal amount of the Security with respect to which such
notice of withdrawal is being submitted, and
(3) the principal amount, if any, of such Security which remains
subject to the original Notice of Redemption, Purchase Notice,
Change of Control Purchase Notice or Notice of Payment at Stated
Maturity, as the case may be, and which has been or will be
delivered for purchase by the Company.
A written notice of withdrawal of a Notice of Redemption, Purchase Notice
or Notice of Payment at Stated Maturity may be in the form set forth in the
preceding Section or may be in the form of (i) a conditional withdrawal
contained in a Purchase Notice pursuant to the terms of Section 3.7(a)(1)(D) or
(ii) a conditional withdrawal containing the information set forth in Section
3.7(a)(1)(D) and the preceding Section and contained in a written notice of
withdrawal delivered to the Paying Agent as set forth in the preceding
paragraph.
A written notice of withdrawal of a Change of Control Purchase Notice may
be in the form set forth in the preceding Section or may be in the form of (i) a
conditional withdrawal contained in a Purchase Notice pursuant to the terms of
Section 3.9(c)(4) or (ii) a conditional withdrawal containing the information
set forth in Section 3.9(c)(4) and the preceding Section and contained in a
written notice of withdrawal delivered to the Paying Agent as set forth in the
preceding paragraph.
There shall be no redemption purchase or payment of any Securities
pursuant to Section 3.1, 3.7 or 3.9 if there has occurred (prior to, on or
after, as the case may be, the giving, by the Holders of such Securities, of the
required Notice of Redemption, Purchase Notice or Change of Control Purchase
Notice, as the case may be) and is continuing an Event of Default (other than a
default in the payment of the Redemption Price, Purchase Price or Change of
Control Purchase Price, as the case may be, with respect to such Securities).
The Paying Agent will promptly return to the respective Holders thereof any
Securities (x) with respect to which a Notice of Redemption, Purchase Notice or
Change of Control Purchase Notice, as the case may be, has been withdrawn in
compliance with this Indenture, or (y) held by it during the continuance of an
Event of Default (other than a default in the payment of the Redemption Price,
Purchase Price or Change of Control Purchase Price, as the case may be, with
respect to such Securities) in which case, upon such return, the Notice of
Redemption, Purchase Notice or Change of Control Purchase Notice with respect
thereto shall be deemed to have been withdrawn.
Section 3.11. Deposit of Purchase Price or Change of Control Purchase
Price. Prior to 10:00 a.m. (New York City time) on the Business Day following
the Purchase Date or the Change of Control Purchase Date, as the case may be,
the Company shall deposit with the Trustee or with the Paying Agent (or, if the
Company or a Subsidiary or an Affiliate of either of them is acting as the
Paying Agent, shall segregate and hold in trust as provided in Section 2.4) an
amount of cash (in immediately available funds if deposited on such Business
Day) or shares of Applicable Stock, if permitted hereunder, sufficient as
evidenced in writing by a certified public accountant to pay the aggregate
Purchase Price or Change of Control Purchase Price, as the case may be, of all
the Securities or portions thereof which are to be purchased as of the Purchase
Date or Change of Control Purchase Date, as the case may be.
35
As soon as practicable after the Purchase Date or Change of Control
Purchase Date, as the case may be, the Company shall deliver to each Holder
entitled to receive shares of Applicable Stock through the Paying Agent, a
certificate for the number of full shares of Applicable Stock issuable in
payment of the Purchase Price or Change of Control Purchase Price, as the case
may be, and cash in lieu of any fractional interests. The person in whose name
the certificate for the shares of Applicable Stock is registered shall be
treated as a holder of record of Applicable Stock on the Business Day following
the Purchase Date or Change of Control Purchase Date, as the case may be.
Subject to Section 3.9(c), no payment or adjustment will be made for dividends
on the shares of Applicable Stock the record date for which occurred on or prior
to the Purchase Date or Change of Control Purchase Date, as the case may be.
Section 3.12. Securities Purchased in Part. Any Certificated Security
which is to be purchased only in part shall be surrendered at the office of the
Paying Agent (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or such Xxxxxx's attorney duly
authorized in writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security, without service charge,
a new Security or Securities, of any authorized denomination as requested by
such Holder in aggregate principal amount equal to, and in exchange for, the
portion of the principal amount of the Security so surrendered which is not
purchased.
Section 3.13. Covenant to Comply With Securities Laws Upon Purchase of
Securities. When complying with the provisions of Section 3.7 or 3.9 hereof
(provided that such offer or purchase constitutes an "issuer tender offer" for
purposes of Rule 13e-4 (which term, as used herein, includes any successor
provision thereto) under the Exchange Act at the time of such offer or
purchase), and subject to any exemptions available under applicable law, the
Company shall (i) comply with Rule 13e- 4 and Rule 14e-1 (or any successor
provision) under the Exchange Act, (ii) file the related Schedule TO (or any
U.S. successor schedule, form or report) under the Exchange Act, and (iii)
otherwise comply with all Federal, state and Canadian securities laws so as to
permit the rights and obligations under Sections 3.7 and 3.8 to be exercised in
the time and in the manner specified in Sections 3.7 and 3.8.
Section 3.14. Repayment to the Company. The Trustee and the Paying Agent
shall return to the Company any cash or Shares that remain unclaimed as provided
in Section 12 of the Securities, together with interest or dividends, if any,
thereon (subject to the provisions of Section 7.1(f)), held by them for the
payment of the Purchase Price or Change of Control Purchase Price, as the case
may be; provided, however, that to the extent that the aggregate amount of cash
or Shares deposited by the Company pursuant to Section 3.11 exceeds the
aggregate Purchase Price or Change of Control Purchase Price, as the case may
be, of the Securities or portions thereof which the Company is obligated to
purchase as of the Purchase Date or Change of Control Purchase Date, as the case
may be, then, unless otherwise agreed in writing with the Company, promptly
after the Business Day following the Purchase Date or Change of Control Purchase
Date, as the case may be, the Trustee shall return any such excess to the
Company together with interest or dividends, if any, thereon (subject to the
provisions of Section 7.1(f)).
36
ARTICLE IV
COVENANTS
Section 4.1. Payment of Securities. The Company shall promptly make all
payments in respect of the Securities on the dates and in the manner provided in
the Securities or pursuant to this Indenture. Any amounts of cash or shares of
Applicable Stock to be given to the Trustee or Paying Agent, shall be deposited
with the Trustee or Paying Agent by 10:00 a.m., New York City time, by the
Company. Principal amount plus accrued interest, if any, including additional
interest, if any, Redemption Price, Purchase Price, Change of Control Purchase
Price and cash interest, if any, shall be considered paid on the applicable date
due if on such date (or, in the case of a Purchase Price or Change of Control
Purchase Price, on the Business Day following the applicable Purchase Date or
Change of Control Purchase Date, as the case may be) the Trustee or the Paying
Agent holds, in accordance with this Indenture, cash or securities, if permitted
hereunder, sufficient to pay all such amounts then due.
Section 4.2. SEC and Other Reports. The Company shall ensure delivery to
the Trustee within 30 days after it files or furnishes such annual and quarterly
reports with the SEC, and other reports (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe) which the
Company is required to file or furnish with the SEC pursuant to Section 13 or
15(d) of the Exchange Act in accordance with TIA Section 314(a). In the event
the Company is at any time no longer subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, it shall continue to provide the
Trustee with reports containing substantially the same information as would have
been required to be filed with the SEC pursuant to the Canada-U.S.
Multijurisdictional Disclosure System on Form 40-F and Form 6-K had the Company
continued to have been subject to such reporting requirements. In such event,
such reports shall be provided within 15 days after the times the Company would
have been required to provide reports had it continued to have been subject to
such reporting requirements. The Company also shall comply with the other
provisions of TIA Section 314(a). Delivery of such reports, information and
documents to the Trustee is for informational purposes only and the Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely conclusively on Officers' Certificates).
Section 4.3. Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company
(beginning with the fiscal year ending on December 31, 2003) an Officers'
Certificate, stating whether or not to the knowledge of the signers thereof, the
Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and if the Company shall be
in Default, specifying all such Defaults and the nature and status thereof of
which they may have knowledge.
Section 4.4. Further Instruments and Acts. Upon request of the Trustee,
or as otherwise necessary, the Company will execute and deliver such further
instruments and do such
37
further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
Section 4.5. Maintenance of Office or Agency. The Company will maintain
in the Borough of Manhattan, The City of New York, an office or agency of the
Trustee, Registrar, Paying Agent and Conversion Agent where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer, exchange, purchase, redemption or conversion and where
notices and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The office of The Bank of New York, 000 Xxxxxxx Xxxxxx,
Xxxxx 00X, Xxx Xxxx, Xxx Xxxx 00000 (Attention: Corporate Trust Trustee
Administration), shall initially be such office or agency for all of the
aforesaid purposes. The Company shall give prompt written notice to the Trustee
of the location, and of any change in the location, of any such office or agency
(other than a change in the location of the office of the Trustee). If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 11.2.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York, for such purposes.
Section 4.6. Delivery of Certain Information. At any time when the
Company is not subject to Section 13 or 15(d) of the Exchange Act, upon the
request of a Holder or any beneficial owner of Securities or holder or
beneficial owner of Shares issued upon conversion thereof, or in accordance with
Section 3.8(c), the Company will promptly furnish or cause to be furnished Rule
144A Information (as defined below) to such Holder or any beneficial owner of
Securities or holder or beneficial owner of Shares, or to a prospective
purchaser of any such security designated by any such holder, as the case may
be, to the extent required to permit compliance by such Holder or holder with
Rule 144A under the Securities Act in connection with the resale of any such
security. "Rule 144A Information" shall be such information as is specified
pursuant to Rule 144A(d)(4) under the Securities Act. Whether a person is a
beneficial owner shall be determined by the Company to the Company's reasonable
satisfaction.
Section 4.7. Payment of Additional Amounts. (a) All payments made by the
Company under or with respect to the Securities shall be made free and clear of
and without withholding or deduction for or on account of any present or future
tax, duty, levy, impost, assessment or other governmental charge (including
penalties, interest and other liabilities related thereto) imposed or levied by
or on behalf of (1) the Government of Canada or of any province or territory
thereof or by any authority or agency therein or thereof having power to tax,
(2) any jurisdiction from or through which payment on the Securities is made, or
any political subdivision or governmental authority thereof or therein having
the power to tax, or (3) any other jurisdiction in which the payor is organized
or otherwise considered to be resident for tax purposes, or any political
subdivision or governmental authority thereof or therein having the power to tax
(hereinafter, the "TAXES"), unless the Company is required to withhold or deduct
Taxes by law or by the interpretation or administration thereof. If the Company
is required to
38
withhold or deduct any amount for or on account of Taxes from any payment made
under or with respect to the Securities, the Company shall pay (together with
such payments) such additional amounts (the "ADDITIONAL AMOUNTS") as may be
necessary so that the net amount received by each Securityholder (including
Additional Amounts) after such withholding or deduction (including such
deduction or withholding from Additional Amounts) shall not be less than the
amount such Holder would have received if such Taxes had not been withheld or
deducted; provided, however, that no Additional Amounts will be payable with
respect to a payment made to a Holder (an "EXCLUDED HOLDER") (i) with which the
Company does not deal at arm's-length (within the meaning of the Canadian Tax
Act) at the time of making such payment, or (ii) which is subject to such Taxes
by reason of its being connected with Canada or any province or territory
thereof otherwise than solely by reason of the Holder's activity in connection
with purchasing the Securities, by the mere holding of Securities or by reason
of the receipt of payments thereunder. The Company will also (a) make such
withholding or deduction and (b) remit the full amount deducted or withheld to
the relevant authority in accordance with applicable law.
(b) The Company will furnish the Securityholders, within 30 days after
the date the payment of any Taxes is due pursuant to applicable law, certified
copies of tax receipts evidencing such payment by the Company or will, upon
written request of each Holder (other than an Excluded Holder), reimburse each
such Holder for the amount of (x) any Taxes so levied or imposed and paid by
such Holder as a result of payments made under or with respect to the
Securities, and (y) any Taxes so levied or imposed with respect to any
reimbursement under the foregoing clause (x) or this clause (y) but excluding
any such Taxes on such Holder's net income so that the net amount received by
such Holder (net of payments made under or with respect to the Securities) after
such reimbursement will not be less than the net amount the Holder would have
received if Taxes on such reimbursement had not been imposed.
(c) At least 30 days prior to each date on which any payment under or
with respect to the Securities is due and payable, if the Company will be
obligated to pay Additional Amounts with respect to such payment, the Company
will deliver to the Trustee an Officer's Certificate stating the fact that such
Additional Amounts will be payable and the amounts so payable and will set forth
such other information necessary to enable the Trustee to pay such Additional
Amounts to Holders on the payment date. Whenever in this Indenture there is
mentioned, in any context, the payment of principal, premium, if any, Redemption
Price, change of control offer, Purchase Price, interest or any other amount
payable under or with respect to any Security, such mention shall be deemed to
include mention of the payment of Additional Amounts to the extent that, in such
context, Additional Amounts are, were or would be payable in respect thereof.
Section 4.8. Statement by Officers as to Default. The Company shall
deliver to the Trustee, as soon as practicable and in any event within five
Business Days after the Company becomes aware of the occurrence of any Event of
Default or an event which, with notice or the lapse of time or both, would
constitute an Event of Default, an Officers' Certificate setting forth the
details of such Event of Default or default and the action which the Company
proposes to take with respect thereto.
39
ARTICLE V
SUCCESSOR CORPORATION
Section 5.1. When Company May Merge or Transfer Assets. The Company shall
not consolidate with or merge with or into any other Person or convey, transfer,
sell, lease or otherwise dispose of its properties and assets substantially as
an entirety to any person, unless:
(a) either (1) the Company shall be the continuing corporation or (2) the
Person (if other than the Company) formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance, transfer or
lease the properties and assets of the Company substantially as an entirety (i)
shall be a corporation organized and validly existing under the laws of (A) the
United States or any State thereof or the District of Columbia or (B) Canada or
any province or territory thereof and (ii) shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in form
reasonably satisfactory to the Trustee, all of the obligations of the Company
under the Securities and this Indenture;
(b) immediately after giving effect to such transaction, no Default shall
have occurred and be continuing; and
(c) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such (A) consolidation,
merger, conveyance, transfer or lease and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture,
comply with this Article 5 and that all conditions precedent herein provided for
relating to such transaction have been satisfied and (B) in the case of a merger
or consolidation in which the Company is not the continuing corporation and in
which the successor to the Company is an entity organized under the laws of
Canada or any province or territory thereof, that such merger will not result in
any material adverse tax consequences to any Holders of the Securities.
For purposes of the foregoing, the transfer (by lease, assignment, sale
or otherwise) of the properties and assets of one or more Subsidiaries (other
than to the Company or another Subsidiary), which, if such assets were owned by
the Company, would constitute all or substantially all of the properties and
assets of the Company, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.
The successor Person formed by such consolidation or into which the
Company is merged or the successor Person to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor had been named as the Company herein; and thereafter, except in
the case of a lease and obligations the Company may have under a supplemental
indenture, the Company shall be discharged from all obligations and covenants
under this Indenture and the Securities. Subject to Section 9.6, the Company,
the Trustee and the successor Person shall enter into a supplemental indenture
to evidence the succession and substitution of such successor Person and such
discharge and release of the Company.
40
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1. Events of Default. So long as any Securities are
outstanding, each of the following shall be an "Event of Default":
(1) the Company fails to convert any portion of the principal amount of
any Security following the exercise by the Holder of the right to convert
such Security into Shares pursuant to and in accordance with Article X
hereof, subject to the Company's right to pay cash in lieu of Shares;
(2) the Company defaults in its obligation to repurchase any Security, or
any portion thereof, upon the exercise by the Holder of such Holder's right
to require the Company to purchase such Securities pursuant to and in
accordance with Section 3.7 hereof or the Company defaults in its obligation
to offer to purchase all Securities upon a Change of Control pursuant to and
in accordance with Section 3.9 hereof;
(3) the Company defaults in its obligation to redeem any Security, or any
portion thereof, called for redemption by the Company pursuant to and in
accordance with Section 3.1 hereof;
(4) the Company defaults in the payment of the principal amount on any
Security when the same becomes due and payable at its Stated Maturity or
when otherwise due and payable;
(5) the Company defaults in the payment of any accrued and unpaid
interest, including additional interest, if any, in each case when due and
payable, and continuance of such default for a period of 30 days;
(6) the Company fails to comply with any of its agreements or covenants
in the Securities or this Indenture (other than those referred to in clause
(1) through (5) above) and such failure continues for 60 days after receipt
by the Company of a Notice of Default;
(7) a failure to pay when due at Stated Maturity or a default, event of
default or other similar condition or event (however described) that results
in the acceleration of maturity of any indebtedness for borrowed money of
the Company or any Designated Subsidiary in an aggregate amount of
US$25,000,000 or more, unless the acceleration is rescinded, stayed or
annulled within 30 days after written notice of default is given to the
Company by the Trustee or Holders of not less than 25% in aggregate
principal amount of the Securities then outstanding;
(8) the Company or any Designated Subsidiary, or any group of two or more
Subsidiaries that, taken as a whole, would constitute a Designated
Subsidiary, pursuant to or under or within the meaning of any Bankruptcy
Law:
41
(A) commences a voluntary case or proceeding;
(B) consents to the entry of any order for relief against it in
an involuntary case or proceeding or the commencement of any
case against it;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property;
(D) makes a general assignment for the benefit of its creditors;
(E) files a petition in bankruptcy or answer or consent seeking
reorganization or relief; or
(F) consents to the filing of such petition or the appointment of
or taking possession by a Custodian;
(9) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(A) is for relief against the Company or any Designated
Subsidiary, or any group of two or more Subsidiaries that,
taken as whole, would constitute a Designated Subsidiary, in
an involuntary case or proceeding, or adjudicates the Company
or any Designated Subsidiary, or any group of two or more
Subsidiaries that, taken as whole, would constitute a
Designated Subsidiary, insolvent or bankrupt;
(B) appoints a Custodian of the Company or any Designated
Subsidiary, or any group of two or more Subsidiaries that,
taken as whole, would constitute a Designated Subsidiary, or
for any substantial part of its property; or
(C) orders the winding up or liquidation of the Company or any
Designated Subsidiary, or any group of two or more
Subsidiaries that, taken as whole, would constitute a
Designated Subsidiary,
and the order of decree remains unstayed and in effect for 60 days; or
"Bankruptcy Law" means Title 11, United States Code, or any similar
Federal or State law for the relief of debtors.
"Custodian" means any receiver, trustee, assignee, liquidator, custodian
or similar official under any Bankruptcy Law.
(10) the commencement by the Company or any of its Subsidiaries that is a
Designated Subsidiary or any group of two or more Subsidiaries that, taken
as a whole,
42
would constitute a Designated Subsidiary, of a voluntary case or proceeding
under any applicable bankruptcy, insolvency, reorganization or other similar
law or of any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by the Company or any of its Subsidiaries that is
a Designated Subsidiary or any group of two or more Subsidiaries that, taken
as a whole, would constitute a Designated Subsidiary, to the entry of a
decree or order for relief in respect of the Company or any of its
Subsidiaries that is a Designated Subsidiary or any group of two or more
Subsidiaries that, taken as a whole, would constitute a Designated
Subsidiary, in an involuntary case or proceeding under any applicable
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against the
Company, or the filing by the Company or any of its Subsidiaries that is a
Designated Subsidiary or any group of two or more Subsidiaries that, taken
as a whole, would constitute a Designated Subsidiary, of a petition or
answer or consent seeking reorganization or relief under any applicable law,
or the consent by the Company to the filing of such petition or to the
appointment of or the taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Company or of any substantial part of its property, or the making by the
Company or any of its Subsidiaries that is a Designated Subsidiary or any
group of two or more Subsidiaries that, taken as a whole, would constitute a
Designated Subsidiary, of an assignment for the benefit of creditors, or the
admission by the Company or any of its Subsidiaries that is a Designated
Subsidiary or any group of two or more Subsidiaries that, taken as a whole,
would constitute a Designated Subsidiary, in writing of its inability to pay
its debts generally as they become due, or the taking of corporate action by
the Company or any of its Subsidiaries that is a Designated Subsidiary or
any group of two or more Subsidiaries that, taken as a whole, would
constitute a Designated Subsidiary, expressly in furtherance of any such
action.
"DESIGNATED SUBSIDIARY" shall mean (i) each of Odyssey Re Holdings Corp.,
Xxxx & Xxxxxxx Holdings Corp. and Northbridge Financial Corporation, in each
case so long as it is a subsidiary (as defined in Rule 405 under the Securities
Act) of the Company; and (ii) any future, direct or indirect, subsidiary of the
Company whose assets constitute 25% or more of the total assets of the Company
on a consolidated basis.
A Default under clause (6) above is not an Event of Default until the
Trustee notifies the Company, or the Holders of at least 25% in aggregate
principal amount of the Securities at the time outstanding notify the Company
and the Trustee, of the Default and the Company does not cure such Default (and
such Default is not waived) within the time specified in clause (6) above after
actual receipt of such notice. Any such notice must specify the Default, demand
that it be remedied and state that such notice is a "Notice of Default."
The Trustee shall, within 90 days of the occurrence of a Default, give to
the Holders of the Securities notice of all uncured Defaults known to it and
written notice of any event which with the giving of notice or the lapse of
time, or both, would become an Event of Default, its status and what action the
Company is taking or proposes to take with respect thereto; provided, however,
the Trustee shall be protected in withholding such notice if it, in good faith,
determines that the withholding of such notice is in the best interest of such
Holders, except in the case of a Default specified in clauses (1) through (8)
above.
43
Section 6.2. Acceleration. If an Event of Default (other than an Event of
Default specified in Section 6.1(9) or (10)) occurs and is continuing, the
Trustee by notice to the Company, or the Holders of at least 25% in aggregate
principal amount of the Securities at the time outstanding by notice to the
Company and the Trustee, may declare the principal amount plus accrued and
unpaid interest, including additional interest, if any, on all the Securities to
be immediately due and payable. Upon such a declaration, such accelerated amount
shall be due and payable immediately. If an Event of Default specified in
Section 6.1(9) or (10) occurs and is continuing, the principal amount plus
accrued and unpaid interest, including additional interest, if any, on all the
Securities shall become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Securityholders. The
Holders of a majority in aggregate principal amount of the Securities at the
time outstanding, by notice to the Trustee (and without notice to any other
Securityholder) may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default have been cured or waived except nonpayment of the principal
amount plus accrued and unpaid interest, including additional interest, if any,
that have become due solely as a result of acceleration and if all amounts due
to the Trustee under Section 7.7 have been paid. No such rescission shall affect
any subsequent Default or impair any right consequent thereto.
Section 6.3. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of the principal amount plus accrued and unpaid interest, including additional
interest, if any, on the Securities or to enforce the performance of any
provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if the Trustee does not
possess any of the Securities or does not produce any of the Securities in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of, or acquiescence in, the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative.
Section 6.4. Waiver of Past Defaults. The Holders of a majority in
aggregate principal amount of the Securities at the time outstanding, by notice
to the Trustee (and without notice to any other Securityholder), may waive an
existing Default and its consequences except (1) an Event of Default described
in Section 6.1(1) or (2), (2) a Default in respect of a provision that under
Section 9.2 cannot be amended without the consent of each Securityholder
affected or (3) a Default which constitutes a failure to convert any Security in
accordance with the terms of Article 10. When a Default is waived, it is deemed
cured, but no such waiver shall extend to any subsequent or other Default or
impair any consequent right. This Section 6.4 shall be in lieu of Section
316(a)1(B) of the TIA and such Section 316(a)1(B) is hereby expressly excluded
from this Indenture, as permitted by the TIA.
Section 6.5. Control by Majority. The Holders of a majority in aggregate
principal amount of the Securities at the time outstanding may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or of exercising any trust or power conferred on the Trustee. However,
the Trustee may refuse to follow any direction that conflicts with law or this
Indenture or that the Trustee determines in good faith is prejudicial to the
rights of other Securityholders or would involve the Trustee in personal
liability unless the
44
Trustee is offered indemnity satisfactory to it. This Section 6.5 shall be in
lieu of Section 316(a)1(A) of the TIA and such Section 316(a)1(A) is hereby
expressly excluded from this Indenture, as permitted by the TIA.
Section 6.6. Limitation on Suits. A Securityholder may not pursue any
remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in aggregate principal amount of the
Securities at the time outstanding make a written request to the
Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee security or indemnity
satisfactory to the Trustee against any loss, liability or
expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of such notice, request and offer of security or
indemnity; and
(5) the Holders of a majority in aggregate principal amount of the
Securities at the time outstanding do not give the Trustee a
direction inconsistent with the request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights of
any other Securityholder or to obtain a preference or priority over any other
Securityholder.
Section 6.7. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
the principal amount, Redemption Price, Purchase Price, Change of Control
Purchase Price or interest, including additional interest, if any, in respect of
the Securities held by such Holder, on or after the respective due dates
expressed in the Securities or any Redemption Date, and to convert the
Securities in accordance with Article X, or to bring suit for the enforcement of
any such payment on or after such respective dates or the right to convert,
shall not be impaired or affected adversely without the consent of such Holder.
Section 6.8. Collection Suit by Trustee. If an Event of Default described
in Section 6.1(2), (3) or (4) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount owing with respect to the Securities and the amounts
provided for in Section 7.7.
Section 6.9. Trustee May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee (irrespective
of whether the principal amount, Redemption Price, Purchase Price, Change of
Control Purchase Price or interest, including additional interest, if any, in
respect of the Securities shall then be due and payable as therein expressed or
by declaration or otherwise and
45
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of any such amount) shall be entitled and empowered, by
intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of the principal
amount, Redemption Price, Purchase Price, Change of Control
Purchase Price, or interest, including additional interest, if
any, and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel
or any other amounts due the Trustee under Section 7.7) and of the
Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 6.10. Priorities. If the Trustee collects any money pursuant to
this Article 6, it shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to Securityholders for amounts due and unpaid on the Securities
for the principal amount, Redemption Price, Purchase Price, Change of Control
Purchase Price or interest, including additional interest, if any, as the case
may be, ratably, without preference or priority of any kind, according to such
amounts due and payable on the Securities; and
THIRD: the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10. At least 15 days before such
record date, the Trustee shall mail to each Securityholder and the Company a
notice that states the record date, the payment date and the amount to be paid.
Section 6.11. Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant (other than
46
the Trustee) in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.7 or a suit by Holders of more than 10% in
aggregate principal amount of the Securities at the time outstanding. This
Section 6.11 shall be in lieu of Section 315(e) of the TIA and such Section
315(e) is hereby expressly excluded from this Indenture, as permitted by the
TIA.
Section 6.12. Waiver of Stay, Extension or Usury Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury or other law
wherever enacted, now or at any time hereafter in force, which would prohibit or
forgive the Company from paying all or any portion of the principal amount,
Redemption Price, Purchase Price or Change of Control Purchase Price in respect
of Securities, or any interest, including additional interest, if any, on such
amounts, as contemplated herein, or which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE VII
TRUSTEE
Section 7.1. Duties of Trustee. (a) If an Event of Default has occurred
and is continuing, the Trustee shall exercise the rights and powers vested in it
by this Indenture and use the same degree of care and skill in its exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties that are specifically
set forth in this Indenture and no others; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Indenture, but in the case of any such
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall examine the certificates and opinions to determine whether
or not they conform to the requirements of this Indenture, but
need not confirm or investigate the accuracy of mathematical
calculations or other facts stated therein.
47
This Section 7.1(b) shall be in lieu of Section 315(a) of the TIA and such
Section 315(a) is hereby expressly excluded from this Indenture, as permitted by
the TIA.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(1) this Section (c) does not limit the effect of Section (b) of this
Section 7.1;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.5.
Subparagraphs (c)(1), (2) and (3) shall be in lieu of Sections 315(d)(1),
315(d)(2) and 315(d)(3) of the TIA and such Sections 315(d)(1), 315(d)(2) and
315(d)(3) are hereby expressly excluded from this Indenture, as permitted by the
TIA.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section 7.1.
(e) The Trustee may refuse to perform any duty or exercise any right or
power or incur any financial liability unless it receives indemnity satisfactory
to it against any loss, liability or expense.
(f) Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee (acting in
any capacity hereunder) shall be under no liability for interest on any money
received by it hereunder unless otherwise agreed in writing with the Company.
Section 7.2. Rights of Trustee. Subject to its duties and
responsibilities under the TIA,
(a) the Trustee may conclusively rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document (whether in
original or facsimile form) believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(b) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
conclusively rely upon an Officers' Certificate;
(c) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not
48
be responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder;
(d) the Trustee shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith which it believes to be authorized or
within its rights or powers conferred under this Indenture;
(e) the Trustee may consult with counsel selected by it and any advice or
Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such advice or Opinion of Counsel;
(f) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders, pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities which may be
incurred therein or thereby;
(g) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(h) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney
at the sole cost of the Company and shall incur no liability or additional
liability of any kind by reason of such inquiry or investigation;
(i) the Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office of the Trustee,
and such notice references the Securities and this Indenture;
(j) the rights, privileges, protections, immunities and benefits given to
the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and to each agent, custodian and other person employed to act
hereunder; and
(k) the Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
49
Section 7.3. Individual Rights of Trustee. The Trustee in its individual
or any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee. Any Paying Agent, Registrar, Conversion Agent or
co-registrar may do the same with like rights. However, the Trustee must comply
with Sections 7.10 and 7.11.
Section 7.4. Trustee's Disclaimer. The Trustee makes no representation as
to the validity or adequacy of this Indenture or the Securities, it shall not be
accountable for the Company's use or application of the proceeds from the
Securities, it shall not be responsible for any statement in the registration
statement for the Securities under the Securities Act or in any offering
document for the Securities, the Indenture or the Securities (other than its
certificate of authentication), or the determination as to which beneficial
owners are entitled to receive any notices hereunder.
Section 7.5. Notice of Defaults. If a Default occurs and if it is known
to the Trustee, the Trustee shall give to each Securityholder notice of the
Default within 90 days after it occurs or, if later, within 15 days after it is
known to the Trustee, unless such Default shall have been cured or waived before
the giving of such notice. Notwithstanding the preceding sentence, except in the
case of a Default described in Section 6.1(1) or (2), the Trustee may withhold
the notice if and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interest of the
Securityholders. The preceding sentence shall be in lieu of the proviso to
Section 315(b) of the TIA and such proviso is hereby expressly excluded from
this Indenture, as permitted by the TIA. The Trustee shall not be deemed to have
knowledge of a Default unless a Responsible Officer of the Trustee has received
written notice of such Default, which notice specifically references this
Indenture and the Securities.
Section 7.6. Reports by Trustee to Holders. Within 60 days after each May
1 beginning with the May 1 following the date of this Indenture, the Trustee
shall mail to each Securityholder a brief report dated as of such May 1 that
complies with TIA Section 313(a), if required by such Section 313(a). The
Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Securityholders shall
be filed with the SEC and each securities exchange, if any, on which the
Securities are listed. The Company agrees to notify the Trustee promptly
whenever the Securities become listed on any securities exchange and of any
delisting thereof.
Section 7.7. Compensation and Indemnity. The Company agrees:
(a) to pay to the Trustee from time to time such compensation as the
Company and the Trustee shall from time to time agree in writing
for all services rendered by it hereunder (which compensation
shall not be limited (to the extent permitted by law) by any
provision of law in regard to the compensation of a trustee of an
express trust);
(b) to reimburse the Trustee upon its request for all expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the
50
expenses, advances and disbursements of its agents and counsel),
except any such expense, disbursement or advance as shall be
determined to have been caused by its own negligence or willful
misconduct; and
(c) to fully indemnify the Trustee or any predecessor Trustee and
their agents for, and to hold them harmless against, any and all
loss, damage, claim, liability, cost or expense (including
attorney's fees and expenses, and taxes (other than taxes based
upon, measured by or determined by the income of the Trustee))
incurred without negligence or willful misconduct on its part,
arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of
defending itself against any claim (whether asserted by the
Company or any Holder or any other person) or liability in
connection with the exercise or performance of any of its powers
or duties hereunder.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay the principal
amount, Redemption Price, Purchase Price, Change of Control Purchase Price or
interest, including additional interest, if any, as the case may be, on
particular Securities.
The Company's payment obligations pursuant to this Section 7.7 shall
survive the discharge of this Indenture and the resignation or removal of the
Trustee. When the Trustee incurs expenses after the occurrence of a Default
specified in Section 6.1(5) or (6), the expenses including the reasonable
charges and expenses of its counsel, are intended to constitute expenses of
administration under any bankruptcy law.
Section 7.8. Replacement of Trustee. The Trustee may resign by so
notifying the Company; provided, however, no such resignation shall be effective
until a successor Trustee has accepted its appointment pursuant to this Section
7.8. The Holders of a majority in aggregate principal amount of the Securities
at the time outstanding may remove the Trustee by so notifying the Trustee and
the Company. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the Trustee or its
property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint, by resolution of
its Board of Directors, a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company satisfactory in form and substance to
the retiring Trustee and the Company. Thereupon the resignation or removal of
the retiring Trustee shall become
51
effective, and the successor Trustee shall have all the rights, powers and
duties of the Trustee under this Indenture. The successor Trustee shall mail a
notice of its succession to Securityholders. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, subject to
the lien provided for in Section 7.7.
If a successor Xxxxxxx does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in aggregate principal amount of the Securities at the
time outstanding may petition at the expense of the Company any court of
competent jurisdiction at the expense of the Company for the appointment of a
successor Xxxxxxx.
If the Trustee fails to comply with Section 7.10, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Section 7.9. Successor Trustee by Xxxxxx. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation, the resulting,
surviving or transferee corporation without any further act shall be the
successor Trustee.
Section 7.10. Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA Sections 310(a)(1) and 310(b). The Trustee
(or its parent holding company) shall have a combined capital and surplus of at
least US$50,000,000 as set forth in its most recent published annual report of
condition. Nothing herein contained shall prevent the Trustee from filing with
the Commission the application referred to in the penultimate paragraph of TIA
Section 310(b).
Section 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE VIII
DISCHARGE OF INDENTURE
Section 8.1. Discharge of Liability on Securities. When (i) the Company
delivers to the Trustee all outstanding Securities (other than Securities
replaced or repaid pursuant to Section 2.7) for cancellation or (ii) all
outstanding Securities have become due and payable and the Company deposits with
the Trustee cash and/or Shares sufficient to pay all amounts due and owing on
all outstanding Securities (other than Securities replaced pursuant to Section
2.7), and if in either case the Company pays all other sums payable hereunder by
the Company, then this Indenture shall, subject to Section 7.7, cease to be of
further effect. The Trustee shall join in the execution of a document prepared
by the Company acknowledging satisfaction and discharge of this Indenture on
demand of the Company accompanied by an Officers' Certificate and Opinion of
Counsel and at the cost and expense of the Company.
52
Section 8.2. Repayment to the Company. The Trustee and the Paying Agent
shall return to the Company upon written request any money or securities held by
them for the payment of any amount with respect to the Securities that remains
unclaimed for two years, subject to applicable unclaimed property law. After
return to the Company, Holders entitled to the money or securities must look to
the Company for payment as general creditors unless an applicable abandoned
property law designates another person and the Trustee and the Paying Agent
shall have no further liability to the Securityholders with respect to such
money or securities for that period commencing after the return thereof.
ARTICLE IX
AMENDMENTS
Section 9.1. Without Consent of Holders. The Company and the Trustee may
amend this Indenture or the Securities without the consent of any Securityholder
to:
(a) add to the covenants of the Company for the benefit of the Holders of
Securities;
(b) surrender any right or power herein conferred upon the Company;
(c) add additional dates on which the Securities shall be purchased by
the Company pursuant to Section 6 of the Securities at the option of the Holder;
(d) provide for conversion rights of Holders of Securities if any
reclassification or change of the Shares or any consolidation, merger or sale of
all or substantially all of the Company's assets occurs;
(e) provide for the assumption of the Company's obligations to the
Holders of Securities in the case of a merger, consolidation, conveyance,
transfer or lease pursuant to Article V hereof;
(f) increase the Conversion Rate; provided, however, that such increase
in the Conversion Rate shall not adversely affect the interests of the Holders
of Securities (after taking into account tax and other consequences of such
increase);
(g) comply with the requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA or the Canada
Business Corporations Act;
(h) make any changes or modifications necessary in connection with the
registration of the Securities under the Securities Act as contemplated in the
Registration Rights Agreement; provided, however, that such action pursuant to
this clause (g) does not, in the good faith opinion of the Board of Directors of
the Company (as evidenced by a Board Resolution) and the Trustee, adversely
affect the interests of the Holders of Securities in any material respect;
(i) cure any ambiguity, to correct or supplement any provision herein
which may be inconsistent with any other provision herein or which is otherwise
defective, or to make
53
any other provisions with respect to matters or questions arising under this
Indenture which the Company may deem necessary or desirable and which shall not
be inconsistent with the provisions of this Indenture; provided, however, that
such action pursuant to this clause (h) does not, in the good faith opinion of
the Board of Directors of the Company (as evidenced by a Board Resolution) and
the Trustee, adversely affect the interests of the Holders of Securities in any
material respect;
(j) add or modify any other provisions herein with respect to matters or
questions arising hereunder which the Company and the Trustee may deem necessary
or desirable and which will not adversely affect the interests of the Holders of
Securities in any material respect; and
(k) eliminate the Company's ability to pay the Redemption Price, Purchase
Price, Change of Control Offer Purchase Price or Principal Amount at Stated
Maturity for the Securities in Shares on the Redemption Date, Purchase Date,
Change of Control Purchase Date or at Stated Maturity, as the case may be, after
the date of that amendment.
Section 9.2. With Consent of Holders. Except as provided below in this
Section 9.2, this Indenture or the Securities may be amended, modified or
supplemented, and noncompliance in any particular instance with any provision of
this Indenture or the Securities may be waived, in each case with the written
consent of the Holders of at least a majority of the principal amount of the
Securities at the time outstanding.
Without the written consent or the affirmative vote of each Holder of
Securities affected thereby, an amendment, supplement or waiver under this
Section 9.2 may not:
(a) change the maturity of the principal amount of, or any installment of
interest, including additional interest, on, any Security;
(b) reduce the principal amount of, or interest, including additional
interest, payable on, or the Redemption Price, Purchase Price or Change of
Control Purchase Price of any Security;
(c) impair or adversely affect the conversion rights of any Holder of
Securities;
(d) reduce the value of the Shares to which reference is made in
determining whether an interest adjustment will be made on the Securities, or
change the method by which this value is calculated;
(e) change the currency of any amount owed or owing under the Security or
any interest thereon from U.S. Dollars;
(f) alter or otherwise modify the rate of interest, including additional
interest, on any Security, or the manner of calculation thereof, or extend time
for payment of any amounts due and payable to the Holders of the Securities;
54
(g) impair the right of any Holder to institute suit for the enforcement
of any payment or with respect to, or conversion of, any Security;
(h) modify the obligation of the Company to maintain an agency in The
City of New York pursuant to Section 4.5;
(i) adversely affect the purchase right of the Holders of the Securities
as provided in Article III or the right of the Holders of the Securities to
convert any Security as provided in Article X;
(j) modify the provisions of Article III in a manner adverse to the
Holders of the Securities;
(k) modify any of the provisions of this Section, or reduce the principal
amount of outstanding Securities required to waive a default, except to provide
that certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each outstanding Security affected thereby;
or
(l) reduce the percentage of the principal amount of the outstanding
Securities the consent of whose Holders is required for any such supplemental
indenture or the consent of whose Holders is required for any waiver provided
for in this Indenture.
It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section 9.2 becomes effective, the Company
shall mail to each Holder a notice briefly describing the amendment.
Nothing in this Section 9.2 shall impair the ability of the Company and
the Trustee to amend this Indenture or the Securities without the consent of any
Securityholder to provide for the assumption of the Company's obligations to the
Holders of Securities in the case of a merger, consolidation, conveyance,
transfer or lease pursuant to Article V hereof.
Section 9.3. Compliance with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall comply with the TIA.
Section 9.4. Revocation and Effect of Consents, Waivers and Actions.
Until an amendment, waiver or other action by Holders becomes effective, a
consent thereto by a Holder of a Security hereunder is a continuing consent by
the Holder and every subsequent Holder of that Security or portion of the
Security that evidences the same obligation as the consenting Holder's Security,
even if notation of the consent, waiver or action is not made on the Security.
However, any such Holder or subsequent Holder may revoke the consent, waiver or
action as to such Holder's Security or portion of the Security if the Trustee
receives the notice of revocation before the date the amendment, waiver or
action becomes effective. After an amendment, waiver or action becomes
effective, it shall bind every Securityholder.
55
Section 9.5. Notation on or Exchange of Securities. Securities
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Securities so
modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
outstanding Securities.
Section 9.6. Trustee to Sign Supplemental Indentures. The Trustee shall
sign any supplemental indenture authorized pursuant to this Article 9 if the
amendment contained therein does not affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may, but need not, sign such
supplemental indenture. In signing such supplemental indenture the Trustee shall
receive, and (subject to the provisions of Section 7.1) shall be fully protected
in relying upon, an Officers' Certificate and an Opinion of Counsel stating that
such amendment is authorized or permitted by this Indenture.
Section 9.7. Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
ARTICLE X
CONVERSIONS
Section 10.1. Conversion Privilege. (a) Subject to and upon compliance
with the provisions of this Article X, a Holder of a Security shall have the
right, at such Holder's option, to convert all or any portion (if the portion to
be converted is $1,000 principal amount or an integral multiple thereof) of such
Security into Shares at the Conversion Rate in effect on the date of conversion:
(1) during any fiscal quarter of the Company (a "FISCAL QUARTER"), if as
of the last day of the immediately preceding Fiscal Quarter, the Sale Price
of the Shares for at least 20 Trading Days in the 30 consecutive Trading Day
period ending on the last day of such preceding Fiscal Quarter was more than
120% of the Conversion Price in effect on such 30th Trading Day;
(2) at any time prior to the close of business on the Business Day
preceding the date fixed for redemption, if such Security has been called
for redemption pursuant to Article III hereof;
(3) at any time following the occurrence and during the continuance of an
Event of Default; or
(4) as provided in Section (b) of this Section 10.1.
56
The Company or a designated agent shall determine on a daily basis
whether the Securities shall be convertible as a result of the occurrence of an
event specified in clauses (1) through (4) above and, if the Securities shall be
so convertible, the Company shall promptly deliver to the Trustee and Conversion
Agent written notice thereof. Whenever the Securities shall become convertible
pursuant to Section 10.1, the Company or, at the Company's request, the Trustee
in the name and at the expense of the Company, shall notify the Holders of the
event triggering such convertibility in the manner provided in Section 11.2, and
the Company shall also publicly announce such information and publish it on the
Company's Web site. Any notice so given shall be conclusively presumed to have
been duly given, whether or not the Holder receives such notice.
(b) In addition, in the event that:
(1) the Company makes a distribution described in Section 10.3(d) or (f),
the Fair Market Value (as determined by the Board of Directors) of such
distribution per Share exceeds 15% of the Sale Price of a Share on the
Business Day immediately preceding the date of declaration of such
distribution, then, in each case, the Securities may be surrendered for
conversion at any time on and after the date that the Company gives notice
to the Holders of such right, which shall be not less than 20 days prior to
the Ex-Dividend Time for such distribution, until the earlier of the close
of business on the Business Day immediately preceding the Ex-Dividend Time
or the date the Company announces that such distribution will not take
place; or
(2) the Company consolidates with or merges into another Person, or
transfers, sells, leases or otherwise disposes of all or substantially all
of its assets, or is a party to a binding share exchange pursuant to which
the Shares would be converted into cash, securities or other property as set
forth in Section 10.4 hereof, then the Securities may be surrendered for
conversion at any time from and after the date which is 15 days prior to the
date announced by the Company as the anticipated effective time of such
transaction until 15 days after the actual date of such transaction, and, at
such effective time, the right to convert the Securities into Shares shall
be changed, as set forth in Section 10.4, into a right to convert into the
kind and amount of such cash, securities or other property which the Holder
of such Securities would have received if such Holder had converted the
Securities immediately prior to such transaction. However, if such event or
transaction occurs before July 15, 2008, the consideration into which the
Securities will be convertible will be limited to Shares or other prescribed
securities (within the meaning of the Canada Income Tax Act).
"EX-DIVIDEND TIME" means, with respect to any issuance or distribution on
Shares, the first date on which the Shares trade regular way on the principal
securities market on which the Shares are then traded without the right to
receive such issuance or distribution.
Section 10.2. Conversion Procedure; Conversion Rate; Fractional Shares.
(a) Each Security shall be convertible at the office of the Conversion
Agent into fully paid and nonassessable Shares (calculated to the nearest
1/10,000th of a Share). The rate at which Shares shall be delivered upon
conversion (the "CONVERSION RATE") shall be
57
initially 4.7057 Shares for each $1,000 principal amount of Securities. The
Conversion Rate shall be adjusted in certain instances as provided in Section
10.3 hereof, but shall not be adjusted for any accrued and unpaid interest, or
additional interest, if any. Upon conversion, no payment shall be made by the
Company with respect to any accrued and unpaid interest or additional interest,
if any. Instead, such amount shall be deemed paid by the Shares delivered upon
conversion of any Security. In addition, no payment or adjustment shall be made
in respect of dividends on the Shares on a converted Security. The Company shall
not issue any fraction of Share in connection with any conversion of Securities,
but instead shall, subject to Section 10.3(h) hereof, make a cash payment
(calculated to the nearest cent) equal to such fraction multiplied by the Sale
Price of the Shares on the last Trading Day prior to the date of conversion.
Notwithstanding the foregoing, a Security in respect of which a Holder has
delivered a Purchase Notice or Change of Control Purchase Notice may be
converted only if such notice of exercise is withdrawn in accordance with the
Section 3.12 hereof.
(b) Before any Holder of a Security shall be entitled to convert the same
into Shares, such Holder shall, in the case of Securities issued in global form,
comply with the procedures of the Depositary in effect at that time, and in the
case of definitive Securities, surrender such Securities, duly endorsed to the
Company or in blank, at the office of the Conversion Agent, and shall give
written notice to the Company in form on reverse of such definitive Security (a
"NOTICE OF CONVERSION") at said office or place that such Holder elects to
convert the same and shall state in writing therein the principal amount of
Securities to be converted and the name or names (with addresses) in which such
Holder wishes the certificate or certificates for Shares to be issued.
Before any such conversion, a Holder also shall pay all taxes or duties,
if any, as provided in Section 10.5.
If more than one Security shall be surrendered for conversion at one time
by the same Holder, the number of full Shares which shall be deliverable upon
conversion shall be computed on the basis of the aggregate principal amount of
the Securities (or specified portions thereof to the extent permitted thereby)
so surrendered. Subject to the next succeeding sentence, the Company will, as
soon as practicable thereafter, issue and deliver at said office or place to
such Holder of a Security, or to such Xxxxxx's nominee or nominees, certificates
for the number of full Shares to which such Holder shall be entitled as
aforesaid, together, subject to the last sentence of Section 10.2(a) above, with
cash in lieu of any fraction of a share to which such Holder would otherwise be
entitled. The Company shall not be required to deliver certificates for Shares
while the stock transfer books for such stock or the security register are duly
closed for any purpose, but certificates for Shares shall be issued and
delivered as soon as practicable after the opening of such books or security
register.
(c) A Security shall be deemed to have been converted as of the close of
business on the date of the surrender of such Securities for conversion,
accompanied by the Notice of Conversion, as provided above, and the person or
persons entitled to receive the Shares issuable upon such conversion shall be
treated for all purposes as the record Holder or Holders of such Shares as of
the close of business on such date.
58
(d) In case any Security shall be surrendered for partial conversion, the
Company shall execute and the Trustee shall authenticate and deliver to or upon
the written order of the Holder of the Security so surrendered, without charge
to such Holder (subject to the provisions of Section 10.5 hereof), a new
Security or Securities in authorized denominations in an aggregate principal
amount equal to the unconverted portion of the surrendered Securities.
(e) By delivering to the Holder the number of Shares issuable upon
conversion, together with cash in lieu of any fractional shares as provided in
Section 10.2(b) hereof, the Company will satisfy its obligation with respect to
the Security, and upon such delivery accrued and unpaid interest, and additional
interest, if any, with respect to such Security will be deemed to be paid in
full rather than canceled, extinguished or forfeited.
(f) If a Holder delivers a Notice of Conversion after the Interest Record
Date for a payment of interest but prior to the corresponding Interest Payment
Date, such Holder must pay to the Company, at the time such Holder surrenders
Securities for Conversion, an amount equal to the interest and additional
interest, that has accrued and will be paid on the related Interest Payment
Date. This Section 10.2(f) shall not apply to a Holder that converts Securities
that are called by the Company for redemption pursuant to Section 3.1 after an
Interest Record Date for a payment of Interest but prior to the corresponding
Interest Payment Date.
Section 10.3. Adjustment of Conversion Rate. The Conversion Rate shall be
adjusted from time to time by the Company as follows:
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Shares in Shares (regardless of
whether such dividend or distribution is received and accepted by any holder of
outstanding Shares), the Conversion Rate shall be increased so that the same
shall equal the rate determined by dividing the Conversion Rate in effect at the
opening of business on the date following the Record Date by a fraction,
(i) the numerator of which shall be the number of Shares outstanding
at the close of business on the date fixed for such determination; and
(ii) the denominator of which shall be the sum of such number of
Shares and the total number of Shares constituting such dividend or other
distribution,
such increase to become effective immediately after the opening of business on
the day following the Record Date. For the purpose of this paragraph (a), the
number of Shares at any time outstanding shall not include Shares held in the
treasury of the Company. The Company will not pay any dividend or make any
distribution on Shares held in the treasury of the Company. If any dividend or
distribution of the type described in this Section 10.3(a) is declared but not
so paid or made, the Conversion Rate shall again be adjusted to the Conversion
Rate that would then be in effect if such dividend or distribution had not been
declared.
(b) In case the Company shall issue rights or warrants to all holders of
its outstanding Shares entitling them for a period expiring within forty-five
(45) days after the Record Date, to subscribe for or purchase Shares at a price
per share less than the Current Market Price (as defined below) on the Record
Date, the Conversion Rate shall be adjusted so that the
59
same shall equal the rate determined by dividing the Conversion Rate in effect
immediately prior to the Record Date,
(i) the numerator of which shall be the number of Shares
outstanding at the close of business on the Record Date plus the number
of Shares that the aggregate offering price of the total number of Shares
so offered would purchase at such Current Market Price, and
(ii) the denominator of which shall be the number of Shares
outstanding on the Record Date plus the total number of additional Shares
offered for subscription or purchase.
Such adjustment shall be successively made whenever any such rights or
warrants are issued, and shall become effective immediately after the opening of
business on the day following any such Record Date. To the extent that Shares
are not delivered pursuant to such rights or warrants, upon the expiration or
termination of such rights or warrants, the Conversion Rate shall be readjusted
to the Conversion Rate that would then be in effect had the adjustments made
upon the issuance of such rights or warrants been made on the basis of delivery
of only the number of Shares actually delivered. In the event that such rights
or warrants are not so issued, the Conversion Rate shall again be adjusted to be
the Conversion Rate that would then be in effect if such date fixed for the
determination of shareholders entitled to receive such rights or warrants had
not been fixed. In determining whether any rights or warrants entitle the
holders to subscribe for or purchase Shares at less than such Current Market
Price, and in determining the aggregate offering price of such Shares, there
shall be taken into account any consideration received by the Company for such
rights or warrants and any amount payable on exercise or conversion thereof, the
value of such consideration, if other than cash, to be determined by the Board
of Directors.
(c) In case outstanding Shares shall be subdivided into a greater number
of Shares, the Conversion Rate in effect at the opening of business on the day
following the day upon which such subdivision becomes effective shall be
proportionately increased, and conversely, in case outstanding Shares shall be
combined into a smaller number of Shares, the Conversion Rate in effect at the
opening of business on the day following the day upon which such combination
becomes effective shall be proportionately reduced, such increase or reduction,
as the case may be, to become effective immediately after the opening of
business on the day following the day upon which such subdivision or combination
becomes effective.
(d) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Shares of any class of Capital Stock of the Company or
evidences of its indebtedness or assets (including securities, but excluding any
rights or warrants referred to in Section 10.3(e), dividends or distributions of
stock referred to in Section 10.3(a), 10.3(b) and excluding any dividend or
distribution paid exclusively in cash referred to in Section 10.3(f)) (any of
the foregoing hereinafter in this Section 10.3(d) called the "DISTRIBUTED
ASSETS"), then, in each such case (unless the Company elects to reserve such
Distributed Assets for distribution to the Holders upon the conversion of the
Securities so that any such holder converting Securities will receive upon such
conversion, in addition to the Shares to which such holder is entitled, the
amount and kind of such Distributed Assets which such holder would have received
if such
60
holder had converted its Securities into Shares immediately prior to the Record
Date for such distribution of the Distributed Assets), the Conversion Rate shall
be adjusted so that the same shall be equal to the rate determined by dividing
the Conversion Rate in effect on the Record Date with respect to such
distribution by a fraction,
(i) the numerator of which shall be the Current Market Price per
Share on such Record Date less the Fair Market Value (as determined by
the Board of Directors, whose determination shall be conclusive, and
described in a resolution of the Board of Directors) on the Record Date
of the portion of the Distributed Assets so distributed applicable to one
Share; and
(ii) the denominator of which shall be the Current Market Price
per Share,
such adjustment to become effective immediately prior to the opening of business
on the day following such Record Date; provided, however, that in the event (1)
the then fair market value (as so determined) of the portion of the Distributed
Assets so distributed applicable to one Share is equal to or greater than the
Current Market Price of the Shares on the Record Date or (2) the Current Market
Price of Shares on the Record Date exceeds the then fair market value (as so
determined) of the portion of the Distributed Assets so distributed applicable
to one Share by less than $1.00, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder shall have the right to receive upon
conversion the amount of Distributed Assets such holder would have received had
such holder converted each Security on the Record Date. In the event that such
dividend or distribution is not so paid or made, the Conversion Rate shall again
be adjusted to be the Conversion Rate that would then be in effect if such
dividend or distribution had not been declared. If the Board of Directors
determines the fair market value of any distribution for purposes of this
Section 10.3(d) by reference to the actual or when issued trading market for any
securities, it must in doing so consider the prices in such market over the same
period used in computing the Current Market Price of the Shares. However, if
such event or transaction occurs before July 15, 2008, the consideration into
which the Securities will be convertible will be limited to Shares or other
prescribed securities (within the meaning of the Canada Income Tax Act).
Rights or warrants distributed by the Company to all holders of Shares
entitling the holders thereof to subscribe for or purchase shares of the
Company's Capital Stock other than Shares, except as set forth in the second
paragraph following this paragraph (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a specified
event or events ("TRIGGER EVENT"): (i) are deemed to be transferred with such
Shares; (ii) are not exercisable; and (iii) are also issued in respect of future
issuances of Shares, shall be deemed not to have been distributed for purposes
of this Section 10.3 (and no adjustment to the Conversion Rate under this
Section 10.3 will be required) until the occurrence of the earliest Trigger
Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the Conversion
Rate shall be made under this Section 10.3(d). If any such right or warrant,
including any such existing rights or warrants distributed prior to the date of
this Indenture, are subject to events, upon the occurrence of which such rights
or warrants become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the date of the occurrence of any and each
such event shall be deemed to be the date of
61
distribution and record date with respect to new rights or warrants with such
rights (and a termination or expiration of the existing rights or warrants
without exercise by any of the holders thereof). In addition, in the event of
any distribution (or deemed distribution) of rights or warrants, or any Trigger
Event or other event (of the type described in the preceding sentence) with
respect thereto that was counted for purposes of calculating a distribution
amount for which an adjustment to the Conversion Rate under this Section 10.3
was made, (1) in the case of any such rights or warrants that shall all have
been redeemed or repurchased without exercise by any holders thereof, the
Conversion Rate shall be readjusted upon such final redemption or repurchase to
give effect to such distribution or Trigger Event, as the case may be, as though
it were a cash distribution, equal to the per share redemption or repurchase
price received by a holder or holders of Shares with respect to such rights or
warrants (assuming such holder had retained such rights or warrants), made to
all holders of Shares as of the date of such redemption or repurchase, and (2)
in the case of such rights or warrants that shall have expired or been
terminated without exercise by any holders thereof, the Conversion Rate shall be
readjusted as if such rights and warrants had not been issued.
No adjustment of the Conversion Rate shall be made pursuant to this
Section 10.3(d) in respect of rights or warrants distributed or deemed
distributed on any Trigger Event to the extent that such rights or warrants are
actually distributed, or reserved by the Company for distribution to holders of
Securities upon conversion by such holders of Securities to Shares.
For purposes of this Section 10.3(d) and Sections 10.3(a) and (b), any
dividend or distribution to which this Section 10.3(d) is applicable that also
includes Shares, or rights or warrants to subscribe for or purchase Shares (or
both), shall be deemed instead to be (1) a dividend or distribution of the
evidences of indebtedness, assets or shares of capital stock other than such
Shares or rights or warrants (and any Conversion Rate adjustment required by
this Section 10.3(d) with respect to such dividend or distribution shall then be
made) immediately followed by (2) a dividend or distribution of such Shares or
such rights or warrants (and any further Conversion Rate adjustment required by
Sections 10.3(a) and (b) with respect to such dividend or distribution shall
then be made), except (A) the Record Date of such dividend or distribution shall
be substituted as "the date fixed for the determination of shareholders entitled
to receive such dividend or other distribution", "the date fixed for the
determination of shareholders entitled to receive such rights or warrants" and
"the date fixed for such determination" within the meaning of Sections 10.3(a)
and (b), and (B) any Shares included in such dividend or distribution shall not
be deemed "outstanding at the close of business on the date fixed for such
determination" within the meaning of Section 10.3(a).
(e) In case a tender offer or exchange offer made by the Company or any
of its Subsidiaries for all or any portion of the Shares shall expire and such
tender offer or exchange offer (as amended upon the expiration thereof) shall
require the payment to shareholders (based on the acceptance (up to any maximum
specified in the terms of the tender offer or exchange offer) of Shares
tendered) of an aggregate consideration having a Fair Market Value (as
determined in good faith by the Board of Directors) that combined together with:
(i) the aggregate amount of the cash, plus the Fair Market Value, as
of the expiration of such tender offer or exchange offer, of any other
consideration payable in respect of any other tender offers or exchange
offers, by the Company
62
or any of its Subsidiaries for all or any portion of the Shares expiring
within the 12 months preceding the expiration of such tender offer or
exchange offer and in respect of which no adjustment pursuant to this
Section 10.3(e) has been made; and
(ii) the aggregate amount of any distributions to all holders of
Shares made exclusively in cash within 12 months preceding the expiration
of such tender offer and in respect of which no adjustment pursuant to
Section 10.3(f) has been made (excluding cash consideration payable in
respect of any open market repurchase program referred to in this Section
10.3(e));
exceeds 10% of the product of the Sale Price of the Shares as of the last time
(the "EXPIRATION TIME") tenders could have been made pursuant to such tender
offer (as it may be amended), times the number of Shares outstanding (including
any tendered shares) on the Expiration Time, then, and in each such case,
immediately prior to the opening of business on the day after the date of the
Expiration Time, the Conversion Rate shall be adjusted so that the same shall
equal the price determined by multiplying the Conversion Rate in effect
immediately prior to the close of business on the date of the Expiration Time by
a fraction:
(i) the numerator of which shall be the sum of (x) the Fair Market
Value (determined as aforesaid) of the aggregate consideration payable to
shareholders based on the acceptance (up to any maximum specified in the
terms of the tender or exchange offer) of all Shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the Shares deemed
so accepted up to any such maximum, being referred to as the "PURCHASED
SHARES") and (y) the product of (1) the number of Shares outstanding less
any Purchased Shares at the Expiration Time and (2) the last reported
Sale Price of the Shares (determined as provided in the definition of
Current Market Price) on the Trading Day next succeeding the Expiration
Time, and
(ii) the denominator of which shall be the number of Shares
outstanding (including any tendered or exchanged shares) at the
Expiration Time multiplied by last reported Sale Price of the Shares
(determined as provided in the definition of the Current Market Price) on
the Trading Day next succeeding the Expiration Time,
such reduction (if any) shall become effective immediately prior to the opening
of business on the day following the Expiration Time. In the event that the
Company is obligated to purchase Shares pursuant to any such tender offer, but
the Company is permanently prevented by applicable law from effecting any such
purchases or all or a portion of such purchases are rescinded, the Conversion
Rate shall again be adjusted to be the Conversion Rate which would then be in
effect if such (or such portion of the) tender offer had not been made. If the
application of this Section 10.3(e) to any tender offer would result in an
increase in the Conversion Rate, no adjustment shall be made for such tender
offer under this Section 10.3(e).
(f) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Shares cash (regardless of whether such dividend or
distribution is received and
63
accepted by any holder of outstanding Shares) (excluding any dividend or
distribution in connection with the liquidation, dissolution or winding up of
the Company, whether voluntary or involuntary), to the extent that the aggregate
amount of any such cash distributions and dividends in any 12-month period
exceeds, with respect to the period:
(A) prior to July 15, 2008, Cdn$3.00 per Share (or if such
distribution or dividend is declared in U.S. dollars, as
determined using the noon buying rate in The City of New York
for cable transfers in Canadian dollars as certified for
customs purposes by the Federal Reserve Bank of New York on
the date such distribution or dividend is declared); or
(B) on or after July 15, 2008, 4.0% of the Current Market Price
(as defined in Section 10.3(g)) of the Shares,
in each case as determined on the Record Date for such distribution or dividend,
then, in such case, the Conversion Rate shall be increased so that the same
shall equal the rate determined by multiplying the Conversion Rate in effect on
the applicable Record Date by a fraction,
(i) the numerator of which shall be the Current Market Price on such
Record Date; and
(ii) the denominator of which shall be the Current Market Price on
such Record Date less the amount of the excess distribution as applicable
to one Share,
such adjustment to be effective immediately prior to the opening of business on
the day following the Record Date. If such dividend or distribution is not so
paid or made, the Conversion Rate shall again be adjusted to be the Conversion
Rate that would then be in effect if such dividend or distribution had not been
declared. If any adjustment is required to be made as set forth in this Section
10.3(f), such adjustment shall be based upon the amount by which such
distribution exceeds the amount permitted to be excluded pursuant hereto.
(g) For purposes of this Section 10.3, the following terms shall have the
meaning indicated:
(i) "CURRENT MARKET PRICE" shall mean the average of the daily Sale
Prices per Share for the three consecutive Trading Days ending on the
earlier of the Record Date and the day before the ex date with respect to
the issuance, distribution, subdivision or combination requiring such
computation immediately prior to the date in question. For purpose of
this paragraph, the term "ex" date, (1) when used with respect to any
issuance or distribution, means the first date on which the Shares trade,
regular way, on the relevant exchange or in the relevant market from
which the Sale Price was obtained without the right to receive such
issuance or distribution, and (2) when used with respect to any
subdivision or combination of Shares, means the first date on which the
Shares trade, regular way, on such exchange or in such market from which
the Sale Price was obtained without the right to receive such
distribution.
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In the event that another issuance, distribution, subdivision,
combination or tender or exchange offer to which Section 10.3 applies occurs
during the period applicable for calculating "Current Market Price" pursuant to
the definition in the preceding paragraph, "Current Market Price" shall be
calculated for such period in a manner determined by the Board of Directors to
reflect the impact of such issuance, distribution, subdivision, combination or
tender or exchange offer on the Sale Price of the Shares during such period.
(ii) "FAIR MARKET VALUE" shall mean the amount which a willing buyer
would pay a willing seller in an arm's-length transaction.
(iii) "RECORD DATE" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of Shares
have the right to receive any cash, securities or other property or in
which the Shares (or other applicable security) are exchanged for or
converted into any combination of cash, securities or other property, the
date fixed for determination of shareholders entitled to receive such
cash, securities or other property (whether such date is fixed by the
Board of Directors or by statute, contract or otherwise).
(h) The Company may make such increases in the Conversion Rate, in
addition to those required by Sections 10.3(a), (b), (c), (d), (e) or (f) as the
Board of Directors considers to be advisable; provided, however, that such
increase in the Conversion Rate shall not adversely affect the interests of the
Holders of Securities (after taking into account tax and other consequences of
such increase).
To the extent permitted by applicable law, the Company from time to time
may increase the Conversion Rate by any amount for any period of time if the
period is at least twenty (20) days, the increase is irrevocable during the
period and the Board of Directors shall have made a determination that such
increase would be in the best interests of the Company, which determination
shall be conclusive. Whenever the Conversion Rate is increased pursuant to the
preceding sentence, the Company shall mail to holders of record of the
Securities a notice of the increase at least fifteen (15) days prior to the date
the increased Conversion Rate takes effect, and such notice shall state the
increased Conversion Rate and the period during which it will be in effect.
(i) No adjustment in the Conversion Rate shall be required unless such
adjustment would require an increase or decrease of at least one percent (1%) in
such rate; provided, however, that any adjustments that by reason of this
Section 10.3(i) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Article X
shall be made by the Company and shall be made to the nearest cent or to the
nearest one-ten-thousandth (1/10,000) of a share, as the case may be, with one
half-cent and 0.00005 of a share, respectively, being rounded upward. No
adjustment need be made for rights to purchase Shares pursuant to a Company plan
for reinvestment of dividends or interest. To the extent the Securities become
convertible into cash, assets, property or securities (other than capital stock
of the Company), no adjustment need be made thereafter as to the cash, assets,
property or such securities.
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(j) Whenever the Conversion Rate is adjusted as herein provided, the
Company shall promptly file with the Trustee and any conversion agent other than
the Trustee an Officers' Certificate setting forth the Conversion Rate after
such adjustment and setting forth a brief statement of the facts requiring such
adjustment. Unless and until a Responsible Officer of the Trustee shall have
received such Officers' Certificate, the Trustee shall not be deemed to have
knowledge of any adjustment of the Conversion Rate and may assume that the last
Conversion Rate of which it has knowledge is still in effect. Promptly after
delivery of such certificate, the Company shall prepare a notice of such
adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and
the date on which each adjustment becomes effective and shall mail such notice
of such adjustment of the Conversion Rate to the holder of each Security at his
last address appearing on the Security register provided for in Section 2.3 of
this Indenture, within twenty (20) days after execution thereof. Failure to
deliver such notice shall not affect the legality or validity of any such
adjustment.
(k) In any case in which this Section 10.3 provides that an adjustment
shall become effective immediately after (1) a record date or Record Date for an
event, (2) the date fixed for the determination of shareholders entitled to
receive a dividend or distribution pursuant to Section 10.3(a), (3) a date fixed
for the determination of shareholders entitled to receive rights or warrants
pursuant to Section 10.3(b), or (4) the Expiration Time for any tender offer
pursuant to Section 10.3(e), (each a "DETERMINATION DATE"), the Company may
elect to defer until the occurrence of the relevant Adjustment Event (as
hereinafter defined) (x) issuing to the holder of any Security converted after
such Determination Date and before the occurrence of such Adjustment Event, the
additional Shares or other securities issuable upon such conversion by reason of
the adjustment required by such Adjustment Event over and above the Shares
issuable upon such conversion before giving effect to such adjustment and (y)
paying to such holder any amount in cash in lieu of any fraction pursuant to
Section 10.3(a). For purposes of this Section 10.3(k), the term "ADJUSTMENT
EVENT" shall mean:
(i) in any case referred to in clause (1) hereof, the occurrence of
such event,
(ii) in any case referred to in clause (2) hereof, the date any such
dividend or distribution is paid or made,
(iii) in any case referred to in clause (3) hereof, the date of
expiration of such rights or warrants, and
(iv) in any case referred to in clause (4) hereof, the date a sale or
exchange of Shares pursuant to such tender or exchange offer is
consummated and becomes irrevocable.
(l) For purposes of this Section 10.3, the number of Shares at any time
outstanding shall not include Shares held in the treasury of the Company, but
shall include the Shares held by any Person in which the Company holds a direct
or indirect interest (including, but not limited to, The Sixty Two Investment
Company Limited), regardless of whether the dividend or distribution is received
and accepted by such Person, and shall include Shares
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issuable in respect of scrip certificates issued in lieu of fractions of Shares.
The Company will not pay any dividend or make any distribution on Shares held in
the treasury of the Company.
Section 10.4. Effect of Reclassification, Consolidation, Merger or Sale.
If any of the following events occurs, namely (i) any reclassification or change
of the outstanding Shares (other than a subdivision or combination to which
Section 10.3(c) applies), (ii) any consolidation, merger or binding share
exchange of the Company with another Person as a result of which holders of
Shares shall be entitled to receive Shares, other securities or other property
or assets (including cash) with respect to or in exchange for such Shares, or
(iii) any sale or conveyance of the properties and assets of the Company
substantially as an entirety to any other Person as a result of which holders of
Shares shall be entitled to receive Shares, other securities or other property
or assets (including cash) with respect to or in exchange for such Shares, and
(i) the Company is not the surviving or resulting entity, (ii) the transaction
is not with an Affiliate of the Company and (iii) after the transaction, either
more than 50% of the surviving or resulting entity's total voting power is not
held by the Company's pre-transaction shareholders or more than 50% of the
surviving or resulting entity's directors were not directors of the Company,
then the Company or the successor or purchasing Person, as the case may be,
shall execute with the Trustee a supplemental indenture (which shall comply with
the Trust Indenture Act as in force at the date of execution of such
supplemental indenture) providing that each Security shall be convertible into
the kind and amount of Shares, other securities or other property or assets
(including cash) receivable upon such reclassification, change, consolidation,
merger, binding share exchange, sale or conveyance by a holder of a number of
Shares issuable upon conversion of such Securities (assuming, for such purposes,
a sufficient number of authorized Shares are available to convert all such
Securities) immediately prior to such reclassification, change, consolidation,
merger, binding share exchange, sale or conveyance assuming such holder of
Shares did not exercise his rights of election, if any, as to the kind or amount
of Shares, other securities or other property or assets (including cash)
receivable upon such reclassification, change, consolidation, merger, binding
share exchange, combination, sale or conveyance (provided that, if the kind or
amount of Shares, other securities or other property or assets (including cash)
receivable upon such reclassification, change, consolidation, merger, binding
share exchange, combination, sale or conveyance is not the same for each Share
in respect of which such rights of election shall not have been exercised
("NON-ELECTING SHARE"), then for the purposes of this Section 10.4 the kind and
amount of Shares, other securities or other property or assets (including cash)
receivable upon such reclassification, change, consolidation, merger, statutory
share exchange, combination, sale or conveyance for each nonelecting share shall
be deemed to be the kind and amount so receivable per share by a plurality of
the nonelecting shares). Such supplemental indenture shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article X. However, if such event or
transaction occurs before July 15, 2008, the consideration into which the
Securities will be convertible will be limited to Shares or other prescribed
securities (within the meaning of the Canada Income Tax Act).
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder, at its address appearing on the Security
register provided for in Section 2.3 of this Indenture, within twenty (20) days
after execution thereof. Failure to deliver such notice shall not affect the
legality or validity of such supplemental indenture.
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The above provisions of this Section shall similarly apply to successive
reclassifications, changes, consolidations, mergers, statutory share exchanges,
combinations, sales and conveyances.
If this Section 10.4 applies to any event or occurrence, Section 10.3
shall not apply.
Section 10.5. Taxes on Shares Issued. The issue of Share certificates on
conversions of Securities shall be made without charge to the converting Holder
for any tax in respect of the issue thereof. The Company shall not, however, be
required to pay any tax which may be payable in respect of any transfer involved
in the issue and delivery of Shares in any name other than that of the holder of
any Securities converted, and the Company shall not be required to issue or
deliver any such Share certificate unless and until the Person or Persons
requesting the issue thereof shall have paid to the Company the amount of such
tax or shall have established to the satisfaction of the Company that such tax
has been paid.
Section 10.6. Reservation of Shares, Shares to Be Fully Paid; Compliance
with Governmental Requirements; Listing of Shares. (a) The Company shall
provide, free from preemptive rights, out of its authorized but unissued Shares
or Shares held in treasury, sufficient Shares to provide for the conversion of
the Securities from time to time as such Securities are presented for
conversion.
(b) Before taking any action which would cause an adjustment increasing
the Conversion Rate to an amount that would cause the Conversion Price to be
reduced below the then par value, if any, of the Shares issuable upon conversion
of the Securities, the Company will take all corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may validly and
legally issue such Shares at such adjusted Conversion Rate.
(c) (i) The Company covenants that all Shares which may be issued upon
conversion of Securities or in payment of the Redemption Price, Purchase Price,
the Change of Control Purchase Price or Principal Amount at Stated Maturity will
upon issue be fully paid and non-assessable by the Company and free from all
taxes, liens and charges with respect to the issue thereof.
(ii) The Company covenants that, if any Shares to be provided for the
purpose of conversion of Securities hereunder or for payment of the
Redemption Price, Purchase Price, the Change of Control Purchase Price or
Principal Amount at Stated Maturity require registration with or approval
of any governmental authority under any federal or state law before such
Shares may be validly issued upon conversion, the Company will in good
faith and as expeditiously as possible, to the extent then permitted by
the rules and interpretations of the SEC (or any successor thereto),
endeavor to secure such registration or approval, as the case may be.
(iii) The Company further covenants that, so long as the Shares are
listed on the NYSE or any other U.S. national securities exchange or
automated quotation system, the Company will, if permitted by the rules
of such exchange or automated quotation system, list and keep listed, so
long as the Shares shall be so
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listed on such exchange or automated quotation system, all Shares
issuable upon conversion of the Security or in payment of the Redemption
Price, Purchase Price, the Change of Control Purchase Price or Principal
Amount at Stated Maturity; provided, however, that, if the rules of such
exchange or automated quotation system permit the Company to defer the
listing of such Shares until the first conversion of the Securities into
Shares or the first payment of the Redemption Price, Purchase Price, the
Change of Control Purchase Price or Principal Amount at Stated Maturity
in Shares in accordance with the provisions of this Indenture, the
Company covenants to list such Shares issuable upon conversion of the
Securities or in payment of the Redemption Price, Purchase Price, the
Change of Control Purchase Price or Principal Amount at Stated Maturity
in accordance with the requirements of such exchange or automated
quotation system at such time.
Section 10.7. Responsibility of Trustee. The Trustee and any other
conversion agent shall not at any time be under any duty or responsibility to
any holder of Securities to determine the Conversion Rate or whether any facts
exist which may require any adjustment of the Conversion Rate, or with respect
to the nature or extent or calculation of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. The Trustee and any other
conversion agent shall not be accountable with respect to the validity or value
(or the kind or amount) of any Shares, or of any securities or property, which
may at any time be issued or delivered upon the conversion of any Security; and
the Trustee and any other conversion agent make no representations with respect
thereto. Neither the Trustee nor any conversion agent shall be responsible for
any failure of the Company to issue, transfer or deliver any Shares or stock
certificates or other securities or property or cash upon the surrender of any
Security for the purpose of conversion or to comply with any of the duties,
responsibilities or covenants of the Company contained in this Article X.
Without limiting the generality of the foregoing, neither the Trustee nor any
conversion agent shall be under any responsibility to determine the correctness
of any provisions contained in any supplemental indenture entered into pursuant
to Section 10.4 relating either to the kind or amount of Shares or securities or
property (including cash) receivable by Holders upon the conversion of their
Securities after any event referred to in such Section 10.4 or to any adjustment
to be made with respect thereto, but, subject to the provisions of Section 7.1,
may accept as conclusive evidence of the correctness of any such provisions, and
shall be protected in relying upon, the Officers' Certificate (which the Company
shall be obligated to file with the Trustee prior to the execution of any such
supplemental indenture) with respect thereto.
Section 10.8. Notice To Holders Prior To Certain Actions. In case:
(a) the Company shall declare a dividend (or any other distribution) on
its Shares that would require an adjustment in the Conversion Rate pursuant to
Section 10.3; or
(b) the Company shall authorize the granting to the holders of all or
substantially all of its Shares of rights or warrants to subscribe for or
purchase any share of any class or any other rights or warrants; or
(c) of any reclassification or reorganization of the Shares of the
Company (other than a subdivision or combination of its outstanding Shares, or a
change in par value, or
69
from par value to no par value, or from no par value to par value), or of any
consolidation, merger or statutory share exchange to which the Company is a
party and for which approval of any shareholders of the Company is required, or
of the sale or transfer of all or substantially all of the assets of the
Company; or
(d) of the voluntary or involuntary dissolution, liquidation or winding
up of the Company;
the Company shall cause to be filed with the Trustee and to be mailed to each
Holder of Securities at his address appearing on the register provided for in
Section 10.3 of this Indenture, as promptly as possible but in any event at
least twenty (20) days prior to the applicable date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution of rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Shares of record to be entitled to
such dividend, distribution or rights are to be determined, or (y) the date on
which such reclassification, consolidation, merger, or statutory share exchange,
sale, transfer, dissolution, liquidation or winding up is expected to become
effective or occur, and the date as of which it is expected that holders of
Shares of record shall be entitled to exchange their Shares for securities or
other property deliverable upon such reclassification, consolidation, merger, or
statutory share exchange, sale, transfer, dissolution, liquidation or winding
up. Failure to give such notice, or any defect therein, shall not affect the
legality or validity of such dividend, distribution, reclassification,
consolidation, merger, or statutory share exchange, sale, transfer, dissolution,
liquidation or winding up.
Section 10.9. Payment of Cash in Lieu of Shares. If a Holder elects to
convert all or any portion of a Security into Shares as set forth in this
Section 10 and the Company receives such Holder's conversion notice on or prior
to the day that is 20 days prior to the Stated Maturity (the "FINAL NOTICE
DATE"), the Company may choose to satisfy all or any portion of its conversion
obligation (the "CONVERSION OBLIGATION") in cash. Upon such election, the
Company will notify such Holder through the Trustee of the dollar amount to be
satisfied in cash (which must be expressed either as 100% of the Conversion
Obligation or as a fixed dollar amount) at any time on or before the date that
is two Business Days following receipt of written notice of conversion as
specified in Section 10.8 (such period, the "CASH SETTLEMENT NOTICE PERIOD"). If
the Company elects to pay cash for any portion of the shares otherwise issuable
to the Holder, the Holder may retract the conversion notice at any time during
the two Business Day period beginning on the day after the final day of the Cash
Settlement Notice Period (a "CONVERSION RETRACTION PERIOD"); no such retraction
can be made (and a conversion notice shall be irrevocable) if the Company does
not elect to deliver cash in lieu of shares (other than cash in lieu of
fractional shares). If the conversion notice has not been retracted, then
settlement (in cash and/or shares) will occur on the Business Day following the
final day of the 20 Trading Day period beginning on the day after the final day
of the Conversion Retraction Period (the "CASH SETTLEMENT AVERAGING PERIOD").
Settlement amounts will be computed as follows:
(i) if the Company elects to satisfy the entire Conversion Obligation
in Shares, the Company will deliver to such Holder a number of Shares
equal to (a) the aggregate original principal amount at maturity of the
Securities to be converted divided by 1,000, multiplied by (b) the
Conversion Rate;
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(ii) if the Company elects to satisfy the entire Conversion
Obligation in cash, the Company will deliver to such Holder cash in an
amount equal to the product of:
(B) a number equal to (x) the aggregate original principal
amount at maturity of Securities to be converted divided by 1,000,
multiplied by (y) the Conversion Rate, and
(C) the average Sales Price of the Shares during the Cash
Settlement Averaging Period; and
(iii) if the Company elects to satisfy a fixed portion (other than
100%) of the Conversion Obligation in cash (the "CASH AMOUNT"), the
Company will deliver to such Holder the Cash Amount and a number of
Shares equal to the greater of (1) zero and (2) the excess, if any, of
the number of Shares calculated as set forth in clause (i) above over the
number of Shares equal to the sum, for each day of the Cash Settlement
Averaging Period, of (x) 5% of the Cash Amount, divided by (y) the Sale
Price of the Shares on such day.
Notwithstanding the foregoing, a Security in respect of which a Holder
has delivered a Change in Control Purchase Notice exercising such Holder's
option to require the Company to repurchase such Security may be converted as
described in this Section 10.9 only if such notice of exercise is withdrawn as
required in Section 10.1 hereof.
If a Holder elects to convert all or any portion of a Security into
Shares as set forth in Section 10.1 and the Company receives such Holder's
Conversion Notice after the Final Notice Date, if the Company chooses to satisfy
all or any portion of the Conversion Obligation in cash, the Company will have
previously notified the Holders through the Trustee of the dollar amount to be
satisfied in cash at any time on or before the Final Notice Date. Upon such
election, the Company will have notified the Holders through the Trustee of the
dollar amount to be satisfied in cash (which must be expressed either as 100% or
as a fixed dollar amount) at any time on or before the Final Notice Date.
Settlement amounts and settlement dates will be computed in the same manner as
set forth above except that the "Cash Settlement Averaging Period" shall be the
20 Trading Day period beginning on the day after receipt of the Conversion
Notice (or in the event the Company receives the Conversion Notice on the
Business Day prior to the Final Maturity Date, the 20 Trading Day period
beginning on the day after the Final Maturity Date). Settlement (in cash and/or
Shares) will occur on the Business Day following the final day of such Cash
Settlement Averaging Period.
Section 10.10. Unconditional Right Of Holders To Convert. Notwithstanding
any other provision in this Indenture, the Holder of any Security shall have the
right, which is absolute and unconditional, to convert its Security in
accordance with this Article X and subject to Section 10.9 and to bring an
action for the enforcement of any such right to convert, and such rights shall
not be impaired or affected without the consent of such Holder.
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ARTICLE XI
MISCELLANEOUS
Section 11.1. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies, or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
Section 11.2. Notices. Any request, demand, authorization, notice,
waiver, consent or communication shall be in writing and delivered in person or
mailed by first-class mail, postage prepaid, addressed as follows or transmitted
by facsimile transmission (confirmed by guaranteed overnight courier) to the
following facsimile numbers:
if to the Company:
Fairfax Financial Holdings Limited
00 Xxxxxxxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Attn: Vice President, Corporate Affairs
Facsimile No. (000) 000-0000
if to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
Attention: Corporate Trust Administration
The Company or the Trustee by notice given to the other in the manner
provided above may designate additional or different addresses for subsequent
notices or communications.
Any notice or communication given to a Securityholder shall be mailed to
the Securityholder, by first-class mail, postage prepaid, at the
Securityholder's address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not received by the addressee.
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If the Company mails a notice or communication to the Securityholders, it
shall mail a copy to the Trustee and each Registrar, Paying Agent, Conversion
Agent or co-registrar.
Section 11.3. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar, the Paying Agent,
the Conversion Agent and anyone else shall have the protection of TIA
Section 312(c).
Section 11.4. Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Section 11.5. Statements Required in Certificate or Opinion. Each
Officers' Certificate or Opinion of Counsel with respect to compliance with a
covenant or condition provided for in this Indenture shall include:
(1) a statement that each person making such Officers' Certificate or
Opinion of Counsel has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
Officers' Certificate or Opinion of Counsel are based;
(3) a statement that, in the opinion of each such person, he has made
such examination or investigation as is necessary to enable such person
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement that, in the opinion of such person, such covenant or
condition has been complied with.
Section 11.6. Separability Clause. In case any provision in this
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 11.7. Rules by Trustee, Paying Agent, Conversion Agent and
Registrar. The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar, the Conversion Agent and the Paying Agent may
make reasonable rules for their functions.
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Section 11.8. Legal Holidays. A "Legal Holiday" is any day other than a
Business Day. If any specified date (including a date for giving notice) is a
Legal Holiday, the action shall be taken on the next succeeding day that is not
a Legal Holiday, and, if the action to be taken on such date is a payment in
respect of the Securities, no interest, if any, shall accrue for the intervening
period.
Section 11.9. GOVERNING LAW. THIS INDENTURE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 11.10. Agent for Service; Submission to Jurisdiction; Waiver of
Immunities. By the execution and delivery of this Indenture, the Company (i)
hereby irrevocably designates and appoints CT Corporation System (or any
successor entity), 000 0xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000 as its
authorized agent upon which process may be served in any suit, action or
proceeding arising out of or relating to the Securities or this Indenture that
may be instituted in any state or federal court located in the Borough of
Manhattan, The City of New York, State of New York, or brought by the Trustee
(whether in its individual capacity or in its capacity as Trustee hereunder),
(ii) submits to the jurisdiction of any such court in any such suit, action or
proceeding, and (iii) agrees that service of process upon CT Corporation System
and written notice of said service to it (mailed or delivered to Xxxx X.
Xxxxxxxx, Vice President, Corporate Affairs, at its principal office in Toronto,
Canada as specified in Section 11.2 hereof) shall be deemed in every respect
effective service of process upon it in any such suit, action or proceeding. The
Company further agrees to take any and all action, including the execution and
filing of any and all such documents and instruments, as may be necessary to
continue such designation and appointment of CT Corporation System in full force
and effect so long as this Indenture shall be in full force and effect.
To the extent that the Company has or hereafter may acquire any immunity
from jurisdiction of any court or from any legal process (whether through
service of notice, attachment prior to judgment, attachment in aid of execution,
execution or otherwise) with respect to itself or its property, the Company
hereby irrevocably waives such immunity in respect of its obligations under this
Indenture and the Securities, to the extent permitted by law.
Section 11.11. No Recourse Against Others. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture, or in any
Security, or because of any indebtedness evidenced thereby, shall be had against
any incorporator, as such, or against any past, present or future shareholder,
officer or director, as such, of the Company or of any successor, either
directly or through the Company or any successor, under any rule of law, statute
or constitutional provision or by the enforcement of any assessment or by any
legal or equitable proceeding or otherwise, all such liability being expressly
waived and released by the acceptance of the Securities by the Holders and as
part of the consideration for the issue of the Securities.
Section 11.12. Successors. All agreements of the Company in this
Indenture and the Securities shall bind its successor. All agreements of the
Trustee in this Indenture shall bind its successor.
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Section 11.13. Multiple Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
Section 11.14. Repurchase of Securities by the Company. The Company may
repurchase Securities issued under this Indenture in a manner not inconsistent
with this Indenture or the terms of the Securities and in accordance with
applicable law.
75
IN WITNESS WHEREOF, the undersigned, being duly authorized, have executed this
Indenture on behalf of the respective parties hereto as of the date first above
written.
FAIRFAX FINANCIAL HOLDINGS LIMITED
By: /s/ Xxxx X. Xxxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President, Corporate Affairs
THE BANK OF NEW YORK
As Trustee
By: /s/ Xxxxx Xxxxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Assistant Vice President
76
EXHIBIT A
[FORM OF FACE OF GLOBAL SECURITY]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS TO
NOMINEES OF THE DEPOSITORY TRUST COMPANY, OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
THE SECURITY EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT OF
1933"), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE BY ACQUISITION HEREOF, THE HOLDER:
(1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT OF 1933;
(2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE
OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED
HEREBY OR THE SUBORDINATE VOTING SHARES ISSUABLE UPON CONVERSION OF
SUCH SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF,
(B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT OF 1933, (C) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OF 1933
(IF AVAILABLE), (D) TO ANY INSTITUTIONAL INVESTOR THAT IS AN
ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR
(7) OF REGULATION D UNDER THE SECURITIES ACT PURSUANT TO AN EXEMPTION
FROM
REGISTRATION UNDER THE SECURITIES ACT (IF AVAILABLE), OR (E)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT OF 1933 AND WHICH CONTINUES TO
BE EFFECTIVE AT THE TIME OF SUCH TRANSFER;
(3) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THE SECURITIES
IN CANADA TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT EXCEPT IN
ACCORDANCE WITH APPLICABLE CANADIAN SECURITIES LAWS; AND
(4) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY
EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO
CLAUSE 2(C) OR 2(E) ABOVE), A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND.
The foregoing legend may be removed from this Security on satisfaction of
the conditions specified in the Indenture.
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FAIRFAX FINANCIAL HOLDINGS LIMITED
5% Convertible Senior Debentures due 2023
No. 1 CUSIP: 303901 AK 8
Issue Date: July 14, 2003 Principal Amount: US$[ ]
FAIRFAX FINANCIAL HOLDINGS LIMITED, a company duly organized and existing
under the laws of Canada, promises to pay to Cede & Co. or registered assigns,
the principal amount of [ ] dollars (US$[ ]) on July 15, 2023.
Interest Payment Dates: January 15 and July 15, commencing January 15,
2004.
Record Dates: January 1 and July 1.
Reference is hereby made to the further provisions of this Security set
forth on the reverse side of this Security, which further provisions shall for
all purposes have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated: July 14, 2003 FAIRFAX FINANCIAL HOLDINGS LIMITED
By:
---------------------------------------
Title:
------------------------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies that this is one
of the Securities referred to in the
within-mentioned Indenture.
By: _______________________________
Authorized Signatory
Dated: July 14, 2003
A-3
[FORM OF REVERSE OF GLOBAL SECURITY]
5% Convertible Senior Debentures due 2023
This Security is one of a duly authorized issue of 5% Convertible Senior
Debentures due 2023 (the "Securities") of Fairfax Financial Holdings Limited, a
company duly organized and existing under the laws of Canada (including any
successor corporation under the Indenture hereinafter referred to, the
"Company"), issued under an Indenture, dated as of July 14, 2003 (the
"Indenture"), between the Company and The Bank of New York, as trustee (the
"Trustee"). The terms of the Security include those stated in the Indenture,
those made part of the Indenture by reference to the United States Trust
Indenture Act of 1939, as amended ("TIA"), and those set forth in this Security.
This Security is subject to all such terms, and Holders are referred to the
Indenture and the TIA for a statement of all such terms. To the extent permitted
by applicable law, in the event of any inconsistency between the terms of this
Security and the terms of the Indenture, the terms of the Indenture shall
control. Capitalized terms used but not defined herein have the meanings
assigned to them in the Indenture referred to below unless otherwise indicated.
1. Interest.
The Securities shall bear interest on the principal amount thereof at a
rate of 5% per year. The Company shall also pay additional interest as set forth
in the Registration Rights Agreement.
Interest will be payable semi-annually on each Interest Payment Date to
Holders at the close of business on the preceding Interest Record Date. Interest
will be computed on the basis of a 360-day year comprised of twelve 30-day
months.
The Company will not pay interest to the Securityholder of record on the
Interest Record Date if the Company elects to redeem or Securityholders elect to
require the Company to repurchase, the Securities on a date that is after a
Interest Record Date but on or prior to the corresponding Interest Payment Date.
In that instance, the Company will pay accrued and unpaid interest on the
Securities being redeemed to, but not including, the Redemption Date or the
Repurchase Date, as the case may be, to the same person to whom it will pay the
principal of those Securities.
If the principal amount of any Security, or any accrued and unpaid
interest, or additional interest, if any, is not paid when due (whether upon
acceleration pursuant to Section 6.2 of the Indenture, upon the date set for
payment of the Redemption Price pursuant to Section 5 hereof, upon the date set
for payment of the Purchase Price or Change in Control Purchase Price pursuant
to Section 6 hereof, upon the Stated Maturity of the Securities, upon the
Interest Payment Dates or upon the Additional Interest Payment Dates as defined
in the Registration Rights Agreement), then in each such case the overdue amount
shall, to the extent permitted by law, bear cash interest at the rate of 5% per
annum, compounded semiannually, which interest shall accrue from the date such
overdue amount was originally due to the date payment of such
A-4
amount, including interest thereon, has been made or duly provided for. All such
interest shall be payable in cash on demand but if not so demanded shall be paid
quarterly to the Holders on the last day of each quarter.
2. Method of Payment.
Except as provided below, interest will be paid (i) on the Global
Securities to DTC in immediately available funds, (ii) on any definitive
Securities having an aggregate principal amount of US$5,000,000 or less, by
check mailed to the Holders of such Securities; and (iii) on any definitive
Securities having an aggregate principal amount of more than US$5,000,000, by
wire transfer in immediately available funds at the election of the Holders of
these Securities.
At Stated Maturity the Company will pay interest on definitive Securities
at the Company's office or agency in The City of New York, which initially will
be the Corporate Trust Office of the trustee in The City of New York.
Principal on definitive Securities will be payable, upon Stated Maturity
or when due, at the office or agency of the Company in The City of New York,
maintained for such purpose, initially the Corporate Trust Office of the Trustee
in The City of New York.
Subject to the terms and conditions of the Indenture, the Company will
make payments in cash, Shares or a combination thereof, as the case may be, in
respect of Redemption Prices, Purchase Prices, Change of Control Purchase Prices
and at Stated Maturity to Holders who surrender Securities to a Paying Agent to
collect such payments in respect of the Securities. The Company will pay cash
amounts in money of the United States that at the time of payment is legal
tender for payment of public and private debts. However, the Company may make
such cash payments by check payable in such money.
3. Paying Agent, Conversion Agent and Registrar.
Initially, The Bank of New York (the "Trustee") will act as Paying Agent,
Conversion Agent and Registrar. The Company may appoint and change any Paying
Agent, Conversion Agent or Registrar without notice, other than notice to the
Trustee; provided that the Company will maintain at least one Paying Agent in
the State of New York, The City of New York, Borough of Manhattan, which shall
initially be an office or agency of the Trustee. The Company or any of its
Subsidiaries or any of their Affiliates may act as Paying Agent, Conversion
Agent or Registrar.
4. Indenture.
The Securities are general unsecured obligations of the Company limited
to up to US$200,000,000 aggregate principal amount. The Indenture does not limit
other indebtedness of the Company, secured or unsecured.
5. Redemption at the Option of the Company.
No sinking fund is provided for the Securities.
A-5
(a) Prior to July 15, 2008, the Securities will be redeemable at the
option of the Company, in whole or in part, upon not less than 30 nor more than
60 days' notice by mail, at the Redemption Price, plus accrued and unpaid
interest and additional interest, if any, thereon up to, but not including, the
Redemption Date for such Securities if:
(i) the Sale Price has exceeded US$293.12 for at least 20 Trading
Days in any consecutive period of 30 Trading Days ending on the Trading
Day prior to the mailing of the notice of redemption described in Section
7 below; and
(ii) the shelf registration statement covering resales of the
Securities and the Shares into which the Securities are convertible is
effective and available for use and is expected to remain effective and
available for use for the 30 days following such Redemption Date, unless
registration is no longer required pursuant to the terms of the
Registration Rights Agreement.
(b) The Securities are redeemable at the option of the Company, in whole
or in part, at any time or from time to time, on or after July 15, 2008, upon
not less than 30 nor more than 60 days' notice by mail, at the Redemption Price,
plus accrued and unpaid interest and additional interest, if any, thereon up to,
but not including, the Redemption Date for such Securities.
6. Purchase By the Company at the Option of the Holder.
Subject to the terms and conditions of the Indenture, the Company shall
become obligated to purchase, at the option of the Holder, all or any portion of
the Securities held by such Holder on July 15, 2008, July 15, 2013 and July 15,
2018 in integral multiples of US$1,000 at a Purchase Price equal to the
principal amount of those Securities plus accrued and unpaid interest, including
additional interest, if any, of such Security on the Purchase Date. To exercise
such right, a Holder shall deliver to the Company a Purchase Notice containing
the information set forth in the Indenture, at any time from the opening of
business on the date that is 20 Business Days prior to such Purchase Date until
the close of business on the third Business Day prior to such Purchase Date, and
shall deliver the Securities to the Paying Agent as set forth in the Indenture.
The Purchase Price may be paid, at the option of the Company, in cash or
by the issuance and delivery of shares of Applicable Stock, or in any
combination thereof, subject to the terms and conditions of the Indenture.
At the option of the Holder and subject to the terms and conditions of
the Indenture, the Company shall become obligated to offer to purchase the
Securities held by such Holder within 30 days (which purchase shall occur 30
days after the date of such offer) after the occurrence of a Change of Control
of the Company for a Change of Control Purchase Price equal to the principal
amount plus accrued and unpaid interest, including additional interest, if any,
of such Security on the Change of Control Purchase Date. The Change of Control
Purchase Price may be paid, at the option of the Company, in cash or by the
issuance and delivery of shares of Applicable Stock, or in any combination
thereof, subject to the terms and conditions of the Indenture.
A-6
Holders have the right to withdraw any Purchase Notice or Change of
Control Purchase Notice, as the case may be, by delivering to the Paying Agent a
written notice of withdrawal in accordance with the provisions of the Indenture.
If cash and/or Applicable Stock sufficient to pay the Purchase Price or
Change of Control Purchase Price, as the case may be, of all Securities or
portions thereof to be purchased as of the Purchase Date or the Change of
Control Purchase Date, as the case may be, is deposited with the Paying Agent,
on the Business Day following the Purchase Date or the Change of Control
Purchase Date, interest will cease to accrue on such Securities (or portions
thereof) immediately after such Purchase Date or Change of Control Purchase
Date, and the Holder thereof shall have no other rights as such other than the
right to receive the Purchase Price or Change of Control Purchase Price upon
surrender of such Security.
7. Notice of Redemption.
Notice of redemption pursuant to Section 5 of this Security will be
mailed at least 30 days but not more than 60 days before the Redemption Date to
each Holder of Securities to be redeemed at the Holder's registered address. If
money sufficient to pay the Redemption Price of all Securities (or portions
thereof) to be redeemed on the Redemption Date is deposited with the Paying
Agent prior to or on the Redemption Date, immediately after such Redemption Date
interest ceases to accrue on such Securities or portions thereof. Securities in
denominations larger than US$1,000 of principal amount may be redeemed in part
but only in integral multiples of US$1,000 of principal amount.
8. Conversion.
Subject to and in compliance with the provisions of the Indenture
(including, without limitation, the conditions to conversion of this Security
set forth in Section 10.1 thereof), a Holder is entitled, at such Holder's
option, to convert the Holder's Security (or any portion of the principal amount
thereof that is US$1,000 or an integral multiple US$1,000), into fully paid and
nonassessable Shares at the Conversion Price in effect at the time of
conversion.
The Company will notify Holders of any event triggering the right to
convert the Securities as specified above in accordance with the Indenture.
A Security in respect of which a Holder has delivered a Purchase Notice
or Change of Control Purchase Notice, as the case may be, exercising the option
of such Holder to require the Company to purchase such Security may be converted
only if such Purchase Notice or Change of Control Purchase Notice, as the case
may be, is withdrawn in accordance with the terms of the Indenture.
The initial Conversion Rate is 4.7057 Shares per $1,000 principal amount,
subject to adjustment in certain events described in the Indenture. The
Conversion Rate shall not be adjusted for any accrued and unpaid interest, or
additional interest. Upon conversion, no payment shall be made by the Company
with respect to accrued and unpaid interest or additional interest, if any.
Instead, such amount shall be deemed paid by the Shares delivered upon
conversion of any Security. In addition, no payment or adjustment shall be made
in respect of dividends on the Shares, except as set forth in the Indenture.
A-7
To surrender a Security for conversion, a Holder must (1) complete and
manually sign the conversion notice below (or complete and manually sign a
facsimile of such notice) and deliver such notice to the Conversion Agent, (2)
surrender the Security to the Conversion Agent, (3) furnish appropriate
endorsements and transfer documents and (4) pay any transfer or similar tax, if
required.
No fractional Shares shall be issued upon conversion of any Security.
Instead of any fractional Share that would otherwise be issued upon conversion
of such Security, the Company shall pay a cash adjustment as provided in the
Indenture.
No payment or adjustment will be made for dividends on the shares of
Shares, except as provided in the Indenture.
Upon conversion, the Company may choose to deliver, in lieu of Shares,
cash or a combination of cash and Shares in accordance with the Indenture.
If the Company (i) is a party to a consolidation, merger, statutory share
exchange or combination, (ii) reclassifies the Shares or (iii) conveys,
transfers or leases its properties and assets substantially as an entirety to
any Person, the right to convert a Security into Shares may be changed into a
right to convert it into securities, cash or other assets of the Company or such
other Person, in each case in accordance with the Indenture.
9. Conversion Arrangement on Call for Redemption.
Any Securities called for redemption, unless surrendered for conversion
before the close of business on the day that is two Business Days prior to the
Redemption Date, may be deemed to be purchased from the Holders of such
Securities at an amount not less than the Redemption Price, by one or more
investment bankers or other purchasers who may agree with the Company to
purchase such Securities from the Holders, to convert them into Shares and to
make payment for such Securities to the Trustee in trust for such Holders.
10. Denominations; Transfer; Exchange.
The Securities are in fully registered form, without coupons, in
denominations of US$1,000 of principal amount and integral multiples of
US$1,000. A Holder may transfer or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not transfer
or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or any Securities in respect of which a Purchase Notice or Change of Control
Purchase Notice has been given and not withdrawn (except, in the case of a
Security to be purchased in part, the portion of the Security not to be
purchased) or any Securities for a period of 15 days before the mailing of a
notice of redemption of Securities to be redeemed.
A-8
11. Paying Agent, Conversion Agent, Registrar and Calculation Agent.
Initially, the Trustee will act as Paying Agent, Conversion Agent,
Registrar and Calculation Agent. The Company may appoint and change any Paying
Agent, Conversion Agent, Registrar or Calculation Agent without notice, other
than notice to the Trustee; provided that the Company will maintain at least one
Paying Agent in the Borough of Manhattan, The City of New York, State of New
York, which shall initially be an office or agency of the Trustee. The Company
or any of its Subsidiaries or any of their Affiliates may act as Paying Agent,
Conversion Agent, Registrar or Calculation Agent.
12. Persons Deemed Owners.
The registered Holder of this Security may be treated as the owner of
this Security for all purposes.
13. Unclaimed Money or Securities.
The Trustee and the Paying Agent shall return to the Company upon written
request any money or securities held by them for the payment of any amount with
respect to the Securities that remains unclaimed for two years, subject to
applicable unclaimed property law. After return to the Company, Holders entitled
to the money or securities must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another person.
14. Amendment; Waiver.
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in aggregate principal amount of the outstanding
Securities and (ii) certain Defaults may be waived with the written consent of
the Holders of a majority in aggregate principal amount of the outstanding
Securities. Subject to certain exceptions set forth in the Indenture, without
the consent of any Securityholder, the Company and the Trustee may amend the
Indenture or the Securities (i) to add to the covenants of the Company for the
benefit of the Holders of Securities, (ii) to surrender any right or power
conferred upon the Company in the Indenture, (iii) to provide for conversion
rights of Holders of Securities if any reclassification or change of the
Company's Shares or any consolidation, merger or sale of the Company's assets
substantially as an entirety occurs, (iv) to provide for the assumption of the
Company's obligations to the Holders of Securities in the case of a merger,
consolidation, conveyance, transfer or lease pursuant to Article V of the
Indenture, (v) to increase the Conversion Rate; provided, however, that such
increase in the Conversion Rate shall not adversely affect the interest of the
Holders of Securities (after taking into account tax and other consequences of
such increase), (vi) to comply with the requirements of the SEC in order to
effect or maintain the qualification of the Indenture under the TIA, (vii) to
make any changes or modifications necessary in connection with the registration
of the Securities under the Securities Act as contemplated in the Registration
Rights Agreement; provided, however, that such action pursuant to this clause
does not, in the good faith opinion of the Board of Directors of the Company (as
evidenced by a Board Resolution) and the Trustee, adversely affect the interests
of the Holders of Securities in any material respect, (viii) to cure
A-9
any ambiguity, to correct or supplement any provision in the Indenture which may
be inconsistent with any other provision therein or which is otherwise
defective, or to make any other provisions with respect to matters or questions
arising under the Indenture which the Company may deem necessary or desirable
and which shall not be inconsistent with the provisions of the Indenture;
provided, however, that such action pursuant to this clause does not, in the
good faith opinion of the Board of Directors of the Company (as evidenced by a
Board Resolution) and the Trustee, adversely affect the interests of the Holders
of Securities in any material respect, and (ix) to add or modify any other
provisions in the Indenture with respect to matters or questions arising
hereunder which the Company and the Trustee may deem necessary or desirable and
which will not adversely affect the interests of the Holders of Securities in
any material respect.
15. Defaults and Remedies.
If any Event of Default with respect to Securities shall occur and be
continuing, the principal of all the Securities may be declared due and payable
in the manner and with the effect provided in the Indenture.
16. Trustee Dealings with the Company.
Subject to certain limitations imposed by the TIA, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
17. Calculations in Respect of Securities.
The Company or its agents will be responsible for making all calculations
called for under the Securities including, but not limited to, determination of
the market prices for the Securities and of the Shares and the amounts of
interest and additional interest, if any, on the Securities. Any calculations
made in good faith and without manifest error will be final and binding on
Holders of the Securities. The Company or its agents will be required to deliver
to the Trustee a schedule of its calculations and the Trustee will be entitled
to conclusively rely upon the accuracy of such calculations without independent
verification.
18. No Recourse Against Others.
No recourse under or upon any obligation, covenant or agreement contained
in the Indenture, or in this Security, or because of any indebtedness evidenced
thereby, shall be had against any incorporator, as such, or against any past,
present or future shareholder, officer or director, as such, of the Company or
of any successor, either directly or through the Company or any successor, under
any rule of law, statute or constitutional provision or by the enforcement of
any assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the
Securities by the Holders and as part of the consideration for the issue of the
Securities.
A-10
19. Authentication.
This Security shall not be valid until an authorized signatory of the
Trustee manually signs the Trustee's Certificate of Authentication on the other
side of this Security.
20. Abbreviations.
Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
21. GOVERNING LAW.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS SECURITY.
The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture which has in it the text of this Security
in larger type. Requests may be made to:
Fairfax Financial Holdings Limited
00 Xxxxxxxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Attn: Vice President, Corporate Affairs
Facsimile No. (000) 000-0000
22. Registration Rights.
The Holders of the Securities are entitled to the benefits of a Resale
Registration Rights Agreement, dated as of July 14, 2003, among the Company and
the Initial Purchasers named therein, including the receipt of liquidated
damages upon a registration default (as defined in such agreement) and which are
referred to herein and in the Indenture as "additional interest".
A-11
ASSIGNMENT FORM CONVERSION NOTICE
------------------------------------------------- ------- --------------------------------------------
To assign this Security, fill in the form below: To convert this Security into Shares of
the Company, check the box [ ]
------------------------------------------------- ------- --------------------------------------------
I or we assign and transfer this Security to To convert only part of this Security,
_________________________ state the principal amount to be converted
(which must be US$1,000 or an integral
_________________________ multiple of US$1,000):
(Insert assignee's soc. sec. or tax ID no.)
If you want the stock certificate made out
_________________________ in another person's name fill in the form
below:
_________________________ _________________________
_________________________ _________________________
(Print or type assignee's name, address and zip (Insert the other person's soc. sec. tax
code) ID no.)
and irrevocably appoint __________________________
____________________ agent to transfer this __________________________
Security on the books of the Company. The
agent may substitute another to act for him. __________________________
__________________________
__________________________
(Print or type other person's name,
address and zip code)
------------------------------------------------- ------- --------------------------------------------
Date: __________ Your Signature: _________________________________
________________________________________________________________________________
(Sign exactly as your name appears on the other side of this Security)
Signature Guaranteed
_____________________________________
Participant in a Recognized Signature
Guarantee Medallion Program
By:__________________________________
Authorized Signatory
A-12
SCHEDULE OF INCREASES AND DECREASES OF GLOBAL SECURITY
Initial Principal Amount of Global Security: ____________(US$___________).
Date Amount of Increase Amount of Decrease in Principal Amount of Notation by
in Principal Amount Principal Amount of Global Security Registrar or
of Global Security Global Security After Increase or Security Custodian
Decrease
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
A-13
EXHIBIT B
[FORM OF FACE OF CERTIFICATED SECURITY]
THE SECURITY EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT OF
1933") OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE BY ACQUISITION HEREOF, THE HOLDER:
(5) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT OF 1933;
(6) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL
ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THE
SECURITY EVIDENCED HEREBY OR THE SUBORDINATE VOTING SHARES
ISSUABLE UPON CONVERSION OF SUCH SECURITY EXCEPT (A) TO THE
COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT OF 1933, (C) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OF 1933
(IF AVAILABLE), (D) TO ANY INSTITUTIONAL INVESTOR THAT IS AN
ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a)(1), (2), (3)
OR (7) OF REGULATION D UNDER THE SECURITIES ACT PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT (IF
AVAILABLE), OR (E) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS
BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT OF 1933 AND WHICH
CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER; AND
(7) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY
EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO
CLAUSE 2(C) OR 2(E) ABOVE), A NOTICE SUBSTANTIALLY TO THE EFFECT
OF THIS LEGEND.
The foregoing legend may be removed from this Security on satisfaction of
the conditions specified in the Indenture.
FAIRFAX FINANCIAL HOLDINGS LIMITED
5% Convertible Senior Debentures due 2023
No. [ ] CUSIP: 303901 AK 8
Issue Date: [ ]
Issue Price: [ ]
FAIRFAX FINANCIAL HOLDINGS LIMITED, a company duly organized and existing
under the laws of Canada, promises to pay to ___________________, or registered
assigns, the principal amount of [ ] (US$[ ]) on July 15, 2023.
Interest Payment Dates: January 15 and July 15, commencing January 15,
2004.
Record Dates: January 1 and July 1.
Reference is hereby made to the further provisions of this Security set
forth on the reverse side of this Security, which further provisions shall for
all purposes have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated: FAIRFAX FINANCIAL HOLDINGS LIMITED
By:_______________________
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THE BANK OF NEW YORK, as Trustee, certifies that this is one of the Securities
referred to in the within-mentioned Indenture.
By ________________________
Authorized Signatory
Dated:
B-2
[FORM OF REVERSE OF CERTIFICATED SECURITY IS IDENTICAL TO EXHIBIT A]
EXHIBIT C
5% Convertible Senior Debentures due 2023
Transfer Certificate
In connection with any transfer of any of the Securities within the
period prior to the expiration of the holding period applicable to the sales
thereof under Rule 144(k) under the United States Securities Act of 1933, as
amended (the "Securities Act") (or any successor provision), the undersigned
registered owner of this Security hereby certifies with respect to
US$____________ principal amount of the above-captioned Securities presented or
surrendered on the date hereof (the "Surrendered Securities") for registration
of transfer, or for exchange or conversion where the securities issuable upon
such exchange or conversion are to be registered in a name other than that of
the undersigned registered owner (each such transaction being a "transfer"),
that such transfer complies with the restrictive legend set forth on the face of
the Surrendered Securities for the reason checked below:
[_] A transfer of the Surrendered Securities is made to the
Company or any subsidiaries; or
[_] The transfer of the Surrendered Securities complies with
Rule 144A under the Securities Act; or
[_] The transfer of the Surrendered Securities complies with
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act; or
[_] The transfer of the Surrendered Securities is pursuant to
an effective registration statement under the Securities
Act; or
[_] The transfer of the Surrendered Securities is pursuant to
another available exemption from the registration
requirement of the Securities Act;
and unless the box below is checked, the undersigned confirms that, to
the undersigned's knowledge, such Securities are not being transferred to an
"affiliate" of the Company as defined in Rule 144 under the Securities Act (an
"Affiliate").
[_] The transferee is an Affiliate of the Company.
DATE: __________________________________
Signature(s)
(If the registered owner is a corporation, partnership or fiduciary, the
title of the person signing on behalf of such registered owner must be stated.)
Signature Guaranteed
--------------------------------------
Participant in a Recognized Signature
C-2
