EXECUTION COPY
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INCO LIMITED
TO
THE BANK OF NEW YORK,
Trustee
______________
FIRST SUPPLEMENTAL INDENTURE
Dated as of March 7, 2003
______________
SUPPLEMENT TO SUBORDINATED INDENTURE DATED MARCH 7, 2003
3 1/2% Subordinated Convertible Debentures due 2052
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TABLE OF CONTENTS
Page No.
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ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions.....................................................1
Section 102. Section References..............................................6
ARTICLE TWO
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
Section 201. Title of the Subordinated Debentures............................6
Section 202. Stated Maturity.................................................6
Section 203. Limit on Amount of Series.......................................6
Section 204. Interest........................................................7
Section 205. Form............................................................7
Section 206. Company's Right to Elect Manner of Payment in
Certain Events..................................................7
Section 207. Payment by Issuance of Common Shares............................8
Section 208. Fractional Shares..............................................10
Section 209. Other Provisions...............................................10
ARTICLE THREE
SUBORDINATED DEBENTURE FORMS
Section 301. Form of Face of Subordinated Debenture.........................10
Section 302. Form of Reverse of Subordinated Debenture......................14
Section 303. Form of Conversion Notice......................................18
Section 304. Form of Change in Control Purchase Notice......................19
Section 305. Legends For Subordinated Debentures............................21
ARTICLE FOUR
CONVERSION
Section 401. Conversion Privilege; Conversion Rate..........................21
Section 402. Conversion Conditions..........................................22
Section 403. Exercise of Conversion Privilege...............................24
Section 404. Adjustment of Conversion Rate and Conversion Price.............26
Section 405. Reclassification, Reorganization, Sale and Further
Adjustment of Conversion Rate..................................30
Section 406. Notice of Certain Events.......................................32
Section 407. Taxes on Conversion............................................33
Section 408. Company to Provide Shares......................................33
Section 409. Rights under Rights Agreement..................................34
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ARTICLE FIVE
REDEMPTION AT THE OPTION OF THE COMPANY
Section 501. Right to Redeem................................................34
Section 502. Redemption Tax Event...........................................35
Section 503. Conversion Arrangements on Call for Redemption.................35
Section 504. No Sinking Fund................................................36
ARTICLE SIX
CHANGE IN CONTROL PURCHASE OFFER
Section 601. Offer to Purchase Upon a Change in Control.....................36
Section 602. Notices; Method of Exercising Purchase Election, Etc...........36
Section 603. Withdrawal of Change in Control Purchase Notice................39
ARTICLE SEVEN
COVENANTS
Section 701. Additional Amounts.............................................40
Section 702. Amendment of Rights Agreement..................................41
ARTICLE EIGHT
MISCELLANEOUS PROVISIONS
Section 801. Trustee........................................................41
Section 802. Ratification...................................................41
Section 803. Governing Law..................................................42
Section 804. Execution in Counterparts......................................42
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EXECUTION COPY
FIRST SUPPLEMENTAL INDENTURE, dated as of March 7, 2003, between INCO
LIMITED, a corporation duly organized and existing under the laws of Canada
(herein called the "Company"), having its principal office at 000 Xxxx Xxxxxx
Xxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx Xxxxxx X0X 0X0, and THE BANK OF NEW YORK, a
New York banking corporation duly organized and existing under the laws of the
State of New York, as Trustee (herein called the "Trustee").
RECITALS
The Company has executed and delivered to the Trustee the Subordinated
Indenture, dated as of March 7, 2003 (the "Original Indenture"), providing for
the issuance from time to time of one or more series of the Company's
debentures, notes or other evidences of indebtedness as provided in the Original
Indenture (herein and in the Original Indenture called the "Securities").
Section 901 of the Original Indenture provides, among other things,
that the Company and the Trustee may enter into indentures supplemental to the
Original Indenture for, among other things, the purpose of establishing the form
or terms of Securities of any series as permitted by Sections 201 and 301 of the
Original Indenture.
The Company desires to create a series of Securities in an aggregate
principal amount of $220,000,000 (which amount may be increased by up to
$30,000,000 to the extent the Over-Allotment Option (as hereafter defined) is
exercised), which series shall be designated the 3 1/2% Subordinated Convertible
Debentures due 2052 (the "Subordinated Debentures"), and all action on the part
of the Company necessary to authorize the issuance of the Subordinated
Debentures under the Original Indenture and this First Supplemental Indenture
has been duly taken.
All acts and things necessary to make the Subordinated Debentures, when
executed by the Company and completed, authenticated and delivered by the
Trustee as provided in the Original Indenture and this First Supplemental
Indenture, the valid and binding obligations of the Company, have been done and
performed.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Subordinated Debentures by the Holders thereof, it is mutually agreed, for the
equal and proportionate benefit of all Holders of the Subordinated Debentures,
as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 101. Definitions.
For all purposes of the Original Indenture and this First Supplemental
Indenture relating to the Subordinated Debentures, except as otherwise expressly
provided herein or unless the
context otherwise requires, the terms defined in this Article have the meanings
assigned to them in this Article. Each capitalized term that is used in the
Original Indenture and this First Supplemental Indenture but not defined herein
shall have the meaning specified in the Original Indenture.
"Additional Amounts" has the meaning set forth in Section 701.
"Applicable Price" means, in the event of any Reclassification,
Reorganization or Sale, the average of the Closing Sale Price for the Common
Shares (determined as set forth in Section 404(f)) for each of the last ten
Trading Days prior to (x) the record date for the determination of the holders
of Common Shares entitled to receive shares of common equity, other securities
or other property or assets (including cash) in connection with such
Reclassification, Reorganization or Sale, or (y) if there is no such record
date, the date upon which the holders of Common Shares shall have the right to
receive shares of common equity, other securities or other property or assets
(including cash) in connection with such Reclassification, Reorganization or
Sale.
"Average Market Price" means, at any date, the average of the Closing
Sale Prices per share of the Common Shares for the five Trading-Day period
ending on the third Business Day prior to the date in question (if the third
Business Day prior to the date in question is a Trading Day or, if not, then on
the last Trading Day prior thereto), appropriately adjusted to take into account
the occurrence, during the period commencing on the first of such five
Trading-Day period and ending on such date, of any events that would result in
an adjustment of the Conversion Rate with respect to the Common Shares pursuant
to this First Supplemental Indenture.
"Canadian Taxes" has the meaning set forth in Section 701.
"Change in Control" shall be deemed to have occurred at such time as
(i) any person (as the term "person" is used in Section 13(d)(3) or Section
14(d)(2) of the Exchange Act), other than the Company, any Subsidiary or their
Affiliates (or their legal representatives) or any employee benefit plan of the
Company or any Subsidiary, files or is required to file a Schedule 13D or
Schedule TO (or any successor schedule, form or report under the Exchange Act)
disclosing that such person has become the beneficial owner (as the term
"beneficial owner" is used in Rule 13d-3 under the Exchange Act) of 50% or more
of the total number of votes attached to the Voting Securities then outstanding,
(ii) any offeror (as the term "offeror" is defined in Section 89(1) of the
Securities Act (Ontario) for the purpose of Section 101 of the Securities Act
(Ontario), or any successor provision to either of the foregoing) files or is
required to file a report with any securities commission or securities
regulatory authority in Canada, disclosing that the offeror has acquired
beneficial ownership (within the meaning of the Securities Act (Ontario)) of, or
the power to exercise control or direction over, or securities convertible into,
any voting or equity shares of the Company that, together with such offeror's
securities (as the term "offeror's securities" is defined in Section 89(1) of
the Securities Act (Ontario) or any successor provision thereto in relation to
the voting or equity shares of the Company) would constitute voting or equity
shares of the Company representing more than 50% of the total number of votes
attached to all Voting Securities of the Company then outstanding, or (iii)
there is consummated any consolidation, merger, amalgamation, statutory
arrangement (involving a business combination) or similar transaction of the
Company (A) in which the Company is not the continuing or surviving corporation
or (B) pursuant to which the Common Shares would be redeemed, changed
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or converted into or exchanged for cash, securities or other property, other
than (in each case) an amalgamation, consolidation, statutory arrangement
(involving a business combination), merger or similar transaction of the Company
in which the holders of the Voting Securities of the Company immediately prior
to the amalgamation, consolidation, statutory arrangement, merger or similar
transaction have, directly or indirectly, more than 50% of the Voting Securities
of the continuing or surviving corporation immediately after such transaction.
"Change in Control Purchase Date" has the meaning set forth in Section
302.
"Change in Control Purchase Notice" has the meaning set forth in
Section 302.
"Change in Control Purchase Offer" has the meaning set forth in Section
601.
"Change in Control Purchase Offer Notice" has the meaning set forth in
Section 302.
"Change in Control Purchase Price" has the meaning set forth in Section
302.
"Close of Business" means, as of any determination date, 5:00 p.m., New
York City time, on such determination date.
"Closing Sale Price" of the Common Shares on any date means the closing
sale price per Common Share (or, if no closing sale price is reported, the
average of the bid and ask prices or, if more than one in either case, the
average of the average bid and average ask prices) on such date as reported in
composite transactions for the principal United States securities exchange on
which the Common Shares are traded (currently the New York Stock Exchange) or,
if the Common Shares are not listed on a United States national or regional
securities exchange, as reported by the Nasdaq National Market or, if no such
price is reported, as reported by the principal non-United States market on
which the Common Shares are traded (currently the Toronto Stock Exchange). To
the extent such price is in Canadian currency, it shall be converted into U.S.
dollars based on the Bank of Canada noon exchange rate as reported for
conversion into U.S. dollars on such date. In the absence of such quotation, the
Company will determine the Closing Sale Price on the basis of such quotation as
the Company considers appropriate.
"Code" means the United States Internal Revenue Code of 1986, as
amended.
"Common Shares" includes any shares of any class of the Company, which
has voting rights, no preference in respect of dividends or of amounts payable
in the event of any voluntary or involuntary liquidation, dissolution or
winding-up of the Company and which is not subject to redemption by the Company.
However, subject to the provisions of Section 405, shares issuable on
conversion, redemption, purchase or at Maturity of Subordinated Debentures shall
include only shares of the class designated as Common Shares of the Company at
the date of this instrument or shares of any class or classes resulting from any
reclassification or reclassifications thereof and which have no preference in
respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding-up of the Company and which are
not subject to redemption by the Company; provided that, if at any time there is
more than one such resulting class, the shares of each such class then so
issuable shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.
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"Company Notice" has the meaning set forth in Section 206(c).
"Company Notice Date" means a date that is not less than 20 Business
Days prior to the Stated Maturity or the Redemption Date or 29 Business Days
prior to the Change in Control Purchase Date, as applicable.
"Conversion Agent" means any Person authorized by the Company to
convert Subordinated Debentures in accordance with Article Four. The Company has
initially appointed the Trustee as its Conversion Agent, which shall maintain an
office or agency in the Borough of Manhattan, The City of New York, New York.
"Conversion Amount" means the number of Common Shares to be delivered
pursuant to a conversion under Article Four.
"Conversion Consideration" means the Conversion Amount or, where the
Company has elected to satisfy its obligation to deliver the Conversion Amount
in whole or in part in cash (other than in respect of a fraction of a Common
Share), the amount of such cash together with the Common Shares, if any,
deliverable in satisfaction of the Conversion Amount, in each case including any
Additional Amounts.
"Conversion Date" has the meaning set forth in Section 403(a).
"Conversion Notice" has the meaning set forth in Section 403(a).
"Conversion Price" at any time shall equal $1,000 divided by the
Conversion Rate in effect at such time.
"Conversion Rate" means the number of Common Shares issuable upon
conversion per $1,000 aggregate principal amount of a Debenture, which shall
initially be 38.4423 Common Shares, as adjusted pursuant to Article Four hereof.
"Ex-Dividend Time" has the meaning set forth in Section 402(b).
"Excluded Holder" has the meaning set forth in Section 701.
"Expiration Date" has the meaning set forth in Section 404(e).
"Extension Period" has the meaning set forth in Section 301(a).
"Indenture" means the Original Indenture as supplemented by the First
Supplemental Indenture, as may be amended or supplemented from time to time.
"Interest Payment Date" has the meaning set forth in Section 204.
"Option Exercise Date" has the meaning set forth in Section 302.
"Over-Allotment Option" means the option granted to the initial
purchasers pursuant to the Purchase Agreement, dated as of March 4, 2003,
between the Company and the initial purchasers named therein, to purchase
Additional Debentures (as defined therein) in accordance with the terms thereof.
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"Prescribed Security" means a security prescribed for purposes of
clause 212(1)(b)(vii)(E) of the Tax Act.
"Purchased Shares" has the meaning set forth in Section 404(e).
"Purchaser Share Price" means, with respect to any Reclassification,
Reorganization or Sale, the average of the Closing Sale Price for the common
equity (determined as set forth for Common Shares in Section 404(f)) received in
such Reclassification, Reorganization or Sale for each of the last ten Trading
Days prior to (x) the record date for the determination of the holders of Common
Shares entitled to receive such common equity, or (y) if there is no such record
date, the date upon which the holders of the Common Shares shall have the right
to receive such common equity.
"Reclassification" means any reclassification of the Common Shares
(other than a change in par value, or from par value to no par value, or from no
par value to par value, or as a result of a subdivision or combination).
"Redemption Notice" shall mean any notice of redemption delivered by
the Company pursuant to Section 1104 of the Original Indenture.
"Redemption Price" has the meaning set forth in Section 302.
"Redemption Tax Event" means (a) any amendment to or change after March
4, 2003 (including any announced prospective change) in the laws (or any
regulations thereunder) of Canada or any political subdivision or taxing
authority thereof or therein, as applicable, or (b) any change in an
interpretation or application of such laws or regulations after March 4, 2003 by
any legislative body, court, governmental agency, taxing authority or regulatory
authority (including the enactment of any legislation and the publication of any
judicial decision or regulatory or administrative determination), in either
case, as a result of which the Company has or would become obligated to pay
Additional Amounts that are more than de minimis to the Holder of any
Subordinated Debenture, and such obligations cannot be avoided by the Company
taking reasonable measures available to it.
"Reorganization" means a consolidation, merger, amalgamation or
statutory arrangement or similar transaction involving the Company.
"Repurchasers" has the meaning set forth in Section 503.
"Rights" means Rights as defined in the Rights Agreement.
"Rights Agreement" means the Shareholder Rights Plan Agreement dated as
of September 14, 1998, as amended as of April 28, 1999 and amended and restated
as of April 17, 2002, between the Company and CIBC Mellon Trust Company, as
Rights Agent, as the same may be amended or replaced from time to time.
"Sale" means any sale or conveyance of the property and assets of the
Company as an entirety or substantially as an entirety.
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"Subordinated Debenture Payment" means any of the following payments,
in cash or Common Shares or a combination thereof, with respect to the
Subordinated Debentures: the principal amount, Redemption Price, Change in
Control Purchase Price and interest on any Subordinated Debenture, in each case
including any Additional Amounts.
"Subordinated Debenture Payment Date" means the date on which any
Subordinated Debenture Payment is to be made hereunder.
"Tax Act" means the Income Tax Act (Canada) as amended from time to
time.
"Trading Days" with respect to Common Shares means (i) if the Common
Shares are listed or admitted for trading on any national securities exchange,
days on which such national securities exchange is open for business or (ii) if
the Common Shares are quoted on the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotation System or any
similar system of automated dissemination of quotations of securities prices,
days on which trades may be made on such system.
"Trading Price" has the meaning set forth in Section 402(b).
"Voting Securities" means the Company's share capital entitled to vote
in the election of the directors of the Company, either under all circumstances
or under circumstances that have occurred and are continuing.
Section 102. Section References.
Each reference to a particular section or article set forth in this
First Supplemental Indenture shall, unless the context otherwise requires, refer
to this First Supplemental Indenture.
ARTICLE TWO
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
Section 201. Title of the Subordinated Debentures.
The Subordinated Debentures shall be known and designated as the "3
1/2% Subordinated Convertible Debentures due 2052" of the Company.
Section 202. Stated Maturity.
The Stated Maturity of the Subordinated Debentures shall be March 14,
2052.
Section 203. Limit on Amount of Series.
The aggregate principal amount of Subordinated Debentures which may be
authenticated and delivered under this First Supplemental Indenture is limited
to $220,000,000 (which amount may be increased by up to $30,000,000 to the
extent the Over-Allotment Option is exercised), except for Subordinated
Debentures authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Subordinated Debentures pursuant to Section
304, 305, 306, 906, 1107 or 1205 of the Original Indenture.
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Section 204. Interest.
The Subordinated Debentures shall bear interest at a rate of 3 1/2% per
annum on the principal amount from the Issue Date or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
payable semi-annually in arrears on March 14 and September 14 of each year
(each, an "Interest Payment Date"), commencing September 14, 2003, computed on a
semi-annual bond equivalent basis using a 360-day year composed of twelve 30-day
months, to the Persons in whose names the Subordinated Debentures are registered
at the Close of Business on the Regular Record Date for such interest, which
shall be March 1 or September 1 (whether or not a Business Day), as the case may
be, next preceding such Interest Payment Date. The Company shall have the right
to defer payments of interest on any Interest Payment Date pursuant to Section
311 of the Original Indenture.
Section 205. Form.
(a) The Subordinated Debentures, offered and sold in their initial
distribution in reliance on Rule 144A, on original issuance, shall be issued in
the form of a Restricted Global Security registered in the name of DTC, as
Depositary, or its nominee, and deposited with the Trustee, as custodian for
DTC.
(b) DTC shall serve as the initial Depositary for the Global
Security.
(c) Unless and until it is exchanged for definitive Subordinated
Debentures in registered form in accordance with the terms of the Original
Indenture, a Global Security may be transferred, in whole but not in part, only
to another nominee of the Depositary, or to a successor Depositary selected or
approved by the Company or to a nominee of such successor Depositary; provided
that interests in the Restricted Global Security may be exchanged for interests
in a Global Security that is a Registered Security registered in the name of the
Depositary or a nominee of the Depositary in accordance with the terms of the
Original Indenture.
Section 206. Company's Right to Elect Manner of Payment in Certain
Events.
(a) The Company may satisfy its obligation to pay the principal
amount, Redemption Price and Change in Control Purchase Price with respect to
any Subordinated Debentures in cash, Common Shares, or any combination thereof
as provided in this Section 206 and in Section 207 and Articles Five and Six.
(b) The Company may satisfy its obligations to issue Common Shares
on a Conversion Date by paying cash or any combination of cash and Common Shares
as provided in Article Four.
(c) The Company shall designate in the Redemption Notice, the
Change in Control Purchase Offer Notice or, with respect to the principal
amount, a written notice (the "Company Notice") delivered to Holders (and to
beneficial owners as required by applicable law) no later than the applicable
Company Notice Date:
(i) whether the Company will redeem, pay or purchase the
Subordinated Debentures for cash or Common Shares or a combination
thereof,
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(ii) if a combination thereof, the percentages of the
applicable Subordinated Debenture Payment in respect of which it will
deliver cash and Common Shares, and
(iii) if any portion will be redeemed, paid or purchased for
Common Shares, the method of calculating the Average Market Price;
provided that the Company will deliver cash for fractional interests in Common
Shares.
(d) Each Holder whose Subordinated Debentures are purchased or
redeemed, or as to which a payment is made, at any due date shall receive the
same percentage of cash or Common Shares in payment of the applicable
Subordinated Debenture Payment for such Subordinated Debentures, except:
(i) as provided in Section 208 with regard to the payment of
cash in lieu of fractional Common Shares, and
(ii) in the event that the Company is unable to purchase or
make a payment with respect to the Subordinated Debentures of a Holder
or Holders for Common Shares because any necessary qualifications or
registrations of the Common Shares under applicable state securities
laws cannot be obtained, the Company may purchase or make the payment
with respect to the Subordinated Debentures of such Holder or Holders
for cash.
(e) 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 the Redemption Notice, the Change in Control Purchase
Offer Notice or the Company Notice, as applicable, except in the event of a
failure to satisfy, prior to the Close of Business at Stated Maturity,
Redemption Date or Change in Control Purchase Date, as applicable, any condition
to the payment of the applicable Subordinated Debenture Payment, in whole or in
part, in Common Shares.
Section 207. Payment by Issuance of Common Shares.
(a) If the Company elects to make all or part of any Subordinated
Debenture Payment by the issuance of any Common Shares at Stated Maturity or on
any Redemption Date and Change in Control Purchase Date, as applicable, in
accordance with Section 206, the applicable Subordinated Debenture Payment, or
the specified percentage thereof indicated in the notice provided pursuant to
Section 206(c), shall be paid by the Company by the issuance of a number of
Common Shares equal to the quotient obtained by dividing (i) the amount of cash
to which the Holders would have been entitled had the Company elected to pay all
or such specified percentage, as the case may be, of such Subordinated Debenture
Payment in cash by (ii) the Average Market Price.
(b) The Company's right to exercise its election to make all or
part of any Subordinated Debenture Payment pursuant to Section 206 and this
Section 207 through the issuance of Common Shares shall be conditioned upon:
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(1) the Company's not having previously delivered a
Redemption Notice, Change in Control Purchase Notice or Company
Notice electing to make such Subordinated Debenture Payment
entirely in cash and its satisfaction of the notice requirements
set forth in Section 206(c);
(2) such Common Shares being listed on a principal U.S. or
Canadian securities exchange or quoted on the Nasdaq National
Market (or a similar U.S. system for automated dissemination of
quotations of securities);
(3) the registration of such Common Shares under the
Securities Act and the Exchange Act, if required for the initial
issuance thereof;
(4) any necessary qualification or registration under
applicable state securities laws or the availability of an
exemption from such qualification and registration;
(5) the information necessary to calculate the Average
Market Price is published daily in The Wall Street Journal or
another newspaper of U.S. national circulation or on the
Company's website or through such other public medium as the
Company may use at such time; and
(6) 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 Common Shares are in conformity with the
Indenture and (B) the Common Shares to be issued by the Company
in payment of the applicable Subordinated Debenture Payment have
been duly authorized and, when issued, will be 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 conditions (1) through (5) above have
been satisfied and, in the case of such Opinion of Counsel,
stating that conditions (3) and (4) above have been satisfied.
(c) The Officers' Certificate referred to in paragraph (5) above
shall also (i) set forth the number of Common Shares to be issued for each
$1,000 principal amount of Subordinated Debentures and the Closing Sale Price of
the Common Shares on each Trading Day during the period in which the Average
Market Price is calculated, and (ii) if delivered in connection with a Company
Notice, be delivered to the Trustee at least three Business Days before the
Company Notice Date and specify (A) the information required to be included in
the Company Notice pursuant to Section 206 and (B) whether the Company desires
the Trustee to send the Company Notice.
(d) If any of the conditions set forth in Section 207(b) is not
satisfied with respect to a Holder or Holders prior to the Close of Business at
Stated Maturity or any Redemption Date or Change in Control Purchase Date, as
applicable, and the Company has elected to pay or purchase the Subordinated
Debentures or make a payment with respect to the Subordinated Debentures
pursuant to Section 206 and this Section 207 through the issuance of Common
Shares, the Company shall pay, without further notice, the entire applicable
Subordinated Debenture Payment in cash.
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(e) If the Redemption Notice, Change in Control Purchase Offer
Notice or Company Notice with respect to any Subordinated Debenture Payment
states that the Company elects to pay any portion of the Subordinated Debenture
Payment in Common Shares, then when the Company determines the actual number of
Common Shares to be issued, it shall publish such information on its website or
through such other public medium as the Company may use at such time.
(f) Each Common Share issued pursuant to this Section 207 upon
redemption, purchase or at Maturity of Subordinated Debentures shall be entitled
to receive the appropriate number of Rights under the Rights Agreement, and the
certificates, representing the Common Shares issued upon redemption, purchase or
at Maturity and shall bear such legends, if any, in each case as may be provided
by the terms of the Rights Agreement.
Section 208. Fractional Shares.
The Company will not issue fractional Common Shares in payment of a
Subordinated Debenture Payment. Instead, the Company will pay cash equal to the
Average Market Price of the fractional Common Share at Stated Maturity or on the
Redemption Date or Change in Control Purchase Date, as applicable, rounded to
the nearest whole cent with one-half cent being rounded upwards. For purposes of
determining the existence of potential fractional interests, all Subordinated
Debentures subject to payment, purchase or redemption by the Company held by a
Holder shall be considered together (no matter how many separate certificates
are to be presented).
Section 209. Other Provisions.
(a) The Subordinated Debentures shall be convertible by the Holder
as provided in Article Four.
(b) The Subordinated Debentures shall be redeemable at the option
of the Company as provided in Article Five.
ARTICLE THREE
SUBORDINATED DEBENTURE FORMS
Section 301. Form of Face of Subordinated Debenture.
[Insert any legends required by Section 204 of the Original
Indenture.]
[FORM OF FACE OF DEBENTURE]
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INCO LIMITED
3 1/2% SUBORDINATED CONVERTIBLE DEBENTURES DUE 2052
No.____________ CUSIP No. 453258 AQ 8
Issue Date: [March 7, 2003] Stated Maturity: March 14, 2052
Inco Limited, a corporation duly organized and existing under the laws
of Canada (herein called the "Company", which term includes any successor
corporation under the Indenture hereinafter referred to), for value received,
hereby promises to pay to __________, or registered assigns, the principal sum
of $__________ Dollars on March 14, 2052, and to pay interest thereon from March
7, 2003 or from the most recent Interest Payment Date to which interest has been
paid or as duly provided for, semi-annually on March 14 and September 14 in each
year, commencing September 14, 2003, and at the Stated Maturity thereof, at the
rate of 3 1/2% per annum, computed on a semi-annual bond equivalent basis using
a 360-day year composed of twelve 30-day months, until the principal amount
hereof is paid or made available for payment; provided that any overdue
principal and premium, if any, and any overdue installment of interest shall
bear interest at the rate of 3 1/2% per annum (to the extent that the payment of
such interest shall be legally enforceable) from the dates such amounts are due
until they are paid or made available for payment, and such interest shall be
payable on demand; and provided, further, that, if (i) the Company has not filed
a registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), registering this Subordinated Debenture for resale (a "Resale
Registration Statement") within 120 days after the Issue Date of this
Subordinated Debenture, (ii) the Resale Registration Statement is not declared
effective within 210 days after the Issue Date of this Subordinated Debenture,
as set forth in the Registration Rights Agreement, (iii) the Company has failed
to perform its obligations pursuant to Section 2(d) of the Registration Rights
Agreement within the time frames specified therein, or (iv) the Company has
suspended the use of the Resale Registration Statement for an aggregate period
longer than the period permitted pursuant to the Registration Rights Agreement
(each such event referred to in clause (i), (ii), (iii) or (iv), a "Registration
Default"), to the extent required pursuant thereto, then Special Interest shall
accrue (in addition to the stated interest on the Subordinated Debentures) at an
additional annual rate of 0.25% for the first 90 days immediately following the
Registration Default, and thereafter at an additional annual rate of 0.50% until
the Registration Default is cured by meeting the applicable requirement in
clause (i), (ii), (iii) or (iv) as the case may be. Notwithstanding the
existence of more than one Registration Default, in no event shall Special
Interest accrue at an annual rate in excess of 0.50%. Interest accruing as a
result of a Registration Default is referred to herein as "Special Interest".
Whenever in this Subordinated Debenture or in the Indenture there is a
reference, in any context, to the payment of the principal of, premium, if any,
or interest on, or in respect of, any Subordinated Debenture, such mention shall
be deemed to include mention of the payment of Special Interest (if applicable)
payable as described in the preceding paragraph to the extent that, in such
context, Special Interest is, was or would be payable in respect of such
Subordinated Debenture and express mention of the payment of Special Interest
(if applicable) in any provisions of this Subordinated Debenture shall not be
construed as excluding Special Interest in those provisions of this Subordinated
Debenture where such express mention is not made.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this
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Subordinated Debenture (or one or more Predecessor Securities) is registered at
the Close of Business on the Regular Record Date for such interest, which shall
be in each year March 1 or September 1 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date. Any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Subordinated Debenture (or one or more Predecessor Securities) is
registered at the Close of Business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of the Subordinated Debentures not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Subordinated Debentures of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in said Indenture.
So long as no Event of Default has occurred and is continuing, the
Company shall have the right, at any time during the term of this Subordinated
Debenture, from time to time to defer the payment of interest (other than
Special Interest, if any) on this Subordinated Debenture for up to 10
consecutive semi-annual interest payment periods with respect to each deferral
period (each an "Extension Period"), during which Extension Periods the Company
shall have the right to make partial payments of interest on any Interest
Payment Date, and at the end of which the Company shall pay all interest then
accrued and unpaid including any Additional Interest, as provided below;
provided, however, that no Extension Period shall extend beyond the Stated
Maturity of the principal of this Subordinated Debenture; and provided, further,
that during any such Extension Period, the Company shall not declare or pay any
dividend on, make any distributions with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock
or make any guarantee payment with respect thereto (other than (i) repurchases,
redemptions or other acquisitions of shares of capital stock of the Company in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of employees, officers, directors or
consultants, (ii) as a result of an exchange or conversion of any class or
series of the Company's capital stock for any other class or series of the
Company's capital stock, or (iii) the purchase of fractional interests in shares
of the Company's capital stock pursuant to the conversion or exchange provisions
of such capital stock or the security being converted or exchanged), and (b) the
Company shall not make any payment of interest on, principal of or premium, if
any, on, or repay, repurchase or redeem, any debt securities issued by the
Company which rank pari passu with or junior to the Subordinated Debentures
(including the Securities of any other series); provided, however, the Company
may declare and pay a stock dividend where the stock dividend is the same stock
as that on which the dividend is being paid. Prior to the termination of any
such Extension Period, the Company may further defer the payment of interest,
provided that no Extension Period shall exceed 10 consecutive semi-annual
interest payment periods or extend beyond the Stated Maturity of the principal
of this Subordinated Debenture. Upon the termination of any such Extension
Period and upon the payment of all accrued and unpaid interest and (to the
extent permitted by applicable law) any Additional Interest then due on any
Interest Payment Date, the Company may elect to begin a new Extension Period,
subject to the above conditions. No interest shall be due and payable during an
Extension Period, except at the end thereof, but each installment of interest
that would otherwise have been due and payable during such Extension shall bear
Additional Interest (to the extent that the payment of such interest shall be
legally enforceable) at the rate of 3 1/2% per annum, calculated as set forth in
the first paragraph of this Subordinated Debenture, from the dates on which such
amounts would otherwise have been due and payable until paid or made available
for payment. If the principal of any Subordinated Debentures shall become due
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and payable on a day or if any Subordinated Debentures become subject to
Redemption on a Redemption Date that would otherwise occur during an Extension
Period, such Extension Period will automatically end on the immediately
preceding day (which will be the last day of the period). The Company shall give
the Holder of this Subordinated Debenture and the Trustee notice of its election
to begin any Extension Period at least five Business Days prior to the Regular
Record Date on the next succeeding Interest Payment Date on which interest on
this Subordinated Debenture would be payable but for such deferral. The
Company's written notice of its election to begin an Extension Period shall set
forth the first Interest Payment Date in such period and, if known, the date on
which payment of interest (and Additional Interest, if any) on the Subordinated
Debentures will be resumed, and shall be given in the manner set forth in
Section 106 of the Original Indenture. If such resumption date is not known, the
notice must state that the length of the Extension Period will be indefinite.
Payment of the principal, Redemption Price or Change in Control
Purchase Price of this Subordinated Debenture may be made, at the option of the
Company, (i) in cash, (ii) by the issuance of Common Shares at the Average
Market Price at the applicable Subordinated Debenture Payment Date, or (iii) in
any combination thereof. The Conversion Amount may be satisfied, at the option
of the Company, in whole or in part in cash as determined pursuant to Article
Four of the First Supplemental Indenture. No fractional Common Shares will be
issued for payment with respect to any Subordinated Debentures or upon
conversion of any Subordinated Debentures but a payment in cash will be made, as
provided in the Indenture, in respect of any fraction of a Common Share which
would otherwise be issuable upon the surrender of any Subordinated Debenture for
payment or conversion. Any payments in cash on this Subordinated Debenture,
including payment of interest (and Additional Interest, if any), will be made at
the office or agency of the Company maintained for that purpose in the Borough
of Manhattan, The City of New York in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts; provided that, at the option of the Company, payment of interest
(including Special Interest and Additional Interest, if any) may be made (i) by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Securities Register, or (ii) by wire transfer in immediately
available funds at such place and to such account as may be designated by the
Person entitled thereto as specified in the Securities Register.
The indebtedness evidenced by this Subordinated Debenture is, to the
extent provided in the Indenture, subordinate in right of payment to the prior
payment in full of all Senior Indebtedness, and this Subordinated Debenture is
issued subject to the provisions of the Indenture with respect thereto. Each
Holder of this Subordinated Debenture, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
or her behalf to take such actions as may be necessary or appropriate to
effectuate the subordination so provided, and (c) appoints the Trustee his or
her attorney-in-fact for any and all such purposes. Each Holder hereof, by his
or her acceptance hereof, waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Indebtedness, whether now outstanding or hereafter incurred, and waives
reliance by each such holder upon said provisions.
Reference is hereby made to the further provisions of this Subordinated
Debenture set forth on the reverse hereof, including provisions relating to
certain conversion, purchase and redemption rights and obligations of the
Company and the Holder, which further provisions shall for all purposes have the
same effect as if set forth at this place.
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Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Subordinated Debenture shall not be entitled to any benefit under the Indenture
or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
Dated:
INCO LIMITED
By:
----------------------------
Name:
Title:
By:
----------------------------
Name:
Title:
Section 302. Form of Reverse of Subordinated Debenture.
This Subordinated Debenture is one of a duly authorized issue of
securities of the Company (herein called the "Subordinated Debentures"), issued
and to be issued in one or more series under a Subordinated Indenture, dated as
of March 7, 2003 (the "Original Indenture"), as supplemented by the First
Supplemental Indenture, dated as of March 7, 2003 (together, the "Indenture"),
between the Company and The Bank of New York, as Trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee, the holders of Senior
Indebtedness and the Holders of the Subordinated Debentures and of the terms
upon which the Subordinated Debentures are, and are to be, authenticated and
delivered. This Subordinated Debenture is one of the series designated on the
face hereof, limited in aggregate principal amount to $220,000,000 (which amount
may be increased by up to $30,000,000 to the extent the Over-Allotment Option is
exercised).
No sinking fund is provided for the Subordinated Debentures.
At any time on or after March 19, 2008, or such later date as the
Company may by notice in writing to the Holders stipulate, if the Closing Sale
Price of the Common Shares for at least 20 consecutive Trading Days in a period
of 30 consecutive Trading Days ending on the fifth Business Day preceding the
date of the Redemption Notice exceeds 125% of the Conversion Price, the
Subordinated Debentures will be subject to redemption at the option of the
Company as provided in the Indenture, in whole or in part, at a "Redemption
Price" equal to 100% of the principal amount of the Subordinated Debenture.
The Subordinated Debentures are also redeemable at the Company's option
prior to their Stated Maturity upon the occurrence of a Redemption Tax Event as
a result of which the Company has or would become obligated to pay Additional
Amounts that are more than de
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minimis to the Holder of any Subordinated Debenture, and in the opinion of the
Company (evidenced by an Officers' Certificate delivered to the Trustee) such
obligations cannot be avoided by the Company taking reasonable measures
available to it. In such event the Company may, at its option, redeem the
Subordinated Debentures in whole but not in part, upon not less than 20 Business
Days' nor more than 60 Business Days' notice given in accordance with the terms
of the Indenture, at the then applicable Redemption Price, equal to 100% of the
principal amount of the Subordinated Debenture, but without reductions for
applicable Canadian withholding taxes, except that (i) no such notice of
redemption may be given earlier than 60 Business Days prior to the earliest date
on or from which the Company would be obligated to pay any such Additional
Amounts, and (ii) at the time such notice is given, the circumstances creating
such obligation to pay such Additional Amounts remain in effect.
In the event of any redemption, the Company will also pay the Holder,
in addition to the Redemption Price, an amount equal to the accrued and unpaid
interest to the Redemption Date.
In the event of a redemption of less than all of the Subordinated
Debentures, the Company shall not be required (a) to register the transfer or
exchange of Subordinated Debentures for a period of 15 days immediately
preceding the date notice is given identifying the serial numbers of the
Subordinated Debentures called for such redemption or (b) to register the
transfer or exchange of any Subordinated Debenture, or portion thereof, called
for redemption. In the event of redemption of this Subordinated Debenture in
part only, a new Subordinated Debenture or Subordinated Debentures of this
series and of like tenor for the unredeemed portion hereof shall be issued in
the name of the Holder hereof upon the cancellation hereof.
The Holder of any Subordinated Debenture is entitled at such Holder's
option, prior to the Close of Business at Stated Maturity, to convert the
principal amount of any such Subordinated Debenture or any portion of such
principal amount into fully paid and non-assessable Common Shares at any time
when one or more of the following conditions shall be satisfied:
(a) The Subordinated Debentures shall be convertible in any
calendar quarter (and only during such calendar quarter) beginning
with the quarter ending September 30, 2003, if, as of the last day of
the immediately preceding calendar quarter, the Closing Sale Price of
the Common Shares for at least 20 Trading Days in the period of 30
consecutive Trading Days ending on the last Trading Day of such
preceding quarter is more than 120% of the Conversion Price per Common
Share on the last Trading Day of such preceding quarter.
(b) The Subordinated Debentures shall be convertible during the
five Business Days following any ten consecutive Trading Days in which
the Trading Price of the Subordinated Debenture for each day of such
period was less or was deemed to be less than 95% of the product of
the Closing Sale Price of the Common Shares multiplied by the
Conversion Rate.
(c) In the event the Company has called the Subordinated
Debentures for redemption, the Subordinated Debentures shall be
convertible at any time on or after the date the Redemption Notice has
been given until the Close of Business on the Business Day immediately
preceding the Redemption Date.
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(d) Upon the occurrence of certain corporate events specified in
the Indenture.
Each Subordinated Debenture will be convertible into 38.4423 fully paid
and non-assessable Common Shares, as said shares shall be constituted at the
date of conversion, per $1,000 principal amount of the Subordinated Debenture or
portion thereof to be converted (the "Conversion Rate") or such Conversion Rate
as adjusted from time to time as provided in the Indenture, upon surrender of
this Subordinated Debenture, together with a Conversion Notice as provided in
the Indenture, to the Conversion Agent and, unless the Common Shares issuable on
conversion are to be issued in the same name as this Subordinated Debenture,
duly endorsed by, or accompanied by instruments of transfer in form satisfactory
to the Conversion Agent duly executed by the Holder or by its duly authorized
attorney. The Company has the option to satisfy its obligation to deliver Common
Shares upon such conversion by paying cash in lieu of some or all of such Common
Shares. In case a Subordinated Debenture or portion thereof is called for
redemption, such conversion right in respect of the Subordinated Debenture or
portion so called shall expire immediately prior to the Close of Business on the
last Business Day prior to the Redemption Date, unless the Company defaults in
making the payment due upon such redemption.
On any conversion of a Subordinated Debenture, the accrued and unpaid
interest (including Additional Interest, if any) attributable to the period from
the Issue Date to the conversion date with respect to the converted Subordinated
Debenture shall not be canceled, extinguished or forfeited, but rather shall be
paid in full to the Holder thereof through the delivery of the Conversion
Consideration except as provided in the Indenture; and the fair market value of
such consideration shall be applied, first in satisfaction of the accrued and
unpaid interest (including Additional Interest, if any) to the conversion date,
and the balance, if any, of such fair market value of such consideration shall
be applied in satisfaction of the principal amount of the Subordinated Debenture
being converted pursuant to the provisions hereof. A Holder may convert a
portion of a Subordinated Debenture if the principal amount of such portion is
$1,000 or an integral multiple of $1,000. No payment or adjustment shall be made
for any dividends on the Common Shares except as provided in the Indenture.
If a Change in Control occurs, then the Company shall offer to purchase
all of the Subordinated Debentures at a price (the "Change in Control Purchase
Price") equal to the principal amount of the Subordinated Debenture plus accrued
and unpaid interest to such date (the "Change in Control Purchase Date") that is
35 Business Days after notice of the occurrence of such Change in Control. The
Company shall mail to all Holders a notice (the "Change in Control Purchase
Offer Notice") of the occurrence of such Change in Control and of the purchase
offer arising as a result thereof within 15 Business Days after the occurrence
of such Change in Control. For a Subordinated Debenture to be purchased, the
Paying Agent must receive a notice of acceptance from the Holder in the form set
forth in Section 304 of the First Supplemental Indenture (the "Change in Control
Purchase Notice") to purchase on or before the Close of Business on the Change
in Control Purchase Date and the Trustee or Paying Agent must receive such
Subordinated Debenture duly endorsed for transfer. All questions as to the
validity, eligibility (including time of receipt) and acceptance of any
Subordinated Debenture for purchase shall be determined by the Company, whose
determination shall be final and binding.
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Holders have the right to withdraw any Change in Control Purchase
Notice by delivering to the Paying Agent written notice of withdrawal prior to
the Close of Business on the Change in Control Purchase Date in accordance with
the provisions of the Indenture.
The Company has the option to pay the Redemption Price (including on
the occurrence of a Redemption Tax Event) and the Change in Control Purchase
Price in cash, by the issuance of Common Shares at the Average Market Price, or
in any combination thereof.
If an Event of Default with respect to the Subordinated Debentures
shall occur and be continuing, the principal of, together with accrued and
unpaid interest and any Additional Interest, if any, on the Subordinated
Debentures may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of 66 2/3% of the principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages of the principal
amount of the Securities of each series at the time Outstanding, on behalf of
the Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Subordinated Debenture shall be conclusive and binding upon such Holder and
upon all future Holders of this Subordinated Debenture and of any Subordinated
Debenture issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Subordinated Debenture.
As provided in and subject to the provisions of the Indenture, the
Holder of this Subordinated Debenture shall not have the right to institute any
proceeding with respect to the Indenture or for the appointment of a receiver or
trustee or for any other remedy thereunder, unless such Holder shall have
previously given the Trustee written notice of a continuing Event of Default
with respect to the Subordinated Debentures, the Holders of not less than 25% of
the principal amount of the Subordinated Debentures at the time Outstanding
shall have made written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the Trustee indemnity
satisfactory to the Trustee, and the Trustee shall not have received from the
Holders of a majority of the principal amount of the Subordinated Debentures at
the time Outstanding a direction inconsistent with such request, and the Trustee
shall have failed to institute any such proceeding, for 60 days after receipt of
such notice, request and offer of indemnity. The foregoing shall not apply to
any suit instituted by the Holder of this Subordinated Debenture for the
enforcement of any payment of principal hereof or any premium or interest hereon
or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this
Subordinated Debenture or of the Indenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal amount
and interest and any other amounts due on, or in respect of, this Subordinated
Debenture at the times, place and rate, and in the coin or currency or other
form of payment, herein prescribed.
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For disclosure purposes under the Interest Act (Canada), whenever in
the Subordinated Debentures or the Indenture interest at a specified rate is to
be calculated on the basis of a period less than a calendar year, the yearly
rate of interest to which such rate is equivalent is such rate multiplied by the
actual number of days in the relevant calendar year and divided by the number of
days in such period.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Subordinated Debenture is registrable in the
Securities Register, upon surrender of this Subordinated Debenture for
registration of transfer at the office or agency of the Company in any place
where the principal of (and premium, if any) and interest on this Subordinated
Debenture payable, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Subordinated Debenture
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Subordinated Debentures and of like
tenor, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.
The Subordinated Debentures are issuable only in registered form
without coupons in denominations of $1,000 principal amount and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Subordinated Debentures are exchangeable for a
like aggregate principal amount of Subordinated Debentures and of like tenor of
a different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Subordinated Debenture for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Subordinated Debenture is
registered as the owner hereof for all purposes, whether or not this
Subordinated Debenture be overdue, and neither the Company, the Trustee nor any
such agent shall be affected by notice to the contrary.
This Subordinated Debenture is a Global Security and is subject to the
provisions of the Indenture relating to Global Securities, including the
limitations in Section 305 of the Original Indenture on transfers and exchanges
of Global Securities.
All terms used in this Subordinated Debenture which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
Section 303. Form of Conversion Notice.
CONVERSION NOTICE
The undersigned owner of this Subordinated Debenture hereby irrevocably
exercises the option to convert this Subordinated Debenture, or the portion
below designated, into Common Shares of Inco Limited in accordance with the
terms of Article Four of the First Supplemental Indenture referred to in this
Subordinated Debenture, and directs that the Common Shares issuable and
deliverable upon conversion, together with any check in payment for fractional
shares, be issued in the name of and delivered to the undersigned registered
Holder hereof, unless
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a different name has been indicated in this notice below. If Common Shares are
to be issued in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto. Any amount required to
be paid by the undersigned on account of interest accompanies this Subordinated
Debenture.
Dated:
-----------------
-----------------------------------
Signature
NOTICE: The signature to the foregoing notice must correspond to the name as
written upon the face of this Subordinated Debenture in every particular,
without alteration or any change whatsoever.
If Common Shares are to be issued If only a portion of the Subordinated
and registered otherwise than to the Debentures is to be converted, please
registered Holder named above, indicate:
please print or typewrite name and
address, including zip code, and Principal amount to be converted
social security or other taxpayer ($1,000 or multiples thereof):
identification number:
----------------------------------------
------------------------------------ Remaining principal amount following
Name such conversion ($1,000 or multiples
thereof):
------------------------------------ ----------------------------------------
Address
------------------------------------
Social Security or other Taxpayer
Identification Number, if any
Signature(s) must be guaranteed by a commercial bank or trust company or a
member firm of a major stock exchange with membership in an approved signature
guarantee medallion program pursuant to the Securities and Exchange Commission
Rule 17Ad-15 if Common Shares are to be issued, or Subordinated Debentures to be
delivered, other than to or in the name of the registered Holder.
------------------------------------
Signature Guaranteed
NOTICE: The signature to the foregoing notice must correspond to the name as
written upon the face of this Subordinated Debenture in every particular,
without alteration or any change whatsoever.
Section 304. Form of Change in Control Purchase Notice.
NOTICE OF ACCEPTANCE BY HOLDER OF COMPANY'S
OFFER TO PURCHASE UPON CHANGE IN CONTROL
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Pursuant to Section 602 of the First Supplemental Indenture, the
undersigned hereby accepts the Company's offer to purchase this Subordinated
Debenture. The undersigned hereby directs the Company to pay it or ____________
the Change in Control Purchase Price as provided in the First Supplemental
Indenture.
[Insert if the Company elects to pay all or part of the Change in
Control Purchase Price in Common Shares - In the event the Company is not
permitted to deliver Common Shares in lieu of cash, the undersigned elects [to
withdraw its Change in Control Purchase Notice with respect to ________
principal amount represented by certificate numbers ____.][to receive cash in
respect of the entire Change in Control Purchase Price for all Subordinated
Debentures subject to this Change in Control Purchase Notice.]]
Dated:
----------------
-----------------------------------
Signature
If Common Shares are to be issued If only a portion of the Subordinated
and registered otherwise than to the Debentures is to be purchased, please
registered Holder named above, indicate:
please print or typewrite name and
address, including zip code, and Principal amount to be purchased
social security or other taxpayer ($1,000 or multiples thereof):
identification number:
----------------------------------------
------------------------------------ Remaining principal amount following
Name such purchase ($1,000 or multiples
thereof):
------------------------------------ ----------------------------------------
Address
------------------------------------
Social Security or other Taxpayer
Identification Number, if any
Signature(s) must be guaranteed by a commercial bank or trust company or a
member firm of a major stock exchange with membership in an approved signature
guarantee medallion program pursuant to the Securities and Exchange Commission
Rule 17Ad-15 if Common Shares are to be issued, or Subordinated Debentures to be
delivered, other than to or in the name of the registered Holder.
------------------------------------
Signature Guaranteed
NOTICE: The signature to the foregoing notice must correspond to the name as
written upon the face of this Subordinated Debenture in every particular,
without alteration or any change whatsoever.
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Section 305. Legends For Subordinated Debentures.
The Subordinated Debentures shall bear the legends required by Section
204 of the Original Indenture.
ARTICLE FOUR
CONVERSION
Section 401. Conversion Privilege; Conversion Rate.
(a) Prior to the Close of Business at Stated Maturity, so long as
one or more of the conditions set forth in Section 402(a) is satisfied, the
Holder of any Subordinated Debenture is entitled at such Holder's option to
convert such Subordinated Debenture or any portion of such Subordinated
Debenture the principal amount of which is $1,000 or an integral multiple
thereof, into that number of fully paid and non-assessable Common Shares
determined using the Conversion Rate then in effect by surrender of the
Subordinated Debenture to be converted in whole or in part in the manner
provided in Section 403. In case a Subordinated Debenture or portion thereof is
called for redemption, such conversion right in respect of the Subordinated
Debenture or portion so called shall expire immediately prior to the Close of
Business on the last Business Day prior to the Redemption Date, unless the
Company defaults in making the payment due upon such redemption. In case a
Change in Control Purchase Notice has been delivered with respect to such
Subordinated Debenture or a portion thereof, such conversion right in respect of
the Subordinated Debenture or portion thereof subject to such notice cannot be
exercised unless such Change in Control Purchase Notice has been withdrawn in
accordance with the provisions of the Indenture prior to the Close of Business
on the Change in Control Purchase Date.
(b) The Conversion Rate shall be as specified in the form of
Subordinated Debenture set forth in Section 302, and subject to adjustment as
provided in this Article Four. In addition, the Company may, at its option,
increase the Conversion Rate from time to time but, except as otherwise provided
herein, shall have no obligation to do so. The Conversion Rate shall not be
adjusted at any time during the term of the Subordinated Debentures for accrued
and unpaid interest.
(c) The Company has the option to deliver cash in lieu of some or
all of the Conversion Amount. The Company will give notice of its election to
deliver cash in lieu of part or all of the Conversion Amount in cash to the
Holder converting Subordinated Debentures within ten Business Days of its
receipt of the Holder's Conversion Notice, unless the Company has already
informed Holders of its election in connection with a Redemption Notice or a
Change in Control Purchase Offer Notice.
(d) The Company will not issue fractional Common Shares in
satisfaction of the Conversion Amount, but will instead pay cash equal to the
Closing Sale Price of the fractional Common Share on the Trading Day immediately
preceding Conversion Date, rounded to the nearest whole cent with one-half cent
being rounded upwards. For purposes of determining the existence of potential
fractional interests, all Subordinated Debentures held by a Holder subject to
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conversion shall be considered together (no matter how many separate
certificates are to be presented).
(e) If the Company elects to exercise its option to deliver cash
in lieu of part or all of the Conversion Amount, the amount of cash to be
delivered on conversion by a Holder in lieu of each such Common Share will be
equal to the average of the Closing Sale Prices of the Common Shares for the
five consecutive Trading Days immediately following (i) the date of the
Company's notice of election to deliver part or all of the Conversion Amount in
cash if the Company has not given a Redemption Notice, or (ii) the Conversion
Date, in the case of a conversion following the giving by the Company of a
Redemption Notice specifying its intention to deliver cash upon conversion. If
the Company elects to pay all or a portion of the Conversion Amount in cash, the
payment, including the delivery of any Common Shares, will be made to Holders
surrendering Subordinated Debentures no later than the tenth Business Day
following the Conversion Date. If the Company does not so elect, the Common
Shares, together with any cash payment for fractional shares, will be delivered
through the Conversion Agent no later than the fifth Business Day following the
Conversion Date. If an Event of Default (other than a default in payment upon
conversion of the Subordinated Debentures), has occurred and is continuing, the
Company may not deliver cash upon conversion of any Subordinated Debentures
(other than cash in lieu of fractional shares).
(f) A Holder of Subordinated Debentures is not entitled to any
rights of a holder of Common Shares until such Holder has converted its
Subordinated Debentures into Common Shares.
Section 402. Conversion Conditions.
(a) The Subordinated Debentures shall be convertible only so long
as one or more of the following conditions is satisfied.
(i) The Subordinated Debentures may be surrendered for
conversion during any calendar quarter (and only during such calendar
quarter) beginning with the quarter ending September 30, 2003, if, as
of the last day of the immediately preceding calendar quarter, the
Closing Sale Price of the Common Shares for at least 20 Trading Days in
the period of 30 consecutive Trading Days ending on the last Trading
Day of such preceding quarter is more than 120% of the Conversion Price
per Common Share on the last Trading Day of such preceding quarter.
(ii) The Subordinated Debentures may be surrendered for
conversion during the five Business Days following any ten consecutive
Trading Days in which the Trading Price of the Subordinated Debentures
for each day of such period was less or was deemed to be less than 95%
of the product of the Closing Sale Price of Common Shares multiplied by
the Conversion Rate. For the purpose of the foregoing sentence, a
Trading Price shall be deemed to be less than 95% in the circumstances
provided in Section 402(b)(i).
(iii) In the event the Company has called the Subordinated
Debentures for redemption pursuant to Article Five, the Subordinated
Debentures may be surrendered for conversion at any time on or after
the date the Redemption Notice has
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been given until the Close of Business on the Business Day immediately
preceding the Redemption Date.
(iv) In the event that (A) the Company distributes to all
Holders of its Common Shares rights or warrants entitling them (for a
period expiring within 45 days of the record date for the determination
of the shareholders entitled to receive such distribution) to subscribe
for or purchase Common Shares, at a price per share less than the
average of the Closing Sale Prices of the Common Shares for the ten
Trading Days immediately preceding, but not including, the date such
distribution is first publicly announced by the Company, or (B) the
Company distributes to all Holders of its Common Shares, assets, debt
securities or rights or warrants to purchase its securities, where the
fair market value (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and described in a
Board Resolution) of such distribution per share of Common Stock
exceeds 15% of the Closing Sale Price of the Common Shares on the
Trading Day immediately preceding, but not including, the date such
distribution is first publicly announced by the Company, then, in
either case, the Subordinated Debentures may be surrendered for
conversion at any time on or after the date that the Company gives
notice to the Holders of such right, which date shall be not less than
10 days prior to the Ex-Dividend Time for such distribution, until the
earlier of the Close of Business on the Business Day immediately
preceding, but not including, the Ex-Dividend Time or the date on which
the Company publicly announces that such distribution will not take
place; provided that no distribution will entitle the Holder to convert
if the Holder will otherwise participate in such distribution without
conversion.
(v) In the event that (A) the Company is a party to a
consolidation, amalgamation, merger, statutory arrangement (involving a
business combination) or the Company conveys, transfers, sells, leases
or otherwise disposes of all or substantially all of its properties and
assets, (B) the Company is not the resulting or surviving entity, (C)
such transaction is not with an Affiliate of the Company and (D) after
the completion or consummation of such transaction either (i) more than
50% of the surviving or resulting entity's voting stock is not held by
the Company's pre-transaction shareholders or (ii) more than 50% of the
surviving or resulting entity's directors were not directors of the
Company or directors approved by the Board of Directors immediately
prior to the transaction, then the Subordinated Debentures may be
surrendered for conversion at any time from and after the date 15 days
prior to the anticipated effective date of the transaction and ending
on and including the date 15 days after the consummation of the
transaction. The Board of Directors shall determine the anticipated
effective date of the transaction, and such determination shall be
conclusive and binding on the Holders and shall be publicly announced
by the Company and posted on its website or such other public medium as
the Company may use at the time not later than two Business Days prior
to the 30-day period described in the preceding sentence.
(b) As used herein the following terms shall have the following
meanings:
(i) The "Trading Price" of the Subordinated Debentures on any
date of determination means the average of the secondary market bid
quotations per Subordinated Debenture obtained by the Conversion Agent
for $5,000,000 principal amount of the Subordinated Debentures at
approximately 3:30 p.m., New York City time, on such determination date
from two independent nationally recognized securities dealers
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selected by the Company; provided that, if the Conversion Agent cannot
reasonably obtain at least two such bids, but can reasonably obtain one
such bid, this one bid shall be used. If, for any date the Conversion
Agent has been instructed by the Company to determine the Trading Price
pursuant to the last sentence of this paragraph, the Conversion Agent
cannot reasonably obtain at least one bid for $5,000,000 principal
amount of the Subordinated Debentures from a nationally recognized
securities dealer or in the Company's reasonable judgment, the bid
quotation(s) are not indicative of the secondary market value of the
Subordinated Debentures, then the Trading Price of the Subordinated
Debentures for that date will be deemed to be less than 95% of the
product of the Closing Sale Price of the Common Shares multiplied by
Conversion Rate. The Conversion Agent shall have no obligation to
determine the Trading Price of the Subordinated Debentures unless the
Company has requested such a determination; and the Company shall have
no obligation to make such request unless a Holder provides it with
reasonable evidence that the Trading Price of the Subordinated
Debentures would be less than 95% of the product of the Closing Sale
Price of the Common Stock and the Conversion Rate. If such evidence is
provided, the Company shall instruct the Conversion Agent to determine
the Trading Price of the Subordinated Debentures beginning on the next
Trading Day and on each successive Trading Day until the Trading Price
is greater than or equal to 95% of the product of the Closing Sale
Price of the Common Stock and the Conversion Rate.
(ii) "Ex-Dividend Time" means, with respect to any issuance
or distribution on Common Shares, the first date on which the Common
Shares trade regular way on the principal securities market on which
the Common Shares are then traded without the right to receive such
issuance or distribution.
Section 403. Exercise of Conversion Privilege.
(a) To convert a Subordinated Debenture into Common Shares, a
Holder must (a) complete and manually sign the conversion notice in the form set
forth in Section 303 (the "Conversion Notice") (or complete and manually sign a
facsimile thereof) and deliver such notice to the Conversion Agent, (b)
surrender the Subordinated Debentures to the Conversion Agent, (c) if required
by the Conversion Agent, furnish appropriate endorsements and transfer
documents, and (d) if required, pay all transfer or similar taxes. The date on
which the foregoing requirements have been satisfied is the "Conversion Date".
The Conversion Agent shall promptly deliver to the Company and the Common Shares
stock transfer agent notification of such Conversion Notice received by the
Conversion Agent from a Holder.
(b) The Person or Persons in whose name or names any certificate
or certificates for Common Shares shall be issuable upon conversion shall be
deemed to have become at the Close of Business on the Conversion Date the Holder
or Holders of record of the Common Shares issuable upon such conversion;
provided that, if the Conversion Date is on any date when the stock transfer
books of the Company are closed, the Person or Persons in whose name or names
the certificate or certificates for such Common Shares are to be issued shall
constitute the record holder or holders thereof for all purposes at the opening
of business on the next succeeding day on which such stock transfer books are
open but such conversion shall nevertheless be at the Conversion Rate in effect
on the Conversion Date.
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(c) No payment or adjustment shall be made for dividends on, or
other distributions with respect to, any Common Shares except as provided in
this Article Four. On conversion of a Subordinated Debenture, accrued interest
(including Additional Interest, if any) attributable to the period from the
Issue Date of the Subordinated Debenture through the Conversion Date with
respect to the converted Subordinated Debenture shall not be canceled,
extinguished or forfeited, but rather shall be paid in full to the Holder
thereof through delivery of the Conversion Consideration and the fair market
value of such consideration shall be applied, in satisfaction of the principal
amount of the Subordinated Debentures being converted pursuant to the provisions
hereof. The interest payable on any Interest Payment Date on any Subordinated
Debenture (or portion thereof, if applicable) being surrendered for conversion
during the period from the Close of Business on any Regular Record Date to the
opening of business of the next Interest Payment Date shall be paid to the
Holder of such Subordinated Debenture as of the Regular Record Date for such
Interest Payment Date in an amount equal to the interest that would have been
payable on such Subordinated Debenture if such Subordinated Debenture (or a
portion thereof) had not been converted. Interest payable in respect of any
Subordinated Debenture surrendered on an Interest Payment Date shall be paid to
the Holder of such Subordinated Debenture as of the next preceding Regular
Record Date, notwithstanding the exercise of the right of conversion. A Holder
surrendering Subordinated Debentures for conversion during the period from the
Close of Business on any Regular Record Date to the opening of business of the
next Interest Payment Date, except for Subordinated Debentures to be redeemed on
a date within this period or on the next Interest Payment Date, must accompany
such Holder's Conversion Notice with a payment of an amount equal to the
interest that the Holder is entitled to receive on the Subordinated Debenture.
(d) Except to the extent that the Company satisfies the Conversion
Amount by delivering cash, each Subordinated Debenture surrendered for
conversion shall be converted into Common Shares in registered form.
(e) Subordinated Debentures shall be deemed to have been converted
immediately prior to the Close of Business on the Conversion Date, in accordance
with the foregoing provisions.
(f) In case any Subordinated Debenture is converted in part only,
upon such conversion the Company shall execute and the Trustee shall
authenticate and deliver to the Holder a new Subordinated Debenture or
Subordinated Debentures of any authorized denomination as requested by such
Holder, in an aggregate principal amount equal to the unconverted portion of the
principal amount of such Subordinated Debenture. A Subordinated Debenture may be
converted in part, but only if the principal amount of such Subordinated
Debenture to be converted is any integral multiple of $1,000 and the principal
amount of such security to remain Outstanding after such conversion is equal to
$1,000 or any integral multiple thereof.
(g) Subject to Section 403(c), the Company's delivery to the
Holder of the Conversion Consideration shall be deemed to satisfy the Company's
obligation to pay the principal amount of, and the interest (including
Additional Interest, if any) on, the Subordinated Debenture.
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Section 404. Adjustment of Conversion Rate and Conversion Price.
The Conversion Rate (and, consequently, the Conversion Price) shall be
subject to adjustment from time to time as follows:
(a) In case the Company shall (1) pay a dividend or make a
distribution in Common Shares on its Common Shares, (2) subdivide its
outstanding Common Shares into a greater number of shares or (3) combine its
outstanding Common Shares into a smaller number of shares, the Conversion Rate
in effect immediately prior to such action shall be adjusted so that the holder
of any Subordinated Debenture thereafter surrendered for conversion shall be
entitled to receive the number of Common Shares that such Holder would have
owned or have been entitled to receive immediately following such action had
such Subordinated Debenture been converted immediately prior thereto. An
adjustment made pursuant to this subsection (a) shall become effective
immediately, except as provided in subsection (g) below, after the record date
in the case of a dividend and shall become effective immediately after the
effective date in the case of a subdivision or combination.
(b) If (1) the Company shall issue rights or warrants to all
holders of Common Shares entitling them (for a period expiring within 45 days
after the record date mentioned below) to subscribe for or purchase Common
Shares at a price per share less than the current market price per Common Share
(as defined pursuant to subsection (f) below) on the record date for the
determination of shareholders entitled to receive such rights or warrants,
except as provided in subsection (f) below, or (2) rights (including the Rights)
or warrants which were not immediately exercisable when issued to all holders of
Common Shares, shall become exercisable and entitle the holders thereof to
purchase Common Shares at a price per share less than the current market price
per Common Share (as defined pursuant to subsection (f) below) on the date such
rights or warrants become so exercisable, then, in each case, the Conversion
Rate shall be adjusted to a rate, computed to the nearest 1/10,000, so that the
same shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the date of issuance of, or, as the case may be,
exercisability of, such rights or warrants by a fraction, of which
(1) the numerator shall be (A) the number of Common Shares
outstanding on the date of issuance of, or as the case may be,
exercisability of, such rights or warrants, immediately prior to
such issuance, plus (B) the number of additional Common Shares
which are so offered for subscription or purchase, and
(2) the denominator shall be (A) the number of Common Shares
outstanding on the date of issuance of, or, as the case may be,
exercisability of, such rights or warrants, immediately prior to
such issuance, plus (B) the number of shares which the aggregate
offering price of the total number of shares so offered for
subscription or purchase would purchase at such current market
price per Common Share (determined by multiplying such total
number of shares by the exercise price of such rights or warrants
and dividing the product so obtained by such current market price
per Common Share).
Such adjustment shall be made successively whenever any such rights or
warrants are issued or, as the case may be, become exercisable, and shall,
except as provided in subsection (g) below, become effective immediately after
such record date. Except as provided in subsection (f)
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below, in determining whether any rights or warrants entitle the holders to
subscribe for or purchase Common Shares at less than the current market price
per Common Share, and, in determining the aggregate offering price of such
Common Shares, there shall be taken into account any consideration received by
the Company for such rights or warrants, the value of such consideration, if
other than cash, to be determined in good faith by the Board of Directors of the
Company whose determination shall be conclusive and described in a certificate
filed with the Trustee. Upon the expiration of any right or warrant to purchase
Common Shares the issuance of which, or the exercisability of which, resulted in
an adjustment in the Conversion Rate pursuant to this subsection (b), if any
such right or warrant shall expire and shall not have been exercised, the
Conversion Rate shall immediately upon such expiration be recomputed to the
Conversion Rate which would have been in effect had the adjustment of the
Conversion Rate made upon the issuance of such rights or warrants been made on
the basis of offering for subscription or purchase only that number of Common
Shares actually purchased upon the exercise of such rights or warrants actually
exercised.
(c) In case the Company shall distribute to all holders of Common
Shares, evidences of indebtedness, equity securities (other than Common Shares)
or other assets (other than cash dividends or other cash distributions referred
to in subsection (d) below), or shall distribute to all holders of Common Shares
rights or warrants to subscribe for or purchase securities (other than those
referred to in subsection (b) above), then, in each such case the Conversion
Rate shall be adjusted so that the adjusted Conversion Rate shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior to the
date of such distribution by a fraction the numerator of which shall be the
current market price per Common Share on such record date (determined as
provided in subsection (f) below), and of which the denominator shall be the
current market price per Common Share (determined as provided in subsection (f)
below) on the record date mentioned below less the then fair market value (as
determined in good faith by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution)of the portion of the evidences
of indebtedness, equity securities or other assets so distributed or of such
subscription rights or warrants applicable to one Common Share. Such adjustment
shall become effective immediately, except as provided in subsection (g) below,
after the record date for the determination of shareholders entitled to receive
such distribution, except as provided in subsection (f) below.
(d) In case the Company shall, (i) by dividend or otherwise,
declare for distribution to all holders of its Common Shares cash in an
aggregate amount that, combined with (ii) the aggregate amount of any other
distributions to all holders of its Common Shares made exclusively in cash
within the 12 months preceding the date of payment of such distribution and
(iii) the aggregate of any cash plus the fair market value as of the date of the
expiration of the tender or exchange offer referred to below (as determined in
good faith by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution) of consideration payable in respect of any
tender or exchange offer by the Company or any of its subsidiaries for all or
any portion of the Common Shares concluded within the 12 months preceding the
date of payment of the distribution described in clause (i) above exceeds 5% of
the current market price per Common Share on the date for the determination of
holders of Common Shares entitled to receive such distribution times the number
of Common Shares outstanding on such date, then, in such case, the Conversion
Rate shall be adjusted so that the same shall equal the rate determined by
multiplying the Conversion Rate in effect immediately prior to the record date
for such cash distribution by a fraction of which the numerator shall be the
current market price per Common Share on such record date, and the denominator
shall be the current market price per Common
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Share on such record date minus the amount by which such distribution, together
with any other distribution in the 12 months preceding the date of payment of
such distribution, applicable to one Common Share exceeds 5% of the current
market price per Common Share, but excluding any amount for which an adjustment
pursuant to this subsection (d) or subsection (e) of this Section has been
previously made, such adjustment to be effective immediately after such 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 which would then be in
effect if such dividend or distribution had not been declared.
(e) In case (i) a tender or exchange offer made by the Company or
any Subsidiary of the Company for all or any portion of the Common Shares shall
expire and such tender 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 or exchange offer) of
Purchased Shares (as defined below)) of an aggregate consideration having a fair
market value (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution) that
combined with (ii) the aggregate of the cash plus the fair market value (as
determined in good faith by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution), as of the expiration of such
tender or exchange offer, of consideration payable in respect of any other
tender or exchange offer, by the Company or any Subsidiary of the Company for
all or any portion of the Common Shares expiring within the 12 months preceding
the expiration of such tender or exchange offer and in respect of which no
adjustment pursuant to subsection (d) of this Section or this subsection (e) has
been made and (iii) the aggregate amount of any distributions to all holders of
the Company's Common Shares made exclusively in cash within the 12 months
preceding the expiration of such tender or exchange offer and in respect of
which no adjustment pursuant to subsection (d) of this Section or this
subsection (e) has been made, exceeds 5% of the current market price per Common
Share as of the last time (the "Expiration Date") tenders could have been made
pursuant to such tender or exchange offer (as it may be amended) times the
number of shares of Common Stock outstanding (including any tendered shares) at
the Expiration Date, then the Conversion Rate shall be adjusted so that the same
shall equal the rate determined by multiplying the Conversion Rate in effect
immediately prior to the Expiration Date by a fraction of which the numerator
shall be the sum of (x) the fair market value (as determined in good faith by
the Board of Directors, whose determination shall be conclusive and described in
a Board Resolution)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 Date (the shares deemed so accepted up to any such maximum,
being referred to as the "Purchased Shares") minus the product of 5% of the
current market price per Common Share times the number of Purchased Shares and
(y) the product of the number of Common Shares outstanding (less any Purchased
Shares) on the Expiration Date and the current market price per Common Share on
the Expiration Date, and the denominator shall be the number of Common Shares
outstanding (including any tendered or exchanged shares) on the Expiration Date
multiplied by the current market price per Common Share on the Expiration Date,
such adjustment to become effective immediately prior to the opening of business
on the day following the Expiration Date. If the Company is obligated to
purchase shares pursuant to any such tender or exchange offer, but the Company
is permanently prevented by applicable law from effecting any such purchases or
all such purchases are rescinded, the Conversion Rate shall again be adjusted to
be the Conversion Rate which would then be in effect if such tender or exchange
offer had not been made.
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(f) For the purpose of any computation under subsections (b), (c),
(d) and (e) above:
(i) the "current market price per Common Share" on any date
shall be deemed to be the average of the daily Closing Sale Price for
each of the five consecutive Trading Days (as defined below) ending on
the earlier of the day in question and the day before the related
ex-date with respect to any distribution, issuance or other event
requiring such computation; and
(ii) the term "ex-date", when used with respect to any
issuance or distribution, shall mean the first date on which the Common
Shares trade regular way on such exchange or in such market without the
right to receive such issuance or distribution and, when used with
respect to any tender or exchange offer, shall mean the first date on
which the Common Shares trade regular way on such exchange or in such
market after the Expiration Date of such offer.
In addition, for purposes of any computation under subsections (b) and
(c) above: (x) the market value or exercise price of any rights or warrants
shall be determined without giving effect to any potential adjustment that is
contingent upon the occurrence of any event other than the passage of time; and
(y) to the extent that any right or warrant is subject to any condition (other
than the passage of time), the date of issuance or distribution of such right or
warrant and the record date for the determination of shareholders entitled to
receive such rights or warrants shall be deemed to be the date of satisfaction
of such condition.
(g) In any case in which this Section shall require that an
adjustment be made immediately following a record date, the Company may elect to
defer the effectiveness of such adjustment (but in no event until a date later
than the effective time of the event giving rise to such adjustment), in which
case the Company shall, with respect to any Subordinated Debenture converted
after such record date and before such adjustment shall have become effective
(i) defer issuing to the holder of such Subordinated Debenture the number of
Common Shares issuable upon such conversion in excess of the number of Common
Shares issuable thereupon or delivering any cash that the Company has elected to
deliver pursuant to Section 401, in each case only on the basis of the
Conversion Rate prior to adjustment, and (ii) not later than five Business Days
after such adjustment shall have become effective, issue to such holder the
additional Common Shares issuable on such conversion or deliver to such holder
the appropriate cash payment, if any, pursuant to Section 401.
(h) No adjustment in the Conversion Rate shall be required
pursuant to this Section unless such adjustment would require an increase or
decrease of at least 1% in such Conversion Rate; provided that any adjustments,
which by reason of this subsection (h) are not required to be made, shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Article Four shall be made to the nearest cent or to the
nearest one-hundredth of a share, as the case may be.
(i) Whenever the Conversion Rate is adjusted, as herein provided,
the Company shall promptly (i) file with the Trustee and each additional
Conversion Agent, if any, an Officers' Certificate setting forth the Conversion
Rate after such adjustment and setting forth a brief statement of the facts
requiring such adjustment, which certificate shall be conclusive evidence of the
correctness of such adjustment, and (ii) mail or cause to be mailed a notice of
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such adjustment to each Holder of Subordinated Debentures at his address as the
same appears on the registry books of the Company. Neither the Trustee nor any
Conversion Agent shall be under any responsibility to determine the correctness
of any adjustment to the Conversion Rate to be made pursuant to this Section.
The Trustee has no duty to determine when an adjustment under this Article Four
should be made, how it should be made or what it should be. The Trustee has no
duty to determine whether a supplemental indenture under Section 404 need be
entered into or whether any provisions of any supplemental indenture are
correct. The Trustee shall not be accountable for and makes no representation as
to the validity or value of any securities or asset issued upon conversion of
Subordinated Debentures. The Trustee shall not be responsible for the Company's
failure to comply with this Article Four. Each Conversion Agent (other than the
Company or an Affiliate of the Company), if any, shall have the same protection
under this Section as the Trustee.
Anything in this Section to the contrary notwithstanding, the Company
shall be entitled to make such adjustments in the Conversion Rate, in addition
to those required by this Section, and to make any election under Treasury
Regulation ss. 1.305-3(d)(2), as it in its discretion shall determine to be
advisable in order that any stock dividend, subdivision of shares, distribution
of rights or warrants to purchase stock or securities, or distribution of other
assets (other than cash dividends) hereafter made by the Company to its
shareholders shall not be taxable.
Section 405. Reclassification, Reorganization, Sale
and Further Adjustment of Conversion Rate.
(a) If there occurs any: (i) Reclassification, (ii) Reorganization
or (iii) Sale, and as a result holders of Common Shares are entitled to receive
common equity, other securities or other property or assets (including cash)
with respect to or in exchange for such Common Shares, then the holder of each
Subordinated Debenture then Outstanding will be entitled, at the option of the
Company:
(1) to convert such Subordinated Debenture into Common Shares (as
reclassified or changed in the case of a Reclassification), or, in the
case of a Reorganization, into shares of common equity of the
resulting company, at the Conversion Rate calculated as follows:
(A) If the consideration to be received on such conversion
consists solely of common equity which is traded on a
national securities exchange or the New York Stock
Exchange or the Toronto Stock Exchange or quoted on the
National Market System of the National Association of
Securities Dealers, Inc. Automated Quotation System,
the Conversion Rate shall equal the then applicable
Conversion Rate (after giving effect to any adjustment
required pursuant to Section 404) adjusted by
multiplying such then applicable Conversion Rate by a
fraction, the numerator of which shall equal the
Applicable Price and the denominator of which shall
equal the Purchaser Share Price;
(B) If the consideration to be received on such conversion
consists solely of Common Shares, the Conversion Rate
shall equal the then applicable Conversion Rate (after
giving effect to any
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adjustment required pursuant to Section 404) adjusted
by multiplying such then applicable Conversion Rate by
a fraction, the numerator of which shall equal the
average of the Closing Sale Price for such Common
Shares for each of the last ten Trading Days prior to
such Reclassification, Reorganization or Sale and the
denominator of which shall equal the average of the
Closing Sale Price for such Common Shares during the
ten Trading Days following such Reclassification,
Reorganization or Sale; or
(C) If the consideration to be received on such conversion
is not as indicated in (A) or (B) above, the Conversion
Rate shall be equal to the then applicable Conversion
Rate (after giving effect to any adjustment required
pursuant to Section 404);
(2) to convert such Subordinated Debenture into the kind and
amount of shares of common equity, other securities or other property
or assets (including cash) which the holder of such Subordinated
Debenture would have been entitled to receive upon such
Reclassification, Reorganization or Sale had such Subordinated
Debenture been converted at the then applicable Conversion Rate (after
giving effect to any adjustment required pursuant to Section 404)
immediately prior thereto; or
(3) to exchange such Subordinated Debenture with a third party
that is not an Affiliate of the Company for the kind and amount of
shares of common equity, other securities or other property or assets
(including cash) which the holder of such Subordinated Debenture would
have been entitled to receive upon such Reclassification,
Reorganization or Sale had such Subordinated Debentures been converted
at the then applicable Conversion Rate (after giving effect to any
adjustment required pursuant to Section 404) immediately prior
thereto.
If the event referred to above is one to which the Company is a party,
then the Company may elect the option specified in clause (1) above only if the
Common Shares (as reclassified or changed in the case of a Reclassification) or
shares of common equity into which the Subordinated Debentures are thereafter
convertible are, and the Company in good faith believes will remain, listed on
the Toronto Stock Exchange or the New York Stock Exchange, in the case of the
Common Shares, or on a national securities exchange or the Toronto Stock
Exchange or quoted on the National Market System of the National Association of
Securities Dealers, Inc. Automated Quotation System, in the case of common
equity. If the event referred to above is not one to which the Company is a
party, then the Company may elect the option specified in clause (1) above only
if the Company uses its best efforts to so list such Common Shares (as
reclassified or changed in the case of a Reclassification) or shares of common
equity, as the case may be, into which the Subordinated Debentures are
thereafter convertible.
Notwithstanding any provision of the Indenture, if any transaction,
including any Reclassification, Reorganization or Sale contemplated in this
Section 405(a), occurs before March 7, 2008 as a result of which holders of
Common Shares would be entitled to receive any property (including cash) other
than Prescribed Securities with respect to or in exchange for such Common
Shares, then the Company or the successor or purchasing corporation, as the case
may be, shall execute with the Trustee a supplemental indenture as contemplated
in Section 405(b)
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providing that in respect of any Subordinated Debentures surrendered for
conversion following such event and prior to March 7, 2008, the Subordinated
Debentures shall be convertible into Prescribed Securities of a type specified
by the Board of Directors and identified in such supplemental indenture and the
Conversion Rate shall, if necessary, be adjusted so that the value of the
Prescribed Securities immediately following such event into which each
Subordinated Debenture is convertible immediately following such event is
equivalent (as determined in good faith by the Board of Directors whose
determination shall be conclusive and binding) to the value of the property a
Holder of the Subordinated Debenture would have been entitled to receive had the
Holder converted the Subordinated Debenture into Common Shares immediately prior
to such event and, in the circumstances contemplated by this paragraph, no
Holder shall have the right upon the surrender of Subordinated Debentures for
conversion prior to March 7, 2008 to the property which holders of Common Shares
shall be entitled to receive as a result of such event.
(b) The Company, or such successor or purchasing corporation, as
the case may be, shall, as a condition precedent to such Reclassification,
Reorganization or Sale, execute and deliver to the Trustee a supplemental
indenture (which shall conform to the Trust Indenture Act as in force at the
date of the execution thereof) providing that the holder of each Subordinated
Debenture then outstanding shall have the right to convert such Subordinated
Debenture as described in this Section. Such supplemental indenture shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article Four. If, in the
case of any such Reclassification, Reorganization or Sale, the common equity or
other securities and property receivable thereupon by a holder of Common Shares
includes shares of common equity or other securities and property of a
corporation other than the successor or purchasing corporation, as the case may
be, in such Reclassification, Reorganization or Sale, then such supplemental
indenture shall also be executed by such other corporation and shall contain
such additional provisions to protect the interests of the holders of the
Subordinated Debentures as the Board of Directors shall reasonably consider
necessary by reason of the foregoing. The provisions of this Section shall
similarly apply to any successive Reclassification, Reorganization or Sale.
Notice of the execution of each such supplemental indenture shall be
mailed to each Holder of Subordinated Debentures at his address as the same
appears on the registry books of the Company.
Neither the Trustee nor any Conversion Agent shall be under any
responsibility to determine the correctness of any provisions contained in any
such supplemental indenture relating either to the kind or amount of shares of
common equity, other securities or other property or assets (including cash)
receivable by holders of Subordinated Debentures upon the conversion of their
Subordinated Debentures after any such Reclassification, Reorganization or Sale
or to any adjustment to be made with respect thereto, but, subject to the
provisions of Sections 601 and 603 of the Original Indenture, 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 406. Notice of Certain Events.
In case:
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(a) the Company shall declare a dividend (or any other
distribution) payable to all holders of Common Shares that requires no
adjustment to the Conversion Rate pursuant to Section 404,
(b) the Company shall authorize the granting to the holders of
Common Shares of rights to subscribe for or purchase any shares of any class or
of any other rights,
(c) the Company shall become involved in any Reclassification,
Reorganization or Sale, or
(d) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company is proposed,
then the Company shall cause to be filed at the office or agency maintained for
the purpose of conversion of the Subordinated Debentures as provided in Section
1002 of the Original Indenture, and shall cause to be mailed to each holder of
Subordinated Debentures at his address as it shall appear on the registry books
of the Company at least 20 days before the date hereinafter specified (or the
earlier of the dates hereinafter specified, in the event that more than one date
is specified) a notice stating the date on which (1) a record is expected to be
taken for the purpose of such dividend, distribution or rights, or if a record
is not to be taken, the date as of which the holders of Common Shares of record
to be entitled to such dividend, distribution or rights are to be determined, or
(2) such Reclassification, Reorganization, Sale, dissolution, liquidation or
winding-up is expected to become effective and the date, if any is to be fixed,
as of which it is expected that holders of Common Shares of record shall be
entitled to exchange their Common Shares for securities or other property
deliverable upon such Reclassification, Reorganization or Sale, dissolution,
liquidation or winding-up.
Section 407. Taxes on Conversion.
The Company will pay any and all documentary, stamp or similar taxes
payable to the United States of America or Canada or any political subdivision
or taxing authority thereof or therein in respect of the issue or delivery of
Common Shares on conversion of Subordinated Debentures pursuant hereto; provided
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issue or delivery of Common Shares in a
name other than that of the holder of the Subordinated Debentures to be
converted and no such issue or delivery shall be made unless and until the
person requesting such issue or delivery has paid to the Company the amount of
any such tax or has established, to the satisfaction of the Company, that such
tax has been paid. The Company extends no protection with respect to any other
taxes imposed in connection with conversion of Subordinated Debentures.
Section 408. Company to Provide Shares.
(a) The Company covenants to maintain, free from preemptive
rights, out of its authorized but unissued shares, sufficient Common Shares to
provide for the conversion of the Subordinated Debentures from time to time as
such Subordinated Debentures are presented for conversion.
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(b) If any Common Shares to be maintained for the purpose of
conversion of Subordinated Debentures hereunder require registration with or
approval of any governmental authority under any Canadian federal or provincial
law or United States federal or state law before such shares may be validly
issued or delivered upon conversion, then the Company covenants that it will in
good faith and as expeditiously as commercially reasonable endeavor to secure
such registration or approval, as the case may be; provided that nothing in this
Section shall be deemed to affect in any way the obligations of the Company to
convert Subordinated Debentures into Common Shares as provided in this Article
Four.
(c) Before taking any action which would cause an adjustment of
the Conversion Rate that would cause the Conversion Price to be less than the
then par value, if any, of the Common Shares, the Company will take all
commercially reasonable corporate action which may, in the Opinion of Counsel,
be necessary in order that the Company may validly and legally issue fully paid
and non-assessable Common Shares at such adjusted Conversion Rate.
(d) The Company covenants that all Common Shares which may be
issued upon conversion of Subordinated Debentures will upon issue be fully paid
and non-assessable by the Company and free of preemptive rights.
Section 409. Rights under Rights Agreement.
Each Common Share issued upon conversion of Subordinated Debentures
pursuant to this Article Four shall be entitled to receive the appropriate
number of Rights under the Rights Agreement, and the certificates representing
the Common Shares issued upon such conversion shall bear such legends, if any,
in each case as may be provided by the terms of the Rights Agreement. Provided
that the Rights Agreement requires that each Common Share issued upon conversion
of Subordinated Debentures at any time prior to the distribution of separate
certificates representing the Rights be entitled to receive the Rights, then,
notwithstanding anything else to the contrary in this Article Four, there shall
not be any adjustment to the Conversion Rate as a result of the issuance of
Rights, the distribution of any entitlement to receive the Rights, the exercise
or redemption of such Rights in accordance with the Rights Agreement, or the
termination or invalidation of the Rights or similar rights.
ARTICLE FIVE
REDEMPTION AT THE OPTION OF THE COMPANY
Section 501. Right to Redeem.
The Company, at its option, may elect to redeem at the Redemption Price
set forth in Section 302 all or a portion of the Subordinated Debentures at any
time on or after March 19, 2008 in accordance with their terms and in accordance
with Article Eleven of the Original Indenture if the Closing Sale Price of the
Common Shares for at least 20 consecutive Trading Days in a period of 30
consecutive Trading Days ending on the fifth Business Day preceding the date of
the Redemption Notice exceeds 125% of the Conversion Price. In addition to the
Redemption Price, the Company shall pay the Holder an amount equal to the
accrued and unpaid interest to the Redemption Date.
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Section 502. Redemption Tax Event.
On or after the occurrence of a Redemption Tax Event, the Company may,
at its option, redeem the Subordinated Debentures in whole but not in part, upon
providing notice in accordance with their terms and in accordance with Article
Eleven of the Original Indenture and this Section 502, at the then applicable
Redemption Price but without reduction for applicable Canadian withholding taxes
(except for Excluded Holders). Such notice shall be given not less than 20
Business Days nor more than 60 Business Days prior to the Redemption Date;
provided that (i) no such Redemption Notice may be given earlier than 60
Business Days prior to the earliest date on or from which the Company would be
obligated to pay any Additional Amounts were a payment in respect of the
Subordinated Debentures then due, and (ii) at the time such notice is given, the
circumstances creating such obligation to pay such Additional Amounts remain in
effect. In addition to the Redemption Price, the Company shall pay the Holder an
amount equal to the accrued and unpaid interest to the Redemption Date. Prior to
the giving of any such notice under this Section 502, the Company must deliver
to the Trustee (x) a certificate stating that the Company is entitled to effect
such redemption and setting forth a statement of facts showing that the
conditions precedent to the right to the Company so to redeem have occurred and
(y) an opinion of a nationally recognized Canadian tax counsel acceptable to the
Trustee, acting reasonably, to the effect that the Company has or would become
obligated to pay any Additional Amounts (which are more than a de minimis
amount) as a result of the Redemption Tax Event. The Company's right to redeem
the Subordinated Debentures shall continue as long as the Company is obligated
to pay such Additional Amounts, notwithstanding that the Company shall have made
payments of Additional Amounts.
Section 503. Conversion Arrangements on Call for Redemption.
In connection with any redemption of Subordinated Debentures, the
Company may arrange for the purchase and conversion of any Subordinated
Debentures called for redemption by an agreement with one or more investment
bankers or other purchasers (the "Repurchasers") to purchase such Subordinated
Debentures by paying to the Trustee in trust for the Holders, on or before the
Close of Business on the Redemption Date, an amount that, together with any
amounts deposited with the Trustee by the Company for the redemption of such
Subordinated Debentures, is not less than the Redemption Price of such
Subordinated Debentures. Notwithstanding anything to the contrary contained in
this Article Five and in Article Eleven of the Original Indenture, the
obligation of the Company to pay the Redemption Price shall be deemed to be
satisfied and discharged to the extent such amount is so paid by such
Repurchasers. If such an agreement is entered into (a copy of which shall be
filed with the Trustee three days prior to the Redemption Date), any
Subordinated Debentures called for redemption that are not duly surrendered for
conversion by the Holders thereof may, at the option of the Company, be deemed,
to the fullest extent permitted by law, and consistent with any agreement or
agreements with such Repurchasers, to be acquired by such Repurchasers from such
Holders and (notwithstanding anything to the contrary contained in Article Four)
surrendered by such Repurchasers for conversion, all as of immediately prior to
the Close of Business on the Redemption Date (and the right to convert any such
Subordinated Debentures shall be extended through such time), subject to payment
of the above amount as aforesaid. At the direction of the Company, the Trustee
shall hold and dispose of any such amount deposited with it to the Holders in
the same manner as it would monies deposited with it by the Company for the
redemption of Subordinated Debentures. Without the Trustee's prior written
consent, no arrangement between the Company and such Repurchasers for the
purchase and conversion of any Subordinated Debentures shall increase or
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otherwise affect any of the powers, duties, responsibilities or obligations of
the Trustee as set forth in the Indenture, and the Company agrees to indemnify
the Trustee from, and hold it harmless against, any loss, liability or expense
arising out of or in connection with any such arrangement for the purchase and
conversion of any Subordinated Debentures between the Company and such
Repurchasers, including the costs and expenses, including reasonable legal fees,
incurred by the Trustee in the defense of any claim or liability arising out of
or in connection with the exercise or performance of any of its powers, duties,
responsibilities or obligations under the Indenture.
Section 504. No Sinking Fund.
The Subordinated Debentures shall not be entitled to the benefit of any
sinking fund, and the provisions of Article Thirteen of the Original Indenture
shall not apply to the Subordinated Debentures.
ARTICLE SIX
CHANGE IN CONTROL PURCHASE OFFER
Section 601. Offer to Purchase Upon a Change in Control.
In the event that a Change in Control shall occur, the Company shall
offer ("Change in Control Purchase Offer") to purchase all of the Outstanding
Subordinated Debentures, and upon the acceptance of all or part of such offer by
any Holder, shall purchase all of such Holder's Subordinated Debentures, or any
portion of the principal amount thereof that is equal to a $l,000 multiple
thereof as specified by such Holder in the Change in Control Notice, on the
Change in Control Purchase Date, at the Change in Control Purchase Price.
Section 602. Notices; Method of Exercising Purchase Election, Etc.
(a) Unless the Company shall have theretofore called for
redemption all of the Outstanding Subordinated Debentures, within 15 Business
Days after the occurrence of a Change in Control, the Company or, at the request
and expense of the Company, the Trustee, shall deliver a Change in Control
Purchase Offer Notice to all Holders of Subordinated Debentures and to
beneficial owners as required by law, in the manner provided in Section 106 of
the Original Indenture, notifying such Holders of the occurrence of the Change
in Control and of the offer by the Company to purchase all of the Subordinated
Debentures arising as a result thereof. The Company shall also deliver a copy of
such Change in Control Purchase Offer Notice to the Trustee.
Each Change in Control Purchase Offer Notice shall state:
(i) the events causing a Change in Control and the date of
such Change in Control;
(ii) the last date on which the Change in Control Purchase
Notice must be given;
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(iii) the Change in Control Purchase Price;
(iv) the Change in Control Purchase Date;
(v) the election of the Company to pay the Change in Control
Purchase Price in cash or Common Shares or any combination thereof,
pursuant to Section 206, and the percentages of each;
(vi) if the Company elects to pay all or some of the Change
in Control Purchase Price in Common Shares, the method of calculating
the Average Market Price of Common Shares;
(vii) the name and address of the Paying Agent;
(viii) the Conversion Rate and any adjustments thereto;
(ix) that Subordinated Debentures with respect to which a
Change in Control Purchase Notice has been given by the Holder may be
converted pursuant to Article Four hereof only if the Change in Control
Purchase Notice has been withdrawn in accordance with the terms of the
Indenture;
(x) that Subordinated Debentures, together with all necessary
endorsements, must be surrendered to the Paying Agent to collect
payment;
(xi) that the Change in Control Purchase Price for any
Subordinated Debenture as to which a Change in Control Purchase Notice
has been duly given and not withdrawn will be paid promptly following
the later of the Change in Control Purchase Date and the time of
surrender of such Subordinated Debenture as described in Section
602(b);
(xii) briefly, the procedures the Holder must follow to
exercise rights under this Section;
(xiii) the procedures for withdrawing a Change in Control
Purchase Notice;
(xiv) briefly, the conversion rights of the Subordinated
Debentures;
(xv) the CUSIP number or numbers of the Subordinated
Debentures being purchased; and
(xvi) a copy of the Company Notice as provided for in Section
206, if applicable.
No failure of the Company to give the foregoing notice to a particular
Holder and no defect therein shall limit the Company's obligation to make the
Change in Control Purchase Offer or any Holder's right to accept such offer or
affect the validity of the proceedings for the purchase of Subordinated
Debentures pursuant thereto.
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If any of the foregoing provisions or other provisions of this Article
are inconsistent with applicable law, such law shall govern.
(b) To accept a Change in Control Purchase Offer in whole or in
part, a Holder shall deliver to the Trustee or any Paying Agent at any time
prior to the Close of Business on the Change in Control Purchase Date (or if
such day is not a Business Day, the immediately preceding Business Day) a Change
in Control Purchase Notice. The Change in Control Purchase Notice shall state:
(1) the certificate number of the Subordinated Debenture or
Subordinated Debentures which the Holder will deliver to be
purchased;
(2) the portion of the principal amount of the Subordinated
Debenture which the Holder will deliver to be purchased, which
portion must be $1,000 or an integral multiple thereof;
(3) that such Subordinated Debenture shall be purchased as
of the Change in Control Purchase Date pursuant to the Change in
Control Purchase Offer Notice; and
(4) in the event that the Company elects, pursuant to
Section 206 hereof, to pay the Change in Control Purchase Price
to be paid as of such Change in Control Purchase Date (which must
be a multiple of $1,000 principal amount), in whole or in part,
in Common Shares but such portion of the Change in Control
Purchase Price shall ultimately be payable to such Holder
entirely in cash because any of the conditions to payment of the
Change in Control Purchase Price in Common Shares is not
satisfied prior to the Close of Business on such Change in
Control Purchase Date, as set forth in Section 207 hereof,
whether such Holder elects (i) to withdraw such Change in Control
Purchase Notice as to some or all of the Subordinated Debentures
to which such Change in Control Purchase Notice relates (stating
the principal amount and certificate numbers of the Subordinated
Debentures as to which such withdrawal shall relate), or (ii) to
receive cash in respect of the entire Change in Control Purchase
Price for all Subordinated Debentures (or portions thereof) to
which such Change in Control Purchase Notice relates.
If the Holder fails to indicate the Holder's choice with respect to the
election described in paragraph (4) above, the Holder shall be deemed to have
elected to receive cash in respect of the entire Change in Control Purchase
Price for all Subordinated Debentures subject to the Change in Control Purchase
Notice. Anything herein to the contrary notwithstanding, in the case of Global
Securities, Change in Control Purchase Notices may be delivered and such
Subordinated Debentures may be surrendered for redemption in accordance with the
applicable procedures of the Depositary as in effect from time to time.
The Holder shall deliver such Subordinated Debenture to the Paying
Agent prior to, on or after the Change in Control Purchase Date (together with
all necessary endorsements) at the offices of the Paying Agent, such delivery
being a condition to receipt by the Holder of the Change in Control Purchase
Price therefor; provided that such Change in Control Purchase Price shall be so
paid pursuant to this Article only if the Subordinated Debenture so delivered to
the
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Paying Agent shall conform in all respects to the description thereof in the
related Change in Control Purchase Notice.
The right of the Holder to convert the Subordinated Debentures subject
to a Change in Control Purchase Notice shall continue until the Close of
Business on the Change in Control Purchase Date.
(c) In the event a Change in Control Purchase Offer shall be
accepted in accordance with the terms hereof, the Company shall pay or cause to
be paid to the Trustee or the Paying Agent the Change in Control Purchase Price
in cash, as provided above, or Common Shares, as provided in Section 206, or any
combination thereof for payment to the Holder at the Close of Business on the
Change in Control Purchase Date payable with respect to the Subordinated
Debentures with respect to which the Change in Control Purchase Offer has been
accepted. If the Paying Agent holds cash and/or Common Shares sufficient to pay
the Change in Control Purchase Price of the Subordinated Debentures on the
Business Day following the Change in Control Purchase Date in accordance with
the terms of the Indenture, then as of the Close of Business on the Change in
Control Purchase Date, such Subordinated Debenture will cease to be outstanding
and interest on such Subordinated Debenture will cease to accrue, and be deemed
to be paid, whether or not the Subordinated Debenture is delivered to the Paying
Agent. Thereafter, all other rights of the Holder shall terminate, other than
the right to receive the Change in Control Purchase Price upon delivery of the
Subordinated Debenture.
(d) Any Subordinated Debenture which is to be purchased only in
part shall be surrendered to the Trustee (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 his attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and deliver to the Holder, a new Subordinated
Debenture or Subordinated Debentures, of any authorized denomination as
requested by such Holder in an aggregate principal amount equal to the portion
of the principal amount of the Subordinated Debenture so surrendered that was
not to be purchased.
(e) All Subordinated Debentures delivered for purchase shall be
delivered to the Trustee, the Paying Agent or any other agents (as shall be set
forth in the Change in Control Purchase Offer Notice) to be canceled by or at
the direction of the Trustee, which shall dispose of the same as provided in
Section 309 of the Original Indenture.
(f) The Company will comply with the provisions of Rule 13e-4,
Rule 14e-1 and any other tender offer rules under the Exchange Act and any
Canadian laws which may then be applicable in connection with the Change in
Control Purchase Offer, and will file a Schedule TO or any other Schedule or
filing required under the rules under the Exchange Act, and any Canadian laws
which may then be applicable in connection with the Change in Control Purchase
Offer.
Section 603. Withdrawal of Change in Control Purchase Notice.
A Change in Control Purchase Notice may be withdrawn by means of a
written notice of withdrawal delivered to the office of the Paying Agent in
accordance with the Change in Control Purchase Offer Notice at any time prior to
the Close of Business on the Change in Control Purchase Date, specifying:
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(i) the principal amount of the Subordinated Debentures with
respect to which such notice of withdrawal is being submitted,
(ii) the certificate number of the Subordinated Debentures
being withdrawn in respect of which such notice of withdrawal is being
submitted, and
(iii) the principal amount, if any, of such Subordinated
Debentures which remains subject to the original Change in Control
Purchase Notice and which has been or will be delivered for purchase by
the Company.
There shall be no purchase of any Subordinated Debentures pursuant to
this Section (other than through the issuance of Common Shares in payment of the
Change in Control Purchase Price, including cash in lieu of fractional shares)
if there has occurred (prior to, on or after, as the case may be, the giving, by
the Holders of such Subordinated Debentures, of the required Change in Control
Purchase Notice) and is continuing an Event of Default (other than a default in
the payment of the Change in Control Purchase Price with respect to such
Subordinated Debentures). The Paying Agent will promptly return to the
respective Holders thereof any Subordinated Debentures (x) with respect to which
a Change in Control Purchase Notice has been withdrawn in compliance with the
Indenture, or (y) held by it during the continuance of an Event of Default
(other than a default in the payment of the Change in Control Purchase Price
with respect to such Subordinated Debentures) in which case, upon such return,
the Change in Control Purchase Notice with respect thereto shall be deemed to
have been withdrawn.
ARTICLE SEVEN
COVENANTS
Section 701. Additional Amounts.
All payments made by the Company under or with respect to the
Subordinated Debentures, including the Subordinated Debenture Payments, if any,
or delivery of Common Shares (including cash in lieu of fractional shares) made
by or on behalf of the Company will be made without withholding or deduction for
or on account of any present or future tax, duty, levy impost, assessment or
other government charge (including penalties, interest and other liabilities
related thereto) imposed or levied by or on behalf of the Government of Canada
or of any province or territory thereof or by any authority or agency therein or
thereof having power to tax ("Canadian Taxes"), unless the Company is required
to withhold or deduct Canadian Taxes by law or by the interpretation or
administration thereof by the relevant government authority or agency. If the
Company is so required to withhold or deduct any amount for or on account of
Canadian Taxes from any payment made under or with respect to the Subordinated
Debentures as described above, the Company will pay as additional interest such
additional amounts ("Additional Amounts") necessary so that the net amount
received by each Holder of Subordinated Debentures after such withholding or
deduction (including with respect to Additional Amounts) will not be less than
the amount the Holder would have received if such Canadian Taxes had not been
withheld or deducted (a similar payment will also be made to Holders (other than
Excluded Holders (as defined herein)) that are exempt from withholding but are
required to pay tax directly on amounts otherwise subject to withholding);
provided that no Additional Amounts will be payable with respect to a payment
made to a Holder or beneficial
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owner of a Subordinated Debenture (an "Excluded Holder") (i) with which the
Company does not deal at arm's length (for purposes of the Tax Act) at the time
of the making of such payment, (ii) which is subject to such Canadian Taxes by
reason of its failure to comply with any certification, identification,
information, documentation or other reporting requirement if compliance is
required by law, regulation, administrative practice or an applicable treaty as
a precondition to exemption from, or a reduction in the rate of deduction or
withholding of, such Canadian Taxes or (iii) which is subject to such Canadian
Taxes by reason of its carrying on business in or otherwise being connected with
Canada or any province or territory thereof otherwise than by the mere holding
of Subordinated Debentures or the receipt of payment thereunder. Additional
Amounts will be paid in cash, as applicable, at Maturity, on any Redemption
Date, on a Conversion Date, on any Purchase Date or on any semi-annual interest
payment date. The Company will make such withholding or deduction and remit the
full amount deducted or withheld to the relevant authority as and when required
in accordance with applicable law. The Company will pay all taxes, interest and
other liabilities of the Company and any Holder which arise by virtue of any
failure of the Company to withhold, deduct and remit to the relevant authority
on a timely basis the full amounts required in accordance with applicable law.
The Company will furnish to the Holders, within 30 days after the date the
payment of any Canadian Taxes is due pursuant to applicable law, evidence of
such payment by the Company. For greater certainty, this Section 701 does not
apply to any payments made on Common Shares (or other securities) issued on
redemption, purchase, conversion or Maturity. Section 308 of the Original
Indenture shall not apply with respect to the payment of any Additional Amounts.
Section 702. Amendment of Rights Agreement.
The Company will not amend the Rights Agreement in any way that
adversely affects the interests of Holders.
ARTICLE EIGHT
MISCELLANEOUS PROVISIONS
Section 801. Trustee.
The Trustee makes no undertaking or representations in respect of, and
shall not be responsible in any manner whatsoever for and in respect of, the
validity or sufficiency of this First Supplemental Indenture or the proper
authorization or the due execution hereof by the Company or for or in respect of
the recitals and statements contained herein, all of which recitals and
statements are made solely by the Company.
Section 802. Ratification.
Except as expressly amended hereby, the Original Indenture shall
continue in full force and effect in accordance with the provisions thereof and
the Original Indenture is in all respects hereby ratified and confirmed. This
First Supplemental Indenture and all its provisions shall be deemed a part of
the Original Indenture in the manner and to the extent herein and therein
provided.
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Section 803. Governing Law.
THIS FIRST SUPPLEMENTAL INDENTURE AND THE SUBORDINATED DEBENTURES SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
Section 804. Execution in Counterparts.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
-42-
EXECUTION COPY
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, all as of the day and year first
above written.
INCO LIMITED
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President,
General Counsel and
Secretary
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
and Chief Financial Officer
THE BANK OF NEW YORK, as Trustee
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Name: Xxxxx X. Xxxxxx
Title: Assistant Treasurer
