<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number 1-10451
NORTH AMERICAN VACCINE, INC.
--------------------------------
Exact name of registrant as specified in its charter
Canada None
State or other jurisdiction of IRS Employer
incorporation or organization Identification No.
12103 Indian Creek Court, Beltsville, Maryland 20705
---------------------------------------------- -----
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code: (301) 470-6100
_________________________________________________
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
Common Stock, no par value, outstanding as of May 8, 1996 -- 30,547,061
shares
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TABLE OF CONTENTS
PAGE NUMBER
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . . . . . . 3
Consolidated Balance Sheets . . . . . . . . . . . . . . . 4
Consolidated Statements of Operations . . . . . . . . . . 5
Consolidated Statement of Shareholders' Equity . . . . . . 6
Consolidated Statements of Cash Flows . . . . . . . . . . 7
Notes to Condensed Consolidated Financial Statements . . . 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . 11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . 16
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following unaudited, condensed consolidated financial statements of
North American Vaccine, Inc. and Subsidiaries (the "Company") have been
prepared in accordance with the instructions to Form 10-Q and, therefore,
omit or condense certain footnotes and other information normally included
in financial statements prepared in accordance with generally accepted
accounting principles. This report should be read in conjunction with the
Company's Annual Report on Form 10-K filed for the year ended December 31,
1995. In the opinion of management, all adjustments (consisting only of
normal recurring adjustments) necessary for a fair presentation of the
financial information for the interim period reported have been made.
Results of operations for the three months ended March 31, 1996, will not
necessarily be indicative of the results for the entire fiscal year ending
December 31, 1996.
3
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<TABLE>
<CAPTION>
NORTH AMERICAN VACCINE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
March 31, December 31,
1996 1995
--------------- --------------
(Unaudited)
<S> <C> <C>
ASSETS
------
Current assets:
Cash and cash equivalents $10,012 $10,443
Accounts receivable 1,199 2,000
Prepaid expenses and other current assets 1,652 1,067
-------- --------
Total current assets 12,863 13,510
Property, plant and equipment, net 18,065 18,121
Investment in affiliate, at market 3,234 9,065
Other assets 513 553
-------- --------
Total assets $34,675 $41,249
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $3,194 $3,550
Other current liabilities 4,788 4,296
-------- --------
Total current liabilities 7,982 7,846
-------- --------
Deferred rent credit, net of current portion 183 205
Shareholders' equity:
Preferred stock, no par value; unlimited shares authorized-
Series A, convertible; issued and outstanding 2,000,000
shares; entitled to Can $2.50 per share in liquidation 6,538 6,538
Common stock, no par value; unlimited shares authorized; issued
30,492,720 shares at March 31, 1996 and 30,186,711 shares
at December 31, 1995 59,161 58,474
Unrealized investment holding gain 2,606 7,466
Accumulated deficit (41,795) (39,280)
-------- --------
Total shareholders' equity 26,510 33,198
-------- --------
Total liabilities and shareholders' equity $34,675 $41,249
======== ========
</TABLE>
4
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The accompanying notes are an integral part of these condensed
consolidated financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
NORTH AMERICAN VACCINE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three months ended
March 31,
1996 1995
-------- --------
<S> <C> <C>
Sales $ 228 $ -
-------- --------
Operating expenses:
Production 2,932 1,039
Research and development 2,677 1,606
General and administrative 1,481 1,199
-------- --------
Total operating expenses 7,090 3,844
-------- --------
Operating loss (6,862) (3,844)
Other income:
Gain on sale of investment in affiliate 4,228 -
Interest and dividend income 119 234
-------- --------
Net loss ($2,515) ($3,610)
======== ========
Net loss per share ($0.08) ($0.12)
Weighted-average number of common
shares outstanding 30,439 29,409
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
NORTH AMERICAN VACCINE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(In thousands)
(Unaudited)
Series A
Convertible Unrealized
Preferred Stock Common Stock Invest- Total
--------------- ------------ ment Accum- Share-
Holding ulated holders'
Shares Amount Shares Amount Gains Deficit Equity
------ ------ ------ ------ --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1995 2,000 $6,538 30,187 $58,474 $7,466 ($39,280) $33,198
Exercise of stock options - - 303 649 - - 649
Shares issued under
401(k) plan - - 3 38 - - 38
Realized investment holding gain - - - - (4,228) - (4,228)
Decrease in market value
of investment - - - - (632) - (632)
Net loss - - - - - (2,515) (2,515)
-------- -------- -------- -------- -------- -------- --------
Balance, March 31, 1996 2,000 $6,538 30,493 $59,161 $2,606 ($41,795) $26,510
======== ======== ======== ======== ======== ========= ========
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
7
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<TABLE>
<CAPTION>
NORTH AMERICAN VACCINE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
March 31,
1996 1995
------ ------
<S> <C> <C>
Cash flows from operating activities:
Net loss ($2,515) ($3,610)
Adjustments to reconcile net loss to net cash used in operating
activities:
Gain on sale of investment in affiliate (4,228) -
Depreciation and amortization 1,168 336
Contribution of common stock to 401(k) plan 38 30
Decrease (increase) in other assets 40 (8)
Decrease in deferred rent (19) (18)
Cash flows provided by other working capital items 349 482
-------- --------
Net cash used in operating activities (5,167) (2,788)
-------- --------
Cash flows from investing activities:
Capital expenditures (1,112) (6,007)
Proceeds from sale of investment in affiliate 5,199 -
-------- --------
Net cash provided by (used in) investing activities 4,087 (6,007)
-------- --------
Cash flows from financing activities:
Proceeds from exercise of stock options 649 434
-------- --------
Net cash provided by financing activities 649 434
-------- --------
Net decrease in cash and cash equivalents (431) (8,361)
Cash and cash equivalents, beginning of period 10,443 20,922
-------- --------
Cash and cash equivalents, end of period $10,012 $12,561
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
8
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<TABLE>
<CAPTION>
NORTH AMERICAN VACCINE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(In thousands)
(Unaudited)
Three Months Ended
March 31,
1996 1995
------ ------
<S> <C> <C>
Cash Flows Provided By (Used in) Other Working Capital Items:
Decrease (increase) in:
Accounts receivable $ 801 $ -
Amounts receivable from affiliate - 15
Prepaid expenses and other current assets (585) (459)
Increase (decrease) in:
Accounts payable (356) (217)
Other current liabilities 489 1,143
------- -------
Net cash provided by other working capital items $ 349 $ 482
======= =======
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
9
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NORTH AMERICAN VACCINE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BUSINESS
The Company is engaged in the research, development and production of
vaccines for the prevention of infectious diseases in children and adults.
In the first quarter of 1996, the Swedish Medical Products Agency granted
regulatory approval of the Company's acellular pertussis vaccine
formulated as a DTaP vaccine for the prevention of diphtheria, tetanus and
pertussis (whooping cough). The Company has not received approval from
the U.S. Food and Drug Administration ("FDA") or any other regulatory
authority to market its DTaP vaccine or any other product in development.
2. SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Accounting and Currency. The accompanying consolidated
financial statements have been prepared in accordance with generally
accepted accounting principles ("GAAP") in the United States and are
denominated in U.S. dollars, because the Company conducts the majority of
its transactions in this currency. The application of Canadian GAAP would
not result in material adjustments to the accompanying financial
statements except for the impact of the adoption of Statement of Financial
Accounting Standards ("SFAS") No. 115, as discussed in Note 3. The effect
of foreign currency translation has been immaterial.
(b) Pervasiveness of Estimates. The preparation of financial statements
in conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from estimates.
3. INVESTMENTS IN AFFILIATES
In accordance with SFAS No. 115, "Accounting for Certain Investments in
Debt and Equity Securities," equity securities classified as available-
for-sale are reported at fair value, with unrealized gains and losses
reported in a separate component of shareholders' equity.
At December 31, 1995, the Company owned 318,084 shares of IVAX Corporation
("IVAX") common stock. The market value of these securities, as shown on
the accompanying consolidated balance sheets, have been determined based
on the closing prices for registered securities of IVAX as of those dates.
In the first quarter of 1996, the Company sold 193,084 shares of its
investment in IVAX common stock generating approximately $5.2 million in
proceeds (of which $969,000 was received in April 1996) and a realized
gain of $4.2 million. The market value of the Company's investment in
IVAX at May 9, 1996 was approximately $3.5 million. These investment
10
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securities are volatile and therefore subject to significant fluctuations
in value.
4. OTHER CURRENT LIABILITIES
Other current liabilities consisted of the following components:
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
---------- ------------
<S> <C> <C>
Payroll and fringe benefits $ 953 $ 736
Accrued consulting and professional fees 951 767
Reserve for contract loss 720 720
Accrued taxes 633 633
Accrued costs of clinical trials 495 574
Accrued insurance 301 33
Other accrued liabilities 298 438
Accrued construction costs 349 310
Deferred rent credit 88 85
-------- --------
Total other current liabilities $ 4,788 $ 4,296
======== =======
</TABLE>
5. SUBSEQUENT EVENT
In May 1996, the Company completed an offering of 6.50% convertible
subordinated notes in the principal amount of $86.25 million due May 1,
2003. The net proceeds from this offering were approximately $82.7
million. Interest on the notes is payable semiannually on May 1 and
November 1 of each year, commencing November 1, 1996. The notes will be
convertible into common shares of the Company at any time after August 5,
1996, at the conversion price of approximately $24.86 per common share.
The notes are subordinated to present and future senior indebtedness of
the Company and will not restrict the incurrence of future senior or other
indebtedness by the Company.
The notes are redeemable, in whole or in part, at the option of the
Company on or after May 1, 1999 at certain pre-established redemption
prices plus accrued interest. Upon a change in control, the Company is
required to offer to purchase all or part of the notes then outstanding at
a purchase price equal to 100% of the principal amount thereof, plus
interest. The repurchase price is payable in cash or, at the option of the
Company, in common shares.
11
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
BACKGROUND
The Company is engaged in the research, development and production of
vaccines for the prevention of infectious diseases in children and adults.
In 1995, the Company recognized development revenues pursuant to
agreements with Pasteur-Merieux Serums et Vaccins, a wholly-owned
subsidiary of Rhone-Poulenc, which operates in North America through its
subsidiary Connaught Laboratories ("Pasteur Merieux-Connaught"), under
which the Company and Pasteur Merieux-Connaught will jointly develop the
Company's meningococcus B vaccine. Additional funding may be provided to
the Company by Pasteur Merieux-Connaught under the terms of the clinical
development agreement. See "Outlook; Liquidity and Capital Resources,"
below.
In February 1996, the Swedish Ministry of Health granted regulatory
approval to market the Company's acellular pertussis vaccine formulated as
a combined DTaP vaccine for the prevention of diphtheria, tetanus, and
pertussis (whooping cough). This marketing authorization is the first
regulatory approval for any of the Company's products. Under a supply
agreement, the Company manufactures the acellular component of the
vaccine, and Statens Seruminstitut ("SSI") manufactures the diphtheria and
tetanus components and will market and distribute the DTaP vaccine in
Sweden, as well as other Scandinavian and Baltic countries comprising
SSI's territory. The Company filed a product license application with the
FDA in September 1995 for approval to market its DTaP vaccine. See
"Outlook; Liquidity & Capital Resources," below.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
In 1996, the Company recognized $228,000 of revenue from product
sales of its acellular pertussis vaccine under the supply agreement with
SSI.
Production expenses were $2.9 million in 1996 compared to $1.0
million in 1995. The increase in these expenses in 1996 is due to
increases in depreciation, labor, materials and supplies expenses in the
current year as the Company prepares for regulatory approval of its DTaP
vaccine in the United States and produces the DTaP vaccine. The increase
in labor cost is primarily attributable to an increase in number of
employees. In addition, facility costs in 1996 were greater than in 1995
due to the Company's placing in service its expanded production facility.
Research and development expenses increased to $2.7 million in 1996
from $1.6 million in 1995. The increase is primarily clinical testing
expenses, which are the result of expanding the clinical and regulatory
12
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affairs operations of the Company. To a lesser extent, there were
increases in patent filing expenses over the prior year.
General and administrative expenses were $1.5 million in 1996 as
compared to $1.2 million in 1995. The increase is primarily due to higher
labor, insurance, and professional fees as the Company prepares for
regulatory approval to market its DTaP vaccine in the United States.
The Company had 168 and 135 full-time employees as of March 31, 1996
and 1995, respectively.
In the first quarter of 1996, the Company sold 193,084 shares of its
investment in IVAX Corporation common stock, which generated proceeds of
approximately $5.2 million, and a realized gain of $4.2 million.
Interest and dividend income decreased to $119,000 in 1996 from
$234,000 in 1995. This decrease is due primarily to lower cash balances
in 1996.
The factors cited above resulted in a net loss of $2.5 million in
1996 as compared to a net loss of $3.6 million in 1995. The net loss per
share was $0.08 and $0.12 for 1996 and 1995, respectively. Without the
$4.2 million gain on the sales of investment securities, the net loss per
share for 1996 would have been $0.22. The weighted-average number of
common shares outstanding was 30.4 million for 1996 compared to 29.4
million for 1995. The increase in weighted-average shares outstanding is
attributable primarily to exercises of stock options.
OUTLOOK; LIQUIDITY AND CAPITAL RESOURCES
The following paragraphs contain a discussion of the prospects for
the Company's future operations and certain other forward-looking
statements and information, together with a review of the Company's
liquidity and capital resources. The Company's actual results may differ
significantly from the results discussed in the forward looking
statements.
In February 1996, the Swedish Medical Products Agency granted
regulatory approval to market the Company's acellular pertussis vaccine
(formulated as a combined DTaP vaccine). This is the first regulatory
approval for any of the Company's vaccine products under development.
Following this regulatory approval, the Company recognized $228,000 in
revenues from sale of its acellular pertussis vaccine to SSI for
commercialization in Sweden. Additional revenues from such product sales
are dependent upon SSI successfully commercializing the DTaP vaccine in
Sweden.
SSI has a product approval application pending in Denmark for a
combined DTaP-IPV vaccine and has indicated that it will file additional
applications for the acellular pertussis vaccine, both alone and in
combination with other antigens, in other countries within its territory.
Additional product approvals could lead to increased revenues from the
13
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sale of the Company's acellular pertussis vaccine. There are no
assurances that these product approvals will be obtained during 1996 or at
all, or that once obtained SSI will be effective in the marketing and
distribution of the product.
In September 1995, the Company filed a product license application
with the FDA for approval to market its DTaP vaccine. In the event the
FDA approves the Company's DTaP vaccine and the Company successfully
launches the product in the United States, revenues from operations and
the prospects for profitability would significantly increase. There are
no assurances that the FDA's approval will be obtained during 1996 or at
all, or that once obtained the Company will be effective in the marketing
and distribution of the product. The factors affecting successful
commercial launch of the DTaP vaccine in the United States include, among
others: establishing the identity and reputation for the Company and its
products; creating an awareness among pediatricians of the safety and
efficacy of the Company's DTaP vaccine; distinguishing the Company's
product from that of its competitors; whether the Advisory Committee on
Immunization Practices ("ACIP") and the American Academy of Pediatrics
issue a nationwide recommendation for preferred use of acellular pertussis
vaccines in infants and children; and establishing effective distribution
channels.
In connection with the planned marketing and distribution of the DTaP
vaccine, the Company is considering the advisability of executing
distribution agreements for certain markets. The Company also intends to
collaborate in the development of selected vaccine products and may enter
into additional collaborative development agreements similar in nature to
that which was signed with Pasteur Merieux-Connaught, as described below.
These agreements, if executed, would only impact the Company's operating
results in future periods. There are no assurances that the Company will
successfully negotiate and sign any such agreements or that, if executed,
the financial terms for any distribution agreement or further
collaboration agreement will be significant.
In December 1995, the Company signed a clinical development agreement
and license agreement with Pasteur Merieux-Connaught, under which the
parties agreed to jointly develop the Company's new conjugate vaccine
against meningococcus B infection for both adults and pediatric
indications. In 1995 the Company received $3 million from Pasteur
Merieux-Connaught, and further fees and funding would be made upon
achievement of development, clinical and regulatory milestones. Total
fees and payments to the Company upon achievement of all clinical and
regulatory milestones would amount to $52 million. Achievement of the
first milestone, which is the satisfactory completion of a pre-clinical
study and ratification of the license agreement by the National Research
Council of Canada, a Canadian federal government agency (NRC), both of
which are anticipated to occur during 1996, would result in total payments
from Pasteur Merieux-Connaught of $10 million during the course of the
year. The Company's revenues from this collaboration will depend upon
achievement of the development milestones. The time it may take to
achieve these milestones cannot be predicted accurately and no assurances
14
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can be given that any or all of these milestones will be achieved at all
or within the time frames projected. In addition, Pasteur Merieux-
Connaught may terminate these agreements in its sole discretion at any
time after December 22, 1996.
The Company's cash requirements for operations were $5.3 million in
the fourth quarter of 1995 and $7.2 million for the first quarter of 1996.
At March 31, 1996, the Company had cash and cash equivalents of
approximately $10.0 million and investment securities in an affiliate with
a market value of $3.2 million. The investment securities consisted of
125,000 shares of IVAX common stock. The fair market value of these
investment securities as of May 9, 1996 was $3.5 million. These
investments are volatile and therefore subject to significant fluctuations
in value.
Total capital expenditures for the first quarter of 1996 were $1.1
million, which were primarily for production equipment. The Company has
been exploring opportunities to build-out, lease or acquire additional
research, development and clinical production facilities to accommodate
the Company's expanding vaccine development program. The Company has no
present agreements, commitments or understandings in respect of any
additional facilities and the total capital expenditures for such a
project will vary substantially depending upon a number of factors
including, among other things, the size of such a facility, the equipment
and systems requirements for the facility, location, zoning and other
government restrictions. Total projected capital expenditures for 1996
are expected to be approximately $3 million, exclusive of expenditures
associated with the build-out, acquisition or improvement of additional
facilities. The projected capital expenditures could fluctuate based upon
a number of factors including unanticipated costs to replace or repair
existing equipment and systems in order to keep the production facility
operational or to maintain compliance with regulatory requirements.
The Company anticipates that cash requirements for operations will be
between approximately $9 and $10 million in the second quarter of 1996 as
the Company expands production for commercial sale in Europe and in
anticipation of regulatory approval in the United States. Thereafter,
cash requirements for operations will depend upon the level of vaccine
production, costs in preparing for the market introduction of its DTaP
vaccine, and the level of expenditures for the Company's ongoing research
and development program.
In May 1996, the Company completed an offering of 6.50% convertible
subordinated notes in the principal amount of $86.25 million due May 1,
2003. The net proceeds from this offering were approximately $82.7
million. Interest on the notes is payable semiannually on May 1 and
November 1 of each year, commencing November 1, 1996. The notes will be
convertible into common shares of the Company at any time after August 5,
1996. The notes also are subordinated to present and future senior
indebtedness of the Company and will not restrict the incurrence of future
senior or other indebtedness by the Company.
15
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The notes are redeemable, in whole or in part, at the option of the
Company on or after May 1, 1999 at certain pre-established redemption
prices, plus accrued interest. Upon a change in control, the Company is
required to offer to purchase all or part of the notes then outstanding at
a purchase price equal to 100% of the principal amount thereof, plus
interest. The repurchase price is payable in cash or, at the option of the
Company, in common shares.
The quarterly operating results for the remaining quarters in 1996
may fluctuate significantly based upon a number of factors including,
among other things: the magnitude of sales of product for distribution in
Europe; the timing of FDA approval for, and the commercial introduction
of, the DTaP vaccine; the timing of the satisfactory completion of
milestones under the development agreement with Pasteur Merieux-Connaught;
the timing and amount of payments under any additional collaboration
agreement or distribution agreement; and the timing of and amount of
proceeds from the sale of additional investment securities. There are,
however, no assurances that any further regulatory approvals will be
received, or that development milestones will be achieved, or that if
obtained will contribute materially to the quarterly operating results of
the Company. Further, failure or significant delays in receiving
additional regulatory approvals and meeting required milestones would have
a significant adverse effect on the Company's future operating results and
future financial position.
TAX AND OTHER MATTERS
At December 31, 1995, the Company and its subsidiaries had income tax
loss carryforwards of approximately $11 million to offset future Canadian
source income and approximately $48.5 million to offset future United
States taxable income subject to the alternative minimum tax rules in the
United States.
16
<PAGE>
PART II OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit No. Description
10.29 Indenture dated May 7, 1996
between North American Vaccine,
Inc. ("NAV") and Marine Midland
Bank.
10.30 Registration Rights Agreement
dated May 1, 1996 among NAV,
Goldman Sachs & Co. and UBS
Securities LLC
27 Financial Data Schedule
(b) Reports on Form 8-K
On January 16, 1996, the Company filed with the Securities and
Exchange Commission a Current Report on Form 8-K under Item 5
reporting the signing of definitive agreements between the
Company and Pasteur Merieux-Connaught, whereby the companies
would jointly develop a vaccine against meningococcus B
infection.
17
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
NORTH AMERICAN VACCINE, INC.
(Registrant)
By: /s/ Sharon Mates
-------------------------------------
Sharon Mates, Ph.D.
President
By: /s/ Lawrence J. Hineline
-----------------------------------
Lawrence J. Hineline
Vice President - Finance
Date: May 14, 1996
18
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<PAGE>
NORTH AMERICAN VACCINE, INC.
ISSUER
TO
MARINE MIDLAND BANK
TRUSTEE
===============
INDENTURE
Dated as of May 7, 1996
===============
U.S.$86,250,000
6.50% Convertible Subordinated Notes
Due May 1, 2003
<PAGE>
TABLE OF CONTENTS
===========
Page
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RECITALS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. Compliance Certificates and Opinions . . . . . . . . . . 10
SECTION 1.3. Form of Documents Delivered to the Trustee . . . . . . . 11
SECTION 1.4. Acts of Holders of Securities . . . . . . . . . . . . . . 12
SECTION 1.5. Notices, Etc., to Trustee and Company . . . . . . . . . . 13
SECTION 1.6. Notice to Holders of Securities; Waiver . . . . . . . . . 14
SECTION 1.7. Effect of Headings and Table of Contents . . . . . . . . 14
SECTION 1.8. Successors and Assigns . . . . . . . . . . . . . . . . . 14
SECTION 1.9. Separability Clause . . . . . . . . . . . . . . . . . . . 14
SECTION 1.10. Benefits of Indenture . . . . . . . . . . . . . . . . . 14
SECTION 1.11. Governing Law . . . . . . . . . . . . . . . . . . . . . 15
SECTION 1.12. Legal Holidays . . . . . . . . . . . . . . . . . . . . . 15
SECTION 1.13. Consent to Jurisdiction and Service of Process . . . . . 15
SECTION 1.14. Conversion of Currency . . . . . . . . . . . . . . . . . 16
SECTION 1.15. Currency Equivalent . . . . . . . . . . . . . . . . . . 17
SECTION 1.16. Interest Act (Canada) . . . . . . . . . . . . . . . . . 18
SECTION 1.17. Conflict with Trust Indenture Act . . . . . . . . . . . 18
This Table of Contents shall not, for any purpose, be deemed to be a part
of the Indenture.
==========================================================================
- i -
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ARTICLE TWO
SECURITY FORMS
Page
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SECTION 2.1. Forms Generally . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.2. Forms of Securities . . . . . . . . . . . . . . . . . . . 21
SECTION 2.3. Form of Conversion Notice . . . . . . . . . . . . . . . . 42
SECTION 2.4. Legend on Restricted Securities . . . . . . . . . . . . . 42
SECTION 2.5 Form of Trustee's Certificate of Authentication . . . . . 42
ARTICLE THREE
THE SECURITIES
SECTION 3.1. Title and Terms . . . . . . . . . . . . . . . . . . . . . 42
SECTION 3.2. Denominations . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 3.3. Execution, Authentication, Delivery and Dating . . . . . 43
SECTION 3.4. Global Securities . . . . . . . . . . . . . . . . . . . . 44
SECTION 3.5. Registration, Registration of Transfer and Exchange;
Restrictions on Transfer . . . . . . . . . . . . . . . . 46
SECTION 3.6. Mutilated, Destroyed, Lost or Stolen Securities . . . . . 52
SECTION 3.7. Payment of Interest, Interest Rights Preserved . . . . . 53
SECTION 3.8. Persons Deemed Owners . . . . . . . . . . . . . . . . . . 55
SECTION 3.9. Cancellation . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 3.10. Computation of Interest . . . . . . . . . . . . . . . . 55
SECTION 3.11. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . 55
SECTION 3.12. Notification of Withholding . . . . . . . . . . . . . . 55
This Table of Contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
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SECTION 4.1. Satisfaction and Discharge of Indenture . . . . . . . . . 56
SECTION 4.2. Application of Trust Money . . . . . . . . . . . . . . . 57
ARTICLE FIVE
REMEDIES
SECTION 5.1. Events of Default . . . . . . . . . . . . . . . . . . . . 57
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment . . . 60
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement
by Trustee . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 5.4. Trustee May File Proofs of Claim . . . . . . . . . . . . 61
SECTION 5.5. Trustee May Enforce Claims Without Possession
of Securities . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 5.6. Application of Money Collected . . . . . . . . . . . . . 63
SECTION 5.7. Limitation on Suits . . . . . . . . . . . . . . . . . . . 63
SECTION 5.8. Unconditional Right of Holders to Receive Principal,
Premium and Interest and to Convert . . . . . . . . . . . 64
SECTION 5.9. Restoration of Rights and Remedies . . . . . . . . . . . 64
SECTION 5.10. Rights and Remedies Cumulative . . . . . . . . . . . . . 64
SECTION 5.11. Delay or Omission Not Waiver . . . . . . . . . . . . . . 64
SECTION 5.12. Control by Holders of Securities . . . . . . . . . . . . 65
SECTION 5.13. Waiver of Past Defaul . . . . . . . . . . . . . . . . . 65
SECTION 5.14. Undertaking for Costs . . . . . . . . . . . . . . . . . 65
SECTION 5.15. Waiver of Stay or Extension Laws . . . . . . . . . . . . 66
This Table of Contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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ARTICLE SIX
THE TRUSTEE
Page
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SECTION 6.1. Certain Duties and Responsibilities . . . . . . . . . . . 66
SECTION 6.2. Notice of Defaults . . . . . . . . . . . . . . . . . . . 67
SECTION 6.3. Certain Rights of Trustee . . . . . . . . . . . . . . . . 68
SECTION 6.4. Not Responsible for Recitals or Issuance of
Securities . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 6.5. May Hold Securities, Act as Trustee Under Other
Indentures . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 6.6. Money Held in Trust . . . . . . . . . . . . . . . . . . . 69
SECTION 6.7. Compensation and Reimbursemen . . . . . . . . . . . . . . 70
SECTION 6.8. Corporate Trustee Required; Eligibility . . . . . . . . . 70
SECTION 6.9. Resignation and Removal; Appointment of Successor . . . . 71
SECTION 6.10. Acceptance of Appointment by Successor . . . . . . . . . 72
SECTION 6.11. Merger, Conversion, Consolidation or Succession
to Business . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 6.12. Authenticating Agents . . . . . . . . . . . . . . . . . 73
SECTION 6.13 Trust Indenture Legislation . . . . . . . . . . . . . . . 74
ARTICLE SEVEN
AMALGAMATION, CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
SECTION 7.1. Company May Amalgamate, Consolidate, Etc., Only on
Certain Terms . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 7.2. Successor Substituted . . . . . . . . . . . . . . . . . . 76
This Table of Contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
Page
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SECTION 8.1. Supplemental Indentures Without Consent of Holders of
Securities . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 8.2. Supplemental Indentures with Consent of Holders of
Securities . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 8.3. Execution of Supplemental Indentures . . . . . . . . . . 78
SECTION 8.4. Effect of Supplemental Indentures . . . . . . . . . . . . 79
SECTION 8.5. Reference in Securities to Supplemental Indentures . . . 79
SECTION 8.6. Notice of Supplemental Indentures . . . . . . . . . . . . 79
ARTICLE NINE
MEETINGS OF HOLDERS OF SECURITIES
SECTION 9.1. Purposes for Which Meetings May Be Called . . . . . . . . 79
SECTION 9.2. Call, Notice and Place of Meetings . . . . . . . . . . . 79
SECTION 9.3. Persons Entitled to Vote at Meetings . . . . . . . . . . 80
SECTION 9.4. Quorum; Action . . . . . . . . . . . . . . . . . . . . . 80
SECTION 9.5. Determination of Voting Rights; Conduct and Adjournmet
of Meetings . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 9.6. Counting Votes and Recording Action of Meetings . . . . . 82
ARTICLE TEN
COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest . . . . . . . 82
SECTION 10.2. Maintenance of Offices or Agencies . . . . . . . . . . . 83
This Table of Contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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SECTION 10.3. Money for Security Payments To Be Held in Trust . . . . 83
SECTION 10.4. Additional Amounts . . . . . . . . . . . . . . . . . . . 84
SECTION 10.5. Existence . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 10.6. Maintenance of Properties . . . . . . . . . . . . . . . 85
SECTION 10.7. Payment of Taxes and Other Claims . . . . . . . . . . . 86
SECTION 10.8. Registration and Listing . . . . . . . . . . . . . . . . 86
SECTION 10.9. Statement by Officers as to Default . . . . . . . . . . 86
SECTION 10.10. Delivery of Certain Informatio . . . . . . . . . . . . 87
SECTION 10.11. Reporting Issuer . . . . . . . . . . . . . . . . . . . 87
SECTION 10.12. Registration Rights . . . . . . . . . . . . . . . . . . 88
SECTION 10.13. Waiver of Certain Covenants . . . . . . . . . . . . . . 89
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 11. 1. Right of Redemption . . . . . . . . . . . . . . . . . . 89
SECTION 11.2. Applicability of Article . . . . . . . . . . . . . . . . 89
SECTION 11.3. Election to Redeem; Notice to Trustee . . . . . . . . . 89
SECTION 11.4. Selection by Trustee of Securities to Be Redeemed . . . 90
SECTION 11.5. Notice of Redemption . . . . . . . . . . . . . . . . . . 90
SECTION 11.6. Deposit of Redemption Price . . . . . . . . . . . . . . 91
SECTION 11.7. Securities Payable on Redemption Dat . . . . . . . . . . 92
SECTION 11.8. Securities Redeemed in Part . . . . . . . . . . . . . . 92
This Table of Contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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<PAGE>
ARTICLE TWELVE
CONVERSION OF SECURITIES
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SECTION 12.1. Conversion Privilege and Conversion Price . . . . . . . 92
SECTION 12.2. Exercise of Conversion Privilege . . . . . . . . . . . . 93
SECTION 12.3. Fractions of Shares . . . . . . . . . . . . . . . . . . 94
SECTION 12.4. Adjustment of Conversion Price . . . . . . . . . . . . . 95
SECTION 12.5. Notice of Adjustments of Conversion Price . . . . . . . 99
SECTION 12.6. Notice of Certain Corporate Action . . . . . . . . . 100
SECTION 12.7. Company to Reserve Common Shares . . . . . . . . . . 101
SECTION 12.8. Taxes on Conversions . . . . . . . . . . . . . . . . 101
SECTION 12.9. Covenant as to Common Shares . . . . . . . . . . . . 101
SECTION 12.10. Cancellation of Converted Securities . . . . . . . . 101
SECTION 12.11. Provision in Case of Amalgamation, Consolidation,
Merger or Sale of Assets . . . . . . . . . . . . . . 102
SECTION 12.12. Responsibility of Trustee for Conversion Provision . 103
ARTICLE THIRTEEN
SUBORDINATION OF SECURITIES
SECTION 13.1. Securities Subordinated to Senior Indebtedness . . . . 104
SECTION 13.2. No Payments in Certain Circumstances; Payment Over
of Proceeds Upon Dissolution, Etc . . . . . . . . . . 104
SECTION 13.3. Notice to Trustee of Specified Events; Reliance on
Certificate of Liquidating Agent . . . . . . . . . . . 106
SECTION 13.4. Trustee to Effectuate Subordination . . . . . . . . . 107
SECTION 13.5. Trustee Not Charged with Knowledge of Prohibition . . 107
This Table of Contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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SECTION 13.6. Reliance on Judicial Order or Certificate of
Liquidating Agent . . . . . . . . . . . . . . . . . . 108
SECTION 13.7. Trustee Not Fiduciary for Holders of Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . 108
SECTION 13.8. Rights of Trustee as Holder of Senior Indebtedness;
Preservation Of Trustee's Rights . . . . . . . . . . 108
SECTION 13.9. Article Applicable to Paying Agents . . . . . . . . . 109
SECTION 13.10. Certain Conversions Deemed Payment . . . . . . . . . . 109
ARTICLE FOURTEEN
REPURCHASE OF SECURITIES AT THE OPTION OF THE
HOLDER UPON A CHANGE IN CONTROL
SECTION 14.1. Right to Require Repurchase . . . . . . . . . . . . . 109
SECTION 14.2. Notices; Method of Exercising Repurchase Right, Etc . 110
SECTION 14.3. Certain Definitions . . . . . . . . . . . . . . . . . 114
ARTICLE FIFTEEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 15.1. Company to Furnish Trustee Names and Addresses of
Holders . . . . . . . . . . . . . . . . . . . . . . . 115
SECTION 15.2. Preservation of Information . . . . . . . . . . . . . 115
This Table of Contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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<PAGE>
INDENTURE, dated as of May 7, 1996, between NORTH AMERICAN VACCINE,
INC., a corporation duly organized and existing under the laws of Canada,
having its principal office at 12103 Indian Creek Court, Beltsville,
Maryland (herein called the "Company"), and MARINE MIDLAND BANK, a New
York banking corporation and trust company, as Trustee hereunder (herein
called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its
6.50% Convertible Subordinated Notes due May 1, 2003 (herein called the
"Securities") of substantially the tenor and amount hereinafter set forth,
and to provide therefor the Company has duly authorized the execution and
delivery of this Indenture.
All things necessary to make the Securities, when the Securities are
executed by the Company and authenticated and delivered hereunder, the
valid obligations of the Company, and to make this Indenture a valid
agreement of the Company, in accordance with their and its terms, have
been done. Further, all things necessary to duly authorize the issuance
of the Common Shares of the Company issuable upon the conversion of the
Securities, and to duly reserve for issuance the number of Common Shares
issuable upon such conversion, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof it is mutually covenanted and agreed,
for the equal and proportionate benefit of all Holders of the Securities
as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1. Definitions.
-----------
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as
the singular;
(2) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally accepted
accounting principles in the United States, and, except as otherwise
herein expressly provided, the term "generally accepted accounting
principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally
accepted at the date of such computation; and
<PAGE>
(3) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not
to any particular Article, Section or other subdivision.
"Act", when used with respect to any Holder of a Security, has the
meaning specified in Section 1.4.
"Additional Amounts" has the meaning specified in Section 2.2.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this
definition, "control", when used with respect to any specified Person
means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agent Member" means any member of, or participant in, the
Depositary.
"Applicable Procedures" has the meaning in Section 3.5(c).
"Authenticating Agent" means any Person authorized pursuant to
Section 6.12 to act on behalf of the Trustee to authenticate Securities.
"Board of Directors" means either the board of directors of the
Company or any committee of that board empowered to act for it with
respect to this Indenture.
"Board Resolution" means a resolution duly adopted by the Board of
Directors, a copy of which, certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of
Directors and to be in full force and effect on the date of such
certification, shall have been delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment,
Place of Conversion or any other place, as the case may be, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in such Place of Payment, Place of Conversion
or other place, as the case may be, are authorized or obligated by law or
executive order to close; provided, however, that a day on which banking
institutions in New York, New York are authorized or obligated by law or
executive order to close shall not be a Business Day for purposes of
Section 13.5; provided, further, that a day on which banking institutions
in New York, New York or London, England are authorized or obligated by
law or executive order to close shall not be a Business Day for purposes
of Sections 10.1, 10.3 or 11.6.
"Canadian Additional Amounts" has the meaning specified in
Section 2.2.
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"Canadian Excluded Holder" has the meaning specified in Section 2.2.
"Canadian Taxes" has the meaning specified in Section 2.2.
"Cedel" has the meaning specified in Section 2.1.
"Change in Control" has the meaning specified in Section 14.3.
"Closing Price Per Share" means, with respect to a class of Common
Stock of the Company, for any day, the reported last sales price regular
way per share of such class or, in case no such reported sale takes place
on such day, the average of the reported closing bid and asked prices
regular way, in either case (i) on Nasdaq or, if such class of Common
Stock is not quoted on Nasdaq, on the principal (as determined by the
Company's Board of Directors) United States national securities exchange
on which such class of Common Stock is quoted, listed or admitted to
trading or (ii) if not quoted on Nasdaq or listed or admitted to trading
on any United States national securities exchange, the average of the
closing bid and asked prices in the over-the-counter market as furnished
by any New York Stock Exchange member firm selected from time to time by
the Company for that purpose or (iii) if not so available in either manner
set forth in (i) or (ii), as otherwise determined in good faith by the
Board of Directors.
"Commission" means the United States Securities and Exchange
Commission.
"Common Shares" means the Common Shares, with no par value, of the
Company authorized at the date of this instrument as originally executed.
Subject to the provisions of Section 12.11, shares issuable upon
conversion of Securities shall include only Common Shares or shares of any
class or classes of Common Stock resulting from any classification or
reclassification thereof; provided, however, that if at any time as a
result of such classification or reclassification there shall be more than
one such resulting class, the shares so issuable upon conversion of
Securities shall include shares of all such classes, and the number of
shares of each such class then so issuable shall be in the same proportion
which the total number of shares of such class resulting from all such
reclassification bears to the total number of shares of all such classes
resulting from all such reclassification.
"Common Stock" means the Company's Common Shares, with no par value,
together with any other class of capital stock of the Company which has 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.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become
such pursuant to the applicable provisions of this Indenture, and
thereafter "Company" shall mean such successor Person.
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<PAGE>
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman of the Board, any
Vice Chairman of the Board, its Chief Executive Officer, its President or
any Senior Vice President, and by its Corporate Controller, Treasurer, an
Assistant Treasurer, its Secretary or any Assistant Secretary, and
delivered to the Trustee.
"Constituent Person" has the meaning specified in Section 12.11.
"Conversion Agent" means any Person authorized by the Company to
convert Securities in accordance with Article Twelve. The Company has
initially appointed the Trustee as its Conversion Agent in the Borough of
Manhattan, The City of New York, and Midland Bank plc as its Conversion
Agent in London, England.
"Conversion Price" has the meaning specified in Section 12.1.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered (which at the date of this Indenture is located at 140
Broadway, 12th Floor, New York, New York 10005.
"Corporation" means a corporation, company, including, without
limitation, a limited liability company, association, joint-stock company
or business trust.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Definitive Security" means any Security (other than a Global
Security).
"Definitive Restricted Security" has the meaning specified in
Section 2.1.
"Depositary" means, with respect to any Securities issued in whole
or in part in the form of one or more Global Securities, the clearing
agency that is registered under the Exchange Act and designated to act as
Depositary for such Securities, as contemplated by Section 3.4, or any
successor clearing agency registered under the Exchange Act as
contemplated by Section 3.4.
"Determination Notice" has the meaning specified in Section 2.2(a).
"Distribution Date" has the meaning specified in Section 12.4(4).
"Dollar" or "U.S.$" means a dollar or other equivalent unit in such
coin or currency of the United States as at the time shall be legal tender
for the payment of public and private debts.
"Euroclear" has the meaning specified in Section 2.1.
"Event of Default" has the meaning specified in Section 5.1.
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<PAGE>
"Exchange Act" means the United States Securities Exchange Act of
1934, as amended from time at time.
"Exchange Date" means the date 40 days after the latest of the
commencement of the offering of the Securities, the original issue date of
the Securities or the issue date with respect to any additional Securities
issued to cover over-allotments.
"Excluded Holder" has the meaning specified in Section 2.2.
"Global Security" means any of the Restricted Global Security, the
Regulation S Global Security and the Unrestricted Global Security and
registered in the Security Register in the name of a Depositary or a
nominee thereof.
"Holder", when used with respect to any Security, means the Person
in whose name the Security is registered in the Security Register.
"Indenture" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions
hereof.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined under Rule 501(a)(1), (2), (3) or (7) of
the Securities Act.
"Interest Payment Date" means the Stated Maturity of an installment
of interest on the Securities.
"Maturity", when used with respect to any Security, means the date
on which the principal of such Security becomes due and payable as therein
or herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption, exercise of the repurchase right set
forth in Article Fourteen or otherwise.
"Nasdaq" means the Nasdaq National Market System.
"Non-electing Share" has the meaning specified in Section 12.11.
"Officers' Certificate" means a certificate signed by the Chairman
of the Board, any Vice Chairman of the Board, the Chief Executive Officer,
the President or any Senior Vice President and by the Corporate
Controller, the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for, or an employee of, the Company and who shall be reasonably
acceptable to the Trustee.
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<PAGE>
"Outstanding", when used with respect to Securities, means, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for the payment or redemption of which money
in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) or set aside
and segregated in trust by the Company (if the Company shall act as
its own Paying Agent) for the Holders of such Securities, provided
that if such Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made; and
(iii) Securities which have been paid pursuant to Section 3.6
or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than
any such Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such
Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the
requisite principal amount of Outstanding Securities are present at a
meeting of Holders of Securities for quorum purposes or have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder, Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such
determination as to the presence of a quorum or upon any such request,
demand, authorization, direction, notice, consent or waiver, only
Securities which a Responsible Officer of the Trustee actually knows to be
so owned shall be so disregarded. Securities so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obliger.
"Paying Agents" means any Person authorized by the Company to pay
the principal of or interest on any Securities on behalf of the Company
and, except as otherwise specifically set forth herein, such term shall
include the Company if it shall act as its own Paying Agent. The Company
has initially appointed the Trustee as its Paying Agent in the Borough of
Manhattan, The City of New York and Midland Bank plc, located at Mariner
House, Pepys Street, London EC3N 4DA, England as its Paying Agent in
London, England.
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<PAGE>
"Person" means any individual, corporation, partnership, joint
venture, trust, estate, unincorporated organization or government or any
agency or political subdivision thereof.
"Place of Conversion" has the meaning specified in Section 3.1.
"Place of Payment" has the meaning specified in Section 3.1.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 3.6 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated, destroyed,
lost or stolen Security.
"Record Date" means any Regular Record Date or Special Record Date.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Reference Date" has the meaning specified in Section 12.4(4).
"Registration Rights Agreement" has the meaning specified in Section
10.12.
"Regular Record Date" for interest payable in respect of any
Security on any Interest Payment Date means the April 15 or October 15
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act
(including any successor regulation thereto), as it may be deemed from
time to time.
"Regulation S Global Security" has the meaning specified in
Section 2.1.
"Repurchase Date" has the meaning specified in Section 14.1.
"Repurchase Price" has the meaning specified in Section 14.1.
"Responsible Officer", when used with respect to the Trustee, means
any officer within the Corporate Trust Office of the Trustee including
without limitation any vice president, assistant vice president, assistant
treasurer, assistant secretary, corporate trust officer, assistant
corporate trust officer or other employee of the Trustee customarily
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<PAGE>
performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of
his knowledge and familiarity with the particular subject.
"Restricted Global Security" has the meaning specified in
Section 2.1.
"Restricted Period" has the meaning specified in Section 2.1.
"Restricted Security" has the meaning specified in Section 2.4.
"Rule 144" means Rule 144 under the Securities Act (including any
successor rule thereto), as it may be amended from time to time.
"Rule 144A" means Rule 144A under the Securities Act (including any
successor rule thereto), as it may be amended from time to time.
"Rule 144A Information" has the meaning specified in Section 10.10.
"Securities" has the meaning ascribed to it in the first paragraph
under the caption "Recitals of the Company".
"Securities Act" means the United States Securities Act of 1933, as
amended from time to time.
"Security" means any Security (including any Global Security) issued
in substantially the form set forth in Section 2.2 and registered in the
Security Register.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.5.
"Senior Indebtedness" has the meaning specified in Section 13.1.
"Shelf Registration Statement" has the meaning specified in
Section 10.12.
"Significant Subsidiary" means any Subsidiary that would be a
significant subsidiary as defined under the Regulation S-X under the
Securities Act and Exchange Act.
"Special Interest" has the meaning specified in Section 2.2.
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Company pursuant to Section 3.7.
"Stated Maturity" when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security
as the fixed date on which the principal of such Security or such
installment of interest is due and payable.
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<PAGE>
"Subsidiary" means a corporation more than 50% of the outstanding
Voting Stock of which is owned, directly or indirectly, by the Company or
by one or more other Subsidiaries, or by the Company and one or more other
Subsidiaries.
"Tax Affected Security" means any Security that, on or before the
30th day after the date on which the Company publishes a notice of
redemption pursuant to the third paragraph of the reverse of the Security
in Section 2.2 hereof, is delivered to the Trustee together with a written
statement from or on behalf of the beneficial owner of such Security to
the effect that such beneficial owner has or will become entitled to
receive Additional Amounts as a result of such Tax Law Change.
"Tax Law Change" means any change in, or amendment to, the laws
(including any regulations or rulings promulgated thereunder) of the
United States or Canada or any political subdivision or taxing authority
thereof or therein affecting taxation, or any change in, or amendment to,
the application or official interpretation of such laws, regulations or
rulings.
"Taxes" has the meaning specified in Section 2.2.
"Trading Days" of a class of Common Stock means (i) if such class of
Common Stock is listed on any United States national securities exchange,
days on which such national securities exchange is open for business;
(ii) if such class of Common Stock is quoted on a system of automated
dissemination of quotations of securities prices, days on which trades may
be effected through such system; or (iii) if such class of Common Stock is
not listed for trading on any United States national securities exchange
or quoted on any system of automated dissemination of quotation of
securities prices, days on which such class of Common Stock is traded
regular way in the over-the-counter market and for which a closing bid and
a closing asked price for such class of Common Stock are available.
"Transfer Agent" has the meaning specified in Section 2.2. The
Company has initially appointed the Trustee as its Transfer Agent in the
Borough of Manhattan, The City of New York and Midland Bank plc as its
Transfer Agent in London, England.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended
after such date, "Trust Indenture Act" means, to the extent required by
any such amendment, the Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become
such pursuant to the applicable provisions of this Indenture, and
thereafter "Trustee" shall mean such successor Trustee.
"United States" means the United States of America (including the
States and the District of Columbia), its territories, its possessions and
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other areas subject to its jurisdiction (its "possessions" including
Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands).
"U.S. Additional Amounts" has the meaning specified in Section 2.2.
"U.S. Excluded Holder" has the meaning in Section 2.2.
"U.S. Taxes" has the meaning specified in Section 2.2.
"United States person" has the meaning specified in Section 2.2.
"Unrestricted Global Security" means a Global Security which is not
a Restricted Security.
"Vice President", when used with respect to the Company, means any
vice president, whether or not designated by a number or a word or words
added before or after the title "vice president".
"Voting Power" of any Person means the aggregate number of votes of
all classes of Capital Stock of such Person which ordinarily has voting
power for the election of the Board of Directors or their equivalents of
such Person.
"Voting Stock" means stock or other similar interests in the
corporation which ordinarily has or have voting power for the election of
directors, or persons performing similar functions, whether at all times
or only so long as no senior class of stock or other interests has or have
such voting power by reason of any contingency.
"Western Europe" means Austria, Belgium, Denmark, France, Germany,
Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain,
Sweden, Switzerland and the United Kingdom.
SECTION 1.2. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company to the Trustee or the
Paying Agent in London to take any action under any provision of this
Indenture or as required by indenture legislation, the Company shall
furnish to the Trustee or the Paying Agent in London, as the case may be,
an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent, if any, have been complied
with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or
request, no additional certificate or opinion need be furnished, and
except in connection with the initial authentication of the Securities.
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<PAGE>
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (including
certificates provided for in Section 10.9) shall include:
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.3. Form of Documents Delivered to the Trustee.
------------------------------------------
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary
that all such matters be certified by, or covered by the opinion of, only
one such Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect
to some matters and one or more other such Persons as to other matters,
and any such Person may certify or give an opinion as to such matters in
one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or
in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to the matters upon which such
certificate or opinion is based are erroneous. Any such certificate or
opinion of counsel may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect to such
factual matters is in the possession of the Company, unless such counsel
knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.
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<PAGE>
SECTION 1.4. Acts of Holders of Securities.
-----------------------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given
or taken by Holders of Securities may be embodied in and evidenced by (1)
one or more instruments of substantially similar tenor signed by such
Holders in person or by an agent or proxy duly appointed in writing by
such Holders or (2) the record of Holders of Securities voting in favor
thereof, either in person or by proxies duly appointed in writing, at any
meeting of Holders of Securities duly called and held in accordance with
the provisions of Article Nine. Such action shall become effective when
such instrument or instruments or record is delivered to the Trustee and,
where it is hereby expressly required, to the Company. The Trustee shall
promptly deliver to the Company copies of all such instruments and records
delivered to the Trustee. Such instrument or instruments and record (and
the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders of Securities signing such
instrument or instruments and so voting at such meeting. Proof of
execution of any such instrument or of a writing appointing any such agent
or proxy, or of the holding by any Person of a Security, shall be
sufficient for any purpose of this Indenture and (subject to Section 6.1)
conclusive in favor of the Trustee and the Company if made in the manner
provided in this Section. The record of any meeting of Holders of
Securities shall be proved in the manner provided in Section 9.6.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgements of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by a signer acting in a
capacity other than his individual capacity, such certificate or affidavit
shall also constitute sufficient proof of his authority.
(c) The principal amount and serial number of any Security held by
any Person, and the date of his holding the same, shall be proved by the
Security Register.
(d) The Paying Agent in London may in any instance require further
proof with respect to any of the matters referred to in this Section 1.4.
(e) The fact and date of execution of any such instrument or writing
and the authority of the Person executing the same may also be proved in
any other manner which the Trustee or the Paying Agent in London deems
sufficient; and the Trustee or the Paying Agent in London may in any
instance require further proof with respect to any of the matters referred
to in this Section 1.4.
(f) Any request, demand, authorization, direction, notice, consent,
election, waiver or other Act of the Holder of any Security shall bind
every future Holder of the same Security and the Holder of every Security
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issued upon the registration of transfer thereof or in exchange therefor
or in lieu thereof in respect of anything done, omitted or suffered to be
done by the Trustee or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.
(g) The provisions of this Section 1.4 are subject to the provisions
of Section 9.5.
SECTION 1.5. Notices, Etc., to Trustee and Company.
-------------------------------------
Any request, demand, authorization, direction, notice, consent,
election, waiver or Act of Holders of Securities or other document
provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the Trustee or the Paying Agent in London by any Holder
of Securities or by the Company shall be sufficient for every
purpose hereunder if made, given, furnished or filed in writing to
or with the Trustee and received at its Corporate Trust Office,
Attention: Corporate Trust Services North American Vaccine, Inc., or
to or with the Paying Agent in London and received at Mariner House
Pepys Street, London EC3N 4DA, England, Attention: Midland
Securities Services, or
(2) the Company by the Trustee or by any Holder of Securities
shall be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if in writing, mailed, first-class
postage prepaid, or telecopied and confirmed by mail, first-class
postage prepaid, or delivered by hand or overnight courier,
addressed to the Company at 12103 Indian Creek Court, Beltsville,
Maryland, 20705, Attention: Daniel J. Abdun-Nabi, or at any other
address previously furnished in writing to the Trustee by the
Company.
Any request, demand, authorization, direction, notice, consent,
election or waiver required or permitted under this Indenture shall be in
the English language, except that any published notice may be in an
official language of the country of publication.
SECTION 1.6. Notice to Holders of Securities; Waiver.
---------------------------------------
Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of Securities of any event, such notice
shall be sufficiently given to Holders of Securities if in writing and
mailed, first-class postage prepaid, to each Holder of a Security affected
by such event, at the address of such Holder as it appears in the Security
Register, not earlier than the earliest date and not later than the latest
date prescribed for the giving of such notice. Such notice shall be
deemed to have been given when such notice is mailed.
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<PAGE>
Neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder of a Security shall affect the
sufficiency of such notice with respect to other Holders of Securities.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail,
then such notification to Holders of Securities as shall be made with the
approval of the Trustee, which approval shall not be unreasonably
withheld, shall constitute a sufficient notification to such Holders for
every purpose hereunder.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent
of such notice. Waivers of notice by Holders of Securities shall be filed
with the Trustee, but such filing shall not be a condition precedent to
the validity of any action taken in reliance upon such waiver.
SECTION 1.7. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 1.8. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 1.9. Separability Clause.
-------------------
In case any provision in this Indenture or the Securities shall be
invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 1.10. Benefits of Indenture.
---------------------
Except as provided in the next sentence, nothing in this Indenture
or in the Securities, express or implied, shall give to any Person, other
than the parties hereto and their successors and assigns hereunder and the
Holders of Securities, any benefit or legal or equitable right, remedy or
claim under this Indenture. The provisions of Article Thirteen are
intended to be for the benefit of, and shall be enforceable directly by,
the holders of Senior Indebtedness.
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<PAGE>
SECTION 1.11. Governing Law.
-------------
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, THE UNITED STATES OF
AMERICA, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 1.12. Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date,
Repurchase Date or Stated Maturity of any Security or the last day on
which a Holder of a Security has a right to convert his Security shall not
be a Business Day at a Place of Payment or Place of Conversion, as the
case may be, then (notwithstanding any other provision of this Indenture
or of the Securities) payment of interest or principal and premium, if
any, or delivery for conversion of such Security need not be made at such
Place of Payment or Place of Conversion, as the case may be, on or by such
day, but may be made on or by the next succeeding Business Day at such
Place of Payment or Place of Conversion, as the case may be, with the same
force and effect as if made on the Interest Payment Date, Redemption Date
or Repurchase Date, or at the Stated Maturity or by such last day for
conversion; provided, however, that in the case that payment is made on
such succeeding Business Day, no interest shall accrue on the amount so
payable for the period from and after such Interest Payment Date,
Redemption Date, Repurchase Date, Stated Maturity or last day for
conversion, as the case may be.
SECTION 1.13. Consent to Jurisdiction and Service of Process.
----------------------------------------------
The Company agrees that any legal suit, action or proceeding brought
by any party to enforce any rights under or with respect to this Indenture
or the Securities may be instituted in any state or federal court in the
City of New York, State of New York, and waives to the fullest extent
permitted by law any objection which it may now or hereafter have to the
laying of venue of any such suit, action or proceeding and irrevocably
submits to the non-exclusive jurisdiction of any such court in any such
suit, action or proceeding. The Company hereby irrevocably designates and
appoints CT Corporation System ("CT") as the Company's authorized agent to
receive and forward on its behalf service of any and all process which may
be served in any such suit, action or proceeding in any such court and
agrees that service of process upon CT (or any successor) at its office at
1633 Broadway, New York, New York 10019 (or such other address in the
Borough of Manhattan, the City of New York, as the Company may designate
by written notice to the Trustee) and written notice of said service to
the Company mailed or delivered to The CT Corporation System, 1633
Broadway, New York, New York 10019 shall be deemed in every respect
effective service of process upon the Company in any such suit, action or
proceeding and shall be taken and held to be valid personal service upon
the Company. Said designation and appointment shall be irrevocable.
Nothing in this Section 1.13 shall affect the right of any party hereto or
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any Holder to serve process in any manner permitted by law or limit the
right of any party hereto to bring proceedings against the Company in the
courts of any jurisdiction or jurisdictions. The Company further agrees
to take any and all action, including the execution and filing of any and
all such documents and instruments, as may be necessary to continue such
designation and appointment of CT in full force and effect so long as this
Indenture or any of the Securities shall be outstanding. To the extent
that the Company has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through
service of notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property,
the Company hereby irrevocably waives such immunity in respect of its
obligations under this Indenture and the Securities, to the extent
permitted by law.
SECTION 1.14. Conversion of Currency.
----------------------
(a) The Company covenants and agrees that the following provisions
shall apply to conversion of currency in the case of the Securities and
this Indenture:
(i) If for the purpose of obtaining judgment in, or enforcing
the judgment of, any court in any country, it becomes necessary to
convert into any other currency (the "judgment currency") an amount
due in United States dollars, then the conversion shall be made at
the rate of exchange prevailing on the Business Day before the date
on which the judgment is given or the order of enforcement is made,
as the case may be (unless a court shall otherwise determine).
(ii) If there is a change in the rate of exchange prevailing
between the Business Day before the day on which the judgment is
given or an order of enforcement is made, as the case may be (or
such other date as a court shall determine), and the date of receipt
of the amount due, to the extent permitted by applicable law, the
Company will pay additional (or, as the case may be, such lesser)
amount, if any, as may be necessary so that the amount paid in the
judgment currency when converted at the rate of exchange prevailing
on the date of receipt will produce the amount in United States
dollars originally due.
(b) In the event of the winding-up of the Company at any time while
any amount or damages owing under the Securities and this Indenture, or
any judgment or order rendered in respect thereof, shall remain
outstanding, the Company shall indemnify and hold the Holders and the
Trustee harmless against any deficiency arising or resulting from any
variation in rates of exchange between (1) the date as of which the
equivalent of the amount in United States dollars due or contingently due
under the Securities and this Indenture (other than under this subsection
(b)) is calculated for the purposes of such winding-up and (2) the final
date for the filing of proofs of claim in such winding-up. For the
purposes of this subsection (b), the final date for the filing of proofs
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of claim in the winding up of the Company shall be the date fixed by the
liquidator or otherwise in accordance with the relevant provisions of
applicable law as being the latest practicable date as at which
liabilities of the Company may be ascertained for such winding-up prior to
payment by the liquidator or otherwise in respect thereto.
(c) The obligations contained in subsections (a)(ii) and (b) of this
Section 1.14 shall constitute separate and independent obligations of the
Company from its other obligations under the Securities and this
Indenture, shall give rise to separate and independent causes of action
against the Company, shall apply irrespective of any waiver or extension
granted by any Holder or the Trustee or either of them from time to time
and shall continue in full force and effect notwithstanding any judgment
or order or the filing of any proof of claim in the winding-up of the
Company for a liquidated sum in respect of amounts due hereunder (other
than under subsection (b) above) or under any such judgment or order. Any
such deficiency as aforesaid shall be deemed to constitute a loss suffered
by the Holders or the Trustee, as the case may be, and no proof or
evidence of any actual loss shall be required by the Company or the
liquidator or otherwise or any of them. In the case of subsection (b)
above, the amount of such deficiency shall not be deemed to be reduced by
any variation in rates of exchange occurring between the said final date
and the date of any liquidating distribution.
(d) The term "rate(s) of exchange" shall mean the rate, quoted at
noon for transactions in excess of U.S. $1,000,000, at which the Holder or
the Trustee, as the case may be, is able or would have been able on the
relevant date to purchase at United States dollars with the judgment
currency other than United States dollars referred to in subsections (a)
and (b) above and includes any premiums and costs of exchange payable.
SECTION 1.15. Currency Equivalent.
-------------------
Except as provided in Section 1.14, for purposes of the
construction of the terms of this Indenture or of the Securities, in the
event that any amount is stated herein in the currency of one nation (the
"First Currency"), as of any date such amount shall also be deemed to
represent the amount in the currency of any other relevant nation (the
"Other Currency") which is required to purchase such amount in the First
Currency at the spot buying rate for the purchase of the First Currency
with the Other Currency used by The Toronto-Dominion Bank at its main
branch in Toronto as of approximately 12:00 noon (Toronto time) on the
date of determination.
SECTION 1.16. Interest Act (Canada).
---------------------
For purposes of the Interest Act (Canada), where in this Indenture
and the Securities, a rate of interest is to be calculated on the basis of
a year of 360 days, the yearly rate of interest to which the 360 day rate
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is equivalent is such rate multiplied by the number of days in the year
for which such calculation is made and divided by 360.
SECTION 1.17. Conflict with Trust Indenture Act.
---------------------------------
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be
a part of and govern this Indenture, the latter provision shall control.
If any provision of this Indenture modifies or excludes any provision of
the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or to
be excluded, as the case may be. Until such time as this Indenture shall
be qualified under the Trust Indenture Act, this Indenture, the Company
and the Trustee shall be deemed for all purposes hereof to be subject to
and governed by the Trust Indenture Act to the same extent as would be the
case if this Indenture were so qualified on the date hereof.
ARTICLE TWO
SECURITY FORMS
SECTION 2.1. Forms Generally.
--------------
The Securities shall be in substantially the forms set forth in this
Article, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such
legends or endorsements placed thereon as may be required to comply with
the rules of any securities exchange, or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by
their execution thereof.
The Trustee's certificates of authentication shall be in
substantially the form set forth in Section 2.5.
Conversion notices shall be in substantially the form set forth in
the Annexes to the Indenture.
Securities that are Restricted Securities shall bear the legend
required by Section 2.4.
The Securities shall be issued in the form of one or more Global
Securities and Definitive Securities in certificated form in accordance
with Section 3.4. The Depositary for such Global Securities shall
initially be The Depository Trust Company ("DTC").
A Global Security may be printed, lithographed, typewritten,
mimeographed or otherwise produced, as determined by the officers of the
Company executing such Security, as evidenced by their execution thereof.
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<PAGE>
The Definitive Securities shall be printed, lithographed, typewritten,
mimeographed, or engraved or otherwise produced in any other manner
permitted by the rules of any securities exchange on which the Securities
may be listed, all as determined by the officers executing such
Securities, as evidenced by their execution thereof. The format and
spacing of the text of a Security may be varied to facilitate such
production.
Securities offered and sold in their initial distribution in
reliance on Regulation S shall be initially issued in the form of one or
more Global Securities in definitive, fully registered form substantially
in the form of the Regulation S Global Security set forth in Section 2.2,
with such applicable legends as are provided for in Section 2.2, except as
otherwise permitted herein. Such Global Securities shall be registered in
the name of a nominee of DTC and deposited with the Trustee, at its New
York office, as custodian for the Depositary, duly executed by the Company
and authenticated by the Trustee as hereinafter provided, for credit to
the respective accounts at the Depositary of the depositories for Morgan
Guaranty Trust Company of New York, Brussels Office, as operator of the
Euroclear System ("Euroclear"), and Cedel Bank, societe anonyme ("CEDEL").
Until such time as the Restricted Period shall have terminated, such
Global Securities shall be referred to herein as the "Regulation S Global
Security." After such time as the Restricted Period shall have terminated,
such Global Security shall be referred to herein as the "Unrestricted
Global Security." The aggregate principal amount of the Regulation S
Global Security or the Unrestricted Global Security may from time to time
be increased or decreased by adjustments made on the records of the
Trustee, as custodian for the Depositary, in connection with a
corresponding decrease or increase in the aggregate principal amount of
the Restricted Global Security, as hereinafter provided. As used herein,
the term "Restricted Period" means the period of 40 consecutive days
beginning on and including the first day after the later of (i) the day
that Goldman, Sachs & Co., advises the Company and the Trustee of the day
on which the Securities are first offered to persons other than
distributors (as defined in Regulation S) in reliance on Regulation S and
(ii) the latest date of original issue of any Security. The Regulation S
Global Security, the Unrestricted Global Security and all other Securities
that are not Restricted Securities shall collectively he referred to
herein as the "Unrestricted Securities."
Securities offered and sold in their initial distribution in
reliance on Rule 144A shall be issued in the form of one or more Global
Securities (collectively, the "Restricted Global Security") in definitive,
fully registered form substantially in the form of the Restricted Global
Security set forth in Section 2.2, with such applicable legends as are
provided for in Section 2.2, except as otherwise permitted herein. Such
Restricted Global Security shall be registered in the name of the
Depositary or its nominee and deposited with the Trustee, at its New York
office, as custodian for the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of the Restricted Global Security may from time to time
be increased or decreased by adjustments made on the records of the
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<PAGE>
Trustee, as custodian for the Depositary in connection with a
corresponding decrease or increase in the aggregate principal amount of
the Regulation S Global Security or the Unrestricted Global Security as
hereinafter provided.
Securities offered and sold in their initial distribution in
reliance on transaction exempt from registration under the Securities Act
to an institutional investor that is an "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act
("Institutional Accredited Investor") shall be issued in definitive, fully
registered form each a "Definitive Restricted Security", substantially in
the form of the Definitive Restricted Security set forth in Section 2.2
with such applicable legends as are provided for in Section 2.2, except as
otherwise permitted herein.
SECTION 2.2. Forms of Securities.
-------------------
Forms of Securities:
[FORM OF FACE]
THE FOLLOWING LEGEND (THE "RULE 144A LEGEND") SHALL APPEAR ON THE FACE OF
EACH DEFINITIVE RESTRICTED SECURITY OR OTHER RESTRICTED SECURITY OTHER
THAN ANY GLOBAL SECURITY:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY AND ANY
COMMON SHARES ISSUABLE UPON ITS CONVERSION MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. THIS SECURITY MAY ONLY BE SOLD IN ACCORDANCE WITH THE
INDENTURE, COPIES OF WHICH ARE AVAILABLE FOR INSPECTION AT THE CORPORATE
TRUST OFFICE OF THE TRUSTEE. EACH PURCHASER OF THIS SECURITY IS HEREBY
NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF NORTH AMERICAN
VACCINE, INC. (THE "COMPANY") THAT (A) THIS SECURITY AND ANY COMMON SHARES
ISSUABLE UPON ITS CONVERSION MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (I) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(II) IN AN OFFSHORE TRANSACTION COMPLYING WITH THE PROVISIONS OF RULE 904
OF REGULATION S UNDER THE SECURITIES ACT, (III) IN THE CASE OF ANY
PURCHASER OTHER THAN A PURCHASER WHO HAS OTHERWISE AGREED WITH THE COMPANY
TO AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF
RULE 501(a) UNDER THE SECURITIES ACT IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS THEREOF, (IV) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
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THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF THE STATES AND OTHER JURISDICTIONS OF THE UNITED
STATES, AND THAT (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY OR SUCH COMMON SHARES
FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN CLAUSE (A) ABOVE.
THIS SECURITY, ANY COMMON SHARES ISSUABLE UPON ITS CONVERSION AND
ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME
TO MODIFY THE RESTRICTIONS ON AND PROCEDURES FOR RESALES AND OTHER
TRANSFERS OF THIS SECURITY AND ANY SUCH SHARES TO REFLECT ANY CHANGE IN
APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN
PRACTICES RELATING TO THE RESALE OR TRANSFER OF RESTRICTED SECURITIES
GENERALLY. THE HOLDER OF THIS SECURITY AND ANY SUCH SHARES SHALL BE
DEEMED BY THE ACCEPTANCE OF THIS SECURITY AND ANY SUCH SHARES TO HAVE
AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.
THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH RESTRICTED GLOBAL
SECURITY:
THE SECURITIES EVIDENCED BY THIS GLOBAL SECURITY (OR ITS
PREDECESSOR) WERE ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND SUCH SECURITIES AND ANY COMMON SHARES ISSUABLE
UPON THEIR CONVERSION MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
SUCH SECURITIES MAY ONLY BE SOLD IN ACCORDANCE WITH THE INDENTURE, COPIES
OF WHICH ARE AVAILABLE FOR INSPECTION AT THE CORPORATE TRUST OFFICE OF THE
TRUSTEE. EACH PURCHASER OF ANY BENEFICIAL INTEREST IN THE SECURITIES IS
HEREBY NOTIFIED THAT THE SELLER OF SUCH BENEFICIAL INTEREST IN THE
SECURITIES MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION
5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
EACH BENEFICIAL OWNER OF AN INTEREST IN ANY OF THE SECURITIES
EVIDENCED BY THIS GLOBAL SECURITY (INCLUDING ANY PARTICIPANT IN THE
DEPOSITARY HOLDING THE GLOBAL SECURITY THAT IS SHOWN AS HOLDING SUCH AN
INTEREST ON THE RECORDS OF SUCH DEPOSITARY AND EACH BENEFICIAL OWNER THAT
HOLDS THROUGH ANY SUCH PARTICIPANT) AGREES FOR THE BENEFIT OF NORTH
AMERICAN VACCINE, INC. (THE "COMPANY") THAT (A) ANY BENEFICIAL INTEREST IN
THE SECURITIES OR ANY COMMON SHARES ISSUABLE UPON THEIR CONVERSION MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (II) IN AN OFFSHORE TRANSACTION COMPLYING WITH
THE PROVISIONS OF RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (III)
IN THE CASE OF ANY BENEFICIAL OWNER OTHER THAN A BENEFICIAL OWNER WHO HAS
OTHERWISE AGREED WITH THE COMPANY, TO AN INSTITUTION THAT IS AN
"ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501 (A) UNDER THE
SECURITIES ACT IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS
THEREOF, (IV) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE l44 THEREUNDER (IF AVAILABLE), OR (V)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF THE
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STATES AND OTHER JURISDICTIONS OF THE UNITED STATES, AND THAT (B) THE
BENEFICIAL OWNER WILL, AND EACH SUBSEQUENT BENEFICIAL OWNER OF THE
SECURITIES OR ANY COMMON SHARES ISSUABLE UPON THEIR CONVERSION IS REQUIRED
TO, NOTIFY ANY PURCHASER OF ANY BENEFICIAL INTEREST IN THE SECURITIES AND
SUCH COMMON SHARES FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN
CLAUSE (A) ABOVE.
THIS SECURITY, ANY COMMON SHARES ISSUABLE UPON ITS CONVERSION AND
ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME
TO MODIFY THE RESTRICTIONS ON AND PROCEDURES FOR RESALES AND OTHER
TRANSFERS OF THIS SECURITY AND ANY SUCH SHARES TO REFLECT ANY CHANGE IN
APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN
PRACTICES RELATING TO THE RESALE OR TRANSFER OF RESTRICTED SECURITIES
GENERALLY. THE HOLDER OF THIS SECURITY AND ANY SUCH SHARES, REPRESENTING
THE INTERESTS HELD BY EACH BENEFICIAL OWNER HEREOF AND THEREOF, SHALL BE
DEEMED BY THE ACCEPTANCE OF THIS SECURITY AND ANY SUCH SHARES TO HAVE
AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.
THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH GLOBAL SECURITY:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITARY OR A NOMINEE OF THE DEPOSITARY, WHICH MAY BE TREATED BY THE
COMPANY, THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS
SECURITY FOR ALL PURPOSES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IN EXCHANGE FOR THIS SECURITY IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES
IN DEFINITIVE FORM IN THE LIMITED CIRCUMSTANCES REFERRED TO IN THE
INDENTURE, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE
BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY
THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE
OF SUCH SUCCESSOR DEPOSITARY.
THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH REGULATION S GLOBAL
SECURITY AND UNRESTRICTED GLOBAL SECURITY:
THE SECURITIES EVIDENCED BY THIS GLOBAL SECURITY (OR ITS PREDECESSOR) WERE
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE
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UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON
UNLESS SUCH SECURITIES ARE REGISTERED UNDER THE SECURITIES ACT OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE
HAVE THE MEANINGS GIVEN THEM IN REGULATIONS UNDER THE SECURITIES ACT.
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<PAGE>
NORTH AMERICAN VACCINE, INC.
6.50% CONVERTIBLE SUBORDINATED NOTE
DUE MAY 1, 2003
No.__________U.S.$__________
[IF A REGULATION S GLOBAL SECURITY OR AN UNRESTRICTED GLOBAL SECURITY
CUSIP No. U65777AA9 ]
[IF A RESTRICTED GLOBAL SECURITY-CUSIP NO. 657201AA7 ]
[IF A DEFINITIVE RESTRICTED SECURITY-CUSIP NO. 657201AB5 ]
[ISIN No. US657201AA77 ]
NORTH AMERICAN VACCINE, INC., a corporation duly organized and
existing under the laws of Canada (herein called the "Company", which term
includes any successor Person under the Indenture referred to on the
reverse hereof), for value received, hereby promises to pay to
____________________, or registered assigns, the principal sum of
____________________ United States Dollars [(which amount may from time to
time be increased or decreased by adjustments made on the records of the
Trustee, as custodian of the Depositary, in accordance with the rules and
procedures of the Depositary; provided, however, that such amount may not
exceed U.S. $86,250,000 )]* on May 1, 2003 and to pay interest thereon,
from May 7, 1996, or from the most recent Interest Payment Date (as
defined below) to which interest has been paid or duly provided for,
semi-annually in arrears on May 1 and November 1 in each year (each, an
"Interest Payment Date"), commencing November 1, 1996, at the rate of
6.50% per annum (together with any Additional Amounts and Special Interest
the Company may be required to pay), until the principal hereof is due,
and at the rate of 6.50% per annum on any overdue principal and premium,
if any, and, to the extent permitted by law, on any overdue interest. The
interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities)
is registered at the close of business on the Regular Record Date for such
interest, which shall be the April 15 or October 15 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment
Date. Except as otherwise provided in the Indenture, any such interest
not so punctually paid or duly provided for ("Defaulted Interest") 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 Security (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 Company, notice whereof shall be given to Holders of
Securities 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 Securities may be
________________________
* This language shall appear on each Global Security.
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listed, and upon such notice as may be required by such exchange, all as
more fully provided in the Indenture. Payments of principal shall be made
upon the surrender of this Security at the option of the Holder at the
Corporate Trust Office of the Trustee, or at such other office or agency
of the Company as may be designated by it for such 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 shall be legal tender for the
payment of public and private debts or at such other offices or agencies
as the Company may designate, by United States Dollar check drawn on, or
transfer to a United States Dollar account (such a transfer to be made
only to a Holder of an aggregate principal amount of Securities in excess
of U.S. $2,000,000, and only if such Holder shall have furnished wire
instructions in writing to the Trustee no later than 15 days prior to the
relevant payment date) maintained by the payee with a bank in the Borough
of Manhattan, The City of New York. Payment of interest on this Security
may be made by United States Dollar check drawn on a bank in the Borough
of Manhattan, The City of New York mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register,
or, upon written application by the Holder to the Security Registrar
setting forth wire instructions not later than the relevant Record Date,
by transfer to a United States Dollar account (such a transfer to be made
only to a Holder of an aggregate principal amount of Securities in excess
of U.S. $2,000,000 and only if such Holder shall have furnished wire
instructions in writing to the Trustee no later than 15 days prior to the
relevant payment date) maintained by the payee with a bank in the Borough
of Manhattan, The City of New York.
The Company will pay to the Holder of this Security who is a
non-resident of Canada (within the meaning of the Income Tax Act (Canada))
such additional amounts ("Canadian Additional Amounts") as may be
necessary in order that every net payment of the principal of, premium, if
any, and interest on this Security (including payment on redemption or
repurchase), after deduction or withholding for or on account of any
present or future tax, assessment or governmental charge imposed upon or
as a result of such payment by the Government of Canada or of any province
or territory thereof or by any authority or agency thereof or therein
("Taxing Jurisdiction") ("Canadian Taxes"), will not be less than the
amount provided for in this Security to be then due and payable; provided,
that no Canadian Additional Amounts will be payable with respect to a
payment or credit made to a Holder of, or on behalf of an owner of a
beneficial interest in, this Security (collectively, a "Canadian Excluded
Holder") (i) with whom the Company does not deal at arms' length (within
the meaning of the Income Tax Act (Canada)) at the time of making such
payment or credit, or (ii) which is subject to Canadian Taxes by reason of
its being connected with Canada or any province or territory thereof
(including, without limitation, by reason of such person being a resident
or being deemed to be a resident of Canada (within the meaning of the
Income Tax Act (Canada)) or carrying on business or being deemed to carry
on business (within the meaning of such act) in Canada whether in or
through a permanent establishment or fixed base in Canada or otherwise)
otherwise than by the mere holding of this Security or the receipt of
payments or credits thereunder or (iii) which could obtain an exemption
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from, or reduction in, the applicable Canadian Tax by satisfying reporting
or certification requirements imposed by the relevant Taxing Jurisdiction
and which fails to do so.
The Company will also pay to the Holder of this Security who is a
United States Alien (as defined below) such additional amounts ("U.S.
Additional Amounts," and together with the Canadian Additional Amounts,
"Additional Amounts") as may be necessary in order that every net payment
of the principal of, premium, if any, and interest on this Security, after
deduction or withholding for or on account of any present or future tax,
assessment or governmental charge imposed upon or as a result of such
payment by the United States or any political subdivision or taxing
authority thereof or therein ("U.S. Taxes," and together with Canadian
Taxes, "Taxes"), will not be less than the amount provided for in this
Security to be then due and payable; provided, however, that the foregoing
obligation to pay U.S. Additional Amounts will not apply with respect to:
(a) any U.S. Tax that would not have been so imposed but
for (i) the existence of any present or former connection between
such Holder (or between a fiduciary, settlor, beneficiary, member,
shareholder of or possessor of a power over such Holder, if such
Holder is an estate, a trust, a partnership or a corporation) and
the United States or any political subdivision or taxing authority
thereof or therein, including, without limitation, such Holder (or
such fiduciary, settlor, beneficiary, member, shareholder or
possessor) being or having been a citizen or resident of the United
States or treated as a resident thereof, or being or having been
engaged in a trade or business or present therein, or having or
having had a permanent establishment therein, or (ii) such Holder's
present or former status as a personal holding company, a foreign
personal holding company with respect to the United States, or a
foreign private foundation or foreign tax exempt entity for U.S. tax
purposes, or a corporation which accumulates earnings to avoid U.S.
federal Income tax;
(b) any U.S. Tax that would not have been so imposed but
for the presentation by the Holder of this Security for payment on a
date more than 15 days after the date on which such payment became
due and payable or the date on which payment thereof is duly
provided for, whichever occurs later;
(c) any U.S. Tax that is an estate, inheritance, gift,
sales, transfer, personal property or similar tax, assessment or
governmental charge;
(d) any U.S. Tax that would not have been imposed but for
the failure to comply with any certification, identification or
other reporting requirements concerning the nationality, residence,
identity or connection with the United States of the Holder or
beneficial owner of this Security, if compliance is required by
statute or by regulation of the United States as a precondition to
relief or exemption from such U.S. Tax;
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(e) any U.S. Tax that is payable otherwise than by
deduction or withholding from payment of principal of, premium, if
any, or interest on this Security;
(f) any U.S. Tax imposed on a Holder that actually or
constructively owns 10% or more of the total combined voting power
of all classes of stock of the Company entitled to vote or that is a
controlled foreign corporation related to the Company through stock
ownership;
(g) any U.S. Tax required to be withheld by any Paying
Agent from any payment of the principal of, premium, if any, or
interest on any Security, if such payment can be made without such
withholding by any other Paying Agent in Western Europe;
(h) any U.S. Tax imposed on a Holder that is a partnership
or a fiduciary or other than the sole beneficial owner of such
payment, but only to the extent that any beneficial owner or member
of the partnership or beneficiary or settlor with respect to the
fiduciary would not have been entitled to the payment of U.S.
Additional Amounts had the beneficial owner, member, beneficiary or
settlor directly been the Holder of this Security; or
(i) any combination of items (a), (b), (c), (d), (e), (f),
(g) and (h).
(The Holder of this Security with respect to which any of the listed U.S.
Taxes becomes payable is referred to herein as a "U.S. Excluded Holder,"
and U.S. Excluded Holders, together with Canadian Excluded Holders, as
"Excluded Holders.")
The Company will make any deduction or withholding, and remit the
full amount deducted or withheld to the relevant authority, in accordance
with applicable law. The Company will furnish the Holders of the
Securities, within 30 days after the date the payment of any Taxes is due
pursuant to applicable law, certified copies of tax receipts evidencing
such payment by the Company. The Company will indemnify and hold harmless
each Holder of, or owner of a beneficial interest in, the Securities
(other than an Excluded Holder) and upon written request reimburse such
Holder, or owner of a beneficial interest, for the amount of (i) any Taxes
levied or imposed and paid by such Holder, or owner of a beneficial
interest, as a result of payments made with respect to the Securities,
(ii) any liability (including penalties, interest and expenses) arising
from or with respect to Taxes, and (iii) any Taxes imposed with respect to
payment of Additional Amounts or any reimbursement pursuant to this
sentence.
Notwithstanding the foregoing, the Company shall not be obligated to
pay Additional Amounts in respect of payments becoming due on the
Securities more than 15 days after the redemption date for a redemption
described under "Redemption for Taxation Reasons," except to the extent
that the Company's obligations to pay such Additional Amounts does not
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arise from the Tax Law Change that resulted in such redemption. For
purposes of this Security, a "United States Alien" is any person who, for
U.S. federal income tax purposes, is a foreign corporation, a nonresident
alien individual, a nonresident alien fiduciary of a foreign estate or
trust, or a foreign partnership one or more of the members of which is,
for U.S. federal income tax purposes, a foreign corporation, a nonresident
alien individual or a nonresident alien fiduciary of a foreign estate or
trust.
At least 30 days prior to each date on which any payment under or
with respect to the Securities is due and payable, if the Company will be
obligated to pay Additional Amounts with respect to such payments, the
Company will deliver to the Trustee an Officers' Certificate stating the
fact that such Additional Amounts will be payable, the amounts so payable
and will set forth such other information necessary to enable the Trustee
to pay such Additional Amounts to Holders or owners of a beneficial
interest in the Securities, as the case may be, on the payment date.
Except as specifically provided herein and in the Indenture, the
Company shall not be required to make any payment with respect to any
governmental charge imposed by any government or any political subdivision
or taxing authority thereof or therein. Whenever in this Security 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 Security such
mention shall be deemed to include mention of the payment of Additional
Amounts payable as described in the second preceding paragraph to the
extent that, in such context, Additional Amounts are, were or would be
payable in respect of such Security and express mention of the payment of
Additional Amounts (if applicable) in any provisions of this Security
shall not be construed as excluding Additional Amounts in those provisions
of this Security where such express mention is not made.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof or an Authenticating Agent
by the manual signature of one of their respective authorized signatories,
this Security 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 Security to be duly
executed under its corporate seal.
Dated:
NORTH AMERICAN VACCINE, INC.
[Corporate Seal] By:_____________________
Name:
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Title:
Attest:
__________________________
Name:
Title:
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[FORM OF REVERSE]
This Security is one of a duly authorized issue of securities of the
Company designated as its "6.50% Convertible Subordinated Notes due May 1,
2003" (herein called the "Securities"), limited in aggregate principal
amount to U.S. $86,250,000, issued and to be issued under an Indenture,
dated as of May 7, 1996 (herein called the "Indenture"), between the
Company and Marine Midland Bank, 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 Securities and of the terms
upon which the Securities are, and are to be, authenticated and delivered.
The Securities are issuable only in fully registered form, without
coupons, in the denomination of U.S. $1,000 and integral multiples of U.S.
$1,000 in excess thereof. In the case of Securities initially sold to
Institutional Accredited Investors, the Securities will be issued in
minimum denominations of $250,000 and integral multiples of $1,000 in
excess thereof, but on subsequent transfers made in accordance with
applicable transfer restrictions, will be available in denominations of
$1,000 and integral multiples thereof. As provided in the Indenture and
subject to certain limitations therein set forth, Securities are
exchangeable for a like aggregate principal amount of Securities of any
authorized denominations as requested by the Holder surrendering the same
upon surrender of the Security or Securities to be exchanged, at the
Corporate Trust Office of the Trustee or at such other office or agency of
the Company as may be designated by it for such purpose in the Borough of
Manhattan, The City of New York or at such other offices or agencies as
the Company may designate (each a "Transfer Agent"). The Transfer Agent
will then forward such surrendered Securities (together with any payment
surrendered therewith) to the Trustee who in turn will issue the new
Securities.
No sinking fund is provided for the Securities. The Securities are
subject to redemption at the option of the Company at any time on or after
May 1, 1999, in whole or in part, upon not less than 30 nor more than 60
days' notice to the Holders prior to the Redemption Date at the following
Redemption Prices (expressed as percentages of the principal amount) for
the twelve-month period beginning on May 1 of the following years:
Year Redemption Price
1999 103.714 %
2000 102.786 %
2001 101.857 %
2002 100.929 %
and thereafter at a Redemption Price equal to 100% of the principal
amount, together, in each case, with accrued interest to the Redemption
Date.
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Securities are also redeemable, in whole but not in part, under the
circumstances described in the next succeeding paragraph, at a Redemption
Price equal to 100% of the principal amount thereof plus interest accrued
to the Redemption Date and any Additional Amount: provided, however, that
interest installments on Securities whose Stated Maturity is on or prior
to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business
on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.
If as a result of a Tax Law Change, the Company has or will become
obligated to pay to the Holder of any Security Additional Amounts, as
described in the second and third paragraphs of the face of this Security,
and such obligation cannot be avoided by the Company taking reasonable
measures available to it, then the Company may, at its option, redeem the
Tax Affected Securities as a whole, but not in part, upon not less than 30
nor more than 60 days' notice to the Holders prior to the Redemption Date,
at a Redemption Price equal to 100% of the principal amount plus interest
accrued to the Redemption Date, and any Additional Amounts then payable;
provided, that (i) no such notice of redemption shall be given earlier
than 90 days prior to the earliest date on which the Company would be
obligated to pay any such Additional Amounts were a payment in respect of
the Tax Affected Securities then due and (ii) at the time such notice of
redemption is given, such obligation to pay such Additional Amounts
remains in effect. Prior to the publication of any notice of redemption
pursuant to this paragraph, the Company shall deliver to the Trustee (a)
an Officers' 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 of the Company so to redeem have
occurred and (b) an Opinion of Counsel selected by the Company to the
effect that the Company has or will become obligated to pay such
Additional Amounts as a result of such Tax Law Change. The Company's
right to redeem the Tax Affected Securities 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 specified in
such second paragraph.
In the event of a redemption of the Securities, the Company will not
be required (a) to register the transfer or exchange of Securities for a
period of 15 days immediately preceding the date notice is given
identifying the serial numbers of the Securities called for such
redemption, or (b) to register the transfer or exchange of any Security,
or portion thereof, called for redemption.
Notice to the Holders will be given at least twice not less than 30
nor more than 60 days prior to the Redemption Date as provided in the
Indenture.
In any case where the due date for the payment of the principal of,
premium, if any, or interest, including Additional Amounts and Special
Interest, on any Security or the last day on which a Holder of a Security
has a right to convert his Security shall be, at any Place of Payment or
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<PAGE>
Place of Conversion, as the case may be, a day on which banking
institutions at such Place of Payment or Place of Conversion are
authorized or obligated by law or executive order to close, then payment
of principal, premium, if any, or interest, including Additional Amounts
and Special Interest, or delivery for conversion of such Security need not
be made on or by such date at such place but may be made on or by the next
succeeding day at such place which is not a day on which banking
institutions are authorized or obligated by law or executive order to
close, with the same force and effect as if made on the date for such
payment or the date fixed for redemption or repurchase, or by such last
day for conversion, and no interest shall accrue on the amount so payable
for the period after such date.
Subject to and upon compliance with the provisions of the Indenture,
the Holder of this Security is entitled at his option, at any time after
90 days following the latest of the commencement of the offering of the
Securities, the original issue date of the Securities and the issue date
with respect to any additional Securities issued to cover over-allotments,
and on or before the close of business on May 1, 2003, or in case this
Security or a portion hereof is called for redemption or the Holder hereof
has exercised his right to require the Company to repurchase this Security
or such portion hereof, then in respect of this Security until and
including, but (unless the Company defaults in making the payment due upon
redemption or repurchase, as the case may be) not after, the close of
business on the Redemption Date or the Repurchase Date, as the case may
be, to convert this Security (or any portion of the principal amount
hereof that is an integral multiple of U.S. $1,000) into fully paid and
nonassessable Common Shares of the Company at an initial Conversion Price
of U.S. $24.858 for each Common Share (or at the current adjusted
Conversion Price if an adjustment has been made as provided in the
Indenture) by surrender of this Security, duly endorsed or assigned to the
Company or in blank and, in case such surrender shall be made during the
period from the close of business of any Regular Record Date next
preceding any Interest Payment Date to the opening of business on such
Interest Payment Date ("Interest Period") (except Securities called for
redemption on a Redemption Date or to be repurchased on a Repurchase Date
during, in each case, such Interest Period), also accompanied by payment
in New York Clearing House or other funds acceptable to the Company of an
amount equal to the interest payable on such Interest Payment Date on the
principal amount of this Security then being converted, and also the
conversion notice hereon duly executed, to the Company at the Corporate
Trust Office of the Trustee, or at such other office or agency of the
Company, subject to any laws or regulations applicable thereto and subject
to the right of the Company to terminate the appointment of any Conversion
Agent (as defined below) as may be designated by it for such purpose in
the Borough of Manhattan, The City of New York, or at such other offices
or agencies as the Company may designate (each a "Conversion Agent").
Subject to the aforesaid requirement for payment and, in the case of a
conversion after the Regular Record Date next preceding any Interest
Payment Date and on or before such Interest Payment Date, to the right of
the Holder of this Security (or any Predecessor Security) of record at
such Regular Record Date to receive an installment of interest, no cash
- 32 -
<PAGE>
payment or adjustment is to be made on conversion, if the date of
conversion is not an Interest Payment Date, for interest accrued hereon
from the Interest Payment Date next preceding the date of conversion, or
for dividends on the Common Shares issued on conversion hereof. The
Company shall thereafter deliver to the Holder the fixed number of Common
Shares (together with any cash adjustment, as provided in the Indenture)
into which this Security is convertible and such delivery will be deemed
to satisfy the Company's obligation to pay the principal amount of this
Security. No fractions of shares or scrip representing fractions of
shares will be issued on conversion, but instead of any fractional
interest (calculated to the nearest 1/100th of a share) the Company shall
pay a cash adjustment as provided in the Indenture. The Conversion Price
is subject to adjustment as provided in the Indenture. In addition, the
Indenture provides that in case of certain amalgamations, consolidations
or mergers to which the Company is a party or the transfer of all or
substantially all of the property and assets of the Company, the Indenture
shall be amended, without the consent of any Holders of Securities, so
that this Security, if then Outstanding, will be convertible thereafter,
during the period this Security shall be convertible as specified above,
only into the kind and amount of securities, cash and other property
receivable upon such amalgamation, consolidation, merger or transfer by a
holder of the number of Common Shares of the Company into which this
Security could have been converted immediately prior to such amalgamation,
consolidation, merger, sale or transfer, but subject to all requirements
necessary to ensure that the Securities will not be subject to Canadian
withholding tax as a result thereof, and assuming such holder of Common
Shares is not a Person with which the Company consolidated or into which
the Company merged or which merged into the Company or to which such sale
or transfer was made, as the case may be, or an Affiliate thereof and,
failed to exercise any rights of election as to the kind or amount of
securities, cash or other property receivable upon such consolidation,
merger, sale or transfer and further assuming, if such consolidation,
amalgamation, arrangement, merger, conveyance, transfer, sale or lease
occurs prior to the later of 60 days following the latest of (i) May 7,
1996 and (ii) the latest date of original issue of any Security, that the
Security was convertible at the time of such occurrence at the Conversion
Price specified above as adjusted from the issue date of such Security to
such time as provided in the Indenture, subject to any requirements
necessary to ensure that the Securities will be and will remain exempt
from Canadian withholding tax including, without limitation, the
requirement in effect on the date hereof that a Holder of Securities shall
not be entitled to receive shares, other securities or property, other
than securities that are "prescribed securities" as defined in Regulation
6208 to the Income Tax Act (Canada), in the event that any such
amalgamation, consolidation, merger or transfer occurs in or prior to five
years after the date of original issue of the Securities. Notwithstanding
any provision to the contrary if such amalgamation, consolidation, merger,
or transfer occurs on or prior to 5 years from the date which is the
latest date of original issuance of a Security issued hereunder, a holder
of a Security shall not be entitled in any circumstances to convert such
Security into any securities, cash or other property (the "Substituted
Properties") unless such Substituted Properties are "prescribed
- 33 -
<PAGE>
securities" with respect to the Security for purposes of clause
212(1)(b)(vii)(E) of the Income Tax Act (Canada). No adjustment in the
Conversion Price will be made until such adjustment would require an
increase or decrease of at least one percent of such price, provided that
any adjustment that would otherwise be made will be carried forward and
taken into account in the computation of any subsequent adjustment.
Subject to certain limitations in the Indenture, at any time when
the Company is not subject to Section 13 or 15(d) of the Exchange Act or
exempt from such requirements pursuant to Rule 12g3-2(b) under the
Exchange Act, upon the request of a Holder of a Restricted Security or the
holder of Common Shares issued upon conversion thereof, the Company will
promptly furnish or cause to be furnished Rule 144A Information (as
defined below) to such Holder of Restricted Securities or such holder of
Common Shares issued upon conversion of Restricted Securities, or to a
prospective purchaser of any such security designated by any such Holder
or holder, as the case may be, to the extent required to permit compliance
by such Holder or holder with Rule 144A under the Securities Act in
connection with the resale of any such security. "Rule 144A Information"
shall be such information as is specified pursuant to Rule 144A(d)(4)
under the Securities Act (or any successor provision thereto).
The Holder of this Security and the Common Shares of the Company
issuable upon conversion thereof is entitled to the benefits of a
Registration Rights Agreement, dated as of May 1, 1996, between the
Company and Goldman, Sachs & Co. and UBS Securities LLC (the "Registration
Rights Agreement"). Pursuant to the Registration Rights Agreement, the
Company has agreed for the benefit of the Holders from time to time of the
Securities and the Common Shares issuable upon conversion thereof that it
will, at its expense, (a) within 90 days after the date of issuance of the
Securities, file a shelf registration statement (the "Shelf Registration
Statement") with the Commission with respect to resales of the Securities
and the Common Shares issuable upon conversion thereof, (b) within 180
days after the date of issuance of the Securities, use its reasonable best
efforts to cause such Shelf Registration Statement to be declared
effective by the Commission and (c) use its reasonable best efforts to
maintain such Shelf Registration Statement continuously effective under
the Securities Act, as amended, until the third anniversary of the date of
the effectiveness of the Shelf Registration Statement or such other date
as is provided in the Registration Rights Agreement.
If (i) on or prior to 90 days following the date of original
issuance of the Securities, a Shelf Registration Statement has not been
filed with the Commission, or (ii) on or prior to the 180th day following
the date of original issuance of the Securities, such Shelf Registration
Statement is not declared effective (each, a "Registration Default"),
special interest ("Special Interest") will accrue on this Security from
and including the day following such Registration Default to but excluding
the day on which such Registration Default has been cured. Special
Interest will be paid semi-annually in arrears, with the first semi annual
payment due on the first interest payment date in respect of the
Securities following the date on which such Special Interest begin to
- 34 -
<PAGE>
accrue, and will accrue at a rate per annum equal to an additional
onequarter of one percent (0.25%) of the principal amount of the
Securities to and including the 90th day following such Registration
Default and at a rate per annum equal to one-half of one percent (0.50%)
thereof from and after the 91st day following such Registration Default.
In the event that the Shelf Registration Statement ceases to be effective
prior to the third anniversary of the initial effective date of the Shelf
Registration Statement or such other date as is provided in the
Registration Rights Agreement for a period in excess of 60 days, whether
or not consecutive, during any 12-month period, then the interest rate
borne by the Securities shall increase by an additional one-half of one
percent (0.50%) per annum on the 61st day of the applicable 12-month
period such Shelf Registration Statement ceases to be effective to but
excluding the day on which the Shelf Registration Statement again becomes
effective.
Whenever in this Security 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 Security such mention shall be deemed to include mention
of the payment of Special Interest 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 Security and express mention of the
payment of Special Interest (if applicable) in any provisions of this
Security shall not be construed as excluding Special Interest in those
provisions of this Security where such express mention is not made.
The Holder of this Security, by its acceptance thereof, agrees to be
bound by the terms of the Registration Rights Agreement relating to the
Securities and the Common Shares issuable upon conversion thereof.
If a Change in Control occurs, the Holder of this Security shall
have the right, in accordance with the provisions of the Indenture, to
require the Company to repurchase this Security (or any portion of the
principal amount hereof that is an integral multiple of $1,000) for cash
at a Repurchase Price equal to 100% of the principal amount thereof plus
interest accrued to the Repurchase Date. At the option of the Company,
the Repurchase Price may be paid in cash or, as provided in the Indenture,
by delivery of Common Shares having a fair market value equal to the
Repurchase Price; provided that payment may not be made in Common Shares
unless at the time of payment such stock is listed on a national
securities exchange or quoted on Nasdaq. For purposes of this paragraph,
the fair market value of Common Shares shall be determined by the Company
and shall be equal to 95% of the average of the Closing Prices Per Share
for the five consecutive Trading Days immediately preceding the second
Trading Day immediately preceding the Repurchase Date. Whenever in this
Security there is a reference, in any context, to the principal of any
Security as of any time, such reference shall be deemed to include
reference to the Repurchase Price payable in respect of such Security to
the extent that such Repurchase Price is, was or would be so payable at
such time, and express mention of the Repurchase Price in any provision of
this Security shall not be construed as excluding the Repurchase Price in
those provisions of this Security when such express mention is not made.
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<PAGE>
[The following paragraph shall appear in each Security that is not a
Global Security:
In the event of redemption, repurchase or conversion of this
Security in part only, a new Security or Securities for the unredeemed,
unrepurchased or unconverted portion hereof will be issued in the name of
the Holder hereof.]
[The following paragraph shall appear in each Global Security:
In the event of a deposit or withdrawal of an interest in this
Security, including an exchange, transfer, redemption, repurchase or
conversion of this Security in part only, the Trustee, as custodian of the
Depositary, shall make an adjustment on its records to reflect such
deposit or withdrawal in accordance with the rules and procedures of the
Depositary.]
The indebtedness evidenced by this Security is, to the extent and in
the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness of the
Company, and this Security is issued subject to such provisions of the
Indenture with respect thereto. Each Holder of this Security, by
accepting the same, (a) agrees to and shall be bound by such provisions,
(b) authorizes and directs the Trustee on his behalf to take such action
as may be necessary or appropriate to effectuate the subordination so
provided and (c) appoints the Trustee his attorney-in-fact for any and all
such purposes.
If an Event of Default, other than an Event of Default arising by
reason of a Change of Control, shall occur and be continuing, the
principal of all the Securities, together with accrued interest to the
date of declaration, may be declared due and payable in the manner and
with the effect provided in the Indenture. Upon payment (i) of the amount
of principal so declared due and payable, together with accrued interest
to the date of declaration, and (ii) of interest on any overdue principal
and overdue interest, all of the Company's obligations in respect of the
payment of the principal of and interest on the Securities shall
terminate; provided, that in the event of an Event of Default arising by
reason of a Change of Control such Event of Default will be cured after a
Change of Control offer is made and all Securities properly tendered for
purchase pursuant to such Change of Control offer are accepted for payment
and such payment is made.
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 under the
Indenture at any time by the Company and the Trustee with either (a) the
written consent of the Holders of a majority in principal amount of the
Securities at the time Outstanding, or (b) by the adoption of a
resolution, at a meeting of Holders of the Outstanding Securities at which
a quorum is present, by the Holders of 66-2/3% in principal amount of the
Outstanding Securities represented and entitled to vote at such meeting.
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<PAGE>
The Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities at the time Outstanding,
on behalf of the Holders of all the Securities, 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 Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security
issued in exchange herefor or in lieu hereof, whether or not notation of
such consent or waiver is made upon this Security or such other Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security 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, the Holders of at least 25% in aggregate principal
amount of the Outstanding Securities shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default
as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in principal amount
of the Securities Outstanding a direction inconsistent with such request,
and 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 Security for
the enforcement of any payment of principal hereof, premium, if any, or
interest hereon (including any Additional Amounts and Special Interest) on
or after the respective due dates expressed herein or for the enforcement
of the right to convert this Security as provided in the Indenture.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of,
premium, if any, and interest on (including Additional Amounts and Special
Interest, as described herein) this Security at the times, places and
rate, and in the coin, currency, or in the securities herein prescribed or
to convert this Security as provided in the Indenture.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of Securities is registrable on the
Security Register upon surrender of a Security for registration of
transfer (a) at the Corporate Trust Office of the Trustee or at such other
office or agency of the Company as may be designated by it for such
purpose in the Borough of Manhattan, The City of New York, or (b) subject
to any laws or regulations applicable thereto and to the right of the
Company to terminate the appointment of any Transfer Agent, at the offices
of the Transfer Agents described herein or at such other offices or
agencies as the Company may designate, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Company and
the Security Registrar duly executed by, the Holder thereof or his
attorney duly authorized in writing, and thereupon one or more new
Securities, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or
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<PAGE>
transferees by the Registrar. 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 recover any tax or other governmental
charge payable in connection therewith.
Prior to due presentation of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name such Security is registered, as
the owner thereof for all purposes, whether or not such Security be
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF
AMERICA, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
ELECTION OF HOLDER TO REQUIRE REPURCHASE
1. Pursuant to Section 14.1 of the Indenture, the undersigned
hereby elects to have this Security repurchased by the Company.
2. The undersigned hereby directs the Trustee or the Company to pay
it or ________________________ an amount in cash or, at the Company's
election, Common Shares valued as set forth in the Indenture, equal to
100% of the principal amount hereof, plus interest accrued to the
Repurchase Date, as provided in the Indenture.
3. a. Principal amount to be repurchased (must be U.S. $1,000 and
integral multiples thereof):
b. Certificate Number(s): __________________________
and CUSIP Number(s): ____________________________
4. a. Remaining principal amount following such repurchase:
_______________________
b. Name of the Person in which the remaining principal amount
is to be registered:_____________________________________
5. If payment of the Repurchase Price is to be made by the
Company in Common Shares, name(s) and addresses in which the
certificate(s) for Common Shares shall be issued:
____________________________________________________________
(name)
____________________________________________________________
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<PAGE>
____________________________________________________________
Dated: _____________________
___________________________
Signature
___________________________
Signature Guaranteed
Principal amount to be repurchased: ______________
Remaining principal amount following such repurchase: _____________
NOTICE: The signature to the foregoing Election must correspond to the
Name as written upon the face of this Security in every particular,
without alteration or any change whatsoever.
- 39 -
<PAGE>
<TABLE>
<CAPTION>
[GLOBAL SECURITIES]
SCHEDULE OF EXCHANGES
Principal Amount Remaining Principal
Exchanged to or from Amount of this Global
Regulation S Global Securities, Security Following Notation Made
Date Unrestricted Global Securities, Such Exchange (after on Behalf of
Made or Definitive Securities increase or decrease) Security Registrar
---- -------------------------------- ----------------------- ------------------
<S> <C> <C> <C>
________ ____________ ____________ __________
________ ____________ ____________ __________
________ ____________ ____________ __________
________ ____________ ____________ __________
________ ____________ ____________ __________
________ ____________ ____________ __________
________ ____________ ____________ __________
________ ____________ ____________ __________
________ ____________ ____________ __________
________ ____________ ____________ __________
________ ____________ ____________ __________
________ ____________ ____________ __________
________ ____________ ____________ __________
________ ____________ ____________ __________
________ ____________ ____________ __________
________ ____________ ____________ __________
</TABLE>
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<PAGE>
SECTION 2.3. Form of Conversion Notice.
--------------------------
The Forms of Conversion Notice are attached as Annexes A-1 and A-2
hereto.
SECTION 2.4. Legend on Restricted Securities.
-------------------------------
During the period prior to the time the Securities may be resold
without registration pursuant to Rule 144(k) under the Securities Act (the
expiration of which time the Company shall certify in an Officers'
Certificate and an Opinion of Counsel), any Security originally issued
otherwise than in reliance on Regulation S, including any Security issued
in exchange therefor or in lieu thereof, shall be referred to herein as a
"Restricted Security" and shall be subject to the restrictions on transfer
provided in the legends set forth on the face of the form of Restricted
Security other than any Global Security in Section 2.2 or the form of
Restricted Global Security in Section 2.2, as appropriate; provided,
however, that the term "Restricted Security" shall not include any
Securities as to which restrictions have been terminated in accordance
with Section 3.5. All Restricted Securities shall bear the applicable
legends set forth on the face of the form of Security in Section 2.2.
Except as provided in Section 3.5, the Trustee shall not issue any
unlegended Security until it has received an Officers' Certificate and
Opinion of Counsel from the Company directing it to do so.
SECTION 2.5 Form of Trustee's Certificate of Authentication.
-----------------------------------------------
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: MARINE MIDLAND BANK,
as Trustee
By__________________
Authorized Signatory
ARTICLE THREE
THE SECURITIES
SECTION 3.1. Title and Terms.
--------------
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to U.S.
$86,250,000, except for Securities authenticated and delivered in exchange
for, or in lieu of, other Securities pursuant to this Indenture.
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<PAGE>
The Securities shall be known and designated as the "6.50%
Convertible Subordinated Notes due May 1, 2003" of the Company. Their
Stated Maturity shall be May 1, 2003 and they shall bear interest on their
principal amount from May 7, 1996, payable semi-annually in arrears on May
1 and November 1 in each year, commencing November 1, 1996, at the rate of
6.50% per annum (together with any Additional Amounts and Special Interest
the Company may be required to pay) until the principal thereof is due and
at the rate of 6.50% per annum on any overdue principal and, to the extent
permitted by law, on any overdue interest; provided, however, that
payments shall only be made on Business Days as provided in Section 1.12.
The principal of, premium, if any, and interest on the Securities
shall be payable as provided in the forms of Securities set forth in
Sections 2.2 (any city in which any Paying Agent is located being herein
called a "Place of Payment").
The Securities shall be redeemable at the option of the Company at
any time on or after 60 days following the latest of the commencement of
the offering of the Securities, the original issue date of the Securities
and the issue date with respect to any additional Securities issued to
cover over-allotments, in whole or in part, and at the Company's option or
otherwise in the event of certain developments, including developments
with respect to changes in Taxes, as provided in Article Eleven and in the
forms of Securities set forth in Section 2.2.
The Securities shall be convertible as provided in Article Twelve
(any city in which any Conversion Agent is located being herein called a
"Place of Conversion").
The Securities shall be subordinated in right of payment to Senior
Indebtedness of the Company as provided in Article Thirteen.
The Securities shall be subject to repurchase by the Company at the
option of the Holders as provided in Article Fourteen.
SECTION 3.2. Denominations.
-------------
The Securities shall be issuable as registered Securities in the
denomination of U.S. $1,000 and integral multiples of U.S. $1,000 in
excess thereof. In the case of Securities initially sold to Institutional
Accredited Investors, the Securities will be issued in minimum
denominations of U.S. $250,000 and integral multiples of U.S. $1,000 in
excess thereof, but on subsequent transfers, will be available in
denominations of U.S. $1,000 and integral multiples thereof.
SECTION 3.3. Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, one of its Vice Chairmen of the Board, its Chief
Executive Officer, its President or one of its Senior Vice Presidents,
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<PAGE>
under a facsimile of its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. Any such signature may be
manual or facsimile.
Securities bearing the manual or facsimile signature of individuals
who were at any time the proper officers of the Company shall bind the
Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities executed by the
Company to the Trustee or to its order for authentication, together with a
Company Order for the authentication and delivery of such Securities, and
the Trustee or an Authenticating Agent in accordance with such Company
Order shall authenticate and make available for delivery such Securities
as in this Indenture provided and not otherwise. In connection with any
Company Order for authentication, an Officers' Certificate and Opinion of
Counsel pursuant to Section 1.2 shall not be required.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form
provided for herein executed by the Trustee or an Authenticating Agent by
manual signature of an authorized signatory, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder.
SECTION 3.4. Global Securities.
-----------------
The Securities shall be issued initially in the form of a Restricted
Global Security or a Regulation S Global Security (or, if the initial
purchasers are Institutional Accredited Investors, Definitive Restricted
Securities). The Depositary or its nominee shall be the Holder of the
Global Securities, and owners of beneficial interests in the Securities
represented by the Global Securities shall hold such interests pursuant to
the procedures and practices of the Depositary. Any such owner's
beneficial ownership of any such Securities will be shown only on, and the
transfer of such ownership interest shall be effected only through,
records maintained by the Depositary or its nominee. Transfer of
interests in the Global Securities shall be subject to the provisions of
Section 3.5. Investors may hold their interests in the Regulation S
Global Security through CEDEL or Euroclear, if they are participants in
such systems, or indirectly through organizations which are participants
in such systems. After the expiration of the Restricted Period (but not
earlier), investors may also hold such interests through organizations
other than CEDEL and Euroclear that are participants in the Depositary's
system. CEDEL and Euroclear will hold interests in the Regulation S
Global Security on behalf of their participants through customers'
- 43 -
<PAGE>
securities accounts in their respective names on the books of their
respective depositaries, which, in turn, will hold such interests in the
Regulation S Global Security in customer's securities accounts in the
depositaries' names on the books of the Depositary. All interests in a
Global Security, including those held through Euroclear or CEDEL, may be
subject to the procedures and requirements of DTC. Those interests held
through Euroclear and CEDEL will be subject to the procedures and
requirements of such system.
Unless the Depository notifies the Company that it is unwilling or
unable to continue as depository for a Global Security or ceases to be a
"Clearing Agency" registered under the Exchange Act or announces an
intention permanently to cease business or does in fact do so, and a
successor Depositary is not appointed by the Company within 90 days of
such notice, or in the case of a Global Security held for an account of
Euroclear or CEDEL, Euroclear or CEDEL (as the case may be) is closed for
business for 14 continuous days or announces an intention to cease, or
permanently ceases, business, owners of beneficial interests in a Global
Security will not be entitled to have any portions of such Global Security
registered in their names, will not receive or be entitled to receive
physical delivery of Securities in definitive form and will not be
considered the owners or holders of the Global Security. Any Global
Security exchanged upon the occurrence of an event described in the
preceding sentence shall be so exchanged in whole and not in part. Any
Security issued in exchange for a Global Security or any portion thereof
shall be a Global Security, provided that any such Security so issued that
is registered in the name of a Person other than the Depositary or a
nominee thereat shall not be a Global Security. In addition, upon
request, the Company will issue certificates for Securities in definitive,
fully registered, non-global form in exchange for beneficial interests of
like principal amount in any Global Note, but only upon at least 60 days'
prior written notice given to the Trustee in accordance with the
Depositary's customary procedures.
Securities issued in exchange for a Global Security or any portion
thereof pursuant to the preceding paragraph above shall be issued in
definitive, fully registered form shall have an aggregate principal amount
equal to that of such Global Security or portion thereof to be so
exchanged, shall be registered in such names and be in such authorized
denominations as the Depositary shall designate and shall bear any legends
required hereunder. Any Global Security to be exchanged in whole shall be
surrendered by the Depositary to the Trustee, as Security Registrar. With
regard to any Global Security to be exchanged in part, either such Global
Security shall be so surrendered for exchange or, if the Trustee is acting
as custodian for the Depositary or its nominee with respect to such Global
Security, the principal amount thereof shall be reduced, by an amount
equal to the portion thereof to be so exchanged, by means of an
appropriate adjustment made on the records of the Trustee. Upon any such
surrender or adjustment, the Trustee shall authenticate and deliver the
Security issuable on such exchange to or upon the order of the Depositary
or an authorized representative thereof. In the event of the occurrence
of any of the events specified in the preceding paragraph, the Company
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will promptly make available to the Trustee a reasonable supply of
certificated Securities in definitive form.
Except as otherwise set forth in the Indenture or a Global Security,
owners of beneficial interests in the Securities evidenced by a Global
Security will not be entitled to any rights under the Indenture with
respect to such Global Security, and the Depositary or its nominee may be
treated by the Company, the Trustee and any agent of the Company or the
Trustee as the owner and Holder of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any such agent from giving effect to any
written certification, proxy or other authorization furnished by the
Depositary or its nominee or impair, as between the Depositary or its
nominee and such owners of beneficial interests, the operation of
customary practices governing the exercise of the rights of the Depositary
or its nominee as Holder of any Security.
Initially, any and all Global Securities issued hereunder shall be
issued to the Depositary, registered in the name of Cede & Co., as the
nominee of the Depositary, and deposited with the Trustee, as custodian
for Cede & Co.
SECTION 3.5. Registration, Registration of Transfer and Exchange;
Restrictions on Transfer.
---------------------------------------------------
(a) The Company shall cause to be kept at the Corporate Trust Office
of the Trustee a register (the register maintained in such office and in
any other office or agency of the Company designated pursuant to Section
10.2 being herein sometimes collectively referred to as the "Security
Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Securities
and of transfers of Securities. The Trustee is hereby appointed "Security
Registrar" for the purpose of registering Securities and transfers and
exchanges of Securities as herein provided.
Upon surrender for registration of transfer of any Security at an
office or agency of the Company designated pursuant to Section 10.2 for
such purpose, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of any authorized denominations
and of a like aggregate principal amount and bearing such restrictive
legends as may be required by this Indenture (including Section 2.4).
At the option of the Holder, and subject to the other provisions of
this Section 3.5, Securities may be exchanged for other Securities of any
authorized denomination and of a like aggregate principal amount, upon
surrender of the Securities to be exchanged at any such office or agency.
Whenever any Securities are so surrendered for exchange, and subject to
the other provisions of this Section 3.5, the Company shall execute, and
the Trustee shall authenticate and deliver, the Securities which the
Holder making the exchange is entitled to receive. Every Security
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presented or surrendered for registration of transfer or for exchange
shall (if so required by the Company or the Security Registrar) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by
the Holder thereof or his attorney duly authorized in writing.
All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid obligations of the Company, evidencing
the same debt, and subject to the other provisions of this Section 3.5,
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 11.8, 12.2 or 14.2(e)
(other than where the Common Shares are to be issued or delivered in a
name other than that of the Holder of the Security) not involving any
transfer and other than any stamp and other duties, if any, which may be
imposed in connection with any such transfer or exchange by Canada, the
United States or the United Kingdom or any political subdivision thereof
or therein, which shall be paid by the Company.
In the event of a redemption of the Securities in part, neither the
Company nor the Securities Registrar will be required to register the
transfer of or exchange any Security, or portion thereof, called for
redemption.
(b) Beneficial ownership of every Security shall be subject to the
restrictions on transfer provided in the legends required to be set forth
on the face of each Security pursuant to Section 2.4, unless such
restrictions on transfer shall be waived by the written consent of the
Company, or terminated in accordance with this Section 3.5(b) or Section
3.5(c). The Holder of each Security, by such Holder's acceptance thereof,
agrees to be bound by such restrictions on transfer.
The restrictions imposed by this Section 3.5 and Section 2.4 upon
the transferability of any particular Security shall cease and terminate
upon delivery by the Company to the Trustee of an Officers' Certificate
and Opinion of Counsel stating that such Security has been sold pursuant
to an effective registration statement under the Securities Act or
transferred in compliance with Rule 144 under the Securities Act (or any
successor provision thereto). Any Restricted Security as to which the
Company has delivered to the Trustee an Officers' Certificate and Opinion
of Counsel that such restrictions on transfer shall have expired in
accordance with their terms or shall have terminated may, upon surrender
of such Restricted Security for exchange to the Security Registrar or any
Transfer Agent in accordance with the provisions of this Section 3.5 be
exchanged for a new Security, of like tenor and aggregate principal
amount, which shall not bear the restrictive legends required by Section
2.4. The Company shall inform the Trustee in writing of the effective
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date of any registration statement registering the Securities under the
Securities Act. The Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the
aforementioned registration statement.
As used in the preceding two paragraphs of this Section 3.5, the
term "transfer" encompasses any sale, pledge, transfer or other
disposition of any Restricted Security.
(c) Notwithstanding any other provisions of this Indenture or the
Securities, transfers of a Global Security, in whole or in part, transfers
and exchanges of interests therein of the kinds described in Clauses (2),
(3), (4), (5) and (6) below and exchanges of interests in Global
Securities or of other Securities as described in Clause (7) below, shall
be made only in accordance with this Section 3.5(c), and all transfers of
an interest in the Regulation S Global Security shall comply with Section
3.5(c)(8) below. Transfers and exchanges subject to this Section 3.5
shall also be subject to the other provisions of this Indenture that are
not inconsistent with this Section 3.5.
(1) A Global Security may not be transferred, in whole or in
part, to any Person other than the Depositary or a nominee thereof,
and no such transfer to any such other Person may be registered;
provided that this Clause (1) shall not prohibit any transfer of a
Security that is issued in exchange for a Global Security but is not
itself a Global Security. No transfer of a Security to any Person
shall be effective under this Indenture or the Securities unless and
until such Security has been registered in the name of such Person.
Nothing in this Section 3.5(c)(1) shall prohibit or render
ineffective any transfer of a beneficial interest in a Global
Security effected in accordance with the other provisions of this
Section 3.5(c).
(2) RESTRICTED GLOBAL SECURITY TO REGULATION S GLOBAL
SECURITY. If the holder of a beneficial interest in the Restricted
Global Security wishes at any time to transfer such interest to a
Person who wishes to take delivery thereof in the form of a
beneficial interest in the Regulation S Global Security, such
transfer may be effected, subject to the rules and procedures of the
Depositary, Euroclear and CEDEL, in each case to the extent
applicable (the "Applicable Procedures"), only in accordance with
the provisions of this Section 3.5(c)(2). Upon receipt by the
Trustee, as Security Registrar, at its office in The City of New
York of (A) a written order given by the Depositary or its
authorized representative directing the Trustee to credit or cause
to be credited to a specified Agent Member's account a beneficial
interest in the Regulation S Global Security in a principal amount
equal to that of the beneficial interest in the Restricted Global
Security to be so transferred, (B) a written order given by the
Depositary or its authorized representative containing information
regarding the account of the Agent Member (and the Euroclear or
CEDEL account, as the case may be) to be credited with, and the
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account of the Agent Member to be debited for, such beneficial
interest and (C) a certificate in substantially the form set forth
in Annex B-1 given by the holder of such beneficial interest, the
Trustee, as Security Registrar, shall instruct the Depositary to
reduce the principal amount of the Restricted Global Security, and
to increase the principal amount of the Regulation S Global
Security, by the principal amount of the beneficial interest in the
Restricted Global Security to be so transferred, and to credit or
cause to be credited to the account of the Person specified in such
instructions (which shall be the Agent Member for Euroclear or CEDEL
or both, as the case may be) a beneficial interest in the Regulation
S Global Security having a principal amount equal to the amount by
which the principal amount of the Restricted Global Security was
reduced upon such transfer.
(3) RESTRICTED SECURITY TO UNRESTRICTED GLOBAL SECURITY
AFTER THREE YEARS. If the holder of a beneficial interest in a
Restricted Security wishes at any time after three years from the
latest of May 7, 1996 or the date of original issue of any Security
or the resale of any Security by an affiliate of the Company to (i)
transfer such interest to a Person who wishes to take delivery
thereof in the form of a beneficial interest in the Unrestricted
Global Security or (ii) exchange such interest for a beneficial
interest in an Unrestricted Global Security, such transfer may be
effected, subject to the Applicable Procedures, only in accordance
with this Section 3.5(c)(3). Upon receipt by the Trustee, as
Security Registrar, at its office in The City of New York of (A) in
the case of a transfer or exchange of an interest in the Restricted
Global Security, an order given by the Depositary or its authorized
representative directing the Trustee to credit or cause to be
credited to a specified Agent Member's account a beneficial interest
in the Unrestricted Global Security in a principal amount equal to
that of the beneficial interest in the Restricted Global Security to
be so transferred, (B) in the case of a transfer or exchange of an
interest in the Restricted Global Security, an order given by the
Depositary or its authorized representative containing information
regarding the account of the Agent Member (and, if applicable, the
Euroclear or CEDEL account, as the case may be) to be credited with,
and the account of the Agent Member to be debited for, such
beneficial interest and (C) a certificate in substantially the form
set forth in Annex C-2 given by the holder of such beneficial
interest, the Trustee, as Security Registrar, shall (x) in the case
of a transfer or exchange of an interest in the Restricted Global
Security, instruct the Depositary to reduce the principal amount of
the Restricted Global Security, and to increase the principal amount
of the Unrestricted Global Security, by the principal amount of the
beneficial interest in the Restricted Global Security to be so
transferred, and to credit or cause to be credited to the account of
the Person specified in such instructions a beneficial interest in
the Unrestricted Global Security having a principal amount equal to
the amount by which the principal amount of the Restricted Global
Security was reduced upon such transfer, or (y) in the case of
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transfer or exchange of a Definitive Restricted Security, cancel
such Definitive Restricted Security and increase the principal
amount of the Unrestricted Global Security accordingly.
(4) REGULATION S GLOBAL SECURITY OR UNRESTRICTED GLOBAL
SECURITY TO RESTRICTED GLOBAL SECURITY. If the holder of a
beneficial interest in the Regulation S Global Security or the
Unrestricted Global Security wishes at any time to transfer such
interest to a Person who wishes to take delivery thereof in the form
of a beneficial interest in the Restricted Global Security, such
transfer may be effected, subject to the Applicable Procedures, only
in accordance with this Section 3.4(c)(4). Upon receipt by the
Trustee, as Security Registrar, at its office in The City of New
York of (A) a written order given by the Depositary or its
authorized representative directing the Trustee to credit or cause
to be credited to a specified Agent Member's account a beneficial
interest in the Restricted Global Security in a principal amount
equal to that of the beneficial interest in the Regulation S Global
Security or the Unrestricted Global Security to be so transferred,
(B) a written order given by the Depositary or its authorized
representative containing information regarding the account of the
Agent Member to be credited with, and the account of the Agent
Member (and, if applicable, the Euroclear or CEDEL account, as the
case may be) to be debited for, such beneficial interest and (C)
with respect to a transfer of a beneficial interest in the
Regulation S Global Security (but not the Unrestricted Global
Security), a certificate in substantially the form set forth in
Annex B-3 given by the holder of such beneficial interest, the
Trustee, as Security Registrar, shall instruct the Depositary to
reduce the principal amount of the Regulation S Global Security or
Unrestricted Global Security, as the case may be, and to increase
the principal amount of the Restricted Global Security, by the
principal amount of the beneficial interest in the Regulation S
Global Security or Unrestricted Global Security to be so
transferred, and to credit or cause to be credited to the account of
the Person specified in such instructions a beneficial interest in
the Restricted Global Security having a principal amount equal to
the amount by which the principal amount of the Regulation S Global
Security or Unrestricted Global Security, as the case may be, was
reduced upon such transfer.
(5) EXCHANGES OF RESTRICTED GLOBAL SECURITY FOR UNRESTRICTED
GLOBAL SECURITY. If the holder of a beneficial interest in the
Restricted Global Security wishes at any time to exchange such
interest for a beneficial interest in the Unrestricted Global
Security, such exchange may be effected, subject to the Applicable
Procedures, only in accordance with the provisions of this Section
3.5(c)(5). Upon receipt by the Trustee, as Security Registrar, at
its office in The City of New York of (A) a written order given by
the Depositary or its authorized representative directing the
Trustee to credit or cause to be credited to a specified Agent
Member's account a beneficial interest in the Unrestricted Global
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<PAGE>
Security in a principal amount equal to that of the beneficial
interest in the Restricted Global Security to be so exchanged, (B) a
written order given by the Depositary or its authorized
representative containing information regarding the account of the
Agent Member (and the Euroclear or CEDEL account, as the case may
be) to be credited with, and the account of the Agent Member to be
debited for, such beneficial interest and (C) a certificate in
substantially the form set forth in Annex C-1, given by the holder
of such beneficial interest, the Trustee, as Security Registrar,
shall instruct the Depositary to reduce the principal amount of the
Restricted Global Security, and to increase the principal amount of
the Unrestricted Global Security by the principal amount of the
beneficial interest in the Restricted Global Security to be so
exchanged, and to credit or cause to be credited to the account of
the Person specified in such instructions a beneficial interest in
the Unrestricted Global Security having a principal amount equal to
the amount by which the principal amount of the Restricted Global
Security was reduced upon such exchange.
(6) EXCHANGES OF DEFINITIVE RESTRICTED SECURITIES (ISSUED IN
THE INITIAL DISTRIBUTION TO INSTITUTIONAL ACCREDITED INVESTORS) FOR
RESTRICTED GLOBAL SECURITY, REGULATION S GLOBAL OR UNRESTRICTED
GLOBAL SECURITY. If the holder of a Definitive Restricted Security
wishes at any time to exchange such interest for a beneficial
interest in the Restricted Global Security, Regulation S Global
Security, or the Unrestricted Global Security, such exchange may be
effected, subject to the Applicable Procedures, only in accordance
with the provisions of this Section 3.5(c)(6). Upon receipt by the
Trustee, as Security Registrar, at its office in The City of New
York of (A) such Restricted Securities as provided in Section
3.5(a) and written instructions satisfactory to the Trustee
directing the Trustee to credit or cause to be credited to a
specified Agent Member's account a beneficial interest in the
Restricted Global Security, Regulation S Global Security or the
Unrestricted Global Security, as the case may be, in a principal
amount equal to that of the beneficial interest in the Definitive
Restricted Security to be so exchanged, (B) a written order given by
the Depositary or its authorized representative containing
information regarding the account of the Agent Member (and the
Euroclear or CEDEL account, as the case may be) to be credited with,
and the account of the Agent Member to be debited for, such
beneficial interest and (C) a certificate in substantially the form
set forth in Annex B-2, given by the holder of such Definitive
Restricted Security interest, the Trustee, as Security Registrar,
shall cancel such Definitive Restricted Security (and issue a new
Definitive Restricted Security in respect of any untransferred
portion thereof) and instruct the Depositary to increase the
principal amount of the Restricted Global Security, Regulation S
Global Security or the Unrestricted Global Security, as the case may
be, by the principal amount of the beneficial interest in the
Definitive Restricted Security to be so exchanged, and to credit or
cause to be credited to the account of the Person specified in such
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instructions (which shall be the Agent Member for Euroclear or CEDEL
or both, as the case may be, if an interest in the Regulation S
Global Security is being credited) a beneficial interest in the
Regulation S Global Security or the Unrestricted Global Security or
the Restricted Global Security, as the case may be, having a
principal amount equal to the amount by which the principal amount
of the Definitive Restricted Security was exchanged.
(7) OTHER EXCHANGES. In the event that a Global Security or
any portion thereof is exchanged for Securities other than Global
Securities, such other Securities may in turn be exchanged (on
transfer or otherwise) for Securities that are not Global Securities
or for beneficial interests in a Global Security (if any is then
outstanding) only in accordance with such procedures, which shall be
substantially consistent with the provisions of Clauses (1) through
(6) above and (8) below (including the certification requirements
intended to insure that transfers and exchanges of beneficial
interests in a Global Security comply with Rule 144A, Rule 144 or
Regulation S, as the case may be) and any Applicable Procedures, as
may be from time to time adopted by the Company and the Trustee.
(8) INTERESTS IN REGULATION S GLOBAL SECURITY TO BE HELD
THROUGH EUROCLEAR OR CEDEL. Until the termination of the
Restricted Period, interests in the Regulation S Global Security may
be held only through Agent Members acting for and on behalf of
Euroclear and CEDEL, provided that this Clause (8) shall not
prohibit any transfer in accordance with Section 3.5(c)(4) hereof.
(d) Neither the Trustee, the Paying Agent in London nor any
of their agents shall (1) have any duty to monitor compliance with or with
respect to any Canadian, U.S. federal or state or other securities or tax
laws or (2) have any duty to obtain documentation on any transfers or
exchanges other than as specifically required hereunder.
SECTION 3.6. Mutilated, Destroyed, Lost or Stolen Securities.
-----------------------------------------------
If any mutilated Security is surrendered to the Trustee or to a
Transfer Agent outside the United States, the Company shall execute, the
Trustee or an Authenticating Agent shall authenticate and the Trustee or
Transfer Agent shall deliver in exchange therefor a new Security of like
tenor and principal amount and bearing a number not contemporaneously
outstanding.
If there be delivered to the Company and either to the Trustee or to
a Transfer Agent outside the United States:
(1) evidence to their satisfaction of the destruction, loss
or theft of any Security, and
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(2) such security or indemnity as may be satisfactory to the
Company and the Trustee and such Transfer Agent to save each of them
and any agent of either of them harmless,
then, in the absence of actual notice to the Company, the Trustee or the
Transfer Agent that such Security has been acquired by a bona fide
purchaser, the Company shall execute, the Trustee or an Authenticating
Agent shall authenticate and the Trustee or Transfer Agent shall deliver,
in lieu of any such destroyed, lost or stolen Security, a new Security of
like tenor and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its
discretion, but subject to any conversion rights, may instead, of issuing
a new Security, pay such Security upon satisfaction of the conditions set
forth in the preceding paragraph.
Upon the issuance of any new Security under this Section 3.6, the
Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto (other
than any stamp and other duties, if any, which may be imposed in
connection therewith by Canada, the United States or the United Kingdom or
any political subdivision thereof or therein, which shall be paid by the
Company) and any other expenses (including the fees and expenses of the
Trustee, the Paying Agent in London and the Transfer Agent) connected
therewith.
Every new Security issued pursuant to this Section 3.6 in lieu of
any mutilated, destroyed, lost or stolen Security shall evidence the
original contractual obligation of the Company, whether or not the
mutilated, destroyed, lost or stolen Security shall be at any time
enforceable by anyone, and such new Security shall be entitled to all the
benefits of this Indenture equally and proportionately with any and all
other Securities duly issued hereunder.
The provisions of this Section 3.6 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies of any Holder with
respect to the replacement or payment of mutilated, destroyed, lost or
stolen Securities.
SECTION 3.7. Payment of Interest, Interest Rights Preserved.
----------------------------------------------
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities)
is registered at the close of business on the Regular Record Date for such
interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
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"Defaulted Interest") shall forthwith cease to be payable to the Holder on
the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in
each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or their
respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security, the date of the
proposed payment and the Special Record Date, and at the same time
the Company shall deposit with the Trustee an amount of money equal
to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this Clause
provided. The Special Record Date for the payment of such Defaulted
Interest shall be not more than 15 days and not less than 10 days
prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed
payment. The Trustee, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of Securities at
such Holder's address as it appears in the Security Register, not
less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record
Date therefor having been so mailed, such Defaulted Interest shall
be paid to the Persons in whose names the Securities (or their
respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest
in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities may be listed, and
upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment
pursuant to this Clause, such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 3.5,
each Security delivered under this Indenture upon registration of transfer
of or in exchange for or in lieu of any other Security shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried
by such other Security.
In the case of any Security which is converted after any Regular
Record Date and on or prior to the next succeeding Interest Payment Date
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(other than any Security whose Maturity is prior to such Interest Payment
Date), interest whose Stated Maturity is on such Interest Payment Date
shall be payable on such Interest Payment Date notwithstanding such
conversion, and such interest (whether or not punctually paid or duly
provided for) shall be paid to the Person in whose name such Security (or
one or more Predecessor Securities) is registered at the close of business
on such Regular Record Date. Except as otherwise expressly provided in
the immediately preceding sentence, in the case of any Security which is
converted, interest whose Stated Maturity is after the date of conversion
of such Security shall not be payable.
SECTION 3.8. Persons Deemed Owners.
---------------------
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of,
premium, if any, and (subject to Section 3.7) interest on such Security
and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Trustee nor any agent of the Company
or the Trustee shall be affected by notice to the contrary.
SECTION 3.9. Cancellation.
------------
All Securities surrendered for payment, redemption, repurchase,
registration of transfer or exchange or conversion shall, if surrendered
to any Person other than the Trustee, be delivered to the Trustee. All
Securities so delivered to the Trustee shall be canceled promptly by the
Trustee. No Securities shall be authenticated in lieu of or in exchange
for any Securities canceled as provided in this Section 3.9. The Trustee
shall destroy all canceled Securities in accordance with applicable law
and its customary practices in effect from time to time.
SECTION 3.10. Computation of Interest.
-----------------------
Interest on the Securities shall be computed on the basis of a
360-day year of twelve 30-day months.
SECTION 3.11. CUSIP and ISIN Numbers.
----------------------
The Company in issuing Securities shall use "CUSIP" numbers (if then
generally in use) in addition to serial numbers and "ISIN" numbers (if
generally in use); if so, the Trustee shall use such "CUSIP" and "ISIN"
numbers in addition to serial numbers in notices of redemption and
repurchase as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such CUSIP
and ISIN numbers either as printed on the Securities or as contained in
any notice of a redemption or repurchase and that reliance may be placed
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only on the serial or other identification numbers printed on the
Securities, and any such redemption or repurchase shall not be affected by
any defect in or omission of such CUSIP or ISIN numbers.
SECTION 3.12. Notification of Withholding.
---------------------------
The Company shall notify the Trustee in writing of the necessity, if
any, to withhold any amounts from payments to Holders (and the amount of
any such withholding) arising from the delivery by a Holder of any
certificate.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall upon Company Request cease to be of further
effect (except as to any surviving rights of conversion, or registration
of transfer or exchange, or replacement of Securities herein expressly
provided for and any right to receive Additional Amounts and Special
Interest as provided in the forms of Securities set forth in Section 2.2
and the Company's obligations to the Trustee pursuant to Section 6.7), and
the Trustee, at the expense of the Company, shall execute proper
instruments in form and substance satisfactory to the Trustee
acknowledging satisfaction and discharge of this Indenture, when
(l) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 3.6, and
(ii) Securities for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company
and thereafter repaid to the Company or discharged from such trust,
as provided in Section 10.3) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee or the Paying Agent in London or its agent for cancellation
(other than Securities referred to in clauses (i) and (ii) of clause
(1)(A) above)
(i) have become due and payable, or
(ii) will have become due and payable at their Stated
Maturity within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of by
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the Trustee in the name, and at the expense, of the Company,
and the Company, in the case of clause (i) or (ii) above, has
deposited or caused to be deposited with the Trustee as trust
funds (immediately available to the Holders in the case of
clause (i)) in trust for the purpose an amount sufficient to
pay and discharge the entire indebtedness on such Securities
not theretofore delivered to the Trustee for cancellation,
for principal, premium, if any, and interest (including any
applicable Additional Amounts and Special Interest) to the
date of such deposit (in the case of Securities which have
become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied
with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the
obligations of the Company to any Authenticating Agent under Section 6.12,
the obligation of the Company to pay Additional Amounts and, if money
shall have been deposited with the Trustee pursuant to clause (1)(B) of
this Section 4.1, the obligations of the Trustee under Section 4.2 and the
last paragraph of Section 10.3 shall survive. Funds held in trust
pursuant to this Section 4.1 are not subject to the provisions of Article
Thirteen.
SECTION 4.2. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 10.3, all
money deposited with the Trustee pursuant to Section 4.1 shall be held in
trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent),
to the Persons entitled thereto, of the principal, premium, if any, and
interest for whose payment such money has been deposited with the Trustee.
All moneys deposited with the Trustee pursuant to Section 4.1 (and
held by it or any Paying Agent) for the payment of Securities subsequently
converted shall be returned to the Company upon Company Request.
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ARTICLE FIVE
REMEDIES
SECTION 5.1. Events of Default.
-----------------
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and
whether it shall be occasioned by the provisions of Article Thirteen or be
voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(1) default in the payment of any interest (including any
Additional Amounts or Special Interest) upon any Security when it
becomes due and payable, and continuance of such default for a
period of 30 days; or
(2) default in the payment of the principal of or premium, if
any, on any Security whether at its Maturity upon redemption,
repurchase, or otherwise; or
(3) failure to observe or perform any covenant, condition or
agreement on the part of the Company to be observed or performed
pursuant to Sections 7.1 and 10.4 and Article Fourteen hereof; or
(4) default in the performance, or breach, of any other
covenant or warranty of the Company in this Indenture (other than a
covenant or warranty a default in the performance or breach of which
is specifically dealt with elsewhere in this Section), and
continuance of such default or breach for a period of 60 days after
there has been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in principal amount of the Outstanding
Securities a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(5) default by the Company or any Subsidiary (i) in the
payment of any principal of or interest on any Indebtedness, the
principal amount of which, individually or in the aggregate, exceeds
U.S. $10,000,000, when due after giving effect to any applicable
grace periods (whether such Indebtedness exists as of the Issue Date
or is thereafter created) or (ii) on any Indebtedness, the principal
amount of which, individually or in the aggregate, exceeds U.S.
$10,000,000, which default or defaults in the case of clause (ii)
shall have resulted in such Indebtedness becoming due and payable
prior to the date on which it would otherwise have become due and
payable; or
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(6) failure by the Company or any of its Subsidiaries to pay
a final judgment or final judgments or a final order or final orders
entered by a court or courts of competent jurisdiction, which
judgments or orders in the aggregate exceed U.S. $10,000,000, and
either (i) the commencement by any creditor of any enforcement
proceeding upon any such judgment or order or (ii) such judgment or
order remaining unstayed for 45 days; or
(7) (A) a court of competent jurisdiction shall enter a
decree or order for relief in respect of the Company, or any of its
Significant Subsidiaries in any involuntary case under any
Bankruptcy Law or any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, which decree or order is not
stayed; or any other similar relief shall be granted under any
applicable federal or state law; (B) a decree or order of a court of
competent jurisdiction for the appointment of a receiver,
liquidator, sequestrator, trustee, Custodian or other officer having
similar powers over the Company or any of its Significant
Subsidiaries, or over all of or a substantial part of its or their
respective properties, shall have been entered; or the involuntary
appointment of an interim receiver, trustee or other Custodian of
the Company or any of its Significant Subsidiaries for all or a
substantial part of its or their respective properties; or the
issuance of a warrant of attachment, execution or similar process
against any substantial part of the property of the Company or any
of its Significant Subsidiaries and the continuance of any such
events in subpart (B) for 45 days unless stayed or discharged; or
(8) the Company or any of its Significant Subsidiaries (A)
shall have an order for relief entered with respect to it or
commences a voluntary case under any Bankruptcy Law or any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect; (B) shall consent to the entry of an order for
relief in an involuntary case, or to the conversion to an
involuntary case, under any such law; (C) shall consent to the
appointment of or taking possession by a receiver, trustee or other
Custodian for all or a substantial part of its property; (D) shall
have made a general assignment for the benefit of creditors of a
substantial part of its or their assets; (E) shall admit in writing
of its inability to pay its debts as such debts become due; or (F)
the Board of Directors of the Company (or any committee thereof)
adopts any resolution which has not been rescinded or otherwise
authorizes or approves any of the foregoing; or
(9) any order, judgment or decree shall be entered against
the Company decreeing the dissolution or liquidation of the Company
and such order, judgment or decree shall remain undischarged or
unstayed for a period in excess of 30 days; or
(10) the occurrence of a Change of Control; provided, that
such Event of Default will be cured after a Change of Control Offer
is made and all Securities properly tendered for purchase pursuant
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to such Change of Control Offer are accepted for payment and such
payment provided in the Change of Control Offer is made, as
described in Article Fourteen.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors or the Bankruptcy Act
(Canada), the Companies Creditor Arrangement Act (Canada) or any other
Canadian federal or provincial law or the law of any other jurisdiction
relating to the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator, sequestrator or similar official
under any Bankruptcy Law.
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default, other than an Event of Default set out in
subsection 5.1 (10), occurs and is continuing, then in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities may declare the principal of all the Securities to
be due and payable immediately, by a notice in writing to the Company (and
to the Trustee if given by the Holders), and upon any such declaration
such principal and all accrued interest thereon shall become immediately
due and payable.
At any time after such declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter in this Article Five provided, the Holders
of a majority in principal amount of the Outstanding Securities, by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities,
(B) the principal of and premium, if any, on any
Securities which have become due otherwise than by such
declaration of acceleration and any interest thereon at the
rate borne by the Securities,
(C) to the extent that payment of such interest
is lawful, interest upon overdue interest at a rate of 6.50%
per annum, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel; and
(2) all Events of Default, other than the nonpayment of the
principal of, and any interest on, Securities which have become due
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solely by such declaration of acceleration, have been cured or
waived as provided in Section 5.13.
No rescission or annulment referred to above shall affect any
subsequent default or impair any right consequent thereon.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Trustee.
-------------------------------------------------------
The Company covenants that if
(1) default is made in the payment of any interest (including
any Additional Amounts and Special Interest) on any Security when it
becomes due and payable and such default continues for a period of
30 days, or
(2) default is made in the payment of the principal of or
premium, if any, on any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit
of the Holders of such Securities, the whole amount then due and payable
on such Securities for principal and interest (including any Additional
Amounts and Special Interest) and interest on any overdue principal and
premium, if any, and on any overdue interest (including any Additional
Amounts and Special Interest), at a rate of 6.50% per annum, to the extent
permissible by applicable law, and in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon the
Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other
obligor upon the Securities, wherever situated.
If an Event of Default, other than an Event of Default set out in
subsection 5.1(10), occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.
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SECTION 5.4. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the Company or any
other obligor upon the Securities or the property of the Company or of
such other obligor or the creditors of either, the Trustee (irrespective
of whether the principal of, and any interest on, the Securities shall
then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any
demand on the Company for the payment of overdue principal or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(1) to file and prove a claim for the whole amount of
principal, premium, if any, and interest owing and unpaid in respect
of the Securities and take such other actions, including
participating as a member, voting or otherwise, of any official
committee of creditors appointed in such matter, and to file such
other papers or documents, in each of the foregoing cases, as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel)
and of the Holders of Securities allowed in such judicial
proceeding, and
(2) to collect and receive any moneys or other property
payable or deliverable on any such claim and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby
authorized by each Holder of Securities to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of
such payments directly to the Holders of Securities, to pay to the Trustee
any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and any
other amounts due the Trustee under Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a
Security any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof
or to authorize the Trustee to vote in respect of the claim of any Holder
of a Security in any such proceeding; provided, however, that the Trustee
may, on behalf of such Holders, vote for the election of a trustee in
bankruptcy or similar official.
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SECTION 5.5. Trustee May Enforce Claims Without Possession of Securities.
-----------------------------------------------------------
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable benefit of the Holders
of the Securities in respect of which judgment has been recovered.
SECTION 5.6. Application of Money Collected.
------------------------------
Subject to Article Thirteen, any money collected by the Trustee
pursuant to this Article Five shall be applied in the following order, at
the date or dates fixed by the Trustee and, in case of the distribution of
such money on account of principal, premium, if any, or interest, upon
presentation of the Securities, and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 6.7;
SECOND: To the payment of the amounts then due and unpaid
for principal, premium, if any, or interest on the Securities in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for
principal, premium, if any, and interest, respectively; and
THIRD: Any remaining amounts shall be repaid to the Company.
SECTION 5.7. Limitation on Suits.
-------------------
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Securities shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee hereunder;
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(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to
be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders
of a majority in principal amount of the Outstanding Securities;
it being understood and intended that no one or more of such Holders shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of
any other of such Holders, or to obtain or seek to obtain priority or
preference over any other of such Holders or to enforce any right under
this Indenture, except in the manner herein provided and for the equal and
ratable benefit of all such Holders.
SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium
and Interest and to Convert.
------------------------------------------------------------
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of, premium, if any, and (subject to
Section 3.7) interest on such Security (or, in the case of redemption or
repurchase, on the Redemption Date or Repurchase Date, as the case may
be), and to convert such Security in accordance with Article Twelve, and
to institute suit for the enforcement of any such payment and right to
convert, and such rights shall not be impaired without the consent of such
Holder.
SECTION 5.9. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder of a Security has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every
such case, subject to any determination in such proceeding, the Company,
the Trustee and the Holders of Securities shall be restored severally and
respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and such Holders shall continue as though no
such proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last
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paragraph of Section 3.6, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders of Securities is intended to be
exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every
other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion
or employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event
of Default or any acquiescence therein. Every right and remedy given by
this Article Five or by law to the Trustee or to the Holders of Securities
may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or (subject to the limitations contained in this
Indenture) by the Holders of Securities, as the case may be.
SECTION 5.12. Control by Holders of Securities.
--------------------------------
The Holders of a majority in principal amount of the Outstanding
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee, provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture, and
(2) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction.
SECTION 5.13. Waiver of Past Defaults.
-----------------------
The Holders, either (a) through the written consent of not less than
a majority in aggregate principal amount of the Outstanding Securities, or
(b) by the adoption of a resolution, at a meeting of Holders of the
Outstanding Securities at which a quorum is present, by the Holders of at
least 66-2/3% in principal amount of the Outstanding Securities
represented at such meeting, may on behalf of the Holders of all the
Securities waive any past default hereunder and its consequences, except a
default (1) in the payment of the principal of, premium, if any, or
interest on any Security, or (2) in respect of a covenant or provision
hereof which under Article Eight cannot be modified or amended without the
consent of the Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for
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every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 5.14. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee
for any action taken, suffered or omitted by it as Trustee, the filing by
any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section
5.14 shall not apply to any suit instituted by the Company, to any suit
instituted by the Trustee, to any suit instituted by any Holder, or group
of Holders, holding in the aggregate more than 10% in principal amount of
the Outstanding Securities, or to any suit instituted by any Holder of any
Security for the enforcement of the payment of the principal of, premium,
if any, or interest on any Security on or after the respective Stated
Maturity or Maturities expressed in such Security (or, in the case of
redemption or repurchase, on or after the Redemption Date or Repurchase
Date, as the case may be) or for the enforcement of the right to convert
any Security in accordance with Article Twelve.
SECTION 5.15. Waiver of Stay or Extension Laws.
--------------------------------
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force,
which may affect the covenants or the performance of this Indenture; and
the Company (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law and covenants that it will
not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power
as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities.
-----------------------------------
(a) Except during the continuance of an Event of Default,
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(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to
be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Indenture, but not to verify the contents
thereof.
(b) In case an Event of Default has occurred and is continuing of
which a responsible officer of the Trustee has actual knowledge, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise as
a prudent man would exercise or use under the circumstances in the conduct
of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that
(1) this paragraph (c) shall not be construed to limit the
effect of paragraph (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent
facts;
(3) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a majority in
principal amount of the Outstanding Securities relating to the time,
method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture; and
(4) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it.
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(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of
this Section.
SECTION 6.2. Notice of Defaults.
------------------
Within 90 days after the occurrence of any default hereunder as to
which the Trustee has received written notice, the Trustee shall give to
all Holders of Securities, in the manner provided in Section 1.6, notice
of such default, unless such default shall have been cured or waived;
provided, however, that, except in the case of a default in the payment of
the principal of, premium, if any, or interest on any Security, the
Trustee shall be protected in withholding such notice if and so long as
the board of directors, the executive committee or a trust committee of
directors or Responsible Officers of the Trustee in good faith determine
that the withholding of such notice is in the interest of the Holders; and
provided, further, that in the case of any default of the character
specified in Section 5.1(10), no such notice to Holders of Securities
shall be given until at least 30 days after the occurrence thereof. For
the purpose of this Section, the term "default" means any event which is,
or after notice or lapse of time or both would become, an Event of
Default.
SECTION 6.3. Certain Rights of Trustee.
-------------------------
Subject to the provisions of Section 6.1:
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate,
other certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, other evidence
of indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(2) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company
Order and any resolution of the Board of Directors shall be
sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, rely upon
an Officers' Certificate;
(4) the Trustee may consult with counsel of its selection and
the advice of such counsel or any Opinion of Counsel shall be full
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and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;
(5) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders of Securities pursuant to
this Indenture, unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses
and liabilities which might be incurred by it in compliance with
such request or direction;
(6) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Trustee may make
such further inquiry or investigation into such facts or matters as
it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine
the books, records and premises of the Company, personally or by
agent or attorney;
(7) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder;
(8) the permissive right of the Trustee to take or refrain
from taking any actions enumerated in this Indenture shall not be
construed as a duty and the Trustee shall not be answerable in such
actions other than for its own negligence or willful misconduct; and
(9) the Trustee shall not be liable for any action taken,
suffered or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights
or powers conferred upon it by the Indenture.
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained herein and in the Securities (except the
Trustee's certificates of authentication) shall be taken as the statements
of the Company, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture, of the Securities or of the Common Shares
issuable upon the conversion of the Securities. The Trustee shall not be
accountable for the use or application by the Company of Securities or the
proceeds thereof.
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SECTION 6.5. May Hold Securities, Act as Trustee Under Other Indentures.
----------------------------------------------------------
The Trustee, any Authenticating Agent, any Paying Agent, any
Conversion Agent or any other agent of the Company or the Trustee, in its
individual or any other capacity, may become the owner or pledgee of
Securities and may otherwise deal with the Company with the same rights it
would have if it were not Trustee, Authenticating Agent, Paying Agent,
Conversion Agent or such other agent.
The Trustee may become and act as trustee under other indentures
under which other securities, or certificates of interest or participation
in other securities, of the Company are outstanding in the same manner as
if it were not Trustee hereunder.
SECTION 6.6. Money Held in Trust.
-------------------
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall
be under no liability for interest on any money received by it hereunder
except as otherwise agreed in writing with the Company.
SECTION 6.7. Compensation and Reimbursement.
------------------------------
The Company agrees
(1) to pay to the Trustee from time to time such compensation
as the Company and the Trustee shall from time to time agree in
writing for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee (and its directors, officers,
employees and agents) for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith
on its part, arising out of or in connection with the acceptance or
administration of this trust, including the costs, expenses and
reasonable attorneys' fees of defending itself against any claim or
liability in connection with the exercise or performance of any of
its powers or duties hereunder.
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When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 5.1(5) or Section 5.1(6),
the expenses (including the reasonable charges of its counsel) and the
compensation for the services are intended to constitute expenses of the
administration under any applicable Federal or state bankruptcy,
insolvency or other similar law.
The provisions of this Section shall survive the termination of this
Indenture or the earlier resignation or removal of the Trustee.
SECTION 6.8. Corporate Trustee Required; Eligibility.
---------------------------------------
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United
States of America, any State thereof, or the District of Columbia,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least U.S. $50,000,000, subject to
supervision or examination by federal or state authority, in good standing
and having an established place of business in the Borough of Manhattan,
The City of New York. If such corporation publishes reports of condition
at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section,
the combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter specified
in this Article and a successor shall be appointed pursuant to Section
6.9.
SECTION 6.9. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until
the acceptance of appointment by the successor Trustee in accordance with
the applicable requirements of Section 6.10.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If the instrument of acceptance by a successor
Trustee required by Section 6.10 shall not have been delivered to the
Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of
a majority in principal amount of the Outstanding Securities, delivered to
the Trustee and the Company. If the instrument of acceptance by a
successor Trustee required by Section 6.10 shall not have been delivered
to the Trustee within 30 days after the giving of such notice of removal,
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the removed Trustee may petition any court of competent jurisdiction for
the appointment of a successor Trustee.
(d) If at any time:
(1) the Trustee shall cease to be eligible under Section 6.8
and shall fail to resign after written request therefor by the
Company or by any Holder of a Security who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation,
then, in any such case (i) the Company by a Board Resolution may remove
the Trustee, or (ii) subject to Section 5.14, any Holder of a Security who
has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment
of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any
cause, the Company, by a Board Resolution, shall promptly appoint a
successor Trustee and shall comply with the applicable requirements of
this Section and Section 6.10. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee shall be appointed by Act of the Holders of a majority
in principal amount of the Outstanding Securities delivered to the Company
and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 6.10, become the successor Trustee and
supersede the successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Holders of
Securities and accepted appointment in the manner required by this Section
and Section 6.10, any Holder of a Security who has been a bona fide Holder
of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction
for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
Holders of Securities in the manner provided in Section 1.6. Each notice
shall include the name of the successor Trustee and the address of its
Corporate Trust Office.
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SECTION 6.10. Acceptance of Appointment by Successor.
--------------------------------------
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested
with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers
and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such
retiring Trustee hereunder. Upon request of any such successor Trustee,
the Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be eligible under this
Article.
SECTION 6.11. Merger, Conversion, Consolidation or Succession to Business.
-----------------------------------------------------------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation succeeding to all or substantially all of the corporate
trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation shall be otherwise eligible under
this Article without the execution or filing of any paper or any further
act on the part of any of the parties hereto. In case any Securities
shall have been authenticated, but not delivered, by the Trustee then in
office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the
Securities so authenticated with the same effect as if such successor
Trustee had itself authenticated such Securities.
SECTION 6.12. Authenticating Agents.
---------------------
The Trustee may, with the consent of the Company, appoint an
additional Authenticating Agent or Agents acceptable to the Company with
respect to the Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities issued upon exchange or
substitution pursuant to this Indenture.
Securities authenticated by an Authenticating Agent shall be
entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder,
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and every reference in this Indenture to the authentication and delivery
of Securities by the Trustee or the Trustee's certificate of
authentication shall be deemed to include authentication and delivery on
behalf of the Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an Authenticating
Agent. Each Authenticating Agent shall be subject to acceptance by the
Company and shall at all times be a corporation organized and doing
business under the laws of the United States of America, any State
thereof, the District of Columbia, or England and Wales, authorized under
such laws to act as Authenticating Agent and subject to supervision or
examination by government or other fiscal authority. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.12 such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section
6.12.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to
the corporate agency or corporate trust business of an Authenticating
Agent, shall continue to be an Authenticating Agent, provided such
corporation shall be otherwise eligible under this Section 6.12, without
the execution or filing of any paper or any further act on the part of the
Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written
notice thereof to such Authenticating Agent and to the Company. Upon
receiving such a notice of resignation or upon such a termination, or in
case at any time such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 6.12, the Trustee may
appoint a successor Authenticating Agent which shall be subject to
acceptance by the Company. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with like effect
as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the
provisions of this Section 6.12.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section 6.12.
If an Authenticating Agent is appointed with respect to the
Securities pursuant to this Section 6.12, the Securities may have endorsed
thereon, in addition to or in lieu of the Trustee's certification of
authentication, an alternative certificate of authentication in the
following form:
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This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: MARINE MIDLAND BANK
as Trustee
By [Authenticating Agent],
as Authenticating Agent
By______________________
Authorized Signatory
SECTION 6.13. Trust Indenture Legislation.
---------------------------
In this Indenture, the expression "indenture legislation" means the
provisions, if any, of the Canada Business Corporations Act, as amended or
re-enacted, and any other statute of Canada, and of any regulations under
such statute, relating to trust indentures and to the rights, duties and
obligations of trustees under trust indentures and of corporations issuing
debt obligations under trust indentures, to the extent that such
provisions are at the time in force and applicable to this Indenture or
the Company. The Company and the Trustee agree that each will at all
times in relation to this Indenture and in relation to any action to be
taken hereunder observe and comply with and be entitled to the benefits of
indenture legislation. If and to the extent that, any provision of this
Indenture limits, qualifies or conflicts with any mandatory requirement of
indenture legislation, such mandatory requirement shall prevail.
ARTICLE SEVEN
AMALGAMATION, CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
SECTION 7.1. Company May Amalgamate, Consolidate, Etc., Only on Certain
Terms.
----------------------------------------------------------
The Company may not consolidate, amalgamate, enter into an
arrangement or merge with or into any Person or permit any other Person to
consolidate, amalgamate, enter into an arrangement or merge with or into
the Company (whether or not the Company is the surviving corporation), or
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets in one transaction or a
series of related transactions to any Person, if such transaction or
series of transactions, in the aggregate, would result in a sale,
assignment, transfer, lease or other disposition of all or substantially
all of the properties and assets of the Company or of the Company and its
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Subsidiaries on a consolidated basis to any other Person, unless, at the
time and giving effect thereto:
(1) the Company is the surviving corporation or the Person
formed by or surviving any such consolidation, amalgamation,
arrangement or merger (if other than the Company), or to which such
sale, transfer, lease, conveyance or other disposition shall have
been made, is a corporation organized and existing under the laws of
(i) the United States, any state thereof or the District of Columbia
or (ii) the federal laws of Canada or any province thereof;
(2) the Person formed by or surviving any such consolidation,
amalgamation, arrangement or merger (if other than the Company), or
the Person to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made, assumes by
supplemental indenture in a form and substance satisfactory to the
Trustee all the obligations of the Company under the Securities and
this Indenture and such Person assumes the obligations of the
Company under the Registration Rights Agreement;
(3) immediately prior to and after giving effect to such
transaction, no default hereunder or Event of Default shall have
occurred and be continuing;
(4) the interest, principal, premium, if any, and other
amounts paid or credited in respect of the Securities will not be
subject to Canadian Taxes as a result of such consolidation,
amalgamation, arrangement, merger, sale assignment, transfer, lease,
conveyance or other disposition, and the Company shall have
delivered to the Trustee an Opinion of Canadian Counsel to that
effect.
The Company shall deliver to the Trustee and each Holder prior to
the consummation of the proposed transaction an Officers' Certificate to
the foregoing effect and an Opinion of Counsel stating that the proposed
transaction and such supplemental indenture comply with this Indenture,
each in form and substance satisfactory to the Trustee.
SECTION 7.2. Successor Substituted.
---------------------
Upon any amalgamation or consolidation of the Company with, or
merger of the Company into, any other Person or any conveyance, transfer
or lease of all or substantially all the properties and assets of the
Company in accordance with Section 7.1, the successor Person formed by
such consolidation or into which the Company is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this
Indenture with the same effect as if such successor Person had been named
as the Company herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants
under this Indenture and the Securities.
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ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1. Supplemental Indentures Without Consent of Holders of
Securities.
-----------------------------------------------------
Without the consent of any Holders of Securities, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from
time to time, may enter into one or more indentures supplemental hereto
for any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants
and obligations of the Company herein and in the Securities as
permitted by this Indenture; or
(2) to add to the covenants of the Company for the benefit of
the Holders of Securities, or to surrender any right or power herein
conferred upon the Company; or
(3) to secure the Securities; or
(4) to make provision with respect to the conversion rights
of Holders of Securities pursuant to Section 12.11; or
(5) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein or which is otherwise defective, or to make any other
provisions with respect to matters or questions arising under this
Indenture as the Company and the Trustee may deem necessary or
desirable, provided, such action pursuant to this clause (5) shall
not adversely affect the interests of the Holders of Securities; or
(6) to make any changes or modifications to this Indenture
necessary in connection with the registration of any
Securities under the Securities Act as contemplated by Section
10.12, provided, such action pursuant to this clause (6) shall not
adversely affect the interests of the Holders of Securities; or
(7) to comply with the requirements of the Trust Indenture
Act or the rules and regulations of the Commission
thereunder in order to affect or maintain the qualification of this
Indenture under the Trust Indenture Act, as contemplated by this
Indenture or otherwise.
Upon Company Request, accompanied by a Board Resolution authorizing
the execution of any such supplemental indenture, and subject to and upon
receipt by the Trustee of the documents described in Section 8.3 hereof,
the Trustee shall join with the Company in the execution of any
supplemental indenture authorized or permitted by the terms of this
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Indenture and to make any further appropriate agreements and stipulations
which may be therein contained.
SECTION 8.2. Supplemental Indentures with Consent of Holders of
Securities.
--------------------------------------------------
With either (a) the written consent of the Holders of not less than
a majority in principal amount of the Outstanding Securities, by the Act
of said Holders delivered to the Company and the Trustee, or (b) by the
adoption of a resolution, at a meeting of Holders of the Outstanding
Securities at which a quorum is present, by the Holders of 66-2/3% in
principal amount of the Outstanding Securities represented at such
meeting, the Company, when authorized by a Board Resolution, and the
Trustee may enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of modifying in any
manner the rights of the Holders of Securities under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent or affirmative vote of the Holder of each Outstanding Security
affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal
amount or the rate of interest payable thereon or any premium
payable upon redemption or mandatory repurchase thereof, or change
the obligation of the Company to pay Additional Amounts, or change
the coin, currency or security in which any Security or the interest
or any premium thereon or any other amount in respect thereof is
payable, or impair the right to institute suit for the enforcement
of any payment in respect of any Security on or after the Stated
Maturity thereof (or, in the case of redemption or any repurchase,
on or after the Redemption Date or Repurchase Date, as the case may
be) or, except as permitted by Section 12.11, adversely affect the
right to convert any Security as provided in Article Twelve, or
modify the provisions of this Indenture with respect to the
subordination of the Securities in a manner adverse to the Holders
of Securities, or
(2) reduce the requirements of Section 9.4 for quorum or
voting, or reduce the percentage in principal amount of the
Outstanding Securities the consent of whose Holders is required for
any such supplemental indenture or the consent of whose Holders is
required for any waiver (of compliance with certain provisions of
this Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture, or
(3) modify the obligation of the Company to maintain an
office or agency in the Borough of Manhattan, The City of New York,
or
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(4) modify any of the provisions of this Section or Section
5.13 or 10.13, except to increase any percentage contained herein or
therein or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the
Holder of each Outstanding Security affected thereby; or
(5) modify the provisions of Article Fourteen in a manner
adverse to the Holders; or
(6) modify any of the provisions of Section 10.10, 10.11 or
10.12.
It shall not be necessary for any Act of Holders of Securities under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the
substance thereof.
SECTION 8.3. Execution of Supplemental Indentures.
------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be
entitled to receive, and (subject to Sections 6.1 and 6.3) shall be fully
protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by
this Indenture, and that such supplemental indenture has been duly
authorized, executed and delivered by the Company and constitutes a valid
and legally binding obligation of the Company enforceable against the
Company in accordance with its terms. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or
otherwise.
SECTION 8.4. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all
purposes; and every Holder of Securities theretofore or thereafter
authenticated and delivered hereunder appertaining thereto shall be bound
thereby.
SECTION 8.5. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities so modified as to conform, in the opinion of
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the Company and the Trustee, to any such supplemental indenture may be
prepared and executed by the Company and authenticated and delivered by
the Trustee in exchange for Outstanding Securities.
SECTION 8.6. Notice of Supplemental Indentures.
---------------------------------
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 8.2, the
Company shall give notice to all Holders of Securities of such fact,
setting forth in general terms the substance of such supplemental
indenture, in the manner provided in Section 1.6. Any failure of the
Company to give such notice, or any defect therein, shall not in any way
impair or affect the validity of any such supplemental indenture.
ARTICLE NINE
MEETINGS OF HOLDERS OF SECURITIES
SECTION 9.1. Purposes for Which Meetings May Be Called.
-----------------------------------------
A meeting of Holders of Securities may be called at any time and
from time to time pursuant to this Article to make, give or take any
request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be made, given or taken by
Holders of Securities.
SECTION 9.2. Call, Notice and Place of Meetings.
----------------------------------
(a) The Trustee may at any time call a meeting of Holders of
Securities for any purpose specified in Section 9.1, to be held at such
time and at such place in the Borough of Manhattan, The City of New York,
or in the City of London, England, as the Trustee shall determine. Notice
of every meeting of Holders of Securities, setting forth the time and the
place of such meeting and in general terms the action proposed to be taken
at such meeting, shall be given, in the manner provided in Section 1.6,
not less than 21 nor more than 180 days prior to the date fixed for the
meeting.
(b) In case at any time the Company, pursuant to a Board Resolution,
or the Holders of at least 25% in principal amount of the Outstanding
Securities shall have requested the Trustee to call a meeting of the
Holders of Securities for any purpose specified in Section 9.1, by written
request setting forth in reasonable detail the action proposed to be taken
at the meeting, and the Trustee shall not have made the first publication
of the notice of such meeting within 21 days after receipt of such request
or shall not thereafter proceed to cause the meeting to be held as
provided herein, then the Company or the Holders of Securities in the
amount specified, as the case may be, may determine the time and the place
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in the Borough of Manhattan, The City of New York, or in the City of
London, England,for such meeting and may call such meeting for such
purposes by giving notice thereof as provided in paragraph (a) of this
Section.
SECTION 9.3. Persons Entitled to Vote at Meetings.
------------------------------------
To be entitled to vote at any meeting of Holders of Securities, a
Person shall be (a) a Holder of one or more Outstanding Securities, or (b)
a Person appointed by an instrument in writing as proxy for a Holder or
Holders of one or more Outstanding Securities by such Holder or Holders.
The only Persons who shall be entitled to be present or to speak at any
meeting of Holders shall be the Persons entitled to vote at such meeting
and their counsel, any representatives of the Trustee and its counsel and
any representatives of the Company and its counsel.
SECTION 9.4. Quorum; Action.
--------------
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities shall constitute a quorum. In the absence of a
quorum within 30 minutes of the time appointed for any such meeting, the
meeting shall, if convened at the request of Holders of Securities, be
dissolved. In any other cases the meeting may be adjourned for a period
of not less than 10 days as determined by the chairman of the meeting
prior to the adjournment of such meeting. In the absence of a quorum at
any such adjourned meeting, such adjourned meeting may be further
adjourned for a period not less than 10 days as determined by the chairman
of the meeting prior to the adjournment of such adjourned meeting (subject
to repeated applications of this sentence). Notice of the reconvening of
any adjourned meeting shall be given as provided in Section 9.2(a), except
that such notice need be given only once not less than five days prior to
the date on which the meeting is scheduled to be reconvened. Notice of
the reconvening of an adjourned meeting shall state expressly the
percentage of the principal amount of the Outstanding Securities which
shall constitute a quorum.
Subject to the foregoing, at the reconvening of any meeting
adjourned for a lack of a quorum, the Persons entitled to vote 25% in
principal amount of the Outstanding Securities at the time shall
constitute a quorum for the taking of any action set forth in the notice
of the original meeting.
At a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid, any resolution and all matters (except as
limited by the proviso to Section 8.2) shall be effectively passed and
decided if passed or decided by the Persons entitled to vote not less than
66-2/3% in principal amount of Outstanding Securities represented and
entitled to vote at such meeting.
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Any resolution passed or decisions taken at any meeting of Holders
of Securities duly held in accordance with this Section shall be binding
on all the Holders of Securities, whether or not present or represented at
the meeting. The Trustee shall, in the name and at the expense of the
Company, notify all the Holders of Securities of any such resolutions or
decisions pursuant to Section 1.6.
SECTION 9.5. Determination of Voting Rights; Conduct and Adjournment of
Meetings.
----------------------------------------------------------
(a) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for
any meeting of Holders of Securities in regard to proof of the holding of
Securities and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to
vote, and such other matters concerning the conduct of the meeting as it
shall deem appropriate. Except as otherwise permitted or required by any
such regulations, the holding of Securities and the appointment of any
proxy shall be proved in the manners specified therefor in Section 1.4.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman (which may be the Trustees) of the meeting, unless the
meeting shall have been called by the Company or by Holders of Securities
as provided in Section 9.2(b), in which case the Company or the Holders of
Securities calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the Persons entitled
to vote a majority in principal amount of the Outstanding Securities
represented at the meeting.
(c) At any meeting, each Holder of a Security or proxy shall be
entitled to one vote for each U.S.$1,000 principal amount of Securities
held or represented by him; provided, however, that no vote shall be cast
or counted at any meeting in respect of any Security challenged as not
Outstanding and ruled by the chairman of the meeting to be not
Outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of a Security or proxy.
(d) Any meeting of Holders of Securities duly called pursuant to
Section 9.2 at which a quorum is present may be adjourned from time to
time by Persons entitled to vote a majority in principal amount of the
Outstanding Securities represented at the meeting, and the meeting may be
held as so adjourned without further notice.
SECTION 9.6. Counting Votes and Recording Action of Meetings.
-----------------------------------------------
The vote upon any resolution submitted to any meeting of Holders of
Securities shall be by written ballots on which shall be subscribed the
signatures of the Holders of Securities or of their representatives by
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proxy and the principal amounts at Stated Maturity and serial numbers of
the Outstanding Securities held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall
count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified
written reports in duplicate of all votes cast at the meeting. A record,
at least in duplicate, of the proceedings of each meeting of Holders of
Securities shall be prepared by the secretary of the meeting and there
shall be attached to said record the original reports of the inspectors of
votes on any vote by ballot taken thereat and affidavits by one or more
Persons having knowledge of the facts setting forth a copy of the notice
of the meeting and showing that said notice was given as provided in
Section 9.2 and, if applicable, Section 9.4. Each copy shall be signed
and verified by the affidavits of the permanent chairman and secretary of
the meeting and one such copy shall be delivered to the Company and
another to the Trustee to be preserved by the Trustee, the latter to have
attached thereto the ballots voted at the meeting. Any record so signed
and verified shall be conclusive evidence of the matters therein stated.
ARTICLE TEN
COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest.
------------------------------------------
The Company covenants and agrees that it will duly and punctually
pay the principal of and premium, if any, and interest on the Securities
in accordance with the terms of the Securities and this Indenture. The
Company will deposit or cause to be deposited with the Trustee, one
Business Day prior to the Stated Maturity of any Security or one Business
Day prior to the due date for any installment of interest, all payments so
due, which payments shall be in immediately available funds on the date of
such Stated Maturity or due date, as the case may be.
SECTION 10.2. Maintenance of Offices or Agencies.
----------------------------------
The Company hereby appoints (a) the Corporate Trust Office of the
Trustee as its agent in the Borough of Manhattan, The City of New York,
where Securities may be presented or surrendered for payment, where
Securities may be surrendered for registration of transfer or exchange,
where Securities may be surrendered for conversion, and where notices and
demands to or upon the Company in respect of the Securities and this
Indenture may be served, and (b) (i) the office of Midland Bank plc,
Mariner House, Pepys Street, London EC3N 4DA, England, as its agents
outside of the United States where, subject to any applicable laws or
regulations, Securities may be surrendered for payment, where Securities
may be surrendered for registration of transfer or exchange, and where
Securities may be surrendered for conversion.
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The Company may at any time and from time to time vary or terminate
the appointment of any such agent or appoint any additional agents for any
or all of such purposes; provided, however, that until all of the
Securities have been delivered to the Trustee for cancellation, or moneys
sufficient to pay the principal of, premium, if any, and interest on the
Securities have been made available for payment and either paid or
returned to the Company pursuant to the provisions of Section 10.3, the
Company will maintain (1) in the Borough of Manhattan, The City of New
York, an office or agency where Securities may be presented or surrendered
for payment and conversion, where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities and this Indenture may be
served, and (2) subject to any laws or regulations applicable thereto, in
London, an office or agency where Securities may be presented and
surrendered for payment and where Securities may be presented for
registration of transfer or exchange or conversion.
If at any time the Company shall fail to maintain any such required
office or agency, or shall fail to furnish the Trustee with the address
thereof, presentations and surrenders may be made and notices and demands
may be served on the Corporate Trust Office of the Trustee.
SECTION 10.3. Money for Security Payments To Be Held in Trust.
-----------------------------------------------
If the Company shall act as its own Paying Agent, it will, on or
before each due date of the principal of, premium, if any, or interest on
any of the Securities, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal, premium,
if any, or interest so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and the Company will
promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will,
one Business Day prior to each due date of the principal of, premium, if
any, or interest on any Securities, deposit with the Trustee a sum
sufficient to pay the principal, premium, if any, or interest so becoming
due, such sum to be held for the benefit of the Persons entitled to such
principal, premium, if any, or interest, and (unless such Paying Agent is
the Trustee) the Company will promptly notify the Trustee of any failure
so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee, subject to the provisions of this
Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal
of, premium, if any, or interest on Securities for the benefit of
the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
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(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities) in the making of any payment
of principal, premium, if any, or interest; and
(3) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose,
pay, or by Company Order direct any Paying Agent to pay, to the Trustee
all sums held in trust by the Company or such Paying Agent, such sums to
be held by the Trustee upon the same trusts as those upon which such sums
were held by the Company or such Paying Agent; and, upon such payment by
any Paying Agent to the Trustee, such Paying Agent shall be released from
all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of,
premium, if any, or interest on any Security and remaining unclaimed for
two years after such principal, premium, if any, or interest has become
due and payable shall be paid to the Company on Company Request, or (if
then held by the Company) shall be discharged from such trust; and the
Holder of such Security thereto shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability
of the Trustee or such Paying Agent with respect to such trust money, and
all liability of the Company as trustee thereof, shall thereupon cease.
SECTION 10.4. Additional Amounts.
------------------
The Company will pay to the Holder of any Security Additional
Amounts as provided in the form of Security set forth in Section 2.2.
Whenever in this Indenture there is mentioned, in any context, the payment
of the principal of, premium, if any, or interest on, or in respect of,
any Security, such mention shall be deemed to include mention of the
payment of Additional Amounts provided for in this Section to the extent
that, in such context, Additional Amounts are, were or would be payable
in respect thereof pursuant to the provisions of this Section and express
mention of the payment of Additional Amounts in any provisions hereof
shall not be construed as excluding Additional Amounts in those provisions
hereof where such express mention is not made.
At least 10 days prior to the first Interest Payment Date or an
earlier Redemption Date or Repurchase Date (and at least 10 days prior to
each date of payment of principal, premium, if any, or interest thereafter
if there has been any change with respect to the matters set forth in the
below-mentioned Officers' Certificate), the Company will furnish the
Trustee and the Company's Paying Agents in London, England, and in the
Borough of Manhattan, The City of New York, if other than the Trustee,
with an Officers' Certificate instructing the Trustee and such Paying
Agents whether such payment of principal of, premium, if any, or interest
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on the Securities shall be made to Holders of Securities without
withholding for or on account of any tax, assessment or other governmental
charge described in the second paragraph of the face of the forms of
Securities set forth in Section 2.2. If any such withholding shall be
required, then such Officers' Certificate shall specify by country the
amount, if any, required to be withheld on such payments to such Holders
of Securities and the Company will pay to the Trustee or the Paying Agent
in London the Additional Amounts required by this Section to be paid in
the event of any such withholding. The Company covenants to indemnify the
Trustee and any Paying Agent for, and to hold them harmless against, any
loss, liability or expense arising out of or in connection with actions
taken or omitted by any of them in reliance on any Officers' Certificate
furnished pursuant to this Section, except to the extent such loss,
liability or expense is attributable to the Trustee's negligence or bad
faith.
SECTION 10.5. Existence.
---------
Subject to Article Seven, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises; provided,
however, that the Company shall not be required to preserve any such right
or franchise if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business
of the Company and that the loss thereof is not disadvantageous in any
material respect to the Holders.
SECTION 10.6. Maintenance of Properties.
-------------------------
The Company will cause all properties used or useful in the conduct
of its business or the business of any Subsidiary to be maintained and
kept in good condition, repair and working order and supplied with all
necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in
the judgment of the Company may be necessary so that the business carried
on in connection therewith may be properly and advantageously conducted at
all times; provided, however, that nothing in this Section shall prevent
the Company from discontinuing the operation or maintenance of any of such
properties if such discontinuance is, in the judgment of the Company,
desirable in the conduct of its business or the business of any Subsidiary
and not disadvantageous in any material respect to the Holders.
SECTION 10.7. Payment of Taxes and Other Claims.
---------------------------------
The Company will pay or discharge, or cause to be paid or
discharged, before the same may become delinquent, (1) all taxes,
assessments and governmental charges levied or imposed upon the Company or
any Subsidiary or upon the income, profits or property of the Company or
any Subsidiary, (2) all claims for labor, materials and supplies which, if
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unpaid, might by law become a lien or charge upon the property of the
Company or any Subsidiary, and (3) all stamps and other duties, if any,
which may be imposed by Canada, the United States or the United Kingdom or
any political subdivision thereof or therein in connection with the
issuance, transfer, exchange or conversion of any Securities or with
respect to this Indenture; provided, however, that, in the case of clauses
(1) and (2), the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim
whose amount, applicability or validity is being contested in good faith
by appropriate proceedings.
SECTION 10.8. Listing.
-------
The Company will use its reasonable best efforts to cause the Common
Shares required to be issued and delivered upon conversion of Securities,
prior to such issuance or delivery, to be quoted on the American Stock
Exchange or, if the Common Shares are not then listed on the American
Stock Exchange, cause to be listed the Common Shares on a United States
national securities exchange on which Common Shares are listed or to be
quoted on the Nasdaq National Market at the time of such delivery.
SECTION 10.9. Statement by Officers as to Default.
-----------------------------------
The Company shall deliver to the Trustee within 120 days after the
end of each fiscal year of the Company an Officers' Certificate stating
that in the course of performance by the signers of their duties as such
officers of the Company they would normally obtain knowledge of whether
any default exists in the performance and observance of any of the terms,
provisions and conditions of this Indenture and whether the Company has
kept, observed, performed and fulfilled its obligations under this
Indenture. Such Officers' Certificate shall further state, as to each
such officer signing such Officers' Certificate, to the best of the
knowledge of such officer, as of the date of such Officers' Certificate,
(a) whether any such default exists, (b) whether the Company during the
preceding fiscal year kept, observed, performed and fulfilled each and
every covenant and obligation of the Company under this Indenture and (c)
whether there was any default in the performance and observance of any of
the terms, provisions, or conditions of this Indenture during such
preceding fiscal year. If the officers signing the Officers' Certificate
know of such a default, whether then existing or occurring during such
preceding fiscal year, the Officers' Certificate shall describe such
default and its status with particularity. The Company shall also
promptly notify the Trustee if the Company's fiscal year is changed so
that the end thereof is on any date other than the then current fiscal
year end date.
The Company will deliver to the Trustee, forthwith upon becoming
aware of any default in the performance or observance of any covenant,
agreement or condition contained in this Indenture, or any Event of
Default, an Officers' Certificate specifying with particularity such
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default or Event of Default and further stating what action the Company
has taken, is taking or proposes to take with respect thereto.
Any notice required to be given under this Section 10.9 shall be
delivered to the Trustee at its Corporate Trust Office.
SECTION 10.10. Delivery of Certain Information.
-------------------------------
At any time when the Company is not subject to Section 13 or 15(d)
of the Exchange Act or exempt from such requirements pursuant to Rule
12g3-2(b) under the Exchange Act, upon the request of a Holder of a
Restricted Security or the holder of Common Shares issued upon conversion
thereof, the Company will promptly furnish or cause to be furnished Rule
144A Information (as defined below) to such Holder of Restricted
Securities or such holder of Common Shares issued upon conversion of
Restricted Securities, or to a prospective purchaser of any such security
designated by any such Holder or holder, as the case may be, to the extent
required to permit compliance by such Holder or holder with Rule 144A
under the Securities Act (or any successor provision thereto) in
connection with the resale of any such security; provided, however, that
the Company shall not be required to furnish such information in
connection with any request made on or after the date which is three years
from the later of (i) the date such a security (or any such predecessor
security) was last acquired from the Company or (ii) the date such a
security (or any such predecessor security) was last acquired from an
"affiliate" of the Company within the meaning of Rule 144 under the
Securities Act (or any successor provision thereto). "Rule 144A
Information" shall be such information as is specified pursuant to Rule
144A(d)(4) under the Securities Act (or any successor provision thereto).
SECTION 10.11. Reporting Issuer.
----------------
The Company will continue to be a "reporting issuer" for purposes of
Rule 903 under the Securities Act until the Restricted Period has expired.
SECTION 10.12. Registration Rights.
-------------------
The holders of the Securities and the Common Shares issuable upon
conversion thereof are entitled to the benefits of a Registration Rights
Agreement, dated as of May 1, 1996, between the Company and Goldman, Sachs
& Co. and UBS Securities LLC (the "Registration Rights Agreement").
Pursuant to the Registration Rights Agreement, the Company has agreed for
the benefit of the holders from time to time of the Securities and the
Common Shares issuable upon conversion thereof that it will, at its
expense, (i) within 90 days after the date of issuance of the Securities,
file a shelf registration statement (the "Shelf Registration Statement")
with the Commission with respect to resales of the Securities and the
Common Shares issuable upon conversion thereof, (ii) within 180 days after
the date of issuance of the Securities, use its reasonable best efforts to
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cause such Shelf Registration Statement to be declared effective by the
Commission and (iii) use its reasonable best efforts to maintain such
Shelf Registration Statement continuously effective under the Securities
Act until the third annual anniversary of the date of the effectiveness of
the Shelf Registration Statement or such other date as is provided in the
Registration Rights Agreement.
If (i) on or prior to 90 days following the date of original
issuance of the Securities, a Shelf Registration Statement has not been
filed with the Commission, or (ii) on or prior to the 180th day following
the date of issuance of the Securities, such Shelf Registration Statement
is not declared effective (each, a "Registration Default"), additional
interest ("Special Interest") will accrue on the Securities from and
including the day following such Registration Default to but excluding the
day on which such Registration Default has been cured. Special Interest
will be paid semi-annually in arrears, with the first semi-annually
payment due on the first Interest Payment Date in respect of the
Securities following the date on which such Special Interest begins to
accrue, and will accrue at a rate per annum equal to an additional
one-quarter of one percent (0.25%) of the principal amount of the
Securities to and including the 90th day following such Registration
Default and at a rate per annum equal to one-half of one percent (0.50%)
thereof from and after the 91st day following such Registration Default.
In the event that the Shelf Registration Statement ceases to be effective
prior to the third annual anniversary of the initial effective date of the
Shelf Registration Statement or such other date as is provided in the
Registration Rights Agreement for a period in excess of 60 days, whether
or not consecutive, during any 12-month period, then the interest rate
borne by the Securities shall increase by an additional one-half of one
percent (0.50%) per annum on the 61st day of the applicable 12-month
period such Shelf Registration Statement ceases to be effective to but
excluding the day on which the Shelf Registration Statement again becomes
effective.
Whenever in this Indenture there is mentioned, in any context, the
payment of the principal of, premium, if any, or interest on, or in
respect of, any Security, such mention shall be deemed to include mention
of the payment of Special Interest provided for in this Section to the
extent that, in such context, Special Interest is, was or would be payable
in respect thereof pursuant to the provisions of this Section and express
mention of the payment of Special Interest (if applicable) in any
provisions hereof shall not be construed as excluding Special Interest in
those provisions hereof where such express mention is not made.
In the event of any amendment to or modification of, the
Registration Rights Agreement, the Company shall promptly provide the
Trustee with a copy of such amendment or modification.
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SECTION 10.13. Waiver of Certain Covenants.
---------------------------
The Company may omit in any particular instance to comply with any
covenant or conditions set forth in Sections 10.5 to 10.7, inclusive
(other than a covenant or condition which under Article Eight cannot be
modified or amended without the consent of the Holder of each Outstanding
Security affected), if before the time for such compliance the Holders
shall, through the written consent of, or the adoption of a resolution at
a meeting of Holders of the Outstanding Securities at which a quorum is
present by, not less than a majority in principal amount of the
Outstanding Securities, either waive such compliance in such instance or
generally waive compliance with such covenant or condition, but no such
waiver shall extend to or affect such covenant or condition except to the
extent so expressly waived, and, until such waiver shall become effective,
the obligations of the Company and the duties of the Trustee or any Paying
or Conversion Agent in respect of any such covenant or condition shall
remain in full force and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 11.1. Right of Redemption.
-------------------
The Securities may be redeemed in accordance with the provisions of
the forms of Securities set forth in Section 2.2.
SECTION 11.2. Applicability of Article.
------------------------
Redemption of Securities at the election of the Company or
otherwise, as permitted or required by any provision of the Securities or
this Indenture, shall be made in accordance with such provision and this
Article Eleven.
SECTION 11.3. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the
election of the Company of any of the Securities, the Company shall, at
least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee
in writing of such Redemption Date. If the Securities are to be redeemed
pursuant to an election of the Company which is subject to a condition
specified in the forms of Securities set forth in Section 2.2, the Company
shall furnish the Trustee with an Officers' Certificate stating that the
Company is entitled to effect such redemption and setting forth a
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statement of facts showing that the conditions precedent to the right of
the Company so to redeem have occurred.
SECTION 11.4. Selection by Trustee of Securities to Be Redeemed.
-------------------------------------------------
If less than all the Securities are to be redeemed (other than
pursuant to the third paragraph on the reverse of the form of Security in
Section 2.2), the particular Securities to be redeemed shall be selected
by the Trustee within two Business Days after it receives the notice
described in 11.3, from the Outstanding Securities not previously called
for redemption, on a pro rata basis or by such method as the Trustee may
deem appropriate. Partial redemption must be in an amount not less than
U.S.$1,000,000 principal amount of Securities.
If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of
the Security so selected, the converted portion of such Security shall be
deemed (so far as may be) to be the portion selected for redemption.
Securities which have been converted during a selection of Securities to
be redeemed may be treated by the Trustee as Outstanding for the purpose
of such selection.
The Trustee shall promptly notify the Company and each Security
Registrar in writing of the securities selected for redemption and, in the
case of any Securities selected for partial redemption, the principal
amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall
relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has
been or is to be redeemed.
SECTION 11.5. Notice of Redemption.
--------------------
Notice of redemption shall be given in the manner provided in
Section 1.6 to the Holders of Securities to be redeemed not less than 30
nor more than 60 days prior to the Redemption Date, and such notice shall
be irrevocable.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Securities are to be
redeemed, the aggregate principal amount of Securities to be
redeemed and the aggregate principal amount of Securities which will
be outstanding after such partial redemption,
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(4) that on the Redemption Date the Redemption Price, and
accrued interest, if any, will become due and payable upon each such
Security to be redeemed, and that interest thereon shall cease to
accrue on and after said date,
(5) the Conversion Price, the date on which the right to
convert the Securities to be redeemed will terminate and the places
where such Securities may be surrendered for conversion, and
(6) the place or places where such Securities are to be
surrendered for payment of the Redemption Price and accrued
interest, if any.
In case of a partial redemption, the first notice given shall
specify the last date on which exchanges or transfers of Securities may be
made pursuant to Section 3.5 and shall specify the serial and CUSIP
numbers (if any), ISIN number (if any) and the portions thereof called for
redemption.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's written
request, by the Trustee in the name of and at the expense of the Company.
Notice of redemption of Securities to be redeemed at the election of the
Company received by the Trustee shall be given by the Trustee to each
Paying Agent in the name of and at the expense of the Company.
SECTION 11.6. Deposit of Redemption Price.
---------------------------
Not less than one Business Day prior to any Redemption Date, the
Company shall deposit with the Trustee or with the Paying Agent in London
if so directed by the Trustee (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 10.3) an
amount of money (which shall be in immediately available funds on such
Redemption Date) sufficient to pay the Redemption Price of, and (except if
the Redemption Date shall be an Interest Payment Date) accrued interest
on, all the Securities which are to be redeemed on that date other than
any Securities called for redemption on that date which have been
converted prior to the date of such deposit.
If any Security called for redemption is converted, any money
deposited with the Trustee or with a Paying Agent or so segregated and
held in trust for the redemption of such Security shall (subject to any
right of the Holder of such Security, if a Security, or any Predecessor
Security to receive interest as provided in the last paragraph of Section
3.7) be paid to the Company on Company Request or, if then held by the
Company, shall be discharged from such trust.
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SECTION 11.7. Securities Payable on Redemption Date.
-------------------------------------
Notice of redemption having been given as aforesaid, the Securities
so to be redeemed shall, on the Redemption Date, become due and payable at
the Redemption Price therein specified and from and after such date
(unless the Company shall default in the payment of the Redemption Price,
including accrued interest) such Securities shall cease to bear interest.
Upon surrender of any Security for redemption in accordance with said
notice, maturing after the Redemption Date, such Security shall be paid by
the Company at the Redemption Price together with accrued and unpaid
interest to the Redemption Date; provided, however, that installments of
interest on Securities whose Stated Maturity is on or, prior to the
Redemption Date shall be payable to the Holders of such Securities, or one
or more Predecessor Securities, registered as such on the relevant Record
Date according to their terms and the provisions of Section 3.7.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal amount of, premium, if
any, and, to the extent permitted by applicable law, accrued interest on
such Security shall, until paid, bear interest from the Redemption Date at
a rate of 6.50% per annum and such Security shall remain convertible into
Common Shares until the principal of such Security (or portion thereof, as
the case may be) shall have been paid or duly provided for.
SECTION 11.8. Securities Redeemed in Part.
---------------------------
Any Security which is to be redeemed only in part shall be
surrendered at an office or agency of the Company designated for that
purpose pursuant to Section 10.2 (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 make available for
delivery to the Holder of such Security without service charge, a new
Security or Securities, of any authorized denomination as requested by
such Holder, in aggregate principal amount equal to and in exchange for
the unredeemed portion of the principal of the Security so surrendered.
ARTICLE TWELVE
CONVERSION OF SECURITIES
SECTION 12.1. Conversion Privilege and Conversion Price.
-----------------------------------------
Subject to and upon compliance with the provisions of this Article,
at the option of the Holder thereof, any Security may be converted into
fully paid and nonassessable shares (calculated as to each conversion to
the nearest 1/100th of a share) of Common Shares of the Company at the
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Conversion Price, determined as hereinafter provided, in effect at the
time of conversion. Such conversion right shall commence on the latest of
the commencement of the Sale of the Securities, the original issue date of
the Securities and the issue date with respect to any additional
Securities issued to cover overallotments and expire at the close of
business on May 1, 2003, subject, in the case of the conversion of any
Global Security, to any applicable book-entry procedures of the Depositary
therefor. In case a Security or portion thereof is called for redemption
or is delivered for repurchase, such conversion right in respect of the
Security or portion so called shall expire at the close of business on the
Redemption Date or the Repurchase Date (as defined in Article Fourteen),
as the case may be, unless the Company defaults in making the payment due
upon redemption or repurchase, as the case may be.
The price at which shares of Common Shares shall be delivered upon
conversion (herein called the "Conversion Price") shall be initially
U.S.$24.858 per Common Share. The Conversion Price shall be adjusted in
certain instances as provided in this Article Twelve.
SECTION 12.2. Exercise of Conversion Privilege.
--------------------------------
In order to exercise the conversion privilege, the Holder of any
Security to be converted shall surrender such Security, duly endorsed or
assigned to the Company or in blank (in the case of any Definitive
Security), at any office or agency of the Company maintained for that
purpose pursuant to Section 10.2, accompanied by a duly signed conversion
notice substantially in the form set forth in Annex A-1 or A-2 stating
that the Holder elects to convert such Security or, if less than the
entire principal amount thereof is to be converted, the portion thereof to
be converted. Each Security surrendered for conversion (in whole or in
part) during the period from the close of business on any Regular Record
Date to the opening of business on the next succeeding Interest Payment
Date (except Securities called for redemption on a Redemption Date or to
be repurchased on a Repurchase Date during, in each case, such period)
shall be accompanied by payment in New York Clearing House funds or other
funds acceptable to the Company of an amount equal to the interest payable
on such Interest Payment Date on the principal amount of such Security (or
part thereof, as the case may be) being surrendered for conversion. The
interest so payable on such Interest Payment Date in respect of such
Security (or portion thereof, as the case may be) surrendered for
conversion shall be paid to the Holder of such Security as of such Regular
Record Date. Interest payable in respect of any Security surrendered for
conversion on or after an Interest Payment Date shall be paid to the
Holder of such Security as of the next preceding Regular Record Date,
notwithstanding the exercise of the right of conversion. Except as
provided in this paragraph and subject to the last paragraph of Section
3.7, no cash payment or adjustment shall be made upon any conversion on
account of, if the date of conversion is not an Interest Payment Date, any
interest accrued from the Interest Payment Date next preceding the
conversion date, in respect of any Security (or part thereof, as the case
may be) surrendered for conversion, or on account of any dividends on the
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Common Shares issued upon conversion. The Company's delivery to the
Holder of the number of Common Shares (and cash in lieu of fractions
thereof, as provided in this Indenture) into which a Security is
convertible will be deemed to satisfy the Company's obligation to pay the
principal amount of the Security.
Securities shall be deemed to have been converted immediately prior
to the close of business on the day of surrender of such Securities for
conversion in accordance with the foregoing provisions, and at such time
the rights of the Holders of such Securities as Holders shall cease, and
the Person or Persons entitled to receive the Common Shares issuable upon
conversion shall be treated for all purposes as the record holder or
holders of such Common Shares at such time. As promptly as practicable on
or after the conversion date, the Company shall issue and deliver to the
Trustee, for delivery to the Holders, a certificate or certificates for
the number of full Common Shares issuable upon conversion, together with
payment in lieu of any fraction of a share, as provided in Section 12.3.
All Common Shares delivered upon such conversion of Restricted
Securities shall bear restrictive legends substantially in the form of the
legends required to be set forth on the Restricted Securities pursuant to
Section 2.4 and shall be subject to the restrictions on transfer provided
in such legends. Neither the Trustee nor any agent maintained for the
purpose of such conversion shall have any responsibility for the inclusion
or content of any such restrictive legends on such Common Shares;
provided, however, that the Trustee or any agent maintained for the
purpose of such conversion shall have provided, to the Company or to the
Company's transfer agent for such Common Shares, prior to or concurrently
with a request to the Company to deliver such Common Shares, written
notice that the Securities delivered for conversion are Restricted
Securities.
In the case of any Security which is converted in part only, upon
such conversion the Company shall execute and the Trustee shall
authenticate and deliver to the Holder thereof, at the expense of the
Company, a new Security or Securities of authorized denominations in an
aggregate principal amount equal to the unconverted portion of the
principal amount of such Security. A Security may be converted in part,
but only if the principal amount of such Security to be converted is any
integral multiple of U.S.$1,000.
SECTION 12.3. Fractions of Shares.
-------------------
No fractional Common Shares shall be issued upon conversion of any
Securities. If more than one Security shall be surrendered for conversion
at one time by the same Holder, the number of full shares which shall be
issuable upon conversion thereof shall be computed on the basis of the
aggregate principal amount of the Securities (or specified portions
thereof) so surrendered. Instead of any fractional share which would
otherwise be issuable upon conversion of any Securities (or specified
portions thereof), the Company shall calculate and pay a cash adjustment
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in respect of such fraction (calculated to the nearest 1/100th of a share)
in an amount equal to the same fraction of the current market price per
share of Common Shares (calculated in accordance with Section 12.4(8)
below) at the close of business on the day of conversion.
SECTION 12.4. Adjustment of Conversion Price.
------------------------------
The Conversion Price shall be subject to adjustments from time to
time as follows:
(1) In case the Company shall pay or make a dividend or other
distribution on any class of capital stock of the Company payable in
Common Stock, the Conversion Price in effect at the opening of business on
the day following the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution shall be reduced
by multiplying such Conversion Price by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination and the denominator
shall be the sum of such number of shares and the total number of shares
constituting such dividend or other distribution, such reduction to become
effective immediately after the opening of business on the day following
the date fixed for such determination. For the purposes of this paragraph
(1), the number of shares of Common Stock at any time outstanding shall
not include shares held in the treasury of the Company but shall include
shares issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company will not pay any
dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.
(2) In case the Company shall issue rights, options or warrants to
all holders of any class of Common Stock entitling them to subscribe for
or purchase shares of any class of Common Stock at a price per share less
than the current market price per share (determined as provided in
paragraph (8) of this Section) of such class of Common Stock on the date
fixed for the determination of shareholders entitled to receive such
rights, options or warrants, the Conversion Price in effect at the opening
of business on the day following the date fixed for such determination
shall be reduced by multiplying such Conversion Price by a fraction of
which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock which the
aggregate of the offering price of the total number of shares of Common
Stock so offered for subscription or purchase would purchase at such
current market price and the denominator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for
such determination plus the number of shares of Common Stock so offered
for subscription or purchase, such reduction to become effective
immediately after the opening of business on the day following the date
fixed for such determination. For the purposes of this paragraph (2), the
number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company but shall include shares
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issuable in respect of scrip certificates issued in lieu of fractions of
shares of Common Stock. The Company will not issue any rights, options or
warrants in respect of shares of Common Stock held in the treasury of the
Company.
(3) In case outstanding shares of any class of Common Stock shall
be subdivided into a greater number of shares of such class of Common
Stock, and, conversely, in case outstanding shares of any class of Common
Stock shall each be combined into a smaller number of shares of such class
of Common Stock, the Conversion Price in effect at the opening of business
on the day following the day upon which such combination becomes effective
shall be adjusted by the Company so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior
to the effectiveness of the Conversion Price adjustment contemplated by
this subparagraph (3) by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding immediately prior to such
subdivision or combination and the denominator shall be the number of
shares of Common Stock outstanding immediately after giving effect to such
subdivision or combination, such adjustment to become effective
immediately after the opening of business on the day following the day
upon which such subdivision or combination becomes effective.
(4) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock evidences of its indebtedness, shares
of any class of capital stock, cash or other assets or property (including
securities, but excluding (i) any rights, options or warrants referred to
in paragraph (2) of this Section, (ii) any dividend or distribution paid
exclusively in cash, (iii) any dividend or distribution referred to in
paragraph (1) of this Section and (iv) any amalgamation, consolidation or
merger to which Section 12.11 applies), the Conversion Price shall be
adjusted so that the same shall equal the price determined by multiplying
the Conversion Price in effect immediately prior to the close of business
on the date fixed for the determination of stockholders entitled to
receive such distribution by a fraction of which (i) the numerator shall
be the current market price per share (determined as provided in paragraph
(8) of this Section) of the Common Shares on the third Trading Day prior
to the date fixed for such determination (the "Reference Date") less the
then fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution
filed with the Trustee) on the Reference Date of the portion of the
assets, shares or evidences of indebtedness so distributed applicable to
one Common Share and the denominator shall be the current market price per
Common Share on the Reference Date, such adjustment to become effective
immediately prior to the opening of business on the day following the
Reference Date. If the Board of Directors determines the fair market
value of any distribution for purposes of this subparagraph (4) by
reference to the actual or when issued trading market for any securities
comprising such distribution, it must in doing so consider the prices in
such market over the same period used in computing 12.5% of the average of
the current market prices per share of Common Share pursuant to this
subparagraph (4). For purposes of this subparagraph (4), any dividend or
distribution that includes Common Shares or rights or warrants to
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subscribe for or purchase shares of Common Shares shall be deemed instead
to be (1) a dividend or distribution of the evidences of indebtedness,
shares of capital stock, cash or assets other than such shares of Common
Shares or such rights or warrants (making any Conversion Price reduction
required by this subparagraph (4)) immediately followed by (2) a dividend
or distribution of Common Shares or such rights or warrants (making any
further Conversion Price reduction required by subparagraph (1) or (2)),
except (x) the Reference Date of such dividend or distribution as defined
in this subparagraph (4) shall be substituted in place of the phrases (a)
"the date fixed for the determination of stockholders entitled to receive
such dividend or other distribution" and (b) "the date fixed for such
determination" within the meaning of subparagraphs (1) and (2),
respectively, of this Section 12.4 and (y) any shares of Common Shares
included in such dividend or distribution shall not be deemed "outstanding
at the close of business on the date fixed for such determination" within
the meaning of subparagraph (1) of this Section 12.4.
(5) In case the Company shall, by dividend or otherwise, distribute
to all holders of any class of its Common Stock cash (excluding any cash
that is distributed upon a merger or consolidation to which Section 12.11
applies or as part of a distribution referred to in paragraph (4) of this
Section) in an aggregate amount that, combined together with (I) the
aggregate amount of any other cash distributions to all holders of any
class of its Common Stock made exclusively in cash within the 12 months
preceding the date of payment of such distribution and in respect of which
no adjustment pursuant to this paragraph (5) has been made and (II) the
aggregate of any cash plus the fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and described
in a Board Resolution) of consideration payable in respect of any tender
offer by the Company or any of its subsidiaries for all or any portion of
any class of the Common Stock concluded within the 12 months preceding the
date of payment of such distribution and in respect of which no adjustment
pursuant to paragraph (6) of this Section has been made, exceeds 12.5% of
the product 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 shares of all classes of Common Stock
outstanding on such date, then, and in each such case, immediately after
the close of business on such date for determination, the Conversion Price
shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the close
of business on the date fixed for determination of the stockholders
entitled to receive such distribution by a fraction (i) the numerator of
which shall be equal to the current market price per share (determined as
provided in paragraph (8) of this Section) of the Common Shares on the
date fixed for such determination less an amount equal to the quotient of
(x) the excess of such combined amount over such 12.5% and (y) the number
of shares of all classes of Common Stock outstanding on such date for
determination and (ii) the denominator of which shall be equal to the
current market price per share (determined as provided in paragraph (8) of
this Section) of the Common Shares on such date for determination.
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(6) In case a tender or exchange offer (other than an odd-lot
offer) made by the Company or any Subsidiary for all or any portion of any
class of Common Stock shall expire and such tender or exchange offer shall
involve the payment by the Company or such Subsidiary of consideration per
share of such class of Common Stock 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) at the last time
(the "Expiration Time") tenders or exchanges may be made pursuant to such
tender or exchange offer (as it shall have been amended) that exceeds 110%
of the current market price per share (determined as provided in paragraph
(8) of this Section) of such class of Common Stock as of the Trading Day
next succeeding the Expiration Time, the Conversion Price shall be reduced
so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the effectiveness of the
Conversion Price reduction contemplated by this subparagraph (6) by a
fraction of which the numerator shall be the sum of the products of the
number of shares of each class of Common Stock outstanding (including any
tendered or exchanged shares) at the Expiration Time multiplied by the
respective current market price per share (determined as provided in
paragraph (8) of this Section) of each such class of Common Stock on the
Trading Day next succeeding the Expiration Time and the denominator shall
be the sum of (x) the fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the acceptance
(up to any maximum specified in the terms of the tender or exchange offer)
of all shares validly tendered or exchanged and not withdrawn as of the
Expiration Time (the shares deemed so accepted, up to any such maximum,
being referred to as the " Purchased Shares") and (y) the sum of the
products of the number of shares of each class of Common Stock outstanding
(less any Purchased Shares) at the Expiration Time and the respective
current market price per share (determined as provided in paragraph (8) of
this Section) of each such class of Common Stock on the Trading Day next
succeeding the Expiration Time, such reduction to become effective
immediately prior to the opening of business on the day following the
Expiration Time.
(7) The reclassification of any class of Common Stock into
securities including other than Common Stock (other than any
reclassification upon a amalgamation, consolidation or merger to which
Section 12.11 applies) shall be deemed to involve (a) a distribution of
such securities other than Common Stock to all holders of Common Stock
(and the effective date of such reclassification shall be deemed to be
"the date fixed for the determination of stockholders entitled to receive
such distribution" and "the date fixed for such determination" within the
meaning of paragraph (4) of this Section), and (b) a subdivision or
combination, as the case may be, of the number of shares of such class of
Common Stock outstanding immediately prior to such reclassification into
the number of shares of Common Stock outstanding immediately thereafter
(and the effective date of such reclassification shall be deemed to be
"the day upon which such subdivision becomes effective" or "the day upon
which such combination becomes effective", as the case may be, and "the
day upon which such subdivision or combination becomes effective" within
the meaning of paragraph (3) of this Section).
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(8) For the purpose of any computation under paragraphs (2), (4),
(5) or (6) of this Section 12.4, the current market price per share of a
class of Common Stock on any date shall be calculated by the Company and
be deemed to be the average of the daily Closing Prices Per Share of such
class for the five consecutive Trading Days selected by the Company
commencing not more than 10 Trading Days before, and ending not later
than, the earlier of the day in question and the day before the "ex" date
with respect to the issuance or distribution requiring such computation.
For purposes of this paragraph, the term "'ex' date", when used with
respect to any issuance or distribution, means the first date on which
such class of Common Stock trades regular way in the applicable securities
market or on the applicable securities exchange without the right to
receive such issuance or distribution
(9) No adjustment in the Conversion Price shall be required unless
such adjustment (plus any adjustments not previously made by reason of
this paragraph (9)) would require an increase or decrease of at least one
percent in such price; provided, however, that any adjustments which by
reason of this paragraph (9) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this Article shall be made to the nearest cent or to
the nearest one-hundredth of a share, as the case may be.
(10) The Company may make such reductions in the Conversion Price,
for the remaining term of the Securities or any shorter term, in addition
to those required by paragraphs (1), (2), (3), (4), (5) and (6) of this
Section 12.4, as it considers to be advisable in order to avoid or
diminish any income tax to any holders of Common Shares resulting from any
dividend or distribution of stock or issuance of rights or warrants to
purchase or subscribe for stock or from any event treated as such for
income tax purposes.
SECTION 12.5. Notice of Adjustments of Conversion Price.
-----------------------------------------
Whenever the Conversion Price is adjusted as herein provided:
(1) the Company shall compute the adjusted Conversion Price
in accordance with Section 12.4 and shall prepare a certificate
signed by the Treasurer of the Company setting forth the adjusted
Conversion Price and showing in reasonable detail the facts upon
which such adjustment is based, and such certificate shall promptly
be filed with the Trustee and with each Conversion Agent; and
(2) a notice stating that the Conversion Price has been
adjusted and setting forth the adjusted Conversion Price shall
forthwith be required, and as soon as practicable after it is
required, such notice shall be provided by the Company to all
Holders in accordance with Section 1.6.
Neither the Trustee nor any Conversion Agent shall be under any duty or
responsibility with respect to any such certificate or the information and
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calculations contained therein, except to exhibit the same to any Holder
of Securities desiring inspection thereof at its office during normal
business hours.
SECTION 12.6. Notice of Certain Corporate Action.
----------------------------------
In case:
(a) the Company shall declare a dividend (or any other
distribution) on any class of its Common Stock payable (i) otherwise
than exclusively in cash or (ii) exclusively in cash in an amount
that would require any adjustment pursuant to Section 12.4; or
(b) the Company shall authorize the granting to the holders
of any class of its Common Stock of rights, options or warrants to
subscribe for or purchase any shares of capital stock of any class
or of any other rights; or
(c) of any reclassification of any class of Common Stock of
the Company (other than a subdivision or combination of its
outstanding shares of Common Stock), or of any amalgamation,
consolidation or merger to which the Company is a party and for
which approval of any stockholders of the Company is required, or of
the sale or transfer of all or substantially all of the assets of
the Company; or
(d) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company; or
(e) the Company or any Subsidiary shall commence a tender
offer for all or a portion of any class of the Company's outstanding
shares of Common Stock (or shall amend any such tender offer);
then the Company shall cause to be filed at each office or agency
maintained for the purpose of conversion of Securities pursuant to Section
10.2, and shall cause to be provided to all Holders in accordance with
Section 1.6, at least 20 days (or 10 days in any case specified in clause
(a) or (b) above) prior to the applicable record, expiration or effective
date hereinafter specified, a notice stating (x) the date on which a
record is to be taken for the purpose of such dividend, distribution,
rights, options or warrants, or, if a record is not to be taken, the date
as of which the holders of Common Stock of record to be entitled to such
dividend, distribution, rights, options or warrants are to be determined,
(y) the date on which the right to make tenders under such tender offer
expires or (z) the date on which such reclassification, consolidation,
merger, share exchange, conveyance, transfer, sale, lease, dissolution,
liquidation or winding up is expected to become effective, and the date as
of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities, cash or
other property deliverable upon such reclassification, consolidation,
merger, share exchange, conveyance, transfer, sale, lease, dissolution,
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liquidation or winding up. If at the time the Trustee shall not be the
conversion agent, a copy of such notice and any notice referred to in the
following paragraph shall also forthwith be filed by the Company with the
Trustee.
SECTION 12.7. Company to Reserve Common Shares.
--------------------------------
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Shares, for
the purpose of effecting the conversion of Securities, the full number of
Common Shares then issuable upon the conversion of all Outstanding
Securities.
SECTION 12.8. Taxes on Conversions.
--------------------
The Company will pay any and all transfer taxes and duties that may
be payable in respect of the issue or delivery of Common Shares on
conversion of Securities pursuant hereto. The Company shall not, however,
be required to pay any tax or duty which may be payable in respect of any
transfer involved in the issue and delivery of Common Shares in a name
other than that of the Holder of the Security or Securities to be
converted, and no such issue or delivery shall be made unless and until
the Person requesting such issue has paid to the Company the amount of any
such tax or duty, or has established to the satisfaction of the Company
that such tax or duty has been paid. Such taxes payable shall not include
any income, capital taxes payable by a Holder by reason of such conversion
in any jurisdiction, with which such Holder has a connection other than by
reason of acquiring or converting the Securities.
SECTION 12.9. Covenant as to Common Shares.
----------------------------
The Company agrees that all Common Shares which may be delivered
upon conversion of Securities, upon such delivery, will have been duly
authorized and validly issued and will be fully paid and nonassessable
and, except as provided in Section 12.8, the Company will pay all taxes,
liens and charges with respect to the issue thereof. Such taxes payable
shall not include any income, capital taxes payable by a Holder by reason
of such conversion in any jurisdiction, with which such Holder has a
connection other than by reason of acquiring or converting the Securities.
SECTION 12.10. Cancellation of Converted Securities.
------------------------------------
All Securities delivered for conversion shall be delivered to the
Trustee or the Paying Agent in London or its agent to be canceled by or at
the direction of the Trustee, which shall dispose of the same as provided
in Section 3.9.
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SECTION 12.11. Provision in Case of Amalgamation, Consolidation, Merger
or Sale of Assets.
--------------------------------------------------------
(1) Subject to the provisions of subsection 12.11(2), in case of
any amalgamation or consolidation of the Company with, or merger of the
Company into, any other Person, any merger of another Person into the
Company (other than a merger which does not result in any
reclassification, conversion, exchange or cancellation of outstanding
Common Shares of the Company) or any sale or transfer of all or
substantially all of the assets of the Company, the Person formed by such
consolidation or resulting from such merger or which acquires such assets,
as the case may be, shall execute and deliver to the Trustee a
supplemental indenture providing that the Holder of each Security then
Outstanding shall have the right thereafter, during the period such
Security shall be convertible as specified in Section 12.1, to convert
such Security only into the kind and amount of securities, cash and other
property receivable upon such amalgamation, consolidation, merger, sale or
transfer by a holder of the number of Common Shares of the Company into
which such Security might have been converted immediately prior to such
amalgamation, consolidation, merger, sale or transfer, and assuming such
holder of Common Shares of the Company (i) is not a Person with which the
Company consolidated or into which the Company merged or which merged into
the Company or to which such sale or transfer was made, as the case may be
("Constituent Person"), or an Affiliate of a Constituent Person and (ii)
failed to exercise his rights of election, if any, as to the kind or
amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer (provided that if the kind or
amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer is not the same for each Common
Share of the Company held immediately prior to such consolidation, merger,
sale or transfer by others than a Constituent Person or an Affiliate
thereof and in respect of which such rights of election shall not have
been exercised ("Non-electing Share"), then for the purpose of this
Section 12.11 the kind and amount of securities, cash and other property
receivable upon such amalgamation, consolidation, merger, sale or transfer
by the holders of each Non-electing Share shall be deemed to be the kind
and amount so receivable per share by a plurality of the Non-electing
Shares), and further assuming, if such consolidation, amalgamation,
arrangement, merger, conveyance, transfer, sale or lease occurs prior to
the later of 60 days following the latest of (i) May 7, 1996 and (ii) the
latest date of original issue of any Security, that the Security was
convertible at the time of such occurrence at the Conversion Price
specified in Section 12.1 as adjusted from the issue date of such Security
to such time as provided in this Article Twelve subject to any
requirements necessary to ensure that the Securities will be and will
remain exempt from Canadian withholding tax including, without limitation,
the requirement in effect on the date hereof that a Holder of Securities
shall not be entitled to receive shares, other securities or property,
other than securities that are "prescribed securities" as defined in
Regulation 6208 to the Income Tax Act (Canada), in the event that any such
amalgamation, consolidation, merger or transfer occurs in or prior to five
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years after the date of original issue of the Securities. Such
supplemental indenture shall provide for adjustments which, for events
subsequent to the effective date of such supplemental indenture, shall be
as nearly equivalent as may be practicable to the adjustments provided for
in this Article. The above provisions of this Section 12.11 shall
similarly apply to successive consolidations, mergers, sales or transfers.
Notice of the execution of such a supplemental indenture shall be given by
the Company to the Holder of each Security as provided in Section 1.6
promptly upon such execution.
(2) Notwithstanding any provisions of this Article Twelve to the
contrary, if any amalgamation, consolidation, merger, sale or transfer
should occur on or prior to five years from the date of issue of the last
Security to be issued hereunder, a holder of a Security shall not be
entitled in any circumstances to convert such Security into any
securities, cash or other property (the "Substituted Properties") unless
such Substituted Properties are "prescribed securities" with respect to
such Security for purposes of clause 212(1)(b)(vii)(E) of the Income Tax
Act (Canada).
Neither the Trustee, any Paying Agent nor any Conversion Agent shall
be under any responsibility to determine correctness of any provisions
contained in any such supplemental indenture relating either to the kind
or amount of shares of stock or other securities or property or cash
receivable by Holders of Securities upon the conversion of their
Securities after any such consolidation, merger, conveyance, transfer,
sale or lease or to any such adjustment, but may accept as conclusive
evidence of the correctness of any such provisions, and shall be protected
in relying upon, an Opinion of Counsel with respect thereto, which the
Company shall cause to be furnished to the Trustee upon request.
SECTION 12.12 Responsibility of Trustee for Conversion Provisions
---------------------------------------------------
The Trustee, subject to the provisions of Section 6.1, and any
Conversion Agent shall not at any time be under any duty or responsibility
to any Holder of Securities to determine whether any facts exist which may
require any adjustment of the Conversion Price, or with respect to the
nature or extent of any such adjustment when made, or with respect to the
method employed herein or in any supplemental indenture provided to be
employed, in making the same, or whether a supplemental indenture need be
entered into. Neither the Trustee, subject to the provisions of Section
6.1, nor any Conversion Agent shall be accountable with respect to the
validity or value (or the kind or amount) of any Common Stock, or of any
other securities or property or cash, which may at any time be issued or
delivered upon the conversion of any Security; and it or they do not make
any representation with respect thereto. Neither the Trustee, subject to
the provisions of Section 6.1, and any Conversion Agent shall be
responsible for any failure of the Company to make or calculate any cash
payment or to issue, transfer or deliver any shares of Common Stock or
share certificates or other securities or property or cash upon the
surrender of any Security for the purpose of conversion; and the Trustee,
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subject to the provisions of Section 6.1, and any Conversion Agent shall
not be responsible for any failure of the Company to comply with any of
the covenants of the Company contained in this Article.
ARTICLE THIRTEEN
SUBORDINATION OF SECURITIES
SECTION 13.1. Securities Subordinated to Senior Indebtedness.
----------------------------------------------
All Securities issued under this Indenture shall be issued subject
to the following provisions and each Holder of any Security whether upon
original issue or upon transfer or assignment thereof accepts and agrees
to be bound by such provisions.
All Securities issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and subject in right of
payment to the prior payment in full of all Senior Indebtedness. "Senior
Indebtedness" means (i) the principal, premium, if any, and interest in
respect of (A) indebtedness of the Company for money borrowed and (B)
indebtedness evidenced by securities, debentures, bonds or other similar
instruments issued by the Company, (ii) all capital lease obligations of
the Company, (iii) all obligations of the Company issued or assumed as the
deferred purchase price of property, all conditional sale obligations of
the Company and all obligations of the Company under any title retention
agreement (but excluding trade accounts payable arising in the ordinary
course of business), (iv) all obligations of the Company for the
reimbursement on any letter of credit, bankers acceptance, security
purchase facility or similar credit transaction, (v) all obligations of
the type referred to in clauses (i) through (iv) above of other persons
for the payment of which the Company is responsible or liable as obligor,
guarantor or otherwise, and (vi) all obligations of the type referred to
in clauses (i) through (v) above of other persons secured by any lien on
any property or assets of the Company (whether or not such obligation is
assumed by the Company), except for any such indebtedness or other
obligation that is by its terms subordinated to or pari passu with the
Securities.
SECTION 13.2. No Payments in Certain Circumstances; Payment Over of
Proceeds Upon Dissolution, Etc.
-----------------------------------------------------
No payment on account of principal of, premium, if any, or interest
on, or redemption or repurchase of, the Securities shall be made if, at
the time of such payment or immediately after giving effect thereto: (i)
there shall exist a default in the payment of principal of, premium, if
any, sinking funds or interest (including a default under any purchase or
redemption obligations) with respect to any Senior Indebtedness, or (ii)
there shall have occurred an event of default (other than a default in the
payment of principal, premium, if any, sinking funds or interest) with
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respect to any Senior Indebtedness, as defined therein or in the
instrument under which the same is outstanding, permitting the holders
thereof to accelerate the maturity thereof and written notice of such
occurrence shall have been given to the Company and to the Trustee under
this Indenture by the holder or holders of such Senior Indebtedness and
such event of default shall not have been cured or waived or shall not
have ceased to exist after written notice to the Company and the Trustee
by any holder of Senior Indebtedness. Notwithstanding the foregoing, the
Company may make, and the Trustee may receive and shall apply, any payment
in respect of the Securities ( for principal, premium, if any, or interest
or repurchase) if such payment was made prior to the occurrence of any of
the contingencies specified in clauses (i) and (ii) above.
Upon (i) any acceleration of the principal amount due on the
Securities or (ii) any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding up or total or partial
liquidation or reorganization of the Company, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other
proceedings, all principal of, premium, if any, sinking fund and interest
due or to become due upon all Senior Indebtedness shall first be paid in
full, or payment thereof provided for in money or money's worth in
accordance with its terms, before any payment is made on account of the
principal of, premium, if any, or interest on, or repurchase of, the
indebtedness evidenced by the Securities, and upon any such dissolution or
winding up or liquidation or reorganization any payment or distribution of
assets of the Company of any kind or character, whether in cash, property
or securities, to which the Holders of the Securities or the Trustee under
this Indenture would be entitled, except for the provisions hereof, shall
be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or
distribution, or by the Holders of the Securities or by the Trustee under
this Indenture if received by them or it, as the case may be, directly to
the holders of Senior Indebtedness (pro rata to each such holder on the
basis of the respective amounts of Senior Indebtedness held by such
holder) or their representatives, to the extent necessary to pay all
Senior Indebtedness in full, in money or money's worth, after giving
effect to any concurrent payment or distribution to or for the holders of
Senior Indebtedness, before any payment or distribution is made to the
Holders of the Securities or to the Trustee under this Indenture.
In the event that, contrary to the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, shall be received by the Trustee or the
Holders of the Securities before all Senior Indebtedness is paid in full
or provision made for such payment, in accordance with its terms, such
payment or distribution shall be paid over or delivered to, the holders of
such Senior Indebtedness or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any
instruments evidencing any of such Senior Indebtedness have been issued,
as their respective interests may appear, for application to the payment
of all Senior Indebtedness remaining unpaid to the extent necessary to pay
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all such Senior Indebtedness in full in accordance with its terms, after
giving effect to any concurrent payment or distribution to or for the
holders of such Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness, the
Holders of the Securities (together with the holders of any other
indebtedness of the Company which is subordinated in right of payment to
the payment in full of all Senior Indebtedness, which is not subordinated
in right of payment to the Securities and which by its terms grants such
right of subrogation to the holders thereof) shall be subrogated to the
rights of the holders of Senior Indebtedness to receive payments or
distributions of assets of the Company made on the Senior Indebtedness
until the principal of, premium, if any, and interest on, or repurchase
of, the Securities shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of Senior
Indebtedness of any cash, property or securities to which the Holders of
the Securities or the Trustee would be entitled except for the provisions
of this Article, and no payment over pursuant to the provisions of this
Article to the holders of Senior Indebtedness by the Holders of the
Securities or the Trustee, shall, as between the Company, its creditors
other than the holders of Senior Indebtedness, and the Holders of
Securities, be deemed to be a payment by the Company to the holders of or
on account of Senior Indebtedness, it being understood that the provisions
of this Article are and are intended solely for the purpose of defining
the relative rights of the Holders of the Securities, on the one hand, and
the holders of Senior Indebtedness, on the other hand.
SECTION 13.3. Notice to Trustee of Specified Events; Reliance on
Certificate of Liquidating Agent.
--------------------------------------------------
The Company shall give prompt written notice to the Trustee of any
insolvency or bankruptcy proceeding in respect of the Company, of any
proceedings for voluntary liquidation, dissolution or other winding up of
the Company (whether or not involving insolvency or bankruptcy), of the
declaration of any Security as due and payable before its expressed
maturity, and of any event which pursuant to Section 13.2 would prevent
payment by the Company on account of the principal, premium, if any, or
interest on, or repurchase of, the Securities. The Trustee, subject to
the provisions of Section 6.1, shall be entitled to assume that no such
event has occurred unless the Company, or a holder of Senior Indebtedness,
or any trustee therefor, has given such notice.
Upon any distribution of assets of the Company or payment by or on
behalf of the Company referred to in this Article, the Trustee and the
Holders of the Securities shall be entitled to rely upon any order or
decree of a court of competent jurisdiction in which any proceedings of
the nature referred to in Section 13.2 are pending, and the Trustee,
subject to the provisions of Section 6.1, and the Holders of the
Securities shall be entitled to rely upon a certificate of the liquidating
trustee or agent or other Person making any distribution to the Trustee or
to the Holders of the Securities for the purpose of ascertaining the
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Persons entitled to participate in such distribution, the holders of the
Senior Indebtedness and other indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article. In the
event that the Trustee determines, in good faith, that further evidence is
required with respect to the right of any Person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to
this Article, the Trustee may request such Person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amount of Senior
Indebtedness held by such Person, as to the extent to which such Person is
entitled to participate in such payment or distribution, and as to other
facts pertinent to the rights of such Person under this Article, and if
such evidence is not furnished, the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to
receive such payment.
SECTION 13.4. Trustee to Effectuate Subordination.
-----------------------------------
The Holder of each Security by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary
or appropriate to acknowledge or effectuate the subordination as provided
in this Article and appoints the Trustee as attorney-in-fact for any and
all such purposes.
SECTION 13.5. Trustee Not Charged with Knowledge of Prohibition.
-------------------------------------------------
Notwithstanding the provisions of this Article or any other
provision of this Indenture, but subject to the provisions of Section 6.1
as between the Holders of Securities and the Trustee, neither the Trustee
nor any Paying Agent shall be charged with knowledge of any facts which
would prohibit the making of any payment of moneys to or by the Trustee or
any such Paying Agent, unless and until the Trustee or such Paying Agent
shall have received written notice thereof at its Corporate Trust Office
from the Company or any holder of Senior Indebtedness or the trustee or
representative of any holder of such Senior Indebtedness on his behalf;
and, prior to the receipt of any such written notice, the Trustee and any
such Paying Agent shall be entitled to assume that no such facts exist.
If the Trustee or Paying Agent, as the case may be, shall not have
received, at least three Business Days prior to the date upon which by the
terms hereof any such moneys may become payable for any purpose
(including, without limitation, the payment of the principal of, premium,
if any, or the interest on any Security) with respect to such moneys, the
notice provided for in this Section, then, anything herein contained to
the contrary notwithstanding, the Trustee and such Paying Agent, as the
case may be, shall have full power and authority to receive such moneys
and to apply the same to the purpose for which they were received and
shall not be affected by any notice to the contrary which may be received
by it within three Business Days prior to such date.
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Subject to the provisions of Section 6.1, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee
therefor) to establish that such notice has been given by a holder of
Senior Indebtedness (or a trustee therefor). In the event that the
Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this Article, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness held
by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article, and if such evidence is not
furnished, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such
payment.
SECTION 13.6. Reliance on Judicial Order or Certificate of Liquidating
Agent.
--------------------------------------------------------
Upon any payment or distribution of assets of the Company referred
to in this Article, the Trustee, subject to the provisions of Section 6.1,
and the Holders of the Securities shall be entitled to rely upon any order
or decree entered by any court of competent jurisdiction in which such
insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent, or other Person
making such payment or distribution, delivered to the Trustee or to the
Holders of Securities, for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of
the Senior Indebtedness and other indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article.
SECTION 13.7. Trustee Not Fiduciary for Holders of Senior Indebtedness.
--------------------------------------------------------
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders
if it shall in good faith mistakenly pay over or distribute to Holders of
Securities or to the Company or to any other Person cash, property or
securities to which any holders of Senior Indebtedness shall be entitled
by virtue of this Article or otherwise.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants or
obligations as are specifically set forth in this Article and no implied
covenants or obligations with respect to holders of Senior Indebtedness
shall be read into this Indenture against the Trustee.
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SECTION 13.8. Rights of Trustee as Holder of Senior Indebtedness;
Preservation Of Trustee's Rights.
--------------------------------------------------
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness
which may at any time be held by it, to the same extent as any other
holder of Senior Indebtedness, and nothing in this Indenture shall deprive
the Trustee of any of its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 6.7.
SECTION 13.9. Article Applicable to Paying Agents.
-----------------------------------
In case at any time any Paying Agent other than the Trustee shall
have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying
Agent within its meaning as fully for all intents and purposes as if such
Paying Agent were named in this Article in addition to or in place of the
Trustee; provided, however, that Section 13.5, 13.6 and 13.7 shall not
apply to the Company or any Affiliate of the Company if it or such
Affiliate acts as Paying Agent.
SECTION 13.10. Certain Conversions Deemed Payment.
----------------------------------
For the purposes of this Article only, (1) the issuance and delivery
of junior securities upon conversion of Securities in accordance with
Article Twelve or upon the repurchase of Securities in accordance with
Article Fourteen shall not be deemed to constitute a payment or
distribution on account of the principal of or premium or interest on
Securities or on account of the purchase or other acquisition of
Securities, and (2) the payment, issuance or delivery of cash, property or
securities (other than junior securities) upon conversion of a Security
shall be deemed to constitute payment on account of the principal of such
Security. For the purposes of this Section, the term "junior securities"
means Common Stock and any other cash, property or securities into which
the Securities are convertible pursuant to Article Twelve. Nothing
contained in this Article or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as among the Company, its
creditors other than holders of Senior Indebtedness and the Holders of the
Securities, the right, which is absolute and unconditional, of the Holder
of any Security to convert such Security in accordance with Article Twelve
or to exchange such Security for Common Stock in accordance with Article
Fourteen if the Company elects to satisfy the obligations under Article
Fourteen by delivery of Common Stock.
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ARTICLE FOURTEEN
REPURCHASE OF SECURITIES AT THE OPTION OF THE
HOLDER UPON A CHANGE IN CONTROL
SECTION 14.1. Right to Require Repurchase.
---------------------------
In the event that a Change in Control (as hereinafter defined) shall
occur, then each Holder shall have the right, at the Holder's option, to
require the Company to repurchase, and upon the exercise of such right the
Company shall repurchase, all of such Holder's Securities, or any portion
of the principal amount thereof that is equal to U.S.$1,000 or any
integral multiple of U.S.$1,000 in excess thereof (provided that no single
Security may be repurchased in part unless the portion of the principal
amount of such Security to be Outstanding after such repurchase is equal
to U.S.$1,000 or integral multiples of U.S.$1,000 in excess thereof), on
the date (the "Repurchase Date") that is 45 days after the date of the
Company Notice (as defined in Section 14.2) at a purchase price equal to
100% of the principal amount of the Securities to be repurchased (the
"Repurchase Price") plus interest accrued to the Repurchase Date;
provided, however, that installments of interest on Securities whose
Stated Maturity is on or prior to the Repurchase Date shall be payable to
the Holders of such Securities, or one or more Predecessor Securities,
registered as such on the relevant Record Date according to their terms
and the provisions of Section 3.7. Such right to require the repurchase
of the Securities shall not continue after a discharge of the Company from
its obligations with respect to the Securities in accordance with Article
Four, unless a Change in Control shall have occurred prior to such
discharge. At the option of the Company, the Repurchase Price may be paid
in cash or, except as otherwise provided in Section 14.2(j), by delivery
of shares of Common Shares having a fair market value equal to the
Repurchase Price; provided that payment may not be made in Common Shares
unless at the time of payment such stock is listed on a national
securities exchange or quoted on Nasdaq. For purposes of this Section,
the fair market value of Common Shares shall be determined by the Company
and shall be equal to 95% of the average of the Closing Prices Per Share
for the five consecutive Trading Days ending on and including the third
Trading Day immediately preceding the Repurchase Date. Whenever in this
Indenture (including Sections 2.2, 3.1, 5.1(2) and 5.8) there is a
reference, in any context, to the principal of any Security as of any
time, such reference shall be deemed to include reference to the
Repurchase Price payable in respect of such Security to the extent that
such Repurchase Price is, was or would be so payable at such time, and
express mention of the Repurchase Price in any provision of this Indenture
shall not be construed as excluding the Repurchase Price in those
provisions of this Indenture when such express mention is not made.
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SECTION 14.2. Notices; Method of Exercising Repurchase Right, Etc.
----------------------------------------------------
(a) Unless the Company shall have theretofore called for redemption
all of the Outstanding Securities, on or before the 30th day after the
occurrence of a Change in Control, the Company or, at the request and
expense of the Company, the Trustee, shall give to all Holders of
Securities, in the manner provided in Section 1.6, notice (the "Company
Notice") of the occurrence of the Change in Control and of the repurchase
right set forth herein arising as a result thereof. The Company shall also
deliver a copy of such notice of a repurchase right to the Trustee.
Each notice of a repurchase right shall state:
(1) the Repurchase Date,
(2) the date by which the repurchase right must be exercised,
(3) the Repurchase Price,
(4) a description of the procedure which a Holder must follow
to exercise a repurchase right, and the place or places where such
Securities, are to be surrendered for payment of the Repurchase
Price and accrued interest, if any,
(5) that on the Repurchase Date the Repurchase Price, and
accrued interest, if any, will become due and payable upon each such
Security designated by the Holder to be repurchased, and that
interest thereon shall cease to accrue on and after said date,
(6) the Conversion Price then in effect, the date on which
the right to convert the principal amount of the Securities to be
repurchased will terminate and the place or places where such
Securities, may be surrendered for conversion, and
(7) the place or places that the certificate required by
Section 2.2 shall be delivered, and the form of such certificate
In addition, at least two Business Days preceding the Repurchase
Date, the Company shall give to all Holders of the Securities, in the
manner provided in Section 1.6, notice specifying whether the Repurchase
Price will be payable in cash or Common Shares and shall deliver a copy of
such notice to the Trustee.
No failure of the Company to give the foregoing notices or defect
therein shall limit any Holder's right to exercise a repurchase right or
affect the validity of the proceedings for the repurchase of Securities.
If any of the foregoing provisions or other provisions of this
Article are inconsistent with applicable law, such law shall govern.
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(b) To exercise a repurchase right, a Holder shall deliver to the
Trustee or any Paying Agent on or before the 30th day after the date of
the Company Notice (i) written notice of the Holder's exercise of such
right, which notice shall set forth the name of the Holder, the principal
amount of the Securities to be repurchased (and, if any Security is to
repurchased in part, the serial number thereof, the portion of the
principal amount thereof to be repurchased and the name of the Person in
which the portion thereof to remain Outstanding after such repurchase is
to be registered) and a statement that an election to exercise the
repurchase right is being made thereby, and, in the event that the
Repurchase Price shall be paid in Common Shares, the name or names (with
addresses) in which the certificate or certificates for shares of Common
Shares shall be issued, and (ii) the Securities with respect to which the
repurchase right is being exercised, if any, appertaining thereto maturing
after the Repurchase Date. Such written notice shall be irrevocable,
except that the right of the Holder to convert the Securities with respect
to which the repurchase right is being exercised shall continue until the
close of business on the second Trading Day preceding the Repurchase Date.
(c) In the event a repurchase right shall be exercised in
accordance with the terms hereof, the Company shall pay or cause to be
paid to the Trustee or the Paying Agent in London the Repurchase Price in
cash or Common Shares, as provided above, for payment to the Holder on the
Repurchase Date or, if Common Shares are to be paid, as promptly after the
Repurchase Date as practicable, together with accrued and unpaid interest
to the Repurchase Date payable with respect to the Securities as to which
the purchase right has been exercised; provided, however, that
installments of interest that mature on or prior to the Repurchase Date
shall be payable in cash to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Regular Record Date.
(d) If any Security (or portion thereof) surrendered for repurchase
shall not be so paid on the Repurchase Date, the principal amount of such
Security (or portion thereof, as the case may be) shall, until paid, bear
interest to the extent permitted by applicable law from the Repurchase
Date at the rate of 6.50% per annum, and each Security shall remain
convertible into Common Shares until the principal of such Security (or
portion thereof, as the case may be) shall have been paid or duly provided
for.
(e) Any Security which is to be repurchased 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 make available for
delivery to the Holder of such Security without service charge, a new
Security or Securities, containing identical terms and conditions, each in
an authorized denomination in aggregate principal amount equal to and in
exchange for the unrepurchased portion of the principal of the Security so
surrendered.
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<PAGE>
(f) Any issuance of Common Shares in respect of the Repurchase
Price shall be deemed to have been effected immediately prior to the close
of business on the Repurchase Date and the Person or Persons in whose name
or names any certificate or certificates for Common Shares shall be
issuable upon such repurchase shall be deemed to have become on the
Repurchase Date the holder or holders of record of the shares represented
thereby; provided, however, that any surrender for repurchase on a date
when the stock transfer books of the Company shall be closed shall
constitute the Person or Persons in whose name or names the certificate or
certificates for such shares are to be issued as the recordholder or
holders thereof for all purposes at the opening of business on the next
succeeding day on which such stock transfer books are open. No payment or
adjustment shall be made for dividends or distributions on any Common
Shares issued upon repurchase of any Security declared prior to the
Repurchase Date.
(g) No fractions of shares shall be issued upon repurchase of
Securities. If more than one Security shall be repurchased from the same
Holder and the Repurchase Price shall be payable in Common Shares, the
number of full shares which shall be issuable upon such repurchase shall
be computed on the basis of the aggregate principal amount of the
Securities so repurchased. Instead of any fractional share of Common
Shares which would otherwise be issuable on the repurchase of any Security
or Securities, the Company will deliver to the applicable Holder its check
for the current market value of such fractional share. The current market
value of a fraction of a share is determined by multiplying the current
market price of a full share by the fraction, and rounding the result to
the nearest cent. For purposes of this Section, the current market price
of a Common Share is the Closing Price Per Share of the Common Share on
the last Trading Day prior to the Repurchase Date.
(h) Any issuance and delivery of certificates for Common Share on
repurchase of Securities shall be made without charge to the Holder of
Securities being repurchased for such certificates or for any transfer tax
or duty in respect of the issuance or delivery of such certificates or the
securities represented thereby; provided, however, that the Company shall
not be required to pay any transfer tax or duty which may be payable in
respect of (i) income of the Holder or (ii) any transfer involved in the
issuance or delivery of certificates for shares of Common Shares in a name
other than that of the Holder of the Securities being repurchased, and no
such issuance or delivery shall be made unless and until the Person
requesting such issuance or delivery has paid to the Company the amount of
any such tax or duty or has established, to the satisfaction of the
Company, that such tax or duty has been paid.
(i) If any Common Shares to be issued upon repurchase of Securities
hereunder require registration with or approval of any governmental
authority under any federal or state law before such shares may be validly
issued or delivered upon repurchase, the Company covenants that it will in
good faith and as expeditiously as possible endeavor to secure such
registration or approval, as the case may be; provided, however, that
nothing in this Section shall be deemed to affect in any way the
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<PAGE>
obligations of the Company to repurchase Securities as provided in this
Article and if such registration is not completed or does not become
effective or such approval is not obtained prior to the Repurchase Date,
the Repurchase Price shall be paid in cash.
(j) The Company covenants that all Common Shares which may be
issued upon repurchase of Securities will upon issue be duly and validly
issued and fully paid and non-assessable.
SECTION 14.3. Certain Definitions.
-------------------
For purposes of this Article Fourteen,
(a) the term "beneficial owner" shall be determined in
accordance with Rule 13d-3, as in effect on the date of the original
execution of this Indenture, promulgated by the Commission pursuant
to the Exchange Act;
(b) a "Change in Control" shall be deemed to have occurred at
the time, after the original issuance of the Securities, of: an
event or series of events by which any Person or other entity or
Group of Persons shall, as a result of a tender or exchange offer,
open market purchases, privately negotiated purchases, merger,
consolidation or otherwise (collectively, "Control Acquisitions")
have become the beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act) of 50% or more of the total voting power of
all shares of capital stock the Company entitled to vote generally
in the election of directors; (ii) any consolidation or otherwise of
the Company with, or merger of the Company into, any other Person,
any merger of another Person into the Company, or any sales or
transfer of all or substantially all of the assets of the Company to
another Person; or (iii) the direct or indirect, sale, lease,
exchange or other transfer of all or substantially all of the assets
of the Company to any Person or Group of Persons;
provided, however, that a Change in Control shall not be deemed to have
occurred if either (x) the Closing Price Per Share on any five Trading
Days within the period of 10 consecutive Trading Days ending immediately
after the later of the date of the Change in Control or the date of the
public announcement of the Change in Control (in the case of a Change in
Control under Clause (i) above) or the period of 10 consecutive Trading
Days ending immediately prior to the date of the Change in Control (in the
case of a Change in Control under Clause (ii) and (iii) above) shall equal
or exceed 105% of the Conversion Price in effect on such trading day or
(y) all the consideration (excluding cash payments for fractional shares)
to be paid for the Common Shares in a transaction or transactions
constituting the Change in Control as described in Clause (ii) above
consists of shares of common stock traded on a United States national
securities exchange or quoted on Nasdaq National Market System and as a
result of such transaction or transactions the Securities become
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convertible solely into such common stock, and such common stock is a
"prescribed security" with respect to the Securities for purposes of
clause 212(1)(b)(vii)(E) of the Income Tax Act (Canada);
(c) In this Article Fourteen, the term "Person" or "Group of
Persons" shall include any syndicate or group which would be deemed to be
a "person" under Section 13(d)(3) of the Exchange Act, as in effect on the
date of the original execution of this Indenture.
ARTICLE FIFTEEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 15.1. Company to Furnish Trustee Names and Addresses of Holders.
---------------------------------------------------------
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not more than 15 days after the Regular
Record Date, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders of Securities as
of such Regular Record Date, and
(b) at such other times as the Trustee may reasonably request
in writing, within 30 days after the receipt by the Company of any
such request, a list of similar form and content as of a date not
more than 15 days prior to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee
in its capacity as Security Registrar.
SECTION 15.2. Preservation of Information.
---------------------------
The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 15.1 and the
names and addresses of Holders received by the Trustee in its capacity as
Security Registrar. The Trustee may destroy any list furnished to it
pursuant to Section 15.1 upon receipt of a new list so furnished.
______________________________
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto
affixed and attested, all as of the day and year first above written.
NORTH AMERICAN VACCINE, INC.
(Seal) By /s/ Sharon Mates
--------------------------
Name: Sharon Mates, Ph.D.
Title: President
Attest:
/s/ Daniel J. Abdun-Nabi
---------------------------
Name: Daniel J. Abdun-Nabi
Title: Secretary
MARINE MIDLAND BANK,
AS TRUSTEE
(Seal) By /s/ Richard G. Pittius
--------------------------
Name: Richard Pittius
Title: Vice President
Attest:
/s/ Frank J. Godino
--------------------------
Name: Frank J. Godino
Title: Corporate Trust Officer
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<PAGE>
WASHINGTON, )
DISTRICT OF ): SS.:
COLUMBIA )
On the 7th day of May, 1996, before me personally came Sharon Mates,
to me known, who, being by me duly sworn, did depose and say that she is
Sharon Mates of NORTH AMERICAN VACCINE, INC., one of the corporations
described in and which executed the foregoing instrument; that she knows
the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation; and that she signed her name thereto by
like authority.
/s/ Judith E. Snyder
_____________________
Notary Public
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<PAGE>
STATE OF NEW YORK
COUNTY OF NEW YORK
On the 7th day of May, 1996, before me personally came Richard G.
Pittius, to me known, who, being by me duly sworn, did depose and say that
he is Richard G. Pittius of Marine Midland Bank, one of the corporations
described in and which executed the foregoing instrument; that he knows
the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed pursuant to the bylaws of said
corporation; and that he signed his name thereto by like authority.
/s/ Marcia A. Markowski
------------------------
Notary Public
- 118 -
<PAGE>
ANNEX A-1
FORM OF CONVERSION NOTICE - - UNRESTRICTED SECURITIES
________________________
as Conversion Agent
[Address]
Re: North American Vaccine, Inc.
6.50% Convertible Subordinated Notes
Due May 1, 2003 (the "Securities")
Reference is hereby made to the Indenture, dated as of May 7, 1996
(the "Indenture"), between North American Vaccine, Inc. (the "Company"),
as Issuer, and Marine Midland Bank, as Trustee. Capitalized terms used
but not defined herein shall have the meanings given to them in the
Indenture.
This letter relates to the Unrestricted Securities specified below,
which are registered in the name of the undersigned (the "Holder"). The
Holder hereby irrevocably exercises its right to convert such Securities,
or the portion thereof, if any, specified below, into Common Shares and,
as specified below, directs that such Shares, together with any check in
payment for a fractional share and any Security representing any
unconverted principal amount, be issued and delivered in book- entry form
through the facilities of the Depositary, for credit to the account(s) of
the Person(s)] [in certificated form to the Registered owner(s)] indicated
below.
The Holder acknowledges and agrees that no Common Shares will be
delivered upon conversion of the specified Securities during the
Restricted Period unless the beneficial owner(s) is not a U.S. Person (as
defined in Regulation S). In addition, no Common Shares will be delivered
on conversion until any amount payable by the Holder on account of
interest is paid, any certificates evidencing specified Securities not
held in book-entry form are duly endorsed or assigned to the Company or in
blank and surrendered and any taxes or other charges or documents required
in connection with a transfer on conversion, and any other required items,
are delivered to the Conversion Agent.
The Holder acknowledges and agrees that, notwithstanding this
request for conversion, the Company and the Trustee may require that the
Common Shares delivered on conversion of the specified Securities be
delivered in certificated form subject to a restrictive legend.
Conversion of the specified Securities is subject to the
requirements established by the Company and the Trustee pursuant to the
Indenture, as well as to the procedures of the Depositary if such
Securities are held or to be held in book-entry form, all as in effect
from time to time. The specified Securities will be deemed to have been
A-1-119
<PAGE>
converted immediately prior to the close of business on the day of
surrender of the specified Securities for conversion and on which all
other required items have been delivered to the Conversion Agent as
provided above and, upon such conversion, shall cease to accrue interest
or be outstanding. Prior to such conversion, the Holder will have no
rights in the Conversion Securities.
Please provide the information requested below, as applicable.
1. PLEASE SPECIFY THE SECURITIES HELD AND THE PORTION THEREOF TO BE
CONVERTED ;
Principal amount held: U.S. $_____________
CUSIP number(s): __________________
Depositary (DTC) account where held: ______________
Principal amount being converted (if less than all):
U.S. $_____________
All Securities to be converted will be converted into Common Shares and
(together with any unconverted Securities) will be delivered in book-entry
form to the DTC account specified in Item 2 below.
2. Please specify the type, number and form of securities to be
delivered on conversion and the name(s) of the account holder(s) or
registered owner(s), by checking the appropriate boxes and providing the
information requested:
n Book Entry
Number of Common Shares: __________________
Depositary Account: __________________
n Certificates
Number of Common Shares: __________________
Registered Owner: __________________
n Unconverted Book-Entry
Principal Amount: U.S. $ __________________ *
Depositary Account: __________________
n Unconverted Securities
(Only in Instances
Defined by the Indenture)
Principal Amount: U.S. $ __________________ *
Registered Owner: __________________
___________________
* Aggregate principal amount of each certificate must equal U.S.
$1,000 or any integral multiple thereof.
A-1-120
<PAGE>
Please sign and date this notice in the space provided below.
DATE: ____________________
Name of Holder
______________________
Signature(s) of Holder Title(s):
(If the Holder is a corporation,
partnership or fiduciary, the title of
the Person signing on behalf of the
Holder must be stated.)
Signature(s) must be guaranteed by a commercial bank or trust company or a
member firm of a U.S. national securities exchange or a member of the
National Association of Securities Dealers, Inc. if Common Shares or
unconverted Securities are to be delivered other than to and in the name
of the registered owner.
_____________________
Signature Guarantee
A-1-121
<PAGE>
ANNEX A-2
FORM OF CONVERSION NOTICE -- RESTRICTED SECURITIES
________________________
as Conversion Agent
[Address]
Re: North American Vaccine, Inc.
6.50% Convertible Subordinated Notes
Due May 1, 2003 (the "Securities")
Reference is hereby made to the Indenture, dated as of May 7,
1996 (the "Indenture"), between North American Vaccine, Inc. (the
"Company"), as Issuer, and Marine Midland Bank, as Trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in
the Indenture.
This letter relates to the Restricted Securities specified below,
which are registered in the name of the undersigned (the "Holder"). The
Holder hereby irrevocably exercises its right to convert such Securities,
or the portion thereof, if any, specified below, into Common Shares and,
except to the extent specified or required as described below, directs
that Restricted Common Shares, together with any check in payment for a
fractional share and any Security representing any unconverted principal
amount, be issued and delivered [in book-entry form through the facilities
of the Depositary, to the account(s) of the Person(s)] [ in certificated
form to the Registered Owner (s)] indicated below.
No Common Shares will be delivered upon conversion until any
amount payable by the Holder on account of interest is paid, any
certificates evidencing specified Securities not held in book-entry form
are duly endorsed or assigned to the Company or in blank and surrendered
and any taxes or other charges or documents required in connection with a
transfer on conversion, and any other required items, are delivered to the
Conversion Agent.
The Holder acknowledges and agrees that, notwithstanding this
request for conversion, the Company may require that the Common Shares
delivered on conversion of the specified Securities be delivered in
certificated form subject to a restrictive legend, or that additional
certificates be delivered on behalf of the relevant beneficial owner(s).
Any Holder requesting Common Shares or unconverted Securities in
book-entry form acknowledges and warrants for the benefit of the Company
that such Holder and any beneficial owner(s) of such Securities are
Qualified Institutional Buyers (as defined in Rule 144A).
A-2-122
<PAGE>
Conversion of the specified Securities is subject to the
requirements established by the Company pursuant to the Indenture, as well
as to the procedures of the Depositary if such Securities are held or to
be held in book-entry form, all as in effect from time to time. The
specified Securities will be deemed to have been converted immediately
prior to the close of business on the day of surrender of the specified
securities for conversion and on which all other required items have been
delivered to the Conversion Agent as provided above and, upon such
conversion, shall cease to accrue interest or be outstanding. Prior to
such conversion, the Holder will have no rights in the Conversion
Securities.
Please provide the information required below, as applicable:
1. PLEASE SPECIFY THE SECURITIES HELD AND THE PORTION THEREOF TO BE
CONVERTED;
Principal amount held: U.S. $__________________________________
CUSIP number(s):________________________________________________
Depositary (DTC) account where held:____________________________
Principal amount being converted (if less than all): U.S.
$_______________________
2. Please specify the type, number and form of securities to be
delivered on conversion and the name(s) of the account
holder(s) or registered owner(s), by checking the appropriate
boxes and providing the information requested:
n Book Entry *
Number of Common Shares:_______________________
Depositary Account: ___________________________
n Unconverted Book Entry*
Principal Amount: U.S.$_______________________
Depositary Account:____________________________
______________
* Only Qualified Institutional Buyers may receive Common Shares in
book-entry form. Others must receive certificates, each in an amount of
at least U.S. $1,000.
n Unconverted Certificates
Principal Amount: U.S.$________________________
Registered Owner:_______________________________
A-2-123
<PAGE>
n Certificates
Number of Common Shares: _______________________
Registered Owner:_______________________________
3. Please specify whether the beneficial owner (s) are:
n A Qualified Institutional Buyer, as defined in
Rule 144A.
n An institution that is an "accredited investor,"
as defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act, that is not a Qualified
Institutional Buyer.
Not a "U. S. person" (as defined in Regulations
S).
DATE: ____________________
Name of Holder
_____________________
Signature(s) of Holder
(If the Holder is a corporation,
partnership or fiduciary, the
title of the Person signing on
behalf of the Holder must be
stated.)
Signature(s) must be guaranteed by a commercial bank or trust company or a
member firm of a U.S. national securities exchange or a member of the
National Association of Securities Dealers, Inc. if Common Shares are to
be delivered, or unconverted Securities are to be issued, other than to
and in the name of the registered owner.
__________________
Signature Guarantee
(End of Certificate)
A-2-124
<PAGE>
ANNEX B-1
FORM OF TRANSFER CERTIFICATE --
RESTRICTED GLOBAL SECURITY TO
REGULATION S GLOBAL SECURITY
Marine Midland Bank
140 Broadway, 12th Floor
New York, NY 10005-1180
Attention: Corporate Trust Department
Re: North American Vaccine, Inc.
6.50% Convertible Subordinated Notes
Due May 1, 2003
Reference is hereby made to the Indenture, dated as of May 7,
1996 (the "Indenture"), between North American Vaccine, Inc., as Issuer,
and Marine Midland Bank, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
This letter relates to U.S. $_____________ aggregate principal
amount of Securities which are evidenced by the Restricted Global Security
(CUSIP No. 657201AA7) and held with the Depositary in the name of [insert
name of transferor] (the "Transferor"). The Transferor has requested a
transfer of such beneficial interest in the Securities to a Person who
will take delivery thereof in the form of an equal aggregate principal
amount of Securities evidenced by the Regulation S Global Security (CUSIP
No. U65777AA9), which amount, immediately after such transfer, is to be
held with the Depositary through Euroclear or CEDEL or both.
In connection with such request and in respect of such
Securities, the Transferor does hereby certify that such transfer has been
effected pursuant to and in accordance with Rule 904 under the United
States Securities Act of 1933, as amended (the "Securities Act"), and
accordingly the Transferor does hereby further certify that:
(1) the offer of the Securities was not made to a person in the
United States;
(2) either:
(A) at the time the buy order was originated, the
transferee was outside the United States or the Transferor and any person
acting on its behalf reasonably believed that the transferee was outside
the United States, or
(B) the transaction was executed in, on, or through the
facilities of a designated offshore securities market and neither the
Transferor nor any person acting on its behalf knows that the transaction
was pre-arranged with a buyer in the United States;
B-1-125
<PAGE>
(3) no directed selling efforts have been made in contravention
of the requirements of 904(b) of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) upon completion of the transaction, the beneficial interest
being transferred as described above was held with the Depositary through
Euroclear or CEDEL or both.
This certificate and the statements contained herein are made for
the benefit of the Company and the Initial Purchasers. Terms used in this
certificate and not otherwise defined in the Indenture have the meanings
set forth in Regulation S under the Securities Act.
Dated: [Insert Name of Transferor]
By: _______________________
Name:
Title:
(If the registered owner is a corporation, partnership or fiduciary, the
title of the Person
signing on behalf of such registered owner must be stated.)
B-1-126
<PAGE>
ANNEX B-2
FORM OF TRANSFER CERTIFICATE --
DEFINITIVE RESTRICTED SECURITIES TO
RESTRICTED GLOBAL SECURITY, REGULATION S GLOBAL
SECURITY OR UNRESTRICTED GLOBAL SECURITY
Marine Midland Bank
140 Broadway, 12th Floor
New York, NY 10005-1180
Attention: Corporate Trust Department
Re: North American Vaccine, Inc.
6.50% Convertible Subordinated Notes
Due May 1, 2003
---------------
Reference is hereby made to the Indenture, dated as of May 7,
1996 (the "Indenture"), between North American Vaccine, Inc., as Issuer,
and Marine Midland Bank, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
This letter relates to U.S. $_____________ aggregate principal
amount of Securities which are evidenced by a Definitive Restricted
Security (No. ________ in the name of ___________) [insert name of
transferor] (the "Transferor"). The Transferor has requested a transfer
of such interest in the Securities to a Person that will take delivery
thereof in the form of an equal aggregate principal amount of Securities
evidenced by the [Unrestricted Global Security] [Regulation S Global
Security] [(CUSIP No. U65777AA9)]. Restricted Global Security (CUSIP No.
657201AA7).]
In connection with such request and in respect of such
Securities, the Transferor does hereby certify that: such transfer has
been effected pursuant to and in accordance with Rule 904, Rule 144 or
Rule 144A under the United States Securities Act of 1933, as amended (the
"Securities Act") and accordingly the Transferor does hereby further
certify that:
(1) if the transfer has been effected pursuant to Rule
904:
(A) the offer of the Securities was not made to a
person in the United States;
(B) either:
(i) at the time the buy order was
originated, the transferee was outside the United
States or the Transferor and any person acting on
B-2-127
<PAGE>
its behalf reasonably believed that the
transferee was outside the United States, or
(ii) the transaction was executed in, on
or through the facilities of a designated
offshore securities market and neither the
Transferor nor any person acting on its behalf
knows that the transaction was prearranged with a
buyer in the United States;
(C) no directed selling efforts have been made in
contravention of the requirements of 904(b) of Regulation
S, as applicable; and
(D) the transaction is not part of a plan or
scheme to evade the registration requirements of the
Securities Act; [and
(E) if the transfer is made to the Regulation S
Global Security: the transferee will take delivery in
book-entry form to be held with the Depositary only
through Euroclear or CEDEL or both;]
(2) if the transfer has been effected pursuant to Rule
144, the Securities have been transferred in a transaction
permitted by Rule 144; or
(3) if the transfer has been effected pursuant to Rule
144A, the Securities have been transferred to a Qualified
Institutional Buyer.
This certificate and the statements contained herein are made for
the benefit of the Company and the Initial Purchasers. Terms used in this
certificate and not otherwise defined in the Indenture have the meanings
set forth in Regulation S under the Securities Act.
Dated: [Insert Name of Transferor]
By: ____________________
Name:
Title:
(If the registered owner is a corporation, partnership or fiduciary,
the title of the Person signing on behalf of such registered
owner must be stated.)
B-2-128
<PAGE>
ANNEX B-3
FORM OF TRANSFER CERTIFICATE --
REGULATION S GLOBAL SECURITY TO
RESTRICTED GLOBAL SECURITY
Marine Midland Bank
140 Broadway, 12th Floor
New York, NY 10005-1180
Attention: Corporate Trust Department
Re: North American Vaccine, Inc.
6.50% Convertible Subordinated Notes
Due May 1, 2003 (the "Securities")
Reference is hereby made to the Indenture, dated as of May 7,
1996 (the "Indenture"), between North American Vaccine, Inc., as Issuer,
and Marine Midland Bank, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
This letter relates to U.S. $____________ aggregate principal
amount of Securities which are evidenced by the Regulation S Global
Security (CUSIP No. U65777AA9) and held with the U.S. Depository through
Euroclear or CEDEL or both in the name of (insert name of transferor] (the
"Transferor"). The Transferor has requested a transfer of such beneficial
interest in the Securities to a Person that will take delivery thereof in
the form of an equal principal amount of Securities evidenced by the
Restricted Global Security (CUSIP No. 657201AA7).
In connection with such request and in respect of such
Securities, the Transferor does hereby certify that such transfer has been
effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended, and accordingly the Transferor
does hereby further certify that the Securities are being transferred to a
person that the Transferor reasonably believes is purchasing the
Securities for its own account, or for one or more accounts with respect
to which such Person exercises sole investment discretion, and such person
and each such account is a "qualified institutional buyer" within the
meaning of Rule 144A, in each case in a transaction meeting the
requirements of Rule 144A and in accordance with any applicable securities
laws of any state of the United States.
This certificate and the statements contained herein are made for
the benefit of the Company and the Initial Purchasers.
Dated: [Insert Name of Transferor]
By: ____________________
Name:
Title:
(If the registered owner is a corporation, partnership or fiduciary,
the title of the Person signing on behalf of such registered
owner must be stated.)
B-3-129
<PAGE>
ANNEX C-1
FORM OF TRANSFER CERTIFICATE --
RESTRICTED GLOBAL SECURITY TO UNRESTRICTED SECURITY
Marine Midland Bank
140 Broadway, 12th Floor
New York, NY 10005-1180
Attention: Corporate Trust Department
Re: North American Vaccine, Inc.
6.50% Convertible Subordinated Notes
Due May 1, 2003 (the "Securities")
Reference is hereby made to the Indenture, dated as of May 7,
1996 (the "Indenture") between North American Vaccine, Inc., as Issuer,
and Marine Midland Bank, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
This letter relates to U.S. $____________ aggregate principal
amount of Securities which are evidenced by the Restricted Global Security
(CUSIP No. _____________) and held with the Depositary in the name of
______________ [insert name of transferor] (the "Transferor"). The
Transferor has requested a transfer of such beneficial interest in the
Securities to a person who will take delivery in the form of an equal
aggregate principal amount of Securities evidenced by the Unrestricted
Global Security (CUSIP No. _________).
In connection with such request and in respect of such
Securities, the Transferor does hereby certify that such transfer has been
effected pursuant to and in accordance with Rule 904 or Rule 144 under
the United States Securities Act of 1933, as amended (the "Securities
Act"), and accordingly the Transferor does hereby further certify that:
(1) if the transfer has been effected pursuant to Rule 904, the
offer of the Securities was not made to a person in the United States;
(A) either:
(i) at the time the buy order was originated, the
transferee was outside the United States or the
Transferor and any person acting on its behalf reasonably
believed that the transferee was outside the United
States, or
(ii) the transaction was executed in, on or
through the facilities of a designated offshore
securities market and neither the Transferor nor any
person acting on its behalf knows that the transaction
was pre-arranged with a buyer in the United States;
C-1-130
<PAGE>
(B) no directed selling efforts have been made in
contravention of the requirements of 904(b) of Regulation S, as
applicable;
(C) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act; or
(2) if the transfer has been effected pursuant to Rule 144, the
Securities have been transferred in a transaction permitted by Rule 144
under the Securities Act.
This certificate and the statements contained herein are made for
the benefit of the Company and the Initial Purchasers. Terms used in this
certificate and not otherwise defined in the Indenture have the meanings
set forth in Regulation S under the Securities Act.
Dated: [Insert Name of Beneficial Owner]
By: ____________________
Name:
Title:
(If the registered owner is a
corporation, partnership or fiduciary,
the title of the Person signing on
behalf of such registered owner must be
stated.)
C-1-131
<PAGE>
ANNEX C-2
FORM OF TRANSFER CERTIFICATE --
TRANSFER OR EXCHANGE AFTER THREE YEARS
Marine Midland Bank
140 Broadway, 12th Floor
New York, NY 10005-1180
Attention: Corporate Trust Department
Re: North American Vaccine, Inc.
6.50% Convertible Subordinated Notes
Due May 1, 2003 (the "Securities")
Reference is hereby made to the Indenture, dated as of May 7,
1996 (the "Indenture") between North American Vaccine, Inc., as Issuer,
and Marine Midland Bank, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
[For transfers: This letter relates to
U.S.$__________________________ aggregate principal amount of Securities
that are evidenced by a [Restricted Global Security (CUSIP
No._____________________) and held with the Depositary in the name of
[insert name of beneficial owner] [a Restricted Security that is a
Definitive Security (CUSIP No._________________________ ) registered in
the name of _______________________________________ ] [and held for the
benefit of ___________________________________ ] (the "Transferor"). The
Transferor has requested that its beneficial interest in such Securities
be transferred to a Person that will take delivery thereof in the form of
an equal aggregate principal amount of Securities evidenced by the
Unrestricted Global Security (CUSIP No.________________________________)
In connection with such request and in respect of such
Securities, the Transferor does hereby certify that upon such transfer,
(a) a period of at least three years will have elapsed since (i) May 7,
1996 or (ii) the resale of such Securities by an "affiliate" of the
Company (as defined in Rule 144 under the Securities Act), (b) the
Transferor during the three months preceding the date of such transfer was
not an "affiliate" of the Company, and it was not acting on behalf of such
an affiliate and (c) such Person to whom such transfer is being made is
not an "affiliate" of the Company.]
[For exchanges: This letter relates to U.S.
$__________________________ aggregate principal amount of Securities that
are evidenced by a [Restricted Security (CUSIP No.______________________)
and held with the Depositary in the name of _____________________________
_________________________________________________________________________
[insert name of beneficial owner] [a Restricted Security that is a
Definitive Security (CUSIP No.___________________________) that is
registered in the name of __________________ and held for the benefit of
______________________] (the "Beneficial Owner"). The Beneficial Owner
has requested that its beneficial interest in such Securities be exchanged
C-1-132
<PAGE>
for a beneficial interest in an equal aggregate principal amount of
[Securities evidenced by the Unrestricted Global Security] [Unrestricted
Securities] (CUSIP No. _________________).
In connection with such request and in respect of such
Securities, the Beneficial Owner does hereby certify that, upon such
exchange, (a) it will be the beneficial owner of such Securities, (b) a
period of at least three years will have elapsed since (i) May 7, 1996 or
(ii) the resale of such Securities by an "affiliate" of the Company and
(c) the Beneficial Owner will not be, and during the three months
preceding the date of such exchange will not have been, an "affiliate" of
the Company (as defined in Rule 144 under the Securities Act), and it is
not acting on behalf of such an affiliate.]
This certificate and the statements contained herein are made for
the benefit of the Company and the Initial Purchasers.
Dated: [Insert Name of Beneficial Owner]
By: ____________________
Name:
Title:
(If the registered owner is a
corporation, partnership or fiduciary,
the title of the Person signing on
behalf of such registered owner must be
stated.)
C-2-133
<PAGE>
<PAGE>
North American Vaccine, Inc.
6.50% Convertible Subordinated Notes due May 1, 2003
Registration Rights Agreement
May 1, 1996
Goldman, Sachs & Co.
UBS Securities LLC
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
North American Vaccine, Inc., a Canadian corporation (the
"Company"), proposes to issue and sell to Goldman, Sachs & Co. and UBS
Securities LLC (the "Initial Purchasers") upon the terms set forth in a
purchase agreement dated May 1, 1996 (the "Purchase Agreement") between
the Initial Purchasers and the Company, its 6.50% Convertible Subordinated
Notes Due May 1, 2003 (the "Securities"). As an inducement to the Initial
Purchasers to enter into the Purchase Agreement and in satisfaction of a
condition to the obligations of the Initial Purchasers thereunder, the
Company agrees with the Initial Purchasers, (i) for the benefit of the
Initial Purchasers and (ii) for the benefit of the holders from time to
time of the Securities and the Common Stock, no par value per share (the
"Stock"), of the Company initially issuable upon conversion of the
Securities (collectively, the "Registrable Securities"), including the
Initial Purchasers (each of the foregoing a "Holder" and, together, the
"Holders"), as follows:
1. DEFINITIONS. Capitalized terms used herein without
definition shall have their respective meanings set forth in or pursuant
to the Purchase Agreement or the Offering Circular, dated May 1, 1996, in
respect of the Securities. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:
"Act" or "Securities Act" means the United States Securities Act
of 1933, as amended.
"Affiliate" of any specified person means any other person which,
directly or indirectly, is in control of, is controlled by, or is under
common control with such specified person. For purposes of this
definition, control of a person means the power, direct or indirect, to
direct or cause the direction of the management and policies of such
person whether by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Commission" means the United States Securities and Exchange
Commission.
<PAGE>
"DTC" means The Depository Trust Company.
"Effectiveness Period" has the meaning set forth in Section 2(b)
hereof.
"Exchange Act" means the United States Securities Exchange Act of
1934, as amended.
"Managing Underwriters" means the investment banker or investment
bankers and manager or managers that shall administer an underwritten
offering, if any, as set forth in Section 6 hereof.
"Person" shall mean an individual, partnership, corporation,
trust or unincorporated organization, or a government or agency or
political subdivision thereof.
"Prospectus" means the prospectus included in any Shelf
Registration Statement (including, without limitation, a prospectus that
discloses information previously omitted from a prospectus filed as part
of an effective registration statement in reliance upon Rule 430A under
the Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities.
"Shelf Registration" means a registration effected pursuant to
Section 2 hereof.
"Shelf Registration Statement" means a shelf registration
statement of the Company pursuant to the provisions of Section 2 hereof
filed with the Commission which covers some or all of the Registrable
Securities, as applicable, on an appropriate form under Rule 415 under the
Act, or any similar rule that may be adopted by the Commission, amendments
and supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"Underwriter" means any underwriter of Registrable Securities in
connection with an offering thereof under a Shelf Registration Statement.
2. SHELF REGISTRATION. (a) The Company shall, within 90
days following the date of original issuance (the "Issue Date") of the
Securities, file with the Commission a Shelf Registration Statement
relating to the offer and sale of the Registrable Securities by the
Holders from time to time in accordance with the methods of distribution
elected by such Holders and set forth in such Shelf Registration Statement
and, thereafter, shall use its reasonable best efforts to cause such Shelf
Registration Statement to be declared effective under the Act within 180
calendar days after the date of filing of such Shelf Registration
Statement; provided, however, that no Holder shall be entitled to have the
Registrable Securities held by it covered by such Shelf Registration
unless such Holder is in compliance with Section 3(m) hereof.
- 2 -
<PAGE>
(b) The Company shall use its reasonable best efforts:
(i) To keep the Shelf Registration Statement
continuously effective in order to permit the Prospectus forming
part thereof to be usable by Holders for a period of three years
from the date the Shelf Registration Statement is declared
effective or such shorter period that will terminate upon the
earliest of the following: (A) when all the Securities covered by
the Shelf Registration Statement have been sold pursuant to the
Shelf Registration Statement, (B) when all shares of Stock issued
upon conversion of any such Securities that had not been sold
pursuant to the Shelf Registration Statement have been sold
pursuant to the Shelf Registration Statement and (C) when, in the
written opinion of independent counsel to the Company, all
outstanding Registrable Securities held by Persons that are not
Affiliates of the Company may be resold without registration
under the Act pursuant to Rule 144(k) under the Act or any
successor or analogous provision thereto (in any such case, such
period being called the "Effectiveness Period"); and
(ii) After the effectiveness of the Shelf Registration
Statement, promptly upon the request of any Holder, to take any
action reasonably necessary to register the sale of any
Registrable Securities of such Holder and to identify such Holder
as a selling securityholder.
The Company shall be deemed not to have used its reasonable best efforts
to cause such Registration Statement to be declared effective or to keep
the Shelf Registration Statement effective during the Effectiveness Period
if the Company voluntarily takes any action that would result in Holders
of Registrable Securities covered thereby not being able to offer and sell
any such Registrable Securities during that period, unless (x) such action
is required by applicable law, rule or regulation or action of the
Commission, or (y) the Shelf Registration Statement would require the
Company to disclose a material financing, acquisition or other corporate
transaction or development, and the Board of Directors shall have
determined in good faith that such disclosure is not in the best interests
of the Company and its stockholders, and, in the case of clause (x) above,
the Company thereafter promptly complies with the requirements of
paragraph 3(i) below.
3. REGISTRATION PROCEDURES. In connection with any Shelf
Registration Statement, the following provisions shall apply:
(a) The Company shall furnish to the Initial
Purchasers, prior to the filing thereof with the Commission, a
copy of any Shelf Registration Statement, and each amendment
thereof and each amendment or supplement, if any, to the
Prospectus included therein and shall use its reasonable best
efforts to reflect in each such document, when so filed with the
Commission, such comments as the Initial Purchasers reasonably
may propose.
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<PAGE>
(b) The Company shall take such action as may be
necessary so that (i) any Shelf Registration Statement and any
amendment thereto and any Prospectus forming part thereof and any
amendment or supplement thereto (and each report or other
document incorporated therein by reference in each case) complies
in all material respects with the Securities Act and the Exchange
Act and the respective rules and regulations thereunder, (ii) any
Shelf Registration Statement and any amendment thereto does not,
when it becomes effective, contain an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading and (iii) any Prospectus forming part of any Shelf
Registration Statement, and any amendment or supplement to such
Prospectus, does not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make
the statements, in the light of the circumstances under which
they were made, not misleading.
(c) (1) The Company shall advise the Initial
Purchasers and, in the case of clause (i), the Holders and, if requested
by the Initial Purchasers or any such Holder, confirm such advice in
writing:
(i) when a Shelf Registration Statement and
any amendment thereto has been filed with the Commission and when
the Shelf Registration Statement or any post-effective amendment
thereto has become effective; and
(ii) of any request by the Commission for
amendments or supplements to the Shelf Registration Statement or
the Prospectus included therein or for additional information.
(2) The Company shall advise the Initial Purchasers and the
Holders and, if requested by the Initial Purchasers or any such Holder,
confirm such advice in writing of:
(i) the issuance by the Commission of any stop order
suspending effectiveness of the Shelf Registration Statement or
the initiation of any proceedings for that purpose;
(ii) the receipt by the Company of any notification
with respect to the suspension of the qualification of the
Registrable Securities included therein for sale in any
jurisdiction or the initiation of any proceeding for such
purpose; and
(iii) the happening of any event that requires the
making of any changes in the Shelf Registration Statement or the
Prospectus so that, as of such date, the Shelf Registration
Statement and the Prospectus do not contain an untrue statement
of a material fact and do not omit to state a material fact
required to be stated therein or necessary to make the statements
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<PAGE>
therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading (which
advice shall be accompanied by an instruction to suspend the use
of the Prospectus until the requisite changes have been made).
(d) The Company shall use its reasonable best efforts to
prevent the issuance, and if issued to obtain the withdrawal, of any order
suspending the effectiveness of any Shelf Registration Statement at the
earliest possible time.
(e) The Company shall, during the Effectiveness Period,
furnish to each Holder of Registrable Securities included within the
coverage of any Shelf Registration Statement, without charge, at least one
copy of such Shelf Registration Statement and any post-effective amendment
thereto, including financial statements and schedules, and, if the Holder
so requests in writing, all reports, other documents and exhibits
(including those incorporated by reference).
(f) The Company shall, during the Effectiveness Period,
deliver to each Holder of Registrable Securities included within the
coverage of any Shelf Registration Statement, without charge, as many
copies of the Prospectus (including each preliminary Prospectus) included
in such Shelf Registration Statement and any amendment or supplement
thereto as such Holder may reasonably request; and the Company consents
(except during the continuance of any event described in Section
3(c)(2)(i) or (iii)) to the use of the Prospectus or any amendment or
supplement thereto by each of the selling Holders of Registrable
Securities in connection with the offering and sale of the Registrable
Securities covered by the Prospectus or any amendment or supplement
thereto during the Shelf Registration Period.
(g) Prior to any offering of Registrable Securities pursuant
to any Shelf Registration Statement, the Company shall use its reasonable
best efforts to register or qualify or cooperate with the Holders of
Registrable Securities included therein and their respective counsel in
connection with the registration or qualification of such Registrable
Securities for offer and sale under the securities or blue sky laws of
such jurisdictions as any such Holders reasonably request in writing and
do any and all other acts or things necessary or advisable to enable the
offer and sale in such jurisdictions of the Registrable Securities covered
by such Shelf Registration Statement: provided, however, that in no event
shall the Company be obligated to (i) qualify as a foreign corporation or
as a dealer in securities in any jurisdiction where it would not otherwise
be required to so qualify but for this Section 3(g) or (ii) file any
general consent to service of process in any jurisdiction where it is not
as of the date hereof then so subject.
(h) Unless any Registrable Securities shall be in book-entry
only form, the Company shall cooperate with the Holders of Registrable
Securities to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold pursuant to
any Shelf Registration Statement free of any restrictive legends and in
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such permitted denominations and registered in such names as Holders may
request in connection with the sale of Registrable Securities pursuant to
such Shelf Registration Statement.
(i) Upon the occurrence of any event contemplated by
paragraphs 2(b)(x) or 3(c)(2)(iii) above, the Company shall promptly
prepare a post-effective amendment to any Shelf Registration Statement or
an amendment or supplement to the related Prospectus or file any other
required document so that, as thereafter delivered to purchasers of the
Registrable Securities included therein, the Prospectus will not include
an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If the Company
notifies the Holders of the occurrence of any event contemplated by
paragraphs 2(b)(x) or 3(c)(2)(iii) above, the Holders shall suspend the
use of the Prospectus until the requisite changes to the Prospectus have
been made.
(j) Not later than the effective date of any Shelf
Registration Statement hereunder, the Company shall provide a CUSIP number
for the Securities registered under such Shelf Registration Statement.
(k) The Company shall use its reasonable best efforts to
comply with all applicable rules and regulations of the Commission and
shall make generally available to their security holders or otherwise
provide in accordance with Section 11(a) of the Securities Act as soon as
practicable after the effective date of the applicable Shelf Registration
Statement an earnings statement satisfying the provisions of Section 11(a)
of the Securities Act.
(l) The Company shall cause the Indenture and the Securities
to be qualified under the Trust Indenture Act in a timely manner.
(m) The Company may require each Holder of Registrable
Securities to be sold pursuant to any Shelf Registration Statement to
furnish to the Company such information regarding the Holder and the
distribution of such Registrable Securities as may be required by
applicable law or regulation for inclusion in such Shelf Registration
Statement and may require each Holder to execute an acknowledgment that
such Holder agrees to be bound by the terms of this Agreement, and the
Company may exclude from such registration the Registrable Securities of
any Holder that fails to furnish such information or acknowledgment within
a reasonable time after receiving such request.
(n) The Company shall, if requested, promptly include or
incorporate in a Prospectus supplement or post-effective amendment to a
Shelf Registration Statement, such information as the Managing
Underwriters reasonably agree should be included therein and to which the
Company does not reasonably object and shall make all required filings of
such Prospectus supplement or post-effective amendment as soon as
practicable after they are notified of the matters to be included or
incorporated in such Prospectus supplement or post-effective amendment.
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<PAGE>
(o) The Company shall enter into such customary agreements
(including underwriting agreements in customary form) to take all other
appropriate actions in order to expedite or facilitate the registration or
the disposition of the Registrable Securities, and in connection
therewith, if an underwriting agreement is entered into, cause the same to
contain indemnification provisions and procedures substantially identical
to those set forth in Section 5 (or such other provisions and procedures
acceptable to the Managing Underwriters, if any) with respect to all
parties to be indemnified pursuant to Section 5.
(p) The Company shall:
(i) cause the Company's officers, directors and
employees to make reasonably available for inspection all
relevant information reasonably requested by such Holders or any
such underwriter, attorney, accountant or agent in connection
with any such Shelf Registration Statement, in each case, as is
customary for similar due diligence examinations; provided,
however, that any information that is designated in writing by
the Company, in good faith, as confidential at the time of
delivery of such information shall be kept confidential by such
Holders or any such underwriter, attorney, accountant or agent,
unless such disclosure is made in connection with a court
proceeding or required by law, or such information becomes
available to the public generally or through a third party
without an accompanying obligation of confidentiality and the
Company may require that such Holders or any such underwriter,
attorney, accountant and agent execute a confidentiality
agreement with respect to such information; and provided further
that the foregoing inspection and information gathering shall, to
the greatest extent possible, be coordinated on behalf of the
Holders and the other parties entitled thereto by one counsel
designated by and on behalf of such Holders and other parties;
(ii) make such representations and warranties to the
Holders of Registrable Securities registered thereunder and the
underwriters, if any, in form, substance and scope as are
customarily made by the Company to underwriters in primary
underwritten offerings and covering matters including, but not
limited to, those set forth in the Purchase Agreement;
(iii) obtain opinions of counsel to the Company and
updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the Managing
Underwriters, if any) addressed to each selling Holder and the
underwriters, if any, covering such matters as are customarily
covered in opinions requested in underwritten offerings and such
other matters as may be reasonably requested by such Holders and
underwriters (it being agreed that the matters to be covered by
such opinion or written statement by such counsel delivered in
connection with such opinions shall include in customary form, as
of the date of the opinion and as of the effective date of the
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<PAGE>
Shelf Registration Statement or most recent post-effective
amendment thereto, as the case may be, the absence from such
Shelf Registration Statement and the prospectus included therein,
as then amended or supplemented, including the documents
incorporated by reference therein, of an untrue statement of
material fact or the omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein (in the case of the prospectus, in light of the
circumstances under which they were made) not misleading;
(iv) obtain "cold comfort" letters and updates thereof
from the independent public accountants of the Company (and, if
necessary, any other independent public accountants of any
subsidiary of the Company or of any business acquired by the
Company for which financial statements and financial data are, or
are required to be, included in the Shelf Registration
Statement), addressed to each such Holder of Registrable
Securities registered thereunder and the underwriters, if any, in
customary form and covering matters of the type customarily
covered in "cold comfort" letters in connection with primary
underwritten offerings;
(v) deliver such documents and certificates as may be
reasonably requested by any such Holders and the Managing
Underwriters, if any, including those to evidence compliance with
Section 3(i) and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the
Company.
The foregoing actions set forth in clauses (iii), (iv), (v) and (vi) of
this Section 3(p) shall be performed at each closing under any
underwritten offering to the extent required thereunder.
(q) The Company will use its reasonable best efforts to cause
the Stock issuable upon conversion thereof to be listed for quotation on
the American Stock Exchange, the New York Stock Exchange or the Nasdaq
National Market on or prior to the effective date of any Shelf
Registration Statement hereunder.
(r) In the event that any broker-dealer registered under the
Exchange Act shall underwrite any Registrable Securities or participate as
a member of an underwriting syndicate or selling group or "assist in the
distribution" (within the meaning of the Rules of Fair Practice and the
By-Laws of the National Association of Securities Dealers, Inc. ("NASD"))
thereof, whether as a Holder of such Registrable Securities or as an
underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, the Company shall assist such broker-dealer in
complying with the requirements of such Rules and By-Laws, including,
without limitation, by (A) if such Rules or By-Laws, including Schedule E
thereto, shall so require, engaging a "qualified independent underwriter"
(as defined in Schedule E) to participate in the preparation of the Shelf
Registration Statement relating to such Registrable Securities and to
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<PAGE>
exercise usual standards of due diligence in respect thereto, (B)
indemnifying any such qualified independent underwriter to the extent of
the indemnification of underwriters provided in Section 5 hereof and (C)
providing such information to such broker-dealer as may be required in
order for such broker-dealer to comply with the requirements of the Rules
of Fair Practice of the NASD.
(s) The Company shall use its reasonable best efforts to take
all other steps necessary to effect the registration, offering and sale of
the Registrable Securities covered by the Shelf Registration Statement
contemplated hereby.
4. REGISTRATION EXPENSES. Except as otherwise provided in
Section 6, the Company shall bear all fees and expenses incurred in
connection with the performance of its obligations under Sections 2 and 3
hereof and shall bear or reimburse the Holders for the reasonable fees and
disbursements of one firm of counsel designated by the Company and
reasonably acceptable to the Holders of a majority of the Registrable
Securities covered by the Shelf Registration Statement to act as counsel
therefor in connection with an underwritten public offering.
5. INDEMNIFICATION AND CONTRIBUTION. (a) In connection with
any Shelf Registration Statement, the Company shall indemnify and hold
harmless the Initial Purchasers, each Holder, each underwriter who
participates in an offering of Registrable Securities, each person, if
any, who controls any of such parties within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act and each of their
respective directors, officers, employees, trustees and agents, as
follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, including any amounts paid in settlement of any
investigation, litigation, proceeding or claim, joint or several, as
incurred, arising out of any untrue statement or alleged untrue statement
of a material fact contained in any Shelf Registration Statement (or any
amendment thereto) covering Registrable Securities, including all
documents incorporated therein by reference, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (or any amendment or supplement thereto) or
the omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, that the Company
shall not be liable under this clause (i) for any settlement of any action
effected without its written consent, which consent shall not be
unreasonably withheld; and
(ii) against any and all expenses whatsoever, as incurred
(including reasonable fees and disbursements of counsel chosen by the
Holders, such Holder or any underwriter (except to the extent otherwise
expressly provided in Section 5(c) hereof)), reasonably incurred in
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investigating, preparing or defending against any litigation, or any
investigation or proceeding by any court or governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under
subparagraph (i) of this Section 5(a); provided that this indemnity shall
not apply to any loss, liability, claim, damage or expense to the extent
arising out of an untrue statement or omission or alleged untrue statement
or omission made in reliance upon and in conformity with written
information furnished to the Company by the Initial Purchasers, such
Holder or any underwriter in writing expressly for use in the Shelf
Registration Statement (or any amendment thereto) or any Prospectus (or
any amendment or supplement thereto). Any amounts advanced by the Company
to an indemnified party pursuant to this Section 5 as a result of such
losses shall be returned to the Company if it shall be finally determined
by such a court in a judgment not subject to appeal or final review that
such indemnified party was not entitled to indemnification by the Company.
(b) Each Holder agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Initial Purchasers, each
underwriter who participates in an offering of Registrable Securities and
the other selling Holders and each of their respective directors, officers
including each officer of the Company who signed the Shelf Registration
Statement), employees, trustees and agents and each Person, if any, who
controls the Company, the Initial Purchasers, any underwriter or any other
selling Holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all loss,
liability, claim, damage and expense whatsoever described in the indemnity
contained in Section 5(a)(i) and (ii) hereof, as incurred, but only with
respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Shelf Registration Statement (or any amendment
thereto) or any Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such selling Holder expressly for use in the Shelf Registration
Statement (for any amendment thereto) or any Prospectus (or any amendment
or supplement thereto); provided, however, that, no such Holder shall be
liable for any claims hereunder in excess of the amount of proceeds
received by such Holder from the sale of Registrable Securities pursuant
to the Shelf Registration Statement.
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against the indemnified party
in respect of which indemnity may be sought hereunder, enclosing a copy of
all papers served on such indemnified party, but failure to so notify an
indemnifying party shall not relieve it of any liability which it may have
to the indemnified party under such subsection if such failure does not
materially prejudice the indemnifying party in the defense of any such
action, and shall not relieve such indemnifying party from any liability
which it may have other than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of
any such action. If an indemnifying party so elects within a reasonable
time after receipt of such notice, such indemnifying party, separately or
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<PAGE>
jointly with any other indemnifying party, may assume the defense of such
action with counsel chosen by it and approved by the indemnified party or
parties defendant in such action, provided that if any such indemnified
party reasonably determines that there may be legal defenses available to
such indemnified party which are different from or in addition to those
available to such indemnifying party or that representation of such
indemnifying party and any indemnified party by the same counsel would
present a conflict of interest, then such indemnifying party or parties
shall not be entitled to assume such defense. If an indemnifying party is
not entitled to assume the defense of such action as a result of the
proviso to the preceding sentence, counsel for such indemnifying party
shall be entitled to conduct the defense of such indemnifying party and
counsel for such indemnified party or parties shall be entitled to conduct
the defense of such indemnified party or parties. If an indemnifying
party assumes the defense of an action in accordance with and as permitted
by the provisions of this paragraph, such indemnifying party shall not be
liable for any fees and expenses of counsel for the indemnified parties
incurred thereafter in connection with such action. In no event shall the
indemnifying party or parties be liable for the fees and expenses of more
than one counsel (in addition to any one local counsel) separate from the
indemnifying parties own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions
in the same jurisdiction arising out of the same general allegations or
circumstances.
(d) In order to provide for just and equitable contribution
in circumstances in which the indemnity provision agreement provided for
in this Section 5 is for any reason held to be unavailable to the
indemnified parties although applicable in accordance with its terms, the
Company, the Initial Purchasers and the Holders shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by said indemnity agreement incurred by the Company, the
Initial Purchasers and the Holders, as incurred; provided that no Person
guilty of fraudulent misrepresentation (within the meaning of Section 11
(f) of the Securities Act) shall be entitled to contribution from any
Person that was not guilty of such fraudulent misrepresentation. As
between the Company, the Initial Purchasers and the Holders, such parties
shall contribute to such aggregate losses, liabilities, claims, damages
and expenses of the nature contemplated by such indemnity agreement in
such proportion as shall be appropriate to reflect the relative fault of
the Company, on the one hand, and the Initial Purchasers and the Holders,
on the other hand, with respect to the statements or omissions which
resulted in such loss, liability, claim, damage or expense, or action in
respect thereof, as well as any other relevant equitable considerations.
The relative fault of the Company, on the one hand, and of the Initial
Purchasers and the Holders, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, on the one
hand, or by or on behalf of the Initial Purchasers or the Holders, on the
other, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
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<PAGE>
Company, the Initial Purchasers and the Holders of the Registrable
Securities agree that it would not be just and equitable if contribution
pursuant to this Section 5 were to be determined by pro rata allocation or
by any other method of allocation that does not take into account the
relevant equitable considerations. For purposes of this Section 5(d),
each director, officer, employee, trustee, agent and Person, if any, who
controls the Initial Purchasers or a Holder within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act shall have the
same rights to contribution as the Initial Purchasers or such Holder, and
each director, officer, employee, trustee and agent of the Company, and
each Person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act shall
have the same rights to contribution as the Company. No party shall be
liable for contribution with respect to any action, suit, proceeding or
claim settled without its written consent.
6. UNDERWRITTEN OFFERING. The Holders of Registrable
Securities covered by the Shelf Registration Statement who desire to do so
may sell such Registrable Securities in an underwritten offering. In any
such underwritten offering, the investment banker or bankers and manager
or managers that will administer the offering will be selected by, and the
underwriting arrangements with respect thereto will be approved by the
Holders of a majority of the Registrable Securities to be included in such
offering; provided, however, that (i) such investment bankers and managers
and their counsel and underwriting arrangements must be reasonably
satisfactory to the Company and (ii) the Company shall not be obligated to
arrange for more than one underwritten offering during the Effectiveness
Period. No Holder may participate in any underwritten offering
contemplated hereby unless such Holder (a) agrees to sell such Holder s
Registrable Securities in accordance with any approved underwriting
arrangements, (b) completes and executes all reasonable questionnaires,
powers of attorney, indemnities, underwriting agreements, lock-up letters
and other documents required under the terms of such approved underwriting
arrangements and (c) at least 40% of the outstanding Registrable
Securities are included in such underwritten offering. The Holders
participating in any underwritten offering shall be responsible for any
expenses customarily borne by selling securityholders, including
underwriting discounts and commissions and fees and expenses of counsel to
the selling securityholders and shall reimburse the Company for the fees
and disbursements of its counsel, its independent public accountants and
any printing expenses incurred in connection with such underwritten
offerings. Notwithstanding the foregoing or the provisions of Section
3(n) hereof, upon receipt of a request from the Managing Underwriter to
prepare and file an amendment or supplement to the Shelf Registration
Statement and Prospectus in connection with an underwritten offering, the
Company may delay the filing of any such amendment or supplement for up to
90 days if the Company in good faith has a valid business reason for such
delay.
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7. MISCELLANEOUS.
(a) OTHER REGISTRATION RIGHTS. The Company may grant
registration rights that would permit any Person that is a third party the
right to piggy-back on any Shelf Registration Statement, provided that if
the Managing Underwriter, if any, of such offering delivers an opinion to
the selling Holders that the total amount of securities which they and the
holders of such piggyback rights intend to include in any Shelf
Registration Statement is so large as to materially adversely affect the
success of such offering (including the price at which such securities can
be sold), then only the amount, the number or kind of securities to be
offered for the account of holders of such piggy-back rights will be
reduced to the extent necessary to reduce the total amount of securities
to be included in such offering to the amount, number or kind recommended
by the Managing Underwriter prior to any reduction in the amount of
Registrable Securities to be included.
(b) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the written consent of the
Company and the Initial Purchasers is obtained.
(c) NOTICES. All notices and other communications provided
for or permitted hereunder shall be made in writing by hand-delivery,
first-class mail, telex, telecopier, or air courier guaranteeing overnight
delivery:
(1) if to a Holder, at the most current address given
by such Holder to the Company in accordance with the provisions
of this Section 7(c);
(2) if to the Initial Purchasers, initially at the
address set forth in the Purchase Agreement; and
(3) if to the Company, initially at its address set
forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given when received.
The Initial Purchasers or the Company by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
(d) SUCCESSORS AND ASSIGNS. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of each of
the parties and the Holders, including, without the need for an express
assignment or any consent by the Company thereto, subsequent Holders of
Registrable Securities. The Company hereby agrees to extend the benefits
of this Agreement to any Holder of Registrable Securities and any such
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Holder may specifically enforce the provisions of this Agreement as if an
original party hereto.
(e) COUNTERPARTS. This agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all
of which taken together shall constitute one and the same agreement .
(f) HEADINGS. The headings in this agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) GOVERNING LAW. This agreement shall be governed by and
construed in accordance with the laws of the State of New York, without
giving effect to any provisions relating to conflicts of laws.
(h) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any respect
for any reason, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions hereof
shall not be in any way impaired or affected thereby, it being intended
that all of the rights and privileges of the parties shall be enforceable
to the fullest extent permitted by law.
Please confirm that the foregoing correctly sets forth the
agreement between the Company and you.
Very truly yours,
NORTH AMERICAN VACCINE, INC.
By: /s/ Sharon Mates
-------------------------------
Name: Sharon Mates, Ph.D.
Title: President
The foregoing Registration Rights Agreement is hereby confirmed and
accepted as of the date first above written.
Goldman, Sachs & Co.
UBS Securities LLC
By /s/ Goldman, Sachs & Co.
---------------------------
(Goldman, Sachs & Co.)
Name: Marcus Colwell
Title: Vice President
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S QUARTERLY REPORT ON FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31,
1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 10,012
<SECURITIES> 3,234
<RECEIVABLES> 1,199
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 12,863
<PP&E> 29,159
<DEPRECIATION> 11,094
<TOTAL-ASSETS> 34,675
<CURRENT-LIABILITIES> 7,982
<BONDS> 0
0
6,538
<COMMON> 59,161
<OTHER-SE> (39,189)
<TOTAL-LIABILITY-AND-EQUITY> 34,675
<SALES> 228
<TOTAL-REVENUES> 228
<CGS> 0
<TOTAL-COSTS> 7,090
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,515)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,515)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,515)
<EPS-PRIMARY> (0.08)
<EPS-DILUTED> (0.08)
<PAGE>
</TABLE>
