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ATLAS CORPORATION
ISSUER
TO
CHEMICAL BANK
TRUSTEE
________________
INDENTURE
DATED AS OF NOVEMBER 10, 1995
________________
U.S.$11,000,000
7% EXCHANGEABLE DEBENTURES
DUE OCTOBER 25, 2000
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CROSS REFERENCE TABLE
TIA Indenture
Section Section
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310 (a) ..................................................... 609(d)(1), 614
(b) ..............................................................614(a)
(c) ................................................................N.A.
311 (a) .................................................614 (b)
(b) .............................................................614 (b)
(c) ................................................................N.A.
312 (a) .................................................614 (c)
(b) ................................................................1404
(c) ................................................................1404
313 (a) ..................................................613(a)
(b) ..............................................................613(a)
(c) ..............................................................613(a)
(d) ..............................................................613(b)
314 (a) .................................................102 (c)
(b) ...............................................................1312
(c) (1) ................................................................102
(c) (2) ................................................................102
(c) (3) ...............................................................N.A.
(d) ...............................................................1312
(e) .............................................................102(a)
(f) ...............................................................N.A.
315 (a) .................................................601 (a)
(b) ................................................................602
(c) ............................................................601 (b)
(d) ............................................................601 (c)
(e) ................................................................514
316 (a)
(a) (1) ...........................................................512, 513
(a) (2) ...............................................................N.A.
(b) ................................................................508
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
(c) .............................................................103(e)
317 (a) (1) ................................................................503
(a) (2) ................................................................504
(b) ...............................................................1001
318 (a) ....................................................1403
Note: This Cross Reference Table shall not, for any purpose, be deemed to be
part of the indenture.
TABLE OF CONTENTS
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Page
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PARTIES..................................................................... 1
RECITALS OF THE COMPANY................................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions................................................ 2
Act 2
Affiliate.......................................................... 2
Authenticating Agent............................................... 2
Authorized Newspaper............................................... 2
Board of Directors................................................. 3
Board Resolution................................................... 3
Business Day....................................................... 3
Code 3
common stock....................................................... 3
Company............................................................ 3
Company Request.................................................... 3
Company Order...................................................... 3
Corporate Trust Office............................................. 4
corporation........................................................ 4
Defaulted Interest................................................. 4
Dollar" and "U.S.$................................................. 4
Event of Default................................................... 4
Exchange Rate...................................................... 4
Holder 5
Indebtedness....................................................... 5
Indenture.......................................................... 5
Interest Payment Date.............................................. 5
Maturity........................................................... 5
Officers' Certificate.............................................. 5
Opinion of Counsel................................................. 5
Note: This table of contents shall not, for any purpose, be deemed to be part
of the Indenture.
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Page
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Outstanding......................................................... 5
Paying Agent........................................................ 6
Person 6
Place of Exchange................................................... 6
Place of Payment.................................................... 6
Predecessor Security................................................ 6
Principal Paying Agent.............................................. 7
Record Date......................................................... 7
Redemption Date..................................................... 7
Redemption Price.................................................... 7
Regular Record Date................................................. 7
Responsible Officer................................................. 7
Securities.......................................................... 7
Security............................................................ 7
Security Register................................................... 7
Security Registrar.................................................. 7
Special Record Date................................................. 8
Stated Maturity..................................................... 8
Subsidiary.......................................................... 8
Transfer Agent...................................................... 8
Trustee............................................................. 8
Underwriting Agreement.............................................. 9
Vice President...................................................... 9
SECTION 102. Compliance Certificates and Opinions; Form of
Documents Delivered to Trustee................................ 9
SECTION 103. Acts of Holders of Securities................................. 10
SECTION 104. Notices, Etc., to Trustee and Company......................... 13
SECTION 105. Notice to Holders of Securities; Waiver....................... 13
SECTION 106. Effect of Headings and Table of Contents...................... 14
SECTION 107. Successors and Assigns........................................ 14
SECTION 108. Severability Clause........................................... 14
SECTION 109. Benefits of Indenture......................................... 14
SECTION 110. Governing Law................................................. 14
SECTION 111. Legal Holidays................................................ 15
ARTICLE TWO
SECURITY FORMS
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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Page
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SECTION 201. Forms Generally............................................... 16
SECTION 202. Form of Securities............................................ 16
SECTION 203. Form of Certificate of Authentication......................... 27
SECTION 204. Form of Exchange Notice....................................... 27
SECTION 205. Transfer Restrictions......................................... 29
ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms............................................... 32
SECTION 302. Denominations................................................. 33
SECTION 304. Securities.................................................... 34
SECTION 305. Registration, Registration of Transfer and
Exchange; Restrictions on Transfer .......................... 34
SECTION 306. Mutilated, Destroyed, Lost or Stolen Securities............... 36
SECTION 307. Payment of Interest, Interest Rights Preserved................ 37
SECTION 308. Persons Deemed Owners......................................... 38
SECTION 309. Cancellation.................................................. 39
SECTION 310. Computation of Interest....................................... 39
SECTION 311. Form of Certification......................................... 39
SECTION 312. CUSIP Numbers................................................. 42
SECTION 313. Taxes and Withholding......................................... 42
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture....................... 45
SECTION 402. Application of Trust Money.................................... 46
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default............................................. 47
SECTION 502. Acceleration of Maturity; Rescission and Annulment............ 49
Note: This table of contents shall not, for any purpose, be deemed to be apart
of the Indenture.
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Page
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SECTION 503. Collection of Indebtedness and Suits
for Enforcement by Trustee.................................... 50
SECTION 504. Trustee May File Proofs of Claim.............................. 51
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities.................................................... 52
SECTION 506. Application of Money Collected................................ 52
SECTION 507. Limitation on Suits........................................... 52
SECTION 508. Unconditional Right of Holders to Receive
Principal and Interest and to Exchange........................ 53
SECTION 509. Restoration of Rights and Remedies............................ 53
SECTION 510. Rights and Remedies Cumulative................................ 54
SECTION 511. Delay or Omission Not Waiver.................................. 54
SECTION 512. Control by Holders of Securities.............................. 54
SECTION 513. Waiver of Past Defaults....................................... 55
SECTION 514. Undertaking for Costs......................................... 55
SECTION 515. Waiver of Usury, Stay or Extension Laws....................... 55
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities........................... 57
SECTION 602. Notice of Defaults............................................ 58
SECTION 603. Certain Rights of Trustee..................................... 58
SECTION 604. Not Responsible for Recitals or Issuance
of Securities................................................. 60
SECTION 605. May Hold Securities, Act as Trustee
Under Other Indentures........................................ 60
SECTION 606. Money Held in Trust........................................... 60
SECTION 607. Compensation and Indemnification of Trustee
and Its Prior Claims.......................................... 60
SECTION 608. Corporate Trustee Required; Eligibility....................... 61
SECTION 609. Resignation and Removal; Appointment
of Successor.................................................. 62
SECTION 610. Acceptance of Appointment by Successor........................ 63
SECTION 611. Merger, Conversion, Consolidation or
Succession to Business........................................ 64
SECTION 612. Authenticating Agent.......................................... 64
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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Page
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SECTION 613. Reports by Trustee to Holders................................. 66
SECTION 614. Additional Qualifications and Duties Pursuant to the
Trust Indenture Act........................................... 66
ARTICLE SEVEN
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 701. Company May Consolidate, Etc., Only on Certain Terms.......... 68
SECTION 702. Successor Substituted......................................... 69
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 801. Supplemental Indentures Without Consent of
Holders of Securities......................................... 70
SECTION 802. Supplemental Indentures with Consent of
Holders of Securities......................................... 71
SECTION 803. Execution of Supplemental Indentures.......................... 72
SECTION 804. Effect of Supplemental Indentures............................. 72
SECTION 805. Reference in Securities to Supplemental
Indentures.................................................... 72
SECTION 806. Notice of Supplemental Indentures............................. 73
ARTICLE NINE
MEETINGS OF HOLDERS OF SECURITIES
SECTION 901. Purposes for Which Meetings May Be Called..................... 74
SECTION 902. Call, Notice and Place of Meetings............................ 74
SECTION 903. Persons Entitled to Vote at Meetings.......................... 74
SECTION 904. Quorum; Action................................................ 75
SECTION 905. Determination of Voting Rights; Conduct
and Adjournment of Meetings................................... 75
SECTION 906. Counting Votes and Recording Action
of Meetings................................................... 76
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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Page
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ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal and Interest...................... 78
SECTION 1002. Maintenance of Offices or Agencies..................... 78
SECTION 1003. Money for Security Payments To Be Held
in Trust............................................... 79
SECTION 1004. Corporate Existence.................................... 80
SECTION 1005. Maintenance of Properties.............................. 81
SECTION 1006. Payment of Taxes and Other Claims...................... 81
SECTION 1007. Registration and Listing............................... 81
SECTION 1008. Statement by Officers as to Default.................... 83
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Right of Redemption.................................... 84
SECTION 1102. Applicability of Article............................... 84
SECTION 1103. Election to Redeem; Notice to Trustee.................. 85
SECTION 1104. Notice of Redemption................................... 85
SECTION 1105. Deposit of Redemption Price............................ 86
SECTION 1106. Securities Payable on Redemption Date.................. 87
ARTICLE TWELVE
EXCHANGE OF SECURITIES
SECTION 1201. Right of Exchange...................................... 88
SECTION 1202. Method of Exchange..................................... 88
SECTION 1203. Fractional Interests................................... 90
SECTION 1204. Adjustment of Exchange Rate............................ 90
SECTION 1205. Escrow and Pledge Agreement............................ 94
SECTION 1206. Company to Give Notice of Certain Events............... 95
SECTION 1207. Covenant by the Company................................ 96
SECTION 1208. Transfer Taxes......................................... 96
SECTION 1209. Fully Paid Shares...................................... 97
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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Page
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SECTION 1210. Cancellation of Securities............................. 97
SECTION 1211. Obligations of Trustee and Escrow Agent................ 97
SECTION 1212. Exchange Arrangements in Case of Redemption............ 98
SECTION 1213. Tax Adjustments in Exchange Rate....................... 98
ARTICLE THIRTEEN
SECURITY AND PLEDGE OF COLLATERAL
SECTION 1301. Grant of Security Interest............................. 102
SECTION 1302. Delivery of Exchange Property.......................... 102
SECTION 1303. Representations and warranties......................... 102
SECTION 1304. Further Assurances..................................... 103
SECTION 1305. Dividends; Voting Rights: Withdrawal Rights............ 103
SECTION 1306. Trustee Appointed Attorney-in Fact..................... 105
SECTION 1307. Trustee May Perform.................................... 105
SECTION 1308. Trustee's Duties....................................... 105
SECTION 1309. Remedies upon Event of Default......................... 105
SECTION 1310. Application of Proceeds................................ 106
SECTION 1311. Continuing Lien........................................ 107
SECTION 1312. Certificates and Opinions.............................. 107
ARTICLE FOURTEEN
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 1401. Company to Furnish Trustee Names and
Addresses of Holders................................... 108
SECTION 1402. Preservation of Information............................ 108
SECTION 1403. Trust Indenture Act Controls........................... 109
SECTION 1404. Communication by Holders with Other Holders............ 109
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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INDENTURE, dated as of November 10, 1995, between Atlas Corporation, a
corporation duly organized and existing under the laws of the State of Delaware,
having its principal office at 370 Seventeenth Street, Suite 3150, Denver,
Colorado 80202 (herein called the "Company"), and Chemical Bank, a New York
banking corporation, as Trustee hereunder (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its 7%
Exchangeable Debentures due October 25, 2000 (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 executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, 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.
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 101. 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 prevailing at the time of any relevant
computation hereunder; and
(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.
"1933 Act" means the United States Securities Act of 1933, as amended.
"1934 Act" means the United States Securities Exchange Act of 1934, as
amended.
"Act", when used with respect to any Holder of a Security, has the
meaning specified in Section 103.
"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.
"Authenticating Agent" means any Person authorized pursuant to Section
612 to act on behalf of the Trustee to authenticate Securities.
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"Authorized Newspaper" means a newspaper, in an official language of
the country of publication or in the English language, customarily published on
each Monday, Tuesday, Wednesday, Thursday and Friday, whether or not published
on Saturdays, Sundays or holidays, and of general circulation in the place in
connection with which the term is used or in the financial community of such
place. Where successive publications are required to be made in Authorized
Newspapers, the successive publications may be made in the same or in different
newspapers in the same city meeting the foregoing requirements and in each case
on any Monday, Tuesday, Wednesday, Thursday and Friday.
"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 Exchange 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 Exchange 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
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authorized or obligated by law or executive order to close shall not be a
Business Day for purposes of Section 1001, 1003 or 1105.
"Code" has the meaning specified in Section 201.
"common stock" includes any stock of any class of capital stock,
including common shares, 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 issuer thereof and which is not subject to
redemption by the issuer thereof.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its Chief Executive Officer, its President or a Vice
President, and by its principal
-3-
financial officer, Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee.
"Constituent Person" has the meaning specified in Section 1204.
"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 450 West 33
Street, 15 floor, New York, New York 10001).
"corporation" means a corporation, limited liability company,
association, joint-stock company or business trust.
"Defaulted Interest" has the meaning specified in Section 307.
"Dollar" and "U.S.$" each 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.
"Escrow Agent" means the Trustee, as Escrow Agent under the Escrow and
Pledge Agreement unless and until a successor Escrow Agent shall have become
such pursuant to the provisions of the Escrow and Pledge Agreement, and
thereafter "Escrow Agent" shall mean such successor Escrow Agent thereunder and
from time to time any subsequent successor.
"Escrow and Pledge Agreement" means the Escrow and Pledge Agreement
entered into pursuant to the provisions of Section 1205, as the same may be
supplemented and amended from time to time.
"Event of Default" has the meaning specified in Section 501.
"Exchange Property" means initially the shares of Granges Common Stock
delivered to the Escrow Agent by the Company pursuant to the Escrow and Pledge
Agreement simultaneously with the original execution and delivery of this
Indenture as provided in Section 1205, and thereafter means the securities
(including Granges Common Stock), cash and other property, if any, which at the
time are deliverable upon the surrender of the Securities for exchange in
accordance with the provisions of Article Twelve.
"Exchange Rate" has the meaning specified in Section 1201.
-4-
"Granges" means Granges, Inc., a Vancouver-based precious metals
mining company whose shares are traded on the Toronto Stock Exchange and
American Stock Exchange.
"Granges Common Stock" means any common stock of Granges.
"Holder", when used with respect to any Security, means the Person in
whose name such Security is registered in the Security Register.
"Indebtedness" has the meaning specified in Section 501.
"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.
"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 or otherwise.
"Non-Electing Shares" has the meaning specified in Section 1204.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, its Chief Executive Officer, the
President or a Vice President and by the principal financial officer, the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Company, and delivered to the Trustee. One of the officers signing an
Officers' Certificate given pursuant to Section 1008 shall be the principal
executive, financial or accounting officer of the Company.
"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.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
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(i) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for the payment or redemption of which money or
shares of Granges Common Stock (to the extent permitted hereby) 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 306 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 the Trustee 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 obligor.
"Paying Agent" 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.
"Person" means any individual, corporation, partnership, joint
venture, trust, estate, unincorporated organization or government or any agency
or political subdivision thereof.
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"Place of Exchange" means the Corporate Trust Office of the Trustee
specified in Section 1002 for exchange of Securities, or such other place as the
Company or Trustee may designate for exchange of Securities pursuant to Article
Twelve.
"Place of Payment" has the meaning specified in Section 301.
"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 306 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.
"Principal Paying Agent" means the Trustee, until and unless a
successor, if any, has been appointed pursuant to the terms hereof.
"Qualification Deadline" means February 9, 1996.
"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 par value of such Security plus accrued interest to the
Redemption Date.
"Regular Record Date" for interest payable in respect of any Security
on any Interest Payment Date means the October 15 or April 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 1933 Act.
"Responsible Officer", when used with respect to the Trustee, means
any officer within the Corporate Trustee Administration Department (or any
successor group) of the Trustee including without limitation any vice president,
assistant vice president, assistant secretary or other officer of the Trustee
customarily 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 Securities" has the meaning specified in Section 205.
-7-
"SEC" means the United States Securities and Exchange Commission.
"Securities" has the meaning ascribed to it in the first paragraph
under the caption "Recitals of the Company".
"Security" means one of the Securities.
"Security Register" has the meaning specified in Section 305.
"Security Registrar" has the meaning specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Company pursuant to Section 307.
"Special Warrant Indenture" means the special warrant indenture dated
November 10, 1995, between the Company and the Special Warrant Trustee.
"Special Warrant Trustee" means The Montreal Trust Company of Canada.
"Special Warrants" has the meaning specified in the Underwriting
Agreement.
"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.
"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. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.
"TIA" means the Trust Indenture Act.
"Transfer Agent" has the meaning specified in Section 202. The Company
has initially appointed the Corporate Trust Office of the Trustee as Transfer
Agent.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
effect on the date of this Indenture; provided, however, that in the event the
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Trust Indenture Act is
-8-
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; provided
--------
further, that unless and until this Indenture shall become qualified under the
- -------
Trust Indenture Act, the term "Trust Indenture Act" shall be a nullity and any
reference to it shall likewise be a nullity with no force or effect, imposing no
conditions or obligations and conferring no rights under this Indenture.
"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.
"U.S. Person" or "U.S. Persons" means a U.S. person or persons as such
terms are defined in Regulation S.
"Underwriter" has the meaning specified in the Underwriting Agreement.
"Underwriting Agreement" means the Underwriting Agreement, dated
October 25, 1995, among the Company, Yorkton Securities, Inc. and First Marathon
Securities, Inc.
"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".
SECTION 102. Compliance Certificates and Opinions; Form of
Documents Delivered to Trustee.
(a) Upon any application or request by the Company to the Trustee or
the Principal Paying Agent to take any action under any provision of this
Indenture, the Company shall furnish to the Trustee or the Principal Paying
Agent, 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.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than certificates
provided for in Section 1008) shall include:
-9-
(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.
(b) 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.
(c) The Company shall make all reports required by TIA Section 314(a)
as provided therein.
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SECTION 103. 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. Except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments or record is delivered to the Trustee and copies
thereof are delivered 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 601)
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 906.
(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 ownership, 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 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 Principal Paying Agent deems sufficient;
and the Trustee or the Principal Paying Agent may in any instance require
further proof with respect to any of the matters referred to in this Section
103.
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(e) The Company may set any day as the record date for the purpose of
determining the Holders entitled to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action, or to vote on
any action, authorized or permitted by this Indenture to be given or taken by
Holders. Promptly and in any case not later than ten days after setting a
record date, the Company shall notify the Trustee, the Principal Paying Agent
and the Holders of such record date. If not set by the Company prior to the
first solicitation of a Holder made by any Person in respect of any such action,
or, in the case of any such vote, prior to such vote, the record date for any
such action or vote shall be the 30th day (or, if later, the date of the most
recent list of Holders required to be provided pursuant to Section 1401) prior
to such first solicitation or vote, as the case may be. With regard to any
record date, the Holders on such date (or their duly appointed agents or
proxies), and only such Persons, shall be entitled to give or take, or vote on,
the relevant action or revoke any Act relating thereto, whether or not such
Holders remain Holders after such record date. Notwithstanding the foregoing,
the Company shall not set a record date for, and the provisions of this
paragraph shall not apply with respect to, any notice, declaration or direction
referred to in the next paragraph.
Upon receipt by the Trustee or the Principal Paying Agent from any
Holder of (i) any notice of default or breach referred to in Section 501(3), if
such default or breach has occurred and is continuing and the Trustee shall not
have given such a notice to the Company, (ii) any declaration of acceleration
referred to in Section 502, if an Event of Default has occurred and is
continuing and the Trustee shall not have given such a declaration to the
Company, or (iii) any direction referred to in Section 512, if the Trustee shall
not have taken the action specified in such direction, then a record date shall
automatically and without any action by the Company or the Trustee be set for
determining the Holders entitled to join in such notice, declaration or
direction, which record date shall be the close of business on the tenth day
(or, if such day is not a Business Day, the first Business Day thereafter)
following the day on which the Trustee receives such notice, declaration or
direction. Promptly after such receipt by the Trustee, and as soon as
practicable thereafter, the Trustee shall notify the Company and the Holders of
any such record date so fixed. The Holders on such record date (or their duly
appointed agents or proxies), and only such Persons, shall be entitled to join
in such notice, declaration or direction, whether or not such Holders remain
Holders after such record date; provided that, unless such notice, declaration
--------
or direction shall have become effective by virtue of Holders of the requisite
principal amount of Securities on such record date (or their duly appointed
agents or proxies) having joined therein on or prior to the 90th day after such
record date, such notice, declaration or direction shall automatically and
without any action by any Person be cancelled and of no further effect. Nothing
in this paragraph shall be construed to prevent a Holder (or a duly appointed
agent or proxy thereof) from giving, before or after the expiration of such 90-
day period, a notice, declaration or direction contrary to or different from,
or, after the expiration of such period, identical to, the notice, declaration
or direction to which such record date relates, in which event a new record date
in respect thereof shall be set pursuant to this paragraph. In addition,
nothing in this paragraph shall be construed to render ineffective any notice,
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declaration or direction of the type referred to in this paragraph given at any
time to the Trustee and the Company by Holders (or their duly appointed agents
or proxies) of the requisite principal amount of Securities on the date such
notice, declaration or direction is so given.
(f) Except as provided in Sections 512 and 513, 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 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 103 are subject to the provisions
of Section 905.
SECTION 104. 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 Principal Paying Agent 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 at its
Corporate Trust Office, Attention: Corporate Trustee Administration
Department 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 370 Seventeenth
Street, Suite 3150, Denver, Colorado 80202, telecopy no.: (303) 892-8808,
Attention: Senior Vice President -- Legal and Business Affairs, 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.
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SECTION 105. 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
sufficient if in writing and mailed, first-class postage prepaid, to each Holder
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 and such notice shall be
deemed to have been given when such notice is mailed.
In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. 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 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 106. 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 107. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
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SECTION 108. Severability 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 109. Benefits of Indenture.
Nothing in this Indenture or in the Securities express or implied,
shall give to any Person, other than the parties hereto, the Escrow Agent and
their successors and assigns hereunder and the Holders of Securities, any
benefit or legal or equitable right, remedy or claim under this Indenture.
SECTION 110. 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.
SECTION 111. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, or
Stated Maturity of any Security or the last day on which a Holder of a Security
has a right to exchange his Security shall not be a Business Day at a Place of
Payment or Place of Exchange, as the case may be, then (notwithstanding any
other provision of this Indenture or of the Securities) payment of interest or
principal or delivery for exchange of such Security need not be made at such
Place of Payment or Place of Exchange, 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 Exchange, as the case may be, with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity or by such last day for exchange; 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, Stated Maturity or last day for exchange as the case may
be.
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ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities shall be in substantially the form 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, the Internal Revenue Code of 1986, as amended (the "Code"),
and regulations thereunder, 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 203.
Exchange notices shall be in substantially the form set forth in
Section 204.
Securities shall bear any legend required by Section 205.
Securities shall be printed, lithographed or engraved or produced by
any combination of these methods on steel engraved borders or may be 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.
SECTION 202. Form of Securities.
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[FORM OF FACE]
[LEGEND TO APPEAR ON RESTRICTED SECURITIES]
THIS DEBENTURE WAS ORIGINALLY ISSUED (i) IN THE UNITED STATES AND TO U.S.
PERSONS IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), FOR OFFERS AND SALES
OF SECURITIES WHICH DO NOT INVOLVE ANY PUBLIC OFFERING, AND ANALOGOUS EXEMPTIONS
UNDER STATE SECURITIES LAWS AND (ii) OUTSIDE THE UNITED STATES TO PERSONS OTHER
THAN U.S. PERSONS IN ACCORDANCE WITH THE REQUIREMENTS OF REGULATION S UNDER THE
1933 ACT. THIS DEBENTURE AND THE SHARES OF COMMON STOCK OF GRANGES INC. FOR
WHICH IT MAY BE EXCHANGED HAVE NOT BEEN REGISTERED UNDER THE 1933 ACT OR THE
SECURITIES LAWS OF ANY OF THE STATES OF THE UNITED STATES, AND MAY NOT BE
OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS (AS SUCH TERM IS DEFINED
IN REGULATION S UNDER THE 1933 ACT), AND DEBENTURES MAY NOT BE EXCHANGED EXCEPT
BY A NON-U.S. PERSON (NOT ACTING ON BEHALF OF A U.S. PERSON) IN ACCORDANCE WITH
THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, UNLESS THE SECURITIES ARE
REGISTERED UNDER THE 1933 ACT OR AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.
-17-
ATLAS CORPORATION
7% EXCHANGEABLE DEBENTURE
DUE OCTOBER 25, 2000
(Exchangeable for Granges Common Stock)
No. R-_____________ U.S.$_____
CUSIP No. 049267 AB 3
Atlas Corporation, a corporation duly organized and existing under the
laws of the State of Delaware (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 "Holder"), the principal sum of _____________ United States Dollars plus
accrued and unpaid interest in cash (or at the Company's option, evidenced by an
Officers' Certificate of the Company received by the Trustee not less than two
Business Days prior to October 25, 2000, the principal hereof may be repaid, in
whole or in part, but in any case on a pro-rata basis to all holders of
outstanding Securities under the Indenture, in shares of Granges Common Stock
valued at ninety five percent of the then per share market price of Granges
Common Stock, such market price to be calculated by the Company as the average
closing trade price of Granges Common Stock on the American Stock Exchange, or,
if Granges Common Stock is not then listed on the American Stock Exchange, the
stock exchange or over-the-counter market upon which the Granges Common Stock is
traded which, in aggregate, has the highest dollar trading volume, during the
twenty consecutive trading days ending on the last trading day prior to October
25, 2000, or, should Granges Common Stock not be traded on any stock exchange or
over-the-counter market, then ninety five percent of the per share fair value of
Granges Common Stock over such twenty-day period as determined in good faith by
an investment banking firm retained in good faith by the Company and which is a
member of the New York Stock Exchange or the Toronto Stock Exchange and as set
forth in an Officers' Certificate of the Company received by the Trustee
promptly after October 25, 2000) on October 25, 2000 (or, in the case of any
payment, in whole or in part, in Granges Common Stock, such cash and stock shall
be paid on or within five Business Days of October 25, 2000, payment by such
time to be deemed made on October 25, 2000) and to pay interest in cash on the
principal hereof, retroactively from October 25, 1995, 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 (an
"Interest Payment Date"), commencing May 1, 1996, at the rate of 7% per annum,
until October 25, 2000, and at the rate of 7% per annum on any overdue principal
and, to the extent permitted by law, on any overdue interest. The interest so
payable, and punctually
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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) next preceding such Interest Payment Date.
Except as otherwise provided in the Indenture, any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder in whose name this Security (or one or more Predecessor Securities) is
registered 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 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 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 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 by United States Dollar check 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 fifteen days prior to the relevant payment date, by
transfer to a United States Dollar account (such transfer to be made only to a
Holder of an aggregate principal amount of Securities in excess of U.S.$500,000)
maintained by the payee with a bank in The City of New York (or in whole or in
part by shares of Granges Common Stock as indicated in the first sentence hereof
or on the reverse hereof). Payment of interest on this Security may be made by
United States Dollar check 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 transfer to be made only to a Holder of an aggregate
principal amount of Securities in excess of U.S.$500,000) maintained by the
payee with a bank in The City of New York.
Subject to Section 313(d) of the Indenture, any and all payments shall
be made subject to deduction for any present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto
including (i) United States withholding taxes applicable to the payment of
interest to a Holder (including United States withholding taxes applicable to
payments to a Holder claiming that it is entitled to an exemption or relief from
such withholding taxes if such Holder does not comply with the requirements of
Section 313(d) of the Indenture) and (ii) any tax or charge arising from the
transfer of ownership of Securities or the registration of Securities in a name
other than that
-19-
of the prior Holder. Except as specifically provided herein and in the
Indenture, the Company shall not be required to make any payment with respect to
any tax, assessment or other governmental charge imposed by any government or
any political subdivision or taxing authority thereof or therein.
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 by an Authenticating Agent by
the manual signature of one of its authorized officers, 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.
ATLAS CORPORATION
[Corporate Seal]
By:__________________________
Title:
Attest:
________________________
Title:
[FORM OF REVERSE OF SECURITIES]
This Security is one of a duly authorized issue of securities of the
Company designated as its "7% Exchangeable Debentures due October 25, 2000"
(herein called the "Securities"), limited in aggregate principal amount to
U.S.$11,000,000, issued and to be issued under an Indenture, dated as of
November 10, 1995 (herein called the "Indenture"), between the Company and
Chemical 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
-20-
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. All capitalized
terms used and not otherwise defined herein shall have the meanings specified in
the Indenture. The Securities are issuable in denominations of U.S.$100 and
integral multiples of U.S.$100 in excess 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, (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 or (b) 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, in whole or in part, at the option of the Company on or
after October 25, 1998 so long as the Average Market Price of Granges Common
Stock is at least $2.94 per share, upon not more than 60 nor less than 30 days'
notice to the Holders prior to the Redemption Date, at a Redemption Price equal
to 100% of the principal amount plus accrued and unpaid interest to the
Redemption Date, such payment to be made in cash or, at the Company's option,
upon not less than 20 days notice to the Holders prior to the Redemption Date,
the principal payable on such redemption may be paid in whole or in part, but in
any case on a pro-rata basis to all Holders of Outstanding Securities under the
Indenture being redeemed, in Granges Common Stock (such cash and stock to be
delivered to Holders on or before five Business Days after the Redemption Date,
payment by such time to be deemed made on the Redemption Date) valued at the
Exchange Rate, initially set at 42.50 shares of Granges Common Stock per
U.S.$100 principal amount of Securities (but subject to adjustment as provided
in the Indenture), provided, however, that interest installments on Securities
-------- -------
whose Stated Maturity is on or prior to such Redemption Date will be payable in
cash 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; and provided further that
-------- -------
payments of principal and accrued and unpaid interest, if any, upon redemption
or exchange of any Security shall be made only upon delivery to the Company of
such certifications as the Company may reasonably require to comply with any
applicable laws or regulations. The term "Average Market Price" means the
average closing trading price of Granges Common Stock on the American Stock
Exchange (or, if Granges Common Stock is not then listed on the American Stock
Exchange, the stock exchange or over-the-counter market upon which the Granges
Common Stock is traded which, in aggregate, has the highest dollar trading
volume) during a 20 consecutive trading day period ending on the last trading
day prior to the date upon
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which the Company gives notice, pursuant to Section 1104 of the Indenture, of
its option to redeem. Should Granges Common Stock not be traded on any stock
exchange or over-the-counter market, then the Securities shall not be subject to
redemption until so traded.
Notice of redemption will be given by mail to Holders of Securities at
least once not more than 60 nor less than 30 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 or
interest on this Security or the last day on which the Holder of this Security
has a right to exchange this Security shall not be a Business Day, then payment
of principal or interest or delivery for exchange of this Security need not be
made on or by such date at such place but may be made on or by the next
succeeding Business Day with the same force and effect as if made on the date
for such payment or the date fixed for redemption, or by such last day for
exchange, and no interest shall accrue for the period after such date.
Subject to and upon compliance with the provisions of the Indenture,
the Holder of this Security is entitled, upon provision, if applicable, of
certification regarding compliance with applicable securities laws, at his
option evidenced by written notice to the Trustee received not less than seven
days prior to the date of exercise (except that such seven-day notice shall be
waived in case such notice is provided within seven days of a Redemption Date),
at any time after November 10, 1995 and on or before the close of business on
October 25, 2000, or in case this Security is called for redemption until and
including, but (unless the Company defaults in making the payment due upon
redemption) not after, the close of business on the Redemption Date, to exchange
this Security (or any portion of the principal amount thereof) into fully paid
and nonassessable shares of Granges Common Stock at an initial Exchange Rate of
42.50 shares of Granges Common Stock per U.S.$100 principal amount of Securities
(or at the current adjusted Exchange Rate 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 together with the exchange 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 as may be designated by it for such
purpose (each an "Escrow Agent"). The Company shall thereafter deliver to the
Holder (together with the cash payment of any accrued and unpaid interest or any
cash adjustment, as provided in the Indenture) the fixed number of shares of
Granges Common Stock into which this Security is exchangeable 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 exchange, redemption or maturity 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 Indenture provides
for certain adjustments to
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the Exchange Rate to prevent dilution of the exchange rights contained in this
Security and the Indenture.
In the event of redemption or exchange of this Security in part only,
a new Security or Securities for the unredeemed or unexchanged portion hereof
will be issued in the name of the Holder hereof.
As provided in the Indenture, the Company shall, for the benefit of
Holders, as soon as practicable, file (or cause to be filed): (i) a preliminary
prospectus and final prospectus (the "Prospectus") in the Canadian Provinces of
Ontario and British Columbia qualifying the distribution of the Securities and
(ii) a registration statement or registration statements (the "1933 Registration
Statement") under the 1933 Act, registering the Securities and the underlying
shares of Granges Common Stock for resale, and shall also file (or cause to be
filed) all required filings with state securities or "blue sky" administrators
in the states where the Holders of the Securities propose to offer and sell the
Securities and the underlying shares of Granges Common Stock (the "Blue Sky
Filings"). Subject to the following paragraph, the Company shall use its best
efforts to cause receipts to be issued by the securities commissions in Ontario
and British Columbia for the (final) Prospectus and to cause the 1933
Registration Statement and Blue Sky Filings to become effective not later than
February 9, 1996 (the "Qualification Deadline") and to cause the 1933
Registration Statement and the Blue Sky Filings to remain effective and current
until the date which is three years after the latest date on which Granges
Common Stock is acquired pursuant to the Indenture by Holders; provided,
--------
however, that the Company may, upon notice to the Holders of Securities,
- -------
temporarily suspend sales under the 1933 Registration Statement during any
reasonable period in which its board of directors determines, in good faith,
that because of material corporate changes, it would not be feasible to maintain
a current prospectus during such period, provided, further, that in such event,
-------- -------
the Company will, at the earliest possible time thereafter, take all necessary
steps to update the prospectus disclosure and notify the Holders that sales
under the 1933 Registration Statement may resume. The Company shall further, as
soon as practicable, file (or cause to be filed) with the United States
Securities and Exchange Commission a registration statement (the "1934
Registration Statement") under the 1934 Act, registering the Securities under
Section 12(b) of the 1934 Act, and to cause the 1934 Registration Statement to
become effective not later than the Qualification Deadline and to remain
effective throughout the term of the Securities.
The Prospectus, the 1933 Registration Statement, the Blue Sky Filings
and the 1934 Registration Statement shall collectively be referred to
hereinafter as the "Registration Filings". In the event that the Registration
Filings are not made effective (or, in the case of the (final) Prospectus, the
securities commissions in Ontario and British Columbia have not issued receipts
therefor) on or before the Qualification Deadline, the
-23-
Company shall, unless all Special Warrants are retracted and cancelled pursuant
to the Underwriting Agreement, be obligated to complete the Registration Filings
and to make such filings effective as soon as practicable after the
Qualification Deadline and cause the 1933 Registration Statement, the Blue Sky
Filings and the 1934 Registration Statement to remain effective for the period
set forth herein.
The Company will cause the Securities to be listed, posted and called
for trading on the Vancouver Stock Exchange (and will use its best efforts to
have the Securities listed, posted and called for trading on the New York Stock
Exchange or such other U.S. securities exchange as is acceptable to the
Underwriters) not later than the earlier of either (i) the fifth Business Day
following the date upon which the requirements of the paragraph above have been
fulfilled or (ii) the first Business Day which is twelve months after November
10, 1995. The Company will maintain such listings throughout the term of the
Securities.
The Company's obligations under this Security and the Indenture are
secured by a pledge of shares of Granges Common Stock owned by the Company (the
"Exchange Property") in the amount of 1 share of Granges Common Stock for each
$1.18 of principal amount of Special Warrants issued on the date hereof, or a
maximum of 8,474,576 shares. In the event of any reduction of the principal
amount of Securities Outstanding, as evidenced by the delivery to the Trustee by
the Company of Securities for cancellation, the Exchange Property held by the
Escrow Agent shall be reduced in the same proportion as the principal amount of
the Securities was so reduced, provided, that the Escrow Agent shall retain a
--------
sufficient amount of Exchange Property to exchange all Securities then
Outstanding on the basis of the then applicable Exchange Rate and the other
terms and provisions of the Indenture, and the Company shall, upon Company
Request, be entitled to any excess Exchange Property created by such reduction
net of any Exchange Property delivered in connection with any reduction caused
by an exchange pursuant to the fifth paragraph of the reverse of this Security.
If an Event of Default shall occur and be continuing, the principal of all the
Securities, together with accrued and unpaid interest to the date of
declaration, may be declared due and payable in the manner and with the effect
provided in the Indenture. Upon (i) payment of the amount of principal so
declared due and payable, together with accrued and unpaid interest to the date
of declaration, and of interest on any overdue principal and overdue interest,
or (ii) delivery of Granges Common Stock or, if applicable, Granges Common Stock
and cash, to the Holder upon exchange pursuant to Article Twelve of the
Indenture or upon redemption or Stated Maturity as provided above, all of the
Company's obligations in respect of the payment of the principal of and interest
on the Securities shall terminate.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and
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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 then 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 two-thirds in principal amount
of the Outstanding Securities represented and entitled to vote at such meeting.
The terms of the Indenture may also be modified, subject to Section 508 of the
Indenture, in any non-material way acceptable to the Company and the Trustee so
as to comply with the requirements or suggestions of any official or semi-
official regulatory or self-regulatory body having jurisdiction over the Company
or the Securities, provided, however, that nothing in this sentence shall permit
-------- -------
any such modification disadvantageous in any material respect to the Holders
without the consent or vote of Holders pursuant to the procedures specified in
Section 802 of the Indenture. The Indenture also contains provisions permitting
the Holders of specified percentages in principal amount of Outstanding
Securities, on behalf of the Holders of all the Securities, to waive 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 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 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 Outstanding Securities a direction inconsistent with such request, and
shall have failed to institute any such proceeding, for 45 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 or interest hereon on or after the respective due
dates expressed herein.
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 and interest on this
Security at the times, places and rate, and in the coin or currency and stock,
herein prescribed or to exchange this Security as provided in the Indenture.
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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, 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 in the Indenture 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 its 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
transferees. 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.
The Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name a Security is registered, as the owner
thereof for all purposes, whether or not the Security is overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA.
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SECTION 203. Form of Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially
the following form:
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: _______________
CHEMICAL BANK
as Trustee
By:______________________
Authorized Officer
SECTION 204. Form of Exchange Notice.
EXCHANGE NOTICE
The undersigned Holder of this Security hereby irrevocably exercises
the option to exchange this Security, or any portion of the principal amount
hereof below designated, into shares of Granges Common Stock in accordance with
the terms of the Indenture referred to in this Security and directs that such
shares, together with a check in payment for any fractional share and any
Securities representing any unexchanged principal amount hereof, be delivered to
and be registered in the name of the undersigned unless a different name has
been indicated below. The undersigned hereby certifies (please check one):
____The undersigned is a non-U.S. Person (not acting on behalf of a U.S.
Person); is not exercising this option within the United States; and the
securities issuable in respect of the exercise of this option are to be
delivered to an address outside the United States;
____The undersigned is exercising this option pursuant to an effective
Registration Statement under the Securities Act of 1933 (the "1933 Act");
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____The undersigned is an "accredited investor" within the meaning of Rule
501(a) under the 1933 Act and is not exercising this option with a view to a
distribution.
(In the absence of checking one of the above boxes, the undersigned will be
required to deliver herewith an opinion of counsel with substantial experience
under the 1933 Act and otherwise reasonably acceptable to the Company to the
effect that the undersigned's exercise of this option complies with the 1933
Act.)
If shares of Granges Common Stock or Securities are to be registered in the name
of a Person other than the undersigned, the undersigned will pay all transfer
taxes payable with respect thereto and, if this Security is a Restricted
Security as defined in the Indenture, the undersigned is delivering herewith a
certificate in proper form provided for in Section 311 of the Indenture referred
to in the Security certifying that the applicable restrictions on transfer have
been complied with.
Dated: _____________________
____________________
Signature
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If shares or Securities are to be registered If only a portion of the Securities is to be
in the name of a Person other than the exchanged, indicate:
Holder, please print such Person's name
and address:
1. Principal amount to be exchanged
($100 or integral multiples thereof):
_________________________ U.S.$___________
Name
2. Principal amount and denomination of
Securities representing unexchanged
principal amount to be issued ($100 or
_________________________ integral multiples thereof):
Address
Amount: U.S.$________
_________________________ Denominations:
Social Security or other Taxpayer U.S.$______
Identification Number, if any
_________________________ Signature Guaranteed
(Commercial bank, trust company or
member firm of the New York Stock
Exchange)
SECTION 205. Transfer Restrictions.
(a) Unless and until any Security shall become freely transferrable as a
result of:
(1) its sale pursuant to an effective registration statement of the
Company under the 1933 Act covering the resale of the Securities and an
effective registration statement of Granges covering the offer for resale of
the Granges Common Stock deliverable in exchange therefor, as evidenced by an
Officers' Certificate of the Company (not subsequently withdrawn) delivered
to the Trustee, stating that such registration statements covering such
Securities and such Granges Common Stock have been declared effective; legend
provided in Section 202, and the
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(2) its sale in, on or through the facilities of a Designated
Offshore Securities Market, as that term is defined in Regulation S,
provided, that, the seller of such Security delivers a certificate to the
-------- ----
Trustee, certifying that such Security has been so sold, that neither the
seller nor any affiliate of the seller nor any person acting on their behalf
shall have made any directed selling efforts (as that term is defined in
Regulation S) in the United States, and that neither such seller nor anyone
acting on its behalf knows that the sale of such Security was pre-arranged
with a buyer in the United States; or
(3) its sale in compliance with Rule 144 under the 1933 Act (or any
successor provision thereto); (provided that the Trustee has received an
opinion of counsel having substantial experience in practice under the 1933
Act and otherwise reasonably acceptable to the Company, addressed to the
Company and in form acceptable to the Company, with respect to compliance
with Rule 144 or such successor provision);
such Security, and all Securities issued pursuant to Section 305 or 306 in
respect of such Security are "Restricted Securities" and shall bear the legend
set forth on the face of the form of Security in Section 202, provided, however,
-------- -------
that after December 20, 1995 the Transfer Agent will promptly upon the written
request of a holder of a Security who certifies to the Trustee that such
Security was originally sold under a Private Placement Subscription Agreement
for Non-U.S. Subscribers and that such Security is not owned by or on behalf of
a U.S. Person (unless, and then only to the extent that, the SEC adopts revised
legend requirements applicable to the Security, without charge to such Holder
and in accordance with the procedure set forth in Section 305(a) regarding
registration of transfer, authenticate and deliver to such Holder, a new
Security not bearing the Company will as a condition to such transfer, if
required by the Transfer Agent, furnish the Transfer Agent with a supporting
Opinion of Counsel. Except as provided in the preceding sentence, the Trustee
shall not issue any unlegended Security until it has received an Officers'
Certificate from the Company directing it to do so.
(b) All Securities as to which the legend set forth in Section 202 shall
have been removed in accordance with subsection (a) above shall be imprinted
with a legend to the following effect:
THIS DEBENTURE MAY NOT BE EXCHANGED FOR SHARES OF COMMON STOCK OF
GRANGES, INC. EXCEPT (i) BY A NON-U.S. PERSON (NOT ACTING ON BEHALF OF
A U.S. PERSON) IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S
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UNDER THE U.S. SECURITIES ACT OF 1933 (THE "1933 ACT") OR (ii) IF SUCH
SHARES OF GRANGES, INC. ARE REGISTERED UNDER THE 1933 ACT OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.
(c) Unless and until any shares of Granges Common Stock (i) shall become
freely transferable as a result of:
(1) having been acquired in exchange for Securities pursuant to an
effective registration statement of Granges, covering the resale of Granges
Common Stock, under the 1933 Act, as evidenced by an officers' certificate of
Granges delivered to the Trustee (and not subsequently withdrawn), stating
that a registration statement covering the Granges Common Stock has been
declared effective, or
(2) having been acquired in exchange for Securities by a non-U.S.
Person (not acting on behalf of a U.S. Person) in accordance with the
provisions of Regulation S, provided, that the person acquiring such Granges
-------- ----
Common Stock in exchange for Securities delivers a certificate to the
Trustee, certifying that the Securities were not exchanged by or on behalf of
a U.S. Person and certifying that it is not exercising its right to acquire
Granges Common Stock in exchange for Securities within the United States, and
provided, further, that the address to which the Granges Common Stock is
-------- -------
delivered upon exchange of the Securities is not within the United States; or
(ii) the Trustee shall have received from the Holder an opinion of counsel
having substantial experience under the 1933 Act and otherwise reasonably
satisfactory to the Company that the legends on the Granges Common Stock may be
removed, such certificate representing Granges Common Stock delivered pursuant
to the Indenture shall bear the following restrictive legend:
THE SECURITIES COVERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), AND MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED WITHOUT REGISTRATION UNDER THE
1933 ACT UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE OR
REGISTRATION IS OTHERWISE NOT REQUIRED PURSUANT TO REGULATION S, AS EVIDENCED
BY AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY.
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ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to U.S.$11,000,000,
except for Securities authenticated and delivered in exchange for, or in lieu
of, other Securities pursuant to Section 305, 306 or 1202.
The Securities shall be known and designated as the "7% Exchangeable
Debentures due October 25, 2000" of the Company. Their Stated Maturity shall be
October 25, 2000 and they shall bear interest on their principal amount
retroactively from October 25, 1995, payable semi-annually in arrears on May 1
and November 1 in each year, commencing May 1, 1996, at the rate of 7% per annum
until the principal thereof is due and at the rate of 7% 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 111.
The principal of and interest on the Securities shall be payable as
provided in the forms of Securities set forth in Section 202 (any city in which
any Paying Agent is located being herein called a "Place of Payment"), provided,
--------
however, that no fractional shares of Granges Common Stock shall be delivered
- -------
upon payment at Stated Maturity. If more than one Security being paid shall be
held by the same Holder, the number of whole shares (or other integral units of
securities), payable shall be computed on the basis of the aggregate principal
amount of the Securities (or specified portions thereof to the extent permitted
hereby) held and being paid. Instead of any fractional share (or other
fractional unit) which would otherwise be payable on any Security or Securities
the Escrow Agent on behalf of the Company shall pay (but only from the sources
specified below) a cash adjustment in respect of such fractional interest in an
amount equal to the same fraction of the market price per share of the Granges
Common Stock (or per unit of such other security), such market price to be
calculated by the Company as ninety-five percent of the average closing trade
price of Granges Common Stock on the American Stock Exchange, or, if Granges
Common Stock is not then listed on the American Stock Exchange, the stock
exchange or over-the-counter market upon which the Granges Common Stock is
traded which, in aggregate, has the highest dollar trading volume, during the
twenty consecutive trading days ending on the last trading day prior to Stated
Maturity, or, should Granges Common Stock not be traded on any stock exchange or
over-the-counter market, then ninety five percent of the per share fair value of
Granges Common Stock over such twenty-
-32-
day period as determined in good faith by an investment banking firm retained in
good faith by the Company and which is a member of the New York Stock Exchange
or the Toronto Stock Exchange. The Company shall deliver to the Escrow Agent, or
at its option authorize the Escrow Agent to obtain by the sale of shares of
Granges Common Stock (or other securities which are part of the Exchange
Property) held by it, the funds necessary or anticipated by the Escrow Agent to
be necessary for payment of such fractional interests. The Company agrees to
furnish or cause to be furnished to the Escrow Agent any additional funds
required to permit such cash payments in respect of fractional interests.
The Securities shall be redeemable at the option of the Company at any
time on or after October 25, 1998, as provided in Article Eleven and in the form
of Securities set forth in Section 202.
The Securities shall be exchangeable as provided in Article Twelve.
SECTION 302. Denominations.
The Securities shall be issuable, without coupons, in denominations as
indicated in Section 202.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its Chief Executive
Officer, its President or one of its Vice Presidents, 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.
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
-33-
Authenticating Agent by manual signature of an authorized officer, 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 304. Securities.
(a) The Trustee shall authenticate, register and deliver Securities
for original issuance as instructed from time to time by a requisition of the
Special Warrant Trustee. Under no circumstances will the Trustee authenticate,
register and deliver Securities for original issuance without first having
received such requisition. Such requisition shall specify the aggregate
principal amount of Securities previously issued under this Indenture, the
remaining aggregate principal amount of Securities authorized under this
Indenture, the name or names to be registered, the principal amount or amounts
to be authenticated and the manner and place of delivery and shall otherwise be
in a format agreed upon by the Trustee and the Special Warrant Trustee. In the
event that a retraction right arises with respect to the Special Warrants, the
Company shall give the Trustee immediate notice thereof and, thereafter, prior
to the issuance of any Securities pursuant to this Section 304(a), the Trustee
shall be entitled to receive an Opinion of Counsel to the effect that the
issuance of such Securities is entitled to an exemption under the 1933 Act.
Promptly upon receipt of such requisition, the Trustee shall give written notice
to the Special Warrant Trustee as to the time by which it reasonably expects to
be able to authenticate, register and deliver the Securities referred to in such
requisition. Upon such authentication, registration and delivery, the Trustee
shall notify the Company and the Special Warrant Trustee in writing thereof and
the Company shall deliver to the Trustee a receipt therefor.
(b) The Securities shall be issued in definitive registered form,
without coupons, substantially in the form specified in Section 202.
(c) 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 pursuant to this
Section 304 together with a Company order for authentication and delivery of
such Securities, and the Trustee or an Authenticating Agent in accordance with
such Company Order shall authenticate and deliver such Securities as in this
Indenture provided and not otherwise. In connection with any Company Order for
authentication, a compliance certificate and Opinion of Counsel pursuant to
Section 102 shall not be required.
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SECTION 305. 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 being herein
sometimes 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 1002 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 205).
At the option of the Holder, and subject to the other provisions of
this Section 305, Securities may be exchanged for other Securities of any
authorized denominations 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 305, 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 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 305, 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 1202 (other than where the shares of Granges
Common Stock are to be issued or delivered in a name other than that of the
Holder of the Security) not involving any transfer.
-35-
(b) Beneficial ownership of every Security shall be subject to the
restrictions on transfer provided in the legend required to be set forth on the
face of each Security pursuant to Section 205, unless such restrictions on
transfer shall be waived by the written consent of the Company, and the Holder
of each Security, by such Holder's acceptance thereof, agrees to be bound by
such restrictions on transfer. Whenever any such legended Security is presented
or surrendered for registration of transfer or for exchange for a Security
registered in a name other than that of the Holder, such Security must be
accompanied by a certificate in substantially the form set forth in Section 311,
dated the date of such surrender and signed by the Holder of such Security, as
to compliance with such restrictions on transfer. Neither the Security Registrar
nor any Transfer Agent shall be required to accept for such registration of
transfer or exchange any such legended Security not so accompanied by a properly
completed certificate.
As used in the preceding paragraph of this Section 305, the term
"transfer" encompasses any sale, pledge, transfer or other disposition of any
Security.
(c) Neither the Trustee, the Principal Paying Agent nor any of their
agents shall (1) have any duty to monitor compliance with or with respect to any
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 306. Mutilated, Destroyed, Lost or Stolen Securities.
If any mutilated Security is surrendered to the Trustee or a Transfer
Agent 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 the Trustee or a Transfer
Agent:
(1) evidence to their satisfaction of the destruction, loss or theft
of any Security, and
(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
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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 exchange 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 306, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee, the Principal Paying
Agent and the Transfer Agent) connected therewith.
Every new Security issued pursuant to this Section 306 in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and 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 306 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. 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
"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)
-37-
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. Not less than
10 days prior to a Special Record Date, 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. 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 305,
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 exchanged as permitted by Section
1201 interest accrued to the date of exchange on the principal amount exchanged
shall be payable 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 the date
on which such Security shall have been properly surrendered for exchange.
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SECTION 308. 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 and (subject to
Sections 305 and 307) 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 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange 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
309 except as expressly permitted by this Indenture. All canceled Securities
and any certificates in connection therewith held by the Trustee shall be
delivered to the Company.
SECTION 310. Computation of Interest.
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.
SECTION 311. Form of Certification.
In connection with the certification contemplated by Section 305 or
1202 relating to compliance with certain restrictions relating to transfers of
Restricted Securities, such certification shall be provided substantially in the
form of the following certificate, with only such changes as shall be approved
by the Company and the Trustee:
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"CERTIFICATE
ATLAS CORPORATION
7% EXCHANGEABLE DEBENTURES DUE OCTOBER 25, 2000
This is to certify that as of the date hereof with respect to
U.S.$________ principal amount (as defined in the Indenture) of the above-
captioned securities presented or surrendered on the date hereof (the
"Surrendered Securities") for registration of transfer, or for exchange for like
Securities of other denominations or for Granges Common Stock where the
securities issuable upon such exchange are to be registered in a name other than
that of the undersigned Holder (each such transaction being a "transfer"), the
undersigned Holder (as defined in the Indenture) certifies that the transfer of
Surrendered Securities associated with such transfer complies with the
restrictive legend set forth on the face of the Surrendered Securities for the
reason checked below:
__________ The transfer of the Surrendered Securities complies with Rule 144
under the United States 1933 Act of 1933, as amended (the "1933 Act"); or
__________ The transfer of the Surrendered Securities complies with Rule 144A
under the 1933 Act; or
__________ The transfer of the Surrendered Securities complies with Rule 904
under the 1933 Act.
__________ The transfer of the Surrendered Securities has been made to an
individual or institution that is an "accredited investor" within the meaning of
Rule 501(a) under the 1933 Act in a transaction exempt from the registration
requirements of the 1933 Act because such institution is:
__________ any bank as defined in Section 3(a)(2) of the 1933 Act, or
any savings and loan association or other institution as
defined in Section 3(a)(5)(A) of the 1933 Act whether
acting as an individual or fiduciary capacity; any broker
or dealer registered pursuant to Section 15 of the 1934
Act; any insurance company as defined in Section 2(13) of
the 1933 Act; any investment company registered under the
Investment Company Act of 1940
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or a business development company as defined in Section
2(a)(48) of that act; any Small Business Investment
Company licensed by the U.S. Small Business Administration
under Section 301(c) or (d) of the Small Business
Investment Act of 1958; any plan established and
maintained by a state, its political subdivisions, or any
agency or instrumentality of a state or its political
subdivisions for the benefit of its employees, if such
plan has total assets in excess of $5,000,000; any
employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974 if the investment
decision is made by a plan fiduciary, as defined in
Section 3(21) of such act, which is either a bank, savings
and loan association, insurance company, or registered
investment adviser, of if the employee benefit plan has
total assets in excess of $5,000,000 or, if a self-
directed plan, with investment decisions made solely by
persons that are accredited investors;
__________ any private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940;
__________ any organization described in Section 501(c)(3) of the
Internal Revenue Code, corporation, Massachusetts or
similar business trust, or partnership, not formed for the
specific purposes of acquiring the securities offered,
with total assets in excess of $5,000,000;
__________ any director, executive officer, or general partner of the
Company;
__________ any natural person whose individual net worth, or joint
net worth with that person's
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spouse, at the time of his purchase exceeds $1,000,000;
__________ any natural person who had an individual income in excess
of $200,000 in each of the two most recent years or joint
income with that person's spouse in excess of $300,000 in
each of those years and has a reasonable expectation of
reaching the same income level in the current year;
__________ Any trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the
securities offered, whose purchase is directly by a
sophisticated person as described in Rule 506(b)(2)(ii) of
Regulation D under the 1933 Act; or
__________ any entity in which all of the equity owners are
accredited investors.
________ The transfer of the Surrendered Securities has been made pursuant to
an effective registration statement filed under the 1933 Act.
[Name of Holder]
____________________
Dated: ____________, ____*"
* To be dated the date
of presentation or
surrender
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SECTION 312. CUSIP Numbers.
The Company in issuing Securities may use "CUSIP" numbers (if then
generally in use) in addition to serial numbers; if so, the Trustee shall use
such "CUSIP" numbers in addition to serial numbers in notices of redemption as a
convenience to Holders; provided that any such notice may state that no
--------
representation is made as to the correctness of such CUSIP numbers either as
printed on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the serial or other identification numbers
printed on the Securities, and any such redemption shall not be affected by any
defect in or omission of such CUSIP numbers.
SECTION 313. Taxes and Withholding.
(a) Unless the requirements of Section 313(d) are met and then except
to the extent that the certifications in Section 313(d) validly provide for
exemption or relief therefrom, any and all payments hereunder shall be made
subject to deduction for any present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto
including (i) United States withholding taxes applicable to the payment of
interest to a Holder, and (ii) any tax or charge arising from the transfer of
ownership of Securities or the registration of Securities in a name other than
that of prior Holder (all such expenses being referred to as "Taxes").
(b) The Company shall promptly furnish to the Trustee Internal
Revenue Service Form 1042S evidencing payment of Taxes or other evidence of
payment chosen by the Company, in each case to the extent reasonably available,
and the Trustee shall in turn distribute copies of such evidence to each Person
requesting such copies on whose behalf taxes were paid.
(c) Without prejudice to the survival of any other agreement of the
Company hereunder, the agreements and obligations of the Company contained in
this Section 313 shall survive the satisfaction and discharge of this Indenture
until six months after the applicable statute of limitations with respect to the
relevant Taxes expires.
(d) The Company shall, until the end of the period described in
paragraph (c) of this Section 313, maintain a record of the identity of any
Person who held a beneficial interest in the Securities. To the extent
applicable to such Person, and to the extent such Person wishes to claim the
benefits of this Section 313, such Person shall provide to the Company its name
and address and shall certify to the Company that (i) it is entitled to receive
payments of interest hereunder subject to the portfolio interest exemption from
United States withholding tax on interest pursuant to Sections 871(h) and 881(c)
of the
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Code, (ii) it is not a ten percent shareholder of the Company within the
meaning of Section 871(h)(3) of the Code, (iii) it is not a controlled foreign
corporation receiving interest from a related person for purposes of Section
881(c)(3), (iv) it is not a United States person, citizen or resident, and (v)
it is not licensed to conduct a banking business or to accept deposits from
members of the public and, in fact, does not accept such deposits, and such
Person shall have undertaken to provide to the Company such tax forms, including
a Certificate of Foreign Status (Internal Revenue Service Form W-8), as may
reasonably be requested from time to time by the Company to ensure the
availability to such Person of such exemption from United States withholding tax
on interest pursuant to Sections 871(h) and 881(c) of the Code. In the event
that such a Person is unable to provide the certifications set forth in the
previous sentence, it shall provide to the Company, if applicable, a properly
completed U.S. Internal Revenue Service Form 1001 and shall certify to the
Company that it is entitled to receive interest subject to a reduced U.S.
withholding tax rate, or a properly completed Form 4224 and shall certify to the
Company that it is entitled to receive interest without deduction of U.S.
withholding taxes. Such certification by each such Person on such Form 1001
shall be accompanied by a copy of a Certificate of Foreign Status (Internal
Revenue Service Form W-8) duly executed by the Person named in such
certification or Form. Such Person shall also provide to the Company from time
to time any other documentation or information required by the Code and the
regulations, rulings and forms pertaining thereto or to any successor provision,
or by any other provision of law, with respect to any such applicable exemption
from United States withholding tax on interest or reduction in the rates thereof
with respect to payments to be made hereunder.
(e) The Company shall give the Trustee an Officers' Certificate as to
the necessity, if any, to withhold any amounts from payments to Holders (and the
amount of any such withholding) whether pursuant to this Section 313 or arising
from the delivery by a Holder of any certificate or notice pursuant to Section
204 of this Indenture and the Trustee and any Paying Agent may rely conclusively
on such Officers' Certificate in making payments hereunder.
(f) If any Taxes are assessed against the Company or the Trustee with
respect to payments previously made hereunder, the Holder of any Security in
respect of which such Taxes were assessed shall, and each such Holder, by his
acceptance of the Securities, hereby agrees to, promptly, upon demand, pay such
Taxes directly to the entity imposing such Taxes or, in case that the Company or
Trustee, as the case may be, shall have already made such payment, shall repay
the full amount of such Taxes so paid, and each such Holder, by his acceptance
of the Securities further agrees that amounts not so repaid shall be paid
------- ------
directly to the Company or Trustee, as the case may be, and not to the Holder
out of the amount of any interest or principal payable to such Holder hereunder
as such payments become due or out of the amount of any Granges Common Stock
otherwise
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deliverable to such Holder upon exchange hereunder at the time such exchange
takes place, whether or not such payments or Granges Common Stock are
deliverable in respect of the Security in respect of which Taxes were paid,
until such amount shall have been fully repaid.
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect (except as to any surviving rights of exchange, or registration of
transfer or exchange pursuant to Section 305, or replacement of Securities
herein expressly provided for and the Company's obligations to the Trustee
pursuant to Section 607), and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture, when
(1) 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 306, 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 1003) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee
or the Principal Paying Agent 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 notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of clause (i), (ii) or (iii) 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), which
funds may include, in the case of a deposit under clause (i), Granges
Common Stock if
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permitted by the first sentence of the face or by the reverse of the
Securities) in trust an amount sufficient, and for the purpose, to pay
and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for principal
and 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; and
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Company to any Authenticating Agent under Section 612 and, if money shall
have been deposited with the Trustee pursuant to clause (1)(B) of this Section
401, the obligations of the Trustee under Section 402 and the last paragraph of
Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all
money and securities deposited with the Trustee pursuant to Section 401 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 and interest for whose payment such
money and securities has been deposited with the Trustee.
All moneys deposited with the Trustee pursuant to Section 401 (and
held by it or any Paying Agent) for the payment of Securities subsequently
exchanged shall be returned to the Company upon Company Request.
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ARTICLE FIVE
REMEDIES
SECTION 501. 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 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
Amount) 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 any Security within
the period of time after Maturity as provided in Sections 1001 and 1106, as
applicable; or
(3) default in the performance or observance, or breach, of any term,
covenant, warranty or agreement of the Company in the Securities or this
Indenture, and continuance of such default or breach for a period of 60 days
after written notice of such failure, requiring the Company to remedy the
same and stating that such notice is a "Notice of Default", shall have been
given to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in aggregate principal amount of the Outstanding
Securities; or
(4) (a) failure by the Company to pay when due an aggregate amount in
excess of U.S.$500,000 or the equivalent thereof in any other currency in
respect of any outstanding Indebtedness and the continuance of such failure
beyond any applicable grace period provided for in the terms of such
Indebtedness, or (b) default by the Company with respect to outstanding
Indebtedness, which default results in the acceleration of Indebtedness in an
aggregate amount in excess of U.S.$500,000 or the equivalent thereof in any
other currency, without, in the case of (a) or (b), such Indebtedness having
been discharged or such payment default or acceleration, as the case may be,
having been cured, waived, rescinded or annulled within a period of 10 days
after written notice thereof by or on behalf of the holders of such
Indebtedness; provided, however, that if, prior to the entry of judgment in
-------- -------
favor of any trustee with respect to any Indebtedness or in favor of any
holder of any Indebtedness or other representative of the holders thereof,
such failure or default under such indenture or instrument shall be remedied
or cured by the Company, or waived by or on behalf of
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the holders of such Indebtedness, and such acceleration (if applicable) shall
be rescinded, then the Event of Default under this Indenture shall be deemed
likewise to have been remedied, cured or waived; "Indebtedness" is defined to
mean obligations of, or guaranteed or assumed by, the Company for borrowed
money, including obligations evidenced by bonds, debentures, notes or other
similar instruments (it being understood that "Indebtedness" does not include
obligations under the Securities and obligations to pay the purchase price of
goods if such goods are acquired, and such obligations are incurred, in the
ordinary course of the Company's business); or
(5) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company under Federal bankruptcy law or any other applicable
Federal or State law, or appointing a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or
of any substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days; or
(6) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency, reorganization
or other similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by it to the entry of a decree or order
for relief in respect of the Company in an involuntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency, reorganization
or other similar law or to the commencement of any bankruptcy or insolvency
proceedings against it, or the filing by it of a petition or answer or
consent seeking reorganization or relief under Federal bankruptcy law or any
other applicable Federal or State law, or the consent by it to the filing of
such petition or to the appointment or taking possession of a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors, or the admission
by it in writing of its inability to pay its debts generally as they become
due, or the taking of corporate action by the Company in furtherance of any
such action.
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SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Section 501(5) or 501(6)) 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. If
an Event of Default specified in Section 501(5) or 501(6) occurs, the principal
of, and accrued interest on, all the Securities shall ipso facto become
---- -----
immediately due and payable without any declaration or other Act of the Holder
or any act on the part of the Trustee.
At any time after such declaration of acceleration has been made and
before a judgment or decree for payment of the money due or delivery of the
Pledged Shares 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 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) interest upon overdue interest at a rate of 7% 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 solely by such
declaration of acceleration, have been cured or waived as provided in Section
513.
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In addition to the foregoing, if any declaration of acceleration is
based solely on an Event of Default specified in Section 501(4) and if, at any
time after such declaration and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article
provided, such Event of Default is deemed to have been remedied, cured or waived
pursuant to the proviso of Section 501(4) and the conditions set forth in
Clauses (1) and (2) of the preceding paragraph have been satisfied, then such
declaration and its consequences shall be deemed to have been automatically
rescinded and annulled without any further action by the Trustee or the Holders.
No rescission or annulment referred to above shall affect any
subsequent default or impair any right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits
for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any 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 any Security
within the period of time after the Maturity thereof as provided in Sections
1001 and 1106, as applicable,
the Company will, upon demand of the Trustee, pay to it in cash, for the benefit
of the Holders of such Securities the whole amount then due and payable on such
Securities for principal and interest and interest on any overdue principal and
on any overdue interest, at a rate of 7% per annum, 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 whole amount of such interest and principal
remaining unpaid, and may prosecute such proceeding to judgment or final decree
and may enforce the same against the Company or any other obligor upon the
Securities.
If an Event of Default 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
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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.
SECTION 504. 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 either of
their creditors, 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 and
interest owing and unpaid in respect of the Securities and to file such other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel)
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 607.
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
- -------- -------
-52-
behalf of such Holders, vote for the election of a trustee in bankruptcy or
similar official and be a member of a creditors' or other similar committee.
SECTION 505. 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 506. Application of Money Collected.
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 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
607;
SECOND: To the payment of the amounts then due and unpaid for
interest on the Securities in respect of which or for the benefit of which
such money has been collected;
THIRD: To the payment of the amounts then due and unpaid for
principal on the Securities in respect of which or for the benefit of which
such money has been collected; and
FOURTH: Any remaining amounts shall be repaid to the Company.
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SECTION 507. 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;
(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 45 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 45-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.
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SECTION 508. Unconditional Right of Holders to Receive
Principal and Interest and to Exchange.
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 and (subject to Section 307) interest on
such Security on the respective Stated Maturities expressed in such Security
(or, in the case of redemption on the Redemption Date), and to exchange such
Security in accordance with Article Twelve, and to institute suit for the
enforcement of any such payment and right to exchange, and such rights shall not
be impaired without the consent of such Holder.
SECTION 509. 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 510. 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 paragraph
of Section 306, 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.
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SECTION 511. 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.
SECTION 512. 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
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(1) such direction shall not be in conflict with any rule of law or
with this Indenture and could not involve the Trustee in personal liability,
and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction or this Indenture.
SECTION 513. Waiver of Past Defaults.
The Holders, either (a) through the written consent of Holders of not
less than a majority in 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 two thirds
in principal amount of the Outstanding Securities represented at such meeting,
may waive any past default hereunder and its consequences, except a default (1)
in the payment of the principal of 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 Holders 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 every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
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SECTION 514. 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 514 shall not apply 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 or interest on any Security on or after the
respective Stated Maturity or Maturities expressed in such Security (or, in the
case of redemption, on or after the Redemption Date) or for the enforcement of
the right to exchange any Security in accordance with Article Twelve.
SECTION 515. Waiver of Usury, 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 usury, 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.
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ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(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.
This Section 601(a) shall be in lieu of Section 315(a) of the TIA and such
Section 315(a) is hereby expressly excluded from this Indenture, as permitted by
the TIA.
(b) In case an Event of Default has occurred and is continuing
(provided, in the case of an Event of Default under Section 501(4), the Trustee
is deemed to have notice of such Event of Default pursuant to Section 603(8)),
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 wilful misconduct, except that
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(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;
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(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.
(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 602. Notice of Defaults.
Within 60 days after the occurrence of any default hereunder as to
which the Trustee has received notice, the Trustee shall give to all Holders of
Securities, in the manner provided in Sections 105 and 613, notice of such
default, unless such default shall have been cured or waived; provided,
--------
however, that in the case of any default of the character specified in Section
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501(3), no such notice to Holders of Securities shall be given until at least 30
days after the occurrence thereof, provided further, that, except in the case of
----------------
default in the payment of principal or interest on any Security, the Trustee may
withhold such notice if and so long as the board of directors, executive
committee, or a trust committee of directors and/or responsible officers, of the
Trustee in good faith determine that the withholding of such notice is in the
interests of the Holders. 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.
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SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(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, note, coupon, 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
written advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;
(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, coupon, 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;
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(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; and
(8) the Trustee shall not be deemed to have notice of any Event of
Default under Section 501(4) unless a Responsible Officer of the Trustee
shall have received notice thereof from Holders of not less than 25% in
principal amount of the Outstanding Securities.
SECTION 604. 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 or of the Securities. The Trustee shall not be accountable for the
use or application by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities, Act as Trustee
Under Other Indentures.
Subject to Section 614(a), the Trustee, any Authenticating Agent, any
Paying Agent, any Escrow 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, Escrow Agent or
such other agent.
Subject to Section 614(a), 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.
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SECTION 606. 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 607. Compensation and Indemnification of Trustee
and Its Prior Claims.
The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, such compensation as the Company and
the Trustee shall from time to time agree on in writing (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust) and the Company covenants and agrees to pay or reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by or on behalf of it in accordance with any of the provisions
of this Indenture (including the reasonable compensation and the expenses and
disbursements of its counsel and of all agents and other persons not regularly
in its employ), except to the extent that any such expense, disbursement or
advance is due to its negligence or bad faith. The Company also covenants to
indemnify the Trustee for, and to hold it harmless against, any and all loss,
liability, damage, claims or expense including taxes (other than taxes based on
or measured or determined by the income of the Trustee) incurred by it, arising
out of or in connection with the acceptance or administration of this Indenture
or the trusts hereunder or the performance of its duties hereunder, including
the costs and expenses of defending itself against or investigating any claim or
liability in the premises, except to the extent that any such loss, liability,
damage, claims or expense was due to the Trustee's negligence or bad faith. The
obligations of the Company under this Section 607 to compensate and indemnify
the Trustee and to pay or reimburse the Trustee for expenses, disbursements and
advances shall constitute additional indebtedness hereunder and shall survive
the satisfaction and discharge of this Indenture. To secure the Company's
payment obligations under this Section, the Trustee shall have a lien prior to
the Securities on (i) all money or property held or collected by the Trustee, as
such, except money or property held in trust to pay the principal of or interest
on particular Securities and (ii) all Exchange Property held under the Escrow
and Pledge Agreement and such lien shall survive the satisfaction and discharge
of the Indenture and any other termination of the Indenture including any
termination under any bankruptcy law. Without limiting any other rights
available to the Trustee under applicable law, when the Trustee incurs expenses
or renders services in connection with an Event of Default specified in Section
501(5) or (6), the Holders by their acceptance of the Securities hereby agree
that such expenses and the compensation for such services are intended to
constitute expenses of administration under
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any bankruptcy law. "Trustee" for purposes of this Section 607 shall include any
predecessor Trustee, but the negligence or bad faith of any Trustee shall not
(except to the extent otherwise required by law) affect the indemnification of
any other Trustee.
SECTION 608. 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 and in good standing. 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 609.
SECTION 609. 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 610.
(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 610 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.
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(d) If at any time:
(1) the Trustee shall cease to be eligible under this Article 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 514, 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
who shall comply with the applicable requirements of this Section and Section
610. 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 610, 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 and accepted
appointment in the manner required by this Section and Section 610, 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 105. Each notice shall
include the name of the successor Trustee and the address of its Corporate Trust
Office.
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SECTION 610. 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 611. 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,
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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.
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SECTION 612. Authenticating Agent.
The Trustee may, with the consent of the Company, appoint an
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 transfer, exchange or substitution pursuant
to this Indenture. The Trustee shall so appoint any such agent required to
effectuate the listing on the Vancouver Stock Exchange contemplated by Section
1007.
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, 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 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 the federal or any
provincial laws of Canada, 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 612, such Authenticating Agent
shall resign immediately in the manner and with the effect specified in this
Section 612.
Any corporation into which an Authenticating Agent may be merged or
exchanged 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
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under this Section 612, 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 612, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to 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
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originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section 612.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section 612.
If an Authenticating Agent is appointed with respect to the Securities
pursuant to this Section 612, 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:
This is one of the Securities referred to in the within-mentioned
Indenture.
__________________________,
as Trustee
By [Authenticating Agent],
as Authenticating Agent
By ___________________________
Authorized Officer
If the Special Warrant Trustee or any other Canadian Person is
appointed to act as an Authenticating Agent with respect to the Securities
pursuant to this Section 612, 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:
Countersigned for Authentication Only
_______________________,
as Transfer Agent
By ___________________________
Authorized Officer
SECTION 613. Reports by Trustee to Holders.
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(a) The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
TIA at the times and in the manner provided pursuant thereto. To the extent
that any such report is required by the TIA with respect to any 12-month period,
such report shall cover the 12-month period ending May 15 and shall be
transmitted within 60 days thereafter.
(b) A copy of each report at the time of its mailing to Holders shall
be filed with the United States Securities and Exchange Commission and each
securities exchange on which the Securities are listed. The Company shall
notify the Trustee whenever the Securities become listed on any securities
exchange and any delisting therefrom.
(c) The Trustee shall also transmit any reports made pursuant to this
Section 613 to those parties required to receive them by virtue of the TIA.
SECTION 614. Additional Qualifications and Duties Pursuant to the Trust
Indenture Act.
In addition to the other qualifications and duties required of the
Trustee by this Article Six, the Trustee shall also comply with the following:
(a) the Trustee shall at all times satisfy the requirements of TIA
Sections 310(a)(1), 310(a)(5) and 310(b);
(b) The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
(c) The Company shall furnish or cause to be furnished to the
Trustee, at six-month intervals and at such other times as the Trustee shall
request in writing, all information in its possession or control, or the control
of any Paying Agents, regarding the names and addresses of Holders, and the
Trustee shall preserve such information in as current a form as is reasonably
practicable, including any such information received by the Trustee as Paying
Agent.
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ARTICLE SEVEN
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 701. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person
or convey, transfer, sell or lease all or substantially all of its properties
and assets to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company or convey, transfer, sell or lease
all or substantially all of its properties and assets to the Company, unless:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer, sell or lease all or substantially all of its
properties and assets to any Person, the Person formed by such consolidation
or into which the Company is merged or the Person which acquires by
conveyance, transfer or sale, or which leases, all or substantially all of
the properties and assets of the Company shall be a corporation, partnership
or trust, shall be organized and validly existing under the laws of the
United States of America, any State thereof or the District of Columbia and
shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of and interest on all of the Securities
and the performance or observance of every covenant of this Indenture on the
part of the Company to be performed or observed and shall have provided for
exchange rights in accordance with Section 1204(a)(5) if applicable;
(2) immediately after giving effect to such transaction and treating
any Indebtedness which becomes an obligation of the Company as a result of
such transaction as having been incurred by the Company at the time of such
transaction, no Event of Default, and no event which, after notice or lapse
of time or both, would become an Event of Default, shall have happened and be
continuing; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture comply with
this Article and that all conditions precedent herein provided for relating
to such transaction have been complied with, together with any documents
required under Section 803.
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SECTION 702. Successor Substituted.
Upon any 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 701, 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 801. 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 make provision with respect to the exchange rights of Holders
of Securities pursuant to Section 1204(a)(5);
(4) 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
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(4) shall not adversely affect the interests of the Holders of Securities; or
(5) subject to Section 508, to comply, by a non-material modification
of terms, with the requirements or suggestions of any official or semi-
official regulatory or self-regulatory body having jurisdiction over the
Company or the Securities, provided, however, that nothing in this paragraph
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(5) shall permit any modification disadvantageous in any material respect to
the Holders without the consent or vote of Holders pursuant to the procedures
specified in Section 802.
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 803 hereof, the
Trustee shall join with the Company in the execution of any supplemental
indenture authorized or permitted by the
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terms of this Indenture and to make any further appropriate agreements and
stipulations which may be therein contained.
SECTION 802. 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 two-thirds 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
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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 reduce the amount of principal that
would be due and payable upon a declaration of acceleration of the maturity
thereof pursuant to Section 502 or a redemption thereof pursuant to Article
Eleven, or change the coin or currency in which any Security or the interest
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 on or after the Redemption Date) or, except as permitted by
Section 1204, adversely affect the right to exchange any Security as provided
in Article Twelve, or
(2) reduce the requirements of Section 904 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 provided for in this
Indenture, or
(3) modify the obligation of the Company to maintain an office or
agency pursuant to Section 1002, or
(4) modify any of the provisions of this Section or Section 513,
except to increase any voting requirements contained herein or therein or to
provide that certain
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other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security affected thereby, or
(5) waive a default in the payment of the principal of or interest on
any Security.
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 803. 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 601 and 603) 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, 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 804. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
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SECTION 805. 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 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 806. Notice of Supplemental Indentures.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 802, 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 105. 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.
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ARTICLE NINE
MEETINGS OF HOLDERS OF SECURITIES
SECTION 901. 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 902. 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 901, to be held at such time and
at such place 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 105, 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 10% 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 901, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have mailed 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 for
such meeting and may call such meeting for such purposes by giving notice
thereof as provided in paragraph (a) of this Section with regard to notice by
the Trustee, for which purpose the Trustee shall, upon written request of the
Company or such Holders, provide the names and addresses of all Holders as
indicated in the Security Register.
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SECTION 903. 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 904. 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
case, 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). Except
as provided in Section 905(d), notice of the reconvening of any adjourned
meeting shall be given as provided in Section 902(a), except that such notice
need only be given 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.
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 802) shall be effectively passed and decided
if passed or decided by the Persons entitled to vote not less than two-thirds in
principal amount of Outstanding Securities represented and entitled to vote at
such meeting.
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
105.
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SECTION 905. 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 shall
be proved in the manner specified in Section 103 and the appointment of any
proxy shall be proved in the manner specified in Section 103.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman (which may be the Trustee) of the meeting, unless the meeting
shall have been called by the Company or by Holders of Securities as provided in
Section 902(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
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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 902 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.
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SECTION 906. 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 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 902 and, if applicable, Section 904. 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.
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ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal and Interest.
The Company covenants and agrees that it will duly and punctually pay
the principal of 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 or the Principal Paying Agent, prior to the due date
for any installment of interest, all payments so due, which payments shall be in
immediately available funds on the due date. Any payments so deposited shall be
held in trust for the Holders and the Trustee, and any Paying Agent shall give
notice to the Trustee of any default by the Company in making any payments so
due. Upon maturity of the Securities the Company shall retire the Securities by
making payment in cash, Granges Common Stock or cash and Granges Common Stock as
provided in Section 202.
In the case of any payments of principal due at Stated Maturity, in
whole or in part, in Granges Common Stock, the Company will deposit or cause to
be deposited with the Trustee or the Principal Paying Agent on or before the
fifth Business Day after the Stated Maturity of the Securities the cash due in
accordance with the first sentence of the face of the Securities set forth in
Section 202 and, in the case that the Exchange Property to be released from the
lien of this Indenture for payment on Maturity in accordance with Section 11 of
the Escrow and Pledge Agreement is insufficient to make payment in accordance
with the first sentence of the face of the Securities set forth in Section 202,
the Company shall also deliver on or before such fifth Business Day a sufficient
amount of Granges Common Stock to make up such insufficiency, such cash or stock
to be held in trust for the Holders and the Trustee, and any Paying Agent shall
give notice to the Trustee of any default by the Company in making any such
payments so due.
In the case of any payments of principal due at Stated Maturity made
wholly in cash, such cash will be deposited with the Trustee or the Principal
Paying Agent prior to Stated Maturity, to be held in trust for the Holders and
the Trustee, and any Paying Agent shall give notice to the Trustee of any
default by the Company in making any such payments so due.
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SECTION 1002. 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
Registered 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 exchange and where notices and demands to or
upon the Company in respect of the Securities and this Indenture may be served.
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
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been delivered to the Trustee for cancellation, or moneys sufficient to pay the
principal of 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
1003, the Company will maintain an office or agency where Securities may be
presented or surrendered for payment and exchange, 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. The Company will give prompt written notice to the Trustee, and
notice to the Holders in accordance with Section 105, of the appointment or
termination of any agents and of the location and any change in the location of
any such office or agency.
If at any time the Company shall fail to maintain an 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 1003. Money for Security Payments To Be Held
in Trust.
If the Company shall act as a Paying Agent, it will, on or before each
due date of the principal of 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 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.
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:
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(1) hold all sums held by it for the payment of the principal of 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;
(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
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 and the Company 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 or interest on any
Security and remaining unclaimed for two years after such principal 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 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; provided, however, that the
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Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in an Authorized
Newspaper in each Place of Payment, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
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SECTION 1004. Corporate 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 corporate
existence, rights (charter and statutory) and franchises; provided, however,
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that the Company shall not be required to preserve any such right or franchise
if the Board of Directors, or Chief Executive Officer and Chief Financial
Officer of the Company jointly, 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 1005. 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
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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 1006. Payment of Taxes and Other Claims.
The Company will promptly 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, real or personal, or upon any part
thereof, of the Company or any Subsidiary, and (2) all claims for labor,
materials and supplies which, if unpaid, might by law become a lien or charge
upon the property of the Company or any Subsidiary; provided, however, that
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neither the Company nor any Subsidiary shall be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim (i)
whose amount, applicability or validity is being contested in good faith by
appropriate proceedings, or (ii) if the effect of such failure to pay or
discharge would not have a material adverse effect on the assets, business,
operations, properties or condition (financial or otherwise) of the Company and
its Subsidiaries taken as a whole.
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SECTION 1007. Registration and Listing.
The Company shall, for the benefit of Holders, as soon as practicable,
file (or cause to be filed): (i) a preliminary prospectus and final prospectus
(the "Prospectus") in the Canadian Provinces of Ontario and British Columbia
qualifying the distribution of the Securities and (ii) a registration statement
or registration statements (the "1933 Registration Statement") under the 1933
Act, registering the Securities and the underlying shares of Granges Common
Stock for resale, and shall also file (or cause to be filed) all required
filings with state securities or "blue sky" administrators in the states where
the Holders of the Securities propose to offer and sell the Securities and the
underlying shares of Granges Common Stock (the "Blue Sky Filings"). Subject to
the following paragraph, the Company shall use its best efforts to cause
receipts to be issued by the securities commissions in Ontario and British
Columbia for the (final) Prospectus and to cause the 1933 Registration Statement
and Blue Sky Filings to become effective not later than the Qualification
Deadline and to cause the 1933 Registration Statement and the Blue Sky Filings
to remain effective and current until the date which is three years after the
latest date on which Granges Common Stock is acquired pursuant to the Indenture
by Holders; provided, however, that the Company may, upon notice to the Holders
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of Securities, temporarily suspend sales under the 1933 Registration Statement
during any reasonable period in which its board of directors determines, in good
faith, that because of material corporate changes, it would not be feasible to
maintain a current prospectus during such period, provided, further, that in
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such event, the Company will, at the earliest possible time thereafter, take all
necessary steps to update the prospectus disclosure and notify the Holders that
sales under the 1933 Registration Statement may resume. The Company shall
further, as soon as practicable, file (or cause to be filed) with the SEC a
registration statement (the "1934 Registration Statement") under the 1934 Act,
registering the Securities under Section 12(b) of the 1934 Act, and shall use
its best efforts to cause the 1934 Registration Statement to become effective
not later than the Qualification Deadline and to remain effective throughout the
term of the Securities.
The Prospectus, the 1933 Registration Statement, the Blue Sky Filings
and the 1934 Registration Statement shall collectively be referred to
hereinafter as the "Registration Filings". In the event that the Registration
Filings are not made effective (or, in the case of the (final) Prospectus, the
securities commissions in Ontario or British Columbia have not issued receipts
therefor) on or before the Qualification Deadline, the Company shall, unless all
Special Warrants are retracted and cancelled pursuant to the Underwriting
Agreement, be obligated to complete the Registration Filings and to make such
filings effective as soon as practicable after the Qualification Deadline and
cause the 1933 Registration Statement, the Blue Sky filings and the 1934
Registration Statement to remain effective for the period set forth herein.
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The Company will cause the Securities to be listed, posted and called
for trading on the Vancouver Stock Exchange (and will use its best efforts to
have the Securities listed, posted and called for trading on the New York Stock
Exchange or such other U.S. securities exchange as is acceptable to the
Underwriters) not later than the earlier of either (i) the fifth Business Day
following the date upon which the requirements of the paragraph above have been
fulfilled or (ii) the first Business Day which is twelve months after November
10, 1995. The Company will maintain such listings throughout the term of the
Securities.
SECTION 1008. 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 Certificate shall further
state, as to each such officer signing such 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 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 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 1008 shall be
delivered to the Trustee at its Corporate Trust Office.
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ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Right of Redemption.
The Securities may be redeemed in accordance with the provisions of
the form of Securities set forth in Section 202, provided, however, that no
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fractional shares of Granges Common Stock (or any form of fractional interest in
any other security which is part of the Exchange Property) shall be delivered
upon redemption of Securities. If more than one Security held by a Holder shall
be redeemed at one time, the number of whole shares (or other integral units of
securities), which shall be delivered upon payment shall be computed on the
basis of the aggregate principal amount of the Securities (or specified portions
thereof to the extent permitted hereby) so redeemed. Instead of any fractional
share (or other fractional unit) which would otherwise be deliverable upon
redemption of any Security or Securities (or specified portions thereof), the
Escrow Agent on behalf of the Company shall pay (but only from the sources
specified below) a cash adjustment in respect of such fractional interest in an
amount equal to the quotient obtained by dividing the product of the fractional
amount of such fractional share and one hundred by the Exchange Rate. The
Company shall deliver to the Escrow Agent, or at its option authorize the Escrow
Agent to obtain by the sale of shares of Granges Common Stock (or other
securities which are part of the Exchange Property) held by it, the funds
necessary or anticipated by the Escrow Agent to be necessary for payment of such
fractional interests, provided that after such sale the number of shares of
Granges Common Stock (and of such other securities) held by it as Exchange
Property shall be sufficient to permit the exchange of all Outstanding
Securities for Granges Common Stock (and any other Exchange Property), on the
basis of the Exchange Rate then in effect, in accordance with the provisions of
Article Twelve. The Company agrees to furnish or cause to be furnished to the
Escrow Agent any additional funds required to permit such cash payments in
respect of fractional interests.
SECTION 1102. 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.
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SECTION 1103. 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, not more than 60 nor
less than 40 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 which notice shall be revocable until the time
the notice of the redemption pursuant to Section 1104 is given. If the
Securities are to be redeemed pursuant to an election of the Company which is
subject to a condition specified in the form of Securities set forth in Section
202, the Company shall furnish the Trustee with 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.
In case of the Company's election to pay the principal due upon
redemption, in whole or in part, in shares of Granges Common Stock, the Company
shall, not less than 30 days prior to the Redemption Date fixed by the Company,
notify the Trustee in writing of such election. Not less than 20 days prior to
the Redemption Date, the Trustee shall notify Holders, in the manner provided in
Section 105, of any such election.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given in the manner provided in Section
105 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, and accrued interest, if any,
(3) if then known, whether payment of principal will be made wholly
in cash or in cash and Granges Common Stock or wholly in Granges Common
Stock,
(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,
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(5) the Exchange Rate, the date on which the right to exchange the
Securities to be redeemed will terminate and the places where such Securities
may be surrendered for exchange,
(6) the place or places that any certificate required by Section 311
shall be delivered, and the form of such certificate,
(7) the place or places where such Securities are to be surrendered
for payment of the Redemption Price and accrued interest, if any, and
(8) the serial and CUSIP numbers (if any) of the Securities called
for redemption 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 request, by the
Trustee in the name of and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price.
In the case of any payment to be made solely in cash, one Business Day
prior to any Redemption Date, the Company shall deposit with the Trustee or with
the Principal Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money (all of which shall be in immediately available form on such Redemption
Date) sufficient to pay such Redemption Price of and 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 exchanged prior to the date
of such deposit.
In the case of any payment to be made in whole or in part in Granges
Common Stock, the Company will deposit or cause to be deposited with the Trustee
or the Principal Paying Agent on or before the fifth Business Day after the
Redemption Date of the Securities any cash due in accordance with the reverse of
the Securities set forth in Section 202 and, in the case that the Exchange
Property to be released from the lien of this Indenture for payment on
Redemption in accordance with Section 11 of the Escrow and Pledge Agreement is
insufficient to make payment in accordance with the reverse of the Securities
set forth in Section 202, the Company shall also deliver by such fifth Business
Day a sufficient amount of Granges Common Stock to make up such insufficiency,
If any Security called for redemption is exchanged, any money
deposited with the Trustee or with a Paying Agent or so segregated and held in
trust for the
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redemption of such Security shall (subject to any right of the Holder of such
Security or any Predecessor Security to receive interest as provided in the last
paragraph of Section 307) be paid to the Company on Company Request or, if then
held by the Company, shall be discharged from such trust.
SECTION 1106. 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; provided, however, that any payment made in
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whole or in part in Granges Common Stock (including any cash payable therewith)
may be made up to five Business Days after the Redemption Date, and any such
payment made within such period shall be deemed paid on the Redemption Date, and
from and after such Redemption 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, 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
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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 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal amount of such Security shall,
until paid, bear interest from the Redemption Date at a rate of 7% per annum and
each Security shall remain exchangeable into Granges Common Stock until the
principal of such Security (or portion thereof, as the case may be) shall have
been paid or duly provided for.
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ARTICLE TWELVE
EXCHANGE OF SECURITIES
SECTION 1201. Right of Exchange.
Subject to and upon compliance with the provisions of this Article
Twelve, at the option of the Holder thereof, any Security may, at any time on or
before the close of business on October 25, 2000, or in the case of Securities
called for redemption in accordance with Section 1101, on or before the close of
business on the Business Day next preceding the Redemption Date (unless the
Company shall default in the payment of the Redemption Price), be exchanged for
fully paid and non-assessable shares (calculated as to each exchange to the
nearest 1/1,000 of a share) of Granges Common Stock (and other Exchange
Property, if any, as provided in this Article) at the Exchange Rate hereinafter
provided.
The rate at which shares of Granges Common Stock shall be deliverable
upon exchange of each U.S.$100.00 principal amount of Securities (herein called
the "Exchange Rate") shall be initially 42.50 shares of Granges Common Stock.
The Exchange Rate shall be subject to adjustment as provided in Sections 1204
and 1213.
SECTION 1202. Method of Exchange.
Subject to the requirement of prior notice set forth in the reverse of
the form of Security set forth in Section 202, in order to exercise the right of
exchange, the Holder of any Security to be exchanged shall surrender such
Security for exchange by delivering such Security, duly endorsed or assigned to
the Company or in blank, to the Company at the Corporate Trust Office of the
Escrow Agent, or at such other office or agency of the Company as may be
designated by it for such purpose, or at such other offices or agencies as the
Company may designate. Securities surrendered shall be accompanied in each
case by written notice, substantially in the form set forth in Section 204 (with
an appropriate box filled in or accompanied by an opinion of counsel with
substantial experience in practice under the 1933 Act and otherwise reasonably
acceptable to the Company, that the Holder's exercise of its right to exchange
is in compliance with the 1933 Act), that the Holder elects to exchange such
Security or, if less than the entire principal amount of a Security is to be
exchanged, the portion thereof to be exchanged, which shall be in an authorized
denomination.
As promptly as practicable after the proper surrender of such Security
for exchange as aforesaid (subject however to the following paragraph of this
Section 1202) and
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in accordance with the procedures set forth in the Escrow and Pledge Agreement
the Company shall deliver or cause the Escrow Agent to deliver at said office or
agency to such Holder, or on his written order, a certificate or certificates
for the number of whole shares of Granges Common Stock and any other Exchange
Property deliverable upon exchange of such Security (or specified portion
thereof), and a check payable to such Holder for any interest accrued on the
principal amount exchanged to the date upon which such Security shall have been
properly surrendered. In addition, provision shall be made for any fraction of a
share as provided in Section 1203. Such exchange shall be deemed to have been
effected immediately prior to the close of business on the date on which such
Security shall have been properly surrendered for exchange as aforesaid, and at
such time the rights of the Holder of such Security as a Holder shall cease and
the Person or Persons in whose name or names any certificate or certificates for
shares of Granges Common Stock or other Exchange Property shall be deliverable
upon such exchange shall, as between such Person or Persons and the Escrow
Agent, be deemed to have become the holder or holders of record of the shares
represented thereby.
Delivery of such certificate or certificates and of any check for any
cash may be delayed for a reasonable period at the request of the Company in
order to effectuate the calculations of the adjustments pursuant to this Article
Twelve, to obtain any certificate representing securities to be delivered or to
complete any reapportionment of the shares of Granges Common Stock and any other
Exchange Property apportioned thereto which is required by this Article Twelve.
If, between the date of exchange and the date of delivery of the applicable
security or securities, such security or securities shall cease to have any or
certain rights, or a record date or effective date of a transaction to which
Section 1204 applies shall occur, the Person entitled to receive such security
or securities shall be entitled only to receive such security or securities as
so modified and any dividends or proceeds received thereon on or after the date
of exchange, and the Company, the Trustee and the Escrow Agent shall not be
otherwise liable with respect to the modification, from the date of exchange to
the date of such delivery, of such security or securities.
Except as otherwise expressly provided in this Indenture, no payment
or adjustment shall be made upon any exchange on account of any interest after
the date on which the Securities are properly surrendered or on account of any
dividends on the Granges Common Stock or other Exchange Property delivered upon
such exchange.
In the case of any Security which is exchanged in part only, upon such
exchange 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 principal amount equal to the
unexchanged portion of such Security.
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If shares of Granges Common Stock to be issued upon exchange of a
Restricted Security, or Securities to be issued upon exchange of a Restricted
Security in part only, are to be registered in a name other than that of the
beneficial owner of such Restricted Security, then such Holder must deliver to
the Escrow Agent a certificate in substantially the form set forth in Section
311, dated the date of surrender of such Restricted Security and signed by such
beneficial owner, as to compliance with the restrictions on transfer applicable
to such Restricted Security. Neither the Trustee nor the Escrow Agent,
Registrar or Transfer Agent shall be required to register in a name other than
that of the Holder shares of Granges Common Stock or Securities issued upon
exchange of any such Restricted Security not so accompanied by a properly
completed certificate.
SECTION 1203. Fractional Interests.
No fractional shares of Granges Common Stock (or any form of
fractional interest in any other security which is part of the Exchange
Property) shall be delivered upon exchange of Securities. If more than one
Security shall be surrendered for exchange at one time by the same Holder, the
number of whole shares (or other integral units of securities), which shall be
delivered upon exchange shall be computed on the basis of the aggregate
principal amount of the Securities (or specified portions thereof to the extent
permitted hereby) so surrendered. Instead of any fractional share (or other
fractional unit) which would otherwise be deliverable upon exchange of any
Security or Securities (or specified portions thereof), the Escrow Agent on
behalf of the Company shall pay (but only from the sources specified below) a
cash adjustment in respect of such fractional interest in an amount equal to the
quotient obtained by dividing the product of the fractional amount of such
fractional share and one hundred by the Exchange Rate. The Company shall deliver
to the Escrow Agent, or at its option authorize the Escrow Agent to obtain by
the sale of shares of Granges Common Stock (or other securities which are part
of the Exchange Property) held by it, the funds necessary or anticipated by the
Escrow Agent to be necessary for payment of such fractional interests, provided
that after such sale the number of shares of Granges Common Stock (and of such
other securities) held by it as Exchange Property shall be sufficient to permit
the exchange of all Outstanding Securities for Granges Common Stock (and any
other Exchange Property), on the basis of the Exchange Rate then in effect, in
accordance with the provisions of this Article. The Company agrees to furnish or
cause to be furnished to the Escrow Agent any additional funds required to
permit such cash payments in respect of fractional interests.
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SECTION 1204. Adjustment of Exchange Rate.
(a) The Exchange Rate shall be subject to adjustments from time to
time as follows:
(1) In case Granges, at any time or from time to time after November
10, 1995, shall declare, order, pay or make a dividend or other distribution
(including, without limitation, any distribution of other or additional stock or
other securities or property or options by way of dividend or spinoff,
reclassification, recapitalization, merger or consolidation in which Granges is
the continuing or resulting corporation, or similar corporate rearrangement) on
the Granges Common Stock, other than a regular periodic cash dividend declared
out of accumulated earnings of Granges or enter into any agreement for the
issuance of Granges Common Stock (or securities convertible onto or exchangeable
for Granges Common Stock) at a cash price per share (or having a conversion or
exchange price per share) less than the Average Market Price (the date upon
which the Company announces its intention to make such issuance being the
relevant record date), then, and in each such case, the Exchange Rate in effect
immediately prior to the close of business on the record date fixed for the
determination of the persons entitled to receive such dividend or distribution
shall be adjusted, effective as of the close of business on such record date, by
multiplying such Exchange Rate by the quotient obtained by dividing (all amounts
being calculated to the nearest cent or 1/100 of a share, as the case may be)
the Average Market Price in effect on such record date, by such Average Market
Price less the amount of such dividend or distribution (as determined in good
faith by the Board of Directors of the Company) applicable to one share of
Granges Common Stock.
As used in this Section 1204(a)(1), the term "Average Market Price"
means the average closing trading price of Granges Common Stock on the American
Stock Exchange (or, if Granges Common Stock is not then listed on the American
Stock Exchange, the stock exchange or over-the-counter market upon which the
Granges Common Stock is traded which, in aggregate, has the highest dollar
trading volume) during a 20 consecutive trading day period ending one day prior
to the record date fixed for the determination of the persons entitled to
receive such dividend or distribution. Should Granges Common Stock not be
traded on any stock exchange or over-the-counter market, then "Average Market
Price" shall mean the fair value of Granges Common Stock over such twenty-day
period as determined in good faith by an investment banking firm retained in
good faith by the Company and which is a member of the New York Stock Exchange
or the Toronto Stock Exchange.
(2) In case Granges, at any time or from time to time after November
10, 1995, shall effect a subdivision of the outstanding shares of Granges Common
Stock into a greater number of shares of Granges Common Stock (by
reclassification or except by
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payment of a dividend in Granges Common Stock), then, and in each such case, the
Exchange Rate in effect immediately prior to such subdivision shall,
concurrently with the effectiveness of such subdivision, be proportionately
increased to reflect such transaction, as determined by the Board of Directors
of the Company.
(3) In case the outstanding shares of Granges Common Stock shall be
combined or consolidated, by reclassification or otherwise, into a lesser number
of shares of Granges Common Stock, the Exchange Rate in effect immediately prior
to such combination or consolidation shall, concurrently with the effectiveness
of such combination or consolidation, be proportionately decreased to reflect
such transaction, as determined by the Board of Directors of the Company.
(4) All determinations by the Board of Directors of the Company under
the provisions of this Indenture shall be made in good faith with due regard to
the interests of the Holder, and in accordance with good financial practice.
(5) In case Granges (i) shall consolidate with or merge into any
other person and shall not be the continuing or surviving corporation in such
consolidation or merger, or (ii) shall permit any other person to consolidate
with or merge into Granges and Granges shall be the continuing or surviving
person but, in connection with such consolidation or merger, the Granges Common
Stock shall be changed into or exchanged for stock or other securities of any
other person or cash or any other property, or (iii) shall transfer all or
substantially all of its properties or assets to any other person, or (iv) shall
effect a capital reorganization or reclassification of the Granges Common Stock,
then, and in each such case, the Company shall execute and deliver to the
Trustee a supplemental indenture, and to the Escrow Agent a supplement to the
Escrow and Pledge Agreement, providing that, upon the basis and the terms and in
the manner provided in this Section 1204(a)(5), each Holder, upon the exercise
of any exchange privilege provided herein at any time after the consummation of
such consolidation, merger, transfer, reorganization or reclassification, shall
be entitled to receive at the aggregate Exchange Rate in effect at the time of
such consummation for all Granges Common Stock issuable upon such exchange
immediately prior to such consummation, in lieu of the Granges Common Stock
issuable upon such exchange prior to such consummation, the stock and other
securities, cash and property to which such Holder would have been entitled upon
such consummation if such Holder had exercised its exchange privilege hereunder
immediately prior thereto, provided, however, that such Holder (i) is not a
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Person with which Granges consolidated or into which Granges merged or which
merged into Granges or to which such conveyance, transfer or lease was made, as
the case may be (a "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, conveyance, transfer or lease (provided that if the kind
or amount of securities, cash and other property
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receivable upon such consolidation, merger, conveyance, transfer or lease is not
the same for each share of Granges Common Stock held immediately prior to such
consolidation, merger, conveyance, transfer or lease by others than a
Constituent Person or any Affiliate thereof and in respect of which such rights
of election shall not have been exercised ("Non-Electing Shares"), then for the
purpose of this Section the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, conveyance, transfer or
lease 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 in each case subject to adjustments (subsequent to such corporate action) as
nearly equivalent as possible to the adjustments provided for herein.
Notice of any such supplemental indenture shall as soon as practicable
be filed with the Escrow Agent and mailed by or on behalf of the Company to the
Holders at their last addresses as they shall appear on the Security Register.
Neither the Trustee nor the Escrow Agent shall be under any
responsibility to determine the correctness of any provisions contained in any
such supplemental indenture relating either to the kind or amount of shares of
stock or securities or property or cash receivable by the Holders upon the
exchange of their Securities as herein provided after any such consolidation,
merger, sale or transfer or to any adjustment to be made with respect thereto.
(6) No adjustment in the Exchange Rate shall be required unless such
adjustment would require an increase or decrease of at least one percent in the
Exchange Rate; provided, however, that any adjustments which by reason of this
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Section 1204 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.
(7) In case any event shall occur as to which the provisions of this
Section 1204 are not strictly applicable but the failure to make an adjustment
would not fairly protect the exchange rights represented by this Indenture and
the Securities in accordance with the essential intent and principles of this
Section, then, in each such case, the Company shall appoint a firm of
independent certified public accountants of recognized national standing (which
may be the regular independent auditors of the Company), which shall give their
opinion upon the adjustment, if any, on a basis consistent with the essential
intent and principles established in this Section 1204, necessary to preserve,
without dilution, the exchange rights represented by this Indenture and the
Securities. Upon receipt of such opinion, the Company will promptly mail a copy
thereof to the Holders and shall make the adjustments described therein.
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(b) In the case of any adjustment or readjustment in the shares of
Granges Common Stock issuable upon the exchange of Securities pursuant to this
Article Twelve, the Company at its expense will promptly compute such adjustment
or readjustment in accordance with the terms of this Indenture and prepare a
report setting forth such adjustment or readjustment and showing in detail the
facts upon which such adjustment or readjustment is based. The Company will
forthwith mail a copy of each such report to the Trustee and to each Holder, and
will, upon the written request at any time of such Holder, furnish to each
Holder a like report setting forth the Exchange Rate at the time in effect and
showing how it was calculated. The Company will also keep copies of all such
reports at its principal office and will cause the same to be available for
inspection at such office during normal business hours by each Holder or any
prospective purchaser of Securities designated by a Holder.
(c) Distributions giving rise to an adjustment to the Exchange
Rate pursuant to paragraph (a) of this Section 1204 shall become Exchange
Property subject to the lien of this Indenture. In the event that any increase
in the Exchange Rate shall cause the aggregate amount of Granges Common Stock
deliverable upon exchange of all Outstanding Securities to exceed the number of
shares of Granges Common Stock constituting Exchange Property, the amount of any
such excess shall be satisfied by apportioning to each Holder, in proportion to
the principal amount of Outstanding Securities held, such Exchange Property as
is not Granges Common Stock.
SECTION 1205. Escrow and Pledge Agreement.
(a) The Company simultaneously with the execution and delivery of
this Indenture is entering into the Escrow and Pledge Agreement with the Trustee
as Escrow Agent, pursuant to which it is depositing with the Escrow Agent, and
granting a security interest for the benefit of the Trustee and the Holders in,
1 share of Granges Common Stock for each $1.18 of principal amount of Special
Warrants issued on the date hereof, or a maximum of 8,474,576 shares of Granges
Common Stock, initially constituting the Exchange Property. The Escrow Agent
shall be the exchange agent for the exchange of Securities for Granges Common
Stock hereunder.
(b) All cash received by the Escrow Agent as herein provided will be
invested upon the written request of the Company by the Escrow Agent from time
to time as so requested by the Company pursuant to the Escrow and Pledge
Agreement.
(c) In the event of any reduction of the principal amount of
Securities Outstanding, as evidenced by the delivery to the Trustee by the
Company of Securities for cancellation, the Exchange Property held by the Escrow
Agent shall be reduced in the same
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proportion as the principal amount of the Securities was so reduced, provided,
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that the Escrow Agent shall retain a sufficient amount of Exchange Property to
exchange all Securities then Outstanding on the basis of the then applicable
Exchange Rate and the other terms and provisions of this Article Twelve and of
the Escrow and Pledge Agreement, and the Company shall, upon Company Request, be
entitled to any excess Exchange Property created by such reduction net of any
Exchange Property delivered in connection with any reduction caused by an
exchange pursuant to this Article. Upon expiration of the right to surrender
Securities for exchange pursuant to this Article and when all other obligations
of the Company shall have been satisfied under the Escrow and Pledge Agreement,
the Trustee will cause all Granges Common Stock and cash and investments and
other property held by the Escrow Agent under the Escrow and Pledge Agreement
which are not required with respect to Securities previously surrendered for
exchange to be delivered by the Escrow Agent to the Company pursuant to the
terms of the Escrow and Pledge Agreement.
(d) The Escrow Agent shall not make any distribution of Exchange
Property to the Company prior to the receipt by the Escrow Agent from the
Company of an Officers' Certificate to the effect that no Event of Default
exists hereunder and no event or condition exists hereunder which with notice or
lapse of time or both would become such an Event of Default and which states in
detail the basis asserted by the Company for such distribution.
(e) The obligations, covenants and agreements contained in the Escrow
and Pledge Agreement shall not constitute obligations, covenants or agreements
contained in this Indenture or any of the Securities and neither the failure by
the Company to observe any obligation, covenant or agreement contained in the
Escrow and Pledge Agreement nor the failure of the Escrow Agent to fulfill any
obligations, agreements or covenants set forth therein shall constitute (with or
without the giving of notice, the passage of time or both) an Event of Default;
provided, however, that nothing in this paragraph shall impair the right of a
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Holder to receive the Exchange Property apportioned to such Holder's Securities
in exchange for such Securities in accordance with the terms and conditions of
this Article Twelve, and nothing in this paragraph shall impair the rights and
remedies of the Trustee and the Holders under Article Five with respect to a
failure by the Company to observe its express agreements and covenants to cause
the exchange of Securities actually surrendered for exchange pursuant to this
Article Twelve for Exchange Property apportioned thereto in accordance with the
terms and conditions of this Article Twelve.
SECTION 1206. Company to Give Notice of Certain Events.
In case at any time after November 10, 1995:
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(a) Granges shall declare a dividend (or any other distribution)
on the Granges Common Stock which the Escrow Agent would be entitled to hold
and apply for the benefit of the Holders of the Securities in accordance with
Sections 1204 or 1305; or
(b) there shall occur any reclassification of Granges Common
Stock (other than a subdivision or combination of outstanding shares of
Granges Common Stock) or any consolidation or merger to which Granges is a
party and for which approval of any stockholders of Granges is required, or
the sale or transfer of all or substantially all of the assets of Granges; or
(c) there shall occur the voluntary or involuntary dissolution,
liquidation or winding up of Granges:
then the Company shall cause to be filed at each office or agency maintained
pursuant to Section 1002, and shall cause to be mailed to the Holders of
Securities at their last addresses as they shall appear upon the Security
Register, at least 20 days or such shorter period which may be necessary under
the circumstances (or six days in any case specified in Clause (a) above) prior
to the record date or other applicable date hereinafter specified, a notice
stating (x) the date, if known by the Company, on which a record is to be taken
for the purpose of such dividend, distribution or rights, or, if a record is not
to be taken, the date as of which the holders of Granges Common Stock of record
to be entitled to such dividend or distribution are to be determined, or (y) the
date, if known by the Company, on which such reclassification, merger,
consolidation, sale, transfer, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is expected that
holders of Granges Common Stock of record shall be entitled to exchange their
shares of Granges Common Stock for securities or other property deliverable upon
such reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up.
SECTION 1207. Covenant by the Company.
So long as any Securities shall be Outstanding and exchangeable
pursuant to this Article, the Company shall use its best efforts to preserve
unimpaired the right of each Holder of Securities, upon exchange thereof, to
receive shares of Granges Common Stock or all other securities, cash or other
property as such Holder shall from time to time be entitled to receive in
accordance with the provisions of this Article.
SECTION 1208. Transfer Taxes.
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The Company will pay any and all taxes that may be payable in respect
of the transfer and delivery of shares of Granges Common Stock (and any other
securities included in the Exchange Property) pursuant hereto, other than
income, capital gains and similar taxes imposed on any Holder by reason of
exchange of Securities for Exchange Property; provided, however, that the
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Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the delivery, upon an exchange of Securities, of shares
of Granges Common Stock (or any other securities included in the Exchange
Property) in a name other than that in which the Securities so exchanged were
registered, and no such transfer shall be made unless and until the Person
requesting such transfer has paid to the Company or the Escrow Agent the amount
of any such tax, or has established to the satisfaction of the Company and the
Escrow Agent that such tax has been paid.
SECTION 1209. Fully Paid Shares.
The Company covenants that all shares of Granges Common Stock
delivered upon the exchange of Securities will be fully paid and non-assessable
and that each Holder who receives shares of Granges Common Stock (or other
Exchange Property) in exchange for his Security pursuant to this Article will
receive valid and marketable title to such shares (or other Exchange Property),
free and clear of all claims, liens and encumbrances provided, however, that,
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except as provided in Section 1007, the Company shall bear no responsibility
for, and makes no covenant regarding, restrictions on transferability that may
be imposed under the securities laws of the United States or any State thereof
(including the 1933 Act, the Exchange Act and state securities and Blue Sky
laws), Canada, or any Province thereof, or any authority (including official or
semi-official regulatory or self-regulatory bodies) of any government asserting
jurisdiction. Except as provided in Section 1208 and Section 313, the Company
will pay all taxes, liens and charges with respect to the delivery of Granges
Common Stock (and other Exchange Property) in exchange for Securities hereunder.
SECTION 1210. Cancellation of Securities.
All Securities delivered for exchange shall be delivered by the Escrow
Agent to the Trustee and be cancelled by the Trustee, and the Trustee shall
dispose of the same as provided in Section 309.
SECTION 1211. Obligations of Trustee and Escrow Agent.
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Subject to the provisions of Section 601, neither the Trustee nor the
Escrow Agent shall 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 Exchange Rate, or with respect to the nature or extent of any
such adjustment when made, or with respect to the method employed, or herein or
in any supplemental indenture provided to be employed, in making the same.
Neither the Trustee nor the Escrow Agent shall be accountable with respect to
the validity or value (or the kind or amount) of any Exchange Property which may
at any time be issued or delivered upon the exchange of any Security; and
neither the Trustee nor the Escrow Agent makes any representation with respect
thereto. Neither the Trustee nor the Escrow Agent shall be responsible for any
failure of the Company to transfer or deliver any Exchange Property or
certificates or other evidence thereof to the Escrow Agent as provided herein,
or to comply with any of the covenants of the Company contained in this Article
Twelve.
SECTION 1212. Exchange Arrangements in Case of Redemption.
In connection with any redemption of Securities, the Company may
arrange for the purchase and exchange for Exchange Property of all or any part
of such Securities by an arrangement with one or more investment bankers or
other purchasers to purchase such Securities by paying to the Holders thereof,
or to the Trustee in trust for such Holders, on or before the close of business
on the Business Day next preceding the Redemption Date, an amount not less than
the applicable Redemption Price of the Securities to be purchased, plus interest
accrued to the Redemption Date. Notwithstanding anything to the contrary
contained in Article Eleven, the obligation of the Company to pay the Redemption
Price of such Securities, plus interest accrued to the Redemption Date, shall be
satisfied and discharged to the extent such amount is so paid by such
purchasers. Any Securities to be purchased pursuant to such agreement which are
not presented for redemption or not duly surrendered for exchange by the Holders
thereof shall be deemed acquired by such purchasers from the Holders and
surrendered by such purchasers for exchange, all as of immediately prior to the
close of business on the Business Day next preceding the Redemption Date,
subject to payment of the above amount as aforesaid. Notwithstanding anything
to the contrary contained in this Article Twelve, in the event that any
Securities subject to such agreement are surrendered for exchange (other than by
the purchasers) by the close of business on the Business Day next preceding the
Redemption Date, the amounts so paid to the Trustee in trust for the Holders of
the Securities so surrendered for exchange shall be returned to such purchasers.
SECTION 1213. Tax Adjustments in Exchange Rate.
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If an event shall occur which causes the Exchange Rate to be subject
to adjustment pursuant to Section 1204 hereof, or a merger, consolidation or
sale or transfer of assets shall occur requiring a supplemental indenture, and
if, within ten days after the effective date of such transaction the Company
shall furnish the Escrow Agent with an Opinion of Counsel to the effect that
such transaction is taxable to the Company or the Escrow Agent and an Officers'
Certificate as to the amount of federal, state and local tax payable by the
Company and the Escrow Agent as a result of such transaction (computed at the
marginal tax rate applicable to such transaction), the Escrow Agent shall pay
to, or to the order of, the Company, in the case of taxes payable by the
Company, or itself, in the case of taxes payable by it, the cash held by it and
apportioned or to be apportioned to the Exchange Property for which outstanding
Securities are exchangeable, up to the amount of such taxes. In the event that
the cash held by the Escrow Agent and so apportioned or to be apportioned is
insufficient to pay to the Company or the Escrow Agent the amount of such taxes,
the Escrow Agent shall, as soon as reasonably practicable and to the extent
legally permissible, sell in accordance with written instructions received from
the Company, or if no such instructions are received it may at its option sell,
as determined by the Escrow Agent, such Exchange Property (including any
securities or other property included therein as shall be specified in such
written instructions) as may be necessary to pay, from the proceeds thereof
after payment of any taxes by the Company and the Escrow Agent on such sale
(which shall be similarly evidenced by an Opinion of Counsel and Officers'
Certificate), the amount of any such insufficiency. The Escrow Agent shall
notify the Company and the Trustee of any such sale and the Exchange Property
sold. In the event that proceeds from the sale of all Exchange Property is
insufficient to pay to the Escrow Agent the amount of such taxes, the Company
shall pay such insufficiency from its own assets. Following payment of all
necessary amounts to the Company and to the Escrow Agent, the Exchange Property
held by the Escrow Agent and any cash apportioned thereto shall be
proportionately adjusted (based on an Officers' Certificate) so as to be
apportioned equally to the Securities Outstanding as of immediately after the
close of business on the record date or the effective date for the transaction
to which this Section 1213 applies (as shall be specified in Section 1204). Any
Holder surrendering any Securities after such record date, or such effective
date, as the case may be, shall be entitled to receive the Exchange Property and
any cash apportioned thereto as so adjusted pursuant to this paragraph. If this
Section 1213 shall apply to a transaction and the sale by the Escrow Agent of
the consideration receivable therein shall not be legally permissible and the
amount of cash apportioned to the Exchange Property shall not be sufficient to
pay all taxes payable by the Company and the Escrow Agent which arise from such
transaction, the Company may direct the Escrow Agent to segregate for the
benefit of the Company or the Escrow Agent (as the case may be) or deliver to
the Company or to the Escrow Agent (as the case may be) an amount of Exchange
Property theretofore held by the Escrow Agent for exchange of Securities having
an Average Market Price equal to the unsatisfied portion of the tax payable by
the Company or the Escrow Agent (as the case may be) with respect to
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such transaction including any tax payable upon the delivery or sale thereof in
order to satisfy the aforementioned tax, and such Exchange Property shall
thereafter be solely for the account of the Company or the Escrow Agent (as the
case may be) and Holders of Securities shall have no rights thereto.
As used in this Section 1213 the term "Average Market Price" means the
average closing trading price of Granges Common Stock on the American Stock
Exchange (or, if Granges Common Stock is not then listed on the American Stock
Exchange, the stock exchange or over-the-counter market upon which the Granges
Common Stock is traded which, in aggregate, has the highest dollar trading
volume) during a 20 consecutive trading day period ending one day prior to the
date fixed for segregation of Exchange Property. Should Granges Common Stock
not be traded on any stock exchange or over-the-counter market, then "Average
Market Price" shall mean the fair value of Granges Common Stock over such
twenty-day period as determined in good faith by an investment banking firm
retained in good faith by the Company and which is a member of the New York
Stock Exchange or the Toronto Stock Exchange.
In the event that an Opinion of Counsel given pursuant to this
Indenture concludes that whether taxes are payable by the Company or the Escrow
Agent is uncertain under the then state of the law or facts or both, the Company
shall have the option of requiring the Escrow Agent to segregate the amount of
funds that would be payable (or securities or other property in lieu thereof),
pursuant to an Officers' Certificate, if such taxes were deemed payable,
together with the amount estimated in good faith to be the reasonable costs and
expenses (including attorneys' fees) of obtaining a determination as set forth
below. The Holders shall have no rights to such funds or securities or other
property, which shall be held by the Escrow Agent for the Company (or for the
Escrow Agent, as the case may be), the Exchange Property and any cash
apportioned thereto deliverable upon exchange of Securities pursuant to this
Article Twelve shall be reapportioned (based on an Officers' Certificate from
the Company) as though such segregated amounts had been paid to the Company or
the Escrow Agent for such taxes, and any Holder surrendering any Security after
the record or effective date of the applicable transaction giving rise to an
adjustment pursuant to Section 1204 shall be entitled to receive only such
Exchange Property and any cash apportioned thereto upon exchange of Securities
pursuant to this Article Twelve as so reapportioned. The Company shall
thereupon in good faith seek an appropriate determination from the appropriate
agencies and, if judged necessary by the Company in good faith, from appropriate
courts, as to whether taxes are so payable. If an appropriate determination is
made that such taxes are so payable then the Escrow Agent shall immediately pay
the funds or deliver the securities or other property so segregated to the
Company (or, if taxes are payable by the Escrow Agent, shall retain such funds
or securities or other property for itself), and if an appropriate determination
is made that such taxes are not payable or an amount of tax is payable which is
less than the amount of funds
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or property so segregated, then the Escrow Agent, after paying to the Company
(or itself, as the case may be) out of such funds or securities or other
property the reasonable expenses and costs (including attorneys' fees) of
obtaining such determination (and any taxes so payable), shall apportion such
remaining funds or securities or other property which had been so segregated
among the Exchange Property and cash apportioned thereto as of immediately after
the close of business on the record date or the effective date of such
transaction giving rise to an adjustment pursuant to Section 1204 hereof,
whichever is applicable. If any Security has been exchanged on or after such
record date or such effective date, as the case may be, and before a
determination is made that no taxes are payable or an amount of tax is payable
which is less than the amount of funds or securities or other property so
segregated, the Escrow Agent, to the extent not previously delivered, shall
deliver such Exchange Property and any cash apportioned thereto as reapportioned
following such determination, to the person to which and in the manner in which
the other proceeds of the exchange of such Security were delivered.
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ARTICLE THIRTEEN
SECURITY AND PLEDGE OF COLLATERAL
SECTION 1301. Grant of Security Interest.
(a) To secure the full and punctual payment when due and the full and
punctual performance of the Company's obligations under this Indenture, the
Company hereby grants to the Trustee as Escrow Agent, for the benefit of the
Trustee and the Holders, a security interest in all its right, title and
interest in all Exchange Property, all distributions on Exchange Property giving
rise to an adjustment to the Exchange Rate pursuant to Section 1204(a) (such
distributions to become Exchange Property) and all proceeds from the sale of
Exchange Property.
SECTION 1302. Delivery of Exchange Property.
Any and all certificates or instruments representing or evidencing
Exchange Property shall be delivered to and held by the Escrow Agent, on behalf
of the Trustee and the Holders, and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form satisfactory to the Trustee. The Trustee shall
have the right at any time to exchange certificates or instruments representing
or evidencing Exchange Property for certificates or instruments of different
denominations.
SECTION 1303. Representations and warranties.
The Company hereby represents and warrants as follows:
(a) It is, and at the time of delivery of the Exchange Property to
the Escrow Agent pursuant to the Escrow and Pledge Agreement will be, the record
and beneficial owner of the Exchange Property, free and clear of any lien,
except for the Liens created by this Indenture and the Escrow and Pledge
Agreement.
(b) It has full corporate power, authority and legal right to pledge
and grant a security interest in all the Exchange Property pledged by it
pursuant to this Indenture.
(c) The pledge in accordance with the terms of this Indenture and the
Escrow and Pledge Agreement creates a valid and perfected first priority lien on
the
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Exchange Property and all proceeds from the sale thereof, securing payment and
performance of the Company's obligations under this Indenture.
SECTION 1304. Further Assurances.
The Company agrees that at any time and from time to time, at the
expense of the Company, the Company will promptly execute and deliver all
further instruments and documents and take all further action that may be
necessary or that the Trustee may reasonably request in order to perfect and
protect any Lien granted or purported to be granted hereby or in the Escrow and
Pledge Agreement or to enable the Escrow Agent or the Trustee to exercise and
enforce its rights and remedies hereunder or under the Escrow and Pledge
Agreement with respect to any Exchange Property.
SECTION 1305. Dividends; Voting Rights: Withdrawal Rights.
(a) So long as no Event of Default has occurred and is continuing,
and except to the extent received pursuant to a plan of liquidation or partial
liquidation, the Company may retain and dispose of, free and clear of the lien
of this Indenture, any interest, dividends paid and distributions made on the
Exchange Property received by it not giving rise to an adjustment to the
Exchange Rate pursuant to Section 1204(a); provided, that if the Escrow Agent
shall receive any such interest, dividends paid and distributions made to which
the Company is entitled pursuant hereto, the Escrow Agent shall not be required
to transfer to the Company any such dividends paid, distributions made or
interest to which the Company is entitled pursuant hereto until receipt of an
Officers' Certificate to the effect that the Company is entitled to such
dividends paid, distributions made or interest pursuant hereto. The Company
shall also be entitled to any interest or gain on investments made by the Escrow
Agent pursuant to Section 8 of the Escrow and Pledge Agreement, which shall be
paid to the Company on demand as provided in the Escrow and Pledge Agreement.
Any loss on such investments shall be for the account of the Company.
Dividends and distributions giving rise to an adjustment to the
Exchange Rate pursuant to Section 1204(a) shall become Exchange Property subject
to the lien of this Indenture.
(b) So long as an Event of Default has occurred and is continuing,
and at all times in the case of distributions on the Exchange Property received
pursuant to a plan of liquidation or partial liquidation, the Trustee shall be
entitled to receive and retain as collateral all interest, dividends paid and
distributions made in respect of the Exchange Property. Any such interest,
dividends and distributions shall, if received by the Company,
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be received in trust for the benefit of the Trustee, be segregated from the
other property or funds of the Company, and be forthwith delivered to the Escrow
Agent as Exchange Property in the same form as so received (with any necessary
endorsement). In addition, the Trustee may during such continuance of an Event
of Default by instrument in writing direct the Escrow Agent not to make any
payments to the Company pursuant to Section 11 of the Escrow and Pledge
Agreement and either (i) to make all payments to which the Company would have
been entitled pursuant to such Section 11 directly to the Trustee or (ii) to add
such payments to the Exchange Property.
(c) Until an Event of Default has occurred and is continuing and
thereafter until written notice from the Trustee to the Company that the Trustee
intends to exercise its right to vote the Exchange Property, the Company shall
be entitled to exercise any and all voting and other consensual rights relating
to the Exchange Property or any securities forming part of the Exchange Property
or any part thereof for any purpose; provided, however, that no vote shall be
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cast, and no consent, waiver or ratification given or action taken, which would
be inconsistent with or violate any provision of the Indenture or the
Securities.
(d) Upon the occurrence and during the continuance of an Event of
Default, all rights of the Company to exercise the voting and other consensual
rights that it would otherwise be entitled to exercise pursuant to Section
1305(c) shall cease upon notice from the Trustee to the Company pursuant thereto
and upon the giving of such notice all such rights shall thereupon be vested in
the Trustee who shall thereupon have the sole right to exercise such voting and
other consensual rights.
(e) In order to permit the Trustee to exercise the voting and other
consensual rights which it may be entitled to exercise pursuant to Section
1305(d), and to receive all interest, dividends and distributions which it may
be entitled to receive under Sections 1305(a) and 1305(b), the Company shall, if
necessary, upon written notice of the Trustee, from time to time execute and
deliver to the Trustee or the Escrow Agent such instruments as the Trustee or
the Escrow Agent, as the case may be, may reasonably request.
(f) The Company shall be entitled to retain, free of the lien of this
Indenture, any Exchange Property released to the Company in accordance with
Article Twelve hereof and Section 11 of the Escrow and Pledge Agreement.
(g) Any Exchange Property delivered to the Escrow Agent, as provided
in the Escrow and Pledge Agreement, for the satisfaction of the Company's
obligations under this Indenture (including redemption of Securities pursuant to
Article Eleven and Exchange of Securities pursuant to Article Twelve) shall,
upon such delivery, be released from the Lien of this Indenture.
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(h) It is specifically agreed that, until this Indenture has been
discharged, any release or transfer of Exchange Property other than as
contemplated by Sections 7 or 11 of the Escrow and Pledge Agreement shall not
terminate the lien of this Indenture on such Exchange Property.
SECTION 1306. Trustee Appointed Attorney-in Fact.
The Company hereby appoints the Trustee as the Company's attorney-in-
fact, with full authority in the place and stead of the Company and in the name
of the Company or otherwise, from time to time during the continuance of an
Event of Default in the Trustee's discretion, to take any action and to execute
any instrument which the Trustee may deem necessary or advisable in order to
accomplish the purposes of this Indenture, including to receive, endorse and
collect all instruments made payable to the Company representing any dividend,
interest payment or other distribution in respect of the Exchange Property or
any part thereof and to give full discharge for the same. This power, being
coupled with an interest, is irrevocable.
SECTION 1307. Trustee May Perform.
If the Company fails to perform any agreement contained herein, the
Trustee may itself perform, or cause performance of, such agreement, and the
expenses of the Trustee incurred in connection therewith shall be payable by the
Company.
SECTION 1308. Trustee's Duties.
The powers conferred on the Trustee under this Article are solely to
protect its interest in the Exchange Property and shall not impose any duty upon
it to exercise any such powers. Except for the safe custody of any Exchange
Property in its possession and the accounting for moneys actually received by it
hereunder, the Trustee shall have no duty as to any Exchange Property or as to
the taking of any necessary steps to preserve rights against prior parties or
any other rights pertaining to any Exchange Property.
SECTION 1309. Remedies upon Event of Default.
If any Event of Default shall have occurred and be continuing, the
Trustee may exercise in respect of the Exchange Property, in addition to other
rights and remedies
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provided for herein or otherwise available to it, all the rights and remedies
provided a secured party upon the default of the debtor under the New York
Uniform Commercial Code at that time, and the Trustee may also, without notice
except as specified below, sell the Exchange Property or any part thereof in one
or more parcels at public or private sale, at any exchange, broker's board or at
any of the Trustee's offices or elsewhere, for cash, on credit or for future
delivery, upon such terms as the Trustee may determine to be commercially
reasonable, and the Trustee or any Holder may be the purchaser of any of or all
the Exchange Property so sold and thereafter hold the same, absolutely, free
from any right or claim of whatsoever kind. The Company agrees that, to the
extent notice of sale shall be required by law, at least 10 days' notice to
the,Company of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. The Trustee
shall not be obligated to make any sale of collateral regardless of notice of
sale having been given. The Trustee may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned. The Trustee shall incur no liability as a result of the sale of the
Exchange Property, or any part thereof, at any private sale.
The Company recognizes that, by reason of certain prohibitions
contained in the 1933 Act and applicable state securities laws, the Trustee may
be compelled, with respect to any sale of all or any part of the Exchange
Property, to limit purchasers to those who will agree, among other things, to
acquire such securities for their own account, for investment, and not with a
view to the distribution or resale thereof. The Company acknowledges and agrees
that such sale may result in prices and other terms less favorable to the seller
than if such sale were a public sale without such restrictions and,
notwithstanding such circumstances, agrees that any such sale shall be deemed to
have been made in a commercially, reasonable manner. Until the Qualification
Deadline shall have passed, the Trustee may, in the event that the Company
provides the Trustee with an Officers' Certificate stating that the Company will
complete the Registration Filings and make such filings effective not later than
the Qualification Deadline, delay the sale of any securities forming part of the
Exchange Property for the period of time necessary (but such obligation shall
cease after the Qualification Deadline) to permit the Company to complete
registration and listing of the securities as provided in Section 1007 if such
delay will, in the opinion of the Trustee, be beneficial to Holders.
SECTION 1310. Application of Proceeds.
Any cash held by the Trustee as Exchange Property during the
continuance of an Event of Default may, and all cash proceeds received by the
Trustee in respect of any sale of, collection from, or other realization upon,
all or any part of the Exchange Property shall, be applied by the Trustee in the
manner specified in Section 506.
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SECTION 1311. Continuing Lien.
This Indenture shall create a continuing Lien on the Exchange Property
that shall (i) remain in full force and effect until this Indenture is
discharged pursuant to Section 401, (ii) be binding upon the Company and its
successors and assigns and (iii) inure to the benefit of the Trustee and its
successors, transferees and assigns.
SECTION 1312. Certificates and Opinions.
Unless otherwise exempted therefrom by order of the SEC, the Company
shall comply with (i) TIA Section 314(b) relating to opinions of Counsel
regarding the Lien of this Indenture and (ii) TIA Section 314(d), relating to
the release of Exchange Property from the Lien of this Indenture and Officers'
Certificates or other documents regarding fair value of the Exchange Property,
to the extent such provisions are applicable. Any certificate or opinion
required by TIA Section 314(d) may be executed and delivered by an officer of
the Company to the extent permitted by TIA Section 314(d).
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ARTICLE FOURTEEN
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 1401. 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 each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders of Registered 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
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capacity as Security Registrar.
SECTION 1402. 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 1401 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
1401 upon receipt of a new list so furnished.
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SECTION 1403. Trust Indenture Act Controls.
If and to the extent that any provision of this Indenture limits,
qualifies and conflicts with the duties imposed by, or with another provision
(an "incorporated provision") included in this Indenture by operation of,
Sections 310 to 318 inclusive, of the TIA, such imposed duties or incorporated
provision shall control.
SECTION 1404. Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Securities.
The Company, the Trustee, the Registrar, the Escrow Agent and anyone else shall
have the protection of TIA Section 312(c).
_____________________
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.
ATLAS CORPORATION
By /s/ Gerald E. Davis
----------------------------
Name: Gerald E. Davis
Title: President
[SEAL]
Attest:
/s/ Gregg B. Shafter
- ------------------------------
Name: Gregg B. Shafter
Title: Vice President
CHEMICAL BANK
By /s/ Peter Morse
--------------------------------
Name: Peter Morse
Title: Vice President
[SEAL]
Attest:
/s/ L.O'Brien
- ------------------------------------
Name: L. O'Brien
Title: Senior Trust Officer
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